Case: Campbell v BackOffice Investments Pty Ltd [2008] NSWCA 95 ; (2008) 66 ACSR 359
Outcome: cited
"contrary to the interests" provision now contained in subpar (d) of s 232 has a separate and distinct area of operation from the "oppression" provisions in subpar (e) of s 232. The manner in which a company is being administered and in which its affairs are conducted may fall within the category of conduct contrary to the interests of the company's members as a whole although it may not be described as oppressive, unfairly prejudicial to, or unfairly discriminatory against members of the company: Turnbull v National Roads &amp; Motorists' Association Limited [2004] NSWSC 577 ; (2004) 50 ACSR 44 at 52, 57; Campbell v BackOffice Investments Pty Ltd [2008] NSWCA 95 ; (2008) 66 ACSR 359 at 400. (See also Re Spargos Mining NL (1990) 3 ACSR 1 at 42; Shelton v NRMA Limited (2005) 51 ACSR 278.) An example of such conduct may be found where a company is formed for the purpose of undertaking particular activities but the directors and management disregard those activities and direct the company into different commercial areas. The proposition that the purpose of granting a remedy under ss 232 and 233 is to bring to an end the conduct or oppression of which complaint is made was explained by Giles JA in Campbell v BackOffice Investments Pty Ltd (supra) at 386 7: "The predecessors to ss 232 and 233 were introduced in the United Kingdom as s 210 of the Companies Act 1948 (UK), as a means of giving an aggrieved shareholder a remedy when winding-up on the just and equitable ground would be too harsh. They enabled orders by which the oppression came to an end with the shareholder remaining a shareholder (as in Re H R Harmer Ltd [1958] 3 All ER 689; (1959) 1 WLR 62) or came to an end through the shareholder being brought out as a shareholder (as in Scottish Cooperative Wholesale Society Ltd v Meyer [1959] AC 324 ; [1958] 3 All ER 66 ( Scottish Cooperative )). That legislation was adopted in Australia, and has since been significantly amended to the form earlier set out. There are more widely available statutory remedies, but historically the point of granting a remedy is to bring an end to the oppression as Powell J said in Re Dernacourt Investments Pty Ltd (1990) 20 NSWLR 588 at 620; 2 ACSR 553 at 566 "if it be possible, to bring the 'oppression' to an end without recourse to a cure the effects of which would, in many cases, be worse than the disease"." See also per Basten JA at 397; Young CJ in Eq at 430. Given that the purpose of granting a remedy under ss 232 and 233 is to bring to an end the conduct complained of, what is the situation if that conduct, in existence at or prior to the commencement of the proceeding, has terminated by the time of trial? The general trend of authority is that it is open to a court to grant relief under s 233(1) of the Act notwithstanding the fact that at the time of the trial or the making of an order the conduct or oppression complained of is not continuing. A considerable number of authorities in this context were considered by the members of the Court in Campbell v BackOffice Investments Pty Ltd (supra). I consider that the appropriate approach to take is that expressed by Giles JA in Campbell v BackOffice Investments Pty Ltd (supra) at 389: "In my opinion, it is not necessary that the conduct complained of be continuing at the time the court considers making an order. Rather, claimed relief founded on conduct which is no longer continuing may be refused, but will not always be refused, in the exercise of the discretion, and the discretion adequately allows for the logicality to which Hamilton J referred [in Bessounian v Australian Wholesale Mortgages Pty Ltd [2007] NSWSC 35 ]."