In the matter of Lamrock Place Property Pty Ltd

1. [1]

   This proceeding concerns a dispute between the participants in an incorporated joint venture. It is common ground that there has been a breakdown in trust and confidence between them. Each blames the other for the breakdown, and each seeks to buy out the other’s interest.

2. [2]

   The First Defendant, Lamrock Place Property Pty Ltd (Company), was incorporated in August 2021 by the Plaintiff, Ms Malin Widhe, and the Second Defendant, Mr Jonathan Shteinman, for the purpose of purchasing and developing a residential property at 15 Lamrock Place in Bondi Beach, New South Wales (Property).

3. [3]

   The Property is a single title duplex consisting of a ground floor apartment (15B) and a first-floor apartment (15A), with a single attached garage, and forms part of a mixed-use strata complex of nineteen lots.

4. [4]

   The Company holds the Property as trustee for the Lamrock Place Property Trust (LPPT), which is a fixed unit trust.

5. [5]

   The two directors of the Company are Ms Widhe and Mr Shteinman, each of whom owns 50% of the shares in the Company. The units in the LPPT are equally held by:

   1. (1)

      Ms Widhe as trustee of the Sweet Avenue Trust (SAT); and

   2. (2)

      the Third Defendant, JIS Bondi Investments Pty Ltd as trustee for the Bondi Investment Trust (BIT).

6. [6]

   Mr Shteinman is a director of JIS, and owns 50% of its shares. The BIT is a discretionary trust. Mr Shteinman is one of the discretionary beneficiaries of the BIT, is the sole appointor, and has substantial control over the operations of the BIT.

7. [7]

   Ms Widhe is married to Mr Sean Tolpinrud. It was common ground that, at all material times, Mr Tolpinrud acted as Ms Widhe’s authorised agent in his dealings with Mr Shteinman in relation to the Company, the LPPT and the Property. Accordingly, Ms Widhe accepted that anything said or done by Mr Tolpinrud in the course of those dealings was done on her behalf.

8. [8]

   By Originating Process filed 7 March 2025, Ms Widhe as trustee of the SAT sought relief under s 233 of the Corporations Act 2001 (Cth) (the Act) in respect of alleged oppressive, unfairly prejudicial or unfairly discriminatory conduct falling within s 232 of the Act. The relief sought included an order that Ms Widhe purchase the shares in the Company held by Mr Shteinman and the units in the LPPT held by JIS as trustee for the BIT at a price to be determined by the Court and, in the alternative, an order that the Company be wound up on just and equitable grounds pursuant to s 233 or s 461(1)(e), (f), (g) and/or (k) of the Act.

9. [9]

   By an Interlocutory Process filed 22 May 2025 (which was, in substance, a Cross-Claim), Mr Shteinman brought an application under ss 232 and 233 of the Act against Ms Widhe and Mr Tolpinrud. In the Cross-Claim, Mr Shteinman alleged that Ms Widhe and Mr Tolpinrud had breached fiduciary duties which they owed to the Company and to Mr Shteinman, and had engaged in oppressive conduct, and sought orders that Mr Shteinman buy out Ms Widhe’s interest in the Company and the LPPT or, alternatively, that the Company be wound up on just and equitable grounds.

10. [10]

    The parties agreed, for the purposes of this proceeding, that the Property had, as at the time of the hearing, a value of $4,740,000.

11. [11]

    A central issue in the proceeding concerns whether Mr Tolpinrud misled Mr Shteinman in the course of their dealings relating to the financing arrangements for the purchase of the Property. As outlined below, the parties had difficulty in obtaining finance for the purchase of the Property. In December 2021, an arrangement was ultimately reached whereby the National Australia Bank (NAB) loaned funds to Ms Widhe as trustee of the SAT at a rate of 2.49% per annum, and Ms Widhe on-lent those funds to the Company as trustee for the LPPT, at a rate of 4.50% per annum (that is, at a margin of 2.01% above the rate charged by NAB).

12. [12]

    Mr Shteinman claimed that Mr Tolpinrud falsely represented to him that the margin of 2.01% and/or the interest rate of 4.50% were requirements set by NAB and “was, in effect, a fait accompli”. Ms Widhe and Mr Tolpinrud denied any such representation.

13. [13]

    Mr Shteinman claimed that he only learned of the true position in around March 2023, when he was informed by a representative of NAB that it had not insisted on the extra profit margin being charged by the SAT (described as the “NAB Revelation”).

14. [14]

    Mr Shteinman relied on the alleged representations both as the basis of his own claim of oppressive conduct, and also as an answer, in part, to Ms Widhe’s claim of oppressive conduct (asserting, in effect, that much of the conduct on his part which is alleged to have been oppressive was a legitimate response to his having learned, in around March 2023, that he had been misled).

15. [15]

    I set out below the factual background to the matter, based primarily on the documentary record. I then briefly address the issue of credit, before turning to consider the three main issues in the proceeding, namely:

    1. (1)

       whether Mr Tolpinrud misled Mr Shteinman about the margin (and whether Ms Widhe thereby engaged in oppressive conduct);

    2. (2)

       whether Mr Shteinman engaged in oppressive conduct in his dealings with Ms Widhe and Mr Tolpinrud in relation to the Company and the LPPT); and

    3. (3)

       having regard to those matters, what form of relief should be ordered.

Factual Background

1. [16]

   In October 2019, the previous owner of the Property, Mr Richard Glasson, passed away.

2. [17]

   On 27 January 2020, Mr Shteinman emailed Mr Tolpinrud, advising him that Mr Glasson had passed away and of the possibility that the Property would be put up for sale. At this time, each of Mr Shteinman and Mr Tolpinrud already owned a lot in the strata development in which the Property is located. In this email, Mr Shteinman stated as follows:

3. [18]

   Rick, Alice and Brian were other lot owners in the same development.

4. [19]

   The Property was subsequently put up for sale in around July 2021.

5. [20]

   On 1 August 2021, Mr Shteinman sent an email to Mr Tolpinrud, which enclosed a number of draft plans and set out a proposal to form a joint venture or partnership to acquire and redevelop the Property. In this email, Mr Shteinman stated that:

6. [21]

   Mr Shteinman and Mr Tolpinrud subsequently had a number of discussions about this proposal. On 10 August 2021, Mr Shteinman sent an email to Mr Tolpinrud which “summarised some of [their] discussions” as follows (emphasis in original):

7. [22]

   On 11 August 2021, Mr Tolpinrud sent Mr Shteinman a document which was headed “Contemplated intentions for Sean Tolpinrud and Jonathan Shteinman to partner to acquire 15 Lamrock Place, Bondi Beach NSW 2026”. This document set out the “contemplated” framework for the joint venture between Mr Tolpinrud and Mr Shteinman as follows:

8. [23]

   Mr Shteinman responded shortly afterwards, indicating that he had read the document “quickly” and “so reserve[d] [his] rights”.

9. [24]

   Both parties referred in submissions to this arrangement as a joint venture.

10. [25]

    The parties did not enter into any written joint venture agreement which set out the terms upon which the Property was to be purchased and held by them.

11. [26]

    In closing submissions, Ms Widhe contended that the following “investment agreement” was reached between Ms Widhe and Mr Shteinman:

    1. (1)

       the Company would be incorporated, with each of Ms Widhe and Mr Shteinman being equal shareholders;

    2. (2)

       a fixed unit trust would be established, with each of Ms Widhe as trustee for the SAT and JIS as trustee for the BIT being equal unitholders; and

    3. (3)

       the Company, in its capacity as trustee of the fixed unit trust, would purchase the Property.

12. [27]

    It may be accepted that such an agreement was entered, since those steps were in fact taken in August 2021.

13. [28]

    Ms Widhe pleaded, in her Points of Claim, that the investment agreement also contained a number of implied terms, which Mr Shteinman and JIS denied. It is unnecessary to resolve this dispute since Ms Widhe did not, in closing written or oral submissions, advance any contention that these terms had been breached or seek damages for breach of contract, instead framing her claims in terms of oppression and seeking relief pursuant to s 233 of the Act.

14. [29]

    On 11 August 2021, the Company was incorporated. Each of Ms Widhe and Mr Shteinman was appointed as a director and each held a 50% shareholding in the Company.

15. [30]

    On the same day, the LPPT was established by a Fixed Unit Trust Deed, with the Company being appointed as trustee. The unitholders of the LPPT in equal shares were Ms Widhe as trustee of the SAT and JIS as trustee of the BIT.

16. [31]

    On 14 August 2021, the Company entered into a contract for the sale and purchase of the Property for a price of $3,761,600, with settlement scheduled for 27 September 2021. A deposit of $376,160 was paid by Mr Shteinman and Ms Widhe in equal proportions, leaving a balance of $3,385,440.

17. [32]

    On 18 August 2021, Mr David Marangoni, who held the role of “Private Direct Banker” at NAB, sent an email to Mr Tolpinrud requesting a number of documents in respect of a possible loan application to finance the purchase of the Property, and requesting contact information for Mr Shteinman. The proposal at this stage was that NAB would lend around 80% of the purchase price ($3,008,000), and that the lending would “sit under each trust [namely, the SAT and the BIT] for $1,504,000”. On 27 August 2021, Mr Tolpinrud sent the requested information to NAB.

18. [33]

    On 9 September 2021, Mr Marangoni sent an email to Mr Tolpinrud and Mr Shteinman stating that NAB was still “in the process of collecting information from both parties”, and advising as follows (emphasis in original):

19. [34]

    Mr Tolpinrud gave unchallenged evidence that, on 13 September 2021, following receipt of Mr Marangoni’s email, he spoke with a NAB representative and “enquired whether NAB could provide finance, or could provide finance more rapidly, if [Mr Tolpinrud] provided credit support for the whole of the loans made to both BIT and SAT, meaning that [he] would guarantee BIT’s $1.5 million portion of the debt in addition to SAT’s $1.5 million portion”.

20. [35]

    On 15 September 2021, Mr Marangoni sent an email to Mr Tolpinrud, which stated as follows (emphasis added):

21. [36]

    Mr Tolpinrud forwarded this email to Mr Shteinman on the evening of 15 September 2021.

22. [37]

    On 16 September 2021, Mr Tolpinrud responded to Mr Marangoni, querying whether NAB would change its position in respect of Mr Tolpinrud guaranteeing 100% of the loan amount if he signed what he described as a “Big Boy Letter”, so as to provide NAB with “legal and reputational cover”. Mr Tolpinrud proposed that such a letter would:

23. [38]

    This proposal was not accepted by NAB.

24. [39]

    On 16 September 2021, Mr Tolpinrud sent an email to Mr Shteinman, in which he proposed requesting, from the vendors of the Property, an eight-week extension to complete the sale of the Property. Mr Tolpinrud indicated that such an extension would “give NAB time” and also allow him and Mr Shteinman to “launch an application with other big 4 banks right away”. Mr Tolpinrud added as follows:

25. [40]

    Mr Shteinman had, by this time, obtained an indicative term sheet from AAA Financial Group, which is a mortgage broker with a non-bank lending program. The indicative term sheet offered a bridging loan from Austar Capital Pty Ltd in the amount of $2.82m (approximately 75% of the purchase price) and contemplated that the Company would be the borrower. The indicative term sheet further stipulated a loan term of three months, an interest rate of 6.5% per annum and a default interest rate of 10% higher than the facility interest rate.

26. [41]

    Also on 16 September 2021, Mr Tolpinrud submitted an application for finance with the ANZ Bank.

27. [42]

    On 20 September 2021, Mr Marangoni sent an email to Mr Tolpinrud, advising that an additional period of four to eight weeks was required for processing the loan application in relation to the Property. On the same day, Mr Tolpinrud’s solicitor forwarded this email to Ms Kylie Fitzgerald, the conveyancer who was acting on behalf of the vendors of the Property, and requested a seven-week extension of the settlement date (which was 27 September 2021).

28. [43]

    On 22 September 2021, Ms Fitzgerald responded that the vendors did not agree to the proposed seven-week extension and instead would grant a two-week extension to 11 October 2021.

29. [44]

    Also on 22 September 2021, Mr Tolpinrud contacted the Commonwealth Bank of Australia (CBA) in respect of obtaining finance to purchase the Property. On 23 September 2021, Mr Sate, who was a “Private Banker” with CBA, wrote to Mr Shteinman requesting, among other things, the “Most recent 2 years tax returns for [Mr Shteinman]” and the “Most recent Financials/tax return for [the BIT]”. On the same day, Mr Shteinman responded to Mr Sate, stating as follows: “Tax return – my latest is 2019”.

30. [45]

    On 24 September 2021, Mr Greg Clarkson of ANZ sent an email to Mr Tolpinrud and Mr Shteinman, in which he requested the following documents:

31. [46]

    On 27 September 2021, Ms Melissa Ashcroft of AAA Financial sent an email to Mr Shteinman which outlined indicative terms for financing the purchase of the Property by the Company. The terms included an interest rate of 4.50% per annum for the first five years, with a non-refundable commitment fee of $2,500. In addition, AAA Financial required “2 years financials for all directors as a new entity”, including “notices of assessments (2019 and 2020)”, with Ms Ashcroft noting that: “We can do less docs but LVR only 70%”. Ms Ashcroft also stated that the bridging loan offer had “now expired”, this being a reference to the term sheet provided to Mr Shteinman on 8 September 2021 (see paragraph [40] above). Mr Shteinman forwarded Ms Ashcroft’s email to Mr Tolpinrud on 28 September 2021.

32. [47]

    On 29 September 2021, Mr Sate of CBA emailed Mr Shteinman querying whether Mr Shteinman’s “personal FY20 tax return” had been completed. Mr Shteinman responded a few minutes later, answering in the negative. Shortly afterwards, Mr Sate sent another email to Mr Shteinman requesting copies of the “financials/tax returns” for the BIT.

33. [48]

    Also on 29 September 2021, Mr Shteinman had an email exchange with his accountant, Mr Joe Kifley, in which Mr Shteinman asked whether there were “financials/tax returns for [the BIT]”, and was told by Mr Kifley that the “last ones prepared for [the BIT] are at 30-6-2019”, and that it was on Mr Kifley’s “list” to “do FY20”.

34. [49]

    On 30 September 2021 at 5:34pm, Mr Sate sent an email to Mr Shteinman, stating as follows:

35. [50]

    Around fifteen minutes later, Mr Shteinman responded to Mr Sate’s email as follows:

36. [51]

    On 1 October 2021, Mr Sate responded to Mr Shteinman’s queries as follows:

37. [52]

    On 5 October 2021, Mr Sate sent an email to Mr Tolpinrud advising that, in order to provide a loan to the LPPT, Mr Shteinman would need to be removed as director and shareholder of the Company, and the BIT would need to be removed as a unitholder of the LPPT, stating that this “would mean that we wouldn’t require a guarantee from [Mr Shteinman] or his daughter” (Mr Shteinman’s daughter being a director of JIS). Later that evening, Mr Tolpinrud replied to Mr Sate’s email, querying whether the SAT could be the borrower for 100% of the proposed loan, rather than the LPPT, as “a potential solution/workaround…as a backup plan (if [Mr Shteinman] can’t deliver financials that work for CBA in time)”.

38. [53]

    On 6 October 2021, Mr Sate responded that he had “explored this option”, but that Mr Shteinman “would have to be removed as a shareholder/director of [the Company] if we are to proceed without a guarantee from him”, and that there was “no way around it”.

39. [54]

    Also on 6 October 2021, Mr Tolpinrud sent an email to Mr Shteinman which requested that “by no later than tomorrow (or maybe Friday if required), give ANZ and CBA everything they need” in order to “confirm your income to a bank standard”.

40. [55]

    On 11 October 2021, a representative of ANZ sent an email to Mr Shteinman indicating that ANZ’s “minimum requirements” included “2020 Tax return and ATO assessment notice”. As noted above, Mr Shteinman’s 2020 tax return had, as at this time, not been completed.

41. [56]

    The purchase of the Property did not complete on the extended settlement date of 11 October 2021.

42. [57]

    On 12 October 2021, the vendor issued a Notice to Complete, requiring settlement by 3:00pm on 27 October 2021.

43. [58]

    On 14 October 2021, Mr Tolpinrud sent an email to Mr Shteinman, outlining the “option set” for funding the purchase of the Property, as follows (emphasis added):

44. [59]

    There is a dispute between the parties regarding whether, at this time, Mr Shteinman voiced any objection to the idea of a “margin” being charged by the SAT to the LPPT above the interest rate being charged to the SAT by NAB, and regarding the extent to which any “margin” was discussed. This issue is addressed below, when dealing with Mr Shteinman’s claims regarding the margin.

