Tzavaras [2022] NSWSC 359

One brother, trustee, Plaintiff, tried to wind up a Company, he owned with his elderly mum and two other brothers. The family trust whose approximate $5.8m corpus included some real estate related to a family auto repair business formerly operated by the trustee.

(There was also a s66G issue that we will ignore.)

Plaintiff had left the auto repair business in 2012.

In a 2012 letter, Plaintiff’s lawyers wrote a letter confirming Plaintiff intentionally “walked out” of the family business.

Plaintiff did not attend any meetings of the trust from 2012 tough received and signed some occasional documents.

One of the Defendant’s brother’s auto repair businesses later operated from the trust’s real estate rent free from around 2013.

Plaintiff claimed he was oppressed as a shareholder of the trust by having been excluded from management, having not received dividends or the benefit of a loan account, the trust failing to charge the Defendant’s brother’s business rent, the trust losing money on a failed transaction, and the other brothers having rent-free benefit of the trust’s holiday apartment.

The Plaintiff tendered accounting evidence based on the incorrect assumption that the value of the shares in a trustee Co was proportionate to the assets of the trust.

The Plaintiff pressed for a windup, and no other remedy.

The Plaintiff was unwilling to meaningfully re-engage, apparently believing he would have to work for the Defendant’s brother free to do that. The Plaintiff complaint about rent free use of the trust’s premises range hollow when he did the same thing with his race cars.

In relation to the Plaintiff’s oppression claims, the Court found: it was not oppressive for the Plaintiff not to be involved day-to-day management of the trust where he had expressed a wish to cut ties and if that was wrong then the remedy is for the Plaintiff to be provided with notices of future meetings and company documents, not a winding up.

While a failure to pay dividends may be oppressive, here no dividends were paid to any shareholder and drawings were made as part of a regime the Plaintiff absented himself from including for elderly mum’s benefit.

The Defendant’s brother’s business occupying the Tee property rent free could be oppressive, but the remedy would not be wind up the Tee, but to direct it to charge rent.

The directors of the Tee falling victim to a financial fraud was not oppressive.

The use of the holiday unit rent free is not prohibited nor oppressive.

The Plaintiff failed in all of his oppression claims.

If oppression had been made out, the windup sought by the Plaintiff would not have been the appropriate relief.

The Plaintiff also failed in seeking a windup on the just and equitable basis.

If you require assistance with any kind of corporate dispute you should seek legal advice.

Our team of qualified corporate and commercial lawyers at Chamberlains Law Firm can assist you with these issues to ensure that the dispute is managed correctly.