In the matter of Gunyahweh Pty Limited

The Plaintiff, Gunyahweh Pty Ltd (“Company”) commenced these proceedings seeking orders for possession of part of land situated in Chowan Creek in New South Wales (“Property”) against the Defendant, Mr Benjamin Smith (to whom I will refer, without disrespect, as Benjamin, to avoid confusion with his cousin Daniel). Those orders were previously made by consent, but it remains to determine Benjamin’s Cross-Claim against the Company and four of its shareholders, Mr Anthony Grumley, Mr Daniel Smith (to whom I will refer, without disrespect, as Daniel, to avoid confusion with Benjamin), Ms Susanne McKenna and Ms Elizabeth Austen.

I now turn to a chronology of events, which raises issues of substance since the Company did not take, validly or at all, many of the corporate steps which were at issue in the proceedings. I have here drawn on the pleadings, the affidavit evidence and exhibits, and the Cross-Defendants’ chronology, where the Cross-Claimant did not provide a chronology.

In about July 2014 (Amended First Cross Claim Statement of Cross-Claim (“SCC”) [9]); denied First Cross-Claim Defence to Cross-Claim (“Defence”) [4]), Benjamin and his brother Sascha Smith (to whom I will refer, without disrespect, as Sascha, to avoid confusion with Benjamin and Daniel) commenced communications with Mr Bryant (“Bryant”), the then registered proprietor of the Property. On 20 August 2014 (SCC [10], largely admitted Defence [5]) Sascha and Bryant entered into a written agreement concerning occupancy of the Property, which provided for payment of a weekly rent and allowed Sascha the right to buy the Property for $1,100,000 during the term of the agreement (Ex J1, 10; Benjamin 27.5.22 [2]; Benjamin 7.11.22 [6]; Benjamin 15.2.23 [11]; Daniel 18.1.23 [19]). Benjamin pleads and the Company denies (SCC [11]; denied Defence [2]) that, although Sascha was party to that agreement, he and Benjamin were joint venturers in the performance of the agreement and the objective of securing the purchase of the Property. It is not necessary to determine that question to decide the proceedings. Benjamin also pleads and the Company does not admit (SCC [12], Defence [4]) that, after 20 August 2014, Benjamin and Sascha secured tenants and income and fulfilled the terms of that agreement.

A valuation report (Ex J1, 182) dated 23 November 2016 prepared by Gilchrist Valuers Pty Ltd for Southern Cross Credit Union Ltd, which had been initially approached to lend for the acquisition of the Property, assessed the Property’s then current market value as $1,400,000 and its rental value as $1,000 per week, which was a lower rental value than the amount that was being paid under the agreement with Bryant, and described the proposed purchase by Sasha and his associates as a “good purchase”.

The Company was incorporated on 20 January 2017 and acquired the Property under the arrangements between Sascha and Bryant (SCC [2]-[3]; admitted Defence [1]; Ex J1, 359). Benjamin pleads and the Company denies (SCC [14]; Defence [2]) that, prior to the Company’s registration, Benjamin, Sascha and Mr Grumley had agreed that the purpose of the Company was to be the registered proprietor of the Property and hold the Property so that existing and future shareholders of the Company could enjoy the benefit of a right to occupy a portion of the Property, on such terms as may be agreed between the Company and the individual shareholder. It is unlikely that such an agreement would have been enforceable, where the pleaded agreement would have depended on a future agreement with the shareholder as to the terms of occupancy. In a Notice to Admit Facts (Ex CC-5), Benjamin sought an admission that a document exhibited to Mr Grumley’s affidavit dated 10 June 2023 (Ex CD-3) was a true copy of the Company’s constitution from its incorporation to at least 1 February 2021; the Company denied that proposition (Ex CC-5), and it is now common ground that the Company’s shareholders did not take the steps necessary to adopt a constitution, either in that form or in a different from later put forward by Benjamin

On 20 January 2017, Benjamin sent Mr Grumley, Sascha, Daniel and others an email with attachments relating to the incorporation of the Company on that date (Ex J1, 273), which included information from the company registration provider as to how to set up a proprietary company, referring to the need for written consents to be given to act as directors and the need for the Company’s constitution to be executed by all of the Company’s members (Ex J1, 277). It appears that neither occurred. The constitution prepared by the company registration provider (Ex J1, 288), had it been adopted, would have provided for the issue of several classes of shares with specified rights. The attachments also included draft minutes prepared by the company registration provider for a meeting of directors and shareholders to deal with matters including the execution of the constitution (Ex J1, 360). It is now common ground that such a meeting was not held. The register of members prepared by the company registration provider recorded six ordinary shares owned by each of Benjamin, Mr Grumley, Sascha, Daniel, Ms Sandra Diwa (who is Daniel’s mother) and Ms McKenna (Ex J1, 371-376). The consents to act as a director provided by the company registration provider (Ex J1, 363-368) do not appear to have been signed.

Benjamin claims that, also on 20 January 2017, he and Sascha signed a “Gunyahweh Pty Ltd Founder Share Agreement 2017”, copies of which he initially said he could not locate (Benjamin 20.2.23 [4], [6]). I do not accept that document was then prepared or executed, given the limits of Benjamin’s recollection which emerged on his cross-examination, the issues as to the reliability of his evidence and the fact that it is highly unlikely that Benjamin and Sascha executed that document at that time or later when they did not then or later take other necessary steps relating to the Company’s incorporation, such as passing a resolution to adopt a constitution or providing written consents to their appointment as directors of the Company.

By April 2017, disputes had already arisen between Sasha and Benjamin (Ex J1, 423) and, in about April 2017, Sascha left the Property (Benjamin 7.11.22 [15]); Ex J1, 423-425).

In January 2019, Benjamin submitted a loan application to Westpac Banking Corporation (“Westpac”) (Benjamin 7.11.22 [22]). In February 2019, a meeting took place between Benjamin and Daniel and a representative of Westpac concerning funding for the purchase of the Property (Benjamin 7.11.22 [24]). Benjamin pleads (SCC [15]) that he was substantially involved in compiling a business plan which was intended to demonstrate the Company’s financial viability, the sources and potential sources of its income, its existing operations and the scope for expansion of those operations and its ability to borrow funds so as to acquire the Property. Benjamin pleads (SCC [16]-[18]) that the business plan was compiled so as to secure a loan and was provided by the Company to Westpac as part of the documents submitted in the Company's loan application to Westpac; and, on about 5 August 2019, Westpac approved a loan of $660,000 (“Loan”) to the Company, which accepted that Loan. Benjamin was then one of the guarantors of the Loan, although it appears that Westpac has now discharged him from liability as a guarantor (Ex J1, 2729).

Benjamin also claims that, in February 2019, the Company’s directors agreed that he “would be issued with a further three [G class] shares” in the Company (Benjamin 7.11.22 [21]). I do not accept that evidence, and Benjamin no longer presses his claim to have been issued G class shares in the Company. On 3 February 2019, Daniel sent Benjamin an email which attached a “Preliminary Inaugural Share Prospectus (Draft)” in respect of the Company (Ex J1, 722) which purported to amount to a “first public prospectus and preliminary offering of shares” and identified Mr Grumley, Benjamin and Daniel as the “founding directors” and referred to several categories of shares to be issued, there described as “founder investor wholesale shares”, “standard investor shares”, “founding director shares”, “manager share packages”.

On 28 March 2019 Benjamin sent to Daniel an email which attached a draft business plan (Ex J1, 771) and, on 29 March 2019, he sent Daniel a further email attaching a “Gunyahweh Landholder Share Agreement” and a further draft prospectus referring to “standard investor shares”, “founding director shares” and “manager share packages” (Ex J1, 778).

On 2 April 2019, a meeting took place on which Benjamin initially relied for a claim that the ordinary shares in the Company were “cancelled” and replaced by shares including “3x3 Founder Shares” (Ex J1, 849-851). I understand that claim is no longer pressed, where Benjamin no longer contends that he was validly issued G class shares. There is a dispute as to whether a meeting took place as recorded in minutes dated 2 April 2019 (Ex J1, 849), but little turns on that dispute where the steps recorded in those minutes, including Benjamin’s claim that he had “let all the appropriate people know and has the approval of the shareholders” did not satisfy the requirements for a share buy-back of the Company’s ordinary shares under Pt 2J.1 of the Corporations Act 2001 (Cth) (“Act”) or lead to the cancellation of those ordinary shares. It is not necessary to decide whether the mechanism described in that document could have effect to divide the “36 current shares” there referred to, however they originated, into specified classes of shares, or whether that course would have complied with ss 246B(2) or 246C(5) of the Act, since the parties took no point as to those sections.

On or about 8 April 2019, Benjamin lodged a notification of share buy-back with the Australian Securities & Investments Commission (“ASIC”) which wrongly recorded that the Company had undertaken an equal access share buy-back scheme within the 10/12 limit and, inconsistently but also wrongly, that shareholder approval had been obtained where the 10/12 limit was exceeded under s 257C(3) of the Act (Ex CD-3, 156). As I noted above, it is plain that the Company had not undertaken a share buy-back of its ordinary shares in accordance with the requirements specified in Pt 2J.1 of the Act and the parties do not now contend to the contrary.

By an email dated 23 April 2019 (Ex J1, 878), Benjamin sent Ms Austen a different version of a constitution of the Company (Ex J1, 881) together with an “Inaugural Share Prospectus” (Ex J1, 936) and, by a further email (Ex J1, 941), a “Landholder Share Package Agreement” (Ex J1, 942). There is no evidence that the constitution was adopted by the Company. The draft prospectus summarised the shares in the Company and described three “founder shares” held by each of the three directors (Ex J1, 936), likely referring to the three G class shares which Benjamin was then understood to hold, and stated that those shares entitled the holder to a position on the Company’s board of directors, were not transferable other than in limited circumstances and had dividend entitlements from five years after the purchase of the Property. It made no reference to any right of occupancy of the Property by the founding directors including Benjamin, by contrast with the description of “landholder shares” on the same page which referred to the fact that such share packages of 3 shares were available for $120,000 or $40,000 per share, entitled the holder to a position on the board of directors and “entitle the holder to build permanent dwellings (subsequent to local government approval) on one of the 3 currently undeveloped lots on the [P]roperty” and entitled the shareholder to “3 hectares of land for personal use along with building entitlements.” It seems to me highly implausible that those rights would have been described in detail in respect of the landholder shares but no reference, even in a summary form, made to corresponding rights attached to the founder shares, had such rights then been understood to exist.

For completeness, it is not necessary to decide whether the issue of a “prospectus” by the Company contravened s 113 of the Act, which relevantly provides that a proprietary company must not engage in activity that would require disclosure to investors under Ch 6D of the Act, other than an offer of shares or options in respect of shares to existing shareholders of the Company and employees of the Company or of a subsidiary of the Company. That would likely depend on whether the offers in this case had the “personal” character necessary for the exception in s 708(1) of the Act.

On 16 June 2019, Benjamin sent Ms Austen a further email (Ex J1, 1088) attaching documents including a “business spreadsheet” and “business plan” and a standard share purchase agreement. That email stated that it attached the Company’s constitution, but that is not among the documents tendered with that email. The attached business plan referred to three “founder shares” issued to each of the three directors, again likely referring to the three G class shares which Benjamin was then understood to hold, and stated (Ex J1, 1094) that those shares “are not sell-able [sic] though contain all rights to company dividends after 5 years and a position on GUNYAHWEH board of directors.” Importantly, it made no reference to any right of occupancy of the Property by the founding directors including Benjamin, by contrast with the description of “landholder shares” on the same page which referred to the fact that nine such share packages “contain right of long term residency on one of the 3 unoccupied lots” and that holders of the landholder shares “are entitled to first option on long term residential building rights on these lots” and those packages “also give entitlement to 3 hectares of property for private development”. It again seems to me highly implausible that those rights would have been described, now for the second time, in such detail in respect of the landholder shares but no reference, even in a summary form, made to corresponding rights attached to the founder shares had such rights then been understood to exist. That business plan and spreadsheet provided to Ms Austen (Ex J1, 1089) also made no reference to any liability of the Company for the monetary amounts which Benjamin later claimed against the Company

On 18 June 2019, the Company lodged a finance application with Westpac (Ex J1, 1119-1166). In June or July 2019, Benjamin also claims to have completed and signed a “Gunyahweh Pty Ltd Landholder Share Package Agreement” (Benjamin 27.5.22 [7]). I am not persuaded by his evidence in that regard, where no executed copy of that agreement is in evidence, and given his lack of attention to documentation in other areas, but there is in any event no evidence that the Company resolved to enter into such an agreement with him. Benjamin also contends that, in July 2019, a special general meeting of the Company adopted a new constitution (Benjamin 27.5.22 [6]; disputed Grumley 10.6.22 [11]). I am also not persuaded that occurred. On 26 July 2019, the Company executed a contract for the purchase of the Property (Grumley 16.1.23 [106]).