45. [60]

    On 18 October 2021, Ms Ashcroft of AAA Financial sent, by email, a “final offer” to Mr Tolpinrud and Mr Shteinman and enclosed a letter of offer for a revised bridging loan to finance the purchase of the Property. The terms of the offer were as follows:

46. [61]

    Mr Tolpinrud and Ms Widhe decided not to proceed with the Austar Bridging Loan for Ms Widhe’s 50% share of balance of the purchase price of the Property, and obtained funding from other sources.

47. [62]

    On 19 October 2021, Mr Shteinman sent a text message to Mr Tolpinrud confirming that Mr Shteinman would be “doing a bridge loan f[o]r $1.5m secured by first mortgage” and would “pay the balance of [his] half”, and that Mr Tolpinrud would “cover” his own half. Mr Tolpinrud agreed with the “$1.5m facility limit for Austar being 1st ranking, with it understood that $1.5m of [Mr Tolpinrud’s] money will rank next from any recoveries”.

48. [63]

    Later on the same day, Mr Shteinman sought Mr Tolpinrud’s agreement to the facility limit for the Austar Bridging Loan being increased to $1.7m. Mr Tolpinrud replied that he would prefer to “keep it $1.5M [until] we have a solution that’s not a ticking bomb”. Mr Shteinman responded that “It just makes it a bit harder for me, that’s all” and added, shortly afterwards, “I will keep it at $1.5m but it’s truly unfortunate”.

49. [64]

    There was a dispute between the parties as to whether, by an exchange of text messages later on the same day, Mr Tolpinrud agreed to the amount drawn down by Mr Shteinman under the Austar Bridging Loan being increased to $1.7m. It is unnecessary to resolve this dispute. It is sufficient for present purposes to note that the amount was increased to $1.7m, and that Mr Tolpinrud expressed, in messages sent on the evening of 21 October 2021, unhappiness that this had occurred, complaining to Mr Shteinman that it would “push that liquidity risk to [Mr Tolpinrud] at the worst possible time for [him]”. In particular, Mr Tolpinrud explained to Mr Shteinman that he was concerned about what would happen “[i]f CBA doesn’t approve [Mr Shteinman’s loan application] in that narrow window between [Mr Shteinman] getting [his] tax filings current and this bridge exploding”. Mr Shteinman responded that he was “sticking to” the $1.7m loan amount, as he considered that this had been agreed in their previous text exchange, and added:

50. [65]

    On 22 October 2021, the Company completed the purchase of the Property, using funds drawn down by Mr Shteinman under the Austar Bridging Loan and funds provided by Mr Tolpinrud.

51. [66]

    At 3:12pm on 22 October 2021, being the date on which the purchase of the Property settled, Mr Tolpinrud sent a lengthy email to Mr Shteinman, which opened as follows: “Hi Jonathan – Writing down what I think we have discussed regarding the understanding of our intent”.

52. [67]

    Relevantly, Mr Tolpinrud stated as follows (emphasis added):

53. [68]

    The email concluded with this request: “Do we agree this is the intention and basis upon which we are settling?” Mr Shteinman responded shortly afterwards, stating “Yes to everything except”, relevantly, the “Intermediary NAB loan if CBA going well”. That is, Mr Shteinman was suggesting that the proposed on-loan arrangement with NAB should not be entered so long as it appeared that CBA would provide finance. Mr Tolpinrud responded several minutes later, as follows:

54. [69]

    As set out above, Mr Tolpinrud’s email indicated that NAB was “only willing” to lend to the SAT (that is, it was not willing to lend to the Company as trustee of the LPPT, or to Mr Shteinman or JIS as trustee of the BIT). Mr Marangoni confirmed in cross-examination that NAB was unable to proceed with a loan application for:

    1. (1)

       separate loans to the unitholders in the LPPT (namely, the SAT and the BIT) for their respective 50% shares in the balance of the purchase price of the Property, because Mr Shteinman’s “financials weren’t in order to be able to make a financial assessment”; and

    2. (2)

       a loan to the Company as trustee of the LPPT so long as Mr Shteinman was a director of the Company, because Mr Shteinman could not satisfy NAB’s requirement for up-to-date tax returns.

55. [70]

    On 25 October 2021, ANZ informed Mr Shteinman and Mr Tolpinrud that ANZ would not be able to assist with finance for the Property, because it had “insufficient financial information”. Given the terms of previous communications from ANZ (see paragraphs [45] and [55] above), this is likely a reference to the lack of tax returns from Mr Shteinman. Shortly prior to this, on 20 October 2021, Ms Ashcroft had advised Mr Shteinman and Mr Tolpinrud that, because Mr Shteinman had provided only an accountant’s letter (rather than the requested financials), the “deal will need to be treated as Alt Doc”, with the result that “max loan size is - $2,000,000”.

56. [71]

    Accordingly, from late October 2021, the two options which remained in play for repaying the Austar Bridging Loan and refinancing the Property were a loan from CBA, or otherwise a loan from NAB to the SAT, which would then be on-lent to the LPPT.

57. [72]

    On 9 and 10 November 2021, Mr Shteinman and Mr Tolpinrud had the following email exchange in relation to these options:

58. [73]

    On 10 November 2021, Mr Shteinman sent an email to Mr Sate of CBA informing him that his “financial controller and external accountants are in the process of ‘catching up’ where we have been behind, and more specifically, complete tax returns to meet your requirements”. He also told Mr Sate that he had instructed his accountants that his “personal return was the most crucial for CBA”. Mr Shteinman added that he had, since giving this instruction, re-read Mr Sate’s email of 30 September 2021, in which Mr Sate stated that CBA would need tax returns and financial statements both for Mr Shteinman and for the BIT, as well as various other entities associated with Mr Shteinman (see paragraph [49] above). Mr Shteinman concluded his email to Mr Sate as follows: “I guess I wish to ask whether in any scenario the loan could actually be reviewed, approved, processed and settled if any one of the entities listed has still not furnished its tax return?”

59. [74]

    CBA did not provide a favourable response to this query. On 18 November 2021, Mr Shteinman informed his accountant, Mr Kifley, that CBA had confirmed that they needed tax returns for “all entities”. Mr Shteinman also informed Mr Kifley that the CBA loan could not be progressed until these tax returns were completed (“We will just have to wait until all 2020 is done to reapply”) and that he had “told CBA that we would get back to them in February”. Mr Shteinman further stated as follows:

60. [75]

    Accordingly, as at this time, it was plain to Mr Shteinman that no finance from CBA would be available before the expiry of the Austar Bridging Loan (on 22 January 2022). This left only one option for refinancing the Property by that date, namely, a loan from NAB to the SAT, with funds being on-lent by the SAT to the LPPT.

61. [76]

    On 16 December 2021, NAB made an offer to Ms Widhe and Mr Tolpinrud to provide four loans to the SAT totalling $4m, broken down into amounts of $2,700,000, $900,000, $300,000 and $100,000 (NAB Loan). Mr Tolpinrud gave evidence that, based on his discussions with NAB, he understood that:

62. [77]

    On 18 December 2021, Mr Tolpinrud sent a text message to Mr Marangoni, stating as follows:

63. [78]

    It is apparent from the terms of this message that Mr Tolpinrud and Mr Marangoni had discussed, prior to the documents for the NAB Loan being issued, that the amount guaranteed by the Company would be $3m (being that part of the funds drawn down under the NAB Loan which were being on-lent to the Company as trustee of the LPPT) rather than $4m (being the full amount drawn down under the NAB Loan, which was being guaranteed by Mr Tolpinrud). It is also apparent, from a later communication from Mr Marangoni about this issue (see paragraph [95] below) that the documents for the NAB Loan were not amended to reflect this agreed position prior to their execution, because of the urgent need to put the NAB Loan in place, with it being intended that the amount of the guarantee would be reduced after execution. These matters were discussed with Mr Shteinman at the time. Mr Tolpinrud sent a follow-up text message to Mr Marangoni, stating that: “Jonathan was fine to amend the guarantee later and execute as is now”.

64. [79]

    On 19 December 2021, each of Mr Shteinman and Ms Widhe executed the guarantee and indemnity given by the Company in respect of the NAB Loan, and the mortgage granted by the Company to NAB over the Property. Ms Widhe also executed the letter of offer sent by NAB on 16 December 2021.

65. [80]

    On 20 December 2021, at around 5:15pm, Mr Tolpinrud sent an email to Mr Shteinman, which sought Mr Shteinman’s consent to release the loan documents to NAB “on the basis of our ongoing / mutual understanding of the arrangement”, which was stated to be as follows (emphasis added):

66. [81]

    At approximately 11:20pm that evening, Mr Shteinman responded to Mr Tolpinrud’s email in the following terms (emphasis added):

67. [82]

    The last paragraph of this email refers to discussions having occurred regarding Mr Shteinman’s “concern/confusion regarding the interest margin”. I deal below with the parties’ respective accounts of these discussions, when addressing the issues relating to the margin and the on-lending arrangement.

68. [83]

    The following morning, Mr Tolpinrud replied to Mr Shteinman’s email:

    1. (1)

       rejecting the additional term proposed in Mr Shteinman’s email (namely, an obligation “to immediately do all things necessary to facilitate a refinance by LPPT”);

    2. (2)

       agreeing to “cooperate with CBA” and not to “attempt to frustrate a refinancing in order to retain the margin”;

    3. (3)

       noting that “the only impediments to a CBA loan are believed to be your updated tax returns showing a similar financial picture to the prior year and conducting ID checks on your daughter overseas”; and

    4. (4)

       requesting Mr Shteinman’s consent to release the loan documents to NAB.

69. [84]

    Shortly afterwards, Mr Shteinman emailed Mr Tolpinrud confirming his consent to release the loan documents to NAB.

70. [85]

    The NAB Loan was drawn down on or around 11 January 2022, with $3m of the $4m being on-lent to the LPPT (On-Loan), and used to repay the Austar Bridging Loan and to refinance the Property. The whole of the $4m borrowed by Ms Widhe as trustee for the SAT was guaranteed by each of the Company and Mr Tolpinrud, and secured by mortgages over each of the Property and the personal residence of Mr Tolpinrud and Ms Widhe.

71. [86]

    Mr Shteinman did not, following the drawing down of the NAB Loan, take steps to put his tax affairs in order, so that the On-Loan could be replaced with a loan by CBA (or another one of the major banks) to the LPPT at a lower interest rate. There was evidence that Mr Shteinman did not complete his personal tax return for FY2021 until May 2023, and had not, as at the date of the hearing, completed the tax return for the BIT for FY2021.

72. [87]

    On 6 May 2022, Mr Tolpinrud sent an email to Mr Shteinman seeking his consent to transfer funds from the LPPT’s bank account to the SAT’s bank account in respect of interest that had accrued on the On-Loan. Mr Tolpinrud explained that NAB withdrew interest from the SAT’s account on the last business day of each month, and requested “that LPPT pays [the SAT] on the second to last business day of the month”. Mr Tolpinrud also set out a schedule of the amount of interest payable for each month from January to December 2022 on the loan balance of $3m at an interest rate of 4.50% per annum. Mr Tolpinrud added that: “If this loan is still outstanding at the end of the year, we will calculate 2023’s payments and send a new schedule.”

73. [88]

    On 12 May 2022, Mr Shteinman responded to Mr Tolpinrud’s email as follows:

74. [89]

    On 30 May 2022 at 1:01pm, Mr Tolpinrud sent an email to Mr Shteinman, stating as follows:

75. [90]

    At 6:01pm on the same day, Mr Shteinman responded to Mr Tolpinrud, making the three bullet points that are set out below. Mr Tolpinrud replied at 8:13pm, by inserting the commentary in respect of each of those bullet points which is indented and set out in italics below:

76. [91]

    This email chain was copied to Ms Widhe. In the time between Mr Shteinman’s email of 30 May 2022 at 6:01pm, and Mr Tolpinrud’s response at 8:13pm, Ms Widhe and Mr Tolpinrud exchanged the following text messages:

77. [92]

    On 28 December 2022, Mr Hayden Caughey, a representative of NAB, sent an email to Ms Widhe and Mr Shteinman, stating that NAB had reviewed the guarantee provided by the Company as trustee for the LPPT and had “arrived to the conclusion that [the LPPT] should not have to guarantee loans that were not related to the purchase of [the Property]”. The email continued as follows:

78. [93]

    On the following day, Mr Caughey sent an email to Mr Shteinman requesting his consent to this reduction in the guarantee. On the same day, Mr Shteinman sent an email to Mr Caughey, copied to Mr Marangoni, stating as follows:

79. [94]

    Mr Shteinman was mistaken in suggesting that this issue had not previously been raised with him. In fact, as set out at paragraphs [77]-[81] above, Mr Tolpinrud had alerted NAB and Mr Shteinman to this issue before the signed documents in respect of the NAB Loan were provided to NAB, and had raised the need for the amount of the LPPT’s guarantee to be reduced from the amount of the NAB Loan ($4m) to the amount of the On-Loan ($3m); and Mr Shteinman had agreed to the documents for the NAB Loan being executed on the basis that the amount of the LPPT’s guarantee would be subsequently reduced.

80. [95]

    Mr Marangoni responded on 3 January 2023, explaining to Mr Shteinman (as was the case) that this issue had been identified before the NAB Loan had been entered but that, because of the urgency of refinancing the Property, “this was intended to be an amendment after the fact given that new documentation would be required”. This does not seem to have satisfied Mr Shteinman, who responded by again requesting as follows: “What was the ‘commercial benefit’ that accrued to [the LPPT] for guaranteeing debts beyond what this trust needed for this trust’s property financing?”

81. [96]

    On 8 February 2023, Mr Tolpinrud sent an email to Mr Shteinman, copied to Ms Widhe, requesting that Mr Shteinman advise if he consented to reducing the guarantee provided by the LPPT from $4m to $3m and noting that he had attempted “unsuccessfully” to contact Mr Shteinman to discuss NAB’s request for his consent to reduce the guarantee. Mr Tolpinrud stated that: “We would like it to be reduced, and would assume that you would too, however given that you have not consented for some reason, we are no longer sure what you want.” Mr Shteinman did not, in response to this email, provide any justification for withholding his consent to a reduction in the LPPT guarantee.

82. [97]

    Nor did he provide any such justification when the matter was raised with him at a meeting of directors of the Company on 28 June 2024, which was attended virtually by Mr Shteinman and by Mr Tolpinrud, who acted as an alternative director appointed by Ms Widhe (June Directors’ Meeting). Mr Tolpinrud’s draft minutes of that meeting record the following exchange:

83. [98]

    Mr Shteinman deposed in his affidavit that there were various other inaccuracies with these draft minutes, but did not dispute any aspect of the paragraph relating to the guarantee that is set out above.

84. [99]

    Mr Shteinman did not, following the June Directors’ Meeting, provide his consent to a reduction in the level of the guarantee and, as at the date of the hearing, the level of the guarantee has not been reduced.

85. [100]

    Mr Shteinman deposed that, in March 2023, he called Mr Marangoni of NAB to ask him about obtaining access to the bank account for the LPPT, and had a conversation to the following effect:

86. [101]

    Mr Shteinman deposed that: “In that moment, I lost my trust in Sean and Malin.” The Defendants referred to this conversation as the “NAB Revelation” (that is, the revelation to Mr Shteinman that NAB did not specify the form of commercial benefit to be received by the SAT, and did not require there to be a margin of 2.01% in respect of the On-Loan). I address this evidence below, when dealing with Mr Shteinman’s claims relating to the margin.

87. [102]

    Shortly after his conversation with Mr Marangoni, Mr Shteinman sent an email to Mr Tolpinrud and Ms Widhe on 31 March 2023 in which he stated as follows: “I still object to paying interest above the bank rate.”

88. [103]

    However, Mr Shteinman did not say anything in this email to indicate that he had come to learn, or was of the view, that he had been misled by Mr Tolpinrud about the margin. Such an allegation was not raised with them for more than a year after the “NAB Revelation”. Mr Shteinman deposed that he “decided not to confront them yet until I understood my legal rights better”.

89. [104]

    The first time that Mr Shteinman did raise an allegation that he had been misled regarding the margin was, on his own evidence, at the June Directors’ Meeting. The draft minutes of this meeting which were prepared by Mr Tolpinrud record that, in respect of the On-Loan, the following discussion took place:

90. [105]

    Mr Shteinman deposed that, at the June Directors’ Meeting, he said words to the effect that: “The margin is profiteering and should be repaid. I was misled to consent to the NAB facility under duress”.

