- Ample Source International Ltd v Bonython Metals Group Pty Ltd

Supreme Court of NSW|2023-04-18|Before: Black J

Background facts

I now set out several background facts, which are partly common ground, emerging from the parties' Points of Claim ("POC") and Amended Points of Defence ("APOD").
SRD was incorporated on 18 April 2018 and is the trustee of the SRD Property Trust; is engaged in the business of property development; and, although there is a dispute as to the amount of issued share capital of SRD, it is common ground that half of its shares are owned by Mr Ates and Mrs Oncu respectively (POC [4], [8], APOD [4], [8]). It is common ground that, on 9 August 2018, SRD contracted to purchase a property on Kildare Road Blacktown ("Blacktown Property") for $4,600,000.00; on 18 December 2019 the contract to purchase the Blacktown Property settled; and the Blacktown Property has development approval from Blacktown City Council to build a 6 story, 67 unit residential building ("Blacktown Project") (POC [9]-[11], APOD [9]-[11]). SRD subsequently entered into a contract with Sitecorp Construction Pty Limited ("Sitecorp") to build a unit block on the Blacktown Property, building work has commenced on the Blacktown Project (POC [12]-[13], APOD [12]-[13]) and the ground floor concrete slab has been poured, although work at the site has now been suspended, likely as a result of the issues in these proceedings. I address a dispute as to the extent of the parties' financial contributions to SRD below.