The Company entered an undated “landholder share package agreement” in mid-2019 relating to land now occupied by Ms Natalie Hollingsworth (Ex J1, 1321; T14). That document states that:

That document imposes certain conditions and obligations on Ms Hollingsworth including that all “[C]ompany business shall be conducted in line with the GUNYAHWEH PTY LTD Constitution”. That provision has the difficulty that, as noted above, there are two versions of the constitution, the evidence does not identify which constitution was there referred to and there is no evidence that either was adopted by the Company’s shareholders. That document also records certain commitments by the Company to allow use of its facilities by the “landholder” who would have an “automatic position” on the Company’s board of directors and gives permission for the permanent use of a worker’s cottage and two hectares of land on a specified lot, but provides for “share capital” to be returned to shareholders if the Property was not purchased before the end of the option to acquire it. It is not necessary to decide whether that agreement would be enforceable, where Ms Hollingsworth is not a party to it and has not signed it and it is not executed as a deed poll.

The Company also entered an apparently contingent “General Business Agreement” dated 18 August 2019 in respect of Ms Hollingsworth. The agreement provides (Ex J1, 1826):

A “landholder share package agreement” (Ex J1, 1653) in respect of Ms Talitha Mitchell is signed by her, but then only by a director of the Company as “witnessing director” rather than in a manner that would ordinarily bind a company. A share purchase agreement in favour of Ms Austen, signed in August 2019 (Ex J1, 1822) is in broadly similar form, and is signed by Ms Austen and witnessed by Daniel and Benjamin, but also not in a manner that would ordinarily bind a company.

At about this time, two B class shares in the Company were also issued, or purportedly issued, which were not associated with a building entitlement, and B class shareholders were to be granted “1 hectare exclusive use for projects approved by” the Company and use of Company resources “not utilised or required by the company”, including “the entitlement to share in shared land use, available accommodation, workshops, storage and agistment facilities, collective structures… and other assets” of the Company (Ex J1, 1660; T280).

On 5 August 2019, Westpac made on offer of finance for the purchase of the Property (Ex J1, 1399-1410) and, on 26 August 2019, the purchase of the Property was completed (Grumley 16.1.23 [108]-[111]). A further residential valuation report prepared for Westpac in mid-August 2019 (Ex J1, 1679) valued the land at $975,000 with improvements of $425,000 for a total of $1,400,000.

From about the date on which the Company acquired the Property, Benjamin expressed his unhappiness with his role and responsibilities within the Company in increasingly strident terms. By a Facebook message to Ms McKenna on 30 August 2019 (Ex J1, 1840), he stated that:

By a second series of Facebook messages to Ms McKenna on 31 August 2019 (Ex J1, 1842), he advised that:

By a third series of Facebook messages to Ms McKenna on 3 September 2019 (Ex J1, 1843-1847), he stated that:

By a Facebook message to Mr Grumley on 3 September 2019 (Ex J1, 1858), he stated that:

By a second Facebook message to Daniel on the same day (Ex J1, 1862), he advised that:

By a third Facebook message to Daniel on 7 September 2019 (Ex J1, 1863), he stated that:

A share certificate dated 9 September 2019 was issued for three G class shares each in the Company in favour of Benjamin, initially showing $120,000 paid on the shares (Ex J1, 1894). On 9 September 2019, Benjamin pointed out that he had paid only $1 for his shares not $120,000, although he claimed the shares were “currently worth way more than that” and contested the validity of the then share certificate (Ex J1, 1896-1898). Mr Grumley responded that he would reissue Benjamin’s, Daniel’s and Mr Grumley’s share certificates showing $1 as paid (Ex J1, 1892, 1897). A second share certificate dated 9 September 2019 was then issued for three G class shares in the Company in favour of Benjamin, showing $1 paid on each share (Ex J1, 1895). I am satisfied that this was the genesis of the further share certificates on which Benjamin previously relied to claim that he holds six rather than three G class shares in the Company, and that claim was not well founded. In any event, Benjamin does not now contend that he was validly issued G class shares and the Company has denied in its Defence and in a Notice Disputing Facts that such shares were issued. The fact that no-one now contends that G class shares were effectively issued has significant implications for the scope of the remaining issues in the proceedings.

On 17 September 2019, a meeting took place at which Benjamin ceased to be the company secretary, whether permanently or temporarily, although nothing turns on that for the determination of the proceedings (Ex J1, 1911). It is plain, from the correspondence between the parties, that the relationship between Benjamin and the other shareholders was strained, if it had not already broken down, as early as September 2019 (Ex J1, 1845, 1858, 1860, 1891, 1909, 1969-1970, 2350, 2352) and the parties’ oral evidence also makes clear that the breakdown is by now irretrievable.

Mr Alkadamani, who appears for Benjamin, initially contended that Benjamin was allocated a further 3 G class shares for recognition of his efforts and Benjamin gives evidence of the suggested forfeiture in late 2019 of the further three G class shares (Benjamin 27.5.22 [9]). I do not accept this evidence, and I accept the submission of Mr Epstein, who appears for the Cross-Defendants, that Benjamin sought to develop a false claim to this effect from about mid-October 2019. On 15 October 2019, Benjamin sent a Facebook message to Ms McKenna (Ex J1, 1969) stating that

As I noted above, the issue of substitute share certificates that recorded G class shares paid up to $1 was plainly directed to replacing the earlier share certificates which falsely stated that the shares were paid up to an amount of $120,000, rather than to double Benjamin’s shareholding, and it is now common ground that effective steps were not taken to issue the shares in any event.

The “minutes” of a meeting of directors or shareholders in the Company on 3 December 2019 (Ex J1, 2046–2048) recorded, under the heading “Gunyahweh Main House and Tenants agreements” that:

On 9 December 2019, the Company wrote to Benjamin requiring him to vacate the premises where he was then residing (Ex J1, 2052; Benjamin 27.5.22 [12]). On 16 January 2020, the Company made an offer to Benjamin to occupy an area on the Property known as the “pirate ship” with necessary improvements to amenities being made (Ex J1, 2115) which Benjamin did not accept. That letter referred to that area as being “your share entitlement on the farm”, and I accept that phrase suggested that the Company and other shareholders then accepted that Benjamin had an expectation that he would be permitted to live on the Property, although it does not follow that that expectation was enforceable either in contract or by principles of estoppel on which Benjamin now relies. It should also be recognised that, on its face, that offer suggests a real attempt by the Company to meet Benjamin’s expectations and needs.

By an email also dated 16 January 2020 (Ex J1, 2096), Ms McKenna similarly seems to have sought to reach an acceptable arrangement with Benjamin, emphasising the benefits of the offer of occupancy of that area, including that he would be living “rent free” and only paying for costs and that he would “have [his] own home … before any of us others” and that “you can create a haven, it’s yours for life.” She went further to raise the possibility that he could “pick another spot” and stated that “[w]herever you choose pick [sic] as your permanent home on the farm, we will support you to get it sorted and livable.” Again, that appears on its face to have been a constructive approach.

An annual general meeting of the Company took place on 21 January 2020 and Benjamin claims that his original three shares were forfeited or deregistered by the Company on that date (Ex J1, 2142-2143; Benjamin 27.5.22 [11]).

On 12 March 2020, the Company commenced proceedings against Benjamin in the NCAT seeking his removal from the Property (Ex J1, 2198; Smith 27.5.22 [13]; Grumley 10.6.22 [24]). Those proceedings were dismissed for lack of jurisdiction on 25 May 2020 (Ex J1, 2234; Smith 27.5.22 [13]; Grumley 10.6.22 [24]).

By an email dated 11 August 2020 (T2111, T113-114), Benjamin advised that:

By a lengthy email dated 9 November 2020 (Ex J1, 2404), marked “without prejudice save as to costs” but tendered without objection, the Company advised Benjamin that, inter alia:

A further valuation of the Property dated 20 November 2020, obtained by the Company in anticipation of a selective reduction of capital in respect of the three G class shares that Benjamin was then understood to hold, valued the land and improvements with a mid-range value of $1,750,000, comprising $1,400,000 for the land and $350,000 for the value of the improvements (Ex J1, 400A).

Between 11 November 2020 and 11 December 2020, correspondence took place between the Company’s and Sascha’s legal representatives concerning his earlier exclusion as a director and shareholder of the Company (Ex J1, 2416, 2450, 2458, 2462). On 3 December 2020 (Ex J1, 2450), in responding to Sasha’s complaint as to the circumstances in which his ordinary shares had purportedly previously been extinguished, the Company gave its account of events as follows:

By letter dated 7 December 2020 (Ex J1, 2458), Sasha’s legal representative responded, with some force, that:

On 7 December 2020, the Company lodged a notification of a reduction in share capital with ASIC (Ex J1, 2479) which annexed notice of two extraordinary general meetings, the first of which provided for approval by all G class shareholders of the reduction in capital by the cancellation of only Benjamin’s G class shares, on the basis that the Company would pay an amount of $30,000 for each G class share to Benjamin, with the total amount paid being debited to the Company’s share capital account. A second extraordinary general meeting was to address a resolution for a reduction in the Company’s share capital by the cancellation of Benjamin’s shares.

The explanatory memorandum for that share cancellation recorded that a total of $90,000 was to be paid to Benjamin in compensation for the capital reduction, in nine instalments of $10,000 (Ex J1, 2484-2485). The explanatory memorandum stated that:

Benjamin attacks the operation of that formula, so far as it includes an allowance for costs and damages allegedly caused by Benjamin to the Company and had an error so far as that amount was then deducted from the amount payable to Benjamin, rather than divided between the shareholders. That notice of the extraordinary general meetings also included an explanatory note referring to s 256C(2) of the Act, which requires, inter alia, that such a capital reduction be approved by a special resolution passed at the meeting of the shareholder(s) whose shares are to be cancelled. That requirement was not complied with, and required Benjamin’s approval of the cancellation of the G class shares (had they existed) which plainly could not occur.

By letter dated 11 December 2020 (Ex J1, 2477), the Company made an offer to acquire the G class shares that Benjamin was then understood to hold, on the basis of entry into a non-negotiable deed of settlement and release as follows:

Benjamin responded, by an email dated 11 December 2020 (Ex J1, 2478), in a manner which illustrates both the breakdown in the parties’ relationships and Benjamin’s inflammatory approach to matters, as follows:

By an email dated 12 December 2020 (Ex J1, 2488), Benjamin advised that he had no interest in selling his shares, that no equivalent land in the Tweed area could be purchased for the money that was offered and inviting the board to “refrain from your attempts to rob me”. He also stated that he did not care that other shareholders did not like him and that he would not be “bullied” by them and advanced several allegations as to shareholders’ conduct before making the following threat:

By an email dated 14 December 2020, the Company convened two meetings to be held on 10 January 2021 to cancel the three G class shares which Benjamin was then understood to hold, with a total payment of $90,000 to be made to him (Ex J1, 2489-2494). By email also dated 14 December 2020 (Ex J1, 2500), Benjamin indicated that his vote was against the proposal, a matter that would have been of significance so far as the proposal could only have proceeded if Benjamin had voted in favour of it under s 256C(2) of the Act, if the G class shares which he was then understood to hold had in fact been issued.

On 10 January 2021, meetings of the Company’s shareholders resolved to cancel the three G class shares in the Company that Benjamin was understood to hold for a consideration of $90,000, which was ultimately not paid to Benjamin (Ex J1, 2529-2530). On 12 January 2021, the Company issued a notice to quit to Benjamin (Ex J1, 2548) and lodged a notice of a reduction in share capital with ASIC, attaching the documents to which I have referred above and minutes that recorded the passage of both resolutions at the relevant meetings (Ex J1, 2555).

By letter dated 27 January 2021 (Ex J1, 2572; Benjamin 27.5.22 [14]), the Company wrote to Benjamin advising that his shares had been “deregistered” and introducing an additional requirement, before he would be paid the $90,000 in respect of the reduction of share capital in accordance with the resolutions passed on 10 January 2021, that he sign a deed of settlement, and requested him to nominate a bank account to which payment could be made.

