In my Judgment delivered on 29 August 2018 ([2018] NSWSC 1315) ("Judgment"), I determined an application brought by the plaintiff, Dr Najjarine, for an order for winding up ICB Medical Distributors Pty Ltd ("ICB Medical") and several other companies within the ICB group of companies (together, "ICB Companies"). I also determined Mr Kielt's Cross-Claim, by which he sought an order that he buy out Dr Najjarine's shares in the ICB Companies. I held that a winding up order should not be made. I observed that, although Dr Najjarine's Second Amended Statement of Claim had sought an order that he purchase all of the shares of Mr Kielt in the ICB Companies, he had placed primary emphasis in seeking a winding up order at the hearing and had made no submissions of substance in support of an order that he buy out Mr Kielt's shares in those companies. I also observed (at Judgment [222]-[223]) that, where a winding up order was not made, several factors supported an order that Mr Kielt should buy Dr Najjarine's shares, rather than the reverse, although I had found that both Mr Kielt's and Dr Najjarine's conduct amounted to oppression of the other.
I held that orders should be made, as Mr Kielt proposed, that he purchase Dr Najjarine's shares in the ICB Companies at the date of judgment, with the price to be calculated on a basis that made adjustments for several transactions that I had addressed in the Judgment. I observed (at Judgment [221]) that:
"It seems to me that an order for Mr Kielt to buy out Dr Najjarine's shares in ICB Medical and the other companies in the ICB Group on that basis will sufficiently address the oppressive conduct that has been established without the adverse impacts on third parties, including employees, arising from a winding up, and without allowing Dr Najjarine to use a winding up order to advance his and his associated entities' adverse interests as trade competitors of ICB Medical. In principle, a valuation could be undertaken of Dr Najjarine's equity in the companies in the ICB Group, by reference to future cashflow, excluding the liabilities to which I have referred above, and having regard to income tax that would properly be payable on those future earnings. The financial adjustments that would be required to bring about a purchase of Dr Najjarine's shares at fair value, by excluding debt that I have held was not properly recorded as owed to Mr Kielt, his associated companies and members of his family, are relatively straightforward and Mr Kielt has proposed orders that would largely bring them about. There is no reason to think that those adjustments would not address all relevant matters, given the detail of the exploration of ICB Medical's financial affairs in these proceedings. Where an order of that kind can appropriately address the oppression, a winding up order should not be made."
I also observed (at Judgment [224]) that:
"While I will make an order that Mr Kielt buy out, and Dr Najjarine sell, Dr Najjarine's shares in the companies in the ICB Group, I will not order the appointment of a single expert to value those shares as Dr Najjarine proposed. It seems to me that there is little or no prospect that the parties would agree common assumptions for such an expert, and the appointment of such an expert would be the precursor to a range of further disputes as to his or her instructions. I will instead make orders for each party to serve their respective expert evidence, based on assumptions they agree or otherwise adopt at their own risk, in respect of the valuation of those shares. There will then need to be a further hearing to determine the value of Dr Najjarine's shares, if the parties cannot agree that matter so as to avoid the costs of that further hearing. I should add, for completeness, that I do not consider it necessary to make orders in respect of amounts that would be credited to directors' loans accounts, as proposed by Mr Kielt, if Dr Najjarine does not consent to them, even to the extent that they would be in his favour."
By my further Judgment delivered on 14 September 2018 ([2018] NSWSC 1415), I noted three corrections that Dr Najjarine had submitted should be made to the Judgment under the "slip rule" including corrections of two figures, one of which involved an incorrect figure and the other a double counting of part of an amount. I also made orders as to the valuation process to be adopted and set down a further hearing in respect of the valuation issues to commence on 6 December 2018.
At that further hearing, the Plaintiffs relied on the affidavit dated 26 November 2018 of their solicitor, Ms Carollo, which exhibited eight documents without further explanation of what was sought to be established from those documents. One of those documents, a 2014 Quickbooks ledger comparison was the subject of further examination at that hearing.
