Federal Court of Australia

Annear Holdings Pty Ltd v Farm Projects Pty Ltd [2026] FCA 188

ORDERS

THE COURT ORDERS THAT:

1.    The plaintiff has leave to file a third amended statement of claim in the form of MFI-P1 18/3/2025, excluding the amendments proposed at [12A], [39A] and [40].

2.    Subject to paragraph 3, on or before 14 April 2026 (Date) the first defendant is to buy back the plaintiff’s share for a Price being the amount $416,667.00, adjusted upward or downward by an amount to be fixed by the Court (if not agreed) having regard to any increase or decrease in the first defendant’s net assets occurring since 28 February 2024 (adjustment amount).

3.    In the event that legal and beneficial ownership of the plaintiff’s share is transferred to any one of the second, third or fourth defendants (or an entity or entities of their nomination) in consideration for the Price (or any other amount agreed in writing by the parties) and prior to the Date, then paragraph 2 will cease to operate.

4.    Any application to vary the Date in paragraph 2 is to be made:

(a)    if the variation is by consent, by correspondence to Associate.CharlesworthJ@fedcourt.gov.au; and

(b)    if the variation is opposed by any other party, by interlocutory application and supporting affidavit filed not later than four business days prior to the Date.

5.    The parties are to confer with a view to reaching an agreement on the adjustment amount referred to in paragraph 2 and, in the event that agreement is reached, the agreement is to be communicated to the Court by email to Associate.CharlesworthJ@fedcourt.gov.au on or before 17 March 2024.

6.    In the event that the adjustment amount cannot be agreed then, by this order, argument on the calculation of the adjustment amount is set down for hearing at 2:00 pm (ACST) on 20 May 2026 together with any question of indemnity costs payable by a party withholding agreement to any reasonable proposal put forward by another party.

7.    In the event that the Price is not paid by the Date in accordance with paragraphs 2 or 3, the plaintiff has liberty to apply for an order that the first defendant be wound up under s 461(k) of the Corporations Act 2001 (Cth), such application to be supported by an affidavit identifying the liquidator to be appointed and the consent of the liquidator to that appointment.

8.    Other than with the leave of the Court or the written consent of the plaintiff, the first and second defendants are restrained from repaying loan balances owing to each shareholder other than in a manner that reduces the loan balances by equal amounts.

9.    The second amended originating application (as further amended) is otherwise dismissed.

10.    The cross-claimant’s application for leave to file a third amended cross-claim in the form annexed to the cross-claimant’s written submissions filed on 5 March 2025 is dismissed.

11.    The cross-claim is dismissed.

12.    On or before 20 April 2026 any party seeking an order for costs is to file and serve an affidavit specifying the orders sought together with written submissions not exceeding three pages.

13.    Any applications for costs filed in accordance with paragraph 12 are referred to a Registrar (as referee) for consideration and report under r 28.62 of the Federal Court Rules 2011 (Cth) both as to:

(a)    the appropriate orders as to costs; and

(b)    the lump sums to be paid pursuant to the recommended orders.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

CHARLESWORTH J

1    The plaintiff, Annear Holdings Pty Ltd (ACN 009 618 071) owns one of three issued shares in the first defendant, Farm Projects Pty Ltd (ACN 108 891 765). Mr Geoffrey Annear is Annear Holdings’ sole director.

2    The other two shares in Farm Projects are separately owned by the third defendant, Norvest Projects Pty Ltd (ACN 090 448 696), and the fourth defendant, Greenfair Holdings Pty Ltd (ACN 101 090 368).

3    The second defendant, Mr Stephen McNamee, is Farm Projects’ sole director and secretary and the sole director of Norvest.

4    Since 2004, Farm Projects has been the owner of Land in the Northern Territory situated at Lot 2924 Batchelor Road, Batchelor.

5    Annear Holdings became a shareholder of Farm Projects in 2006. At that time, relations between Mr Annear and Mr McNamee were cordial, each intending to assist Farm Projects to pursue an opportunity to rezone and subdivide the Land into residential allotments for sale at a profit. It is common ground that Mr Annear agreed to utilise his contacts in the residential development sector to design the project and secure some of the necessary development approvals. That he did, until about April 2011 by which time relations between him and Mr McNamee deteriorated. By the time of the trial of this action, their relationship had irretrievably broken down as evidenced by (among other things) a pub fight in a Darwin hotel in 2019.

6    Section 232 of the Corporations Act 2001 (Cth) relevantly provides:

232    Grounds for Court order

The Court may make an order under section 233 if:

(a)    the conduct of a company’s affairs; or

(b)    an actual or proposed act or omission by or on behalf of a company; or

(c)    a resolution, or a proposed resolution, of members or a class of members of a company;

is either:

(d)    contrary to the interests of the members as a whole; or

(e)    oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity.

7    Annear Holdings seeks a declaration to the effect that Mr McNamee has conducted the affairs of Farm Projects in an oppressive, unfairly prejudicial or unfairly discriminatory way, contrary to its interests as a shareholder and the interests of the members of Farm Projects as a whole within the meaning of s 232 of the Corporations Act (Oppression Claim). As a part of that claim, it alleges that there existed obligations of “mutual cooperation, trust and confidence” between Farm Projects’ shareholders by virtue of them standing in a “quasi partnership” relationship vis a vis each other. It asserts that those obligations have been breached in multiple respects, including because Mr Annear has been excluded from participating in the management of Farm Projects’ affairs.

8    Whether there existed a “quasi partnership” giving rise to obligations of the alleged kind is one of two key issues in this proceeding.

9    Among additional relief, Annear Holdings seeks orders under s 233 of the Corporations Act compelling Norvest and Greenfair to purchase its share, or an order that the share be bought back by Farm Projects.

10    Alternatively, if the Oppression Claim is unsuccessful, Annear Holdings seeks an order that Farm Projects be wound up on the just and equitable ground under s 461(k) of the Corporations Act (Winding Up Claim).

11    In addition, Annear Holdings sues Farm Projects in contract for the immediate repayment of a loan in the amount of $185,722.73 (Loan Claim).

12    By way of cross-claim, Mr McNamee (in his personal capacity) joins Annear Holdings and Mr Annear as cross-respondents. He alleges that Annear Holdings and Mr Annear have themselves engaged in oppressive conduct within the meaning of s 232 of the Corporations Act. He seeks an order that an amount of $200,403.00 be paid as “restitution” or (alternatively) set off against the price to be paid for Annear Holdings’ share in Farm Projects. In addition, Mr McNamee seeks declarations that Annear Holdings’ shareholding be declared to be held on constructive trust for the benefit of Norvest and Greenfair by reason of there being unequal contributions to a joint venture. Mr McNamee seeks additional orders extending the time by which his claims for relief may be brought for the purposes of s 44(1) of the Limitation Act 1981 (NT).

13    Underpinning the position of the defendants (and Mr McNamee as cross-claimant) is an allegation that Annear Holdings made and breached a commitment to advance money (by way of a loan) to Farm Projects in order to meet the expenses of getting the residential development on the Land ready for physical works to start (referred to as the “Shovel Ready Commitment”). They allege that Annear Holdings breached that obligation such that steps subsequently taken by Mr McNamee from 2011 cannot be characterised as oppressive. In addition, they allege that, as a consequence of the breach, Annear Holdings’ share does not have a value equal to that of the other shareholders. Rather, it is alleged that if Annear Holdings is entitled to an order that Farm Projects buy back the share, the price should equate to the capital it originally invested, without regard to the significant growth in value of the Land since that time.

14    Whether the Shovel Ready Commitment was made, whether it was breached, and (if so) the consequences that should follow from the breach is the second key issue arising in the proceeding.

15    By the conclusion of the trial, the Court had before it an application of Annear Holdings to further amend its statement of claim, and an application of Mr McNamee to rely on an amended statement of cross-claim (including for the apparent purpose of adding Farm Projects, Norvest and Greenfair as cross-claimants).

Outcome on Annear Holdings’ claim

16    There will be an order granting Annear Holdings leave to file a third amended statement of claim in a form marked MFI-P1 18/3/2025, minus some of the proposed amendments. The claim proceeds to judgment on the amended pleading.

17    On the Oppression Claim, I am satisfied that Mr McNamee in his capacity as director of Farm Projects has conducted its affairs in a manner that is oppressive toward, and unfairly discriminatory against, Annear Holdings in its capacity as a shareholder, albeit in only one of the several respects pleaded. The oppression lies in Mr McNamee’s conduct in persisting with wrongful assertions concerning Annear Holdings’ rights as a member and the value of its share. Declaratory relief and other relief will be granted for the purpose of addressing that ongoing oppression.

18    In arriving at that conclusion, I have rejected Annear Holdings’ claim to stand in a “quasi partnership” relationship with the other shareholders and to have a right to participate in the day to day management of Farm Projects.

19    I have also rejected the defendants’ allegations concerning the Shovel Ready Commitment and hence their contentions concerning the consequences that should flow from the breach of any such commitment.

20    The appropriate remedy is to order the buy back of Annear Holdings’ share by Farm Projects at a specified price fairly reflecting its one third ownership in the company. Alternatively, Annear Holdings’ share may be purchased by either Norvest or Greenfair at the specified price. There will be a further order for the winding up of Farm Projects in the event that Annear Holdings’ share is not bought back in accordance with the Court’s other orders.

21    As to the Loan Claim, I am not satisfied that there should be orders for the immediate repayment of the money indisputably owing by Farm Projects to Annear Holdings. I am not satisfied that the loan is payable on demand and there is at present no indication that the loan will not be repaid in the ordinary course consistent with Farm Projects’ legal obligations as I have identified them to be. The obligations involve the rateable payment down of loans owed to all shareholders in a non-discriminatory way and otherwise in a manner that maintains Farm Projects’ solvency.

22    The originating application will be dismissed other than to the extent reflected in the abovementioned orders.

Outcome on the cross-claim

23    I am not satisfied that Mr McNamee in his personal capacity has standing to seek relief on the cross-claim in its current form. Nor am I satisfied that the central allegations of fact and law in the present cross-claim were established at trial.

24    By the proposed amended cross-claim Mr McNamee seeks to join Norvest, Greenfair and Farm Projects as additional cross-claimants. It is not at all apparent that Greenfair consents to that proposed joinder.

25    Whilst the proposed amendments to the cross-claim may address issues relating to standing, I am not satisfied that the proposed amendments to the cross-claim could assist the proposed additional cross-claimants any more than they could assist Mr McNamee. Moreover, I am not satisfied that Greenfair should be joined as a cross-claimant absent an application by that entity to have the status of an applicant party.

26    Leave to amend will be refused and the cross-claim will be dismissed.

THE TRIAL AND EVIDENCE

27    The parties are aware of the evidence adduced by them and it is unnecessary to list the material here.

28    It is sufficient to say that evidence-in-chief was adduced by affidavits. They have been read subject to some evidentiary rulings, also known to the parties.

29    The parties’ oral closing submissions were supplemented by written submissions relating to (among other things) proposed amendments to pleadings. Judgment was reserved upon receipt of the last submissions.

The position of Greenfair

30    In closing submissions, Counsel for Annear Holdings confirmed that the action founded in oppression was based on the conduct of Farm Projects and Mr McNamee and not upon any act or omission of Greenfair.

31    Greenfair’s role in the trial was limited. It was separately represented and filed a separate defence replete with pleas that it did not know or could not admit critical factual matters. In the pages that follow my references to the defendants jointly may in most cases be understood as a reference to the more active defendants, Mr McNamee and Norvest. Whilst Greenfair’s position was largely neutral, it did not speak against orders concerning the form of relief should the Court uphold the Oppression Claim, the Winding Up Claim or the Loan Claim.

32    For the purpose of the defences and cross-claim, to the extent that Mr McNamee asserted that Greenfair had relied upon any representation or suffered any loss or detriment, or was privy to a contract (or like assertions), I have placed little weight on them where those claims were not corroborated or actively pursued by Greenfair itself.

THE KEY EVENTS

33    In this section of my reasons, I set out some of the events, facts and circumstances against which the two central issues relating to the “quasi partnership” and Shovel Ready Commitment will be decided. In large part, the narrative that follows is either uncontroversial, or contains findings based on contemporaneous documents or other evidence that I consider to be reliable. Where I have resolved contested factual issues my reasoning will either be apparent from what follows, or otherwise explained in later parts of these reasons.

Farm Projects buys the Land

34    Farm Projects was incorporated on 29 April 2004 for the purpose of acquiring and holding the Land and developing it as a residential development. It purchased the Land on 18 May 2004 for $380,000.00. At that time Farm Projects had two equal shareholders, Norvest and Greenfair. They each held one issued share, with Norvest holding its share for the beneficial interests of Mr McNamee, and Greenfair holding its share legally and beneficially.

Annear Holdings becomes a shareholder

35    Mr Annear was introduced to Mr McNamee in late 2004. There is a dispute about whether it was Mr McNamee who approached Mr Annear to invite his investment in Farm Projects, or whether it was Mr Annear who first approached Mr McNamee about it, but (like many sub-brawls on the pleadings and in the affidavits) nothing of importance turns on that.

36    An extract for Farm Projects held by the Australian Securities and Investments Commission shows that Annear Holdings first became a shareholder of Farm Projects on 19 April 2006 upon the issue of an additional share. At that time, the Land (being Farm Projects’ only substantial asset) had increased in value to $795,000.00.

37    In his affidavit evidence, Mr Annear asserted facts surrounding Annear Holdings’ initial investment in Farm Projects and his dealings with Mr McNamee and (to a lesser extent) Mr Russell Aboud, director of Greenfair, concerning the terms on which he agreed that Annear Holdings would become a shareholder and the manner in which his capital was applied. The evidence originally given by Mr Annear on that topic differs from the contemporaneous documentary records concerning the financial transaction underpinning the share acquisition.

38    Those contemporaneous records comprise materials found by Mr Annear when cleaning out his shed on 22 October 2024, well after this action was commenced. They include two letters from management consulting firm Deloitte Growth Solutions Pty Limited dated 14 December 2005 and 21 March 2006 addressed to Mr Annear and copied to Mr McNamee (Deloitte Letters). At that time Deloitte represented the interests of the “vendors”. I do not accept Mr McNamee’s assertion that Deloitte also acted for Annear Holdings, but that too is of little significance.

39    The Deloitte Letters came into existence when relations between Mr McNamee and Mr Annear were functional. They are reliable evidence. By the conclusion of the trial it was generally accepted that they reflected the terms of an agreement pursuant to which Annear Holdings came to be a shareholder in Farm Projects and Mr Annear acknowledged that the evidence he had given in his earlier affidavit about the amount he paid and the treatment of those funds within Farm Projects’ accounts was wrong.

40    In the first of the Deloitte Letters the consultant stated that the total issued capital in Farm Projects was the nominal amount of $2.00 held by two shareholders, each of which had previously advanced loans of $255,000.00 to assist with the acquisition of the Land, buildings, plant and equipment, stock and working capital.

41    The consultant then referred to a discussion concerning the possibility of Annear Holdings contributing funds. After setting out stamp duty, tax and other implications the consultant stated:

It is my understanding that you will be an equity participant in the company to the extent of 1/3 interest. The total consideration payable is $265,000 albeit majority is likely to be by way of loan account.

Our advice is to pay a nominal amount for the newly allotted share which is representative of the market value, namely, $1 and contribute the balance of funds by way of non-interest bearing loan repayable by the company within 10 years. This may be done immediately without attracting stamp duty, GST, CGT or the inappropriate treatment of the contributed debt as equity.