By letter dated 8 February 2021 (Ex J1, 2615), marked “without prejudice” but tendered without objection, the Company observed that Benjamin’s shares had been “de-registered” and that “the [C]ompany’s only remaining obligation to you is the payment of compensation” and enclosed a deed of settlement and release, indicating that Benjamin was required to sign and return the deed before any payments could commence. There was no statutory basis for that approach, if the G class shares then understood to be held by Benjamin had existed and a valid share capital reduction had occurred in respect of them.

On 30 April 2021, the Company obtained a share valuation of what were then understood to be Benjamin’s three G class shares in the Company, which it had sought “for the purposes of providing a compensation payment to a former shareholder following a capital reduction by the company” (Ex J1, 2634B). The valuer relied on a valuation of the Property at $1,750,000 (apparently reflecting the 20 November 2020 property valuation to which I referred above) and observed that the highest value of the shares is obtained by using the Company’s net tangible assets and, on the (likely incorrect) basis that there were 26 shares treated as having equal rights, valued Benjamin’s shares at $144,000, while expressing the view that “A” class shares should be valued more highly than both the “B” class shares and the “G” class shares that Benjamin was then understood to hold.

A current and historical company extract prepared from the records maintained by ASIC as at 23 June 2021 (Ex J1, 235) records the directors of the Company as Mr Grumley, Daniel, Ms McKenna and Ms Austen and records that 15 “A class” shares, 2 “B class” shares and 6 “G class” shares were on issue, with Mr Grumley and Daniel each holding 3 G class shares. As I noted above, Benjamin no longer contends that the G class shares were validly issued and it is common ground that Benjamin, Mr Grumley and Daniel each hold six ordinary shares and, by parity of reasoning, the other shareholders who were issued ordinary shares when the Company was incorporated also hold those ordinary shares.

On 9 February 2022 (Ex J1, 2729), Westpac advised the Company it had removed Benjamin as a guarantor and he would receive a letter in due course advising that he had been released from his obligations under the guarantee. It appears that process took some time, as Benjamin had refused to sign a release authority that Westpac had previously required to implement his release as guarantor. On 15 February 2022, the Company commenced these proceedings, initially claiming possession of the land occupied by Benjamin.

On 17 February 2023, Benjamin claims to have discovered, in a cupboard in his mother’s home unit, a USB drive including a copy of an unexecuted “Gunyahweh Pty Ltd Founder Share Agreement 2017” (Benjamin 20.2.23 [12]). I address his evidence in that regard below. On 21 February 2023, Lindsay J made consent orders for possession in these proceedings on the Company’s application and with Benjamin’s consent.

I now turn to the affidavit evidence and cross-examination. The parties sought to read numerous and lengthy affidavits addressing unpleaded allegations of criminality against each other. Benjamin alleged that other shareholders in the Company, inter alia, engaged in unlawful drug dealing from the Property and in money laundering using the Company’s bank accounts and funds. The Company, under the control of the other shareholders, alleged that Benjamin was angry, aggressive, had unlawfully destroyed property and had violently assaulted them. For the reasons indicated in an ex tempore judgment, I rejected the parts of that evidence led by both parties to which objection was taken, since there would have been a fundamental denial of procedural fairness in determining unpleaded allegations against the other, where each party and the Court would have to deduce the scope of those allegations from voluminous and often inadmissible affidavit evidence.

It was not apparent that, in any event, the large part of that evidence would be material to a determination of the case. It is plain that the Company was established on a basis that assumed trust and confidence of the shareholders; that the relationship between Benjamin and other shareholders has irretrievably broken down; and that both Benjamin and other shareholders have contributed to that breakdown, at least by vitriolic correspondence on Benjamin’s part, and by other shareholders’ attempt to cancel Benjamin’s G class shares by a selective reduction of capital, initially on the basis that he would be compensated for their value, but in fact on the basis that the payment would only be made if he accepted their terms and over a long period in which he would be exposed to the risk of non-payment. I use the term “attempt” here because, as will emerge below, no party now contends that the G class shares that the Company sought to cancel, by a selective reduction of capital, had been validly issued and all parties accept that Benjamin still holds ordinary shares which the Company had not sought to cancel.

The affidavit evidence that remains, after excluding that relating to unpleaded allegations, is of limited scope and takes matters little further than what emerges from the documentary evidence. Nonetheless, in addressing that evidence, I have regard to the fallibility of human memory which increases with the passage of time, particularly where disputes or litigation intervene: Watson v Foxman (1995) 49 NSWLR 315 at 318–319; Varma v Varma [2010] NSWSC 786 at [424]–[425]. I also have regard to the fact that objective evidence, where available, is likely to be the most reliable basis for determining matters of credit that arise as to the affidavit evidence: Armagas Ltd v Mundogas SA [1985] 1 Ll R 1 at 57; Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 at [10]. I also bear in mind the observations of Bell P (as the Chief Justice then was, with whom Bathurst CJ agreed) in ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24 at [27]-[28]:

I have here drawn on my summary of the applicable principles in Re SRD Property Pty Ltd [2023] NSWSC 441 at [8]ff.

Benjamin relies on numerous affidavits, significant parts of which were, as I noted above, directed to unpleaded claims of misconduct and criminality on the part of other shareholders in the Company, which were rejected for lack of relevance and under s 135 of the Evidence Act 1995 (Cth) (“Evidence Act”). By his affidavit dated 27 May 2022, Benjamin outlined the circumstances in which he and Sascha first dealt with Bryant in relation to the purchase of the Property and referred to his and Sascha’s decision to incorporate a proprietary company to own the Property and to his having originally been a director of the Company after its incorporation on 20 January 2017. He refers to the arrangements for occupancy of the Property after it was acquired, which included sub-letting rooms, houses and workshops and entering into agistment arrangements with third parties. He also refers to the financing of the purchase of the Property, which included the loan from Westpac to which I referred above and significant amounts paid by persons who acquired shares in the Company, including Ms Talitha Mitchell, Ms McKenna and Mr Alan Oshlack and lesser amounts contributed by Ms Natalie Hollingsworth (although partly not in money as noted in the above chronology) and paid by Mr Ron Berry and Ms Braja Mansfield. Benjamin’s evidence is that he previously “paid” to the Company an amount in excess of $120,000 by payment of expenses associated with it and the management of the land, but that proposition is not established by the evidence and he was unable to support it in cross-examination. Benjamin also refers to a copy of the landholder share package agreement distributed to shareholders (or potential shareholders) holding (or potentially acquiring) parcels of three shares in the Company in June or July 2019 and to the fact that the Company became the registered proprietor of the Property in September 2019. Benjamin also refers to a contentious meeting of members of the Company which he says took place in November 2019 and to the circumstances in which he believed the Company sought to forfeit or deregister his shares in the Company. In the event, although the Company sought to extinguish Benjamin’s three G class shares in the Company, which it then understood he held, it took no such step in respect of his ordinary shares in the Company.

By a second affidavit dated 7 November 2022, Benjamin expanded on his account of the initial lease of the Property, the Company’s incorporation and the subsequent purchase of the Property, and the circumstances in which he paid rent in respect of his occupation of a room in the main house of the Property and worked on business plans for the Property or the Company He refers to a suggested agreement that he should invoice the Company for work done for it and to the issue of a further three shares to him in payment for that work. I do not accept his evidence in that regard and find that three replacement share certificates were issued so as to correct the misstatement of the amount he had paid to acquire his shares, then understood to be G class shares, from $120,000 to $3, which it appears was also not paid (T126). Benjamin also refers to his dealings with Westpac in respect of a loan made to the Company to acquire the Property, his subsequent claims for payment in respect of work he had done and a dispute that took place at a meeting in mid-October 2019. He also refers to subsequent offers made by the Company to pay him amounts, initially of $120,000 and subsequently of $90,000, on extinguishing his shares. Benjamin did not accept the offer which contemplated payment of the higher amount and the Company did not pay the lesser amount.

By a third affidavit dated 15 February 2023, Benjamin responded to evidence of the Cross-Defendants, significant parts of which were rejected or were not read. By a fourth affidavit dated 20 February 2023, large parts of which were rejected, Benjamin claimed to have discovered a USB drive left in a cupboard at his mother’s home unit which contained copies of founder, A class and B class share agreements and claimed to have found a document titled “Gunyahweh Pty Ltd Founder Share Agreement 2017” located on that USB drive. Benjamin was cross-examined as to that evidence and gave a somewhat incoherent explanation, which sought to explain the fact that the USB drive which contained that document could not have been discovered in a cupboard at his mother’s unit in February 2023, since it had previously contained drafts of his affidavits for these proceedings prepared prior to that date (T164-171). The substance of that evidence involved attempts to explain there was another USB drive, not referred to in his affidavit, from which he had copied the documents found on the USB drive which had been tendered. I do not accept Benjamin’s evidence in that respect and I am not satisfied of the provenance of the document said to have been found on that USB drive which is attached to his affidavit. I do not go so far as to find Benjamin prepared that document in February 2023 to create a false impression that it had existed at an earlier time, where there is some suggestion in the metadata for that document that it may have existed in 2019, or possibly different versions of the agreement from which it was copied had existed in 2019. Even if a draft of that agreement had existed prior to February 2023, there is no satisfactory evidence that it had been executed, at all or with the Company’s authority, so as to become binding upon the Company or any of the shareholders.

A small part of Benjamin’s fifth affidavit dated 28 March 2023 was read. He there reiterated his evidence that the document annexed to his affidavit dated 15 January 2023 was located on a USB drive that he found in a cupboard at his mother’s home on 17 February 2023, and added a claim that he had copied the document into another USB drive so that he could print copies of it in about April 2019 (Benjamin 28.3.23 [138]). Benjamin also claimed to have had a discussion with Mr Grumley in early 2015 in which Benjamin said “[t]he founders will have the right to occupy and build on the property” (Benjamin 28.3.23 [138]). I am not persuaded that a conversation in those terms occurred, where the evidence suggests that the Company needed to raise funds from third parties by offering occupancy rights in order to fund the acquisition of the Property, and it was contemplated that the founding directors and other persons would rent rooms on the Property, rather than having a right to build on it, at least until the bank loan taken to acquire the Property was paid out.

By a further affidavit dated 6 April 2023, Benjamin led evidence that a document exhibited to an earlier affidavit and titled “Inaugural Share Prospectus” was submitted to Westpac in support of the loan application in respect of the Property and that he was largely responsible for creating that document, although he did so in conjunction with Mr Grumley, Daniel and Sascha. He refers to a subsequent reduction of the area to be occupied by the holders of parcels of three shares in the Company from 10 hectares to 3 hectares and gives evidence that copies of the document were provided to all shareholders and that it was published on the Company’s website. He claims to have had conversations with Daniel in May 2019 where Daniel said that “[t]he founders will have the same rights as the other shareholders” and that Mr Grumley agreed to that proposition. I do not accept that evidence, for the reasons I have noted above in respect of his similar evidence in his 28 March 2023 affidavit.

By a further affidavit dated 8 June 2023, Benjamin addressed his difficulties arising from a serious illness affecting his mother, anxiety, referred to prescription medication which had an adverse affect on him and gave a further account of the circumstances in which he claims to have copied the document on the first USB drive found in his mother’s unit to a second USB drive, and he now claims that he handed the “attempted backup drive” to his solicitor and that he has now not been to locate the first USB drive. I am not persuaded by Benjamin’s account of the origins of the document on which he relied, although I have not found that he deliberately falsified it for the reasons noted above.

Benjamin was cross-examined at substantial length (T93ff). Benjamin plainly had difficulties of recollection of particular events and also had difficulties in giving any reasonably precise account of events, and substantially qualified or resiled from the evidence that he had given by affidavit in cross-examination. Those qualifications related to significant matters, including whether he had contributed in excess of $50,000 in money to the Company, a proposition which was difficult to reconcile with his limited income as an invalid pensioner and which he accepted in cross-examination “might have been wrong” (T99). Benjamin was also anxious to make adverse comment as to the Company’s other shareholders in the course of his cross-examination, and sought to justify his own correspondence with those shareholders by reference to the “emotional stress” that he had suffered in dealing with the Company (T102). Benjamin was also cross-examined as to the circumstances in which he claimed to have executed a founder share agreement in 2019, and later found that agreement in February 2023, but I was not persuaded of the truth of his evidence in that respect (T125-132). He was also cross-examined as to the differing versions of constitutions which had been prepared at various times (T129). No party now contends that either of those constitutions were adopted by the Company. Mr Epstein also submits, and I accept, that Benjamin’s evidence is prepared to advance false claims where he considers it will advance his interests, and that there was no proper basis for his claims that he had held six, rather than three, G class shares, even if those shares had validly been issued. I also accept that there was no proper basis for Benjamin to verify the pleading in his Cross-Claim that he “has made payments to the Company in excess of $50,000” or to give evidence that “I had previously paid to or on behalf of the [Company] an amount in excess of $120,000” (Benjamin 27.5.22 [5]), as emerged from his cross-examination (T97-99, 125-126). I accept these matters substantially undermine his credit and I approach his evidence with caution, although the findings that I reach below largely do not depend on matters of credit.

