Ian Allan Byrne v A J Byrne Pty Limited

[2012] NSWSC 667

Supreme Court of NSW

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Interrogate

Catchwords

1. Corporations
2. › Oppression
3. › Conduct of company's affairs
4. › Whether exclusion from management established
5. › Whether offer to acquire shares at minority discount gives rise to unfairness
6. › Whether minority shareholder was unwilling seller or voluntarily sought exit
7. › Corporations Act 2001 (Cth), ss 232, 233(1)(d)
1. Corporations
2. › Oppression
3. › Valuation of shares on buy-out
4. › Whether minority discount applicable
5. › Distinction between forced exclusion and voluntary exit by minority shareholder
6. › Corporations Act 2001 (Cth), s 233(1)(d)
1. Corporations
2. › Winding up
3. › Just and equitable ground
4. › Whether quasi-partnership
5. › Whether loss of confidence justified
6. › Whether winding up is remedy of last resort
7. › Whether minority shareholder contributed to breakdown of relationship
8. › Corporations Act 2001 (Cth), ss 461(1)(k), 467(4)
1. Corporations
2. › Oppression
3. › Valuation of shares on buy-out
4. › Whether allowance for cost of liquidating assets appropriate where assets to be retained
5. › Corporations Act 2001 (Cth), s 233(1)(d)

Quick Take

The policy against applying a minority discount when valuing shares in oppression proceedings does not extend to circumstances where the minority shareholder voluntarily seeks to exit the company rather than being unilaterally excluded by the majority. An offer to purchase minority shares at a value determined by an independent accountant, incorporating a minority discount, does not itself constitute oppression absent independent oppressive conduct. However, a valuation that deducts costs of liquidating assets is incorrect where the assets are to be retained by the remaining shareholders.