42    The second of the Deloitte Letters reflects the agreement ultimately recached. The consultant there referred back to the first letter, before stating “I provide a brief outline of the deal that will give you one third share of Farm Projects Pty Ltd as outlined by the vendors”. The consultant then set out a balance sheet as at 30 June 2005, recording liabilities in the nature of loans then owed to Greenfair and Norvest in the amounts of $255,000.00 and $255,998.00 respectively. After accounting for the value of assets (including the increased value of the Land) the net assets of Farm Projects totalled $284,399.00 and the value of each share was calculated at $142,199.50 per share. I find that to be the correct starting point.

43    There followed this text:  “Issue G Annear 1 share for $142,199.50 (rounded up to $142,200)”.

44    The consultant then proposed a contribution of $265,000.00. That figure is one third of the value of the Land at the time. The letter proposed that the money be appropriated as $15,397.00 in cash deposited to Farm Projects’ bank account, and $125,000.00 to each of Norvest and Greenfair by way of repayment of their loans. The resulting new balance sheet was as follows:

Assets

Property (at valuation)    $795,000

Cash    $ 15,397

Liabilities

Shareholder Loans

Greenfair Holdings Pty Ltd    $130,000

Norvest Projects Pty Ltd     $130,998

Annear Holdings Pty Ltd     $122,800

Net Assets     $426,599

45    On the consultant’s calculations (which are not disputed), each of the three shares had an equalised value of $142,199.67, representing a one third of the value of the company’s net assets. The consultant concluded that upon the payment of $265,000.00 to Farm Projects, the additional share would issue to Annear Holdings. There is no mention in the Deloitte Letters of any rights or obligations of Annear Holdings or Mr Annear, whether by way of consideration for the share purchase or otherwise. In particular, there is no mention of Mr Annear having any entitlement to participate in the day to day management of Farm Projects, nor any mention of future obligations to provide additional loans or capital.

46    On the following day, Mr McNamee sent a letter to Annear Holdings in terms consistent with the “deal” referred to in the second of the Deloitte Letters and providing Farm Projects’ bank details. That letter makes no mention of any additional terms of the “the deal”.

47    Consistent with the preceding correspondence, Annear Holdings paid $265,000.00 to Farm Projects on 28 March 2006. Farm Projects’ reports for the financial year ending 30 June 2006 show:

(1)    loan amounts owing to Greenfair and Norvest each having been reduced to $130,000.00 and $141,236.60 respectively (evidencing that most of Annear Holdings’ investment was applied by Farm Projects to repay those amounts); and

(2)    a new loan account recording $122,800.00 owing to Annear Holdings.

48    A share certificate signed by Mr McNamee on 19 April 2006 indicates that Mr Annear was issued one share fully paid to the value of $142,200.00. Nothing turns on the $2.00 difference recorded in the share certificate and the transaction reports.

49    I find that the Deloitte Letters and the steps giving effect to the consultant’s proposal together disclose a common intention that Annear Holdings pay a sum for the additional issued share that would equalise the value of the three shareholdings whilst at the same time ensuring that Annear Holdings made a financial contribution equating to a one third of Farm Projects’ assets, as valued at that time. In addition, the records evince an intention that from the time of the share issue, Farm Projects would be indebted to the three shareholders in roughly equal amounts.

Funding of the residential development

50    Farm Projects did not seek external finance to fund the considerable costs of pursuing and assessing the opportunity to develop the Land into a residential development. No witness suggested that it was in a financial position to secure any such finance. In addition, I find that Mr Annear was wrong in his initial affidavit evidence to the effect that much of his capital investment was expended pursuing the residential development project. With less than $30,000.00 cash at bank, it did not have cash reserves to meet those expenses, and most of Mr Annear’s investment had been paid to Norvest and Greenfair in reduction of their loans.

51    It is common ground that prior to Annear Holdings acquiring its one third interest, Mr McNamee and Mr Annear had one or more discussions about how the expenses of pursuing the opportunity would be paid. Broadly summarised, the disputed issues relate to whether the three shareholders were to equally share the cashflow burden of those activities (as alleged by Mr Annear) or whether Annear Holdings made the Shovel Ready Commitment, being a commitment to solely fund those activities by way of loans to the company. The Shovel Ready Commitment was said to have contractual force or, alternatively, to have arisen in equity by promissory estoppel.

52    Importantly, the evidence does not show that the shareholders (through their respective directors or otherwise) had any discussion about what might occur should the planned residential development of the Land be practically unachievable or financially unfeasible, nor is there evidence of any discussion about the rights and obligations of the parties in that event. The evidence before me does not disclose any discussion about other possible uses of the Land at the time that Annear Holdings acquired its share.

53    Ultimately, development of the Land for residential development proved financially unviable. That finding is based in part on evidence of a $10.1 million quote for the development to be brought to fruition, obtained by Farm Projects in 2014. Mr McNamee did not suggest that the conduct of Mr Annear caused Farm Projects to lose the opportunity to exploit an objectively profitable venture. No attempt was made to show that the development could and would have been pursued even if the alleged Shovel Ready Commitment was both made and honoured.

Expenses and personal services

54    It is not disputed that prior to Annear Holdings acquiring its share, Mr Annear agreed that he would make use of his contacts in the residential development sector and that he would engage and instruct those consultants to design the development and obtain the necessary development approvals. He deposed, and I accept, that he has past experience in land subdivision and development and I find that he agreed to bring that expertise and effort to the project without any expectation of fee or reward (other by sharing profits flowing to the company through the corporate structure).

55    Mr Annear did not bear sole responsibility for securing the necessary approvals. He acknowledged the personal effort expended by Mr McNamee in liaising with the relevant authorities to achieve the rezoning of the Land. However, I am satisfied that Mr Annear bore primary responsibility for communicating with planning and other consultants. That work resulted in Farm Projects obtaining development consent for the subdivision of the Land on 13 August 2009. Further expenses were then incurred in the preparation of detailed drawings and technical specifications and in undertaking tests for further approvals. I am also satisfied that Mr Annear took some responsibility for ensuring that the invoices of the consultants were paid. Generally, that was done by Annear Holdings paying the invoices on Farm Projects’ behalf, reflected in increases in Annear Holdings’ loan account. Farm Projects’ financial statements from 2007 to 2024 show its indebtedness to Annear Holdings increasing by $62,922.23.00 to $185,723.00. It is not disputed that the increase is explained by Annear Holdings meeting expenses relating to the residential development project.

56    However, also in evidence are banking records showing that some consultant invoices were paid directly from Farm Projects’ bank accounts without resort to Annear Holdings for cashflow. In addition, Farm Projects’ financial statements show the loan balances owing to Norvest and Greenfair increasing in the period prior to June 2011. Annear Holdings has not alleged that those increases are unrelated to Farm Projects’ activities in holding the Land or exploring opportunities for its development. I infer that the expenses of the project were shared in varying proportions by the three shareholders in an ad hoc way by the advancement of shareholder loans, each expecting in due course for their respective loans to be repaid from future revenue from the sale of the divided allotments.

Annear Holdings loses interest

57    On 16 April 2011 Mr Annear and Mr McNamee had a heated discussion about the development of the Land (April 2011 argument). The disputed question of whether the argument occurred by telephone or in person is not clearly established on the evidence. Neither Mr Annear nor Mr McNamee professed to have a reliable recollection of where they each were when the conversation took place. At the time of the trial, the conversation was an event that had occurred nearly 14 years prior. Given the passage of time, I approach evidence of its content with some caution.

58    Mr Annear’s evidence was to the effect that by April 2011 he considered the project to be financially unviable. He also held a subjective belief at that time that Annear Holdings had been funding the development alone and without contribution from the other shareholders. In addition, he had (justifiably or not) become frustrated with Mr McNamee’s behaviour and I find that he had lost the desire to work with him. It does not appear to be disputed that Mr Annear made it known to Mr McNamee that he wanted to have no further involvement in the project. I am satisfied that Mr Annear’s belief that Annear Holdings was shouldering more than its share of the expenses was genuinely held at that time, although the belief was objectively wrong.

59    Mr Annear’s view as to the financial viability of the project finds some support in the surrounding context (including the fact that the project was later costed at $10 million), together with the absence of evidence that Farm Projects made any effort to explore external finance to carry out the physical works and had no assets or sources of income to independently fund them. Mr McNamee alleged that Mr Annear was going through a costly family law property settlement at the time, and that was the reason for his seeking to have Annear Holdings withdraw. In my view little turns on the reasons for Annear Holdings’ seeking to withdraw its support for the project, whether in the nature of financial contributions or personal services. That is because it has not been shown by any of the defendants that it was a term of their arrangement that they must pursue the residential development to fruition irrespective of their personal appetite or circumstances.

60    It is common ground that during the conversation, Mr McNamee said words to the following effect:

Fuck you, Annear. You can sit there until we are ready to get you out of the deal. We will return your money and cancel your equity when we can.

61    From those choice words, it may be inferred that Mr Annear had told Mr McNamee that Annear Holdings did not want Farm Projects to pursue the residential development, that Annear Holdings would make no further financial contribution and that Mr Annear would make no further personal contribution. With respect to the last of those topics, given the movements in the loan accounts discussed elsewhere in these reasons, I am satisfied that the work necessary for an assessment of the financial viability of the project had by that time been substantially completed.

62    I am also satisfied that Mr Annear raised the topics of Annear Holdings being repaid and its share bought back or transferred. It is unnecessary to make a finding about precisely how that was proposed. It is sufficient to find that Mr McNamee was affronted by the suggestion and (to politely rephrase), he informed Mr Annear that Farm Projects’ refused the proposal (“Fuck you”), that Mr Annear was excluded from the company’s activities (“you can sit there until we are ready”), that Farm Projects would buy back Annear Holdings’ share (“cancel your equity”), that Annear Holdings would be paid what it had contributed (“return your money”), but not until Farm Projects was in a financial position to do so (“when we can”). The comment fairly reflects the circumstance that as at April 2011 Farm Projects had increased liabilities in the form of swollen shareholder loans and no means to immediately repay them other than by the sale of the Land.

63    It has not been shown that Mr McNamee was objectively incorrect to assert that Annear Holdings had no immediate right to the repayment of its capital, and Annear Holdings in any event does not assert that any such right existed at the time of the April 2011 argument.

64    The reference to the return of Annear Holdings’ money is to be understood in the commercial context that at the time of the April 2011 argument, the shares in Farm Projects had not grown in value. That finding is based on the increased indebtedness of the company, together with valuation evidence showing that the Land had not significantly increased in value between 2006 and 2011. Accordingly, I do not consider the phrase “return your money” in and of itself to include an assertion that Annear Holdings rights were limited to the repayment of its invested capital irrespective of any subsequent growth in the value of the Farm Projects’ net assets.

65    On Mr Annear’s version of events, in the course of the April 2011 argument, Mr McNamee also said:

It’s all mine, it always was mine. You’ll get out when I feel like letting you out.

66    I am not satisfied that those words were said, specifically because of concerns I have about the reliability of Mr Annear’s memory of events occurring so long ago.

67    Following the April 2011 argument, Annear Holdings made no further financial contribution to Farm Projects. The last of the invoices paid by Annear Holdings is dated 15 April 2011. The evidence does not demonstrate that Mr Annear at that time asserted any rights akin to that of a director for the ongoing management of Farm Projects, in respect of its financial governance or its commercial business judgements. Indeed, the evidence shows that even prior to the April 2011 argument, Mr Annear’s activities were limited to him engaging and working with his development contacts to explore the residential development on the Land. He had no access to Farm Projects’ bank accounts, did not review its bank statements, and did not participate in the preparation of financial statements or its tax affairs. It has not been shown that he asserted an entitlement to have that level of involvement in the company’s governance.

68    From 2011, Mr Annear and Mr McNamee were in dispute in respect of other ventures, culminating in other unrelated litigation. Correspondence from Annear Holdings’ lawyer to Mr McNamee made reference to dealing with the dispute about Farm Projects after an “agreement had been reached” on other disputed ventures in which the two men were joined. For some nine years, neither Mr McNamee nor Mr Annear asserted rights or interests against each other, neither making any written request or demand with respect to the subject matter of the claim or counterclaim.

69    In his first affidavit, Mr Annear gave the following evidence (at [9]):

In around mid to late 2018, after our plans to subdivide the Property had stalled, I had a conversation with Mr McNamee in which I proposed that either I could buy him out of Farm Projects, or he could buy me out. Mr McNamee responded with words to the effect of:  ‘It’s all mine, it always was mine. You’ll get out when I feel like letting you out.’ I was surprised and disappointed and considered this to be the end of our business partnership.

70    The timing of that discussion was later admitted to be wrong by Mr Annear, and significantly so. The correct state of affairs was that for several years following the April 2011 argument, Annear Holdings did not seek to cause or influence Farm Projects to pursue any other opportunity relating to the Land.

Development of the Land as a solar farm

71    Between 2015 and 2017, Mr McNamee caused Farm Projects to pursue an opportunity for the development of the Land as a solar farm in conjunction with Eni Australia Limited.

72    At around the same time, the prospect of the Land accommodating a solar farm also occurred to Mr Annear. On 26 September 2017, he sent an email to Mr McNamee proposing the idea.

73    Mr McNamee did not respond to Mr Annear’s email, whether to acknowledge receipt of it or to explain why no substantive response would be provided. Mr McNamee told the Court that at the time that the solar farm project was being pursued, the dealings were commercially sensitive and he believed that Mr Annear had associations with entities in competition with Eni Australia. He alleged that Annear Holdings as a minority shareholder had no entitlement to be privy to the discussions and it was not in Farm Projects’ best interests to include him in them. I accept those opinions were genuinely held.

74    The potential for the Land to accommodate a solar farm was eventually realised by way of a series of transactions, including the entry into a lease over a part of the Land to Eni Australia, later assigned to Eni New Energy Batchelor Pty Ltd. Pursuant to the lease, 28,756 solar panels were constructed on a portion of the Land. There is no lease affecting the remaining portion.

75    Farm Projects’ dealings with third parties for the establishment of the solar farm need not be detailed here. They are evidenced in a number of agreements entered into in 2019. It is sufficient to identify the transaction documents as the Call Option Deed (entered into on 19 March 2019), the Eni Lease (entered into in November 2019), the Lease Assignment, and the Licence and Options Agreement (entered into in September 2019).

76    The solar farm continues to operate on a portion of the Land. The leasehold for its operation is a benefit that has significantly increased its value and hence the net value of Farm Projects’ assets at the time of the trial.

Pub fight

77    In early 2019 Mr McNamee and Mr Annear met together at the Cavanagh Hotel in Darwin. Their discussion on that occasion descended into a physical fight. In unchallenged oral evidence, Mr Annear described the altercation as follows:

… he sat there and waited at my table until I arrived, about 4.30 in the afternoon. I said ‘What are you doing here?’, and he said, ‘Out in the street. We will sort this out right now.’ I said ‘Oh, okay’, so I started walking to the – and he grabbed my shirt and ripped it off me, and then I turned and pushed him over a table, and we were in the middle of the hotel, and I thought, ‘I don’t want to escalate this’. I could have hit him there, and I let him up, and as he got up, he snotted me in the nose and bloodied my nose. And then we were both thrown out in the street.

78    The verbal argument leading to the fight does not directly relate to the substantive issues in dispute in this proceeding. However, it demonstrates the extent to which the relationship between Mr McNamee and Mr Annear has deteriorated. Plainly enough, they cannot work together.

79    Notwithstanding the 2019 pub fight, I am not satisfied that Annear Holdings’ delay in asserting its rights in the years following the April 2011 argument is explained by Mr Annear having a fear of Mr McNamee responding with physical violence. The evidence shows that the two men through their corporate entities in due course engaged lawyers including for the purpose of litigation surrounding a different investment. In large part, the delays in Annear Holdings asserting or enforcing rights forming the subject matter of the claims are explained by it diverting its attention to other conflicts relating to other corporate entities. It was open to Annear Holdings to communicate with Mr McNamee through its lawyer about Farm Projects’ affairs, but it elected not to do so.