In cross-examination, Benjamin initially maintained that he had contributed an amount of $250,000 to the Company, incorporating money and all of the resources that his family had put into the project which was well in excess of $120,000 and that the work he had put in on top of that would “easily come to $250,000” (T141). He did not explain why he was entitled to claim payment for amounts that other family members had contributed or the basis on which those contributions were to be valued or how any agreement by the Company to pay for the work that he had done at a particular rate had arisen. I do not accept his evidence in that regard. Benjamin sought to justify making a claim for that amount against the Company by reference to a claim that he had been assaulted by Mr Grumley and had been “thrown out of the [C]ompany” (T141). He accepted that he had intended that the work was his “gift” to his friends (T141), a matter that highlighted the lack of basis to convert that “gift” to a claim to payment of $250,000, even if that friendship had failed.

Benjamin continued to maintain in cross-examination that others had “acknowledged” the work that he had done as a basis for the issue of three additional G class shares to him and claimed that an agreement had been reached to issue additional shares to him at a meeting in March 2019, after the acquisition of the Property (T149-150). I also do not accept that evidence. Benjamin also maintained in cross-examination that he had simply “forgot” to put in reference to the founder directors’ rights as to occupancy of the land in the document sent to Ms Austen where parts of the document were “thrown together at the very last moment” (T144). I also do not accept that evidence, where a detailed explanation had been provided of the rights attached to the landholder shares and the different rights attached to the founder shares were also explained in some detail, without reference to a right of occupancy linked with those shares. Benjamin was also cross-examined at length as to the circumstances in which he claimed to have found a USB drive containing a founder shareholders agreement and a landholder share package agreement in a cupboard at his mother’s unit on February 2023 (T165ff).

In cross-examination, Mr Epstein put to Benjamin that his state of mind was that he had no rights under a shareholder agreement to choose any particular part of the Property and Benjamin denied that proposition as follows (at T172):

Benjamin contended that that understanding was recorded in communications between the founder shareholders (T172). There is no reference to such an understanding in the extensive email and Facebook communications in the evidence, although I have noted in the chronology above that the later offer to Benjamin to occupy the part of the Property known as the “pirate ship” suggested that other shareholders accepted that Benjamin had an expectation, although not necessarily a legal right, to reside on the Property. Benjamin also claimed in cross-examination that he sought to take other shareholders up on an offer in respect of another area of the Property known as the “banana shed”, but that they then turned him down and that he would have “happily accepted” an offer as to that part of the Property if they had not turned him down (T172-173). I am not persuaded by Benjamin’s evidence in that respect, given the extent to which other aspects of his evidence are mistaken or false.

Benjamin also relied on the affidavit dated 1 November 2022 of his father, Mr Steven Smith, who referred to Sascha’s entry into an agreement with Bryant in 2014 relating to the Property and referred to circumstances in which Steve Smith moved to the Property and rented rooms in the main house in 2016. Steve Smith also referred to his contribution to the business plan and suggested that Benjamin had done market research to assist in building a website for the Company and noted that several new shareholders had also moved to the Property. Mr Steven Smith was not required for cross-examination.

Benjamin also read parts of the affidavit dated 30 March 2023 of Mr Alan Oshlack, who is a former shareholder of the Company who had hoped to build a mandir (which is a form of temple) on the land that he was to occupy on the Property. Mr Oshlack referred to a meeting in June 2019 between Benjamin, Mr Grumley, Ms McKenna and Daniel and an officer of Westpac in relation to the loan for the Property and to Benjamin’s, Mr Grumley’s and Mr Oshlack’s agreement to personally guarantee the proposed loan. Mr Oshlack refers to his understanding that his payment of $120,000 for three shares in the Company allowed him to occupy 5 hectares in the Property and notes that the rest of the Property was to “be common and used for the purpose of organic farming, enterprises and the environment”. As I noted above, Benjamin and other “founder” shareholders did not subscribe corresponding amounts, or any amounts, for their ordinary shares in the Company.

Mr Oshlack was cross-examined. He presented as a witness who was doing his best to assist the Court, although his fulsome answers to questions often reflected his own evaluation of the events that were in issue. Mr Oshlack emphasised in cross-examination that he had paid $120,000 in the anticipation of obtaining an entitlement to occupy a block of the Property, and has now sold his shares to a third person who has established themselves on that block (T211-212). Mr Oshlack recollected having seen the business plan although he did not recall whether he had a copy of the document (T217). He emphasised that he was not driven by monetary considerations in his investment in the shares in the Company (T217), but by his wish to “build something which is on a spiritual basis which could assist not only our immediate community but the wider community in Uki and the North Coast” (T217). Mr Oshlack’s evidence in cross-examination was that he could not “work … out” the basis of the dispute between Benjamin and Daniel who had a “lot of stuff going”, although he later formed the view that areas of concern which Benjamin had expressed to him “largely were true” and that “these people … have been having issues with each other for years” (T222). He also referred to his appointment as chairperson of the Company’s board and to the hope, apparently not realised, that his involvement would “help resolve some of these tensions” to allow the development of a “progressive community” on the Property (T224-225). Mr Oshlack also referred, in re-examination, to a discussion at a meeting between Benjamin, Mr Grumley and Daniel and an officer of Westpac in relation to land occupation rights for shareholders who held three shares, to the effect that “people who hold the three shares were entitled to occupation, a landholding occupation” (T229). That evidence was unclear as to whether his understanding was that that entitlement extended beyond those who had entered landholder agreements to the founder shareholders and as to the character of such an entitlement.

The Cross-Defendants also relied on numerous affidavits, significant parts of which were, as I noted above, directed to unpleaded claims of violence and aggression on Benjamin’s part, which were rejected for lack of relevance and under s 135 of the Evidence Act. The Cross-Defendants relied on Mr Grumley’s affidavit dated 4 May 2022 who referred to his commencing residence at the Property when it was owned by Mr Bryant, in February 2015, when he occupied a room in the “top house” at the Property, and Benjamin, Sascha and Daniel also occupied rooms in that house. He refers to the opening of bank accounts, initially in the name of a business trading as “Gunyaweh” and subsequently in the name of the Company, and to payments made by persons residing on the Property into those accounts.

By a second affidavit dated 10 June 2022, Mr Grumley responded to Benjamin’s affidavit dated 27 May 2022, agreeing with some parts of Benjamin’s evidence and referring to documentation in relation to landholder share package agreements, including in respect of Ms Tahlia Mitchell and Ms McKenna, and to dealings with other shareholders. Mr Grumley’s evidence was that Benjamin did not provide an amount in excess of $120,000 to the Company in order to acquire his shares, and acquired them for their par value of $1 each, although I add that it is not apparent that even that amount was itself paid. Mr Grumley’s evidence was that no general meeting of the Company was held in about July 2019 to replace the Company’s original constitution. In the event, it is now common ground that the Company’s shareholders had not taken steps either to adopt an original constitution for the Company or to replace that constitution. Mr Grumley’s evidence was that neither Benjamin nor the Company ever executed a landholder share package agreement that entitled Benjamin to occupy any part of the Property (Grumley 10.6.22 [12]). Mr Grumley also denies that a meeting occurred, as recorded in minutes on which Benjamin relied, which referred to Benjamin presenting a landholder share package agreement to the meeting.

Mr Grumley also refers to a notification lodged by Benjamin with ASIC in July 2019, which recorded the issue of three G class shares to Mr Grumley, Benjamin and Daniel, and to their having paid the amounts of $40,000, $120,000 and $120,000 respectively and Mr Grumley’s evidence is that no such amounts were paid (Grumley 4.5.22 [15]). I accept that evidence, and Benjamin no longer presses the claim that he or others were issued G class shares in the Company. Mr Grumley also refers to steps that he took to amend the Company’s share register to record the lesser amounts paid (or, I interpolate, notionally paid) for the shares in place of the information previously provided by Benjamin to ASIC. Mr Grumley also refers to a directors’ meeting held on 13 November 2020 which resolved to conduct an extraordinary general meeting to reduce the Company’s share capital in respect of the three G class shares that Benjamin was then understood to hold and to the documents relating to that capital reduction. In the event, no party now contends that those G class shares were validly issued, so as to later be cancelled by that transaction.

By a third affidavit dated 16 January 2023, significant parts of which were not read, Mr Grumley again addressed the financial arrangements in respect of the purchase of the Property and took issue with aspects of Benjamin’s evidence of the work which Benjamin claimed to have undertaken in respect of the financing of the Property and to aspects of the conduct of the Company’s business. He also addressed the conduct of a meeting held on 3 September 2019 and I broadly accept his evidence in that respect (Grumley 16.2.23 [123]). By a fourth affidavit dated 1 September 2023, Mr Grumley denied that, when Mr Grumley first moved to the Property in early 2015, Benjamin told him that “[t]he founders will have the right to occupy and build on the property”. Mr Grumley also denied Benjamin’s evidence of conversations with Daniel and Mr Grumley to that effect at least in any conversation at which he was present. I accept Mr Grumley’s evidence in that respect in preference to Benjamin’s evidence.

Mr Grumley was cross-examined and I found him generally to be a credible witness, who did his best to assist the Court. Mr Grumley (and several other shareholders in the Company) accepted in cross-examination that the explanatory memorandum issued in respect of Benjamin’s G class shares was then understood to hold accurately conveyed the appropriate amount of compensation for the cancellation of Benjamin’s shares and his evidence was that that matter had been discussed between the Company’s board and other shareholders (T196). His evidence was also that the board had discussed the offer of $126,000 to acquire Benjamin’s shares before sending the letter of 11 December 2020 and that he had believed that offer was a “very generous offer” where Benjamin and other founder shareholders had not paid for their shares and other shareholders had “invested $120,000 and more” (T203-204). There is force in that view.

Mr Grumley (and other shareholders) also accepted in cross-examination that a purpose of purchasing the Property was, so far as Benjamin, Daniel and Mr Grumley were concerned, the “hope” that one day they could live rent free at the Property, although Mr Grumley’s evidence was that there were “no details and, to what kind of occupation”, and his hope was that he could have a room, and the idea of having his own land “hadn’t really crossed [his] mind” (T258). Mr Grumley also accepted, based on conversations with Daniel, that he expected that the founder shareholders would be able to reside on the Property after it was purchased, although he noted Benjamin was less involved in those conversations where Benjamin was living in Melbourne for most of 2016, before the Company was incorporated in 2017 (T258). Mr Grumley’s evidence in cross-examination, which I accept, is that there was no discussion to the effect that founding directors’ shares would have building entitlements (T259).

In cross-examination, Mr Grumley also addressed the offer to Benjamin in respect of the part of the Property known as the “pirate ship” in the 16 January letter (Ex J1, 2115) to which I referred above. His evidence was that the reference to a “share entitlement on the farm” in that letter was “badly worded”; he disputed the use of the term “entitlement”; and he observed that, at the time, other shareholders “didn’t want to see [Benjamin] homeless, and this was a generous offer of somewhere for him to live” (T261). I broadly accept the last proposition and note that the real difference between an understanding or expectation of occupancy on the one hand and a “right” or entitlement of occupancy on the other would not have been as clear to non-lawyers, at the time of this communication, as it has become to the parties as this dispute has developed.

The Cross-Defendants also rely on Daniel’s affidavit dated 18 January 2023, significant parts of which were not read or were not admissible and not admitted. Daniel is a cousin of Benjamin and Sascha and he refers to discussions with Benjamin and Sascha in mid-2014 about buying land for a permaculture life farm project. He refers to an approach made to Bryant in respect of the Property and to the entry into an agreement between Sascha and Bryant to lease and take an option to acquire the Property and to the steps then taken to let rooms in the main house to third parties. Daniel refers to the incorporation of the Company in January 2017 and to Benjamin’s communications with Westpac in raising finance to acquire the Property and to the circumstances in which Sascha left the Property. Daniel also responds to aspects of Benjamin’s evidence and gives evidence of the circumstances in which Ms Hollingsworth came to occupy part of the Property, on making a substantially lower financial contribution than other persons who had entered landholder agreements. Daniel also addressed the deterioration of the relationship between Benjamin and other shareholders although some parts of his evidence in that respect related to unpleaded allegations and were not admitted.