91. [106]

    On 31 August 2024, Mr Tolpinrud sent an email to Mr Shteinman, copied to Ms Widhe, regarding various amounts payable to the LPPT, including the payment of interest to the SAT in respect of the On-Loan. Mr Tolpinrud set out the extent of the shortfall between the available cash of the LPPT and the amount of those payments, and requested Mr Shteinman’s agreement to pay 50% of the amount needed to cover the shortfall. On the following day, 1 September 2024, Mr Shteinman sent an email to Ms Widhe demanding that she “[c]ease and desist transferring funds from LPPT’s account to the account and benefit of your personal family trust [SAT]”. He also demanded that she “return all funds taken to date in this manner”, and in particular to “return all funds taken that exceed your genuine, legitimate cost of funds” (that is, all funds above the amount of interest payable by the SAT to NAB), asserting as follows: “Profiteering through usury from a trust to which you have responsibilities is inherently unethical and unlawful.”

92. [107]

    From that date, there ceased to be any further payments made by the LPPT to the SAT in respect of interest that has accrued on the On-Loan. It was common ground that, as a consequence, even if the SAT has no entitlement to the margin of 2.01%, and the LPPT is liable to pay the SAT only the amount of interest payable by the SAT to NAB (as the Defendants contend), then the LPPT is currently in debt to the SAT in respect of such payments.

93. [108]

    From about December 2022 onwards, Mr Tolpinrud sent requests to Mr Shteinman to deposit funds into the Company’s bank account in order to pay strata levies and to cover the shortfall between the income and expenses of the LPPT. A selection of these communications is set out below.

94. [109]

    On 21 December 2022, Mr Tolpinrud sent an email to Mr Shteinman, proposing that each of the SAT and the BIT contribute $20,000 to cover outstanding strata levies, various property expenses and “any and all bills that come in during January”.

95. [110]

    On 30 December 2022, Mr Tolpinrud sent Mr Shteinman an updated record of the “current bills, costs we’ve committed to and which will be due soon” and repeated his request that each of the BIT and the SAT pay $20,000 to the Company’s bank account to cover the LPPT’s expenses.

96. [111]

    On 1 January 2023, Mr Shteinman emailed Mr Tolpinrud, stating that he would “need to do further analysis” and that he intended to speak to Mr Julian Mark (who was managing the listing of the upstairs apartment on Airbnb), about “where all the revenue from upstairs is”. Approximately ten minutes later, Mr Tolpinrud responded to Mr Shteinman, enquiring how long he would require to undertake such analysis and requesting that he “approve strata levy now please?”

97. [112]

    On 6 February 2023, Mr Tolpinrud sent another email to Mr Shteinman in respect of various expenses of the LPPT which were overdue and payable, stating as follows:

98. [113]

    Around ten minutes later, Mr Shteinman responded to Mr Tolpinrud’s email in the following terms:

99. [114]

    Mr Tolpinrud responded to Mr Shteinman’s email later on the same day as follows:

100. [115]

     Around one hour later, Mr Shteinman confirmed that he would “put in $15,000”.

101. [116]

     On 12 May 2023, Mr Shteinman sent an email to Mr Tolpinrud, in response to a request that Mr Shteinman approve the payment of certain invoices issued to the Company, stating as follows:

102. [117]

     On 29 June 2023, Mr Tolpinrud sent an email to Mr Shteinman which set out a summary of the expenses “currently due/accrued” by the LPPT. Mr Tolpinrud proposed that each of the SAT and the BIT contribute $12,500 at a minimum, stating that the “strata levy payments are due tomorrow and we have received a final notice regarding the prior levy before it is turned over to the debt collectors”.

103. [118]

     On the following day, 30 June 2023, Mr Shteinman responded to Mr Tolpinrud’s email in the following terms (emphasis in original):

104. [119]

     Later that afternoon, Mr Tolpinrud replied to Mr Shteinman’s email as follows:

105. [120]

     On 15 November 2023, the Owners Corporation for Strata Plan 13031 sent a Final Reminder Notice to the Company, advising that it was in arrears in respect of overdue strata levies, interest and recovery fees in the amount of $36,095.85, and that if payment was not made within 28 days of the date of the correspondence, the Owners Corporation would “undertake legal debt recovery action” against the Company.

106. [121]

     On 1 December 2023, Mr Tolpinrud forwarded to Mr Shteinman a copy of the Final Reminder Notice and proposed that each of the SAT and the BIT contribute $32,500 towards covering the overdue strata levies, including the levy due on 1 January 2024. In this email, Mr Tolpinrud stated that it is “important to settle up with strata soon, ahead of the pending AGM, so that the [LPPT] can vote at the meeting and protect its interests”.

107. [122]

     On 16 January 2024, Collection Corporation of Australia (CCA) issued a “First and Final Notice Before Legal Action” to the Company, which demanded payment of outstanding strata levies, interest and recovery costs totalling $53,348.26 by 30 January 2024, failing which the Owners Corporation would commence legal proceedings (Letter of Demand).

108. [123]

     On 18 January 2024, Mr Tolpinrud forwarded the Letter of Demand to Mr Shteinman, who did not provide any response.

109. [124]

     On 15 March 2024, CCA issued a “Statutory Notice before Action” to the Company requiring payment of outstanding strata levies, interest and expenses totalling $55,588.15 by 5 April 2024 (the First Statutory Notice). On around 25 March 2024, Ms Widhe forwarded the First Statutory Notice to Mr Shteinman.

110. [125]

     On 28 March 2024, Ms Widhe sent a follow-up email to Mr Shteinman, requesting that he “provide [his] $35,000 funding share so that we can pay the overdue strata levies” and stating that she and Mr Tolpinrud “don’t want to ask for a payment plan, we want to just pay the bills and stay current”. Mr Tolpinrud repeated Ms Widhe’s request in a separate email to Mr Shteinman on 28 March 2024. Mr Shteinman did not provide a response.

111. [126]

     On 4 April 2024, Ms Widhe sent a follow-up email to Mr Shteinman, copied to Mr Tolpinrud, stating as follows:

112. [127]

     Mr Shteinman did not respond to this correspondence or contribute any funds towards the amount stipulated as due and owing in the First Statutory Notice.

113. [128]

     On 19 June 2024, the Owners Corporation brought a proceeding in the Local Court of NSW claiming liquidated damages in the amount of $58,500.61 (First Strata Proceeding).

114. [129]

     On 28 June 2024, the June Directors’ Meeting took place. The draft minutes of this meeting record that, in respect of the payment of outstanding strata levies, Mr Shteinman did not agree to a capital raise as had been proposed by Mr Tolpinrud and instead proposed that the Company revert to the Owners Corporation in respect of a payment plan. The minutes also record that:

115. [130]

     The draft minutes also record the following exchange:

116. [131]

     Mr Shteinman disputed the accuracy of the matters stated in the quotation in the previous paragraph, deposing that he and Mr Tolpinrud did not, in their earlier discussions, reach agreement that they expected “there to be a shortfall of $150,000 per annum”; that he did not expect the LPPT “to operate at a significant shortfall”; and that, although Mr Tolpinrud did, in August 2021, request “a $300,000 cash reserve” be paid up-front, Mr Shteinman did not agree to this request. (I deal with these matters below, when addressing Ms Widhe’s oppression claim against Mr Shteinman.)

117. [132]

     The draft minutes of the June Directors’ Meeting concluded with the following statement:

118. [133]

     On 7 July 2024, Mr Tolpinrud forwarded a copy of the Statement of Claim filed in the First Strata Proceeding to Mr Shteinman, reiterating that the SAT was “standing by ready to put in half of the funds owed to strata to settle all debts in full…if you are willing and able to put in your half”.

119. [134]

     On 12 July 2024, Mr Shteinman sent an email to Mr Tolpinrud, which commenced by querying whether it had been confirmed when the Company was served with the Statement of Claim filed in the First Strata Proceeding, and continued as follows:

120. [135]

     On 16 July 2024, Mr Tolpinrud responded to Mr Shteinman’s email as follows:

121. [136]

     Between 16 July and 25 July 2024, Ms Widhe unsuccessfully attempted on several occasions to arrange a telephone conversation with Mr Shteinman, at his request, to discuss the First Strata Proceeding and the affairs of the LPPT.

122. [137]

     On 25 July 2024, Mr Tolpinrud emailed Mr Shteinman, noting that Mr Shteinman had “not responded for nine days to three requests for the directors to urgently raise $100,000 from the unitholders on a pro-rata basis” and stating that “we are forced to arrange for [the SAT] to pay off the strata debts before the company incurs a judgment”.

123. [138]

     On 29 July 2024, the SAT paid the full amount claimed in the First Strata Proceeding, with no contribution from Mr Shteinman or from JIS as trustee of the BIT.

124. [139]

     On 31 July 2024, Mr Tolpinrud sent an email to Mr Shteinman, which referred to amounts owing in respect of the On-Loan, and stated that: “as with the strata levies, the directors should be urgently raising capital from the unitholders on a pro-rata (50/50 basis) to ensure the [LPPT’s] debt can be serviced. Do you support to this?” No response was received.

125. [140]

     On 28 August 2024, CCA issued another Statutory Notice to the Company, requiring payment of outstanding strata levies, interest and expenses totalling $36,353.13 by 18 September 2024 (Second Statutory Notice). Mr Tolpinrud forwarded a copy of the Second Statutory Notice to Mr Shteinman on 16 September 2024.

126. [141]

     On 19 September 2024, Mr Tolpinrud sent an email to Mr Shteinman, which noted that Ms Widhe had “asked the debt collectors to allow more time before initiating more legal proceedings against the company” and requested that Mr Shteinman arrange for the BIT to pay the amount claimed in the Second Statutory Notice on the basis that the SAT had paid the (larger) sum claimed in the First Strata Proceeding. Mr Shteinman did not provide a response to this correspondence or render payment of the amount claimed in the Second Statutory Notice.

127. [142]

     On 4 October 2024, CCA issued a third Statutory Notice to the Company, requiring payment of outstanding strata levies, interest and expenses totalling $42,412.14 by 25 October 2024 (Third Statutory Notice).

128. [143]

     On 19 October 2024, Mr Tolpinrud forwarded a copy of the Third Statutory Notice to Mr Shteinman and requested that the BIT pay the amount claimed in that notice prior to the stipulated deadline.

129. [144]

     On 21 October 2024, Mr Shteinman replied to Mr Tolpinrud’s email of 19 October 2024, asserting that the SAT had been “profiteering” by charging a margin of 2.01% to the LPPT, and that this “profiteering has now directly led to the failure to pay strata levies, and we hold [the SAT], and yourselves, liable for any damages flowing from the failure to pay strata levies.”

130. [145]

     On 8 November 2024, the Owners Corporation commenced another proceeding in the Local Court of NSW claiming liquidated damages in the amount of $44,499.97 (Second Strata Proceeding). (It appears that Ms Widhe and Mr Tolpinrud were first provided with a copy of the Statement of Claim filed in the Second Strata Proceeding on around 31 January 2025.)

131. [146]

     On 25 November 2024, the Owners Corporation held its annual general meeting, at which the Company was ineligible to vote due to outstanding strata levies.

132. [147]

     On 10 December 2024, the Owners Corporation issued a notice of “Levies Due in January 2025” which stated that the Company owed around $45,006.42 in respect of outstanding levies, interest and expenses, with a further $7,500 being due on 1 January 2025 for the following quarter. Mr Tolpinrud forwarded this notice to Mr Shteinman on 19 December 2024. Mr Shteinman provided no response.

133. [148]

     On 17 February 2025, Ms Widhe and Mr Tolpinrud arranged for payment of $58,680.37 to the Owners Corporation, comprising all outstanding strata levies, interest and “associated charges”, from the Company’s bank account to the Owners Corporation in order to settle the Second Strata Proceeding.

134. [149]

     On 7 March 2025, Ms Widhe commenced this proceeding, alleging oppressive conduct on the part of Mr Shteinman.

135. [150]

     On 22 May 2025, Mr Shteinman filed his Cross-Claim, alleging oppressive conduct on the part of Ms Widhe.

Witnesses – Credit

1. [151]

   Each of Mr Tolpinrud and Mr Shteinman was called to give evidence, and was cross-examined at length.

2. [152]

   Neither party advanced a submission that the opposing witness gave deliberately dishonest evidence. However, each submitted that the other’s evidence was not reliable.

3. [153]

   As outlined above, the events at issue in this matter stretch back over a considerable period, with the key discussions in respect of the margin taking place more than four years ago. Further, the parties have engaged in hostile communications for much of the past two years, adopting entrenched positions in respect of the matters at issue in this proceeding. Each side holds strong negative opinions regarding the conduct of the other, and is convinced that the other is to blame for the total breakdown in trust and confidence that has occurred.

4. [154]

   In Watson v Foxman (1995) 49 NSWLR 315 at 319, McLelland CJ in Eq made the following often-quoted observations regarding the fallibility of human memory, particularly when disputes intervene:

5. [155]

   In Jeffreys v Sheer [2025] NSWCA 31 at [36], Adamson JA (with whom Mitchelmore JA and Basten AJA agreed) quoted with approval the following observations by Lord Pearce in Onassis v Vergottis [1968] 2 Lloyd’s Rep. 403 at 431:

6. [156]

   Those matters underline the importance of the Court reasoning to its conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events: Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [31] per Gleeson CJ, Gummow and Kirby JJ. This does not eliminate the established principles about witness credibility, but it tends to reduce the occasions where those principles are seen as critical: ibid.

7. [157]

   While oral testimony needs to be carefully assessed in light of the objective contemporaneous evidence, particularly when given by a party to litigation many years after the events, such testimony can provide important context for understanding particular documents and their significance. In ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24 at [28], Bell P (as his Honour then was) (with whom Bathurst CJ and Leeming JA agreed) observed as follows:

8. [158]

   Having regard to those principles, I have evaluated the oral evidence of each of Mr Tolpinrud and Mr Shteinman, particularly in respect of disputed conversations, in light of the contemporaneous documents, the objectively established facts, the apparent logic of events, the existence and nature of corroborative evidence, and the effect of the evidence as a whole. I deal with particular challenges to the evidence of each of Mr Tolpinrud and Mr Shteinman below, when addressing the parties’ respective oppression claims.

9. [159]

   In addition, Mr Shteinman and JIS led evidence from Mr Marangoni of NAB, and from a banking expert, Mr Geoffrey Green. This evidence was primarily directed at establishing the proposition that NAB would not have required, and did not require, that the SAT receive any specific form of commercial benefit from the On-Loan to the LPPT and, in particular, that NAB would not have required, and did not require, that the SAT lend moneys to the LPPT at a margin of 2.01% above its cost of funds. However, Ms Widhe did not contend that a margin of 2.01% was required or specified by NAB. Instead, the critical issue was whether Mr Tolpinrud had represented to Mr Shteinman, prior to obtaining his agreement to the On-Loan on 21 December 2021, that this margin had in fact been required or imposed by NAB. Ms Widhe accepted that, if any such representation had been made, then it was made on her behalf and was misleading. This issue is addressed below.

Relevant Principles

1. [160]

   Section 232 of the Act relevantly provides as follows:

2. [161]

   In Tzavaras v Tzavaras & Sons Pty Ltd [2023] NSWCA 168 at [74], the Court of Appeal (Gleeson and Adamson JJA, Griffiths AJA) adopted the following summary of the relevant principles by Stevenson J in Munstermann v Tayward; Rayward v Munstermann [2017] NSWSC 133 at [22] (citations omitted):

3. [162]

   The affairs of trustee companies fall within the scope of “the conduct of a company’s affairs” under s 232(a) of the Act, having regard to the definition of “the affairs of a body corporate” in s 53: David & Ros Carr Holdings Pty Ltd v Ritossa [2025] NSWCA 108 at [97] and [106] per Leeming JA (with whom Stern JA and Griffiths AJA agreed). Accordingly, the conduct of a named beneficiary of a discretionary trust who was also a director and member of the trustee falls within the scope of s 232 as informed by s 53: David & Ros Carr Holdings at [107]-[108], referred with approval to Melrob Investments Pty Ltd v Blong Ume Nominees Pty Ltd (2022) 141 SASR 1; [2022] SASCA 29 at [110]-[111] per Bleby JA (with whom Lovell and David JJA agreed).

4. [163]

   Further, s 232 expressly contemplates that conduct may be oppressive where it affects the member in their capacity as a member or in some other capacity.