Resolutions to prioritise repayment of Norvest and Greenfair loans

80    Decreases in loan balances for Norvest and Greenfair from about 2020 are explained by resolutions passed by Mr McNamee at Board Meetings with himself as Farm Projects’ sole director.

81    On 14 October 2019, he resolved that the shareholder loan accounts would be repaid to the amounts outstanding at the end of the 2009 financial year, subject to his discretion and to surplus funds becoming available. Minutes of a Board Meeting of 4 July 2022 disclose that Farm Projects had by that time made repayments to Norvest totalling $44,000.00 and one payment to Greenfair of $10,000.00.

82    Then, on 25 April 2023, Mr McNamee passed an “addendum” to the 2019 resolution as follows:

1.    The loan accounts will be initially repaid to 2011 amounts using the LIFO principle (last loans in first loans paid back) to repay Greenfair $75,000 and Norvest $172,753. These are the amounts both shareholders loaned in additional funding to the company to maintain solvency.

2.    The cumulative loan account repayments to Greenfair/Norvest by financial year end 30/6/23, will leave a balance payable to Norvest of $43,753 and to Greenfair $55,000 to satisfy Paragraph 1 above.

3.    The director has determined that based on current income and subject to unforeseen expenses, it is projected that it will take the next 3 trading years to return loan repayments to the 2011 level.

4.    The director has further determined, that after the above has been achieved further loan repayments will be made to all shareholders on a pro rata basis.

83    Mr Annear was unaware of the 2019 resolution and the repayments referred to at the Board Meeting in 2022 until after the commencement of this proceeding. He was not consulted before the “addendum” resolution was made in April 2023.

84    The trial proceeded on the basis that the intended effect of the resolution was to pay down the amounts owing to Norvest and Greenfair to a point where their balances resembled the amount of indebtedness of each shareholder as at the time of the April 2011 argument.

85    Farm Projects’ balance sheets record movements in the shareholder loan accounts in the amounts set out the table below:

86    No party has suggested that the recorded amounts do not reflect the amounts in fact owing. However, the financial years in which the recorded balances increased do not necessarily reflect the dates on which money was advanced for Farm Projects’ benefit by a shareholder, but rather when they were first recorded in the accounts as in the nature of loans. So much is apparent from the increase in Annear Holdings’ loan account balance, recording the value of its expenditure on Farm Projects’ behalf in the financial year ending 30 June 2012, well after the last payment was in fact made. Given the unreliability I dates, I consider it was for the defendants to establish that they made their payments on the dates specified in the balance sheets. The evidence was not of sufficient quality to support such a finding.

87    I have not accepted Mr Annear’s assertion that Norvest and Greenfair made no contribution toward the expenses of pursuing the residential development prior to April 2011. The increase in loan balances, considered together with some bank statements, support an inference that they did, the holding and development of the Land being Farm Projects’ only enterprise. Annear Holdings has not shown that the increase in amounts owing to Norvest and Greenfair were explained by anything other than their contributions to the cost of exploring the residential development or otherwise meeting Farm Projects’ expenses more generally.

88    In cross-examination, Mr Annear appeared to be ignorant of bank transactions evidencing direct payments made by Farm Projects to development and other consultants, referable to a period in which the residential development was still being pursued. He said that he would need to see the underlying invoices in order to respond to questions on the topic. However, questioning in re-examination did not return him to the topic, leaving that part of his testimony unresolved. Having said all of that, Mr Annear’s belief that Annear Holdings was unfairly shouldering the burden of the cashflows is of little significance. Annear Holdings’ causes of action are not founded on a wrongful withholding of support by the other shareholders. Mr Annear frankly acknowledged that he was willing to pay invoices on behalf of Farm Projects to protect his own commercial reputation as the person who had engaged the consultants. He expected that in due course the money expended by Annear Holdings in meeting Farm Projects’ liabilities would be repaid and there is no dispute that the money presently remains owing. As discussed below, the significance of the contributions of the other shareholders (without complaint or subsequent demand) is that it tells against a finding that there was a legal obligation on Annear Holdings to meet those expenses alone.

89    For reasons that will be explained, I do not accept Mr McNamee’s evidence that Farm Projects continued to pursue the residential development potential of the Land. Nor do I accept his evidence that Norvest and Greenfair respectively advanced further loans to Farm Projects for that purpose in the amounts of $129,003.00 and $75,000.00 respectively following the April 2011 argument. In the course of the trial, there was no attempt to support that assertion with business records relating to the timing of services for the pursuance of the opportunity following Annear Holdings’ withdrawal of financial support, and I have found that Farm Projects’ balance sheet is not a reliable record of the timing of payments. Nor was specific evidence given of the steps in fact taken to advance the project in any practical way. Accordingly, to the extent that payments were made with money loaned by Norvest and Greenfair between the April 2011 argument and the solar farm activities (which is not reliably established), it has not been shown that they related to services to pursue the residential development of the Land.

90    I have mentioned that in 2014 Farm Projects received a quotation for the performance of physical works to achieve the residential development in an amount exceeding $10 million. Mr McNamee did not give evidence to the effect that the residential development was financially viable and there is no evidence that Farm Projects thereafter took any step to bring it to fruition. Accordingly, I find that even if Annear Holdings had provided funding by way of a loan to bring the residential development to a so called “shovel ready” stage, the development would not have proceeded because the likely return on investment was not attractive. I am reinforced in that conclusion by the diversion of attention to the solar farm opportunity from 2015.

91    Relevantly, by the time of the trial, the debts owing to each of the shareholders were again roughly equal. Mr McNamee told the Court (and I accept) that his intention was to bring about that result, and to then reduce the balances at an equal pace. That is consistent with the resolution made on 25 April 2023. I find that his decision to prioritise repayment of the Norvest and Greenfair balances is explained by the circumstance that they more recently advanced funds to maintain Farm Projects solvency whilst holding the Land, and to assist it to pursue the solar farm opportunity.

Mr Annear requests documents and information

92    In November 2019 a caveat over the Land was lodged by Eni Australia protecting its rights in the Call Option Deed. Mr Annear became aware of the caveat in February 2020, however for about six months he did not instruct his lawyer to make enquiries about it. Those events occurred some three years after Annear Holdings raised the topic of a solar farm but received no response.

93    Mr Annear’s requests for documents made by or on behalf of Annear Holdings and the responses (or lack of responses) to them are evidenced in the documentary record. They relate to information concerning the solar farm development and financial records of the company more generally. It is not necessary to detail every request or response (or non response as the case may be) in these reasons as there is no contest concerning the fact of them. By way of illustration:

(1)    on 28 August 2020 Mr Annear requested that Mr McNamee, provide a copy of the relevant deeds and information entered into regarding the solar farm;

(2)    those documents were eventually supplied over a series of emails between 3 March 2022 and 28 April 2023; and

(3)    the time elapsed for disclosure since requested on 28 August 2020 is as follows:

(a)    for the Call Option Deed, a total of 552 days;

(b)    for the Lease Assignment transaction documents, a total of 973 days; and

(c)    for the Licence and Options Agreement, a total of 580 days.

94    In addition, there are admitted delays in the provision to Annear Holdings of Farm Projects’ financial records in response to a number of requests made by Mr Annear’s accountants.

95    The various explanations for the delays include:

(1)    the commercial sensitivity of the solar farm project at its negotiation stage (discussed above) and the need to draw up a non disclosure agreement before the documents could be provided;

(2)    an assertion that the establishment of the solar farm thereafter was not of itself a secret and could be ascertained by media reports in the NT News;

(3)    the disruption of professional services arising from the COVID-19 pandemic;

(4)    delays in professionals carrying out Mr McNamee’s instructions to disclose documents; and

(5)    Mr McNamee’s “apprehension” that Annear Holdings was not pressing its demands for information whilst the parties were in the process of separating their interests in other ventures.

96    With the exception of the need to protect confidentiality in the solar farm negotiations, I consider those explanations to be unconvincing, unsatisfactory, or both. However, I also consider Annear Holdings to have taken a languid approach to the advancement and protection of its interests over a long period of time. It took no step to seek the Court’s intervention to enforce undisputed rights of inspection, nor did it seek timely declarations as to its contested right to share equally in the management of Farm Projects’ business or asserted entitlements to information over and above that ordinarily disclosable to a company member. The complaints about delay in the provision of information are largely historical, spanning several years in which Annear Holdings sought no remedy for the delays and defaults.

Mr Annear seeks appointment as a director and company meetings

97    On 28 August 2020, Mr Annear caused his lawyers to write a letter to Mr McNamee requesting that he be appointed as a director of Farm Projects. In response, Mr McNamee said that the issue could be raised at a shareholder meeting to be called together with an Annual General Meeting after the finalisation of Farm Projects’ records for the financial year ending 30 June 2020. The financial statements for the year ending 30 June 2020 were provided on 4 October 2021. However, no Annual General Meeting was convened.

98    On 21 July 2022 Mr Annear called a meeting with the intention of putting forward a proposed resolution to inspect Farm Projects’ books. Mr McNamee called the meeting and passed the resolution on 15 August 2022, without notifying Mr Annear or giving him an opportunity to participate. There is some dispute as to whether the lawyers for Mr Annear and Mr McNamee’s interests had a separate conversation to the effect that a meeting would be futile given that Norvest and Greenfair would not vote in favour of the resolution sought by Annear Holdings. That is another area of dispute that is unnecessary to decide. Annear Holdings does not seek a declaration that Mr McNamee breached the Corporations Act by failing to comply with provisions concerning the holding of meetings. In addition, as discussed below, Mr Annear did not have an entitlement to be appointed as a director.

Alleged related dealings

99    Annear Holdings alleged that Mr McNamee had wrongly used the Land for the benefit of a relative who had stored equipment there. That allegation was met with an explanation and the explanation, was not effectively challenged. Little or no reliance was placed on that circumstance in closing submissions and nothing of significance turns upon it in the resolution of the wider dispute.

Valuation disputes

100    On 1 April 2022, Annear Holdings put forward a proposal that its share be valued by a chartered accountant at Farm Projects’ expense (including a separate valuation of the Land) with a view to the share being bought back or transferred, or with a view to Anner Holdings buying Norvest’s interest in the company. Mr McNamee ignored the request.

101    Mr McNamee remains fixed in the view that Annear Holdings’ share has a lesser value than that of the other shareholders. His position is that Annear Holdings is entitled only to the repayment of the amount presently standing to its loan account $185,722.73 together with the notional value of its share as described in the second of the Deloitte Letters $142,200.00. Critically, Mr McNamee asserts that Annear Holdings has no entitlement to share equally in the benefits flowing from Farm Projects’ income and the increase in value of its net assets. That is because, according to Mr McNamee, the shareholders stood together in a joint venture the terms of which were breached by Annear Holdings when it withdrew its support for the residential development of the Land. Mr McNamee’s stance is that by virtue of Annear Holdings’ “contractual default”, Farm Projects has the right to “claw back” Annear Holdings’ equity and loan account with the repayment of $327,923.00. That is the rounded up sum of the two figures mentioned above.

102    Mr McNamee’s firmly held conviction has underpinned settlement offers made in the course of the proceeding without settlement privilege claims. Increases in the offers reflected some degree of pragmatism, but the fundamental assertion that Annear Holdings’ share has a lesser value remains the common theme. The conviction has not only been expressed in correspondence, but also by way of Notes endorsed on Farm Projects’ financial accounts, including this (appearing in the Notes to the Financial Statement for year ended 30 June 2024):

2.    Shareholder Loan Accounts

* Farm Projects continues to maintain the discretion to capitalise $122,800 of the Annear loan account to reflect he [sic] initial purchase price of $265,000 for a 1/3rd interest

# Farm Projects also continues to maintain the right (due to contractual default) to claw back Annear equity and loan account with the repayment of $327,923

103    Lest it be unclear, the “contractual default” there referred to is the alleged breach of the alleged Shovel Ready Commitment. The Note to the most recent financial statements is consistent with an aspect of the contemporaneous documentary record discussed below.

104    Against that background I now turn to resolve the Oppression Claim, the Winding Up Claim and the Loan Claim.

THE OPPRESSION CLAIM

105    Section 232 of the Corporations Act is extracted at [6] above. If the criteria in s 232 are satisfied, the Court may make orders under s 233. It relevantly provides:

233    Orders the Court can make

(1)    The Court can make any order under this section that it considers appropriate in relation to the company, including an order:

(a)    that the company be wound up;

…

(c)    regulating the conduct of the company’s affairs in the future;

(d)    for the purchase of any shares by any member or person to whom a share in the company has been transmitted by will or by operation of law;

…

(i)    restraining a person from engaging in specified conduct or from doing a specified act;

(j)    requiring a person to do a specified act.

Note: If the company is a CCIV there are modifications for paragraphs (1)(a) and (h) (see section 1227G and Part 8B.6).

Order that the company be wound up

(2)    If an order that a company be wound up is made under this section, the provisions of this Act relating to the winding up of companies apply:

(a)    as if the order were made under section 461; and

(b)    with such changes as are necessary.

The alleged oppression

106    Eight facts and circumstances are relied upon. The first six are pleaded at [17] – [41] of the second amended statement of claim. They are summarised in list form at [42] as follows:

a.    the failure to disclose information and documents to the plaintiff about the affairs of the first defendant or properly inspect the accounts/books of the first defendant, in a timely manner upon request or at all …

b.    the refusal to appoint Mr Annear a director of the first defendant …

c.    the failure to call general meetings to deliberate and resolve important matters relating to the first defendant when requested or at all …

d.    resolving to pay repay loans of other shareholders without consulting with or even notifying the plaintiff of the intention to do so …

e.    failing to engage with the plaintiff about valuing the shares in the first defendant as a step towards separating the business relationship of the plaintiff and the other parties …

f.    stating words to the effect that he will exclude the plaintiff until he is ready to get the plaintiff out of the first defendant and cancel his equity …

107    In addition, it is alleged that there existed a mutual obligation of cooperation, trust and confidence as between Annear Holdings and the other shareholders and that the abovementioned conduct constituted a breach of that obligation because it had the effect of excluding Annear Holdings from “the management, decision making and knowledge of the affairs” of Farm Projects. That alleged breach is said to be a separate and distinct instance of oppressive conduct for which a remedy under s 233 of the Corporations Act may lie. The asserted “quasi partnership” relationship was also said to provide the factual and context against which all of the discrete acts or omissions should be assessed under s 232.

108    As I understood the submissions, the “quasi partnership” relationship was said to give rise to a set of obligations, breach of which was not sued for as a discrete cause of action. Hence the absence of any equitable remedy on the face of the originating application.

109    The eighth aspect of oppressive conduct is said to arise from Mr McNamee’s repeated insistence that Annear Holdings’ rights as a shareholder are limited to the repayment of the capital it originally invested incorporating the repayment of its original loan, together with the repayment of additional loan amounts, amounting to $327,923.00.

110    The trial proceeded on the basis that the assertion by Mr McNamee of a purported entitlement to “cancel” Annear Holdings’ share upon payment of $327,923.00 was one of the several bases upon which a finding of oppression was sought, notwithstanding that it did not find clear expression in the second amended statement of claim, but only obliquely referred to in [42(f)]. However, that aspect of oppression was the subject of submissions, affidavit evidence-in-chief and oral evidence adduced in cross-examination. The subject matter of the Oppression Claim clearly included Mr McNamee’s assertion that Annear Holdings did not have rights ordinarily attaching to its share but rather was liable to have its share bought back for the same amount it originally invested in 2006, notwithstanding the significant increase in the value of Farm Projects’ net assets since that time.

111    Much of the objective conduct relied upon by Annear Holdings is admitted by Farm Projects, Norvest and Mr McNamee. For example, there is no dispute concerning objective delays in the provision of documents and information responding to Mr Annear’s requests, there is no dispute that Mr Annear was not made a director of Farm Projects and no dispute that Mr McNamee did not call meetings for the purpose of considering resolutions for any such appointment. Nor is it disputed that Mr McNamee has made representations that Annear Holdings breached the alleged Shovel Ready Commitment and that he has denied that Annear Holdings’ share has equal value to that of the other shareholders by reason of that alleged breach. It is not disputed that (at least prior to the commencement of this claim) no steps were taken to cause or facilitate a buy back or transfer of Annear Holdings’ share including because of the dispute concerning its value. Nor is it disputed that negotiations for the exit of Annear Holdings are either non existent or have stalled because of irreconcilable positions concerning the basis on which Annear Holdings’ share should be valued.

112    The primary controversy is whether the conduct amounts to oppression having regard to the legal relationships alleged by the parties, specifically:

(1)    Annear Holdings’ allegation that there existed a legal relationship between the shareholders characterised by a mutual obligation of cooperation, trust and confidence; and

(2)    the defendants’ allegation that Annear Holdings made (and then breached) the Shovel Ready Commitment such that the conduct complained of was neither unfair, unjustified nor discriminatory in the relevant sense.

Legal principles

113    The legal principles are not in dispute. Convenient summaries can be found in numerous authorities. It is convenient to extract this statement from Austin J in Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152 (at [38]):

(a)    consistent with the principle that the purpose of relief is to terminate the effects of oppression, relief will generally be inappropriate as a matter of discretion if there is no continuing oppression:  Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [182]; [2009] HCA 25;

(b)    unfairness is assessed by reference to whether ‘objectively in the eyes of a commercial bystander, there has been unfairness, namely conduct that is so unfair that reasonable directors who consider the matter would not have thought the decision fair’:  eg, Campbell v Backoffice Investments Pty Ltd (2008) 66 ACSR 359, per Basten JA at [181]; [2008] NSWCA 95;

(c)    while it is recognised that conduct may be oppressive if inconsistent with the ‘legitimate expectations’ of shareholders, expectations are not immutable. The non-fulfilment of expectations will not establish oppression, if there has been some good reason for the extinguishment of the expectation:  Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672 at [85], [86], [175]; [2001] NSWCA 97; Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343 at [96]; [2009] NSWSC 342 per Barrett J;

(d)    ‘it is important when assessing corporate activities to see if there has been oppression that judges do not remain in their ivory tower’:  Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd And Others (1988) 28 ACSR 688, Young J at 739; [1998] NSWSC 413;

(e)    a particular matter which will be taken in account in assessing the gravity of any allegation of oppression, is the extent to which the minority shareholder has ‘baited’ the majority shareholder to act in an oppressive manner:  Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1988) 28 ACSR 688 at 741; [1998] NSWSC 413;

114    See also Boyd v Feeney [2017] NSWSC 1595 (at [34] – [40]) and Munstermann v Rayward [2017] NSWSC 133 (at [22]).

115    In the present case the legitimate expectations of the shareholders is said by Annear Holdings to arise from the alleged “quasi-partnership” relationship, articulated as follows:

… there existed an agreement or understanding between the plaintiff/Mr Annear and the second/third defendants, that Mr Annear participate in the management and decision making of the first defendant as it related to the Development Opportunity and generally or alternatively that Mr Annear had a legitimate expectation that participate [sic] in the management and decision making of the first defendant as it related to the Development Opportunity and generally such that the association between the plaintiff/Mr Annear and the second/third defendants was formed on the basis of and bore the character of a quasi-partnership and was predicated on, warranted and entailed an obligation of mutual cooperation, trust and confidence or alternatively bore the character of a majority controlled business requiring an obligation of mutual cooperation and a level of trust of the kind described in Nassar v Innovative Precasters Group Pty Ltd (2009) [71 ACSR 343; [2009] NSWSC 342].

116    In Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343, shares in a number of profitable trading companies were variously owned by three corporate entities and three natural persons in equal proportions. Pursuant to an agreement, the plaintiff provided accountancy and other services to the companies. Other individual shareholders provided services to the companies to advance its business, including engineering, production and investment activities. The intended arrangement was that each of the shareholders and their related entities would enjoy the financial rewards of those contracts for services. It was on that basis that Barrett J concluded that at the commencement of the relationship, the plaintiff had an expectation that he would participate in the management of the companies and that he would not be excluded from that entitlement without having an opportunity to negotiate reasonable terms for his withdrawal.

117    On the facts, the agreement for the plaintiff’s accountancy and sales services was terminated and relations between the individual shareholders irretrievably broke down, evidenced by a physical altercation between them. The plaintiff brought an action alleging oppression, seeking orders compelling the purchase of his shares by the other shareholders. He alleged that he had been wrongfully excluded from the day to day management of the business of the companies without an opportunity to remove his capital on reasonable terms. Alternatively, he sought an order that the companies be wound up on just and equitable grounds under s 461(k) of the Corporations Act. By the time of judgment, provisional liquidators had been appointed and the companies’ businesses sold.

118    Barrett J held that the relationship between the shareholders entailed “mutual co-operation and a level of trust” such that they stood together in a form of “quasi partnership”. His Honour equated the relationship to that discussed by Lord Wilberforce in Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 (a case in which winding up was sought on the just and equitable ground). His Lordship there said (at 379 – 380):

… a limited company is more than a mere legal entity, with a personality in law of its own:  … there is room in company law for recognition of the fact that behind it, or amongst it, there are individuals, with rights, expectations and obligations inter se which are not necessarily submerged in the company structure.  …  The ‘just and equitable’ provision does not, as the respondents suggest, entitle one party to disregard the obligation he assumes by entering a company, nor the court to dispense him from it. It does, as equity always does, enable the court to subject the exercise of legal rights to equitable considerations; considerations, that is, of a personal character arising between one individual and another, which may make it unjust, or inequitable, to insist on legal rights, or to exercise them in a particular way.

It would be impossible, and wholly undesirable, to define the circumstances in which these considerations may arise. Certainly the fact that a company is a small one, or a private company, is not enough. There are very many of these where the association is a purely commercial one, of which it can safely be said that the basis of association is adequately and exhaustively laid down in the articles. The superimposition of equitable considerations requires something more, which typically may include one, or probably more, of the following elements:  (i) an association formed or continued on the basis of a personal relationship, involving mutual confidence—this element will often be found where a pre-existing partnership has been converted into a limited company …

It is these, and analogous, factors which may bring into play the just and equitable clause, and they do so directly, through the force of the words themselves. To refer, as so many of the cases do, to ‘quasi-partnerships’ or ‘in substance partnerships’ may be convenient but may also be confusing. It may be convenient because it is the law of partnership which has developed the conceptions of probity, good faith and mutual confidence, and the remedies where these are absent, which become relevant once such factors as I have mentioned are found to exist:  the words ‘just and equitable’ sum these up in the law of partnership itself. And in many, but not necessarily all, cases there has been a pre-existing partnership the obligations of which it is reasonable to suppose continue to underlie the new company structure. But the expressions may be confusing if they obscure, or deny, the fact that the parties (possibly former partners) are now co-members in a company, who have accepted, in law, new obligations. A company, however small, however domestic, is a company not a partnership or even a quasi-partnership and it is through the just and equitable clause that obligations, common to partnership relations, may come in.

119    As Barrett J observed, the terminology of a “quasi partnership” is perhaps best avoided, it being more appropriate to characterise the relationship as a “majority controlled business requiring mutual cooperation and a level of trust” (citing MMAL Rentals Pty Ltd v Bruning (2004) 63 NSWLR 167, Spigelman CJ (at [71])).

120    His Honour identified that the relations between shareholders was that the shareholders each had legitimate expectations that the corporate structure would provide financial rewards in the nature of profitable contracts for services benefiting each of them, and were not limited to the right to enjoy in the distribution of company profits by way of dividends. In addition, they had elected to associate with each other in the operations of the companies’ business including by way of directorships across the entities. Thus, whilst the rights of two or more of the shareholders in law encompassed the ability to direct a course not favoured by the other, the circumstances may be such that it would be unjust or inequitable for them to insist on those legal rights or to exercise them in a particular way to the detriment of the minority.

121    However, in the result, Barrett J held that the expectation that the plaintiff would participate in the management of the companies was not immutable, and that it could not persist once the relations between the shareholders had irretrievably broken down. In particular, the ability of the plaintiff to participate in the companies’ affairs was affected by fundamentally changed circumstances in which the shareholders were unable to work together. Accordingly, he had not been excluded in a manner that would constitute oppression for the purposes of s 232 of the Corporations Act. In addition, it had not been shown that the plaintiff had been denied the opportunity to negotiate reasonable terms for his withdrawal, as he had not responded to invitations to engage in further talks to discuss the terms of his exit. Accordingly, the claim for relief under s 233 of the Corporations Act failed. His Honour went on to find that even if an order were made for the compulsory sale of the plaintiff’s shares to the other shareholders it had not been shown that they had the capacity to pay and hence such an order would be futile. The appropriate remedy was to order the winding up of the companies on the ground that the breakdown in relations between the shareholders made winding up just and equitable, given that the relationship had been predicated on mutual cooperation, trust and confidence. His Honour concluded that equity would not require the continuation of such an association including because continuation would be tantamount to specific enforcement of a contract for personal services (citing Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd (2008) 66 ACSR 325, Dodds-Streeton JA (at [119])).

No “quasi partnership” in this case

122    To some extent, the facts and circumstances said to give rise to an “agreement or understanding” amounting to a “quasi partnership” have been canvassed earlier in these reasons. They include:

(1)    the purchase by Annear Holdings of its share for a price representing a one third value of Farm Projects’ net assets at the time of the acquisition and its agreement to have its capital applied in such a way that Farm Projects was indebted to the three shareholders in equal amounts;

(2)    the agreement or understanding that Mr Annear would use his contacts in the residential development sector to pursue the residential development opportunity;

(3)    the fact that Mr Annear indeed utilised his contacts in the residential development sector, expending personal efforts in engaging those contacts as consultants, ultimately achieving development approvals in 2009;

(4)    Mr Annear’s strategic input into the work of the consultants relating to the design and scope of the project (the fact of which is not denied); and

(5)    Annear Holdings’ conduct in making financial contributions (by way of loans) toward the residential development project by meeting Farm Projects’ obligations to pay the consultants.

123    The circumstances I have described are premised on a common expectation that the residential development project would proceed to a point where physical works could commence. The personal contributions made by Mr Annear were specifically related to his harnessing contacts in the residential development sector to achieve that end. The financial contributions of Annear Holdings were also directed toward that purpose. On that basis, I find that at the time that the association between the shareholders was first formed, Annear Holdings had a legitimate expectation that Mr Annear would have strategic input into the design of the residential development project and would pay a key role in obtaining the necessary plans and approvals.

124    However, I am not satisfied that the expectation I have just identified necessarily translated to an entitlement to participate more generally in the management of Farm Projects, nor that there existed a legitimate expectation of participation in management in the event that Annear Holdings withdrew its interest and support for that development. Nor am I satisfied that Annear Holdings had an immediate right to exit from the investment in Farm Projects by way of a share transfer or buy back at any time of its choosing and irrespective of the financial position of the company. For the nine broad reasons discussed below, there was no “quasi partnership” of the kind alleged.

125    First, I have found that in or around April 2011, Annear Holdings (through Mr Annear) formed the view that it no longer wanted to make any further contributions (whether by way of loans or personal effort) toward the residential development project. Whether or not it had good commercial reasons for forming that view is not to the point. The salient point is that Annear Holdings announced its position to Mr McNamee in terms that made it plain that no further contributions would be made. Prior to the April 2011 argument there is no suggestion that Mr Annear invited the other shareholders to cooperatively assess the financial viability of the project so as to jointly decide the future direction of the company. Mr Annear caused Annear Holdings to cease participation in the project by his own initiative, not by reason of any exclusionary act or other wrongdoing on the part of Mr McNamee, Norvest or Greenfair.

126    Second, I find that the question of what should occur in the event that one of the shareholders lost interest in the residential development project was not the subject of discussion, let alone an “agreement or understanding” at the time that their association was first formed. No witness gave evidence that the possibility of the residential development not coming to fruition for that reason (or any reason) even crossed their minds. The commercial reality was such that Farm Projects held an asset that was intended to be developed and sold at a profit by the specific means of a residential development. The personal effort expended by Mr Annear was directed to those means, and on his own admission he expended the effort because those means aligned with his claimed expertise and commercial contacts. No fall back scenario was expressly discussed. It is therefore necessary to look to the surrounding facts and circumstances as a source of rights of the kind asserted.

127    Third, the assertion that Mr Annear had an entitlement to participate in the management of the company more generally is difficult to reconcile with the circumstance that for some years following the April 2011 argument there was a period of silence in which he did nothing to express or assert that entitlement. During that time Farm Projects paid holding costs relating to the Land and it is not suggested that it did not meet the expenses of its compliance with corporate and taxation laws. The evidence does not support a finding that Mr Annear did anything to assert an entitlement or responsibility to assist Farm Projects to meet those obligations. That conduct evinces a lack of any subjective belief on Mr Annear’s part with respect to a set of rights involving mutual obligations.

128    Fourth, I have found that from the date of the April 2011 argument, Annear Holdings knew that Mr McNamee’s view was that it should be excluded from Farm Projects’ commercial activities and that it would be repaid its capital when Farm Projects had the financial capacity. Mr Annear did not cause Annear Holdings to contest that assertion for many years. I infer that is because Annear Holdings did indeed seek an end to the relationship and was indeed waiting until Farm Projects’ financial position permitted a buy back of its share. That does not equate to a finding that Mr Annear agreed that the value of Annear Holdings’ share would be fixed in time and not increase in value in alignment with any increase in Farm Projects’ net worth.

129    Fifth, the commercial reality was such that in the event that the residential development project could not for any reason be pursued, Farm Projects’ financial position was such that it would have increased indebtedness in the form of increased borrowings with no revenue to repay the loans or to buy back the share of any shareholder desirous of withdrawing their investment. In the absence of express agreement or necessary implication, I am not satisfied that the facts and circumstances gave rise to a right in Annear Holdings to exit from its investment after unilaterally excluding itself from the only commercial activity upon which the shareholders’ association was originally premised: the residential development of the Land. To the extent that there were features of mutuality in the relationship, it has not been shown that they gave rise to rights in any of the shareholders to compel the sale of Farm Projects’ only asset to fund the buy back of a share irrespective of the readiness or views of the others. Unlike the facts in Nassar, Farm Projects did not have a business trading as a going concern to which the various shareholders provided personal services in a commercially cooperative way. The better view is that following the April 2011 argument, Annear Holdings, Greenfair and Norvest were shareholders in a company subject to the business judgements of its Board of Directors with respect to future activities to derive revenue from the Land, its sole director having a duty to act in the best interests of the members as a whole. It has not been suggested that the application of the Land as a solar farm was in any way contrary to that duty.

130    Sixth, upon Annear Holdings losing interest in the project and notifying Mr McNamee that no further support would be provided, it is unclear how it was that Mr Annear understood he might contribute to Farm Projects’ management more generally as a matter of practical and commercial reality. I am reinforced in that view by the somewhat ambiguous response given by Mr Annear as to scope of his right to participate in the company’s business. In his testimony concerning his earlier participation he focussed entirely on his personal efforts in engaging and working with consultants to pursue to the residential development. When pressed about his role in “management” he qualified his responses by referring back to his role in the management of that aspect of the “project”. He emphasised that he provided the personal services because he possessed expertise in the area of land division and development, describing the work as relating to “block layout” and “design”. He said that his work in that particular area exceeded the efforts of Mr McNamee, Mr McNamee having no expertise in such things. When asked why the Deloitte Letters made no reference to rights of participation in the management of Farm Projects, Mr Annear said that “it probably wasn’t important at that time” and that it “probably wasn’t thought of”. He did not assert that he was a co-manager of Farm Projects but said again he was a co-manager “of the subdivision”. The identification of legitimate expectations arising in equity may not depend on express words or agreements but rather by reference to all of the surrounding facts and circumstances. However, the search for facts and circumstances defining that relationship is thus far unrewarding.

131    Seventh, to the extent that the assertion of the existence of a “quasi partnership” finds expression in Mr Annear’s affidavit evidence, I place little weight upon it. That is principally because the relationship is to be discerned from the objective facts and circumstances. It is also because I am not satisfied that Mr Annear took enough care to ensure that his affidavit evidence, drafted by his lawyers, truly reflected his actual recollection and understanding of events. I find that he included in his affidavit assertions of objective fact which were not within his actual recollections. For example, he said without qualification that Annear Holdings originally paid $200,122.73 for the purchase of the share and then contributed a further $185,722.73 by way of loans toward residential development costs. That evidence was contradicted by the Deloitte Letters once they came to light. I find Mr Annear was careless in the preparation of that evidence, as evidenced by the following exchange in cross-examination:

COUNSEL:    Your co-management wasn’t an important point?

MR ANNEAR:    ---I – my co-partnership was very important, my co-management - - -

COUNSEL:    Well, you’ve already said multiple times that there was no partnership - - -?

MR ANNEAR:    ---I’m sorry, not partnership. My – my shareholdings.

COUNSEL:    Your shareholdings?

MR ANNEAR    ---Yes.

COUNSEL:    Yes, okay. You’re very reliant on your professional advisors, aren’t you, Mr Annear?

MR ANNEAR:    ---Absolutely.

COUNSEL:    Yes. And you have, effectively, outsourced your memory to whatever your professional advisors come up with?

MR ANNEAR:    ---It’s – it’s not just my memory, it’s – I don’t have an accounting background.

COUNSEL:    What I’m saying is you’ve outsourced your memory - - -?

Mr ANNEAR:    ---Yes.

COUNSEL:    - - - to your professional advisors?

MR ANNEAR:    ---Yes, yes.

COUNSEL:    Whatever they come back and say, ‘This is the story’, that’s what you go with, isn’t it?

MR ANNEAR:    ---Yes, yes.

COUNSEL:    Yes. So much so that your affidavit is not actually what you know or remember, it’s actually what your professional advisors have put together?

MR ANNEAR:     ---Well, I give them – excuse me, I give – I give them the figures from – from my bookkeeper, and they extrapolate out from there, and say, ‘This is what’s happened to your money.’

132    In his second affidavit, Mr Annear used the word “partnership” repeatedly to describe the relationship between Farm Projects’ shareholders. The word does not appear in his first affidavit. In cross-examination he was reluctant to use the word “partnership” at all. I formed the impression that he was unable to articulate what the word might entail, over and above his expectation that he would have a close hands on role in pursuing the residential development. Whilst ignorance of the meaning of the word is not ordinarily a matter that would affect the reliability of a witness, it reflects poorly on Mr Annear that he should swear an affidavit employing the word without being able to give it meaningful content. I find that Mr Annear’s admitted reliance on professionals has extended to permitting his lawyer to draft his evidence and that he has sworn to its truth without having a subjective understanding of its meaning or founding it upon his own knowledge and belief. Compounding that issue are the findings I have made about Mr Annear’s faulty memory of the timing of critical events, specifically the April 2011 argument, discussed earlier in these reasons. These adverse findings explain why Mr Annear’s evidence should not be relied upon to support his case as to the features of the legal relationship, except to the extent that it is admitted or supported by reliable contemporaneous materials.

133    At no time in the years following 2011 did Mr Annear assert a right to participate in the management of the company as if he had rights equivalent to that of a director. In periods spanning months or years at a time he did not suggest or pursue alternative income streams for Farm Projects before he sent an email in 2017 raising the idea of a solar farm. That occurred several years after informing Mr McNamee that Annear Holdings would contribute no further to the residential development project and after a significant period of no financial contribution.

134    I have found that whilst Annear Holdings made contributions (by way of loans) to fund the exploration of the development of the Land, it was not the only contributor and nor did Mr Annear believe it was obliged to be the sole contributor. To the contrary, he had a subjective sense of grievance that Annear Holdings was contributing more than the other shareholders to meet the expenses of the consultants’ work. He told the Court that he funded most of the consultants’ invoices not because of an obligation to do so but to protect his own reputation with the consultants in circumstances where he lacked confidence that Farm Projects would discharge the liability to pay.

135    Eighth, Annear Holdings did not plead any entitlement (arising by agreement or otherwise) to compel the sale of the Land in the event that the residential development project did not proceed. In light of my other findings, I conclude that that question was left to be resolved by Farm Projects’ business judgement, acting through the organ of its Board of Directors having regard to the interests of the members as a whole.

136    Ninth, the phrase “Fuck you Annear. You can sit there until we are ready to get you out of the deal.” should not be construed as an act that unilaterally excluded Mr Annear from participation in Farm Projects’ business in any event, even if a right of participation had previously existed. I have found that Annear Holdings had notified Farm Projects’ sole director that it had no intention to participate in the company’s activities and that it was seeking instead to explore ways to have its investment returned. Put bluntly, it chose to step outside of the relationship, in the absence of any agreement or prior discussion as to when and how the exit of any one of the shareholders might occur.

137    Consistent with that choice, from the date of the April 2011 argument and for about six years following, Annear Holdings made no offer to contribute to the holding costs of the Land or the compliance costs of the company, whether by way of advancement or further loans or by way of personal effort and Annear Holdings did not assert rights of the kind now forming the basis of its claim. Its prolonged inaction is inconsistent with the existence of any ongoing mutual obligation of cooperation, trust and confidence of the kind alleged.

138    The circumstances are such that following the April 2011 argument, any right Annear Holdings may previously have had to participate to any degree in Farm Projects’ management (whether by reason of a “quasi partnership” relationship or otherwise) was, in the words of Barrett J in Nassar “not immutable” (at [96]). It was capable of evolution over time in response to commercial circumstances. Critically among those circumstances is its withdrawal from participation in the residential development and its stated desire to end the relationship in 2011. Annear Holdings has not been unilaterally excluded in a way that should ordinarily give rise to a right of a negotiated exit in accordance with the principles discussed by his Honour.

139    Accordingly, I conclude that any finding of oppression under s 232 of the Corporations Act must be founded on matters that are not dependent on the existence of the alleged “quasi partnership”.

No “Shovel Ready Commitment”

140    I begin this topic by identifying the evidence that tends to support to the existence of the Shovel Ready Commitment alleged Mr McNamee.

141    The first is Mr Aboud’s affidavit evidence, as follows:

Some time prior to March 2006, Mr McNamee and I had a conversation where he told me that Mr Annear was interested in participating in the development. After a series of conversations with Mr McNamee, I understood (from him telling me) that Annear Holdings Pty Ltd was offering to purchase $265,000 of shares in Farm Projects Pty Ltd, in order to make it an equal shareholder with Greenfair Holdings Pty Ltd and Norvest Projects Pty Ltd. I also understood that Mr Annear, either personally or via Annear Holdings Pty Ltd, would finance the initial stage of the Batchelor residential property development.

(emphasis added)

142    There was no objection to the admissibility of the emphasised out of court statement and Mr Aboud was not cross-examined upon it. I give the unchallenged evidence some weight, however it must be considered in light of all of the evidence bearing on the topic including the remainder of Mr Aboud’s own evidence and pleading.

143    Importantly, Mr Aboud did not go on to state any understanding or agreement as to the consequences that should follow in the event that Mr Annear or Annear Holdings did not “finance the initial stage” of the development. He did not explain his understanding of what the “initial stage” entailed. He did not give evidence of having any knowledge of the contributions actually made by Annear Holdings, nor did he allege any steps taken to his detriment or the detriment of Greenfair in reliance on the statement. Nor did Mr Aboud allege that Greenfair had suffered any loss as a consequence of anything done or not done by Annear Holdings or Mr Annear relating to the finance of the development. He did not assert that the residential development did not proceed because of any withdrawal of support by Annear Holdings. He did not put forward any other reason why it did not proceed, nor did he assert any loss or damage attributable to Annear Holdings by reference to it not proceeding. In light of what follows, I find that even if Mr McNamee said the emphasised words to Mr Aboud, it does not present an obstacle to the discrete finding of oppression I will in due course make.

144    The second supportive feature of the evidence is a letter dated 14 December 2007 from Mr McNamee to Farm Projects’ accountant (Mr Edgar Moritz) who apparently took responsibility from Deloitte for the preparation of the company’s accounts. It is as follows:

Attention:  Edgar Moritz                    14/12/2007

I understand you have been in correspondence with Deloites and that the accounts for Farm Projects P/L have now been transferred to you.

One thing I want to ensure has been transferred/included from Deloites is a notation against Attache 86120 (Annear Loan Account) that in the event of Mr Annearn [sic] not fulfilling his obligation to pay the Subdivision Development Costs the amount of $122,800 in 86120 will be reclassified to Attache 87700 (Annear Purchase) and capitilised [sic] to the Share Premium Account.

This will be done at the discretion of Farm Projects sole director Steve McNamee.

145    That is an early business record prepared at a time when relations between Mr Annear and Mr McNamee were cordial. It tells against a finding that Mr McNamee would pay development costs is a recent invention and I afford it some weight. At the very least, the statement may be interpreted to mean that Mr McNamee believed Annear Holdings to have an apparently unqualified obligation to “pay the Subdivision Development Costs”. However, an unqualified and open ended obligation of that kind does not accord with the defendants’ pleaded case.

146    In addition, the assertion that the amount of $122,800.00 (being the Annear Holdings loan account balance) could be “reclassified to Attache 87700 (Annear Purchase) and capitalised to the Share Premium Account” was not satisfactorily explained in the evidence before me. The phrase is laden with accountancy terms and there is real danger in the Court making a finding about its precise meaning without hearing from the accountant. To the extent that it was submitted that the statement evinces an agreement that Annear Holdings’ rights as a shareholder were unequal such that the value of its share would not increase or decrease in accordance with the increase or decrease of the company’s enterprise value, I am not satisfied that the evidence supports such a finding.

147    In his affidavit evidence, Mr McNamee alleged that Mr Annear had consented to a memorandum to the above effect being placed on Farm Project’s books. He did not state how and when any such consent was given. It is a bald unparticularised assertion and I give it little weight for that reason, especially having regard to other features of the evidence discussed below.

148    The third category of evidence capable of supporting the allegation is Mr McNamee’s affidavit and oral testimony to the effect that the commitment was given and then breached. I will consider that evidence in the paragraphs below.

149    The following facts and circumstances weigh against the existence of the Shovel Ready Commitment.

150    First, notwithstanding the above memorandum and the allegation of breach, Mr McNamee did not do anything to carry out the instruction in the memorandum by “recapitalising” any amount in Farm Projects’ books. The loan balance owing to Annear Holdings has remained as a liability in company’s balance sheet over many years with its balance unchanged, as have the equal “share premium amounts” standing against the names of each shareholder.

151    Second, nothing is said in the Deloitte Letters about a term so significant as an obligation on Annear Holdings to bear sole responsibility to advance loans to Farm Projects to meet its expenses until such time as the development was “shovel ready”. When questioned on that topic, Mr McNamee said that the commitment was made by Annear Holdings at a time before the second of the Deloitte Letters was sent. However, he did not accept that the absence of any reference to the commitment in the letter was odd. He said, “It’s not the type of thing that you would put into that deal”. Given the nature of the commitment and the significant inequality between members it introduced into the bargain, I treat that evidence with scepticism. As I have previously observed, the structure of the agreement set out in the second of the Deloitte Letters was carefully crafted to bring about equality in capital contribution and debt exposure of the three shareholders. It tells against the existence of a further unspoken term that the significant burden of providing cashflows in the preconstruction stage would be borne by only one of the three shareholders.

152    Third, there is the changing nature of evidence and pleadings concerning the alleged commitment, the manner in which it was given, its content and its consequences. In the first iteration of the defence of Mr McNamee, Farm Projects and Norvest, those defendants alleged that it was a term of the offer (accepted by Annear Holdings) that it would advance “further monies by way of loan as were required to exploit the Development Opportunity … until such time as the Development Opportunity had been successfully exploited”. The words “successfully exploited” were later withdrawn and replaced with the phrase “progressed to the stage where all approvals necessary to facilitate the immediate commencement of earthworks and other substantive civil works were obtained (‘made shovel ready’)”.

153    The pleading does not particularise how and when the alleged term was the subject of any offer and acceptance. The words used by the participants in any correspondence or conversation are not particularised. It is then pleaded, in the alternative, that the Shovel Ready Commitment arose because Mr Annear had, by an unparticularised representation, “led [Mr McNamee] to believe” that Annear Holdings would “advance monies to [Farm Projects] by way of loan on commercially favourable terms … as and when expenses associated with the Development Opportunity became due and payable” such that in the absence of the representation no offer for the issue of a share to Annear Holdings would have been made. The words of a representation to that effect are not pleaded. All that is said is that a representation was made “over the course of several conversations”. That plea also changed, so as to qualify the commitment as one that was open ended to one that persisted only until the development was “shovel ready”.

154    The difference between the original plea and the amended plea is significant when viewed in the commercial context of a multimillion dollar residential development.

155    Fourth, Mr McNamee’s own affidavit evidence contained inconsistent versions of the content of the obligation. In his first affidavit, he deposed to conversations between him, Mr Annear and (significantly) Mr Aboud, as follows:

7.    In one of the last conversations we had before Annear Holding’s acquisition of shares in 2006, Mr Annear said words to the effect that, in exchange for receiving a one-third interest in Farm Projects at an agreed valuation of $795,000, he would finance the development and subdivision of the property as well as use his extensive contacts in the subdivision and development industry to obtain services for Farm Projects at ‘mates rates’, telling us that we would save at least $100,000 on the expenses. On these terms, Mr Aboud and I agreed to allow Mr Annear to participate in the project.

8.    Mr Aboud and I agreed (in March 2006) to transfer to Annear Holdings a one-third interest in Farm Projects in exchange for the payment of $265,000 (being one third of $795,000) and Mr Annear’s promise to pay the expenses via an ongoing loan facility (recorded as a shareholder loan account) at Farm Projects in order to finance the development of its real property asset.

156    In his first affidavit, Mr McNamee alleged an unqualified obligation to finance the expenses of the residential development without any qualification as to the point in the project at which that commitment would end. However, in a subsequent affidavit Mr McNamee said that the commitment was limited to persist to only to the so called “shovel ready” stage:

COUNSEL:        Mr McNamee, over the course of this proceeding, you changed your story about the so-called shovel ready commitment made by Mr Annear, haven’t you?

MR MCNAMEE:    ---Incorrect.

COUNSEL:        You originally deposed that Mr Annear said words to the effect that in exchange for a one-third interest in Farm Projects, he would finance the development and subdivision of the property. You said that, didn’t you?

MR MCNAMEE:    ---To the shovel-ready stage, which is a known figure of 400,000.

COUNSEL:        No, Mr McNamee, I’m putting to you that on 24 April 2023 in your affidavit, you originally deposed that - - -?

MR MCNAMEE:    ---Please, just wait. Can I read that, please?

COUNSEL:        Yes, paragraph 7?

MR MCNAMEE:    ---Which - - -

COUNSEL:        At tab 4?

MR MCNAMEE:    ---Tab 4. Whereabouts at tab 4? Yes.

COUNSEL:        Paragraph 7?

MR MCNAMEE:    ---Yes.

COUNSEL:        So you say there that he would finance the development and subdivision of the property. Do you accept that, that you said that?

MR MCNAMEE:    ---Yes, but I’m – to shovel ready. Yes. To shovel ready.

COUNSEL:        But you accept that you said that, don’t you?

MR MCNAMEE:    ---Yes.

COUNSEL:        And that - - -?

MR MCNAMEE:    ---There is the shovel ready that’s the word that’s missing, because it’s already implied.

COUNSEL:        Well, I put it to you that it’s not implied, and I put it to you that what you meant by that was that Annear was going to fund the entire development?

MR MCNAMEE:    ---Incorrect.

COUNSEL:        That would be a huge commitment for Mr Annear to make, wouldn’t it?

MR MCNAMEE:    ---Not expecting that at all.

COUNSEL:        As high as $10.1 million, according to BMD – a commitment of that kind?

MR MCNAMEE:    ---That – it would not be permitted. That was to shovel-ready stage, which is what that paragraph means in 7.

COUNSEL:        It doesn’t say shovel-ready there, though, does it?

COUNSEL:        Asked and answered.

HER HONOUR:    Does it – I’m – I will overrule with that objection. I would like to hear the flow of evidence.

COUNSEL:        It doesn’t say shovel-ready in that paragraph, does it?

MR MCNAMEE:    ---I agree it doesn’t, but that’s what it infers, because it has been repeated throughout the rest of all the affidavit. It’s shovel-ready. So we – we fully know that.

COUNSEL:        All right?

MR MCNAMEE:    ---But I take your point. Semantics – there’s a couple of words missing in there, which you may change – it may change the complexion, but it’s not the intent.

157    I do not accept that the original overstatement can be explained away as a semantic issue nor that his initial evidence can be interpreted as referring to a finance commitment persisting only to the “shovel ready” stage. His evidence concerning the scope of the commitment has changed and there is no adequate explanation for the internal inconsistency in Mr McNamee’s testimony.

158    Fifth, Mr McNamee’s assertion that there were discussions between him and Mr Annear concerning the financing of the development at which Mr Aboud was present finds no support in the evidence of Mr Aboud. Mr Aboud did not depose to having any conversation with Mr Annear at which he personally heard anything said by Mr Annear on the topic. In his very short affidavit, he said that his knowledge about a financing commitment of some kind came from things said to him by Mr McNamee. He gave no evidence of having any conversation with Mr Annear at all. That is consistent with the defence of Greenfair, in which it stated that it did not know and could not admit the conversations between Mr McNamee and Mr Annear and that Mr Aboud’s understanding was based on things said to him by Mr McNamee. Greenfair pleaded that it did not know and could not admit most other significant matters defining the relationships between the shareholders. Counsel for the other defendants did not cross-examine Mr Aboud so as to adduce evidence of any conversation at which both Mr Aboud and Mr Annear were present. It is significant that Mr Aboud did not depose to having any understanding of any agreed consequences that would befall Annear Holdings in the event that the Shovel Ready Commitment was breached, whether as to the valuation of its share or otherwise.

159    In the circumstances, I do not accept Mr McNamee’s evidence that there were discussions between the three men at which a representation or promise of the kind alleged was made and relied upon.

160    Sixth, the parties’ subsequent conduct in meeting Farm Projects’ expenses at critical times is difficult to reconcile against the assertion that Annear Holdings has a legal obligation to finance the residential development to the “shovel ready” stage. Mr McNamee gave evidence in which he complained that invoices relating to the project had been made out to and paid by Annear Holdings without him first having an opportunity to review them or utilise them as expenses for the purposes of Farm Projects’ tax returns. He said he had intervened at times to stop the payments until invoices were issued naming Farm Projects as the payer. For present purposes it may be assumed that that occurred. However, the business records of Farm Projects also show that in the years leading up to the April 2011 argument, payment of expenses relating to the residential development project were not being paid solely by Annear Holdings but rather directly from Farm Projects’ bank accounts and that in the same period the loan balances of (at least) Norvest increased in amounts reflecting its contributions.

161    In cross-examination Mr McNamee was taken to bank records which evidenced Norvest advancing a further $106,000.00 to finance the residential development project during the very period in which Annear Holdings was alleged to be solely responsible for meeting those costs. That included payments of $26,000.00 and $40,000.00 made in July and September 2010. Cross-examination on that topic went as follows:

COUNSEL:        Yes. Mr McNamee, those payments of 26,000 on 13 July, and 40,000 in September 2010 are contrary – are loans that you made to farm projects, and are contrary to the story that you’re telling the court, that Mr Annear committed to paying the development costs, aren’t they?

MR MCNAMEE:    ---This is a quick explanation. Mr Annear – we had to move and get on with it. Mr Annear said he would catch up on payments, can I get on with it with money available, and I gave him that room, but the catch-up never came.

COUNSEL:        Well, I put it to you that the accounts say that?

MR MCNAMEE:    ---Yes.

COUNSEL:        Yes?

MR MCNAMEE:    ---I was putting my hand in my pocket for a lot of money.

COUNSEL:        Yes, yes?

MR MCNAMEE:    ---And keeping it moving, yes.

COUNSEL:        You were, so it wasn’t 66,000. It was 106,000, wasn’t it?

MR MCNAMEE:    ---No issue at all with that. Mr Annear was going to catch it up, but it shows that I was getting on with it.

COUNSEL:        But it doesn’t fit your story, does it - - -?

MR MCNAMEE:    ---Yes, it does.

COUNSEL:        - - - that he had to cover the costs?

MR MCNAMEE:    --- It does. It does cover the cost, because it all fits out in the end. It doesn’t matter how it comes, whether he pays later or I pay initially. It all works out in the wash, because it’s all recorded in the loan accounts.

COUNSEL:        All works out in the wash. You - - -?

MR MCNAMEE:    ---So we know where we stand.

COUNSEL:        But you haven’t let any evidence about those payments, or those discussions, have you, in any of your affidavits?

MR MCNAMEE:    ---Say that again. I haven’t - - -

COUNSEL:        You’re saying that you spotted him a $106,000?

MR MCNAMEE:    ---It’s not spotting, sir. It’s financing the company.

COUNSEL:        You haven’t put that in any of your affidavits, have you?

MR MCNAMEE:    ---It hasn’t been put in my affidavits because it’s just registered on my loan account, and I’ve reported that in my affidavits. My – well, my loan account has been growing, substantially.

COUNSEL:        But you agree it’s not in any of your affidavits, that what you say is the explanation for making those loan contributions to farm projects, in circumstances where you say Mr Annear was to cover those costs, is there?---There’s nothing in my affidavit to that extent, because I don’t think it was relevant, but that’s my position.

162    In this aspect of his evidence Mr McNamee was an unimpressive witness in two respects. First, I do not accept that any omission of a reference to the significant payments of Norvest prior to the April 2011 argument could be explained by a genuine belief that Norvests’ contributions in that earlier period were irrelevant. I formed the impression that Mr McNamee’s responses on that topic were evasive and contrived. Second, as it happens, in his affidavit evidence Mr McNamee had indeed frankly stated that Norvest contributed a total of $124,000.00 in loans between 13 July 2010 and 5 November 2010, that is, before the April 2011 argument. He did not attest to making any complaint or demand for reimbursement by Annear Holdings with respect to those pre argument payments at the time that they were made and there is no objective evidence that he did so. The admitted pre-argument payments are indeed relevant because they significantly undermine the existence of the Shovel Ready Commitment and the pleas in the cross-claim (discussed below). Among other things, they contradict Mr McNamee’s assertions that Farm Projects was reliant upon Annear Holdings for finance and that Norvest was somehow forced make financial contributions as a consequence of Annear Holdings withdrawing its support.

163    Documentary evidence about the timing of contributions is problematic for reasons discussed elsewhere in these reasons. My conclusions in this paragraph are based on Mr McNamee’s own testimony that in very large part Norvest’s contribution to the residential development were made before Mr Annear told Mr McNamee that Annear Holdings would make no further contribution.

164    Without elaboration, Mr McNamee alleged that he was “forced to sell part of Norvest’s share position and forego other business opportunities in order to cover these loans”. However, in oral evidence Mr McNamee explained that the money was advanced by Norvest because at the end of the day the loan accounts would reflect the respective contributions of the shareholders and he thought that Annear Holdings would “catch up”. I consider these parts of the evidence to be incongruous. The testimony should be understood as reflecting the true state of affairs: there existed an ad hoc, undocumented and informal arrangement under which Mr McNamee and Mr Annear came to resent and distrust the other in the absence of any contractual promise or prior representation obliging Annear Holdings to exclusively finance the residential development project. I find that Annear Holdings in fact made contributions not because it had made a commitment to be solely responsible for doing so, but because the arrangements were informal and because Mr Annear sought to protect his own reputation vis a vis the consultants he had introduced to Farm Projects. I find that both men caused their respective corporate entities to make contributions by way of loans, each expecting that their loan amounts would ultimately be accounted for and be repaid from profits.

165    When it was put to Mr McNamee that he had not sent any letter or sought specific performance from Annear Holdings to fund the residential development project he said “Correct, I didn’t have to”. That was a peculiar response. To the extent that Norvest was required to redirect its own money to Farm Projects by way of interest free loans in the period following Annear Holdings’ share acquisition, it allowed that situation to persist for many years without any demand for reimbursement. Norvest did not seek to have the loan repaid by money other than from Farm Projects’ own revenue, and Mr McNamee then saw to it that the revenue was deployed for that purpose.

166    Seventh, I have already concluded that the evidence does not reliably support a finding that as at April 2011 there was any further significant expenditure to be made in order for the residential development project to proceed. It is apparent that Farm Projects had sufficient drawings, plans and technical data to enable it to obtain a quote for the physical works, which it later did in 2014. On the material to which I was taken, I am not satisfied that as at April 2011 there was significant work to be done to get the project to the so called “shovel ready” stage. I do not consider Farm Projects’ accounts or ledgers to be sufficient to support such a finding as there are obvious examples of delays between payments and the entry of them into the accounts. Mr McNamee’s assertion that there was a significant amount of work yet to be done and paid for does not find sufficient support in the objective documentary record. Even on his own testimony, the amount of $124,000.00 had been contributed by Norvest before November 2010. There was a further amount of $15,000.00 or so contributed after that time but, again, the documentary evidence is insufficient to demonstrate that payment was for services performed after the April 2011 argument.

167    Eighth, I do not accept that the Shovel Ready Commitment arose by the application of principles relating to promissory estoppel or any other form of estoppel. I have had regard to the particulars of that plea as contained in the cross-claim for the purpose of considering the more active defendants defence to Annear Holdings’ primary claim. The cross-claim plea differs from the defence in that it alleges several additional facts and circumstances said to have given rise in a belief in Mr McNamee that the commitment had been made, over and above the allegation of an express representation made before Annear Holdings acquired its share in early 2006. It is convenient to deal with it here.

168    In the cross-claim (in its present form) the estoppel plea includes the following:

4.    Between 28 March 2006 and 15 April 2011, the second cross-respondent variously encouraged and otherwise allowed the cross-claimant to believe and expect that the cross-respondents would advance monies to the first defendant to pay for the expenses necessary to make the Development Opportunity shovel-ready (hereafter ‘the Subdivision Development Costs’), by:

a.    communicating verbally to the cross-claimant that it would ‘finance the development’ in a conversation shortly prior to 28 March 2006;

b.    advancing the sum of $265,000 to the first defendant on 28 March 2006 in circumstances where:

i.    the cross-claimant had issued a document to the cross-respondents conveying an offer for the cross-respondents to purchase a one-third share in the first defendant for $265,000;

ii.    the second cross-respondent caused for the amount of $265,000 to be paid to the first defendant without further communication about the terms of the offer to the cross-claimant; and

iii.    shortly after that payment, the second cross-respondent requested that, instead of the entire amount being recorded by the first defendant as a purchase of shares, a shareholder loan account be opened for the first cross-respondent and that $122,800 of the $265,000 be recorded against that account as a loan;

c.    causing the invoices associated with the Subdivision Development Costs from 2006 onwards to be sent to the cross-respondents in the first instance, by providing the second cross-respondent’s name and GPO Box to the Project Consultants as the contact address for the first defendant;

d.    liaising with the Project Consultants between 28 March 2006 and 15 April 2011 to an extent sufficient to be aware of the scope of their engagement, and the likely expense that would be imposed on the first defendant by their engagement, given the second cross-respondent’s prior experience with land development;

e.    agreeing (or alternatively, acquiescing) to the placement of a memorandum on the company’s books by the cross-claimant recording an agreement between the cross-claimant and the second cross-respondent that the amount of $122,800 recorded in the first defendant’s accounts as a loan could be capitalised by the first defendant and recorded as share premium reserve in the event of the cross-respondents defaulting on their obligation to provide the Development Facility to the first defendant;

f.    departing Australia in the months prior to December 2010 (on a date known to the second cross-respondent and the Commonwealth of Australia), leaving Mr Kevin Barnes with authority to issue cheques on behalf of the first cross-respondent;

g.    advancing the sum of $32,375.73 to the first defendant on 15 December 2010 by way of cheque, upon the first defendant’s receipt of an invoice from soil testers Douglas Partners in that amount;

h.    knowing at the time of the payment on 15 December 2010 (from his awareness of the affairs of the first defendant and his experience in land development) that the first defendant required financial contributions from it to proceed with the project, and that the first defendant was reliant on the cross-respondents for finance, because:

i.    the first defendant still had no arrangements with any external party for financing the Subdivision Development Costs, given that the cross-respondents had been called on for the payment of each invoice;

ii.    the Project Consultants were yet to complete the works to bring the development to the stage of being ‘shovel-ready’, and had a significant amount of work still to do for the development to reach that stage, such that the asset could at least be marketed as being ready for works to begin if the first defendant did not proceed with the Development Opportunity; and

iii.    no reputable bank would accept a mortgage over the land as security for a loan without other security being provided, given:

1.    the characteristics of the land (it being undeveloped, not ‘shovel-ready’ and remote from Darwin); and

2.    the impact of the 2009 Global Financial Crisis on the preparedness of banks to loan monies for commercial projects;

i.    advancing further amounts to the first defendant by way of cheque of $3,184 on 1 February 2011, $11,363 on 25 March 2011 and $11,000 on 15 April 2011, upon and immediately following the first defendants’ receipt of invoices for those amounts from the Project Consultants;

j.    knowing, at the time of the payment on 15 April 2011, that:

i.    the first defendant would continue to face expenses arising from:

1.    works performed by the Project Consultants that were yet to be billed; and

2.    ongoing works that the Project Consultants were contracted to perform;

169    I have already explained why I am not satisfied that there was a representation in early March 2006 to the effect pleaded at [4(a)]. The facts alleged at [4(b)] in my view are neutral factors. The fact of the actual transaction does not assist in proving the existence of the representation. I have already explained why the terms of the share acquisition recorded in the second of the Deloitte Letters tend against a finding that there had been a representation of the significant kind pleaded.

170    As to the allegation at [4(c)] I have already explained why I am not satisfied that all invoices relating to the residential development project were sent to and paid for by Annear Holdings. The circumstance that some invoices were paid by Annear Holdings does not show that there existed an arrangement that it would be exclusively liable to finance the development to the “shovel ready” stage (as opposed to an arrangement in which it would make some contribution).

171    The allegation in [4(d)] that Mr Annear liaised with project consultants with respect to the scope of their work and their expenses reflects the arrangement that Mr Annear would bring his contacts and expertise to bear in moving the development process along. Whilst relevant, it does little to support the case in estoppel that Annear Holdings was exclusively responsible for meeting the expenses by way of advancing loans to Farm Projects.

172    The allegation at [4(e)] introduces an alternative allegation that Annear Holdings “acquiesced” in the placement of the memorandum on Farm Projects’ books. Acquiescence has not been established on the evidence including because it is not apparent that any notes to the financial statements were ever drawn to Mr Annear’s attention in the tardy provision of the accounts.

173    As to the pleas at [4(f)] to [4(j)] The circumstance that Mr Annear and Annear Holdings in fact paid invoices could not give rise to a reasonable expectation on Mr McNamee’s part that all of the development costs to “shovel ready” stage would be met in that way. On the facts as I have found them, other shareholders contributed in the pleaded period without proven remark or objection. It has not been established that Annear Holdings was “called upon” for the payment of each invoice. On this topic, Mr McNamee alleged that he had a series of discussions with an agent of Annear Holdings, Mr Kevin Barnes from which the existence of the Shovel Ready Commitment could be inferred. He submitted that the failure of Annear Holdings to call Mr Barnes to rebut that evidence gave rise to an inference that any evidence Mr Barnes might give on the topic could not assist it: Jones v Dunkel (1959) 101 CLR 298. Whilst I accept that an inference of that kind might be drawn, it does not operate to fill gaps or resolve peculiarities of the kind I have identified in Mr McNamee’s case. It is one factor among many to be considered and I have afforded it some weight.

174    Finally on this topic, the alleged consequences of the breach are problematic, both as a matter of fact and law. The promise or representation said to have been made prior to the share issue in 2006 was pleaded in terms that did not include any consequences that would befall Annear Holdings should the promise or representation be departed from. There is an assertion that Mr Annear consented to a memorandum being placed on the company’s books about the “recapitalisation” of money. I have already commented on the ambiguity affecting that evidence. A further ambiguity is that the memorandum asserts a right in (presumably) Mr McNamee to “cancel” Annear Holdings’ equity at his sole discretion. However, in the course of the trial it was said by Mr McNamee on behalf of himself and Farm Projects that cancellation of the share on the asserted terms could not be done unilaterally but required the Court’s approval. That is inconsistent with there having been any discussion (let alone agreement, representation or promise) as to what Farm Projects or any shareholder would be entitled to do in the event that the alleged Shovel Ready Commitment was breached. The alleged detriment is said to have been Mr McNamee’s decision to cause Farm Projects to issue a share to Annear Holdings, in which case it is necessary to search for conduct inducing that decision prior to 28 March 2006. Conduct occurring after that time cannot be said to have caused that species of detriment. In any event, even if there was detriment in the nature of money loaned by the other shareholders over and above their 2006 balances, that money has been repaid and there is no pleaded case alleging or quantifying the loss of the use of the money in the interim.

175    Overall, the allegation of the Shovel Ready Commitment (whether arising in contract or estoppel) was confusing in its expression and has insufficient support in the evidence.

Conduct not amounting to oppression

176    The conduct summarised at [42] of the second amended statement of claim does not constitute a breach of an obligation to permit Mr Annear to participate in the management of Farm Projects or any other obligation arising out of a “quasi partnership” arrangement. It remains to consider the conduct independently of that alleged breach and without reference to any obligation in Annear Holdings to finance the development to the “shovel ready” stage.

177    In relation to the failure to appoint Mr Annear as a director of Farm Projects, I accept Mr McNamee’s evidence that the holding of a meeting to consider that course would be futile because Norvest and Greenfair would not vote in favour of any motion for his appointment. Mr Annear could not otherwise have a legitimate expectation of appointment given my rejection of his argument concerning the existence of mutual obligations of cooperation, trust and confidence.

178    Whilst the failure to call meetings may amount to a contravention of provisions of the Corporations Act, it has not been shown that the contraventions are ongoing or that, if they are ongoing, an order under s 233 of the Corporations Act is necessary to remedy them.

179    As to the delayed provision of information, I am not satisfied that following the abandonment of the residential development project Annear Holdings had a legal right to documents and information over and above that to which a member of a company is ordinarily entitled. I have accepted Mr McNamee’s evidence that he exercised his ordinary business judgement in deciding whether to disclose the negotiations for the exploitation of the Land by way of leasehold for a solar farm. There is no suggestion that the pursuance of that opportunity constitutes a breach of Mr McNamee’s duty to the company, nor that the resulting income stream was misappropriated in any way. The refusal to disclose information about the solar farm is not conduct sufficient to justify orders under s 233 of the Corporations Act. To the extent that it involved any default at all, the default is not ongoing.

180    Annear Holdings further complains that it was not informed in advance of resolutions providing for the repayment of loans in favour of Norvest and Greenfair before the resolutions were made by Mr McNamee. The source of the legal right to be given prior notice of those decisions is not clear. I am not satisfied that Annear Holdings had any entitlement to restrain or interfere with the decision in any way and hence it is unclear how the failure to give advance notice of the intent to make the decision could amount to oppression. In the absence of agreement or other source of legal obligation, the question of how Farm Projects’ indebtedness to creditors was to be reduced was a matter for Farm Projects’ sole director to make in the exercise of his ordinary business judgement. Of themselves, the decision to repay the Norvest and Greenfair loans to 2011 levels was not discriminatory or unfair in the relevant sense, given that the effect of the resolution was to return the loan balances of the three shareholders to roughly equal value before then reducing them pro rata, that is, in roughly equal measure. I conclude that the failure to give notice of the loan repayment resolutions does not amount to oppression whether considered alone or in conjunction with other acts or omissions.

Conduct constituting oppression

181    I have reached a different conclusion in relation to acts relating to the valuation of Annear Holdings’ share. I have concluded that Mr McNamee has conducted the affairs of Farm Projects in such a way that makes it impossible for Annear Holdings to transfer its share to any other person on terms that properly reflect its rights as a shareholder. By his conduct, Mr McNamee has persisted with an assertion that Annear Holdings’ share does not have equal value to that of (at least) Norvest. His position is inscribed on Farm Projects’ financial statements, documents that would ordinarily be inspected by any person willing to purchase Annear Holdings’ share. Mr Annear’s conduct amounts to an outward misrepresentation of Annear Holdings’ rights without legal justification. At the very least, it is discriminatory in the relevant sense.

Remedy on the Oppression Claim

182    In light of the sorry history between the parties, I am satisfied that the circumstances enliven the Court’s discretion to grant relief so as to require the acquisition of Annear Holdings’ share, either by way of a buy back by Farm Projects or by way of compulsory transfer to one or other of the remaining shareholders. The price should be one that represents “fair value” in all the circumstances: Munstermann (at [22]). To ascertain fair value it is convenient to begin by identifying the value of the Land as Farm Projects primary asset.

Value of the Land

183    Mr Terry Roth provided his opinion about the market value of the Land as at 13 February 2024. The market value was informed by the existing lease over that part of the Land on which the solar farm is situated. For that part of the Land, he adopted a capitalisation rate of 8%, having regard to comparable leaseholds on a rent per square metre basis. He arrived at a market value of $1,800,000.00 excluding GST.

184    The defendants adduced no land valuation evidence of their own. Rather, they submitted that Mr Roth’s valuation could not be acted upon with confidence for two reasons. First, it was said that there was a lack of comparable properties to reliably inform the opinion as to value. Second, it was submitted that Mr Roth had obtained information concerning a comparable property that was dated and “hearsay”. I am not persuaded by those submissions. It seems to me that the question of what properties might be “comparable” is itself a matter falling within a valuer’s expertise. To the extent that a property is not entirely comparable, it is not at all apparent why it might nonetheless inform the value of the subject property if sufficient allowances are made for differences. In addition, the alleged defects in information concerning one of the valued properties were alleged in submissions only. They were not supported by evidence demonstrating that an opinion as to value could not reasonably be formed on the basis of information of the kind in Mr Roth’s possession. Mr Roth’s adoption of an 8% capitalisation rate was confined to that part of the Land that had the benefit and burden of the lease. It has not been established that the adoption of that rate was unreasonable, nor that the methodology relating to the remaining portion of the Land was so flawed that the Court should not act on the report.

185    In closing submissions, the defendants attacked the valuation on other grounds, including because the valuation of that portion of the Land not subject to the solar farm lease was inflated or otherwise unjustified. In the absence of competing expert evidence I am unwilling to act on those submissions. To the extent that the defendants sought to attack Mr Roth’s methodology, that attack ought to have come in the form of a competing expert opinion.

186    Also in evidence is a report of Mr Bill Linkson, who expressed a view that the value of the Land as at 16 April 2011 was $850,000.00 excluding GST. That opinion was not challenged and I accept it. However, given my findings thus far, there is no occasion in law to assess remedies by reference to the value of the Land as at 16 April 2011.

Value of Farm Projects’ net assets

187    Mr Michael Critchley was instructed to value the shares in Farm Projects for the purpose of expressing an opinion about the value of the share held by Annear Holdings. For that purpose, he expressed the view that it was appropriate to value Farm Projects as a land holding entity according to its net assets, which he preferred over other valuation methodologies.

188    Mr Critchley adopted the opinion of Mr Roth concerning the valuation of the Land, and then performed a desktop valuation of fixtures, fitting, plant and equipment described in Farm Projects’ depreciation schedule.

189    In cross-examination Mr Critchley accepted that he had valued a Toyota Land Cruiser according to a notional book value without inspecting the vehicle or having regard to its condition. He accepted that if the motor vehicle were in poor condition he would have given it a lesser value. However, he did not accept that would have a material effect on his valuation of Farm Projects’ net assets because he had adopted the conservative approach he had adopted elsewhere in his calculations. I accept his evidence in that respect.

190    Mr Critchley valued Farm Projects’ net assets (and hence the company’s value) at $1,250,000.00 after accounting for liabilities in the nature of loans owed to Norvest, Greenfair and Annear Holdings.

Value of Annear Holdings’ share

191    For the purposes of valuing Annear Holdings’ share, Mr Critchley was instructed not to make any deduction for lack of marketability or any deduction to reflect the lack of control attending a minority holding. Acting on those instructions, Mr Critchley opined that each share should be valued at one third of the company value, such that Annear Holdings’ share was valued at $416,667.00. That figure assumes that the loan to Annear Holdings remains outstanding, the loan balance having been factored as a liability of Farm Projects when valuing its net assets.

192    In cross-examination Mr Critchley stated that the lack of control attending a minority holding could potentially affect its value, “but not always”. On the evidence before me (and specifically the absence of a competing opinion) there is no obvious basis for rejecting Mr Critchley’s valuation of Annear Holdings’ share by reference to it being a minority holding. As to marketability, the critical factor affecting the marketability of Annear Holdings’ share is the long running saga set out in these reasons and the wrongful conduct of Mr McNamee in misstating the rights attaching to the share itself. The defendants’ submissions and evidence does not otherwise persuade me that there is a proper basis for making a deduction referable to lack of marketability, let along what any such deduction should be. In the circumstances described, I adopt Mr Critchley’s evidence of the value of Annear Holdings’ share, being the amount of $416,667.00. It will be necessary to make some adjustment to that figure by reference to the growth in Farm Projects’ net assets since the valuation date. That growth may have occurred by reason of subsequent repayments reducing Farm Projects’ liabilities, and increases in the value of the Land since Mr Roth’s valuation was performed. The parties will be heard as the most efficient and pragmatic way for calculating that adjustment.

THE WINDING UP CLAIM

193    An order for the winding up of Farm Projects under s 461 of the Corporations Act was sought as an alternate remedy in the event that the allegation of oppression was not established.

194    Had I not made the finding of oppression on the limited factual basis discussed above, I would not have made an order that Farm Projects be wound up on the just and equitable ground in s 461(k) of the Corporations Act. That is because the just and equitable circumstances relied upon depended on a finding of the existence of the “quasi partnership”. As Counsel for Annear Holdings put it, it was the existence of that asserted relationship that would “give access to the 461 remedy”.

195    In my view, it would only be just and equitable to order the winding up of Farm Projects if there was noncompliance with orders for the buy back or purchase of Annear Holdings’ share. In other words, I am satisfied that the relief to be granted under s 233 of the Corporation Act should be reinforced by an order requiring winding up as a consequence for noncompliance with the s 233 remedy. The orders will be framed on that basis.

THE LOAN CLAIM

196    At the time of trial Farm Projects remained indebted to Annear Holdings in the amount of $185,722.73, comprising the amount originally agreed to be ascribed to the loan as recorded in the second of the Deloitte Letters and the amounts contributed by Annear Holdings to the residential development prior to the April 2011 argument.

197    By letter dated 16 August 2023, Annear Holdings made a written demand for repayment of the loan within 21 days.

198    By way of defence, it is alleged that the loan was immediately repayable, that any cause of action for the enforcement of the contract accrued at the time that the money was advanced, and that the claim founded in contract was therefore time barred. I do not accept those contentions. The loan has been recorded as a liability in Farm Projects’ financial statements in every financial year since 2011. Mr McNamee recognised the liability in his 2019 resolution concerning the time and manner in which the loans (including the loan now sued upon) would be repaid. The admission of the liability in the company’s accounts and resolution is inconsistent with the proposition that the loan can no longer be sued upon or is otherwise unenforceable:  Brooker v Pridham (1986) 10 ACLR 428 (at 438 – 439). Moreover, if the loan contract as between Farm Projects and Annear Holdings is not enforceable, it would follow that the loan contracts with the other shareholders would be unenforceable for the same reasons, at least in respect of contributions made more than six years ago. Neither Norvest nor Greenfair contended for such a result and there is no reason on the evidence to treat Farm Projects’ obligations to each shareholder differently.

199    I accept Annear Holdings’ submission that the purpose of the loans was to fund the expenses of exploring the residential development project and that the implication of a term imposing an immediate liability to pay would frustrate that commercial purpose. That same submission undermines Annear Holdings’ case that the making of a demand is the only precondition to the liability to repay. The applicable principles are conveniently summarised by King CJ in Brooker (at 429 – 431):

The first stage in answering that question is to determine when the cause of action, which is said to have been barred, arose. Section 35 of the Limitation of Actions Act 1936 (SA) provides that an action founded upon any simple contract shall be commenced ‘within six years next after the cause of action accrued and not after’. It is trite to say that where there is a simple loan of money, the debt is due and payable immediately and from day to day from the time of the making of the loan, and that the cause of action therefore arises immediately upon the loan of the money. This position is unchanged by the fact that there is an express agreement making the loan repayable on demand, on request or on call; the debt is nevertheless due and payable immediately; Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 566; Norton v Ellam (1837) 2 M & W 464. If, however, the agreement between the parties is that the loan is repayable only upon the happening of a certain event or upon compliance with a condition precedent to liability, the debt is not immediately due and payable and the cause of action does not arise until the happening of the event or compliance with the condition; Atkinson v The Bradford Third Equitable Benefit Building Society (1890) 25 QBD 377.

The agreement may provide that the amount of the loan is not repayable until a demand is made, in the sense that the making of an actual demand is to be a condition precedent to liability to repay, and in that case the cause of action will not arise until the demand has been made:  see Murphy v Lawrence & Anor [1960] NZLR 772. An agreement that liability to repay does not arise until an actual demand is made may be express or implied or may be inferred from the circumstances and the conduct of the parties; it may be implied from their relationship; Joachimson v Swiss Bank Corp [1921] 3 KB 110 .

…

In many cases, of course, liability to repay is governed by the terms of an agreement in writing. Where there is such an agreement, the question is one of construction of the written agreement:  see Ogilvie v Adams [1981] VR 1041. Where there is no written agreement, the question may be determined by reference to express oral terms which are proved and interpreted in the ordinary way. Where, however, there are no express terms, an agreement as to the circumstances in which liability to repay arises must be implied from the surrounding circumstances and the conduct and relationship of the parties. It becomes a question of whether the parties, if they had applied their minds to the issue, would reasonably be expected to have agreed to depart from the general rule of immediate liability to repay and to have agreed that some notice would be a prerequisite of such liability. I feel no doubt that in the generality of cases in which loan moneys are provided as working capital following the incorporation of a company to take over a business or the establishment of a trust, those concerned would assume that some notice of demand was a necessary prerequisite of liability to repay.