By a second affidavit dated 23 June 2023, Daniel corrected a reference to the exhibit to his affidavit. By a third affidavit dated 1 September 2023, Daniel denied Benjamin’s evidence of discussions with Mr Grumley and him in May 2019 concerning the founders having the same rights as other shareholders and, specifically, those other shareholders who had contributed funds to acquire shares in the Company, at least in any conversation at which he was present. I prefer Daniel’s evidence to Benjamin’s evidence in that respect.

Daniel was also cross-examined at some length, and I also formed the view that he was giving honest evidence and genuinely seeking to assist the Court. He readily accepted that the purpose of purchasing the Property reflected a “hope” to provide a place to live and he accepted that he had discussed that hope with Benjamin and Mr Grumley at different times and that they had expressed similar hopes (T270). He did not accept Mr Alkadamani’s characterisation of that position as giving rise to a “right to reside on the property”, preferring the language of a “hope” that that could occur (T271). His evidence was that it was necessary to introduce other shareholders to the Company who could provide finance to acquire the Property, to allow a better chance of obtaining a loan from Westpac (T274-275).

Daniel denied that the shareholders had a “dwelling entitlement” as distinct from being able to build a farm shed or a project and his evidence was that there was not sufficient scope for that on the land and that “hopefully, if were able to … manage the income of the farm well, then we might even be able to remain renting rent-free” (T275). That evidence treated that possibility as conditional, recognising that the ability to achieve it would depend, among other things, on the extent to which the Company could pay out the bank loan from other income. Daniel’s evidence was also that the offer of occupancy of the “pirate ship” area was made to Benjamin in an “attempt to appease the situation”, where there was “a lot of strife at the time” and other shareholders were hoping that the offer might “buy some space for people to be able to, you know, coexist” (T277). He understood the reference to Benjamin’s “share entitlement on the farm” as “offering him to take an entitlement before it was due to him in hopes to appease the situation for everybody” (T277). He explained that the offer was made to seek to persuade Benjamin to move from the top house, so that the Company could regain the income that it required from that area, implicitly by renting rooms and applying the income to repay the Westpac loan (T278). Daniel accepted the attempt to cancel Benjamin’s G class shares was part of a process of seeking to have him leave the Property (T280).

Daniel also accepted that, where Benjamin had given a guarantee to Westpac and was a founding shareholder, his future residency on the Property was “different” to that of persons who did not have a share in the Company and were renting part of the Property and that it was their “hope” that Benjamin would have some form of ongoing occupation on the Property (T286). Daniel also outlined his understanding of the position of founding shareholders in qualified terms in cross-examination, distinguishing their position from shareholders with landholder agreements as follows (T286):

Daniel accepted that there was an understanding that founding shareholders could rent part of the Property and a hope that “if we managed the spaces that we were managing well enough and the income was sufficient, then we wouldn’t be required to pay rent for our … tenancy” (T287). Daniel was also cross-examined as to the content of the explanatory memorandum provided to shareholders in respect of the purported cancellation of Benjamin’s G class shares and the value of compensation attributed to his shares in that explanatory memorandum, but ultimately not paid to him.

The Cross-Defendants also read Ms Austen’s affidavit dated 16 January 2023 which responds to several affidavits on which Benjamin relied. Significant parts of that affidavit were also rejected for lack of relevance and under s 135 of the Evidence Act, as they sought to advance unpleaded allegations of criminal or improper conduct against Benjamin and other parts of her affidavit were not read. Ms Austen refers to her shareholder agreement dated 13 August 2019 and to the fact that she has lived on the Property with her two daughters since February 2022. She refers to conversations with Benjamin prior to the acquisition of her shares in the Company in which he said there were “founder shares” and that they were “worth nothing until we paid off the loan” and that “the founders get nothing until the job is finished” (Ms Austen 16.1.23 [9]). I accept that conversations substantially to that effect took place. She also refers to Benjamin’s interest in creating a wildlife sanctuary in an area on the Property.

Ms Austen was relatively briefly cross-examined. She was cross-examined as to the explanatory memorandum in respect of the cancellation of Benjamin’s purported G class shares and the basis of the compensation which it stated was payable to Benjamin in respect of that cancellation, but which was not paid (T311ff). She emphasised, in cross-examination, Benjamin’s and other founding directors’ “responsibilities” to the Company and other shareholders, rather than on any “right” that he may have had by ownership of shares in the Company. She also accepted that Mr Grumley, Daniel and Benjamin were “not just renters” paying rent for the area of the land that they occupied (T317).

The Cross-Defendants read Ms McKenna’s affidavit dated 18 January 2023. She refers to her payment of $120,000 for her A class shares in the Company in August 2019 and to the circumstances in which she became involved with the Company and the Property. She also refers to the circumstances in which disputes arose with Benjamin, although significant parts of her affidavit evidence were not read and other parts were not admitted for lack of relevance and under s 135 of the Evidence Act, where they were also directed to unpleaded allegations of criminal or serious misconduct on Benjamin’s part. Ms McKenna was also relatively briefly cross-examined, including as to the explanatory memorandum sent to shareholders in respect of the cancellation of Benjamin’s purported G class shares and the compensation that was to be payable to him on that cancellation (T322ff). Her evidence was that she understood that Benjamin would have “some type of” entitlement to occupy the Property if the Company purchased it, although she did not know the exact details (T327). She accepted that part of the reason for the cancellation of Benjamin’s purported G class shares was to remove him from the Property (T327).

The Cross-Defendants read Ms Hollingsworth’s affidavit dated 19 January 2023. Her evidence is that she became an A class shareholder in the Company on 18 August 2019. She refers to meetings of the Company held on 3 and 17 September 2019 and addresses correspondence with Benjamin and takes issue with significant parts of Benjamin’s evidence. Again, parts of her evidence were not read or rejected for lack of relevance and under s 135 of the Evidence Act, where they related to unpleaded allegations of criminality or serious misconduct on Benjamin’s part.

Ms Hollingsworth was relatively briefly cross-examined and her evidence was that she had paid $52,500 in money to acquire her shares in the Company, rather than the $67,500 referred to in her landholder agreement, and that amount had been paid after the entry into that agreement (Ex J1, 1826, T341). She did not accept that the founding shareholders had a “right” to reside on the Property, and she believed that their position was “provisional” on the loan from Westpac being repaid, and accepted Mr Alkadamani’s formulation of her position as that they had “some form of entitlement that was provisional”, combined with their commitment to run the Company and pay off the loan from Westpac (T344) and would have an “entitlement” to reside on the Property if they did so (T345). She accepted that Benjamin was not merely a renter on the Property, although she also expressed her view that any renter could be evicted from the Property if the board of directors determined to do so (T345). She accepted that part of the reason for the Company’s cancellation of Benjamin’s purported G class shares in January 2021 was to allow his removal from the Property (T345). Her evidence in cross-examination was that the “financial investors”, implicitly by contrast with the founding directors, were to have a right to occupy a portion of the land, also subject to approval by the Company’s directors (T351). She accepted that there was a “potential” that the founding directors could live on the Property rent free, once the loan was paid off and the Company owned the Property outright (T352).

The Cross-Defendants read Ms Talitha Mitchell’s affidavit dated 18 January 2023 and she was not required for cross-examination. Ms Mitchell is a shareholder in the Company and refers to her agreement to acquire three shares in the Company and to her payment of $120,000 to acquire those shares. She also addresses her dealings with Benjamin in relation to the acquisition of those shares. She was not required for cross-examination.

The Cross-Defendants also read the affidavit dated 19 January 2023 of Ms Braja Mansfield, and she was not required for cross-examination. Ms Mansfield is also a shareholder in the Company, who purchased one B class share in the Company. Substantial parts of her affidavit were rejected for lack of relevance and under s 135 of the Evidence Act for the reasons noted above in respect of other affidavits. The Cross-Defendants also read the affidavit dated 19 January 2023 of Mr Ron Berry, who was not required for cross-examination. He also purchased one B class share in the Company, and significant parts of his affidavit were also not read or were rejected for the same reasons.

The Cross-Defendants also read the affidavit dated 19 January 2023 of Mr Murray Cox, who has some conveyancing and surveying experience and assisted the Company in its purchase of the Property. He refers to having assisted the Company’s directors and shareholders as problems arose in the Company and to completing documentation that should have been completed when the Company was formed and comments that documentation had been left incomplete. Mr Cox was briefly cross-examined as to the deficiencies in documentation executed at the time of the Company’s incorporation (T356-357).

The Cross-Defendants also read an affidavit of Mr Samji dated 16 April 2023, which annexed his report. Mr Samji is a digital forensics examiner and his evidence was led to seek to establish that the founder share agreement and the landholder share package agreement which Benjamin claimed to have found on the USB device at his mother’s unit was a recent creation. Mr Samji’s analysis of the relevant document properties does not exclude the possibility that, as Benjamin now claims, that document was copied from a first USB drive that Benjamin found to a second USB drive, and the document creation details recorded on the second USB drive reflect the date on which that copying occurred. I have noted above that I am not persuaded by Benjamin’s evidence that the document came into existence at an earlier time, but Mr Samji’s evidence does not establish that the document was a recent creation, particularly where I should have regard to the serious character of that allegation in reaching such a finding.

I will refer to other evidence relating to the valuation of shares in the Company on which Benjamin and the Cross-Defendants relied in dealing with Benjamin’s claim for a buyout order below.

Benjamin pleads and the Company denies (SCC [4]; denied Defence [2]) that he is a member of the Company and is the legal and beneficial owner of 6 G class shares in the Company. The Company contends instead (Ex CC-5) that Benjamin and Mr Grumley each held six ordinary shares in the Company from the date of its incorporation. As I noted above, neither Benjamin nor the Company now contend that G class shares were validly issued and it is common ground that Benjamin holds six ordinary shares in the Company, which were issued to him at the time of its incorporation. Benjamin also pleads (SCC [5]-[8]) that Mr Grumley, Daniel (since about 2 April 2019), Ms McKenna (since about 4 May 2019) and Ms Austen (since about 4 October 2019) have been members of the Company and directors of the Company. The parties proceeded on that basis, qualified by the recognition that no G class shares had been issued. It is not necessary to decide those matters in order to decide the proceedings. Benjamin also pleads and the Company admits (SCC [22]; admitted Defence [1]) that, since acquiring the Property, the Company has agreed to admit other “shareholders” on varying terms as to capital contributions or other contributions. I will proceed on that basis where that fact is admitted.

Benjamin pleads and the Company denies (SCC [23]-[25]; denied Defence [2]) that all other shareholders have enjoyed and continue to enjoy a right to occupy a portion of the Property; since August 2014 he has made payments to the Company exceeding $50,000 and made non-monetary contributions, including giving his guarantee and substantial work in managing the affairs of the Company, on the basis that the purpose of the Company was to be the registered proprietor of the Property and hold the Property so that he, as a shareholder in the Company, could enjoy the benefit of a right to occupy a portion of the Property; and that the shareholders in the Company constitute a quasi-partnership, or alternatively joint venturers, or alternatively parties to an agreement by which the shareholders have agreed to occupy various portions of the Property together and contribute to the Company's ownership of the Property and to the discharge of its obligations under the loan.

Benjamin also pleads and the Company denies (SCC [26]-[32]; denied Defence [2]) that, upon its incorporation the Company represented that its purpose was to be the registered proprietor of the Property and hold the Property so that the shareholders in the Company could enjoy the benefit of a right to occupy a portion of the Property (“Representation”); Benjamin’s monetary and non-monetary contributions were made by reason of his belief as to that matter and in reliance on the Representation; his monetary and non-monetary contributions constitute a detriment suffered by the Cross Claimant; it would be unconscionable for the Company to be permitted to depart from the Representation; the Company is estopped from departing from the Representation; and that he, and all shareholders, are entitled to occupy a portion of the Property.