5. [164]

   As regards s 232(e), the composite expression “oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member” extends to conduct involving “commercial unfairness”, or where the conduct complained of involves a visible departure from the standards of fair dealing and a violation of the conditions of fair play, or where a decision has been made so as to impose a disadvantage, disability or burden on the plaintiff that, according to ordinary standards of reasonableness and fair dealing, is unfair: In the matter of Mobius Distilling Pty Ltd (in liq) [2025] NSWSC 539 at [172] per Black J, citing Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 at 704 (Young J) and Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459 at 472-473; [1985] HCA 68 (Brennan J).

6. [165]

   In Morgan v 45 Flers at 704, Young J noted that whether oppression was established was to be determined by reference to the nature of the business carried on by the company and the nature of the relations between its participants and “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.”

7. [166]

   In Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [176], Gummow, Hayne, Heydon and Kiefel JJ observed that it is not the case that the only conduct of a company’s affairs that is to be classified as “oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member” is conduct of the company’s affairs that is otherwise lawful. Their Honours added that, conversely, it should not “be supposed that there cannot be oppression on the part of one who thinks that he or she is acting rightly” (ibid).

8. [167]

   In Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55 at [9], the Full Court of the Federal Court (Siopis, Rares and Davies JJ) referred to this passage from Campbell in making the following observations:

9. [168]

   The bare fact of an irretrievable breakdown in the relationship between the individuals who own or manage a company does not establish oppression. In David & Ros Carr Holdings at [119], Leeming JA said that:

10. [169]

    However, as Richmond J observed in David & Ros Carr Holdings Pty Ltd v Ritossa [2024] NSWSC 1125 at [194], while the mere fact of the breakdown in a relationship does not establish oppression, it may be one of several matters leading to the conclusion that there has been oppression (referring to Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104 at [199]). His Honour added: “For example, if the breakdown of the relationship between the members is accompanied by a consequential inability to manage the company’s affairs in the proper manner, that may constitute oppression: Beaumont v Peel [2018] NSWSC 95 at [13]; Re Wyndham Park Estate Pty Ltd [2019] VSC 92 at [35]-[37].”

11. [170]

    Although there is no overarching “clean hands” requirement, the conduct of the member who is asserting oppression may “render the impugned conduct not unfair” or may “affect the nature of the relief”: WIJOAV Services Pty Ltd v Goldstone Private Equity Pty Ltd [2025] FCA 622 at [156] (Jackman J). In assessing the gravity of any allegation of oppression, it is relevant to consider 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 (1998) 28 ACSR 688 at 741; [1998] NSWSC 413 (per Young J).

12. [171]

    The onus is on the plaintiff in an oppression suit to show that he or she has been unfairly treated in the relevant sense. Whether conduct is fair or unfair requires weighing conflicting interests of different groups within the company; it is not assessed simply from one member’s point of view: WIJOAV at [156].

13. [172]

    I deal separately below with the principles concerning relief under s 233 of the Act.

14. [173]

    In Breen v Williams (1996) 186 CLR 71 at 113; [1996] HCA 57, Gaudron and McHugh JJ observed that:

15. [174]

    In Pilmer v Duke Group Limited (in liq) (2001) 207 CLR 165; [2001] HCA 31, McHugh, Gummow, Hayne and Callinan JJ quoted (at [74]) the above passage in Breen with approval, and continued (at [78]) as follows:

16. [175]

    Informed consent is a defence. There is no duty on a fiduciary to obtain informed consent, but rather the existence of informed consent will go to negate what was otherwise a breach of duty: Atanaskovic Hartnell v Birketu Pty Ltd (2021) 105 NSWLR 542; [2021] NSWCA 201 at [46] per Gleeson JA (Basten and McCallum JJA agreeing).

17. [176]

    It follows that it is necessary for the fiduciary to make out informed consent. The consent must be “fully informed”, and what is required is a question of fact in all the circumstances of each case: Atanaskovic Hartnell v Birketu at [47]-[48].

18. [177]

    In Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at [107], the plurality of the High Court observed that consent can be established “at different times and in different ways”, and what is required will depend on the sophistication and intelligence of the persons to whom disclosure was made.

19. [178]

    Mr Shteinman and JIS placed particular reliance on the following summary of principles by Black J in Barescape v Bacchus Holdings (No 9) [2012] NSWSC 984 at [154]:

Mr Shteinman’s claims against Ms Widhe and Mr Tolpinrud

1. [179]

   In his Points of Cross-Claim, Mr Shteinman pleaded that each of Ms Widhe, as a director of the Company, and Mr Tolpinrud, as a shadow director, breached their fiduciary duties to the Company; and further or alternatively, that each of them breached fiduciary duties which they owed Mr Shteinman as their co-venturer.

2. [180]

   These claims depended on the following allegations:

   1. (1)

      first, Mr Tolpinrud represented to Mr Shteinman that:

   2. (2)

      secondly, Mr Shteinman relied on the truthfulness of those representations in consenting to the Company entering into the On-Loan with the 2.01% margin;

   3. (3)

      thirdly, one of more of the Commercial Benefit Representation, the Margin Representation and the Specific Excess Interest Margin Representation was false; and

   4. (4)

      fourthly, “[a]s a consequence, the Consent – given by Mr Shteinman and/or [the Company] to the Margin – was not a fully informed consent”.

3. [181]

   Mr Shteinman also claimed that this alleged conduct in respect of the margin and the On-Loan amounted to oppressive conduct within the meaning of s 232 of the Act (Points of Cross Claim, [56]).

4. [182]

   Ms Widhe and Mr Tolpinrud accepted that Mr Tolpinrud had represented that NAB required that the SAT receive some commercial benefit from the on-lending arrangement (which was said to be true), but denied that he had represented that NAB required that the commercial benefit be in the form of a margin or that the margin be set at 2.01%. Instead, they contended that Mr Tolpinrud represented to Mr Shteinman (and it was the case) that:

   1. (1)

      Mr Tolpinrud had informed NAB that the SAT proposed to on-lend the funds to the LPPT at a margin, and

   2. (2)

      NAB had indicated that this proposed arrangement was acceptable.

5. [183]

   Further, Ms Widhe and Mr Tolpinrud denied that Mr Tolpinrud was a shadow director of the Company, or that either of them owed any fiduciary obligations to Mr Shteinman as a “co-venturer”.

6. [184]

   Although informed consent is a defence to a breach of fiduciary obligations, Mr Shteinman and JIS pleaded an absence of informed consent as an element of their claims. That may be explained by the particular circumstances of this case. There was no dispute that Mr Shteinman, when giving his consent to the entry into the On-Loan and the release of the documents relating to the NAB Loan to the bank, had been informed, was aware, and agreed, that the SAT would receive, pursuant to the terms of the On-Loan, a margin of 2.01% above the interest rate which was being charged by NAB to the SAT, and that the SAT would retain this benefit. However, he claimed that his consent to the SAT receiving this benefit was, in effect, vitiated because he was misled by Mr Tolpinrud into believing that the imposition of this margin was a requirement of NAB, and that he did not give fully informed consent because he was not told that this was not in fact the case. The question whether the alleged representations regarding the margin were made by Mr Tolpinrud was, therefore, critical to the claims advanced by Mr Shteinman and JIS.

7. [185]

   The parties made detailed written and oral submissions on the issue as to whether the alleged representations were made, by reference to the various communications between the parties in the period leading up to entry into the On-Loan in late December 2021. A particular focus of those submissions was the reliability of the competing accounts given by Mr Tolpinrud and Mr Shteinman of their conversations, when assessed in light of the contemporaneous documentary record.

8. [186]

   On 15 September 2021, Mr Marangoni sent an email to Mr Tolpinrud, informing him that the NAB credit team had “declined” the “option” of Ms Widhe and Mr Tolpinrud “solely supporting the loan” for “a few reasons, the main one being the unethical lending and liability that would go with such an arrangement” (see paragraph [35] above). Mr Tolpinrud forwarded this email to Mr Shteinman later on the same day, stating that he had “managed to speak to [Mr Marangoni] for quite a while this afternoon, so I can give more color on what they mean”.

9. [187]

   Mr Tolpinrud gave evidence in his affidavit of his conversations with each of Mr Marangoni and Mr Shteinman, following the receipt of Mr Marangoni’s email.

10. [188]

    In particular, Mr Tolpinrud deposed that:

    1. (1)

       Mr Marangoni informed him that “SAT could borrow (guaranteed by [Mr Tolpinrud]) the entire $3 million and inject the funds into LPPT”, and that the “SAT could and should receive an increased unit ownership percentage for doing so”;

    2. (2)

       Mr Tolpinrud informed Mr Marangoni that altering the unit split would likely cause additional stamp duty to be paid and would not be agreed to by Mr Shteinman, “and so we discussed that an alternative approach could be for SAT to on-lend the funds to LPPT at a higher interest rate”; and

    3. (3)

       Mr Tolpinrud then spoke to Mr Shteinman “to explain the idea and ask whether he wanted me to pursue it”, and Mr Shteinman “told me he did”.

11. [189]

    Mr Shteinman denied that he and Mr Tolpinrud had any discussion in September 2021 “about a scenario where SAT would be the borrower and on-lend the funds to [the LPPT] at a higher interest rate”, and that the first time any such arrangement was raised with him was in Mr Tolpinrud’s email of 14 October 2021 (which is referred to below).

12. [190]

    I accept Mr Tolpinrud’s evidence for the following reasons.

13. [191]

    First, it is plain from the emails referred to at paragraph [182] above that Mr Tolpinrud had a discussion with Mr Marangoni, at some length, shortly after he received the news that the NAB credit team had declined the proposal that he and Ms Widhe “solely” support the loan for the Property, primarily because of “the unethical lending and liability that would go with such an arrangement”. It is likely that the subject of their discussion was whether there was some way of structuring the arrangement so as to address the concerns raised by the NAB credit team.

14. [192]

    Secondly, Mr Marangoni agreed, in cross-examination, that he conveyed to Mr Tolpinrud, in a conversation on around 15 September 2021, that the concerns raised by the NAB credit team “could only be overcome if it could be shown that the party bearing the extra burden received some economic benefit, for compensative [as compensation] for that burden”. Mr Marangoni also gave the following evidence:

15. [193]

    Similarly, when questioned about his conversation with Mr Shteinman in March 2023 (see paragraph [99] above), Mr Marangoni gave evidence that if Mr Shteinman had asked him “Did the bank require a benefit to be shown in order to make good this lending?”, he would have responded “yes”.

16. [194]

    Thirdly, given that Mr Tolpinrud stated in his email to Mr Shteinman on 15 September 2021 that he had discussed the issues raised by Mr Marangoni “for quite a while” and could now “give more color on what they mean”, it is likely that there was some discussion between Mr Tolpinrud and Mr Marangoni regarding what would be sufficient to amount to “some economic benefit” such as to compensate the SAT for bearing “the extra burden” of “solely supporting the loan”, and that Mr Tolpinrud then passed on this information to Mr Shteinman (having regard to their mutual, and urgent, interest at this time in ensuring that there were funds to complete the purchase of the Property).

17. [195]

    Finally, in his email to Mr Shteinman on 14 October 2021, Mr Tolpinrud outlined the “the option set” for funding the purchase of the Property, and his understanding of “the status” of each of those options (see paragraph [58] above). One of the six options set out in that email was as follows: “NAB – approvals in place to fast track a commercial loan rather than resi[dential], and credit is signed off. … This will be a loan to [SAT], 80% in the 2.50-3.25% range. It would be on-lent to [LPPT] with a margin”. Mr Shteinman deposed that this was the first time that the issue of a margin was ever mentioned to him. However, that is inconsistent with the text of the email. The option of the SAT on-lending the funds to the LPPT at a margin is not presented in this email as a new “option” which has not been the subject of any discussion and is being proposed for the first time to Mr Shteinman. Instead, it is included in a “status” update as one of six options, with the other five all being options which had been the subject of prior consideration by Mr Tolpinrud and Mr Shteinman (namely, loans from ANZ, CBA or AAA Financial, or bridging finance, or a cash settlement as a short-term solution).

18. [196]

    Having regard to those matters, I find that, in around mid-September 2021:

    1. (1)

       Mr Tolpinrud informed Mr Shteinman (and it was the case) that, in order for the proposed lending arrangement with NAB to be approved, it would be necessary to demonstrate that the SAT was receiving some commercial benefit as a result of on-lending funds to the LPPT; and

    2. (2)

       Mr Tolpinrud proposed to Mr Shteinman that, in order to meet this requirement, the funds be on-lent at a margin.

19. [197]

    Mr Shteinman deposed that, following receipt of Mr Tolpinrud’s email of 14 October 2021, he and Mr Tolpinrud had a telephone discussion on the same day to the following effect (emphasis added):

20. [198]

    Mr Tolpinrud denied that there was any conversation on 14 October 2021 in which Mr Shteinman expressed concern about, or opposition to, the proposal that the funds be on-lent by the SAT at a margin, or suggested that “a peppercorn” would provide a sufficient commercial benefit to the SAT for the On-Loan. Mr Tolpinrud’s denials are consistent with the terms of his subsequent email of 30 May 2022 (see paragraph [88] above), in which he stated that:

    1. (1)

       Mr Shteinman first raised an objection to the margin of 2.01% in December 2021, “right before the NAB loan was to close”; and

    2. (2)

       Mr Shteinman “never raised at the time, when we discussed 4.5%” that the need for a “commercial benefit” was a “legal requirement” which could be satisfied by a “peppercorn”.

21. [199]

    In a reply affidavit, Mr Shteinman conceded, having reviewed Mr Tolpinrud’s evidence and “reconsidering the materials”, that the italicised portion of the conversation of 14 October 2021 “might have been said later”, in the course of the December 2021 conversation that is addressed below. Having regard to the terms of the 30 May 2022 email, I consider it more likely that the “peppercorn” issue was not raised at all prior to the NAB loan being drawn down.

22. [200]

    As regards the non-italicised portion of the 14 October 2021 conversation set out in Mr Shteinman’s affidavit, the statements attributed to Mr Tolpinrud in that conversation were correct. In particular, for the reasons set out above, I am satisfied that, prior to 14 October 2021, NAB had informed Mr Tolpinrud that, in order for the proposed lending arrangement to be approved, the “SAT need[ed] to show a commercial benefit” from on-lending the funds to the LPPT, and that Mr Tolpinrud proposed the margin as a means of addressing this requirement.

23. [201]

    There is no suggestion, in the parts of the conversation attributed to Mr Tolpinrud, that NAB had specifically required that funds be on-lent at a margin (being the pleaded “Margin Representation”), let alone that NAB had specified the level of the margin that should be imposed (being the pleaded “Specific Excess Interest Margin Representation”).

24. [202]

    On 22 October 2021, Mr Tolpinrud sent an email to Mr Shteinman, setting out “what I think we have discussed as the understanding of our intent” (see paragraphs [66]-[67] above). Mr Tolpinrud stated that “[i]t is expected that NAB may be the first bank willing to lend”, but that NAB was “only willing to provide the loan to [the SAT]” (not to the LPPT). He continued as follows:

25. [203]

    Mr Tolpinrud asked Mr Shteinman whether he agreed that “this is the intention and basis upon which we are settling”, and Mr Shteinman responded “Yes to everything except”, relevantly, “Intermediary NAB loan if CBA going well”.

26. [204]

    In his affidavit, Mr Shteinman deposed that he “did not get into a debate” about Mr Tolpinrud’s statement that “the margin for SAT’s on-loan would bring the effective rate up to 4.5% … because by then I had been told that it was the bank’s stipulation and that I had no choice (by reason of my earlier conversation with Sean set out at paragraph 31 above [being the alleged conversation on 14 October 2021, which has been addressed above])”. However, as noted at paragraph [196] above, Mr Tolpinrud did not make any statement, in Mr Shteinman’s version of this conversation, either that NAB had stipulated the interest rate that had been charged or that Mr Shteinman therefore “had no choice”.

27. [205]

    Nor was any such statement made in the email of 22 October 2021.

28. [206]

    In written and oral submissions, Mr Shteinman placed significant weight on the fact that the part of the email of 22 October 2021 that is quoted above used the passive voice, and in particular stated that “At current market rates, NAB is expected to lend at somewhere between 2.5% and 3.2% per annum, and it is envisaged that the additional margin will be set such that the day 1 rate effectively paid by your side is 4.5% per annum …”. In particular, Mr Shteinman submitted that “Mr Tolpinrud used the passive voice to induce and/or cement Mr Shteinman into believing that NAB had stipulated the rate”.

29. [207]

    I reject this submission for two main reasons.