Affidavit evidence

I now turn to the affidavit evidence and cross-examination. 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; Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 at [41]; 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]. There is here little documentary or other evidence that will assist in resolving the issues in dispute.
The principles applicable to assessing evidence of conversations, in dealing with claims for misleading and deceptive conduct, were helpfully summarised by Slattery J in Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd [2010] NSWSC 963 at [87] as follows: "The principal conduct of the defendants that [the plaintiff] alleges was misleading or deceptive was the speaking of words in the course of a series of conversations. Special considerations apply when assessing alleged misleading and deceptive conduct in such a context. It is necessary that the words spoken be proved with a degree of precision sufficient to enable the Court to be reasonably satisfied that they were in fact misleading in proved circumstances: Watson v Foxman (1995) 49 NSWLR 315 at 318 per McLelland CJ in Eq. In assessing whether spoken words were misleading the Court may have to examine relatively subtle nuances flowing from the use of one word, a phrase or a grammatical construction rather than another or the presence or absence of some qualifying word, phrase or condition: Watson v Foxman (1995) 49 NSWLR 315 at 31. The fallibility of human memory and the overlaying of memory with perceptions of self-interest leading to sub conscious reconstruction are all hazards of ordinary human experience to which a Court must be alert in assessing whether particular spoken words are misleading or deceptive: Watson v Foxman (1995) 49 NSWLR 315 at 319. Ultimately each element of the cause of action must be proved to the reasonable satisfaction of the Court which means that the Court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not obtained or established independently of the nature and consequences of the fact or facts to be proved", including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712."
I also note the matters relevant to the assessment of spoken words in the context of a contractual dispute, which were identified by Hammerschlag J (as his Honour was then) in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 ("John Holland") at [94]: "Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319."
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]: "Whilst the quality and accuracy of oral recollection of actual conversations should be treated with care and caution given the fallibility of human memory (of which there has been a growing appreciation within the judiciary in recent decades), oral testimony may still be of value and importance, as was recognised in the nuanced observations of Leggatt J (as his Lordship then was) in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC (Comm) 3560 at [22] (Gestmin): "the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose - though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth." (emphasis added) Documents and events have to be understood in their context, and evidence of context will often be furnished by witnesses in their oral evidence. Documents, moreover, will not always present a complete picture of events. Indeed it would be rare that they do. Nor do contemporaneous documents necessarily or invariably convey or record the background or context in which events took place. That background or context will be familiar to the actors at the time of those events but may not always emerge from documents."
I have here drawn on my summary of the applicable principles in Re Atlas Advisors Australia Pty Ltd [2022] NSWSC 705 at [5], No 1 Victoria Dragons Pty Ltd v AEN Developments Pty Ltd [2022] NSWSC 1345 at [53]ff and Re DCA Enterprises Pty Ltd [2023] NSWSC 11 at [5]ff.
Turning now to the affidavit evidence, Mr Ates relies on his first affidavit dated 9 February 2023 which refers to his business history, his association with Mr Oncu and the circumstances in which they worked together in respect of property development. Mr Ates there refers to conversations with Mr Oncu from April 2018 concerning the Blacktown Property and to the reasons that Mrs Oncu rather than Mr Oncu was listed as a director of SRD, which I need not further address. He gives evidence of discussions concerning funding for the Blacktown Project and the entry into a construction contract with Sitecorp and the subsequent issue of invoices by Sitecorp. Mr Ates refers to Mr Oncu's explanation why he and his wife could not contribute towards construction costs until they had sold their house. Those conversations are contested by Mr Oncu. Mr Ates' evidence is that he continued to pay construction costs for the Blacktown Project in 2022 and that Mr Oncu continued to refer to the prospective sale of his house, until, in October 2022, Mr Ates advised Mr Oncu that he would stop paying Mr Oncu's share of costs and that Mr Oncu "must start paying [his] share" (Ates 9.2.23 [40]). Mr Ates' evidence was that he had paid $4,078,525 towards SRD's expenses and Mrs Oncu had paid $2,023,000 towards those expenses (Ates 9.2.23 [48]); however, the document supporting that calculation was not admitted into evidence, because it was neither a business record nor admissible under s1305 of the Act.
Mr Ates also outlines the process by which NRB acquired the Wentworthville Property. His evidence is that, since February 2022, NRB incurred expenses and he had "numerous conversations" with Mr Oncu, where Mr Oncu requested him to pay invoices because his and Mrs Oncu's house was still on the market and they could pay Mr Ates back once the house was sold (Ates 9.2.23 [58]). That evidence is disputed by Mr Oncu. Mr Ates claimed he had paid $1,573,500 towards NRB's expenses and Mrs Oncu had paid $260,000; again, the document supporting that calculation was not admissible and was not admitted.
Mr Ates also addresses the position concerning Med Apartments in his 9 February 2023 affidavit. He refers to an expectation that he and Mr and Mrs Oncu would not need to source finance to develop that site as the Blacktown Project would have progressed to a point where they could sell units off the plan and could use cash flow generated by a restaurant at the Wentworthville Property (Ates 9.2.23 [62]). That expectation has been disappointed. Again, Mr Ates refers to conversations with Mr Oncu in which Mr Oncu requested Mr Ates to pay invoices, because his and Mrs Oncu's house was on the market and he would pay Mr Ates back when it was sold (Ates 9.2.23 [69]). Mr Ates does not identify a specific occasion for those conversations and his evidence in that regard is substantially identical to his evidence in relation to NRB, and that evidence is disputed by Mr Oncu. Mr Ates' evidence is that he paid $420,000 towards Med Apartment's expenses and Mr Oncu did not contribute any funds and that proposition is not contested.
Mr Ates also gives evidence concerning the entry by a fourth company, Med Yapi Pty Ltd ("Med Yapi") into a contract to acquire a property at Rouse Hill in December 2021, which was due for settlement on 31 December 2022. That settlement period was subsequently extended to January 2023 but Med Yapi then defaulted in settlement and lost its deposit on the property. Mr Ates' evidence is that he paid $1,050,000 towards Med Yapi's expenses and Mr Oncu did not contribute any funds, but the document supporting that proposition was again not admissible and was not admitted. It is not apparent how Mr Ates' evidence in that affidavit supports the personal claim that he now brings against Mr Oncu in respect of the monies that he lent to Med Yapi.
Mr Ates refers to his conversations with Mr Oncu between October and December 2022, in which he claims to have pressed Mr Oncu for payment of money that Mr Oncu owed to the companies, or at least had promised to contribute to the companies. Mr Ates' evidence as to that matter is undermined by a recorded conversation with Mr Oncu on 9 December 2022, which Mr Ates was ultimately successful in tendering over objection, where he said that he had not previously pressed Mr Oncu for payment of those amounts. Mr Ates' evidence, initially contested by Mr Oncu, is that Mr Oncu responded that "[t]his partnership is over I am out"; that Mr Oncu did not wish to finish the projects; that Mr Ates could do so if he wished; that Mr Oncu had offered to be bought out in respect of the projects; and Mr Ates sought to persuade Mr Oncu to continue the project (Ates 9.2.23 [97]). Mr Ates also refers to a discussion as to the value of the projects and Mr Oncu's suggestion that he send an offer to Mr Oncu's lawyers (Ates 9.2.23 [97]).
On 9 December 2022, Mr Ates sent Mr Oncu's cousin, who had done legal work for the companies, an offer to acquire Mr and Mrs Oncu's interest in the several companies (Ates 9.2.23 [100], Ex P1, 230). Mr Ates' evidence is that Mr Oncu rejected that proposal on 10 December 2022 and then sought to buy Mr Ates' shares in the companies on the basis that he would not pay any money amount for those shares, but would transfer several units in the Blacktown Project to Mr Ates on its completion (Ates 9.2.23 [103]). Mr Ates' evidence is that Mr Oncu then claimed that Mr Ates could not either bring in a valuer for the properties or sell them (Ates 9.2.23 [104]).
On 13 December 2022, a solicitor acting for Mr Ates sent a detailed email to Mr Oncu's cousin which contended that Mr Ates had contributed approximately $7.8m to the project and that that exceeded Mr and Mrs Oncu's contributions by $3.6m (Ates 9.2.23 [109], Ex P1, 307). The solicitor advised that (Ex P1, 307): "Our respective clients have discussed proposals whereby one party buys out the other party's interests in the ventures and with all respect, we doubt your client's financial capacity to buy out our client. In this regard, our client will not consider any proposal that requires they wait for the profits of the project to be realised in order to be bought out".
That email noted the possibility that Mr Ates could buy out Mr Oncu, or that receivers could be appointed to all four companies and the assets of the companies could be sold. Mr Ates then offered to buy Mr and Mrs Oncu out of the Wentworthville, Blacktown and Auburn projects for a payment of $3.555m within 28 days, and indicated that Mr Ates would not provide further capital or contributions until Mr Oncu deposited $3.6m into the companies' accounts or paid Mr Ates $1.8m to equalise the parties' contributions or an agreement was reached for Mr Ates to buy out Mr Oncu in accordance with that offer. That was not an unreasonable proposal in the then circumstances. Mr Oncu's cousin did not make a substantive response, and raised the possibility that the solicitors were conflicted in respect of the matter.
Mr Ates further refers to the circumstances in which instructions were later given to stop work at the Blacktown and Wentworthville projects and he refers to a confrontation at the Wentworthville site on 17 December 2022. The circumstances of that confrontation are disputed. Notwithstanding the efforts the parties devoted to each establishing that the other behaved aggressively or violently on that occasion, it is not necessary to decide that question, where the availability and form of relief for oppression turns on more fundamental issues. Mr Ates also refers to subsequent developments in relation to the Blacktown, Wentworthville and Auburn properties, including the issue of a creditors' statutory demand by Sitecorp to SRD on 30 January 2023.