Mr Alkadamani arguably seeks to put Benjamin’s case somewhat more broadly in closing submissions, contending that:

By way of defence to this claim, the Cross-Defendants respond (Defence [9]) that:

The Company also responds (Defence [10]-[11]) that:

The Company also responds (Defence [12]) to Benjamin’s claim based on an estoppel that:

I have referred above to evidence given by witnesses as to their understandings as to whether Benjamin, Daniel and Mr Grumley could live on the Property and on what basis. In cross-examination, they generally indicated an expectation they could do so but expressed diverse views as to the terms of occupation and did not put them in legal terms. Daniel refers in cross-examination to his understanding, formed from discussions with Benjamin and Mr Grumley, that “we'd have the right to remain renting spaces and hopefully, if we were able to, you know, manage the income of the farm well, then we might even be able to remain renting rent-free” (T275). Ms Austen’s evidence was that she was told that the founder shareholders would not get anything for at least the first 5 years or until the Westpac loan was paid off and, after that, their three hectares would be “dolled [sic] out” after “they had fulfilled their responsibilities” (T317). That evidence does not assist Benjamin where the Westpac loan has not yet been paid out. Ms McKenna’s view is different again, where she accepted Mr Alkadamani’s formulation that Benjamin would have “some role on the property if the [C]ompany was able to secure the property” and accepted that Benjamin would have “some type of” entitlement to occupy the Property if the Company purchased it and, when she purchased her shares, she had “an understanding” of those matters but “didn’t know the exact details” (T326-327). Ms Hollingsworth emphasised the founder shareholders’ responsibilities to the Company in her cross-examination, but accepted that Benjamin had what she described as a “provisional” entitlement to live on the Property, implicitly subject to repayment of the loan to Westpac, and was not “merely a renter” on the Property, although she understood the Company could remove him from the Property (T344-345). Mr Alkadamani also refers, in closing submissions, to evidence where witnesses used the term “venture” or “partnership” with reference to their common purpose of seeking to exercise the option and purchase the Property, although he fairly accepts those terms were not used in any legal sense (T255, 269) and also refers to their understanding that Mr Grumley, Daniel and Benjamin could live on the Property, while paying rent, although I did not understand their evidence to accept that they had a legal right to do so (for example, T257-T259, T270-272, T275-276).

This evidence is consistent with a general understanding of these matters, at a vague and general level, which had not been formulated or agreed with any specificity, and which the several shareholders perceived somewhat differently. There is force in Mr Alkadamani’s submission that

Turning to the elements of Benjamin’s pleaded case, I accept that several other shareholders continue to occupy areas of the Property, and that some claim rights to occupy particular areas under landholder share package agreements. I have found above that Benjamin has not established that he made payments to the Company exceeding $50,000 and he has made some non-monetary contributions to the acquisition of the Property, in contributing to the business plan, dealing with Westpac and in giving a guarantee, although the significance of that guarantee was limited by his lack of assets against which it could be enforced, which as of 9 December 2016 amounted to a motor vehicle with a declared value of $1,000 (Ex J1, 201). These contributions were largely made prior to the Company’s incorporation. I do not accept that he made those contributions on the basis that he could enjoy a “right” to occupy a portion of the Property, where the nature of such a “right” was not agreed when or after the Company was incorporated, and the area which he would occupy was also not agreed, although I accept that he and other original (or “founder”) shareholders expected that they would be permitted to rent areas in the Property without making any substantial financial contribution to acquire their shares, and other shareholders shared that expectation. I do not accept that the arrangement fell within the legal categories alleged by Benjamin. I do accept that the arrangement had elements of an arrangement contemplating mutual cooperation and a level of trust and that that trust and confidence has irretrievably broken down and that these matters are relevant to Benjamin’s oppression claim.

I do not accept that the alleged Representation was made, still less that it was made by the Company to Benjamin, where discussions were taking place between the founder directors and other potential shareholders at that time, although I accept that he and other shareholders had the expectations I have noted above. Benjamin has not established that he made any material monetary contributions, and I am not satisfied that his non-monetary contributions constituted a relevant detriment where they were largely made before the Company was incorporated and he had the benefit of occupying part of the main house on the Property in the relevant period. I accept that, as the Company contends (Defence [10]), the claimed right is also too uncertain to be enforceable, where at least the identity and location of the land to which it relates is an essential term of such a right. I adopt, without repeating, my review of the relevant case law in OXS Pty Ltd v Sydney Harbour Foreshore Authority and Minister for Planning and Environment [2014] NSWSC 1174 at [58]ff in that regard. I do not consider it necessary to determine the Company’s defence under s 23C and 54A of the Conveyancing Act 1919 (Cth) given the conclusion that I reach on other grounds.

It seems to me that Benjamin’s claim in this respect must fail. In summary, there is nothing to suggest that the Company made any representation to Benjamin as to its purpose, although he and the other “founding” shareholders had an intention that, at least in principle, they would be able to rent part of the Property under arrangements that had not then been worked out. Second, even if such a representation was made, it was too uncertain to give rise to a claim to occupy the land, where the part of the land that Benjamin might occupy was not identified. Third, where the relationship between Benjamin and other shareholders has broken down and the Court could not properly order that they occupy the Property together, there is nothing unconscionable in leaving Benjamin to any claim for damages that would have been available to him as a result of any failure to comply with the alleged Representation. Benjamin has not sought to establish the amount of such damages.

Possibly in reliance on this claim, Benjamin seeks (Relief [5]) a declaration that he is entitled to remain in occupation of a portion of the land owned by the Company on such terms and conditions as the Court deems reasonable. There is no basis for such a declaration where no such right is attached to the ordinary shares in the Company, no other basis of a right of occupancy is established, the relief sought by Benjamin would place him and other shareholders with whom he is in conflict in proximity, and it would be inconsistent with the order for possession made by Lindsay J on 21 February 2023 in the Company’s favour by consent. Benjamin also seeks (Relief [6]) an order restraining the Company from issuing a notice to quit the Property to him or taking steps to exclude him from continuing in occupation of part of the Property. There is no basis for that relief where the Company obtained an order for possession of the Property by consent and for the reasons noted above.

I now briefly turn to an issue which has been largely displaced by Benjamin’s indication, on 1 September 2023, that he no longer contends that he was validly issued G class shares in the Company. Where Benjamin does not contend that he was validly issued those shares in the first place, nothing turns on whether they were validly cancelled.

For completeness, Benjamin initially pleaded and the Company admitted (SCC [33]-[34]; admitted Defence [2]) that, on 10 January 2021 the Company held a general meeting of members to consider motions for the cancellation of three of Benjamin's G class shares, numbered 01, 02 and 03; the members then purported to pass a special resolution and an ordinary resolution pursuant to s 256C(2) of the Act cancelling those shares. Benjamin pleads (SCC [35]-[41]) that the reduction in share capital involved a cancellation of shares which did not comply with the requirements of s 256C(2) of the Act and, on that basis, none of his G class shares were validly cancelled under s 256C of the Act. It is common ground that the resolution did not comply with s 256C(2) of the Act; the Company submits, and I accept, that that does not invalidate the resolution (Defence [13]); but nothing turns on this matter where Benjamin does not now contend that he was validly issued G class shares in the first place.

Benjamin also attacks (SCC [44]-[60]) the disclosure contained in an explanatory memorandum provided to the Company’s shareholders in respect of the transaction and the basis on which the stated consideration for the cancellation of his three G class shares, $90,000, was calculated by reference to a specified formula, and he attacks the Company’s later failure to pay that amount and its insistence on his entry into a deed of release before any amount would be paid to him. He pleads (SCC [61]-[62]) that the Company contravened s 256C(4) of the Act by not disclosing specified matters and the purported resolutions cancelling the three specified G class shares were null and void and/or of no effect or alternatively liable to be set aside. It is not necessary to determine those claims where Benjamin no longer contends that those shares had been validly issued to him.

Benjamin also pleads (SCC [63]-[69]) that the resolution under s 256C of the Act valued each of his shares that were intended to be cancelled under the resolution at $30,000; that, if the number of the Company's issued shares are 26 shares in total, then the value of each share exceeds $100,000 having regard to the current market value of the Property; the resolution did not comply with the requirements for a reduction of capital under s 256B of the Act; and that he is entitled to declaratory and other relief so that the Company does not contravene or further contravene ss 256A, 256B and/or 256C of the Act. It is also not necessary to determine this claim, where Benjamin no longer contends that those shares had been validly issued to him. It is also not necessary to address the Cross-Defendants’ response to this claim (Defence [13]-[15]) where no-one now contends the G class shares were validly issued to Benjamin or other shareholders.

Benjamin initially sought (Relief [1]) a declaration that the cancellation of his shares in the Company, by way of members' resolutions passed on 10 January 2021 was null, void and/or of no effect or alternatively liable to be set aside. I will not make a declaration in that form, where it has no utility where Benjamin no longer contends that those shares were validly issued to him. Benjamin also sought an order (Relief [2]) under s 1324 of the Act restraining the Company from taking any steps to cancel any of his shares. I will not make such an order, where there is no need for it where no-one now contends those shares were validly issued.

The attack on the cancellation of Benjamin’s G class shares is also necessarily displaced by the fact that Benjamin no longer contends that he was validly issued those shares. For completeness, Benjamin initially pleaded (SCC [70]-[74]) that, as one of the founding shareholders of the Company, he was “awarded” three G class shares; in 2019 the then members of the Company resolved to issue him a further three G class shares “in recognition and compensation of his efforts in securing the Property”; and that there is a dispute as to whether Benjamin is the holder of six (implicitly, G class) shares and that declaratory relief is appropriate. Had it been necessary to determine those disputes, I would have held that the Company did not resolve, in general meeting or otherwise, to issue Benjamin three further G class shares and he did not hold six G class shares although he holds the ordinary shares that were issued to him when the Company was incorporated. It is not necessary to determine that question where Benjamin now accepts that position.

The third and fourth aspects of the relief sought by Benjamin turn on this claim. He seeks (Relief [3]) a declaration that he is the holder of six G class shares in the Company. I will not make that declaration, where Benjamin no longer contends that G class shares in the Company were issued to him, although it is now common ground that he remains the holder of the ordinary shares that were issued to him when the Company was created. Benjamin also seeks (Relief [4]) orders under ss 233 or 1324 of the Act, or alternative bases, that the Company and any other Cross-Defendant do all things and execute all documents as may be necessary so that the members’ register and the records maintained by ASIC record that his shares have not been cancelled and/or that he holds six G class shares in the Company. I will also not make that order, where Benjamin no longer contends that he holds G class shares.

Benjamin pleads an oppression claim (SCC [75]ff) on the basis of the matters to which I have referred above. In particular, he repeats his claim (SCC [75]) that, prior to the registration of the Company, he, Sascha and Mr Grumley had agreed that the purpose of the Company was to be the registered proprietor of the Property and hold the Property so that existing and future shareholders of the Company could enjoy the benefit of a right to occupy a portion of the Property, on such terms as may be agreed between the Company and the individual shareholder; he claims that the Company was conducted on that basis until the Company served a notice to quit on him; he claims that all other shareholders of the Company have enjoyed, and continue to enjoy, a right to occupy a portion of the Property; that the Company has purported to cancel three G class shares held by him (which he now no longer contends exist) in the manner noted above; that the compensation for the cancellation for each of the three G class shares is significantly less than the 1/26 of the value of the Company; and the Company now disputes (I interpolate, rightly) the allotment of the three additional G class shares to Benjamin in 2019. Benjamin pleads (SCC [76]) that, on this basis, the affairs of the Company have been conducted in a manner that is contrary to the interests of the members as a whole and/or in a manner oppressive to, unfairly prejudicial to, or unfairly discriminatory against, him.

In answer to paragraphs 75-80 of the Cross-Claim, the Cross-Defendants respond (Defence [17]) that:

I largely did not admit evidence as to these allegations, where that evidence sought to establish criminal or other serious misconduct by Benjamin, of varying kinds, and the material facts of that conduct had not been pleaded to allow Benjamin a fair opportunity to respond to the allegations. I proceed on the basis that the Cross-Defendants nonetheless deny that their conduct was oppressive.

