“I’m a director.” “No you aren’t.” “Yes, I am!”
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Two people, and their Cos, founded a Co to develop property on the NSW coast: [1]
P was a director. PCo and DCo were equal shareholders: [37]
Their records could “fairly be described as a mess” with “gaping holes” in the evidence: [3], [11]
The parties agreed that they would share the profits, but disagreed on sharing investment: [175]
The Court found that there was a 50 / 50 agreement, where the party whose “50” required the Co to take a bank loan would cause that bank loan to be paid: [181]
In 2016, P and D caused the Co to buy an incomplete tourist resort for $2.95m: [37]
P provided 1/2 the funding. D did not have the funds to contribute their 1/2. D and P caused the Co to borrow that money, and provided personal guarantees: [46] - [51]
PCo ceased being a shareholder as P thought if PCo remained a shareholder PCo would be responsible for the bank loans: [53]
P agreed to being removed as dir, leaving D as sole dir, so P didn’t have to provide a personal guarantee: [56]
In 2017 P lent D $100K for another project P thought never went ahead. (In fact it did but D concealed that from P): [79]
P loaned the Co a further $300K to finish some unfinished buildings: [84], [86]
Later in 2017 P lent a further $65K to the Co: [88]
In 2018 an investor offered to buy half of DCo’s holding - 25% of the Co - for $2.25m. D said no. In circs where the Co needed funding, P had no director role or shareholding, and only P was funding it, this frustrated P: [89], [90]
P wished to resume as director: [91], [182]
D engaged in “ham fisted” attempts to confer legitimacy on the Co’s money funnelled to their spouse after opening a secret bank account: [92]. [94], [95], [99]
By June 2018, P learnt P was not back as a director and caused this to be corrected. By now P had loaned the Co over $2m with only $3K repaid: [113]
In July 2018, D caused the removal of P as a director and the transfer of PCo’s shares to DCo - all without P’s knowledge: [116]
In November 2018 P discovered his removal as director and was re-instated; from then P kept being re-registered as a director and D kept removing them: [130], [184]
D listed the land for auction seeking $12.5m without P’s knowledge, and refused to postpone the auction once P was aware and had sought postponement: [155]
Unusually, P and PCo sought orders via s233 for it to conduct litigation in the name of the Co (usually this would be pursuant to s236): [165]
Oppression established. D’s actions excluded P from management of the Co in breach of their agreement and where P had loaned the Co substantial funds: [187]
The oppression findings meant it was appropriate to grant leave to PCo to bring claim on Co’s behalf: [195]
s461 just and equitable grounds were met: the lack of deadlock was due to D removing P as dir, and breakdown of trust and confidence: [209]
Liq appointed *and* leave granted to PCo to bring the derivative applications: [217]
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