By his second affidavit dated 4 April 2023, Mr Ates referred to several companies which he controlled and responded to aspects of Mr Oncu's affidavit dated 29 March 2023. He referred to a discussion between Mr Ates and Mr Oncu relating to an initial investment in a property at Guildford, which is not directly in issue in these proceedings, although it provides background and requires a financial adjustments in respect of any buy out by Mr Ates of Mrs Oncu's shares in SRD. Mr Ates denied Mr Oncu's claim that he agreed that Mr Oncu would get $1m from each development, apparently irrespective of its outcome, and claimed that guaranteed payments for Mr Oncu were not discussed (Ates 4.4.23 [14]). Mr Ates also identified several communications between Mr Ates and Mr Oncu concerning contributions to the companies, which plainly demonstrate both parties made such contributions, although they do not illuminate the basis on which they were made.
Mr Ates also responded to particular conversations set out in Mr Oncu's first affidavit and corrected some aspects of Mr Ates' earlier evidence as to the parties' contributions, and also addressed dealings with Sitecorp after it issued a creditor's statutory demand to SRD on 30 January 2023. Mr Ates also responded to Mr Oncu's evidence concerning NRB and addressed the circumstances in which a company associated with him made certain payments to NRB, an issue that the parties accept no longer has any practical significance for the resolution of the proceedings. He also addressed issues relating to Med Apartments and Med Yapi and to the development of the dispute between Mr Ates and Mr Oncu on December 2022.
By his third affidavit dated 11 April 2023, Mr Ates referred, in resisting an amendment application brought by Mr Oncu on the first day of the hearing, to several expenses overdue for payment by SRD, NRB and Med Apartments or which would fall due for payment in the next month. These included substantial amounts owed by SRD to Sitecorp and Revenue New South Wales in respect of the Blacktown Property; a substantial amount owed by NRB to the project manager for work on the Wentworthville Property and other amounts due in respect of that property; and about $5.795m due to be paid by Med Apartments in June 2022 under the five contracts to purchase the Auburn Property, being the purchase price less the deposit already paid (Ates 11.4.23 [10]). While that evidence assisted Mr Ates in successfully resisting Mr Oncu's amendment application, it emphasises the extent to which the companies are unable to meet debts without the financial support of Mr Ates (and, to the extent they previously provided such support, Mr and Mrs Oncu) and highlights the question of his capacity to provide such support in the future. I return to that question below.
Mr Ates presented as a plausible witness in cross examination, but his affidavit evidence of his conversation with Mr Oncu giving rise to their suggested agreement had a formulaic quality and his affidavit evidence and evidence on cross-examination that he had pressed Mr Oncu to make payments was inconsistent with the recorded conversation on 9 December 2022 where he emphasised that he had not done so.
Mr Ates relies on the affidavit dated 22 March 2023 of Mr Sahin, his brother in law, which deals with the confrontation that occurred at the Wentworthville Property in mid-December 2022. It is not necessary to address Mr Sahin's evidence or his cross examination in respect of that evidence, where it is not necessary to decide what occurred in order to determine these proceedings.
Mr Ates also relies on an affidavit dated 20 March 2023 of Mr Rizk, a director of Sitecorp, who refers to work done in respect of the Blacktown Project and funding issues in respect of that project and to Mr Ates' insistence in December 2022 that Mr Oncu pay half of the invoice then issued by Sitecorp; to Mr Oncu's response that Mr Ates must pay that invoice and Mr Oncu was not going to do so and that Sitecorp should stop the work; to Mr Oncu's subsequent advice on 28 December 2022 that he would transfer the money due, which did not occur; and to a subsequent conversation with Mr Oncu who then said (Rizk 20.3.23 [26]: "Ring Nick. This is his project. I am not interested in that project at all. Nick will pay you."
Mr Rizk then refers to a further conversation with Mr Oncu in February 2023, when Mr Oncu said he was in Turkey to sell property and would bring money back; that also did not occur, and Mr Oncu relies on the earthquake in Turkey to explain that matter; and Mr Rizk refers to Mr Oncu's subsequent claim that he would not now pay anything because the matter was now in Court. Mr Rizk refers to the agreement which Sitecorp then reached with Mr Ates after it had issued a creditor's statutory demand to SRD and his evidence is that (Rizk 20.3.23 [31]: "I am happy for [Mr Ates] to take over the Blacktown project and Sitecorp would be willing to continue with the project if [Mr Ates] was the officer of SRD in charge of managing the project".
There is no reason to doubt Mr Rizk's account of these conversations and he was not cross-examined. Mr Sirtes, with whom Mr Smith appears for Mr Ates, submits and I accept that Mr Oncu's several changes of position in dealing with Mr Rizk, as to whether he would or would not pay Sitecorp's costs, are adverse to his credit. Mr Rizk's observation that Mr Oncu had told him in early 2023 that the Blacktown Project was now Mr Ates' project is also strong evidence that, at that time, Mr Oncu accepted that Mr Ates would buy out his interests rather than the reverse, and that is starkly inconsistent with his affidavit evidence in the proceedings.
Mr Ates also tendered valuations for the Auburn, Blacktown and Wentworthville properties (Ex P3, P4 and P5 respectively) and also tendered a report and a supplementary report of Mr David Mullins relating to the valuation of shares in the relevant companies (Ex P7 and P8 respectively). There is a remaining issue as to the value of the Blacktown Property, which I address below, but no remaining contest as to other aspects of the expert evidence.
Mr and Mrs Oncu rely on Mr Oncu's affidavit dated 28 March 2023. Mr Oncu's evidence is that, although his wife is a director of SRD and NRB, he was responsible for most of the "day-to-day operations" of the businesses operated by the four companies; his wife's direct involvement was "primarily limited to signing documents from time to time"; and he generally discussed matters regarding SRD and NRB with her every day (Oncu 28.3.23 [8]). It is not necessary to decide whether Mrs Oncu played any meaningful role in the management of the companies in order to determine the proceedings. Mr Oncu's evidence was that the main reason he opted for Mrs Oncu to be a director and shareholder of SRD and NRB was "[he] want[s] her to feel financially secure" (Oncu 28.3.23 [9]). That is implausible, where it is more likely that Mrs Oncu's role as a director of these companies would have exposed her to financial and legal risk than that it would have contributed to her financial security.
Mr Oncu refers to his business background, including his involvement in property developments. He also refers to dealings with Mr Ates and the circumstances in which SRD was incorporated. Mr Oncu disputes Mr Ates' evidence as to whether he approached Mr Ates to be involved in property development and contends that Mr Ates approached him (Oncu 28.3.23 [22]). Nothing turns on the contest as to that matter for the determination of these proceedings. Mr Oncu also gives evidence (Oncu 28.3.23 [26]ff) of an arrangement with Mr Ates that he would be paid a $1m fee on each development, commencing with the Guildford Road property, which was ultimately sold without generating a profit of that amount, after Mr Oncu and Mr Ates were unable to obtain development approval for the site. I do not accept that Mr Oncu's evidence that such an arrangement existed, in respect of that property or the later properties, given the views that I have reached as to his credit and the commercial probabilities.
Mr Oncu also addresses the circumstances in which he and Mr Ates became involved with the Blacktown Property (Ates 28.3.23 [32]ff) and refers to discussions with Mr Ates as to whether SRD should contract with a builder to construct the property, and to attempts to obtain funding for construction. Mr Oncu also contests Mr Ates' evidence as to the amounts he and Mr Ates contributed to the purchase of the Blacktown Property, contending that a larger amount of $2.3m was borrowed from National Australia Bank ("NAB") and he and Mr Ates contributed $920,000 and not $1.3m to acquire that property.
Mr Oncu's evidence is that his arrangement with Mr Ates was that Mr Ates would fund construction, beyond amounts that could be borrowed from a lender, and Mr Oncu would run the companies' day to day operations (Ates 28.3.23 [53]). I am not persuaded that that arrangement was reached, given the views that I have reached as to Mr Oncu's credit and the commercial probabilities, although I am also not persuaded that any binding agreement was reached to the different effect for which Mr Ates contends. Mr Oncu contests substantial parts of Mr Ates' evidence in his 9 February 2023 affidavit and Mr Oncu's evidence is that (Oncu 28.3.23 [62]): "At no time did I ask [Mr Ates] to make a contribution to SRD on my behalf, as we had never agreed that I would fund the costs of the construction of the project. At no time before our relationship broke down did [Mr Ates] ask me to repay to him any of the money he contributed to SRD. At no time did I say I would pay [Mr Ates] back the amount of any of his contributions to SRD, from the proceeds of a sale of my home or otherwise. My home has been on the market for around 2 years, but I never made any statement to [Mr Ates] about using the proceeds from the sale, if it sells, to fund any of our companies". I have also had regard to Mr Oncu's evidence as to the reason he decided to sell his home.
Mr Oncu also addresses the circumstances of the parties' involvement with NRB and the acquisition of the Wentworthville Property (Oncu 28.3.23 [65]ff). Mr Oncu's evidence (Oncu 28.3.23 [78]) is that he had several conversations with Mr Ates about the Wentworthville Property in the following effect: Ates: "We should build the hotel ourselves." Oncu: "I am happy to go with this deal as a construction deal, but I will only contribute to the cost of buying the land. I am not paying for the construction costs, it's not something that I feel comfortable with." Ates "That's ok, I will meet the construction costs and we will go 50-50 on the land."
Mr Oncu also addressed the terms of the arrangements to renovate the restaurant premises on the Wentworthville Property (Oncu 28.3.23 [80]). Mr Oncu's evidence is that a company associated with Mr Ates, Ranay Group Pty Ltd, had leased the premises from NRB on a 10 year lease commencing on 20 June 2022 at a rent of $10,000 per week, although he did not produce a copy of the written lease. It is no longer necessary to resolve a dispute as to that matter as events have developed in the proceedings.
Mr Oncu also addressed the circumstances in which Med Apartments entered a contract to acquire several adjoining sites in Auburn. He contended that Mr Ates said he was willing to fund the purchase of the properties and the cost of getting a construction certificate, if Mr Oncu helped him to get the project finished, and that Mr Ates agreed to Mr Oncu getting his "usual $1m fee" (Oncu 28.3.23 [89]). I am not persuaded that conversation occurred. Mr Oncu also denied Mr Ates' evidence that Mr Oncu had agreed to pay half the $1m deposit for the purchase of the Rouse Hill property when he sold his house and denied that he agreed to contribute to development costs in respect of the Rouse Hill property incurred by Med Yapi, or to repay Mr Ates if he paid those costs (Oncu 28.3.23 [95]-[96]). I am unable to reach a finding as to that aspect of the evidence, given the difficulties to which I refer below.
Mr Oncu denies (Oncu 28.3.23 [98]) that Mr Ates asked him to pay money in respect of the money that Mr Ates had contributed to SRD, NRB or Med Apartments, or to put more money into those companies. I would not accept Mr Oncu's evidence in that respect without corroboration, but there is some support for it in a recorded conversation between Mr Ates and Mr Oncu on 9 December 2022, where Mr Ates says that he had not done so before that date. That conversation took place in Turkish, and a transcript in Turkish and in English translation was tendered by Mr Ates and admitted over objection (Ex P2, 488-499) in circumstances that it had been recorded by Mr Ates without Mr Oncu's consent. I had initially rejected the tender of that transcript, but subsequently allowed that issue to be reopened, and admitted the transcript when it became apparent that it cast substantial light on Mr Oncu's then case, since abandoned, that Mr Ates had initiated a termination of the arrangement between them.
Mr Oncu initially contested Mr Ates' account in his first affidavit of the conversations on 9 December 2022 and contended that Mr Ates had then indicated that he wished to end his partnership with Mr Oncu, and that either Mr Oncu should buy Mr Ates out or Mr Ates should buy Mr Oncu out and they should then go their own ways, and indicated he would send an offer to Mr Oncu's solicitor (Oncu 28.3.23 [120]-[121]). That account is plainly not consistent with the recorded telephone conversation between Mr Ates and Mr Oncu on that date. Mr Oncu there used the word "partner", acknowledging that the arrangement at least had that character in its general usage; he acknowledged that, contrary to his evidence in cross-examination, he had been shouting at Mr Ates in a telephone conversation on the day before and Mr Ates had then hung up the phone him. Mr Oncu then said that he was going to "move on by myself", and Mr Ates then accepted that "partnership" did not suit Mr Oncu and Mr Oncu acknowledged that matter. Mr Oncu then said that he would leave Mr Ates to continue on his own, as follows (Ex P2, 490): "I just want to make a fresh start on my own. You sit down and tell me how you want it, and I'll pull out. You can do it. You can do it better without me. You can't do it (now) because of my presence" and then that: "It's not working while I'm in. Now I am going to withdraw. We will run it smoothly. Do it the way you want. Let everyone do it their own way. It is not a big deal. Not a big deal, is it?"
Notably, Mr Ates then suggested that the parties should first give their separation further thought, and Mr Oncu said that he had already "thought a lot" (Ex P2, 490). Mr Ates then referred to, and Mr Oncu did not contest, Mr Ates' financial contributions to the arrangement. As I noted above, Mr Ates then said, inconsistently with his evidence led in these proceedings, that he had not pressed for repayment as follows (Ex P2, 494): "Look I spent 3.8, close to 4 million without any cent from you. You say, 'brother, I owe 1.8. I will pay you'… have I ever said to you 'Ravbun, when will you pay this?' …"
Mr Oncu also then proposed repayment of the amounts paid by Mr Ates , or at least his withdrawal from the partnership "using [Mr Oncu's] equity", although it is not clear how that could have been implemented. Mr Oncu also suggested that the concrete should be poured at the Blacktown Property and "[t]hat's when it will have value, doesn't matter if you have it or I have it (eventually)" (Ex P2, 495).
Mr Oncu and Mr Ates also discussed the possibility that one or the other would acquire the properties. Mr Ates suggested that "[w]e shall work out our accounts and leave" and Mr Oncu said that Mr Ates should do that, "with a calm head"; that Mr Oncu did not want any profit from the properties and that "I'm not going to cause you stress"; Mr Ates responded "I wouldn't be so unconscionable", implicitly as to not adjust for Mr Oncu's contributions; and Mr Oncu then said (Ex P2, 498): "There is no profit. Look shall I tell you something? I won't cause you stress. You offer me a deal with the conditions you feel comfortable with. I have already decided another path for myself. I want to go down that road. I can leave it all to you. I'll let it go. But think about it tonight, let's sit down tomorrow morning…"
This recording of this conversation indicates that Mr Oncu prompted the termination of the partnership and that is wholly inconsistent with Mr Oncu's evidence in these proceedings and reinforces the adverse view that I have formed of his credit. The recording of this conversation is consistent with that aspect of Mr Ates' account in his first affidavit of a conversation, which he (possibly incorrectly) thought had occurred in person, on 9 December 2022, and specifically his evidence that Mr Oncu then said the partnership was over and that Mr Oncu did not wish to continue it, and suggested that Mr Ates buy him out. The recorded conversation did not go further to involve the discussion of a price for Mr Ates to purchase Mr Oncu's interest that Mr Ates recalled in his 9 February conversation. It is highly unlikely that Mr Ates initiated a termination of the partnership in a conversation in person on 9 December 2022, on the same day as Mr Oncu initiated a termination of the partnership in the recorded conversation on that day. I do not accept Mr Oncu's evidence as to this matter.
On the other hand, Mr Ates' evidence that the conversation commenced with his pressing Mr Oncu as to money that was owed to the companies or Mr Ates is inconsistent with the recording of the 9 December conversation, where he says the contrary. Importantly, there is a striking omission from the 9 December conversation, particularly in the context of discussions of the parties' contributions and how the arrangements would be brought to an end. Mr Oncu there makes no reference to any fee payable to him of $1m in respect of each of the properties, which he now alleges was owing to him under his arrangement with Mr Ates. That reinforces the conclusion that I have reached, that I am not persuaded that any agreement existed to that effect. This conversation is also a sad indication that there was once a possibility, since lost, of a consensual exit from the parties' relationship, that would have avoided the costs of these proceedings.
Mr Oncu's evidence is also that the parties reached agreement as to exit arrangements on 10 December 2022 on the basis that Mr Ates would take 11 units in the Blacktown Project, available at some time in the future, for his share of the projects (Oncu [123]ff). I also do not accept Mr Oncu's account of the conversation. Mr Oncu's evidence is that Mr Ates then resiled from that arrangement, but I do not accept that evidence where I have not accepted that arrangement had been reached. Mr Oncu also refers to the dispute that occurred at the Wentworthville site on 18 December 2022. It is not necessary to determine the circumstances of that dispute in order to determine this matter.
By a second affidavit dated 10 April 2023, only part of which was read, Mr Oncu claimed (Oncu 10.4.23 [4]) that the companies were operated on the basis that Mr Ates and he would put money in from time to time to meet expenses, and contended that he did not agree to put money in toward construction of the building at the Blacktown Property or the construction of the hotel, as distinct from the restaurant, at the Wentworthville Property. I am unable to reach a finding as to the dispute between the parties in respect of that matter for the reasons noted below. Mr Oncu also addressed aspects of Mr Ates' second affidavit and contended, by reference to extracts from bank statements of Med No. 2 Pty Ltd that he had paid certain amounts to third parties that did not appear in the NRB, SRD or Med Apartment bank statements. He also claimed to have paid amounts to Mr Ates personally for one of his companies, as opposed to making payments to NRB, SRD or Med Apartments, payments which he contended fell within that category.
Mr Sirtes points to examples in which Mr Oncu's evidence was unresponsive or evasive in cross-examination, and it was plain that Mr Oncu was not inclined to respond directly to the questions that was asked, and on occasion was evasive or unresponsive, even when questions were repeated on several occasions. Mr Oncu was generally an unimpressive witness in cross examination and I have no confidence in the truth of his evidence. Although Mrs Oncu is a statutory director of each of SRD and NRB, she did not give evidence in the proceedings. I infer that her evidence would not have assisted Mr Oncu's or her defence of the proceedings.
Regrettably, the parties here did not record their arrangements in writing, or even refer to their scope in email or correspondence, so there is little contemporaneous documentation to support their different accounts of events. I recognise that there is evidence that both Mr Ates and Mr Oncu made contributions to the expenses of the properties and, in opening submissions, Mr Sirtes helpfully summarises that evidence as including a text message exchange from August 2020, in which Mr Oncu and Mr Ates discuss consulting with architects and making financial arrangements regarding a construction certificate (Ex P2, 52); a text message exchange from January 2021, in which Mr Oncu writes "brother, I forgot about 35 thousand… I transferred it now… Sorry" (Ex P2, 54); a text message exchange from March 2021, in which Mr Ates writes to Mr Oncu that "… I need 15 thousand for urgent invoices from the councils' electricity, water… Let's deposit $7,500… Let's pay… SRD 15 thousand deposited. Did you deposit it?", and Mr Oncu responds "I deposited 15 thousand brother, at noon", and refers to depositing an extra $7,500 because "there were lots of invoice [sic]" and "There is also the land tax" (Ex P2, 56); a screen shot sent by Mr Ates to Mr Oncu on 22 July 2021, which quantifies expenses for architects, land tax, council rates and stamp duty, and in which he writes "$17,000 - (from) Me, you put in $17,000 please, we have 5 days…" (Ex P2, 58); a text message exchange from 27 July 2021, in which Mr Ates writes "Please deposit 15 today… I'll pay the land tax", to which Mr Oncu responds "Is the total 17, brother?", and sends confirmation of a payment to SRD of an amount of $15,000 (Ex P2, 60); a text message exchange from 8 November 2021, in which Mr Ates writes "From my account, I paid 1.9 million for the bank loan of the hotel's land, to avoid the interest… I'll withdraw when we need money…" to which Mr Oncu replies "Ok brother, let us pay you the money you paid to the bank" (Ex P2, 64); and a text message exchange from May 2022, in which Mr Ates advises Mr Oncu "… 40 thousand sent to Memo. … Tomorrow, I'll send another 40… You send 20 to Taha from Med [Y]api, also send Memo… 20 thousand from N[RB] account…", to which Mr Oncu replies seeking confirmation of Med Yapi's account number (Ex P2, 66). I also recognise that some of these expenses had a connection with the acquisition of then properties and that Mr Oncu now accepts that he had agreed to contribute to costs of that character, as distinct from construction costs of the Blacktown Project and the Wentworthville hotel (construction of which had not commenced). I return to the significance of that evidence in addressing the agreements for which the parties contend below.

The disputed issues

There is a dispute as to the terms of the agreement(s) underlying the dealings between the parties. In opening submissions, Mr Sirtes submits that: "The three companies were incorporated by Mr Ates and Mr and Mrs Oncu pursuant to an oral quasi-partnership agreement made in about April 2018, by which the parties agreed to invest in property development opportunities. A fundamental question in this dispute, which informs all other questions, is what was the nature of that agreement. Mr Ates contends it was an agreement that all expenses, profits, ownership, day-to-day work and risk were to be split 50/50 between him and Mr Oncu. Mr and Mrs Oncu contend that Mr Oncu agreed to pay all the expenses of all developments, and also agreed to guarantee a fee of $1,000,000 to Mr Oncu upon completion of each development."
In his revised opening submissions, Mr Springthorpe, who appears for Mr and Mrs Oncu, also accepts that the relationship between the parties was one of quasi-partnership such that equitable considerations are superimposed on shareholder's ordinary legal rights.
Mr Ates contends and Mr and Mrs Oncu deny that, in or about April 2018, he and Mr Oncu entered into an agreement ("Agreement") with terms that the parties would invest in property development opportunities; they would incorporate a company to purchase and undertake each property development project; Mr Ates would hold a 50% share in the company and Mr and Mrs Oncu would hold a 50% share in the company; and the parties would pay all expenses and share all profits equally (POC [7], APOD [7]). Mr Ates contends that agreement was formed by a conversation in April 2018 and he refers to paragraph 9 of his affidavit dated 9 February 2023 in that regard. Mr Ates' evidence is that Mr Oncu invited him to participate in property developments in the capacity of "partner". Mr Oncu's evidence is to the contrary but it is not necessary, in order to determine these proceedings, to decide whether that particular term was used.
By contrast, Mr Oncu pleads (APOD 9(b)(ii)-(iii)), in respect of SRD and the purchase of the Blacktown Property, that: "ii [Mr Ates and Mr and Mrs Oncu] agreed that [Mr Ates] would become a shareholder and director of SRD and that SRD would purchase the Blacktown Property on the basis that: 1 SRD would seek external finance to complete the purchase; 2 [Mr Ates] would pay half and [Mr and Mrs Oncu] would pay half of the cash amount required to complete the purchase; 3 [Mr Oncu] would make his and [Mrs Once's] assets available as security for the borrowings; 4 SRD would obtain a construction certificate for the Blacktown Property and then seek to sell the land for a profit; and 5 [Mr Oncu] would be paid $1,000,000 upon the sale of the land for his services initiating the project, securing the land and managing the project; iii in or around late 2021 [Mr Ates and Mr and Mrs Oncu] agreed to construct an apartment building on the Blacktown Property on the basis that: 1 SRD would seek external finance for the costs of construction; and 2 [Mr Ates] would pay the costs of the project not funded by the external lender."
I do not accept Mr Oncu's evidence as to the $1 million fee that he claims was payable to him on sale of the land, apparently even it was sold at a loss. Mr Sirtes submits Mr Oncu's version of the parties' agreement is uncommercial, as it would guarantee him a fee of $1m for each project, despite his not committing any funds to development expenses, and irrespective of the success of the project; and because it would leave Mr Ates without recourse if funding could not be obtained for any property. I accept the former proposition although not the latter, where there would be nothing uncommercial in the parties proceeding on either an informal understanding as to their contributions or taking the risks that face all developers in respect of an inability to fund a project.
In closing submissions, Mr Springthorpe in turn submits that: "The Court should accept that the parties' business relationship was on the terms asserted by the defendants; in particular: a. [Mr Ates] was to pay the construction costs for the Blacktown Property; b. [Mr and Mrs Oncu] did not agree to contribute to Med Apartments or Med Yapi; and c. the parties agreed [Mr Oncu] would receive a fee of $1m for each completed project. This arrangement is commercially credible in the context of; a. [Mr Oncu's] superior experience and contacts with property professionals; b. the fact [Mr Oncu] had found a property, exchanged contracts and paid the deposit before the arrangement commenced; c. the fact [Mr Oncu] found every project the parties undertook together; d. the more significant role [Mr Oncu] was expected to, and did, have in managing the projects; and e. [Mr Oncu's] reluctance to have SRD or NRB proceed to build on the land so that the only way [Mr Ates] could achieve the expected higher return from undertaking the construction work was to agree to [Mr and Mrs Oncu's] requirement that [Mr Ates] pay the costs." While that submission puts Mr and Mrs Oncu's case as to the terms of the parties' arrangement in its most attractive version, I am not persuaded by it, given the difficulties with Mr Oncu's credit and the fact that Mr and Mrs Oncu benefited from Mr Ates' financial contributions which allowed them to undertake larger projects, at least as much as Mr Ates benefited from Mr Oncu's experience.
The fact that Mr Oncu made several contributions to expenses, as well as sharing in the cost of acquisition of the properties, provides a weak basis to infer terms of any binding agreement between the parties, as distinct from a practice or mutual expectations as to how the venture would proceed, with both making contributions to it on a fair or possibly an equal basis. I recognise that it would seem implausible, in more conventional business relationships, for Mr Ates to assume the risk of funding the construction and allow Mr Oncu a "free ride" on construction costs. However, in more conventional relationships, it would also be implausible that Mr Oncu would commit himself to pay half of the very substantial construction costs of these projects where there is no reason to think that he had sufficient assets to so, even if he and his wife sold their house or the other assets to which there were tangential references in the proceedings. In any case, this was not a conventional business relationship, given Mr Ates' and Mr Oncu's close friendship when the relationship commenced.
Mr Ates bears the onus of establishing the terms of the arrangement for which he contends and I am not persuaded he has established that arrangement on the balance of probabilities. To the extent that Mr Oncu offers an alternative version of events, I am not persuaded of the truth of Mr Oncu's alternative version of events. In the language of John Holland, I am here not left in any state of reasonable satisfaction as to the terms of the arrangement for which Mr Ates contends, or of a contrary position to the extent that Mr Oncu contends for it. I am unable to find that there was an agreed term as to contributions to all expenses for which Mr Ates contends, although there was plainly a practice of both parties contributing to some expenses.
Mr Ates contends (POC [14]) that he has made capital contributions (albeit by way of loans) to SRD in the amount of $4,078,000 and Mr and Mrs Oncu have made capital contributions in the amount of $2,023,000. Mr and Mrs Oncu had no apparent difficulty in identifying the parties' contributions to the companies at the time they filed their original Points of Defence on 21 March 2013, when they contended that Mr Ates had made capital contributions to SRD in the amount of $2,924,000 and that they had made capital contributions to SRD in the amount of about $3,651,489.80. That position amounted to an admission that Mr Ates had not contributed a lesser amount and they had not contributed a higher amount, which they did not later seek or obtain leave to withdraw. They now contend that: "i [Mr and Mrs Oncu] made capital contributions to SRD despite not being obliged to do so pursuant to any agreement because [Mr Ates] failed to pay all of the expenses of SRD; and ii by reason of [Mr Ates'] failure to pay all of the expenses of SRD he breached the agreement pleaded in [APOD [9(b)iii]]."
Mr Ates contends that the wider agreement for which he contends also applied to the parties' involvement in NRB. Mr Oncu contends (APOD 16(b)(i)-(ii)), in respect of NRB and the purchase of the Wentworthville Property, that a separate agreement existed on similar terms as the agreement relating to SRD and the Blacktown Property, and that agreement also included a term that: "NRB would obtain a development approval to permit a larger hotel to be built on the Wentworthville Property and then seek to sell the land for a profit."
Mr and Mrs Oncu also contend that (APOD [16(b)(ii)]: "ii in or around late 2021 [Mr Ates and Mr and Mrs Oncu] agreed that: 1 NRB would construct a hotel at the Wentworthville Property: 2 NRB would seek a development approval for a restaurant at the Wentworthville Property; 3 NRB would build a restaurant at the Wentworthville Property; 4 [Mr Ates] and [Mr Oncu] would each pay half the costs of building the restaurant; and 5 [Mr Ates] would lease the restaurant from NRB and conduct a restaurant business from the site."
I am again not satisfied that either the agreement for which Mr Ates contends or the different agreement for which Mr Oncu contends was formed in the pleaded terms and I am unable to find that there was the agreed term as to contributions to all expenses for which Mr Ates contends, although there was plainly a practice of both parties contributing to some expenses. I again do not accept Mr Oncu's evidence of the fifth element of the agreements concerning NRB and the Wentworthville Property concerning the suggested $1 million fee.
Mr Ates contends that the wider agreement for which he contends also applied to the parties' involvement in Med Apartments. Mr Oncu pleads (APOD [22(b)] a somewhat different agreement in respect of the Auburn Property, saying that: "[Mr Ates] and [Mr Oncu] agreed that Med Apartments would purchase the Auburn Property on the basis that: i. Med Apartments would seek external finance to complete the purchase; ii. [Mr Ates] would pay the cash amount required to complete the purchase; iii. [Mr Oncu] would make his and [Mrs Oncu's] assets available as security for the borrowings; iv. Med Apartments would obtain a construction certificate for the Auburn Property and then seek to sell the land for a profit; v. [Mr Ates] would pay the costs of obtaining a construction certificate; and vi. [Mr Oncu] would be paid $1,000,000 upon the sale of the land for his services initiating the project, securing the land and managing the project."
I am again not satisfied that either the agreement for which Mr Ates contends or the different agreement for which Mr Oncu contends was formed in the pleaded terms and I am unable to find that there was the agreed term as to contributions to all expenses for which Mr Ates contends, and I note that only Mr Ates contributed to Med Apartments' expenses. I again do not accept Mr Oncu's evidence of the sixth element of the agreements concerning Med Apartments and the Auburn Property as to the $1 million fee, for the same reasons that I do not accept that evidence in respect of SRD and the Blacktown Property and NRD and the Wentworthville Property. Mr Ates pleads and Mrs and Mrs Oncu admit that Mr Ates has made capital contributions to Med Apartments in the amount of $420,000 and Mr and Mrs Oncu have not made any capital contributions (POC [25], APOD [25]) and that is now common ground.
Mr Ates contends that, from February 2022, in breach of the agreement pleaded at POC [7], Mr and Mrs Oncu have failed to pay their 50% share of the operating costs of SRD, NRB and Med Apartments (POC [26]). Mr and Mrs Oncu deny that they breached that agreement and rely on their different version of that agreement (APOD [26]). While I do not accept Mr and Mrs Oncu's version of that agreement, I am also not persuaded that Mr Ates has established the agreement for which he contends so as to establish a breach of that agreement. Plainly, Mr and Mrs Oncu's failure to make sufficient contributions to the companies to support their activities, and their leaving Mr Ates to do so, can still constitute oppression where I have not accepted their contention that Mr Ates was bound to pay such costs and they were not.
Mr Ates contends that, on 9 December 2022, Mr and Mrs Oncu purported to terminate the agreement for which he contends and I have referred to the 9 December telephone conversation above. He also contends that, since 10 December 2022, Mr and Mrs Oncu have refused to negotiate with Mr Ates to sell the relevant properties and he refers to conversations between him and Mr Oncu on 10 and 17 December 2022 (POC [27]-[28]). I largely accept Mr Ates' evidence as to those matters.
Mr and Mrs Oncu plead an elaborate response (APOD [27]), substantial parts of which were abandoned on the penultimate day of the hearing. They maintain a contention that, in late November 2022, Mr Oncu and Mr Ates agreed that NRB and Med Apartments would cease using a particular architect and project manager, although that proposition does not seem to advance the matters in dispute between the parties. They now contend that the relationship between Mr Ates and Mr and Mrs Oncu broke down on or about 9 December 2022 and there can be no doubt that it had irretrievably broken down by mid-December 2022. They also contend that: "on or about 10 December 2022 [Mr Ates and Mrs Oncu] agreed to resolve all issues between them on the basis that: 1. [Mr Ates] would transfer his shares in SRD, NRB, Med Apartments and Med Yapi to [Mr and Mrs Oncu] and resign as a director of each company; 2. upon the completion of the development of the Blacktown Property, SRD would transfer to the plaintiff ten (10) 2-bedroom units and one (1) 1-bedroom unit; and 3. [Mr Ates] would release SRD, NRB, Med Apartments and Med Yapi from the obligation to repay the capital contributions he had made to them. (settlement agreement); and [Mr Ates] has subsequently refused and/or failed to perform the settlement agreement by resigning as a director of SRD, NRB, Med Apartments and Med Yapi and transferring his shares to [Mr and Mrs Oncu].
For the reasons set out above in dealing with Mr Oncu's evidence, I do not accept that such an agreement was reached, and therefore do not accept that Mr Ates breached it.
It is common ground (POC [29]-[31], APOD [29]-[31]) that, on 12 December 2022, Mr Oncu told Sitecorp to cease work on the Blacktown Project; on the same date, he told the builders to cease work on the Wentworthville Property; and, on 13 December 2022, Mr and Mrs Oncu instructed the finance broker to cease work on the St George Bank loan documentation for the Blacktown Project. Mr and Mrs Oncu admit those instructions on the basis (APOD [29]-[31]) that Mr Ates was no longer willing to advance funds to meet the costs of the building work and that Mr Oncu "told the finance broker that [Mr Ates] did not have the funds that would be required to proceed with the St George finance proposal, which was the case." Mr Ates also contends and Mr and Mrs Oncu deny (POC [32], APOD [32]) that, on or about 17 December 2022, Mr and Mrs Oncu changed the locks to the entry of the Wentworthville Property so that Mr Ates could no longer gain access. Mr Ates did obtain such access and nothing turns on this for the determination of the proceedings,

The applicable principles in oppression claims

Before turning to the pleaded oppression claims, I should refer to the applicable legal principles. I have drawn upon Counsels' submissions and my summary of the relevant 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 in this respect.
Section 233(1)(d) of the Act relevantly provides that the Court may make an order for the purchase of shares by a member of a company and s 233(1)(j) allows the Court to make an order requiring a person to do a specified act. Such an order may be made where the matters specified in s 232 of the Act are established. The Court can also make a winding up order under s 233(1)(a) of the Act or on the just and equitable ground under s 461(1)(k) of the Act.
Section 232 of the Act in turn provides that the Court may make an order under s 233 if: "(a) the conduct of a company's affairs; or (b) an actual or proposed act or omission by or on behalf of a company; or (c) a resolution, or a proposed resolution, of members or a class of members of a company; is either: (d) contrary to the interests of the members as a whole; or (e) oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity."
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. In Morgan v 45 Flers Avenue Pty Ltd above at 704, Young J observed that the phrases "oppressive, unfairly prejudicial or unfairly discriminatory" in a predecessor to s 232 of the Act should be construed as "a composite whole and the individual elements mentioned in the section should be considered merely as different aspects of the essential criterion, namely commercial unfairness". His Honour also there noted that whether oppression was established was to be determined by reference to the nature of the business carried on by the company and the nature of the relations between its participants and: "whether objectively in the eyes of a commercial bystander, there has been unfairness, namely conduct that is so unfair that reasonable directors who consider the matter would not have thought the decision fair."
The principles applicable to a claim for oppression were also 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 at [140]. His Honour observed that: "(a) consistent with the principle that the purpose of relief is to terminate the effects of oppression, relief will generally be inappropriate as a matter of discretion if there is no continuing oppression: Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304, at [182]; [2009] HCA 25. (b) unfairness is assessed by reference to whether "objectively in the eyes of a commercial bystander, there has been unfairness, namely conduct that is so unfair that reasonable directors who consider the matter would not have thought the decision fair": eg, Campbell v Backoffice Investments Pty Ltd (2008) 66 ACSR 359, per Basten JA at [181]; [2008] NSWCA 95. (c) while it is recognised that conduct may be oppressive if inconsistent with the "legitimate expectations" of shareholders, expectations are not immutable. The non-fulfilment of expectations will not establish oppression, if there has been some good reason for the extinguishment of the expectation: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672, at [85], [86], [175]; [2001] NSWCA 97; Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343, at [96]; [2009] NSWSC 342 per Barrett J; (d) "it is important when assessing corporate activities to see if there has been oppression that judges do not remain in their ivory tower": Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1988) 28 ACSR 688, Young J at 739; [1998] NSWSC 413; (e) a particular matter which will be taken in account in assessing the gravity of any allegation of oppression, is the extent to which the minority shareholder has "baited" the majority shareholder to act in an oppressive manner: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1988) 28 ACSR 688, at 741; [1998] NSWSC 413 …"
In Munstermann v Rayward [2017] NSWSC 133 at [22], Stevenson J summarised the applicable principles as follows (omitting citations): "(1) The test of oppression is an objective one of unfairness ... (2) The court must look to determine whether on the balance of probabilities the objective commercial bystander would be satisfied that the affairs of the company were being conducted unfairly … (3) A director may act oppressively in the sense relevant to the operation of s 232 and yet not breach any fiduciary or other duty owed as a director ... (4) Conduct of a company's affairs may be oppressive even though the conduct is otherwise lawful ... (5) Conduct that has the effect of paralysing a company in the operation of its business is properly characterised as conduct contrary to the interests of the members as a whole … (6) A shareholder of 50 per cent of the shares in a company can seek relief for oppressive conduct because they do not have control in the form of power to prevent the oppression, particularly where individual strong arm tactics are used … (7) The court must formulate an opinion about oppression or unfair prejudice as at the date of the institution of proceedings and the issue of relief under s 233 must be determined at the date of the hearing … (8) The discretion under s 233 is wide as to the appropriate remedy … (9) The nature of the remedy chosen by the court under s 233 will be dependent upon the conclusions drawn by the court as to the type of oppression with which the court is dealing and the court will choose the remedy which is least intrusive …. (10) The aim of any order under s 233 must be to put an end to the oppression … (11) The court should only look to wind up an otherwise solvent company as a "last resort" … (12) As a remedy for oppression, an oppressor can be ordered to sell their shares to the oppressed party …. (13) If an order is to be made for the purchase of shares under s 233 the task of the court is to fix a price that represents a fair value in all the circumstances." [citations omitted]
The Court will have regard, in determining whether oppression is established under s 232(d) of the Act to "whether conduct adheres to accepted standards of corporate behaviour or is in accordance with how reasonable directors would act in attending to the affairs of the company": Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness (Vic/Tas) Pty Ltd (No 3) [2015] NSWSC 1639 at [84]. An inability to manage the company's affairs in a proper manner may itself constitute oppression for the purposes of s 232(e) of the Act: Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; (2009) 257 ALR 610; [2009] HCA 25 at [177]; Beaumont v Peel [2018] NSWSC 95 at [13]. It is now common ground between the parties that, notwithstanding the decision in Kizquari Pty Ltd v Prestoo Pty Ltd (1993) 10 ACSR 606, s 232 of the Act applies to companies acting as trustees, at least in circumstances where the interests held within the trust are within the scope of a relationship of quasi-partnership between the companies: Vigliaroni v CPS Investments Holdings Pty Ltd [2009] VSC 428 at [68]; Melrob Investments v Blong Ume Nominees Pty Ltd [2022] SASCA 29 at [113]ff; Re Tzavaras & Sons Pty Ltd [2022] NSWSC 359 at [248]. I have also borne in mind the observation in Tomanovic v Global Mortgage Equity Corporation Pty Ltd above that each case has to be considered on its own facts and circumstances, and by reference to the conduct as a whole.
Section 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 recognise that, in Snell v Glatis (No 2) [2020] NSWCA 166, Bell P (as his Honour then was) observed at [6] that: "Although statements may be found in the authorities that winding up is a last resort remedy in a case where oppression is found … the context in which the particular company or companies operate together with their structure and history will always be relevant to the fashioning of appropriate discretionary relief and generalised statements as to, for example, the inappropriateness of ordering winding up in cases of oppression other than as a last resort do not mean that that remedy should not be considered, in an appropriate case, even if neither party in fact seeks it."

Mr Ates' oppression claim in respect of SRD

Mr Ates contends (POC [33]-[34]) that Mr and Mrs Oncu's failure to pay 50% share of operating costs in respect of SRD (POC [26(a)]), the purported termination of the alleged agreement (POC [27]), the refusal to negotiate the sale of the properties (POC [28]) and Mr Oncu's instruction to Sitecorp and the finance broker to cease work on the Blacktown Project (POC [29], [31]) concern SRD's affairs within the meaning of ss 53 and 232(a) of the Act and, by reason of those matters, SRD's affairs have been conducted in a manner that is oppressive to, unfairly predicational to, or unfairly discriminatory against SRD or contrary to the interest of its members as a whole. Mr and Mrs Oncu themselves initially sought an order that the companies be wound up on the basis that their affairs were being conducted contrary to the interests of the members as a whole under s 232(d) of the Act, or in a manner that was oppressive to, unfairly prejudicial to or unfairly discriminatory against them for the purposes of s 232(e) of the Act. They initially submitted that: "The principal reason for the breakdown in the parties' relationship is the refusal by [Mr Ates] to continue to pay the companies' expenses, thereby departing from the agreed basis on which the parties undertook their business."
While I am not persuaded that an agreement in the terms pleaded by Mr Ates has been established, I am comfortably satisfied that Mr and Mrs Oncu's failure to make contributions to the ongoing liabilities incurred by SRD or to cooperate with Mr Ates in realising its assets after December 2022 to meet those liabilities, amounted to oppression and that is sufficient to support either a winding up order in respect of SRD or an order that Mr Ates buy out their shares in SRD. That position is reinforced where Mr Ates will also not now contribute funding that is necessary to SRD's continued operation, until these issues are resolved. I do not accept that Mr Oncu's instruction to Sitecorp on 12 December 2022 to cease work on the Blacktown Property, and his corresponding conduct in respect of the finance broker on 13 December 2022, amounted to oppression where there was then a real issue as to SRD's capacity to pay any further liabilities that it incurred, absent further contributions by Mr Ates or Mr and Mrs Oncu.
I should also here deal, for convenience, with several other matters raised by Mr and Mrs Oncu in answer to Mr Ates claim in respect of the several companies. The first is an allegation (APOD 55(a)] that Mr Ates caused the books of account of SRD, NRB and Med Apartments to be prepared so that they do not accurately reflect the financial affairs of each company in several respects. That allegation must fail, because Mr and Mrs Oncu themselves successfully objected to the tender of the only set of accounts of those companies that might have supported that allegation. The second is an allegation (APOD [55(b)] that Mr Ates has breached his statutory and general law duties as a director of each of SRD, NRB and Med Apartments and failed to act in the best interests of each company. That allegation has not been established as a matter of fact. The third is an allegation APOD [55(c)] that the relationship between Mr Ates and Mr and Mrs Oncu has broken down irretrievably so that the common purpose which was the basis on which SRD, NRB and Med Apartments were incorporated as vehicles for the parties' business undertakings has failed. That is plainly established, but is not a defence to Mr Ates' claims but instead a basis on which either the orders he seeks or a winding up order should be made. The fourth is an allegation (APOD [55(d)]) that the conduct of the affairs of each of SRD, NRB and Med Apartments is contrary to the interests of the members as a whole and/or oppressive to, unfairly prejudicial to, or unfairly discriminatory against the Mr and Mrs Oncu within the meaning of s 232 of the Act. Presumably, that allegation turns on the other matters pleaded in APOD [55] and it has not been established where they have not been established.

Whether a winding up order or a buy out order should be made

I now turn to the question whether an order should be made for Mr Ates to buy out Mr and Mrs Oncu's shares, as applicable, or a winding up order should be made. I here address several issues that are common to each of SRD, NRB and Med Apartments, and two issues that are wholly or primarily relevant to SRD. I recognise that, in a proper case, the Court may make an order for a buy out of a shareholder's shares for no consideration: Zong v Lin [2022] NSWCA 136.
Mr Ates contends that the Court should make an order that he buy out Mr and Mrs Oncu's shares in each of the companies or alternatively that the companies should be wound up. In opening submissions, Mr Sirtes submitted that: "(a) Mr Ates contends that the Court should make an order that Mr Ates pay out the substantial director loans he admits the companies owe Mr Oncu, and upon him doing so, order that he purchase Mr and Mrs Oncu's shares in the three companies at a value of $0.00. That is the value attributed to the shares by the only expert accountant giving evidence; and (b) Mr and Mrs Oncu contend that each of the three companies should be wound up." As events developed, Mr Ates then accepted at the hearing that an amount would be payable to Mrs Oncu to acquire her shares in SRD, but the parties' further review of the contributions made by Mr and Mrs Oncu, in supplementary submissions by leave after the close of the hearing, recognised an increased debt owed by SRD to Mr and Mrs Oncu and consequentially reduced the value of the shares in SRD to nil.
Mr Sirtes submits that the relief that Mr Ates seeks should be made on several grounds. First, he submits the Court should find that Mr Ates' version of the quasi-partnership agreement is correct. I cannot reach that finding for the reasons indicated above, although I also do not find that the agreement for which Mr and Mrs Oncu contend is established. Second, Mr Sirtes contends that the Court should find that the breakdown in the relationship between the parties is due to Mr Oncu's conduct. I accept that submission, at least in the sense that Mr Oncu has ceased to make any substantial contributions to the payment of the companies' expenses; I accept that there was at least an expectation or practice of his doing so; his failure to do so has contributed to the companies' present difficulties; and, in December 2022, Mr Oncu initiated the termination of the relationship between the parties, and then resiled from the basis on which he proposed that termination occurred. Third, Mr Sirtes submits that Mr Ates has taken steps to preserve and rectify the companies' position with regard to their third party creditors and their ongoing business since the dispute arose in December 2022 and he has expended significant personal funds to do so. I accept that submission in respect of SRD, although Mr Ates has not yet done anything of substance to protect the position of the vendors of the Auburn Property to Med Apartments. Fourth, Mr Sirtes submits and I accept that the Court will generally not order a winding up if another remedy is available and appropriate to address the situation.
Mr Sirtes submits that a buy out order is preferable to a winding up on several grounds. He submits that the companies will suffer harm if a winding up is ordered. He points out that each company is in the process of undertaking a significant property development, and I accept that SRD has commenced construction of the Blacktown Property. Mr Sirtes also submits that NRB has incurred costs in preparing an amended development application for the Wentworthville Property that would be thrown away in a liquidation. Mr Sirtes submits that a winding up of Med Apartments would prevent it proceeding with settlement of the contract to purchase the five properties in Auburn, due to settle in June 2023. I accept that submission, although Med Apartments will plainly require substantial funding in the short term to proceed with that settlement in any event.
Mr Sirtes submits that winding up would result in a net benefit to Mr Oncu, who loaned less to the companies than Mr Ates, and would be less exposed to the risk that unsecured creditors might not be repaid in full. I do not accept that submission, even assuming that was a relevant consideration, where Mr Ates and Mr Oncu may each be exposed to claims by a liquidator in respect of the circumstances in which the companies were wound up, where a presumption of insolvency would likely arise from their failure to keep adequate financial records. Both Mr Ates and Mr Oncu would also likely be exposed to claims in respect of their personal guarantees in respect of the purchase of the five Auburn Properties (Ates 4.4.23 [80]). I recognise that Mr Oncu's cross-examination suggests that he does not have assets in Australia available to meet such a liability, but it still does not seem to me that it can be sensibly suggested that Mr Oncu will benefit from that outcome.
Mr Sirtes contends that the evidence shows that Mr Ates has the financial means to purchase Mr and Mr Oncu's shares in the companies. That issue is of lesser significance where the value of those shares is now agreed to be nil. Mr Sirtes contends that Mr Ates also has the financial capacity to pay out the loans between Mr and Mrs Oncu and the companies and support their continued existence. Significant parts of the evidence on which Mr Ates relied to establish that proposition were not admissible and not admitted. However, the short minutes of order now proposed by Mr Ates adopt a mechanism that reduces the significance of this issue, by allowing Mr Ates a short period to pay monies into Court which will demonstrate his ability to repay Mr and Mrs Oncu's loans to the several companies, on the basis that a winding up order would then be made if he is unable to do so, other than if exceptional circumstances intervene. I address those orders further below.
Mr Sirtes also submits that third party creditors will suffer a detriment in the event of a winding up. He submits that, if Mr Ates takes control of the companies, he would be able to meet their liabilities in full. I would have given significant weight to that matter had it been established. Unfortunately, there is little or no admissible evidence that Mr Ates has the capacity to meet the companies liabilities in full, if he takes control of them. That proposition is questioned by Mr Ates' evidence in cross-examination of his inability (or at least unwillingness) to provide further funding to the companies, where Mr Oncu had not provided his proportionate share of such funding, although I recognise the choice whether to fund the companies will present differently if Mr Ates had become their sole shareholder. Mr Ates also relied on an indicative quote from a lender in respect of the future funding of SRD and I recognise that quote was conditional, subject to valuation and not a commitment to provide finance. However, that quote provides an indication that lenders are prepared to engage with Mr Ates in respect of the future financial needs of SRD. The commercial likelihood is also that Mr Ates will have greater capacity to fund or refinance the projects once he has sole ownership and control of the companies. I also bear in mind that, if he is unable to do so for one or more of the companies, the Act provides means for an orderly restructuring of the companies, including under the voluntary administration regime.
Mr and Mrs Oncu accept that the relationship between the parties has broken down so that the Court can and should intervene. However, they submit that the Court should make an order winding up the companies under s 233 or s 461(1)(k) of the Act rather than a buy out order. They also put alternative submissions as to the basis on which any buy out order should be made, which include that Mr Ates should be required to pay out their contributions made to each company by way of loan and the alleged $1 million fee agreed for each project. I have not accepted Mr Oncu's evidence in respect of the existence of that fee.
Mr and Mrs Oncu initially contested Mr Ates' capacity to pay the amount necessary to acquire their shares in SRD, although that submission is displaced by the parties' agreement that the value of those shares is nil. They also contest Mr Ates' capacity to repay the amount of their contributions to the companies (which, as I noted above, has now increased in respect of SRD) and fund the companies' future operations, and it is plain that substantial amounts are required to do so. Mr Springthorpe submits, and I accept, that Mr Ates' 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 at [331]-[343]; Snell v Glatis (No 2) above at [41], [45]; Re Crow Inn Pty Ltd (No 2) [2020] NSWSC 1749 at [269], [271]. Mr Springthorpe points to the lack of admissible evidence of his overall assets or liabilities or income or expenses, or to the position in respect of other businesses with which he may be involved.
Mr Springthorpe also challenged Mr Ates' capacity to support the companies' continued existence. He points out that NRB has a substantial net asset deficiency if Mr Ates' calculation of the parties' contributions are correct, and points to its significant debt to NAB and amounts owed to contractors. He also submits that Med Apartments is insolvent, or at least that it is not now apparent how it will fund the purchase price for the Auburn Property which have now been valued at less than their contract price. However, that purchase price is not yet due for payment, and Med Apartment's capacity to pay it will depend upon the level of the financial support which Mr Ates can give it, once he becomes its sole shareholder. On balance, it seems to me that there is sufficient likelihood that Mr Ates will be able to refinance the companies that he should be allowed the opportunity to do so.
I have also had regard to the fact that the companies had not prepared annual financial reports, or maintained adequate records of the parties' contributions to them. Mr Springthorpe submits that: "There is no evidence this position is likely to improve if [Mr Ates] obtains the remaining shares. The Court should be reluctant to order a buy out in circumstances where the companies are not being properly managed and this state of affairs is likely to continue: Re Bicher & Son Pty Ltd (2020) 147 ACSR 108 at [119], [121], cf [135].
However, I also recognise that Mr Ates had caused a balance sheet and profit and loss to be prepared in the course of the proceedings (although it was not admissible). There is no reason to think that he would not have learnt the lessons of experience from these proceedings and now maintain financial records for the companies on an ongoing basis. I would not decline a buy out order on this basis.
Mr and Mrs Oncu also raise two particular issues in respect of a winding up order concerning SRD. They contend that the lack of reliability of the valuation of the Blacktown Property is a discretionary factor in favour of a winding up, and against a buy out, in respect of SRD. They accept that, if the Court orders a buy out, they do not contend for any different value or for any further process to determine that property's value. The Blacktown Property was valued in Mr Goran's report, to which I referred above, with a market value as at 31 January 2023 of $5,860,000 (excluding GST) if an incoming purchaser continues the project and $7,800,000 (excluding GST) if SRD continues the project. I recognise that Mr Goran conceded in cross examination that the valuation of the property is less reliable than it would have been had he been given further information about the construction project. While I accept that proposition, there is no suggestion that Mr and Mrs Oncu could not have obtained that information, by compulsory process, if they do not already have it, and provide it to any valuer which they retained. They have not done so, and I infer that any contrary valuation evidence which they would have led would not have assisted them. I consider that the valuation of the Blacktown Property is sufficiently reliable to support a buy out order, where that report adopts a common methodology for property valuation and Mr and Mrs Oncu did not seek to offer an alternative valuation of the property, either by leading valuation evidence, or by seeking to have Mr Goran address the impact of any changed assumptions on his valuation. This matter does not support a winding up order in preference to a buy out in respect of SRD.
Mr and Mrs Oncu also submit that the position in respect of contributions requires a winding up order rather than a buy out order in respect of SRD. In opening submissions, Mr Ates submits and I accept that Mr Ates and Mr Oncu each contributed $572,783 to the purchase of the Guildford property in SRD, and the balance of the purchase price was paid from a loan secured over the Guildford property, Mr Ates' and Mr and Mrs Oncu's personal assets, for which personal guarantees were also given by Mr Ates and Mr Oncu (Oncu 28.3.23 [28]; Ates 4.4.23 [17]-[19]). Mr Sirtes also points out, and I accept, that SRD sold the Guildford property for $3,900,000 on 21 October 2021, making a profit of about $600,000 after paying out the Guildford loan (Oncu 28.3.23 [29]; Ates 4.4.23 [24]-[30]). The profit from the sale of that property was then applied by SRD to pay down and discharge a loan on the Blacktown Property, and a shortfall of about $500,000 required to discharge that loan was paid by Mr Ates and Mr Oncu equally (Ates 4.4.23 [27]-[30]).
As Mr Sirtes points out, the purchase price for the Blacktown Property was $4,600,000, with a 10% deposit of $460,000, and the contract for the Blacktown Property settled on 18 December 2018. Mr Ates and Mr Oncu each contributed $927,000 to the purchase of that property and $2,300,000 from a loan was applied to the purchase price, which was secured over the Blacktown Property, the personal assets of Mr Ates and Mr Oncu, and guarantees provided by Mr Ates and Mr Oncu. It is common ground that, since about February 2022, Mr and Mrs Oncu have not paid any expenses relating to the Blacktown Property, other than a payment to Sitecorp that is in dispute, and I have noted the dispute as to whether they were obliged to do so above. Mr Ates submits that: he contributed $1,128,000 to the purchase of the Blacktown Property between July 2018 and December 2018; Mr Oncu contributed $1,017,000 to the purchase of the Blacktown Property between July 2018 and December 2018; Mr Ates contributed $1,315,000 to the development of the Blacktown Property between December 2018 and February 2022; and Mr Oncu contributed $656,000 to the development of the Blacktown Property between December 2018 and February 2022. I recognise that the extent of these contributions has been in issue throughout the proceedings and I will allow a last submission stage in respect of it below.
Mr and Mrs Oncu contend that Mr Ates' calculation of contributions is wrong and the evidence before the Court does not permit a calculation to be undertaken. They also say there are specific errors in the contributions, which they say cannot be decided by the Court or by an expert. In opening submissions, Mr Springthorpe points to the informality of the arrangements between the parties, and to the fact that payments were sometimes made by one party and then adjusted between them. He also submits that any adjustment to the amount of shareholder contributions to the companies changes the net position of the companies and potentially their share value. In closing submissions, Mr Springthorpe submits it is impossible to fix a fair price for the purchase of Mr and Mrs Oncu's shares because the amount of the parties' respective contributions to the companies is unknown and the value of the companies is also unknown and the companies records are incomplete. Mr Springthorpe also submits that it is impossible to calculate the parties' contributions, because Mr Ates' calculations were undertaken by reference to bank statements and Mr and Mrs Oncu had made "substantial contributions" and had paid amounts directly to Mr Ates. The difficulty with this proposition, however, is that Mr and Mrs Oncu do not seek to lead evidence to establish the amount of contributions which they have made, beyond several smaller transactions, to support that proposition.
In supplementary submissions, Mr Sirtes points to the evidence as to these matters and submits that: ",,,in all the above circumstances, it would be unnecessary and wasteful of valuable time and costs for the parties to engage in an additional quantification and/or valuation exercise particularly as there is no longer any issue that the value of the shares in each company is nil. Any "errors" in the Plaintiff's calculations … have either been accounted for in the revised figures … or are simply speculation without proof."
I do not accept Mr and Mrs Oncu's submission that the position in respect of contributions requires a winding up order to the exclusion of a buy out order in respect of SRD. First, I give limited weight to Mr Oncu's evidence as to further contributions given the view that I have formed of his credit, and Mrs Oncu does not herself give evidence that she made contributions to the companies beyond those recognised in Mr Ates' calculation, and I infer that any evidence she could have given would not have assisted her in establishing that matter. Second, Mr Springthorpe was astute to pursue any apparent errors or omissions in Mr Ates' calculation in cross-examination, other than for the possibility of one relating to the Guildford property raised only in his closing submissions, and those errors and omissions have been appropriately addressed. There is no reason to think that any errors that emerge from the affidavit evidence and available documentation have not been addressed in that way. Third, if that evidence was incomplete, it was a matter for Mr and Mrs Oncu to lead further evidence, and it is no answer that they did not maintain records of their contributions to the companies to allow them to do so. To put that another way, Mr and Mrs Oncu cannot now deploy their failure to maintain such records, and any consequential disadvantage they have brought upon themselves, so as to exclude the possibility of a buy out and derive any advantage they perceive from a winding up.
Fourth, there is no conceptual difficulty with calculating the amount of the parties' contributions and no particular difficulty in doing so by reference to the evidence led in the proceedings, as Courts decide matters on the evidence before them and not with any aspiration to take into account the universe of information that is not in evidence. Finally, I bear in mind the case law, albeit in the somewhat different context of the calculation of contractual damages, that indicates that the court must do the best it can to make a reliable assessment of damages, where damages are difficult to assess, including where a plaintiff has failed to lead the best evidence of damages: Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83 (Mason CJ and Dawson J), 125 (Deane J), 153 (Gaudron J). This is not a case where an assessment of the amount of contributions made by Mr and Mrs Oncu to SRD has no rational basis or would be a mere guess, although that assessment is made on incomplete evidence: contrast Troulis v Vamvoukakis [1998] NSWCA 237; McCrohan v Harith [2010] NSWCA 67 at [128].
The parties now agree that, subject to Mr and Mrs Oncu's contentions that the Court cannot determine the amount of Mr and Mrs Oncu's contributions, or that question should be referred for expert determination, SRD is indebted to Mrs Oncu in the amount of $2,414,033. I understand that agreement to indicate that both parties accept that proposition, while Mr and Mrs Oncu contend a greater debt may be owed, although they lead no evidence to establish any further contributions. It is now common ground that direct contributions by Mr and Mrs Oncu to SRD's purchase costs for the Blacktown Property were $1,137,000; direct contributions by Mr and Mrs Oncu to SRD's development costs for the Blacktown Property were $656,000; Mr and Mrs Oncu made contributions directly to Mr Ates in relation to SRD's development costs for the Blacktown Property in the amount of $48,250; and contributions made by Mr and Mrs Oncu directly to a third party in respect of SRD's purchase costs for the Guildford Property were $572,783. I accept that figure is established by the evidence to which the parties refer. This matter also does not support a winding up order in preference to a buy out in respect of SRD.
On balance, it seems to me that a buy out order should be made in preference to a winding up order in respect of the SRD. It seems to me that the disadvantages of a winding up order, to which Mr Ates points in submissions are substantial, and buy out orders allow the best prospect of SRD and its creditors avoiding those disadvantages.