Mr Alkadamani arguably seeks to put this case more widely in closing submissions, relying on the absence of any continuing benefit to Benjamin from his holding of ordinary shares in the Company, as follows:

In closing submissions, Mr Epstein characterises the first element of Benjamin’s oppression case, as pleaded in paragraph 75(a)-(c) of the Cross-Claim, as relating to a “right to occupy” the Property. He presses a narrow construction on Benjamin’s pleaded case, focussing on the reference to “agreed” and “agreement” in that case and seeking to read that reference as excluding reliance on an agreement or understanding falling short of a binding agreement and submits that:

He also submits that:

I have generally accepted similar submissions in dealing with Benjamin’s contractual and estoppel claims above. However, I do not approach the oppression case on so narrow a basis. I bear in mind the principle that, in a proper case, a Court may reach findings in respect of matters raised in the hearing that were not pleaded, where that would promote the interests of justice: JR Consulting & Drafting Pty Ltd v Cummings (2016) 329 ALR 625; [2016] FCAFC 20. Mr Epstein submits that the Cross-Defendants would be disadvantaged if Benjamin were permitted to expand his pleaded case to anything beyond a binding agreement and would have led other evidence and conducted their case differently had he done so. I do not accept that submission, both because it would have been unreasonable for the Cross-Defendants or their legal advisers to read the pleaded case in so strict a manner, and because the evidence of both parties (even apart from that which has been rejected) has ranged widely over the merits of their conduct. In the event, approaching the application on the somewhat wider basis on which Mr Alkadamani seeks to put it will not affect its ultimate result, for the reasons noted below.

Mr Epstein points out that the second and third elements of Benjamin’s oppression case, as pleaded in paragraph 75(d)-(f) of the Cross-Claim, are directed to the purported cancellation of Benjamin’s G class shares, and deny that an additional three G class shares were allotted to Benjamin. Benjamin no longer contends that those shares were validly issued. Mr Epstein submits that this case depends on the existence of those shares and points to the evidentiary basis for the position that is now common ground, that the G class shares were not validly issued. He submits that:

I accept that an attempt to cancel shares that do not in fact exist would generally have less significance in an oppression case than the cancellation of shares that do exist. I also accept that a denial that shares were allotted, which is well-founded, would not amount to oppression. However, it seems to me that the Company’s attempted cancellation of those shares, by way of a selective reduction of capital, and its failure to pay the amount that it had identified as payable in respect of that cancellation, are properly relevant to the oppression case and I consider their significance further below.

Mr Epstein then characterises Benjamin’s case concerning exclusion from the Company, or at least from any benefits arising from the ownership of his ordinary shares in the Company, as an unpleaded case. He refers to cases relating to exclusion of a shareholder from a company’s management and submits that Benjamin had not subscribed any capital to the Company, a matter to which I return below, and that there was no “mutual understanding” that Benjamin would participate in the Company’s management, and that he abandoned his role in the Company’s management rather than being excluded from it. I have referred to the circumstances in which Benjamin withdrew from an active role in the Company, and to the acrimonious character of his correspondence, in the chronology set out above, and I accept that he was not excluded by other shareholders from a management role. However, I also recognise that exclusion from management is only one form of oppression, not the only form of oppression, and that the denial to a shareholder of any benefits arising from his shareholding may also give rise to oppression. I address that issue further below.

I should now turn to the applicable legal principles. I have drawn below upon my summary of those principles in Re Pure Nature Sydney Pty Ltd [2018] NSWSC 914, Re ICB Medical Distributors Pty Ltd [2018] NSWSC 1315 at [65]ff, Re Bicher & Son Pty Ltd (2020) 147 ACSR 108; [2020] NSWSC 711 at [73]ff and Re QB Foods Pty Ltd [2021] NSWSC 1227 at [56]ff.

Section 232 of the Act provides that the Court may make an order under s 233 if:

Section 53 of the Act in turn identifies the “affairs of a body corporate” for several provisions of the Act, including s 232, as including the “promotion, formation, membership, control, business, trading, transactions and … dealings of the body” (s 53(a)) and “the internal management and proceedings of the body” (s 53(c)). The orders which may be made include, relevantly, an order for the purchase of any shares by any member (s 233(1)(d)) and an order that a company be wound up (s 233(1)(a)).

Section 232 of the Act and its predecessors extend 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 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: Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 at 704; Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459; [1985] HCA 68. Conduct may be oppressive even when a defendant believes that he or she is acting for proper purposes: Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; (2009) 257 ALR 610; [2009] HCA 25 at [176].

The principles applicable to a claim for oppression were summarised by Austin J in Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152 at [39], and the Court of Appeal noted the parties did not challenge that summary of the applicable principles in Tomanovic v Global Mortgage Equity Corporation Pty Ltd (2011) 288 ALR 310; (2011) 84 ACSR 121; [2011] NSWCA 104 (“Tomanovic (2011 NSWCA)”) at [140]. Austin J there observed that:

I also summarised the principles applicable to the exclusion of a shareholder from a company in Byrne v AJ Byrne Pty Ltd [2012] NSWSC 667 (“Byrne”) at [45]ff as follows:

In Munstermann v Rayward [2017] NSWSC 133 at [22], Stevenson J summarised the applicable principles as follows (omitting citations):

I have also borne in mind the observation in Tomanovic (2011 NSWCA) above that each case has to be considered on its own facts and circumstances, and by reference to the conduct as a whole.

Returning to the matters on which Benjamin primarily relies in respect of this claim, I accept that, prior to the registration of the Company, it was Benjamin’s, Sascha’s and Mr Grumley’s understanding that the Company’s acquiring and holding the Property would be a means to allow its shareholders to reside on the Property, although that understanding was well short of an enforceable agreement or “right” to that effect and did not extend to a right to occupy any identified portion of the Property or identify the terms on which that could occur. I do not accept his claim that the Company was conducted on that basis until the Company served a notice to quit on him, where disagreements between Sascha and Benjamin had the consequence that Sascha left the Property and did not have the benefit of such a “right”.

I accept that some other shareholders of the Company have enjoyed, and continue to enjoy, occupancy of a portion of the Property, although Sascha and now Benjamin do not now enjoy that occupancy. I accept that some of those shareholders arguably have a “right” to occupy specified areas on the Property, pursuant to landholder share agreements, although others including holders of ordinary shares and B class shares do not. I accept that the Company sought to cancel the three G class shares that Benjamin was understood to hold in the Company in the manner noted above, although he does not now contend those shares were validly issued, and it is not necessary to decide whether the compensation for the cancellation for each of the three G class shares was significantly less than 1/26 of the value of the Company, where no-one contends those shares were effectively issued, it is now common ground that more than 26 shares were issued in the Company and that valuation would proceed on a false premise.

I am satisfied that oppression has been established, by analogy with the position in Tomanovic (2011 NSWCA) where oppression was established where the shareholders had failed to implement an arrangement for separation of their respective interests so that the value of one shareholder’s equity was locked in the companies, the income attributable to that equity had ceased, there was no ready prospect that that party could sell that equity to anyone else for fair value and the resumption of cooperation between the parties was not possible. Here, the Company’s directors and the majority of other shareholders in the Company had previously denied Benjamin’s shareholding in the Company, although they had not undertaken a selective capital reduction in respect of his ordinary shares; they failed to comply with the terms on which they undertook the selective reduction of the Company’s capital so as to extinguish the three G class shares which Benjamin was then understood to hold, by paying the $90,000 to acquire his shares which was the basis of that reduction; and they have since excluded Benjamin from occupancy of any part of the Property, by a successful application for possession, so that Benjamin now obtains no benefit from his shareholding in the Company; he has not been paid any amount referable to the value of his interest in the Company; and there is little prospect that he could sell his shares for value to a third party given the nature of the Company and the lack of any financial or other benefit to him or another purchaser from holding those shares. However, the weight to be given to that finding is substantially reduced by three matters: first, that Benjamin in fact made no or minimal financial contribution to acquire his shares; second, that the combination of substantial amounts paid by several other shareholders for their shares and debt funded the Company’s acquisition of the Property, and Benjamin made no real financial contribution to doing so and also lacked the financial capacity to honour the guarantee he had given to Westpac; and, third, Benjamin’s approach to the matter in correspondence and dealings with other shareholders has substantially contributed to the breakdown of their relationship, and it can fairly be said that he “baited” other shareholders in a manner that contributed to that breakdown.

Turning to the question of relief, Benjamin seeks (Relief [7]) a declaration that Mr Grumley, Daniel, Ms McKenna and Ms Austen have conducted the Company's affairs contrary to the interests of members as a whole and/or in a manner oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members. I do not consider it necessary to make that declaration where it is merely prefatory to the substantive relief that Benjamin seeks.

Benjamin pleads (Relief [8]) a claim to relief under s 233 of the Act to the effect that the Company's affairs be conducted in accordance with the purpose for which the Company was incorporated, namely, to be the registered proprietor of the Property and hold the Property so that existing and future shareholders of the Company could enjoy the benefit of a right to occupy a portion of the Property, on such terms as may be agreed between the Company and the individual shareholder or failing agreement on such terms as the Court deems reasonable. I would not order that relief, since there is no suggestion that any occupant of the Property other than Benjamin seeks it, and the Court should not make an order that requires the Company to allow Benjamin to occupy the Property given the extent of the disputes between him and the other shareholders in the Company who are the occupants of the Property, and the fact that such an order would be inconsistent with Benjamin’s previous consent to an order for possession in favour of the Company.

Alternatively, Benjamin seeks an order (Relief [9]) pursuant to ss 233(1)(a) or 461(1)(k) of the Act that the Company be wound up and an associated order (Relief [10]) under s 472 of the Act that a liquidator be appointed to the Company. Alternatively, he seeks an order (Relief [11]) that Mr Grumley, Daniel, Ms McKenna and/or Ms Austen purchase his shares in the Company at a price determined by the Court, and, to the extent necessary, an order that the Company's share capital be reduced appropriately, although the latter would only be applicable if an order that the Company purchase his shares was made.

Dealing first with the position in respect of a buyout order, I recognise that the Company’s or shareholders’ capacity to pay the price set for the defendant’s shares is relevant to whether a buyout can be ordered: Ample Source International Ltd v Bonython Metals Group Pty Ltd (No 6) (2011) 285 ALR 488; [2011] FCA 1484 at [331]-[344]; Snell v Glatis (No 2) [2020] NSWCA 166 (“Snell v Glatis (No 2)”) at [41], [45]; Re Crow Inn Pty Ltd (No 2) [2020] NSWSC 1749 at [269], [271]. The Court should also be reluctant to order a buyout in circumstances where a company is not properly managed and this state of affairs is likely to continue: Re Bicher & Son Pty Ltd (2020) 147 ACSR 108; [2020] NSWSC 7111 at [119], [121], [135]. I recognise that, in a proper case, the Court may make an order for a buyout of a shareholder’s shares for no consideration, but this case does not have the unusual features which led to that result in Zong v Lin [2022] NSWCA 136, where Benjamin had devoted real efforts to developing the Company’s business plan and securing the financing which allowed the Company to acquire the Property, although he made no real financial contribution to its doing so.

I now address the valuation evidence on which the parties relied in respect of Benjamin’s claim for a buyout order in respect of his shares. I recognise that there is case law that has accepted expert valuations of shares, in an oppression case, by reference to the price a hypothetical prudent purchaser who is a willing but not anxious buyer would be prepared to pay to a willing but not anxious vendor: see, for example, Tomanovic v One Australia Pty Ltd (2015) 104 ACSR 596; [2015] NSWCA 11. Mr Alkadamani submits, and I will proceed on the basis that:

Mr Alkadamani also refers to Wain v Drapac (No 2) [2013] VSC 381, where Ferguson J (as the Chief Justice of Victoria then was) observed (at [39]):

This proposition does not assist Benjamin here, where the deficiencies in both parties’ share valuation evidence noted below are such that they establish neither the price that would be paid by a hypothetical purchaser of Benjamin’s shares nor any fair value of the shares, having regard to the amount that could be realised on any exit from the shareholding, by sale or on a winding up of the Company, and the complexities introduced by the rights of shareholders who are party to landholder agreements.

Both parties led evidence as to the value of the Property. Benjamin read the affidavit dated 7 December 2022 of Mr Anthony Andrews, which annexed his valuation of the Property, which indicated a value of $3.3 million as at 15 January 2021 and $4.4 million as at 23 November 2022. Mr Andrews’ report involved reasonably comprehensive documentation of the improvements on the Property and their condition and he also addressed positive and negative impacts of the Property’s marketability and value, including its subdivision potential as a rural lifestyle development on the one hand, and its poor condition and limited ability to generate farm income and unapproved buildings and “overall poor … presentation” on the other. Mr Andrews also referred to other comparable properties as the basis of his valuation. By second affidavit dated 16 February 2023, Mr Andrews responded to Mr Cunningham’s valuation report, on which the Company relied.

Mr Andrews was cross-examined (T60ff). His evidence was that it was not surprising that there had been an increase in the value of the Property from $3.3 million on 15 January 2021 to $4.4 million on 23 November 2022, given substantial increases in real estate prices during 2021 (T61). However, it appears that he had not had regard to the original purchase price of the Property of $1.1 million in August 2019 in determining his valuations of the Property, although he indicated his understanding from local agents that the original purchase had been at a “good price” (T62). Plainly, his later valuations of the Property were also substantially higher than valuations of the Property which had been undertaken in 2019 (T64-65).

