Case: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672
Outcome: applied
However, it is necessary to consider whether some other remedy might be available of a less drastic kind under s 233 (see s 467(4)). In Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672 at 687 [89]-[90] per Spigelman CJ, 772 [570]-[571] per Priestley JA and 792 [691] per Fitzgerald JA, the Court of Appeal of the Supreme Court of New South Wales held that the existence of irreconcilable differences among persons involved in what is, in effect, a partnership, conducted through a company, applies both to applications for winding up on the just and equitable ground and also to oppression suits. Spigelman CJ pointed out ( Fexuto 37 ACSR at 687 [89] [90]), if the court decided the person excluded was the one responsible for the breakdown in the relationship, he or she would not be entitled to claim to have suffered oppression under s 232. That is not this case. Mr Bax's conduct was understandable and reactive to Mr Gulson's. If fault is to be attributed in the breakdown of the relationship, it is to Mr Gulson for the way he behaved in the Heathrow Hotel and afterwards. That conduct was destructive of and confirmatory of the destruction of the previous relationship of mutual trust and confidence. Mr Cordato later came to participate in association with Mr Gulson in that destructiveness. 247 As Priestley JA said in Fexuto 37 ACSR at 772 [571], putting in quasi partnership terms what happened from 29 May 2005, the majority shareholder and director changed the previous management regime against the opposition of the minority director and shareholder. He held that this entitled the minority to a remedy and that in ordinary partnership situations the remedy was dissolution of the partnership. Priestley JA pointed out that the remedy available under the analogue of ss 232 and 233 was broader than simply a winding up. He had found that oppression in that case had occurred by a change in the previous way in which the business had been conducted, where all the partners or directors jointly engaged in direct management of the company ( Fexuto 37 ACSR at 772 [569]). 248 Even if oppression of, or unfair prejudice or unfair discrimination against Food Improvers (either as a member of BGR or the partnership or as the provider of Mr Bax's services under the consultancy agreement) were not established solely by what occurred on the evening of 29 May 2005, Mr Gulson's later determination to use his voting power to exclude, first, Mr Bax as a director of BGR and, secondly, Food Improvers from the benefits of both his directorship and the consultancy agreement on the knowingly false basis upon which it was asserted that Mr Gobert's contact should be terminated or its termination affirmed, was oppressive of, unfairly prejudicial and unfairly discriminatory against Mr Bax and Food Improvers. When Mr Cordato sided with Mr Gulson and they both voted in favour of the resolutions on 1 July 2005, the oppression of Food Improvers was manifest. 249 Mr Bax was excluded from any management role in BGR. Mr Gulson commenced to pay Triad an increased consultancy fee. He and Mr Cordato initially consulted with Mr Bax about the sale of Main Camp plantation, but later negotiated the sale without Mr Bax's involvement and refused to inform him of the details of its terms apart from the price.