The Defendants relied on the affidavits dated 16 October 2018 and 3 December 2018 of Mr Tony Samuel, an accountant, who prepared a valuation report in respect of shares in the ICB Companies and a supplementary report which indicated certain amendments to that report. By his first report dated 16 October 2018 (Ex D1), Mr Samuel indicated his assessment of the value of shares in ICB Medical, including ICB Medical's ownership of ICB Medical UK Ltd ("ICB UK") and Abu Trading (Shanghai) Co Ltd ("ICB China") and each of the other ICB Companies. That valuation was undertaken after making specified adjustments which reflected matters referred to in the Judgment. Mr Samuel was instructed to make specified assumptions, including that Mr Kielt intended to continue to operate the ICB Companies, with two exceptions, as going concerns; that ICB Medical had not prepared annual financial reports or tax returns since FY 2014; and that no budgets or forecasts existed in relation to any of the ICB Companies. Mr Samuel noted that he had been provided with unaudited financial statements and management accounting records for the ICB Companies and had applied an appropriate level of professional scepticism in his analysis, but had not undertaken an audit of the financial information provided to him and did not provide any audit opinion.
Mr Samuel observed (Ex D1, [103]-[105]) that ICB Medical had not prepared annual financial reports or tax returns since FY 2014 and ICB UK had not compiled financial statements for FY 2018. He indicated that he performed his valuations on the assumption that management accounts provided to him for those periods were accurate and free from material error and noted that:
"As a check over the reasonableness of ICB [Medical's] management accounts, I have compared the FY 2014 financial report compiled by BDO to the FY 2014 management accounts. My analysis shows that ICB [Medical's] management accounts, both the profit and loss statement and balance sheet, materially agree with the FY 2014 financial report."
It became apparent in Mr Samuel's cross-examination that that cross-check was of no real value in establishing the accuracy of ICB Medical's management accounts, because both the management accounts and financial report included adjustments made by ICB Medical's accountants, BDO, and their consistency did not establish anything as to the accuracy of the management accounts prior to those adjustments. Dr Najjarine pointed out that BDO had not made similar adjustments to ICB Medical's management accounts in subsequent years, and had not prepared financial reports in subsequent years, I interpolate, by reason of the dispute between the shareholders.
Mr Samuel undertook his valuation by reference to "fair value" rather than to "market value" of the relevant shares and did not apply a minority discount where a 50% interest was being bought or sold. He valued ICB Medical by consolidating its financial performance and position, as a stand-alone entity, with ICB UK where the latter was operating as a branch of ICB Medical. He did not consolidate ICB China with ICB Medical and instead considered the value of ICB Medical's ownership of the shares in ICB China as a separate asset in its balance sheet, where ICB China purchased inventory direct from third party suppliers and appeared to operate, to a material extent, independently of ICB Medical.
Mr Samuel observed that ICB Medical and ICB UK were historically loss-making companies and, after the specified adjustments were made, had had negative earnings for each of the financial years ended 30 June 2016, 30 June 2017 and 30 June 2018. Mr Samuel expressed the view, in his first report, that where the earnings before interest and tax of ICB Medical for FY 2016 to FY 2018 was negative, it was inappropriate to apply an income-based approach to valuation, such as discounted cash flow or capitalisation of maintainable earnings methodologies (Ex D1 [124]). Mr Samuel concluded that it was nonetheless not appropriate to value the shares in ICB Medical at nil because there was value in the operating assets of the business (Ex D1, [126]-[127]). Mr Samuel adopted an asset-based valuation of ICB Medical (Samuel [145]), on a going concern basis, with primary reference to the book value of its assets and liabilities, and assuming that ICB Medical would continue to operate as a going concern and collect its receivables and settle its liabilities under ordinary operations. I am conscious that the approach adopted by Mr Samuel may require greater focus on the accuracy of the financial records of ICB Medical than I had anticipated in the Judgment, where I had contemplated the possibility of an earnings based valuation (Judgment [221], quoted above).
Mr Samuel was also instructed to take into consideration income tax that would have been payable by ICB Medical over the relevant years had other instructed adjustments been carried out. There was significant dispute as to that aspect of Mr Samuel's report at the hearing, but that dispute was ultimately displaced by an agreement between the parties to which I refer below. On that basis, Mr Samuel initially valued ICB Medical as $101,458, for 100% of its shares; did not allocate any value to Footsteps Orthotics or ICB College; and valued ICB Gait and Posture Clinic Pty Ltd ("ICB G&P") at $86,878, for a total valuation of $188,136. Mr Samuel further revised that valuation, in his second report, to which I refer below.
By his second report dated 3 November 2018, Mr Samuel addressed matters that were raised by an earlier affidavit of Ms Carollo dated 20 November 2018 and documents exhibited to it, which was not read in this hearing; by a further affidavit of Ms Carollo dated 26 November 2018 and documents exhibited to it, which was read in this hearing; and by the Plaintiff's submissions dated 27 November 2018 and further submissions in respect of GST limitation periods dated 28 November 2018. Aspects of Mr Samuel's second report were directed to correcting matters raised by Dr Najjarine in a manner which resolved the dispute about them. In particular, Mr Samuel removed an allowance for motor vehicle hire-purchase liabilities recorded in the financial statements of ICB Medical as at 30 September 2018, which had been reflected in his valuation of the ICB Companies, and excluded an inter-company receivable of $10,712, corresponding to a payment of EUR 7500 received by ICB Medical on behalf of ICB UK in September 2014. The result of those adjustments was to increase the amended fair value of shares in ICB Medical, as assessed by Mr Samuel, to $174,373 and increase the amended fair value of the ICB Companies to $261,051.
In his second report, Mr Samuel also responded (Samuel 3.12.18 [27]) to Dr Najjarine's submissions concerning the absence of financial statements from FY 2015 onwards and noted that his valuation was based on ICB's business records, as set out in his first report, as adjusted for the specified adjustments arising from the Judgment and the further adjustments he had identified. He indicated he had no basis for concluding that any other adjustments to his valuation were required. Mr Samuel's second report also addressed the position in respect of income tax adjustments that he had made in his first report which were challenged in Dr Najjarine's submissions of 26 and 27 November. Mr Samuel expressed the view that a buyer and seller would adjust for a possible future tax liability in their assessment of value of the ICB Companies but noted that, if no allowance was made for tax consequences on the adjustments following from the Judgment, then his valuation would increase by $254,451 to $515,502. Mr Samuel also addressed GST adjustments which had also been criticised in Dr Najjarine's submissions and noted that, if those adjustments were excluded from his valuation, that valuation would further increase by $10,584 to $271,635 and, if both GST and income tax adjustments were excluded, that valuation would increase to $530,623. It is not necessary to address those matters since they are the subject of the agreement between the parties to which I refer below.
Mr Samuels was cross-examined as to the fact that adjustments were made by BDO in the period to FY 2014 to prepare the ICB Companies' financial statements, but no such adjustments have been made since FY 2014. Mr Carnovale, who appeared for Dr Najjarine, put to Mr Samuel that he had not made all of the adjustments that BDO had made in previous years. Mr Samuel's evidence in cross-examination was that many of the adjustments made by BDO in earlier years had been made in the accounts on which he had relied or in the valuation process that he had undertaken (T40, 43). He expressed the view that, while he had not undertaken an audit, he was satisfied the information that he had been provided for valuation purposes (T43). Mr Samuel did not accept that ICB's management accounts, now maintained in the XERO accounting software, were not reliable for valuation purposes because they had not been "fully adjusted" (T43). He pointed out in cross-examination that Dr Najjarine had not identified any material adjustment that BDO had made in earlier years which Mr Samuel ought also to have made, and had not in fact made, and his evidence was that he was not aware of any material error in ICB's management accounts based on the matters which had been put to him in cross-examination (T45). I accept Mr Samuel's evidence in that regard, and it also seems to me that the fact that accounts have not been adjusted does not demonstrate that they are unreliable, unless it is also shown that some adjustment existed which ought to have been made. Dr Najjarine made no attempt to establish the latter. Mr Samuel also fairly pointed out in cross-examination that ICB Medical's management accounts were "business records" at least in the sense that they were maintained for the ordinary conduct of ICB Medical's business, and that he had not seen any adjustments made by BDO in previous years which were not already reflected in his valuation (T45).