The Cross-Defendants read the affidavit dated 8 February 2023 of Mr Timothy Cunningham, which annexed his valuation report of the Property as at 15 January 2021 and as at 1 February 2023. Mr Cunningham also undertook a detailed review of the improvements on the Property and reviewed sales evidence in relation to sales of similar properties in order to derive the retrospective market value of the Property as at 1 January 2021. He also reviewed the real property market in the Tweed region from March 2020 onwards, noting an increase in prices during the COVID-19 period and to subsequent cooling of the market as interest rates rose. He assessed the value of the Property as at 15 January 2021 as between $1,850,000 and $2,150,000 with a mid-range value of $2 million, and the value of the Property as at 1 February 2023 as between $2,800,000 and $3,200,000 with a mid-range value of $3 million, including in each case the market value of the land and the value of improvements.

It is not necessary for me to reach a conclusion as to the value of the Property, where neither party led adequate evidence that would allow a determination as to the value of the Company’s shares based on any determination of the value of the Property, and it is not apparent that either the Company or its shareholders could fund a buyout of Benjamin’s shares. However, had it been necessary to do so, I would have preferred the evidence of Mr Cunningham to Mr Andrews’ evidence, where it seems to me that Mr Andrews’ application of a per hectare rate to the larger area of the Property significantly overstated its value to the Property, where a purchaser would likely discount the amount he or she was prepared to pay for additional acreage in the Property which could not be put to productive use, beyond the minimum size which the purchaser sought for a rural lifestyle property. It seems to me that Mr Andrews’ valuation would also imply a highly implausible level of increase in the value of the Property since the date of its purchase, notwithstanding the evidence of earlier price increases and then a stabilisation of prices in the Tweed region.

Turning to the question of the valuation of Benjamin’s ordinary shares in the Company, Benjamin read the affidavit dated 4 September 2023 of Mr Mathews, an accountant, which annexed a valuation of Benjamin’s shares in the Company on assumptions that were amended when Benjamin abandoned the claim that G class shares in the Company had been issued to him and instead relied on his holding of ordinary shares in the Company. The present state of those assumptions is recorded in a document marked MFI-4. Mr Mathews had limited experience in share valuations, although I admitted his report over objection, and his valuation had significant limitations.

Although Mr Mathews referred to the fact that the valuer retained by the Cross-Defendants had been asked to value those shares on the orthodox basis that their market value was the amount which would be paid for them by a willing but not anxious buyer, he rejected that basis of valuation and instead valued those shares on a net tangible asset basis. That approach did not allow for the fact that Benjamin is a minority shareholder in the Company, and a minority discount would arguably be applicable to the valuation of his shares, where his conduct has contributed to the other shareholders’ wish to exclude him from occupancy of the Property. That approach also did not allow for the fact that Benjamin could not extract the net tangible asset value of his shares from the Company in a winding up, because the Property would have to be sold subject to the rights of those shareholders with landholder agreements with the Company, or a liquidator would have to disclaim those agreements and recognise those shareholders’ claims for loss arising from that disclaimer as debts in the winding up. Those debts would rank in priority to the claims of ordinary shareholders including Benjamin and the liquidator’s costs also have to be met before any distribution could be made to ordinary shareholders. I recognise that Mr Mathews made an attempt to adjust for the rights of A class shareholders, by deducting the amounts that had paid to acquire their shares from the Company’s assets, although it is not clear that adjustment fully recognises the effect of those rights on the Company’s ability to sell the Property or Benjamin’s ability to extract value from his shares.

Mr Mathews was also asked to assume that the land and improvements on the land had a value of $3.3 million at 20 January 2021 and $4.4 million at 23 November 2022, drawing on Mr Andrews’ valuation evidence, which I would likely not have accepted for the reasons noted above. Mr Mathews was not asked the value of the land on the alternative basis that Mr Cunningham’s evidence was accepted, and the Cross-Defendants also did not seek to undertake an alternative valuation using Mr Mathews’ methodology on that basis.

Mr Mathews also offered various further observations as to the impact of contractual permissions for the use of land or buildings, introduced by the fair recognition that he was unqualified to value their impact, and identified a formula that could be used to determine a value of Benjamin’s shares “if the Court were to allocate some value to the contractual entitlements” to which he referred, but it is not possible for the Court to do so where neither party led evidence that would provide an adequate evidentiary basis for doing so. For completeness, Mr Mathews also disregarded two parcels of A class shares issued by the Company after it cancelled Mr Smith’s shares. On balance, it seems to me that those parcels should not have been disregarded, where they now exist, in determining the present value of Mr Smith’s ordinary shares.

The Cross-Defendants read the affidavit of Michael Williams dated 25 June 2023, which annexed the valuation report of Mr Williams, who had stronger valuation expertise than Mr Mathews. However, Mr Williams’ valuation is of no assistance because he proceeded on an assumption that the value of the whole of the land owned by the Company was attributable only to its A class shareholders who had contractual rights to occupy a relatively small part of that land. That assumption was obviously incorrect, because significant parts of the Property are not subject to any such right of occupancy by those shareholders, including the seven bedroom house on the Property and a large part of the unimproved land. Mr Mathews readily conceded the lack of basis for that assumption in cross-examination (T421) and his valuation of the ordinary shares as having no value as at 20 January 2021 was wholly dependent on that assumption. Mr Alkadamani also rightly points to the fact that, while the value of the Property was excluded from Mr Mathews’ valuation, he did not make any adjustment for the Company’s debt to Westpac which had been used to acquire that Property (T420). Mr Mathews’ report therefore provides no basis for determining the value of Benjamin’s shares, and it was notable that the Cross-Defendants did not make any attempt to value Benjamin’s shares on any more realistic basis.

I also recognise that an earlier valuation report dated 30 April 2021 obtained by the Company (Ex J1, 2634A), to which I referred in the chronology above, had valued Benjamin’s shares at $144,000 on a net tangible assets valuation basis, although that did not adjust for the valuer’s view that A class shares should be valued more highly than the B class shares and the G class shares that Benjamin was then understood to hold. I can give limited weight to that valuation here, where it does not adjust for that matter, or for the fact that Benjamin held a minority stake, or for the fact that he would not realise that entitlement on a winding up for the reasons noted above, even if he could cause one to occur.

I would have made a buyout order (including in preference to any winding up order or making no order) in this case, had it been possible to do so in practical terms. However, it is plainly not possible to make a buyout order. First, the valuation evidence does not allow a proper assessment of the value of Benjamin’s shares, given the deficiencies in both share valuation reports to which I referred above, and there is no reason to think that either party would lead better evidence even if I were to give them a further opportunity to do so. Second, there is no reason to think that the Company or its shareholders have the capacity to pay any substantial amount to acquire Benjamin’s shares. When the Company previously set a purchase price of $90,000 for Benjamin’s three G class shares, it did not pay it. When it offered payment on terms of a deed of release, it did so on the basis that it would pay that amount by monthly instalments over several months. The Company does not now make any open offer to buy Benjamin’s shares at fair value. There is no reason to think that the Company has the financial capacity to buy out Benjamin’s ordinary shares at their fair value, if it were possible to determine it, still less at a value comparable to their net asset backing. The individual Cross-Defendants all give evidence, and there is no reason to doubt, that they do not have the financial capacity to acquire Benjamin’s shares at their fair value (again, if it were possible to determine it) or their net asset backing and they have also made no offer to do so.

Turning now to the position in respect of a winding up order, I recognise that s 467(4) of the Act applies where a winding up order is sought on the just and equitable ground, and the matters identified in that section, including the availability of some other remedy and whether a plaintiff would be acting unreasonably in seeking to have the companies wound up instead of pursuing that other remedy, also apply where a winding up order is sought under s 233 of the Act. I also recognise that, in Snell v Glatis (No 2), Bell P (as the Chief Justice then was) observed at [6] that:

I also bear in mind that, by analogy with the position in respect of a winding up order under s 461(1)(k) of the Act, a person who is responsible for the breakdown of the shareholders’ relationship is less likely to be afforded relief, and that a winding up order is not “lightly to be made” and must be “just and equitable not just for the applicant, but for all”: Re G Jeffrey (Mens Store) Pty Ltd (1984) 9 ACLR 193; Ruut v Head (1996) 20 ACSR 160 at 162; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672; [2001] NSWCA 97 at [90]; Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343; [2009] NSWSC 342 at [90], [96], [117]; Byrne at [81]; Re Amazon Pest Control Pty Limited [2012] NSWSC 1568 at [19].

I have found the question whether a winding up order should be made in this case to be a difficult one. I have recognised above that there is evidence of an expectation that persons associated with the Company would live on the Property, although that expectation was falsified at an early stage in respect of Sascha, was not documented in respect of Benjamin or Mr Grumley and has now been falsified in respect of Benjamin. I recognise that the Company made an initial offer of $126,000 to acquire the G class shares that Benjamin was then understood to hold, which he rejected, although it is by no means clear that it could have funded that payment had he accepted that offer. I also recognise that the Company had committed to pay the amount of $90,000 on extinguishing the G class shares which Benjamin was then understood to hold and then did not do so. I recognise that there is significant disadvantage for Benjamin in losing his ability to occupy a part of the Property, without compensation, although he will retain his ordinary shares in the Company from which he will derive no apparent benefit. I also recognise that Benjamin has contributed to that result by the manner in which he has dealt with other shareholders, even apart from the unpleaded allegations against him as to which evidence was not admitted.

I recognise that, on the other hand, a winding up order would defeat what was originally likely an idealistic attempt to create a community with shared values at the Property. There would also be a significant detriment to other shareholders in a winding up, including the likely loss of their ability to occupy the Property, and the risk that ordinary shareholders (including Benjamin) would receive no or only a limited return, after Westpac’s debt and the costs and expenses of a liquidator were paid and the claims of shareholders with rights to occupy the Property under landholder agreements were met following any disclaimer of those agreements, where those persons would rank as creditors and their claims would have priority over claims by other shareholders. I also bear in mind that Benjamin has been confrontational in his dealings with other shareholders and has significantly contributed to the disputes with them, and has not led expert evidence that was capable of establishing that his shares have material financial value and has not established that he made any material financial contribution to acquire those shares. Weighing these various considerations, but with real hesitation, I have concluded that I should not make a winding up order. I recognise that reasonable minds may differ as to the result that should be reached in that regard.

Benjamin also seeks (Relief [12]) an order that the Cross-Defendants do all things necessary to effect a release of any guarantees given by him in respect of the Company’s obligations. It is not necessary to make that order where Westpac has previously addressed the issue; the basis for making that order is also not apparent; and it is also not apparent that the Cross-Defendants have the practical capacity to cause Westpac to release that guarantee, beyond the steps that it has already taken or committed to taking.

For these reasons, the Cross-Claim should be dismissed, and I will also otherwise dismiss the primary proceedings brought by the Company where no issues in them remain to be determined.

My preliminary view is that there should be no order as to the costs of these proceedings, where the manner in which they have been conducted, by both parties, is such that it would be unjust to impose the burden of costs upon the other party. First, the parties led voluminous affidavit evidence, with much of the Cross-Defendants’ affidavit evidence being directed to unpleaded allegations of criminality and misconduct on Benjamin’s part, and much of Benjamin’s evidence in reply then being directed to equally unpleaded allegations of criminality and violence on the part of the Cross-Defendants and their associates. Second, significant parts of the cases of both parties were put on the basis of false premises as to the status of shares in the Company, including the position as to G class shares, and were directed to false issues including the validity of the capital reduction in respect of Benjamin’s G class shares that no-one now contends existed. Third, on any view, the time spent in the conduct of the case and the costs which will have been incurred in its conduct by both parties will be grossly disproportionate to the monetary amounts that were in issue, so far as it is possible to guess the likely value of Benjamin’s shares in the absence of adequate expert evidence. Fourth, and importantly, the failure of both parties to lead adequate expert evidence which might have permitted a buyout order, or at least permitted the Court to stay a winding up order for a period against the possibility that a buyout might occur on specified terms, has forced a result where Benjamin must either fail in his claim or the Company must be exposed to the risks of a winding up and its shareholders to the collateral consequences of a winding up, in a manner that is not consistent with the just resolution of the real issues in dispute between the parties. I will, however, allow the parties a further opportunity to be heard as to costs, if they seek to be heard in that respect.

I make the following orders: