“I was not 2.01% oppressive!”
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TeeCo had 2 directors, each a 50% shareholder and Dir; half the units were held by P (one of the directors, who held that interest as trustee) and D3 (a company related to the other director, A): [2] – [6]
P’s spouse acted as P’s agent throughout: [7]
P sued seeking s 233 sale orders. A cross-claimed seeking s 233 sale orders and alleging a breach of duty by P: [8], [9]
The relevant property had a value of $4.74m: [10]
A JV was struck between P and A to buy the property: [20] – [27]
TeeCo was soon after incorporated and exchanged contracts: [29] – [31]
An attempt to finance the purchase failed: [32] – [55]
The sale completed with bridging finance obtained by A, and funds provided by P: [65]
Discussions about finance continued. Due to A’s self-employed status and delays with tax returns, an “on-loan” arrangement was struck to deal with A’s bridging loan: [66] – [75]
P got the finance and on-lent to TeeCo with a 2.01% margin, putting this to A and proceeding on that basis: [80], [81]
In time, A grew dissatisfied with the margin: [87] – [90]
A said they had thought the 2.01% margin was a lender-required necessity. On learning it was not, A objected: [100] – [107]
P pressed for funding to pay TeeCo’s strata levies and other costs. A resisted. The Owners Corp sued: [108] – [128], [145]
The parties fell into dispute, A asserting P had engaged in “profiteering” with the 2.01% margin: [130] – [144]
Each party was critical of the other’s evidence: [152], [153]
A alleged inter alia that P (incl by their spouse) breached their duties to TeeCo and to A by suggesting the 2.01% was a necessity: [179], [180], [184]
The evidence showed the parties initially contemplated A’s side paying 4.5%. The lender lent to P at its rate (later confirmed at 2.49% - leaving the 2.01% margin for TeeCo to pay): [214] – [216]
Relevantly, this arrangement was discussed with the idea of a prompt refinance being the goal of both: [221]
Key issue: whether P represented to A that the lender *required* the margin that was eventually applied: [233]
A was unable to convince the Court that P induced A into their misapprehension that the lender *required* a margin of 2.01%: [244]
This was fatal to both A’s oppression claim and breach of duty claim: [246]
This left P to progress their oppression claims against A in relation to failures to engage with payment of levies, delaying finance for the project with slowness in getting tax returns etc: [255]
A’s failure to engage with P about TeeCo’s debts was oppressive: [276], [277]
Some of P’s other complaints about A were not oppressive: [286], [295]
Noting the deadlock, the Court resolved the relief should bring the relationship to an end: [305]
A’s attempt to seek an order that they buy the property was not made in part due to A’s oppressive conduct: [333]
P got their buyout orders: [344]
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