Mr Samuel was also cross-examined at some length in respect of differences ICB Medical's internal QuickBooks ledger, as it existed at 2014, and that ledger after it was adjusted by BDO, as disclosed by a document exhibited to Ms Carollo's second affidavit (Ex P1, tab 8). Although Ms Carollo's affidavit and Dr Najjarine's submissions had not identified the proposition that was sought to be derived from that document, Mr Samuel had recognised that there were differences between the two figures on the morning of his cross-examination, and had given thought to that issue before he was cross-examined about it. It seems to me that there is no basis for any criticism of Mr Samuel for any failure to address that matter in his second report, responding to Ms Carollo's second affidavit, where he had not been given fair notice of the issue that was sought to be drawn from that document. Mr Samuel fairly accepted in cross-examination that the difference of $137,000 between ICB Medical's internal QuickBooks ledger, as it existed at 2014, and the ledger after it was adjusted by BDO was material, but did not accept that that gave rise to any issue as to the adjustments he had made or as to the adequacy of his valuation (T45).
Mr Samuel was not prepared to accept in his evidence under cross-examination that the accounts he had been provided were not sufficiently reliable for valuation purposes (T45). I understand Mr Samuel there to have distinguished between the level of accuracy of accounts that may be required for financial reporting purposes and the level of accuracy that is required to determine the price at which a buyer would acquire shares from a purchaser in an arm's-length transaction, and it seems to me that that distinction has force.
The Defendants also relied on the affidavit dated 3 December 2018 of their solicitor, Ms Murphy, which referred to arrangements that were made for a valuer retained by Dr Najjarine to attend ICB Medical's offices and access documents to allow him to prepare a valuation of the ICB Companies, and to arrangements that were made to provide copies of documents to that valuer. In the event, Dr Najjarine did not lead evidence from that valuer.
[3]
Dr Najjarine's primary position
Dr Najjarine's primary position was that, notwithstanding the conclusions that I had reached in the Judgment, the Court should not make an order for Mr Kielt to purchase Dr Najjarine's shares in the ICB Companies and should instead make an order winding up the ICB Companies. Mr Carnovale relied on the decision of Young J in Alessi v The Original Australian Art Co Pty Ltd (1989) 7 ACLC 595, where Young J was prepared to appoint a provisional liquidator on the basis that the probability was that a winding up order would be made, where each director had borrowed funds from the company and accounts had not been kept up to date. It does not seem to me that that decision establishes any general principle that a failure to maintain current accounts prevents a buy-out order being made or requires that a winding up order be made. The Court must determine the appropriate remedy in the relevant circumstances, which will include whether a sufficiently reliable valuation can be achieved, notwithstanding any issues as to the accuracy or currency of a company's accounts. I am satisfied, for the reasons set out below, that a sufficiently reliable valuation can be achieved in this case.