(emphasis added)

200    In the present case, the shareholders’ loans were advanced not as working capital to take over a business as a going concern, but to invest in efforts that may not result in immediate revenues coming into the hands of the corporate debtor. In addition, all of the shareholders knew at the time that they advanced the loans, that Farm Projects, at the time of their respective advances, had no capacity to repay the money either immediately or on demand. There is no basis in the facts to imply a contractual term in the nature of a liability to repay the money on demand if the making of the demand would bring about the conditions for Farm Projects to be wound up in insolvency so ending its capacity to exploit the Land, either by pursuing the opportunity to which the loans were directed or in some other way. Thus, whilst I accept that the making of a demand for repayment is a necessary precondition to the liability to repay, I am not satisfied that it is the only precondition.

201    In order to imply a contractual obligation to repay on demand, it is necessary to show that the term is reasonable and equitable, necessary to give business efficacy to the agreement, so obvious that it goes without saying, capable of clear expression and not contradictory of any express term:  see State Rail Authority of NSW v Codelfa Construction Pty Ltd (1982) 150 CLR 29. Of those requirements, I am not satisfied that the term is reasonable and equitable, nor that it is necessary to give business efficacy to Annear Holdings’ agreement to extend the loan. If the term was equitable, it would be one attaching to all of the shareholders’ loans, there being nothing in the facts and circumstances to distinguish between them at the time that they were first advanced. The commercial circumstances were such that the implication of the term would mean that any one of the shareholders could bring about the winding up of Farm Projects so destroying the potential inherent in the exploitation of the Land for profit. That is not consistent with the common intention of the parties that Farm Projects would continue to hold the Land for the purpose of exploring and exploiting opportunities to increase its value for the shared benefit of them all. Expressed another way, the business efficacy of the agreement was such that Annear Holdings loaned the money with a view to increasing its prospects of returns on its capital investment in its capacity as a shareholder. I find that those returns would come by way of dividends through the chosen corporate structure. All of that is consistent with the implication of a term that the money would be paid on demand provided that Farm Projects had the capacity to make the repayment from its own resources.

202    Moreover, I do not consider that any one of the shareholders had a right to repayment on demand if such a right would prioritise the discharge of the liability of one shareholder in priority over the others, without justification. I have already found that the prioritised repayment of some parts of the loans of Norvest and Greenfair was justified in all of the circumstances given that an intention of the repayments was to restore the amounts owing to the shareholders to 2011 levels. That is significant as 2011 was the year in which Annear Holdings’ contributions toward the residential development project (the commercial purpose of Annear Holdings’ loans) ceased.

203    I am not satisfied that the present refusal to repay the loan amount owing to Annear Holdings in full constitutes a breach of a term of the loan agreement as pleaded in this proceeding. The making of the demand in 2023 was not the only pre requisite to repayment of the loan in full. It has not been shown that Farm Projects had the capacity to repay the loan in full at the time of the demand, nor that it presently has that capacity.

204    I have given some consideration to whether the loan must be repaid as a necessary and ancillary order to the relief to be granted on the Oppression Claim relating to the buy back or transfer of Annear Holdings’ share. However, I am not satisfied that relief should be granted on that basis for two reasons. First, Annear Holdings did not advance the Loan Claim in that way. Its claim to be entitled to repayment was founded in contract on the incorrect footing that the making of a demand was the only prerequisite to the obligation to repay. Second, the “deal” recorded in the second of the Deloitte Letters was that Annear Holdings would stand both as a shareholder and as a creditor of Farm Projects. I am not satisfied that its status as creditor should necessarily depend on the continuation of its status as a member of the company.

205    Given my findings thus far, I consider that any departure by Farm Projects of the stated intention to now repay the loans on a pro rata basis so eliminating them at an equal pace would constitute unjustified discrimination and oppression within the meaning of s 232 of the Corporations Act. Given the fractious nature of the relationship, I am presently of the view that alternative relief relating to the loan should be granted, namely an order restraining Farm Projects from repaying the loans other than on a pro rata basis without the consent of Annear Holdings or the leave of the Court. The parties should be heard in relation to the form that the order should take, and it may also be necessary to ensure that events occurring since the conclusion of the trial would not preclude the grant of alternate relief of that kind.

LEAVE TO AMEND

206    In closing submissions, Annear Holdings applied for leave to rely on a third amended statement of claim. It is marked for identification “MFI-P1 18/3/2025”. Following argument, the defendants confirmed they did not oppose amendments proposed in [6] and [9] (relating to the treatment in Farm Projects’ books concerning the application of the money paid by Annear Holdings for its share). The amendments reflect the evidence as it emerged. Leave to make those amendments is granted.

207    Counsel for Farm Projects, Mr McNamee and Norvest initially opposed a proposed amendment at [12(a)] relating to an asserted implied term (or a term to be “inferred”) that the balance of Annear Holdings’ loan account was not payable until an actual demand was made. The opposition was later withdrawn. I would grant leave to make that amendment even if there were opposition to it. That is because the asserted content of the repayment term was pleaded from the outset. All that is sought to be done is to give particulars of objective facts and circumstances supporting the implication of the term (including reliance on the first of the Deloitte Letters) and an alternative allegation that the term was to be “inferred”. The facts and circumstances concerning the existence of the repayment term were explored at trial. The only basis for opposition tentatively put forward was an assertion that Mr McNamee and Mr Annear could have given evidence about their subjective beliefs concerning the timing of the repayment of the shareholder loans. Their subjective beliefs are irrelevant with respect to the proposed amended plea, just as they are irrelevant to the plea in its original form. To the extent that they could have given evidence to displace an implication of the repayment term, that opportunity was presented at trial on the pleading in its original form. Mr McNamee’s evidentiary case has always been that Annear Holdings’ loan is payable neither immediately nor on demand but is subject to (among other things) the financial resources of Farm Projects to repay it. The amendment will be allowed. I have proceeded on the basis that the amended plea is denied (as was the original plea).

208    By a new proposed [12A], Annear Holdings seeks to introduce a plea commencing with the words “Alternatively, if the Loan(s) were immediately payable” (that is, other than on demand). I am not satisfied that amendment is necessary or appropriate. That is because there is no proper basis to find that the loan originally advanced by Annear Holdings was immediately due and payable absent a demand or any reasonable notice. The pleading attempts to proactively meet a case anticipated to be raised in a defence relating to a statutory time bar and does not belong in a statement of claim. If raised in a defence, a statutory time bar can be met with an answer in reply. That has in fact been done by [3A] of Annear Holdings’ reply. It is as follows:

In relation to [13] of the Amended Defence, to the extent the first, second and third defendants’ pleading in that paragraph is a pleading that the plaintiff is statute barred from bringing a claim for repayment of the Loan, the plaintiff says that the first defendant has on a yearly basis since 30 June 2007, confirmed the cause of action in its end of financial year statements by recording the Loan as a liability and accordingly, the limitation period has not expired by operation of s 41(1) of the Limitation Act 1981 (NT).

209    It remains necessary to decide whether Annear Holdings should be granted leave to make amendments proposed at [39A] and [40] (relating to the content of the April 2011 argument). I do not consider those amendments are necessary. The pleading at [40] presently alleges that on 16 April 2011, Mr Annear said words to the effect “Fuck you Annear. You can sit there until we are ready to get you out of the deal. We will return your money and cancel your equity when we can”. That plea is admitted by Mr McNamee and I have made findings on that basis.

210    Annear Holdings seeks to introduce a new [39A] to allege that Mr Annear, in the same discussion, informed Mr McNamee of his opinion that the residential development project was not financially feasible and of his opinion that it would be best to wait until market conditions were more favourable, or divide the Land into three equal lots for transfer to the shareholders. It is then proposed that the words “In response” be inserted at the beginning of the plea.

211    Prior to trial, all parties had the opportunity to file affidavits. The affidavits of Mr Annear and Mr McNamee put forward their accounts of the conversation of 16 April 2011, including words said before Mr McNamee made the admitted “Fuck you” statement. The evidence of each of those witnesses is relevant to understand the context of that admitted statement. I do not consider it necessary for Annear Holdings to amend its pleading to record its version of events as to the whole of the conversation, just as it was unnecessary for the defendants to do so. In considering whether the admitted statement (or evidence) is oppressive conduct, the Court may have regard to all of the surrounding circumstances referred to in the affidavits and may form a view as to which version of events is to be preferred. I have proceeded on the basis that Mr McNamee denies that the “Fuck you” statement was made “in response” to words alleged to have been said by Mr Annear in his affidavits.

THE CROSS-CLAIM

212    For the reasons given below, the cross-claim will be dismissed because Mr McNamee has no standing to seek the relief sought and because the substantive allegations were not established on the evidence in any event. The latter defect cannot be cured by the joining of proper parties and, accordingly, there is no utility in granting leave to amend after the conclusion of the trial.

Standing

213    The Notice of Cross-Claim was filed on 22 December 2023. The only named cross-claimant is Mr McNamee. Amendments made on 12 April 2024 and 9 August 2024 did not include any application to add or remove a party. The latter version was current at the time of the trial, notwithstanding that Mr McNamee was by then on notice that the cross-claim was defended on standing grounds.

214    Mr McNamee is not a shareholder of Farm Projects. The causes of action alleged to have accrued are not actions in respect of which he has standing to sue. I do not accept his submission that he has standing by virtue of Norvest holding its share in Farm Projects on trust for him (as to which see: Hooker Investment Pty Ltd v Email Ltd (1986) 10 ACLR 443 (at 446 – 447)). Even if there a proper basis in law to recognise the standing of a the beneficiary of such a trust, I am not satisfied on the evidence before me that Mr McNamee is the beneficial owner of the share. If I am wrong about that, I am not satisfied that there is an arguable case that Mr McNamee in his personal capacity has suffered loss as a consequence of any obligation owed by Annear Holdings to Norvest and/or Greenfair.

Merits

215    Questions of standing aside, success on the cross-claim in its present form otherwise depended in large part on proof of the existence and breach of the Shovel Ready Commitment. It was alleged, for example, that there existed a joint venture of unequal rights and obligations, the inequality arising in part from the Shovel Ready Commitment and its breach.

216    The evidence adduced at trial does not support a finding that the parties turned their minds at all to critical features of their relationship, including the manner in which a shareholder should be entitled to dispose of his or her interest and exit the relationship. Whatever be the nature of the relationship, it has not been shown that the facts and circumstances provided any legal or equitable justification for Annear Holdings’ share being given a value less than that of the other shareholders.

217    The plea alleging oppression ignores critical preconditions for the grant of a remedy under s 232 of the Corporations Act. The acts complained of were not undertaken by the cross-respondents in the conduct of Farm Projects’ affairs within the meaning of s 232(a), nor have either of them done or purported to do any act by or on behalf of Farm Projects within the meaning of s 232(b). To the extent that there has been any “proposed resolution” of a company member (for example for the appointment of Mr Annear as a director or for the inspection of books), there is no basis to conclude that the proposed resolution is oppressive. The other conduct may be characterised as correspondence in which Annear Holdings has raised disputed matters with Mr McNamee and Farm Projects. The assertion of legal rights and the commencement of the claim is not conduct amounting to oppression. In any event, Annear Holdings has been vindicated in its claim concerning the value of its share. There is no factual or legal basis for relief claimed under s 233 of the Corporations Act.

218    It was further alleged that it would be unconscionable for Annear Holdings to retain all of the benefits ordinarily attaching to a share in a company in circumstance where it has made unequal contributions to the company’s wealth. The unequal contributions are asserted in a table appearing at [17] of the cross-claim, extracted here in its proposed amended form:

219    The striking feature of the table is that it ascribes to Norvest the “derived value” of the solar farm lease. That value is not properly to be regarded as a contribution of Norvest. Rather, it resulted from the discharge of duties owed by Mr McNamee in his capacity as Farm Projects’ sole director. It has not been shown that Annear Holdings refused to contribute to efforts to establish a solar farm on the Land. To the contrary, Mr Annear raised the very same idea with Mr McNamee. It was Mr McNamee’s choice to exclude Mr Annear from the personal efforts required to bring the lease into existence. In the circumstances described, it is not unconscionable for Annear Holdings to assert that its share is of equal value to that of the other two shareholders.

220    More fundamentally however, the evidence does not show that there existed a joint venture in which the value of each shareholder would increase or decrease in value relative to the others according to their respective contributions, whether in the nature of loan money or personal effort. To uphold this aspect of the amended cross-claim would be to find that Norvest’s share is worth nearly double that of Greenfair’s. That would be a commercially startling outcome. No such term, arrangement or understanding was deposed to by Mr Aboud, nor was any mention made of it in the course of Mr McNamee’s evidence.

221    Submissions in support of the cross-claim called upon equitable principles, said to culminate in remedial constructive trust or restitution: see Rochefoucauld v Boustead [1897] 1 Ch 196; Muschinski v Dodds (1985) 160 CLR 583; Sirtes v Pryer [2005] NSWSC 1082; John Nelson Developments Pty Ltd v Focus National Developments Pty Ltd [2010] NSWSC 150; Carson v Wood (1994) 34 NSWLR 9. It is not necessary to discuss the principles stated in those authorities. It is sufficient to say that they are not enlivened on the facts as I have found them to be in the present case.

No leave to amend

222    A proposed “Third amended statement of cross-claim” is annexed to written submissions filed on behalf of “Stephen Grant McNamee, second defendant and first cross-claimant”. It seeks to add as cross-claimants Farm Projects, Norvest and Greenfair.

223    I am not satisfied that leave should be granted to make the amendments adding additional cross-claimants. That is principally because Annear Holdings’ written submissions, filed in advance of the trial, made it plain that it would submit that the cross-claim should be dismissed on the sole basis that Mr McNamee lacked standing to sue for the pleaded relief. Annear Holdings was entitled to prepare for the trial and to make its forensic decisions based on the cross-claim as it then stood. It was entitled to limit its response to the (correct) submission that the only named cross-claimant had no standing to sue. That position was made plain in its written opening submissions served prior to the commencement of the trial.

224    That is a sufficient basis to refuse leave to amend.

225    The proposed amended case on the cross-claim is affected by the same legal and factual flaws as the cross-claim in its present form. Proposals to include claims for relief founded in equitable principles cannot succeed on the facts as found.

226    Finally, I am not satisfied that Greenfair has joined in the application to sue in the capacity of a cross-claimant. I would not grant leave to join it as a party in that capacity in the absence of its own application to belatedly commence a cross-claim in its own name and right following the closure of evidence.

ORDERS

227    Annear Holdings is entitled to have its share bought back (or purchased) at the value identified by Mr Critchley, together with an adjustment to reflect any movement in the net assets of Farm Projects since the date of the valuation. The parties will be heard as to the most expeditious and cost effective means of calculating that adjustment. Any further valuation is to proceed from the starting point that the valuation evidence of Mr Roth and Mr Critchley has been accepted by the Court.

228    There will be a further order providing for the winding up of Farm Projects under s 461(k) of the Corporations Act in the event that Annear Holdings’ share is neither bought back or purchased at the specified price.

229    In addition, there will be an order restraining Farm Projects (including by its director Mr McNamee) from paying down the shareholder loans in a discriminatory fashion, so as to ensure that the loans now be repaid at equal rates.

230    The parties should be heard as to costs.

Associate:

Dated:    3 March 2026

SCHEDULE OF PARTIES