30. [208]

    First, Mr Shteinman did not give any evidence to the effect that he understood, from reading the text of the 22 October 2021 email (including the relevant part about the margin, expressed in the “passive voice”) that NAB had stipulated the amount of the margin. Instead, as outlined above, he deposed that he did not dispute the margin because he understood, as a result of the previous conversation of 14 October 2021, that this was a non-negotiable requirement of NAB.

31. [209]

    Secondly, it is plain, from reading the whole of the email of 22 October 2021, in which Mr Tolpinrud sought to set out “the understanding of our intent”, and asked Mr Shteinman to agree that this was “the intention and basis upon which we’re settling”, that Mr Tolpinrud used the passive voice in this email to refer to (what he understood to be) the state of mind of each of himself and Mr Shteinman. For example, he stated as follows (emphasis added):

32. [210]

    Mr Tolpinrud, when taken to his 22 October 2021 email in cross-examination, explained why he had used the phrase “it is envisaged” in relation to the margin:

33. [211]

    I accept this evidence, which is consistent with the language used in Mr Tolpinrud’s email.

34. [212]

    Mr Tolpinrud’s use of the passive voice to refer to shared intentions or expectations of himself and Mr Shteinman was not unique to this communication, but is deployed in other emails sent by him around the same time. For example, in Mr Tolpinrud’s email of 10 November 2021 to Mr Shteinman (see paragraph [72] above), he stated that: “it remains the intention to take the NAB loan as soon as it is available (this month) as an interim solution” (emphasis added).

35. [213]

    Accordingly, the statement by Mr Tolpinrud that “it is envisaged that the additional margin will be set such that the day 1 rate effectively paid by your side is 4.5% per annum” was not, and would not reasonably have been read as, a statement that this rate had been stipulated by NAB, but instead as a statement of the shared understanding of Mr Tolpinrud and Mr Shteinman regarding the interest rate which would apply to funds lent pursuant to this arrangement – and Mr Shteinman confirmed, by his response to the email, that this was the case.

36. [214]

    Consistently with this, Mr Tolpinrud gave evidence that there had been a discussion between himself and Mr Shteinman prior to the 22 October 2021 email, in which Mr Tolpinrud proposed that the funds be on-lent at 4.50% per annum, and Mr Shteinman indicated his agreement with this proposal, such that the email of 22 October 2021 was “writing down what we had agreed”. That evidence is consistent with the opening line of the email, which stated that Mr Tolpinrud was “[w]riting down what I think we have discussed as the understanding of our intent”, and the closing line, which sought Mr Shteinman’s agreement that Mr Tolpinrud had set out “the intention and basis upon which we are settling”. Significantly, Mr Shteinman did not respond to this email with any statement to the effect that an interest rate of 4.50% for the On-Loan had not been “discussed” or that this did not reflect his understanding of their shared “intentions” at that point in time, but instead agreed with what had been recorded in relation to the margin. Having regard to those matters, I accept Mr Tolpinrud’s evidence that there was a conversation prior to this email in which Mr Tolpinrud had proposed, and Mr Shteinman had agreed to, this interest rate.

37. [215]

    As Mr Tolpinrud explained in the 22 October 2021 email, and in cross-examination, the margin was an “output”, in the sense that it represented the difference between:

    1. (1)

       the agreed interest rate of 4.50% per annum for the On-Loan from the SAT to the LPPT; and

    2. (2)

       the interest rate at which funds would be loaned by NAB to the SAT (which, as at 22 October 2021, was not known).

38. [216]

    Accordingly, the first time that a margin of 2.01% is mentioned is in email correspondence in December 2021, which is referred to below, when it was known that NAB would be lending funds to the SAT at an initial rate of 2.49% per annum for the first two years.

39. [217]

    Mr Shteinman submitted that “Mr Tolpinrud had a psychological motive in late October 2021 to set a high margin, and to be oblique about his decision to do so”. In particular, Mr Shteinman submitted that the interest rate of 4.50% per annum was nominated by Mr Tolpinrud in his 22 October 2021 email because he was angry with Mr Shteinman for having increased the amount which he was drawing down under the Austar Bridging Loan from $1.5m to 1.7m. The proposition was put to Mr Tolpinrud in cross-examination in the following terms (and rejected by him):

40. [218]

    I accept Mr Tolpinrud’s denial of the proposition that he “struck” the interest rate of 4.5% per annum for the On-Loan, as a means of “putting the knife in because [he was] still angry at Mr Shteinman”, having regard to the following matters.

    1. (1)

       First, the dispute about the increase in the amount of the Austar Bridging Loan occurred on the evening of 21 October 2021. The email of 22 October 2021 was sent at 10.03am the following morning. For reasons given above, I accept Mr Tolpinrud’s evidence that he had proposed the interest rate of 4.50% per annum to Mr Shteinman, and Mr Shteinman had accepted it, in discussions prior to his email of 22 October 2021, and that this email was recording their prior agreement. Accordingly, it is likely that the interest rate of 4.50% was agreed before Mr Tolpinrud knew about the increase in the amount of the Austar Bridging Loan.

    2. (2)

       Secondly, Mr Tolpinrud repeatedly made clear that he would prefer for there not to be any on-lending arrangement and was willing to cooperate in obtaining finance from CBA, even though this would mean that the SAT would not receive any margin. (In an email sent to Mr Shteinman on 21 December 2021, Mr Tolpinrud referred to their having “discussed many times over the prior months” that Ms Widhe and Mr Tolpinrud would “prefer to carry half the debt load and be on equal footing and earn no margin rather than carrying all the debt and earning a margin”).

    3. (3)

       Thirdly, there was a commercial imperative to have in place finance to repay the Austar Bridging Loan. As noted in Mr Shteinman’s written submissions, Mr Tolpinrud is a commercially astute person, who holds a Masters degree in Commerce, and had over 18 years of experience with Goldman Sachs. It would have been commercially irrational for Mr Tolpinrud to have selected an interest-rate for the On-Loan out of spite, and thereby put at risk Mr Shteinman’s agreement to one of the only remaining options to refinance the Property.

    4. (4)

       Fourthly, the interest rate which Mr Tolpinrud proposed for the On-Loan was the same as the interest rate proposed by AAA Financial on 27 September 2021 (being the only other indicative offer of finance which did not come from a major bank, see paragraph [46] above). Mr Tolpinrud confirmed in cross-examination that the interest rate for the On-Loan was selected by reference to the indicative offer from AAA Financial:

41. [219]

    The next significant communications in relation to the margin appear to have occurred in December 2021.

42. [220]

    On 20 December 2021, Mr Tolpinrud sought Mr Shteinman’s agreement, prior to the release of the executed loan documents to NAB, to the terms of the proposed On-Loan (see paragraph [79] above), including that:

43. [221]

    Mr Shteinman responded by confirming that he would agree to these terms, provided that there was an additional term, namely, “a clear compunction to immediately do all things necessary to facilitate a refinance by LPPT”. Mr Tolpinrud rejected this additional term, but promised to “cooperate with CBA” and not to “attempt to frustrate a refinancing in order to retain the margin”. Mr Shteinman then agreed to enter into the On-Loan on this basis (see paragraphs [80]-[83] above).

44. [222]

    In signalling his agreement to the terms of the On-Loan (including the margin of 2.01%), Mr Shteinman stated as follows:

45. [223]

    It is plain from this statement that there had been, as at 20 December 2021, some discussion between Mr Shteinman and Mr Tolpinrud in which Mr Shteinman had indicated his “concern/confusion” about the SAT on-lending the NAB funds at a margin. The parties gave differing accounts of this conversation.

46. [224]

    Mr Shteinman deposed that, in-between receiving Mr Tolpinrud’s email setting out the terms of the On-Loan and providing his agreement to those terms, he and Mr Tolpinrud had a telephone conversation to the following effect:

47. [225]

    Mr Shteinman further deposed that, when he indicated his agreement to the margin later that evening, he “did so on the understanding from my discussions with [Mr Tolpinrud] that this was NAB’s requirement that was not subject to negotiation”.

48. [226]

    The critical issue is, therefore, whether Mr Tolpinrud made a representation, in this conversation, that “the bank requires [the margin] to be 2.01%”.

49. [227]

    Mr Tolpinrud denied having done so, deposing that: “I did not tell Mr Shteinman that the bank specified a 2.01% margin, but I did tell Mr Shteinman that I had informed NAB that the initial interest rate would be 4.50%”. He also disputed that Mr Shteinman had, prior to 20 December 2021, expressed any resistance to the margin; or that Mr Shteinman had, prior to 30 May 2022, suggested that the need for a commercial benefit was a legal requirement that could be satisfied by some nominal charge; or that Mr Shteinman said that retaining the margin would be “profiteering”.

50. [228]

    There was evidence that Mr Tolpinrud had, in fact, advised NAB of the rate at which moneys would be on-lent by the SAT to the LPPT. On 4 March 2022, Mr Tolpinrud wrote to Mr Marangoni regarding various financial matters, and provided an “update” on the Property, which included the following statement (emphasis added):

51. [229]

    The phrase “as previously contemplated” indicates that, prior to this on-lending occurring, Mr Tolpinrud had informed Mr Marangoni of the SAT’s intention to on-lend those funds to the LPPT “at a rate of 4.5%”. This is consistent with Mr Tolpinrud’s evidence that he had done so. Further, it is likely that he did so, prior to entry into the On-Loan, in order to ensure that NAB’s stated requirement (see paragraph [186(2)] above) that the SAT receive some “economic benefit” from the On-Loan was satisfied. This conclusion is consistent with the following evidence by Mr Marangoni:

52. [230]

    Mr Marangoni initially rejected, in cross-examination, the suggestion that he and Mr Tolpinrud discussed the possibility of the SAT on-lending funds to the LPPT at a margin, as a means of showing “some financial or economic benefit” such as to satisfy the NAB credit team. This was described in the Defendants’ submissions as “devastating evidence”. However, Mr Marangoni subsequently conceded that he could not be sure about what was said between him and Mr Tolpinrud in late 2021, particularly without the aid of a file note. Further, he acknowledged that there were “multiple options put forward” for addressing this issue, and that he could not recall which option was “settled on”. He was then asked the following questions:

53. [231]

    Having regard to the matters set out above, I am satisfied that Mr Tolpinrud informed NAB, prior to entry into the NAB Loan, of the SAT’s intention to charge interest on the On-Loan at a rate of 4.50% per annum (that is, at a margin above the interest rate under the NAB Loan), and that he did so in order to meet NAB’s requirement that the SAT receive some economic benefit for entering into the On-Loan. It is also likely, and I find (consistently with Mr Tolpinrud’s evidence), that Mr Tolpinrud informed Mr Shteinman of those matters.

54. [232]

    In contrast, there is no statement by Mr Tolpinrud, in any of his lengthy emails to Mr Shteinman about the financing of the Property, to the effect that NAB had required that the SAT impose a margin, or had specified the amount of the margin, or that the amount of the margin was non-negotiable. Nor is there any contemporaneous documentary reference to any such statement being made by Mr Tolpinrud, or being understood by Mr Shteinman as having been made.

55. [233]

    In closing written submissions, Mr Shteinman and JIS described the distinction between Mr Shteinman’s account of the 20 December 2021 conversation (namely, that Mr Tolpinrud told him that the bank required the margin on the On-Loan to be 2.01%) and Mr Tolpinrud’s account (namely, that he told Mr Shteinman that he had informed the bank that the initial interest rate on the On-Loan would be 4.50%) as a “subtle point”, which “will not satisfy the ‘fully informed consent’ requirement”. It is, however, a key point of distinction for the Defendants’ case. It is plain that Mr Shteinman did give his consent to the Company entering into the On-Loan at an initial interest rate of 4.50% per annum, in circumstances where he had been informed that this represented a margin of 2.01% above the interest rate being charged by NAB to the SAT for the moneys that would be on-lent to the LPPT, and that this margin represented a commercial benefit which the SAT would obtain by entering into the On-Loan. The only basis on which it is alleged that Mr Shteinman’s consent to the margin was not “fully informed consent” was that Mr Shteinman was misled by Mr Tolpinrud into thinking that NAB required that the moneys to be on-lent at a margin, which was to be 2.01% (such that the margin was non-negotiable) and that the true position (namely, that NAB had not imposed any such requirement) was not disclosed to him prior to entry into the On-Loan. If Mr Tolpinrud said nothing to cause Mr Shteinman to be under this misapprehension (and Mr Shteinman said nothing to Mr Tolpinrud, prior to entry into the On-Loan, to indicate that he was under any such misapprehension), then this case is not established.

56. [234]

    Senior Counsel for Mr Shteinman and JIS contended, in closing oral address, that Mr Shteinman’s affidavit account that Mr Tolpinrud told him that “the bank requires [the margin] to be 2.01%” was supported by the following six matters.

57. [235]

    First, it was submitted that Mr Tolpinrud used the passive voice in his email of 22 October 2021 to suggest that NAB had determined the margin: “it is envisaged that the additional margin will be set such that the day 1 rate effectively paid by your side is 4.5% per annum”. I have already addressed this submission above.

58. [236]

    Secondly, it was submitted that the language of Mr Shteinman’s emails indicates that he understood that the bank had a role in setting the margin. However, the Defendants did not point to any statement, in any email prior to the NAB Loan being entered, in which Mr Shteinman had conveyed to Mr Tolpinrud that he had any such understanding. In indicating, on 20 December 2021, that he accepted the margin, Mr Shteinman did not make any statement to the effect that he was doing so because it was non-negotiable, or was set by NAB, but instead on the basis that the “lender receiving the margin” (namely, the SAT) would be required to bear “all costs associated with procuring the loan, and other like bank fees and costs” (see paragraph [217] above).

59. [237]

    Thirdly, it was submitted that “the lack of negotiation” between Mr Shteinman and Mr Tolpinrud regarding the margin, in circumstances where these parties had otherwise been “going toe to toe on the detail” of their arrangements, supported a conclusion that Mr Shteinman understood that the margin was non-negotiable, because it was set by NAB. In this regard, reference was made in written submissions to Mr Shteinman’s statement, in his email to Mr Tolpinrud of 12 May 2022, that despite his disappointment over the margin, “I accept I have no choice” (see paragraph [87] above). However, this was a statement to the effect that Mr Shteinman accepted that he had entered into a binding agreement regarding the On-Loan requiring the payment of interest (“I accept interest must be paid. I also note that this is the arrangement that I will accept it … I accept I have no choice and I accept that I have agreed to accept the situation until it can be replaced.”) It was not a statement that he was of the view, prior to entry into the On-Loan, that the margin was non-negotiable because it had been imposed by the bank.

60. [238]

    Reliance was also placed on Mr Tolpinrud’s statements, in his email to Mr Shteinman of 30 May 2022, that “we do not like this arrangement” and that it was “NAB’s proposal (their idea, not ours) after they rejected a co-borrowing arrangement … that [the SAT] borrow all the money and lend it to LPPT, but only on the basis that [the SAT] receives an economic benefit” (see paragraph [88] above). The Defendants submitted that these statements conveyed that NAB had given Mr Tolpinrud and Ms Widhe no choice about the margin. However, Mr Tolpinrud was here stating that he and Ms Widhe would prefer there to be no on-lending arrangement at all, but that this was the only option because Mr Shteinman did not get his tax affairs in order (describing the On-Loan as “our only option, in part because you did not file your tax returns by November as promised”).

61. [239]

    Further, even if Mr Shteinman was of the understanding, prior to entry into the On-Loan, that NAB had imposed the margin of 2.01% (and this explained the lack of negotiation of the margin), it does not follow that any such misunderstanding was induced by any representation made by Mr Tolpinrud, or that Mr Tolpinrud was, or should reasonably have been, aware that Mr Shteinman was labouring under any such misapprehension. There were various other reasons to explain why, from Mr Tolpinrud’s perspective, Mr Shteinman may have chosen not to negotiate the margin, including that:

    1. (1)

       the interest rate offered by the SAT was in line with the rate offered by AAA Financial, but was on better terms (with a higher LVR, no up-front fees, and no need for Mr Shteinman to provide any financial information);

    2. (2)

       there were no other options for the refinancing of the Property prior to the expiry of the Austar Bridging Loan, which was rapidly approaching; and

    3. (3)

       Mr Shteinman had indicated to Mr Tolpinrud that he was confident that a loan would be obtained from CBA (with the result that the On-Loan would be unnecessary, or quickly replaced). For example, in a text message sent on the evening of 21 October 2021 in response to Mr Tolpinrud’s concerns about the increase in the amount of the Austar Bridging Loan, Mr Shteinman stated that the loan from CBA “will proceed just as the bridge loan has, as envisaged”, and described any other outcome as “unlikely” (see paragraph [64] above).