Dr Najjarine submits that the ICB Companies' financial records are unreliable, and refers to issues raised as to Mr Kielt's conduct at the earlier hearing, which were addressed in the Judgment. Dr Najjarine also points to the absence of financial statements for the ICB Companies from FY 2015 onwards, a matter which was also recognised in the Judgment, and which reflects Dr Najjarine's refusal to sign those financial statements (Judgment [60]). I did not find, in the Judgment, that Dr Najjarine's position was unreasonable, given his concerns as to the content of those financial statements. However, it does not seem to me that the absence of those financial statements, in those circumstances, excludes the making of a buy-out order, as contemplated by the Judgment, if the necessary adjustments to the accounts can be made. I have addressed above the cross-examination of Mr Samuel's as to the absence, in later years, of the adjustments made by BDO in earlier years. As I noted above, that cross-examination did not undermine the reliability of ICB's management accounts for valuation purposes, because it turned on a premise, not established by evidence, that there were other adjustments required in the financial records.
Mr Carnovale also points out that Mr Samuel's first report had assumed that the financial information he was given was accurate and free from material error. Mr Carnovale submits, and I accepted above, that a comparison which Mr Samuel undertook between the Company's financial statements for the year ended 2014 and its management accounts for that year did not provide any real support for the ultimate accuracy of the management accounts, where the versions he had compared both reflected adjustments made by ICB's accountants, BDO, in that year and BDO have not made such adjustments in subsequent years by reason of the dispute between ICB's directors and shareholders.
Mr Carnovale also pointed to two errors in the management accounts in the years from financial year 2015 onwards, which were addressed in Mr Samuel's second report. The first of those errors related to the treatment of hire purchase liabilities of $97,794 in the financial years ending 30 June 2015, 30 June 2016, 30 June 2017 and 30 June 2018, where the amount of that liability was not adjusted downwards as repayments were made, and that error continued in a balance sheet as at 30 September 2018. That error was corrected in Mr Samuel's second report after Dr Najjarine had pointed to it in submissions in this application, and Mr Samuel also there recognised that both of those vehicles had been paid out in 2018. Mr Samuel concluded in his second report that ICB Medical's management accounts should not record a liability for the relevant chattel mortgages at the valuation date, where those liabilities had been paid out.
Mr Carnovale also relied on an email from Ms Naomi Kielt to ICB's solicitors dated 28 November 2018, addressing that error, which accepted that an amount of $97,794 referred to chattel mortgage liabilities on the two vehicles did not exist where both cars were paid out in 2018. Ms Kielt there noted that:
"… the issue we have is that this account in the balance sheet is one that had historically been adjusted by BDO at the end of the year, and because BDO has been unable to do so since FY 2015, we had no way of calculating the appropriate adjustment."
Ms Kielt also referred to a letter dated 26 September 2018 from Dr Najjarine to Mr Kielt which had expressed the view that no changes should be made to prior years' ledgers, journals or financial statements to correct errors that the Court identified in the Judgment or otherwise, on the basis that those matters could be addressed in the relevant expert reports. It seems to me that there is a significant degree of inconsistency in Dr Najjarine, on the one hand, taking the position that such amendments should not be made, because they could be addressed in expert reports - a position that is, on its face, entirely reasonable - and then contending, at this hearing, that the failure to make such an adjustment undermined the reliability of ICB Medical's management accounts generally.
Mr Carnovale also pointed to an error in ICB Medical's balance sheet in respect of inter-company transfers in the same period, in respect of an amount of $10,712. That error related to a UK related party receivable, as to which Mr Samuel concluded in his second report that ICB UK had incorrectly debited the amount owing from ICB Medical to its profit and loss statement, which should have been recorded as an asset (receivable) on its balance sheet. Mr Samuel adjusted for that amount in his second report, including for income tax consequences. The adjustment for income tax consequences was challenged at the hearing and ultimately not pressed by ICB Medical, where it had not taken account of UK as distinct from Australian tax rates.
[4]
Mr Kielt's response
Ms Whittaker and Mr Birch, who appeared for Mr Kielt, respond that Dr Najjarine had not put forward any alternative valuation of the shares in the ICB Companies, by evidence, and submitted that the Court would generally not itself derive an expert valuation, not supported by expert evidence: Re Global Mortgage Equity Corporation Pty Ltd [2013] NSWSC 1586; (2013) 97 ACSR 30 at [92], not challenged on appeal in Tomanovic v One Australia Pty Ltd [2015] NSWCA 11; (2015) 104 ACSR 596. It seems to me that Dr Najjarine does not seek to derive an alternative valuation of the ICB Companies' shares, as distinct from contending that no such valuation is possible and that a winding up order should be made. I have not accepted the latter submission.
Ms Whittaker and Mr Birch submitted in reply that it is not open to Dr Najjarine to maintain the position that the Court should wind up the ICB Companies, rather than proceed to a buy-out of Mr Kielt's shares, where that issue was determined favourably to Mr Kielt after a lengthy hearing in the Judgment. Ms Whittaker and Mr Birch emphasise that, as I noted above, Dr Najjarine had retained a valuer who had been given access to financial information concerning the ICB Companies, but had not sought to lead expert evidence to controvert the reliability of the ICB Group's financial records (a matter which was pressed in cross-examination) or to value the relevant shares.
Ms Whittaker and Mr Birch submitted that:
"The Court would not conclude that there was any material shortcoming in the records of the company where: the primary proceedings involved a comprehensive combing through of the company's accounts; Dr Najjarine has had been [sic] extensive opportunity to review the records of the company for the purposes of this valuation; Dr Najjarine engaged a valuer; and two errors were identified which have been addressed. No evidence of inherent reliability has been adduced other than the differing ledgers, in relation to which Mr Samuel was extensively cross-examined."
They also submitted that the Court could comfortably conclude that the universe of possible complaints about the ICB Companies' accounts have now been identified and addressed, and that those complaints are not sufficient to found a conclusion that the management accounts upon which Mr Samuel's valuation is founded are unreliable in the sense that no valuation can arise from them.
[5]
Determination
I am satisfied that the ICB Companies' financial records were sufficiently reliable to undertake the asset-based valuation performed by Mr Samuel, after the adjustments identified by Dr Najjarine and addressed in Mr Samuel's second report were made. I had observed in the Judgment (at [15], [19]) that the ICB Companies' financial position was closely reviewed in the earlier hearing, and that Dr Najjarine had then retained a forensic accounting expert whose reports were served but not read or tendered at that hearing. It seems to me that ICB's financial records have been scrutinised in detail in these proceedings, involving detailed cross-examination of Mr Kielt and the partner of BDO who was involved in the preparation of ICB's accounts until 2015. A number of significant difficulties with transactions between ICB on the one hand and Mr Kielt, his family members and his companies on the other and those accounts were identified in the Judgment and the necessary adjustments have been made in Mr Samuel's reports.
Second, it seems to me that I can proceed on the basis that, as Mr Samuel pointed out, management accounts are ordinarily prepared on a basis that seeks accurately to reflect underlying financial transactions. The issues that were addressed in the Judgment did not suggest the contrary in respect of ICB Medical, as distinct from identifying particular issues with the treatment of transactions that were favourable to Mr Kielt or his interests or minimised the income of ICB for taxation purposes or both, and which were addressed by that Judgment and adjusted in Mr Samuel's report.
Third, I can readily conclude, given the manner in which these proceedings have been conducted to date, that Dr Najjarine and those advising him have closely scrutinised the management accounts that are the basis of Mr Samuel's report, and that they have identified only the matters that were put to Mr Samuel in cross-examination and which Mr Samuel has now corrected. Fourth, it seems to me that I can conclude that, where Dr Najjarine had retained a valuation expert but did not lead his evidence, that evidence would not have assisted Dr Najjarine in identifying any further errors in ICB Medical's management accounts beyond those identified in cross-examination of Mr Samuel and submissions.