62. [240]

    Fourthly, it was submitted that Mr Shteinman’s suggestion that the amount of the margin be put back into the Property, or donated to charity, “can only be explained by a perception by Mr Shteinman that there was no way out of this margin, that it had some sort of imprimatur or was somehow required by the bank”. However, Mr Shteinman’s statements are equally consistent with a situation where (as I have found) Mr Tolpinrud told Mr Shteinman (a) that NAB required that the SAT receive some economic benefit from the proposed on-lending arrangement, and (b) that Mr Tolpinrud had informed the bank of the proposed margin as a means of addressing those concerns. In those circumstances, any statement by Mr Shteinman that the margin should be reinvested in the Property or given to charity was not indicative of an understanding that the quantum of the margin was stipulated by NAB, but rather was indicative of his disquiet with the fact that the SAT, having proposed the margin to address the bank’s requirement for a “commercial benefit”, would be retaining this benefit for itself.

63. [241]

    Fifthly, it was submitted that it was “very hard to explain” why Mr Shteinman asked Mr Marangoni, in March 2023, whether NAB had “required” that the SAT obtain a “commercial benefit … in the form of a 2.01% interest margin”, unless, as at this time, he “had some sort of belief that the bank had imposed this as a condition”. However, this is an insufficient basis to conclude that any such misapprehension on his part was caused by Mr Tolpinrud having made a statement to that effect more than 15 months earlier, particularly where there is no contemporaneous documentary evidence of such a statement being made. In that regard, it is apparent that, in early 2023, there was some confusion on the part of Mr Shteinman regarding what he had been told, and what he had understood, at the time that the On-Loan was entered. In particular, as set out at paragraphs [92]-[95] above, he mistakenly believed in early 2023 that he had not been informed that the LPPT was guaranteeing the whole amount of the NAB Loan, rather than the lesser amount of the On-Loan. The true position was that Mr Tolpinrud had expressly raised this issue with Mr Shteinman prior to entry into the NAB Loan, and that Mr Shteinman had agreed to execute and release the documents in relation to the NAB Loan in December 2021 on the basis that steps would subsequently be taken to reduce the amount of the LPPT’s guarantee (see paragraphs [77]-[81] above).

64. [242]

    Sixthly, it was submitted that the “killer point” was that, in his email to Mr Tolpinrud in May 2022, Mr Shteinman referred to the “banks’ stipulation that a loan by a trust has to have a commercial benefit” (see paragraph [89] above); that this conveyed “quite clearly … him believing that it’s the bank’s stipulation”; and that Mr Tolpinrud had not corrected him in this regard, which is what would have been the “honest approach between joint venture parties”. However, the statement in Mr Shteinman’s email, which was not corrected by Mr Tolpinrud, is equally consistent with Mr Tolpinrud’s account, namely, that he told Mr Shteinman that (as was in fact the case) NAB had required that the SAT demonstrate that it would receive some commercial benefit from the proposed on-lending arrangement. Mr Shteinman does not say anything in his May 2022 email to the effect that Mr Tolpinrud had informed him that a margin of 2.01% was stipulated by NAB or was non-negotiable. Nor did Mr Tolpinrud say anything to this effect in his email response to Mr Shteinman. Instead, Mr Tolpinrud stated (again, consistently with his account of his conversations with NAB) that the parties could have negotiated some different terms in relation to the On-Loan, but that this would have required them to have “gone back to the NAB” to see whether this other arrangement would have provided the SAT with a sufficient commercial benefit to address the concerns of the NAB credit team.

65. [243]

    For the reasons set out above, Mr Shteinman has not established that any representation was made to him by Mr Tolpinrud to the effect that NAB had required that the SAT on-lend funds to the LPPT at a margin, or had required that the margin be 2.01%, or that the margin was non-negotiable because it was stipulated by the bank.

66. [244]

    For the reasons given above:

    1. (1)

       I have determined that:

    2. (2)

       I am not satisfied that Mr Tolpinrud:

67. [245]

    Further, Mr Shteinman and JIS has not otherwise established that Mr Tolpinrud’s conduct in relation to the negotiation of the margin involved commercial unfairness, such as to amount to oppressive conduct.

68. [246]

    It follows that Mr Shteinman is unable to establish:

    1. (1)

       his claim that his consent to the margin of 2.01% (and the initial interest rate of 4.50% per annum) was, by reason of any alleged misrepresentation, not fully informed consent; or

    2. (2)

       his claims that Mr Tolpinrud’s conduct on behalf of Ms Widhe in his dealings with Mr Shteinman in relation to the margin amounted to either:

69. [247]

    This conclusion follows from Mr Shteinman’s failure to establish the factual foundations on which those claims depend. It is therefore unnecessary to address each of the various other issues arising on Mr Shteinman’s claim – such as whether Mr Tolpinrud was a “shadow director” of the Company, or whether Ms Widhe and Mr Tolpinrud owed fiduciary duties to Mr Shteinman as “co-venturer” – and these reasons should not be taken as having reached any finding on those matters.

70. [248]

    Mr Shteinman and JIS did not, in writing or orally, develop any submissions in support of the other grounds of oppression pleaded in his Points of Cross-Claim. In any case, those claims can be addressed briefly.

71. [249]

    First, a number of the other alleged grounds of oppression pleaded by Mr Shteinman depend on his allegations regarding the On-Loan. For example, Mr Shteinman alleged that Ms Widhe and Mr Tolpinrud “caused [the Company] to mismanage its funds by prioritising payments of the improperly obtained Excess Interest Margin to SAT”, and that the impugned conduct in relation to the On-Loan has given rise to a “justifiable loss of trust and confidence” by Mr Shteinman in Ms Widhe and Mr Tolpinrud, resulting in a “deadlock in decision making concerning [the Company]” (Points of Cross Claim, [48]-[51], [55], [56]-[57]). Given my findings above, I am not satisfied that Ms Widhe and Mr Tolpinrud acted unreasonably in causing the Company to pay the SAT amounts owing pursuant to the On-Loan, or that any breakdown in the relationship between the parties or any deadlock in the management of the Company and the LPPT is attributable to any misconduct on their part in respect of the On-Loan. It follows that these claims for oppression are also not established.

72. [250]

    Secondly, Mr Shteinman alleged that Ms Widhe and Mr Tolpinrud had excluded him from management and engaged in oppressive conduct by having “failed or refused to provide [Mr] Shteinman, a co-director of [the Company], with access to [the Company’s] bank account” (Points of Cross Claim, [45]-[47], [56]-[57]). It is unsurprising that this contention was only briefly mentioned in passing in Mr Shteinman’s closing written submissions, given that there was evidence at the hearing from Mr Marangoni that Mr Shteinman was informed by NAB that, as a co-director, he was able to access the Company’s bank account, and that he only had to ask in order to be given such access; and was also informed that he could be provided with all historical bank statements. Further, Mr Shteinman acknowledged in cross-examination that his lack of access to the bank statements was due to his own technological shortcomings:

73. [251]

    Thirdly, Mr Shteinman alleged that Ms Widhe and Mr Tolpinrud had “frustrated the primary commercial purpose of the Joint Venture, being to generate income from the Property”, by acting unreasonably in relation to decisions concerning the letting of the Property (Points of Cross Claim, [52]). This allegation was not developed in writing or orally by Mr Shteinman. In any case, for reasons given below when dealing with a similar allegation made by Ms Widhe against Mr Shteinman, I do not consider that such legitimate commercial differences between the parties regarding decisions concerning the letting of the Property amounted to oppressive conduct.

74. [252]

    Finally, there were some pleaded allegations regarding conduct of Ms Widhe and Mr Tolpinrud in 2025 (Points of Cross Claim, [53]-[54]). However, there were no submissions directed at these matters; I was not taken, in oral addresses, to evidence regarding these matters; and these matters were not raised with Mr Tolpinrud in cross-examination. It therefore is not apparent on what basis these allegations, if pressed, were advanced.

75. [253]

    For the reasons given above, Mr Shteinman’s claims of breach of duty and oppressive conduct have not been established.

76. [254]

    I do, however, accept that there has been a complete breakdown in trust and confidence between the parties, and that this is a matter which may provide a basis for Mr Shteinman’s alternative relief that the Company be wound up on just and equitable grounds. I consider whether such an order should be made when addressing the question of relief below.

Ms Widhe’s claims against Mr Shteinman and JIS as trustee for the BIT

1. [255]

   In Ms Widhe’s closing written submissions, she advanced the following five grounds for her oppression claim against Mr Shteinman:

   1. (1)

      first, “Mr Shteinman failed to cooperate in obtaining finance, by refusing to complete and provide tax returns”;

   2. (2)

      secondly, “Mr Shteinman failed to assist in managing and operating the property’s rental business”;

   3. (3)

      thirdly, “Mr Shteinman failed to agree to reduce the [Company’s] guarantee” of the moneys loaned by NAB to Ms Widhe, from $4m to $3m;

   4. (4)

      fourthly, “Mr Shteinman failed to approve funding of levies and expenses”; and

   5. (5)

      fifthly, “Mr Shteinman failed to respond to communications in general and failed to respond reasonably”, and his “refusal to cooperate in the management of the affairs of the Property, [the Company], and LPPT has left the parties in an irretrievable corporate deadlock, contrary to the interests of [the Company’s] members”.

2. [256]

   As set out at paragraphs [108]-[147] above, the evidence establishes that Mr Shteinman has failed to respond to repeated communications from Mr Tolpinrud and Ms Widhe regarding the payment of levies and other expenses by the Company. He has left them to fund the payment of levies from their own resources, and to deal with the various demands that have been made on the Company and the proceedings that have been commenced against the Company. Further, the Company and the LPPT have suffered detriment as a result of the failure to pay levies, including becoming liable to pay interest and legal costs and being unable to vote at meetings of the Owners Corporation.

3. [257]

   Mr Shteinman advanced, in closing written submissions, four main responses to the allegation that his failure to engage with, or cooperate with, Mr Tolpinrud and Ms Widhe in relation to the payment of levies and expenses amounted to oppressive conduct.

4. [258]

   First, Mr Shteinman submitted as follows: “If Mr Shteinman is correct about the conduct discovered by the NAB Revelation, his distrust, distance, and unwillingness to contribute funds is justified and understandable.” In light of the findings which I have made regarding the margin, this purported justification for Mr Shteinman’s conduct falls away.

5. [259]

   Secondly, Mr Shteinman acknowledged that the Company has ceased making any payments to the SAT in respect of the On-Loan (following his “cease and desist” instruction, set out in paragraph [105] above), but submitted that: “If Mr Shteinman is correct about the NAB Revelation, some non-payment until determination of the question of whether the margin is payable is justified”.

6. [260]

   As noted above, the test of commercial unfairness is an objective one, and a person may engage in oppressive conduct even where he or she subjectively believes that there is a proper basis for such conduct: Campbell at [176]; and see also Tomanovic at [217]-[224] per Campbell JA.

7. [261]

   Even if Mr Shteinman subjectively believed that he had a basis to cause any payments in respect of the margin to be paused while a dispute as to the legitimacy of the margin was determined, Mr Shteinman went further and prevented the Company from making any payments at all in respect of the On-Loan (including any payments in respect of the interest which the SAT is liable to pay to NAB on the funds which have been on-lent to the Company).

8. [262]

   It was common ground that, as a result of payments by the Company to the SAT being halted, the Company as trustee for the LPPT is, as at the time of hearing, indebted to the SAT – and that this is the case even if the SAT had no right to on-lend the funds at a margin of 2.01%. According to the expert retained by Mr Shteinman and JIS (whose evidence was not challenged), the amount owed by the Company as trustee of the LPPT to the SAT as at 30 November 2025 was:

   1. (1)

      $120,653, on the assumption that the SAT is not entitled to any amount in respect of the margin; or

   2. (2)

      $347,785, inclusive of the margin.

9. [263]

   I am satisfied that Mr Shteinman’s conduct, in causing the Company to cease making payments in respect of the On-Loan from September 2024 onwards, was oppressive, unfairly prejudicial to and unfairly discriminatory against Ms Widhe as trustee of the SAT. In particular, it was commercially unfair, in circumstances where Ms Widhe as trustee of the SAT had advanced an amount of $3m to the Company in order to repay the Austar Bridging Loan and to refinance the Property, for Mr Shteinman to cause the Company to cease making any payments to her in respect of the On-Loan, thereby taking the benefit of the moneys which she had advanced, while leaving her solely to fund, from her own resources, the interest payable on those funds.

10. [264]

    Thirdly, as regards other debts of the Company (including the strata levies), Mr Shteinman submitted that he had authorised the payment of creditors from the Company’s available funds (see paragraph [115] above), and that his conduct in refusing to make further capital injections in order to meet the Company’s expenses is “legitimately explicable by the NAB Revelation and from his perspective … the probability that any past inability to pay creditors is due to the historical overcharging of the interest margin by SAT”. This submission again depends on Mr Shteinman’s contention that the SAT was not entitled to charge or retain the margin and, in any case, ignores that, even if the SAT was not so entitled, the amount paid to the SAT by the Company to date is less than the amount which the SAT has been obliged to pay to NAB by way of interest on the funds advanced to the Company. Accordingly, such matters do not provide any justification for Mr Shteinman’s conduct in refusing to cooperate with Ms Widhe and Mr Tolpinrud regarding the payment of other creditors.

11. [265]

    Fourthly, Mr Shteinman submitted that his decision not to make any further voluntary contribution of capital to the Company in order to meet its expenses was a decision taken by him at a unitholder level, and was not “conduct of [the Company’s] affairs” or an “act or omission by or on behalf of [the Company]”, to which s 232 of the Act could apply.

12. [266]

    The submission was developed in closing oral address, as follows:

13. [267]

    I am satisfied that the arrangement between, on the one hand, Mr Shteinman and, on the other, Ms Widhe and Mr Tolpinrud was in the nature of a partnership in which the parties would equally share in the profits and would also equally share in the exposure and expenses, having regard to the following matters.

14. [268]

    When Mr Shteinman first put a proposal to Mr Tolpinrud in relation to the purchase of the Property on 1 August 2021, he stated that he was looking for a “joint venturer/partner” who was willing to make an “initial cash investment of $180,000 towards the purchase, and probably the same again in fees and costs” (see paragraph [20] above). On 10 August 2021, Mr Shteinman sent a further email to Mr Tolpinrud which noted that, as a result of their discussions, their proposed arrangement had “morphed” into a “50:50 split, regarding exposure and ownership”. In the same email, Mr Shteinman also referred to their intention that there be a “50:50 split on costs” (see paragraph [21] above). On the following day, Mr Tolpinrud sent to Mr Shteinman the document headed “Contemplated intentions for Sean Tolpinrud and Jonathan Shteinman to partner to acquire [the Property]” (emphasis added; see paragraph [22] above).

15. [269]

    It is unsurprising, given those matters, that the opening line of Mr Shteinman’s closing written submissions described the arrangement which was entered between the parties as a “quasi-partnership”. Similarly, in the Points of Cross-Claim, Mr Shteinman described the parties as “co-venturers”. When asked to provide particulars of this allegation, Mr Shteinman’s solicitors responded that the parties had reached an understanding that, among other things, the parties “would equally share in the profits of this venture (Mr Tolpinrud and [Ms] Widhe on the one hand, and Mr Shteinman on the other, via their respective joint vehicles or trusts)”, and would “cooperate reasonably to achieve the venture’s shared objectives”.

16. [270]

    Further, the parties understood and agreed, prior to entry into their venture, that there would be a need to contribute substantial further capital, in order to meet the expenses of the venture and to realise the profits. One of the first bullet points in Mr Tolpinrud’s “Contemplated Intentions” document reads as follows:

17. [271]

    In cross-examination, Mr Shteinman agreed that Mr Tolpinrud was, in this document, setting out what he understood from his discussions with Mr Shteinman, and was giving Mr Shteinman “an opportunity to correct him if he got it wrong”. In particular, Mr Shteinman agreed that one of the things which they had discussed was “an expectation of needing to put in another $300,000 in special levies over the next two to three years”, and gave the following evidence:

18. [272]

    The Company was incorporated and the LPPT was established on the same day as Mr Tolpinrud sent his “Contemplated Intentions” document to Mr Shteinman.

19. [273]

    The draft minutes of the June Directors’ Meeting record the following matters (emphasis added):

20. [274]

    Mr Shteinman did not refer to any of the statements set out above when identifying, in his affidavit, matters in the draft minutes of the June Directors’ Meeting which were inaccurate, or with which he disagreed. Further, in his closing written submissions, Mr Shteinman specifically relied on the accuracy of the second italicised statement in contending that he had made substantial contributions to the joint venture.