I note, for completeness, that Ms Whitaker and Mr Birch also submitted that there was no occasion to revisit the Court's earlier finding that a winding up order should not be made, and that a buy-out should be ordered, where Dr Najjarine had not applied to re-open the Judgment or the Court's further judgment in respect of orders. They referred to the principles applicable to when the Court would permit the reopening of a judgment, as summarised in New Cap Reinsurance Corporation Ltd v AE Grant [2009] NSWSC 950 at [20] and Re Boart Longyear Ltd (No 4) [2017] NSWSC 1357 at [12]-[15]. If Dr Najjarine had established, for example, that the valuation process had failed, by reason of material inaccuracies in the ICB Companies' financial accounts, then he might well have been granted leave to reopen the Judgment, to the extent that such leave was required, rather than the Court now proceeding on a basis that would create injustice between the parties. That question does not here arise, where I have found that the ICB Companies' management accounts are sufficient to support a proper valuation of the shares in those Companies.
[6]
Dr Najjarine's alternative position
The parties were initially at issue as to the fact that Mr Samuel's valuation took into account income tax which would have been payable by ICB Medical had the other specified adjustments been carried out, but was not in fact paid. That matter was plainly relevant, so far as an arms-length vendor or purchaser of the relevant shares would likely at least have regard to the prospect that the Deputy Commissioner of Taxation would now seek to recover tax which would properly have been payable on that basis. Dr Najjarine initially contended, in the alternative, that several adjustments that Mr Samuel had made in respect of ICB Companies' potential liability for tax should not be made. Mr Carnovale addressed, at some length in submissions and in the cross-examination of Mr Samuel, the circumstances in which such tax might be recovered and how it might be calculated. An issue also initially arise between the parties as to the treatment of GST liabilities.
As matters developed at the hearing, Mr Kielt proposed orders that provided for an increase in the amount that would be payable to acquire Dr Najjarine's shares in ICB, to allow for the possibility that the Deputy Commissioner of Taxation would not seek to amend, or would not be entitled to amend, assessments of ICB's tax in earlier years to address the matters that I had identified in the Judgment. Dr Najjarine accepted that such orders should be made, if he was not successful (as he has not been) in his primary case that issues as to the unreliability of the ICB Companies' financial records made it impossible to value their shares and required that a winding up order be made. Counsel for both parties accepted that it was neither necessary not desirable that I deal further with the question whether the relevant tax liabilities were capable of arising, still less the question whether they were likely to be pursued by the Deputy Commissioner of Taxation in the circumstances, and I do not further address those questions.
[7]
Orders
I had indicated, in the Judgment, a tentative view as to the costs of the proceedings. I should allow the parties an opportunity to be heard as to costs, and I will make directions for written submissions and, if necessary, a further oral hearing, to address that question.
I therefore make the following orders, based on the form of orders proposed by Mr Kielt (MFI 3), as amended to reflect matters raised in submissions:
Pursuant to s 233(1)(d) of the Corporations Act 2001 (Cth), the Defendant purchase all shares held by the Plaintiff in:
(a) ICB Medical Distributors Pty Ltd;
(b) The International College of Biomechanics Pty Ltd;
(c) ICB Gait and Posture Clinic Pty Ltd; and
(d) Foot Steps Orthotics Pty Ltd
(together, the ICB Group Companies) as set out in Orders 2 and 3 below.
In exchange for the provision of the share transfers provided for an Order 3 below, the Defendant to pay the sum of $198,772.00 to the Plaintiff (by bank cheque to be made out in favour of Antunes Lawyers Trust Account) by the later of 7 days from the Court's orders and 25 January 2018.
In exchange for the bank cheque being provided in accordance with Order 2 above, the Plaintiff must provide the Defendant (or his agent) with fully executed share transfers, transferring all shares owned by the Plaintiff in the ICB Group Companies.
The parties send their respective draft orders and submissions as to costs to the Associate to Black J by 4pm on 30 January 2019 and any reply submissions by 4pm on 6 February 2019, indicating whether an oral hearing is requested.
[8]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 21 January 2019