21. [275]

    Having regard to the matters set out above, I am satisfied that the parties entered into the venture to acquire the Property via the Company as trustee for the LPTT with the shared understanding, and on the basis, that:

    1. (1)

       it would be necessary for them to contribute substantial additional funds in order to meet the expenses of the Company and, in particular, strata levies, over each of the next three years; and

    2. (2)

       there would be a “50:50 split” between them in respect of such expenses.

22. [276]

    Despite this being the case, Mr Shteinman has, over at least the past two years, declined to engage with Mr Tolpinrud and Ms Widhe regarding the debts of the Company, and the shortfall between the Company’s income and expenses, and has left it to Ms Widhe and Mr Tolpinrud to deal with creditors, including dealing with demands for payment made by, and legal proceedings commenced by, the Owners Corporation, with the result that Ms Widhe and Mr Tolpinrud have had to pay significant amounts on behalf of the Company from their own resources. Moreover, as noted above, Mr Shteinman has caused the Company to cease paying any amounts to Ms Widhe in respect of the On-Loan, and has thereby reduced the resources available to her to meet such liabilities. This conduct is inconsistent with the basis on which the venture was established, is commercially unfair, and has led to a breakdown in trust and confidence between the parties, and a deadlock in the management of the Company.

23. [277]

    For those reasons, I am satisfied that Ms Widhe’s claim of oppressive conduct has been established.

24. [278]

    Ms Widhe submitted that Mr Shteinman’s “failure to cooperate in obtaining finance by refusing to complete and provide tax returns” constituted oppressive conduct and had “a deleterious impact on Ms Widhe” because:

    1. (1)

       it “prevented Ms Widhe from refinancing the NAB loan with SAT, leaving SAT exposed to the borrowing risk for an extended period”;

    2. (2)

       “it prevented [the Company] from settling the purchase by the required date, thereby raising borrowing costs and other expenses incurred on [the Company’s] behalf”; and

    3. (3)

       it “also prevented [the Company] from securing long term finance to refinance the [Austar] Bridging Loan, forcing SAT to take on the loan risk”.

25. [279]

    I am not satisfied that this ground of oppression is established, for the following reasons.

26. [280]

    First, there is evidence that Mr Shteinman did take steps, and deploy resources, with a view to finalising his tax returns in late 2021. In an email of 18 November 2021, Mr Shteinman apologised to his external accountant and internal financial controller for “any stress I caused you asking you to urgently attend to [my personal and family trust returns]”.

27. [281]

    Secondly, while it is apparent, from the text of Mr Shteinman’s email of 18 November 2021, that Mr Shteinman did not take steps to prepare tax returns for his corporations in this period, this appears to have been due to a misunderstanding on his part that such returns were not required (see paragraph [73] above).

28. [282]

    Thirdly, the finalisation of Mr Shteinman’s tax affairs does not appear to have been a straightforward matter (as indicated by the fact that, despite putting significant pressure on his accountant and financial controller, his returns were not able to be completed as at late 2021). This was acknowledged by Mr Tolpinrud, in his email to Mr Shteinman on 30 May 2022 (see paragraph [89] above, emphasis added):

29. [283]

    In the same email, Mr Tolpinrud observed that: “the banks surprised us both with their difficulty and unpredictability, so it’s not a matter of assigning ‘blame’ to you …”.

30. [284]

    Fourthly, I acknowledge that, in his email of 18 November 2021, Mr Shteinman stated to his external accountant and internal financial controller, that while “the tax returns have to be done eventually”, he considered it necessary “to prioritise”, and did not want “to over stretch your efforts unless there is a reason, and we didn’t, and don’t have compelling reasons to file tax returns where tax is not payable” (see paragraph [74] above). However, there is force in Mr Shteinman’s submission that any failure by a member or unitholder to get their tax returns completed is conduct in respect of their own affairs, rather than “conduct of the company’s affairs” or an “act or omission by or on behalf of the company”, within the meaning of s 232 of the Act. (If Mr Shteinman had established oppressive conduct in respect of the On-Loan, it may have been relevant to the issue of the form of relief that Mr Shteinman has, at all times, had it within his power to take steps to put his tax affairs in order so that the Property is refinanced, with the On-Loan being closed out and replaced with a loan at a lower interest rate, but has delayed, until recently, in taking steps to do so.)

31. [285]

    Fifthly, Ms Widhe and Mr Tolpinrud were aware, prior to entry into the venture, that it might be necessary, as a result of issues with Mr Shteinman’s financial position, for them to take on a disproportionate share of the risk of the venture. In the “Contemplated Intentions” document sent to Mr Shteinman on 11 August 2021, Mr Tolpinrud acknowledged that he and Ms Widhe had chosen not to examine Mr Shteinman’s finances; that the banks might assess Mr Tolpinrud as having, due to his income, greater borrowing capacity; and that, as a result, he might have “to provide disproportionate credit support or borrowing capacity to the partnership” (see paragraph [22] above). Further, Mr Tolpinrud acknowledged to Mr Shteinman on 21 December 2021, at the time the On-Loan was entered, that it may be necessary for the On-Loan to remain in place “for several years if it needs to” (as has proved to be the case).

32. [286]

    Finally, while it may be accepted that Mr Shteinman’s failure to get his tax affairs in order resulted in Ms Widhe and Mr Tolpinrud taking on additional and disproportionate risk (in the form of the NAB Loan to Ms Widhe, which is guaranteed by Mr Tolpinrud and secured by a mortgage over their residence), Mr Tolpinrud proposed that the SAT receive the margin specifically to ensure that a commercial benefit was received in return for entering into this arrangement. I accept that, since late 2024, the SAT has not been paid the amounts which it is entitled to receive in respect of the margin (or the On-Loan), but that is a separate issue which I have already addressed above.

33. [287]

    Ms Widhe submitted that Mr Shteinman had engaged in oppressive conduct by failing “to assist in managing and operating the property’s rental business”, and that this “lack of cooperation in making commercial decisions regarding the Property’s rental negatively affected the business’s performance and earnings”.

34. [288]

    Two main complaints were advanced, the first relating to the renovation of the downstairs apartment (15B), and the second relating to Mr Shteinman’s leasing of the garage.

35. [289]

    As regards the first of these matters, the relevant factual background may be briefly stated.

    1. (1)

       On 24 December 2021, Mr Tolpinrud and Mr Shteinman engaged Mr Julian Mark, a property manager, to rent out the upstairs apartment (15A) on Airbnb.

    2. (2)

       The downstairs apartment (15B) was initially occupied by a long term tenant, but became vacant on around 8 June 2022.

    3. (3)

       Architects were engaged to prepare plans for the renovation of apartment 15B, at significant expense to the Company. Following this, there were discussions between Mr Shteinman and Mr Tolpinrud regarding when the renovations should commence and what should be done with this apartment in the interim.

    4. (4)

       Mr Tolpinrud wanted to proceed with the renovation works straight away. On 23 September 2022, Mr Shteinman informed Mr Tolpinrud that he did not “wish to commence renovations that will disturb income from upstairs, nor that will go over the xmas period”. He indicated that it was his preference for renovations to be deferred until after Easter 2023. Mr Shteinman subsequently requested that apartment 15B be rented nightly through Airbnb, and it was listed on that site from around December 2022.

    5. (5)

       During 2023, Mr Tolpinrud repeatedly expressed the view to Mr Shteinman that apartment 15B should be leased, rather than rented nightly on Airbnb, because he considered that Airbnb was underperforming. However, Mr Shteinman did not indicate any agreement to this course.

36. [290]

    Mr Tolpinrud gave the following evidence in cross-examination regarding the competing views expressed by himself and Mr Shteinman about these matters:

37. [291]

    Senior Counsel for Ms Widhe submitted, in closing oral address, that Mr Shteinman “took it upon himself to unilaterally countermand a joint decision” to renovate apartment 15B, and that this conduct showed that Mr Shteinman was “arrogating to himself, because he’s in a position as a 50% owner and controller, to block anything”.

38. [292]

    I am not satisfied that this disagreement between two equal business partners regarding commercial matters amounted to oppressive conduct, particularly where the disagreement appears to have arisen from genuinely held views as to the best means for maximising the income that could be earned by apartment 15B. There is no commercial unfairness in one equal partner declining to bow to the wishes of the other on such a matter. This may give rise to deadlock on the particular issue – in the sense that unless there is agreement to a change in the management of apartment 15B, the status quo will continue – but that does not establish oppression. In David & Ros Carr Holdings at [167]-[168], Leeming JA agreed with the following observations of Richmond J at first instance (David & Ros Carr Holdings Pty Ltd v Ritossa [2024] NSWSC 1125 at [253]-[254]):

39. [293]

    Similarly, in the present case, it is the inevitable consequence of the structure which the parties have adopted for their venture that there will be occasions on which each of them will not get their own way, in circumstances where there is a disagreement as to the management of the venture. This does not establish oppression.

40. [294]

    As regards the second issue concerning the garage, the relevant factual background is as follows.

    1. (1)

       Prior to the Company’s purchase of the Property, Mr Shteinman personally rented the garage of the Property pursuant to an arrangement with the previous owner.

    2. (2)

       Mr Shteinman informed Mr Tolpinrud, in their initial discussions, that he had been leasing the garage space for almost 30 years, and it was “crucial” for him that he “keep the garage”; and that Mr Tolpinrud responded that this was “understood”. Mr Tolpinrud’s document of 11 August 2021 headed “Contemplated intentions for Sean Tolpinrud and Jonathan Shteinman to partner to acquire [the Property]” recorded the following matters (emphasis added):

    3. (3)

       Mr Tolpinrud subsequently formed the view that it would be easier to lease 15A and 15B if tenants had on-site parking, and requested that the lease of the garage to Mr Shteinman be terminated, but Mr Shteinman declined to do so.

    4. (4)

       Mr Shteinman continues to rent the garage for $434.52 per month.

41. [295]

    I am not satisfied that Mr Shteinman’s refusal to bring the lease of the garage to an end constitutes oppressive conduct, particularly in circumstances where, at the outset, Mr Shteinman made clear that he wanted to keep using the garage and Mr Tolpinrud agreed to this arrangement continuing, with Mr Shteinman “renting the car space at current rates” pending any decision to re-develop the Property (which has not occurred). Further, there is no evidentiary basis to conclude that Mr Shteinman’s refusal to terminate the lease of the garage has caused harm to the Company, since there is no evidence to establish that the amount which the Company has received from the leasing of the garage to Mr Shteinman and the renting of the apartments on Airbnb is less than the Company would have received if the Company had leased the garage with one of the apartments.

42. [296]

    Ms Widhe submitted that Mr Shteinman had engaged in oppressive conduct by failing to provide his consent to a reduction in the level of the guarantee given by the Company in respect of the NAB Loan, from $4m (being the full amount borrowed by Ms Widhe) to $3m (being the amount which was on-lent to the Company as trustee of the LPPT).

43. [297]

    As set out at paragraphs [77]-[81] and [91]-[99] above, the evidence establishes that:

    1. (1)

       the parties’ intention, prior to entry into the NAB Loan, was that the Company would only guarantee the amount of the On-Loan ($3m);

    2. (2)

       notwithstanding this, the documents relating to the NAB Loan provided that the Company would guarantee the full amount borrowed by Ms Widhe ($4m);

    3. (3)

       because of the urgency in putting the refinancing in place, the documents relating to the NAB Loan were executed on the basis that, following entry into the loan, the level of the Company’s guarantee would be reduced to the amount of the On-Loan;

    4. (4)

       NAB, Ms Widhe and Mr Tolpinrud have been willing to reduce, and have taken steps for the purpose of reducing, the level of the amount guaranteed by the Company to the amount of the On-Loan;

    5. (5)

       Mr Shteinman has been asked to indicate his consent to such a reduction (including by a short reply email to this effect, stating “I agree”); and

    6. (6)

       Mr Shteinman has consistently failed to do so, despite a number of follow-up requests and without providing any explanation to Ms Widhe and Mr Tolpinrud for failing to do so.

44. [298]

    In cross examination, Mr Shteinman gave the following evidence when asked about his failure to provide any such explanation:

45. [299]

    In short, Mr Shteinman was unwilling to agree that the quantum of the Company’s guarantee should be reduced to the quantum of the On-Loan, because of his allegations (which have not been established) regarding the legitimacy of the margin charged under the On-Loan.

46. [300]

    I am satisfied that Mr Shteinman’s conduct in failing to reduce the level of the Company’s guarantee was contrary to the interests of the members of the Company as a whole, within the meaning of s 232(d) of the Act.

47. [301]

    In New South Wales Rugby League Ltd v Wayde (1985) 1 NSWLR 86 at 96, the Court of Appeal (Street CJ, Kirby P, Hope JA) observed, in relation to the predecessor provision, that:

48. [302]

    In Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness (Vic/Tas) Pty Ltd (No 3) [2015] NSWSC 1639 at [84], Sackar J observed (citing Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640 at [41]-[44] per Barrett J) that the test of whether conduct is contrary to the interests of members as a whole is objective, and is to be determined by reference to whether the conduct adheres to accepted standards of corporate behaviour or is in accordance with how reasonable directors would act in attending to the affairs of the company.

49. [303]

    It was plainly for the benefit of the LPPT, of which the Company was trustee, for the amount of the guarantee to be reduced from $4m to $3m. In circumstances where NAB was willing to agree to such a reduction, there was no commercial rationale for the Company as trustee of the LPPT to continue to guarantee an amount higher than the amount which it had received under the On-Loan. It was inconsistent with the Company’s duties as trustee of the LPPT for it to fail to take steps to effect such a reduction. Any reasonable director attending to the affairs of the Company would provide his or her consent to such a reduction.

50. [304]

    For those reasons, I am satisfied that the claim in respect of Mr Shteinman’s refusal to give his consent to the reduction in the guarantee is established.

Relief

1. [305]

   It is common ground that the parties cannot proceed with their current relationship, which is in a state of deadlock, with a complete breakdown in trust and confidence, and that the Court should make orders that will have the effect of bringing this relationship to an end. The parties canvassed three possibilities in submissions: first, a buy-out of Mr Shteinman’s interest in the Company and the BIT’s interest in the LPPT by Ms Widhe; secondly, a purchase of the Property by Mr Shteinman; and thirdly, a winding up of the Company, with the liquidator also being appointed as receiver of the assets of the LPPT, with a view to selling the Property and distributing the net proceeds to the unitholders.

2. [306]

   Section 233(1) of the Act provides as follows:

3. [307]

   The nature of the remedy chosen by the Court under s 233 will depend upon the conclusions drawn as to the type of oppression with which the Court is dealing, and the Court will choose the remedy which is the least intrusive: Tzavaras at [74(9)] (Gleeson and Adamson JJA, Griffiths AJA) quoting with approval Munstermann at [22(9)] (Stevenson J).

4. [308]

   The aim of any order under s 233 must be to put an end to the oppression: Munstermann at [22(10)]. In WIJOAV at [169], Jackman J observed that:

5. [309]

   As a remedy for oppression, an oppressor can be ordered to sell their shares to the oppressed party: Munstermann at [22(12)].

6. [310]

   In WIJOAV at [170], Jackman J noted that the “very thorough analysis of minority buy-out orders” by Robson J in Slea Pty Ltd v Connective Services Pty Ltd [2022] VSC 136 at [1649]-[1808] included two cases of equal shareholders, where the oppressed party was permitted to buy out the oppressor, namely, Munstermann and Lantsbury v Hauser [2010] EWHC 390 (Ch) (Moss J).

7. [311]

   Another decision in which a buy-out was ordered as between equal shareholders was Patterson v Humfrey [2014] WASC 446. Le Miere J there observed as follows (at [53]):

8. [312]

   Ultimately, the “‘direction’ of any buy-out [is] to be determined by what the justice of the case requires on the basis of all the circumstances of the case”: WIJOAV at [170], referring to Millsave Holdings Pty Ltd v Connective Group Pty Ltd (2023) 75 VR 239; [2023] VSCA 326 at [1025] (McLeish, Macaulay and Lyons JJA).

9. [313]

   In determining the direction of a buy-out order, factors which are relevant include not only whether there has been oppressive conduct (and by whom), but also matters such as whether one party has had a more substantial involvement in the day-to-day management of the company; and whether one party has disproportionately borne the funding, or risk associated with the funding, of the business: see, for example, In the matter of ICB Medical Distributors Pty Ltd and The International College of Biomechanics Pty Ltd [2018] NSWSC 1315 at [222]-[223] (Black J). In addition, as Jackman J observed in WIJOAV at [174], in the context of considering “who should buy out whom”:

10. [314]

    If a buy-out order is made pursuant to s 233, the task of the Court is to fix a price that represents a fair value in all the circumstances: Munstermann at [22(13)].

11. [315]

    Section 461(1) of the Act relevantly provides as follows:

12. [316]

    Where a company has been established on the basis of a relationship of mutual confidence, a winding up order may be made on the just and equitable ground under s 461(1)(k) of the Act where irreconcilable differences emerge between its members: Fexuto v Bosnjak (2001) 37 ACSR 672; [2001] NSWCA 97 at [89]; Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342 at [97]–[98].

13. [317]

    Section 467(4) of the Act provides as follows:

14. [318]

    In Asia Pacific Joint Mining Pty Ltd v Allways Resources Holdings Pty Ltd [2018] 3 Qd R 520; [2018] QCA 048 at [47], McMurdo JA (with whom Gotterson JA and Jackson J agreed) observed that:

15. [319]

    His Honour also observed (at [62]) that:

16. [320]

    It has been said that the Court should only look to wind up an otherwise solvent company as a “last resort”: Munstermann at [22(11)], referring to Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1998) 28 ACSR 688 at 742; [1998] NSWSC 413 (Young J). However, in Snell v Glatis (No 2) [2020] NSWCA 166 at [6], Bell P (as his Honour then was) made the following observations (citations omitted):

17. [321]

    Section 67 of the Supreme Court Act 1970 (NSW) provides that the Court may, at any stage of the proceedings, appoint a receiver by interlocutory order in any case in which it appears to the Court to be just or convenient to do so. In Re Munja Bakehouse Pty Ltd [2024] NSWSC 6 at [30], Black J observed that there are numerous cases in which the Court has made such an appointment in favour of a liquidator appointed to a trustee company in respect of trust assets, and that such an appointment can be made on the basis of a former trustee’s right of indemnity and exoneration in respect of trust assets, which is available even where a trustee’s office is vacated by reason of the appointment of a liquidator to the trustee company: see, for example, Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FLR 17; [2014] NSWSC 1484; Re Double Bay Property Management Pty Ltd (in liq) [2020] NSWSC 203; Re Glenvine Pty Ltd (in liq) [2020] NSWSC 866. (In this regard, see also David & Ros Carr Holdings at [207] per Leeming JA.)

18. [322]

    The alternatives for relief must be evaluated in circumstances where the parties have agreed, for the purposes of this proceeding, that the Property has a current market value of $4,740,000.

19. [323]

    Mr Shteinman and JIS led unchallenged expert evidence that, in the event that (as I have determined) the SAT is entitled to the 2.01% interest margin, and the Property is ascribed the agreed value of $4,740,000, 50% of the units in the LPPT have a current value of $689,371 to an external party and $725,177 to the remaining unitholder.

20. [324]

    Each of the two sets of parties desires to retain the Property, while removing the other party from the investment.

21. [325]

    The open offer made by Ms Widhe to the Mr Shteinman and JIS on 25 November 2025 (Plaintiff’s Open Offer) was an offer for Ms Widhe (or her nominee) to buy the shares in the Company held by Mr Shteinman for $1, and to buy the units in the LPPT held by JIS as trustee of the BIT for $1,167,777. This amount was assessed by:

    1. (1)

       applying the methodology adopted by the expert retained by Mr Shteinman and JIS;

    2. (2)

       ascribing a value of $5,625,000 to the Property; and

    3. (3)

       assessing the value to the remaining unitholder on the basis that the amounts payable to the SAT in respect of the On-Loan include the margin of 2.01%.

22. [326]

    If this offer were accepted, the result would be that the Company would continue to hold the Property as trustee of the LPPT, but Ms Widhe would become sole shareholder and unitholder. It is a term of the Plaintiff’s Open Offer that Mr Shteinman agree to vacate the garage.

23. [327]

    The value of the Property adopted in the Plaintiff’s Open Offer ($5,625,000) represents a premium of 18.67% to the agreed current market value of the Property ($4,740,000); and the amount offered for the BIT’s units in the LPPT ($1,167,777) represents a premium of 39.23% to the value of those units as determined, on the basis of the agreed market value of the Property, by the expert retained by Mr Shteinman and JIS ($725,177).

24. [328]

    Senior Counsel for Ms Widhe and Mr Tolpinrud acknowledged in closing oral address that, if I were to determine that a buy-out order should be made, it would be appropriate for the price for the buy-out to be fixed on the basis of the Plaintiff’s Open Offer, rather than on the basis of the (lower) agreed market value of the Property.

25. [329]

    Mr Shteinman and JIS also made an open offer to Ms Widhe, dated 24 November 2025 (the Defendants’ Open Offer), which included the following elements:

    1. (1)

       Mr Shteinman (or his nominee) purchase the Property from the Company for an amount of $5,600,000;

    2. (2)

       the Company apply $3m to NAB in part payment of NAB’s loan to the SAT, and in repayment of the principal amount that was on-lent by the SAT to the LPPT;

    3. (3)

       after repayment of the Company’s reasonable costs and expenses in effecting the sale, the net sale proceeds be paid into the Company’s bank account; and

    4. (4)

       a liquidator be appointed to wind up the Company, and a receiver be appointed to the LPPT’s assets (which, following the sale of the Property, will be the cash at bank).

26. [330]

    The result would be that Mr Shteinman would become the owner of the Property, and the net sale proceeds would be (after fees and expenses, and subject to any creditor claims) distributed among the unitholders of the LPPT. (It should be noted that the Defendants’ Open Offer does not make any allowance for the interest that is payable to the SAT in respect of the On-Loan, with this presumably a matter to be worked out in the course of the receivership.)

27. [331]

    I accept Ms Widhe’s submission that, in light of the findings which I have made in relation to the oppression claims, it would not be just and equitable to order relief on the basis of the Defendants’ Open Offer. In particular, such an arrangement would result in Mr Shteinman becoming sole owner of the Property, and Ms Widhe ceasing to have any interest in this investment, in circumstances where:

    1. (1)

       Mr Shteinman has engaged in oppressive conduct against Ms Widhe;

    2. (2)

       Ms Widhe and Mr Tolpinrud provided the funds necessary to refinance the Property and have disproportionately assumed the financial risk of the venture (with Ms Widhe as trustee of the SAT borrowing the necessary funds from NAB, and Mr Tolpinrud guaranteeing this loan and granting a mortgage over his residence to secure it);

    3. (3)

       Ms Widhe and Mr Tolpinrud have met a greater proportion of the expenses of the Company as trustee of the LPPT than Mr Shteinman and, in particular, have paid substantial amounts on behalf of the Company in respect of the proceedings brought by the Owners Corporation regarding outstanding levies;

    4. (4)

       Mr Shteinman has withdrawn from engaging with Ms Widhe and Mr Tolpinrud regarding the management of the Property, leaving them to carry the burden of dealing with the Owners Corporation and the other creditors of the LPPT;

    5. (5)

       Ms Widhe and Mr Tolpinrud wish to continue their investment in the Property (with Mr Tolpinrud explaining in cross-examination that they “fundamentally like the investment” and that this is why, despite their disagreements with Mr Shteinman, they have not at any stage put a proposal to sell their interest in the LPPT to him); and

    6. (6)

       Ms Widhe and Mr Tolpinrud are willing to acquire Mr Shteinman’s interest in the Company and JIS’s interest in the LPPT as a means of resolving the deadlock, and have made an offer which will, as noted below, provide Mr Shteinman and JIS with an amount in excess of the current value of those interests.

28. [332]

    A further problem with the Defendants’ Open Offer is that it is not apparent what would be the consequences for the Company’s guarantee to NAB. The offer proposes that the Company pay the amount of $3m to NAB. However, the Company has provided a guarantee to NAB for the full amount of its $4m loan to Ms Widhe. Mr Shteinman and JIS submitted as follows: “It can be inferred that NAB would accept that if the $3m figure is repaid, that it will clear the mortgage from [the Company’s] title and eliminate the guarantee”. While NAB had previously indicated that it would be willing to reduce the level of the guarantee to $3m, such a reduction was not put into effect, due to Mr Shteinman’s own conduct. Mr Shteinman submitted that some correspondence with NAB in late November 2025 indicated that “there is unlikely to be a problem in releasing the guarantee and the mortgage if $3m were repaid to NAB”. However, NAB has not given any assurance to this effect. Instead, a representative of NAB stated, in a response sent to the parties on 24 November 2025, that any proposed amendment to a loan, mortgage or guarantee “will be subject to a full credit assessment, including provision of financials, consents, and servicing capacity, in line with NAB’s lending policies”.

29. [333]

    For those reasons, I decline to order relief on the basis of the Defendants’ Open Offer.

30. [334]

    Mr Shteinman and JIS contended that I should also decline to order relief on the basis of the Plaintiff’s Open Offer, and should instead make orders winding up the Company on the just and equitable basis, and appointing a receiver to the LPPT’s assets, with a view to the Property being sold at auction.

31. [335]

    Three main submissions were advanced in support of this contention.

32. [336]

    First, Mr Shteinman and JIS submitted that the breakdown in the relationship between the parties was caused by the misconduct of Mr Tolpinrud and Ms Widhe in respect of the On-Loan, and the Court “should not permit the wrongdoer to expel the innocent party”. Having regard to the findings I have made in relation to the On-Loan and the parties’ respective claims of oppression, I reject this submission.

33. [337]

    Secondly, Mr Shteinman and JIS submitted that the fact that both parties had made offers based on figures for the Property which were higher than its agreed value suggested that an even higher price might be able to be achieved if, following the appointment of a liquidator to the Company and a receiver to the LPPT, the Property went to auction, with the potential for third parties to be involved in determining the price.

34. [338]

    The problem with this submission is that the parties have agreed, for the purposes of this proceeding, on the current market value of the Property. It is difficult to see how the Court could proceed on the basis that there is a real likelihood that, at an auction, the Property would achieve a price that was not only substantially higher than the agreed market value, but substantially higher than the value ascribed to the Property by the Plaintiff’s Open Offer (which is more than 18% above the agreed market value). Further, in such a scenario, the net sale proceeds available to the unitholders would be reduced by the expenses of the sale process (which, according to the unchallenged evidence of Mr Shteinman’s and JIS’s expert, would total around $80,000), and the remuneration and legal costs of the liquidator / receiver (the likely amount of which was not the subject of any evidence).

35. [339]

    As matters stand, Ms Widhe is willing to pay an amount for the BIT’s units in the LPPT that represents a premium of around 39% to the amount determined by Mr Shteinman’s and JIS’s own expert, based on the agreed market value. I am satisfied, on the evidence referred to above, that the amount offered for the BIT’s units in the Plaintiff’s Open Offer is at least, and likely exceeds, a fair value for those units.

36. [340]

    Thirdly, Mr Shteinman and JIS submitted as follows: “It is not clear why BIT should be obliged to sell its units to Ms Widhe, when BIT has not itself been involved in any of the alleged improper conduct (even if proven) – it is a free-standing beneficiary of the unit trust”.

37. [341]

    In David & Ros Carr Holdings at [111], Leeming JA (with whom Stern JA and Griffiths AJA agreed) determined that an order under s 233 of the Act “in relation to the company” can extend, where the company is a trustee, to an order that one trust beneficiary buy out another. An example of such an order is provided by the decision in Vigliaroni v CPS Investment Holdings Pty Ltd [2009] VSC 428, to which Leeming JA referred with approval in David & Ros Carr Holdings at [106]-[107]. Davies J there determined (at [58]) that, in circumstances where parties had established a business through a company which was the trustee of a unit trust, the units in which were held equally by their respective family trusts, and one of the participants (Mr Gargaro) had engaged in oppressive conduct of the other (Mr Vigliaroni), the Court had power pursuant to s 233 of the Act, and it was appropriate, “to order a buy-out of the Gargaro interests by the Vigliaroni interests, including the unit holdings”. In particular, His Honour, in explaining why such an order was appropriate, observed (at [86]) that there had been a deliberate choice “to conduct … operations under a corporate trustee/unit trust structure”, with the result that the affairs of the trusts were “so intertwined” with the affairs of the companies “that a separation of the interests between companies and trusts is plainly artificial and bears little relation to practical reality” (at [86]).

38. [342]

    Mr Shteinman chose to hold his interest in the joint venture through his family trust. This was an entity which he controlled. Mr Shteinman pleaded in his Points of Cross-Claim that, as well as being one of the directors of JIS, and one of the discretionary beneficiaries of the BIT, he is “the sole appointor with sole power (cl 26) to replace the trustee, and substantial control over the operations of the [BIT]”.

39. [343]

    I have found that the parties agreed to establish the Company and the LPPT for the purpose of purchasing and holding the Property on the basis that the two equal unitholders of the LPPT would equally share the exposure and expenses of this investment (including the strata levies, which were expected to be substantial and to require further capital contributions by the unitholders). I have also found that Mr Shteinman had, in the period following purchase of the Property, caused funds to be provided to the Company as trustee of the LPPT in order to meet the BIT’s share of such expenses; that Mr Shteinman subsequently caused such contributions to cease; that Mr Shteinman did not engage, on behalf of JIS as trustee of the BIT, with Mr Tolpinrud and Ms Widhe as to the payment of the LPPT’s expenses; and that this formed part of a course of conduct which was oppressive within the meaning of s 232 of the Act. Accordingly, the conduct which I have found to be oppressive includes conduct undertaken by Mr Shteinman not only as a director and shareholder of the Company, but also the conduct which he has undertaken as the controller of one of the two equal unitholders of the LPPT.

40. [344]

    Having regard to the matters set out above, I am satisfied that it is appropriate to exercise the power under s 233 of the Act to make an order that Ms Widhe as trustee of the SAT buy out not only the 50% shareholding in the Company held by Mr Shteinman, but also the 50% unitholding in the LPPT held by JIS as trustee of the BIT, for the consideration specified in the Plaintiff’s Open Offer.

41. [345]

    In her closing written submissions, Ms Widhe submitted that the relief to which she is entitled under s 233 of the Act includes compensation for costs and expenses incurred by her on behalf of the Company in respect of the proceedings brought by the Owners Corporation in relation to unpaid strata levies, and also the outstanding amount of interest that is owing to the SAT in respect of the On-Loan.

42. [346]

    I do not consider that it is necessary to make any order requiring Mr Shteinman and JIS to compensate Ms Widhe for those amounts, separately from the buy-out order. That is because the price offered in the Plaintiff’s Open Offer for the BIT’s units has been determined after deducting (consistently with the approach adopted by the Defendants’ expert) amounts which have been paid by the SAT on behalf of the Company in respect of the proceedings concerning unpaid levies, and the outstanding interest which is owed by the Company to the SAT in respect of the On-Loan.

43. [347]

    For the reasons given above, I have determined that:

    1. (1)

       Mr Shteinman has failed to establish his claim that Ms Widhe and Mr Tolpinrud breached any duties which they owed to the Company or him, or that they engaged in oppressive conduct;

    2. (2)

       Ms Widhe has established her claim that Mr Shteinman engaged in oppressive conduct; and

    3. (3)

       orders should be made pursuant to s 233 of the Act that Mr Shteinman sell his shares in the Company to Ms Widhe (or her nominee), and that JIS as trustee of the BIT sell its units in the LPPT to Ms Widhe (or her nominee), for the consideration specified in the Plaintiff’s Open Offer.

44. [348]

    Costs should follow the event, with Mr Shteinman and JIS being ordered to pay the costs of Ms Widhe and Mr Tolpinrud. However, before making an order to this effect, I will give the parties an opportunity to make submissions in the event that any different form of costs order is sought.

45. [349]

    I will direct the parties to bring in short minutes of order to give effect to these reasons for judgment. In the event that the parties are unable to agree on the form of orders, including the form of order with respect to costs, I will give the parties an opportunity to make submissions on those matters and, unless any party requests an oral hearing, will deal with any such dispute on the papers.

46. [350]

    Accordingly, I make the following orders:

    1. (1)

       Direct that the parties are to provide to the Associate to Nixon J, by 5:00pm on 25 February 2026, any agreed form of orders to give effect to the reasons for judgment.

    2. (2)

       Direct that, in the event the parties are unable to agree on a form of orders to give effect to the reasons for judgment (including orders as to costs), the parties are to exchange and provide to the Associate to Nixon J, by 5:00pm on 25 February 2026, the orders which each party proposes, submissions (limited to 5 pages) on those orders, and any evidence in respect of costs, indicating whether, and if so why, an oral hearing is requested to deal with the matters in dispute.