The form of a buy out order in respect of SRD

The differences between the parties as to the form of any buy out order in respect of SRD, where one is to be made, were substantially narrowed on the last day of the hearing and the parties have now recorded their position in a document marked "MFI 3". The remaining issues are, first, the valuation of the Blacktown Property which I addressed above. Second, in respect of Mr Mullins' expert evidence, the parties accept that a net asset basis of valuation is appropriate (which is the approach adopted by Mullins); they accept that no adjustment for CGT is appropriate in a buy out scenario; and they accept that the assets of the SRD Property Trust are to be included in calculating the fair value for a buy out of the SRD shares. Each of these approaches seems to me to be appropriate on the evidence and the case law. Third, although Mr and Mrs Oncu do not accept the correctness of the assumptions given to Mr Mullins in relation to SRD's liabilities (as to building costs, land tax etc), they are prepared to accept those assumptions as the basis of a buy out. I proceed on that basis. I have addressed the fourth issue, in respect of contributions to SRD, above.

Mr Ates' oppression claim in respect of NRB and the form of relief

Mr Ates contends and Mr and Mrs Oncu deny (POC [35]-[36], APOD [35]-[36]) that Mr and Mrs Oncu's failure to pay 50% share of operating costs in respect of NRB (POC [26(b)]), the purported termination of the alleged agreement (POC [27]), the refusal to negotiate the sale of the properties (POC [28]) and Mr Oncu's instruction to the builder to cease work on the Wentworthville project (POC [30]) and the change of locks to the entry on the Wentworthville project (POC [32]) concern NRB's affairs within the meaning of ss 53 and 232(a) of the Act and, by reason of those matters, NRB's affairs have been conducted in a manner that is oppressive to, unfairly predicational to, or unfairly discriminatory against NRB or contrary to the interest of its members as a whole. Again, I am not persuaded that an agreement existed with the terms pleaded by Mr Ates, but I am comfortably satisfied that Mr and Mrs Oncu's failure to make contributions to the ongoing liabilities incurred by NRB or to cooperate with Mr Ates in realising its assets after December 2022 to meet those liabilities amounted to oppression and that is sufficient to support either a winding up order in respect of SRD or an order that Mr Ates buy out their shares in SRD. I do not accept that Mr Oncu's telling the builder at the Wentworthville Property to cease work on 12 December 2022 amounted to oppression, where there was then a real question as to NRB's capacity to meet further liabilities that it incurred, absent contributions by Mr Ates or Mr and Mrs Oncu.
I am satisfied that a buy out order is also preferable to a winding up order in respect of NRB, for the reasons that I set out above in respect of SRD. The differences between the parties as to the form of any buy out order in respect of NRB, if one is to be made, were also narrowed on the last day of the hearing and the parties have recorded their position in a document now marked "MFI 4". First, Mr and Mrs Oncu now make no submissions as to the correctness of the valuation of the Wentworthville Property and there is no reason not to accept the expert evidence as to that matter. Second, they indicate that their position as to Mr Mullins' evidence is "generally" the same as that stated in points 2(i) and 2(ii) of MFI 3, namely that the parties accept a net asset basis of valuation is appropriate (which is the approach adopted by Mullins) and they accept that no adjustment for CGT is appropriate in a buy out scenario. I accept that approach. Third, although Mr and Mrs Oncu also do not accept the assumptions given to Mr Mullins in relation to NRB's liabilities (as to building costs, land tax etc.), they indicate they will accept those assumptions for the basis of a buy out. The Court can properly proceed on that basis.
In opening submissions, Mr Ates submitted that for NRB, Mr Ates contributed $1,225,000 to the purchase of the Wentworthville Property between June 2020 and July 2020; Mr Oncu contributed $466,000 to the purchase of the Wentworthville Property between June 2020 and August 2020; Mr Ates contributed $265,500 to the development of the Wentworthville Property between October 2020 and February 2022; and Mr Oncu contributed $185,000 to the development of the Wentworthville Property, between August 2021 and January 2022. In closing submissions, Mr and Mrs Oncu accept Mr Ates' calculation of their contributions to NRB as $710,000 and, although they do not accept Mr Ates' calculation of his contributions to NRB, they do not contend that any error would result in a difference to the share price.
In supplementary submissions, the parties confirmed their agreement that NRB is indebted to Mrs Oncu in the amount of $710,000, comprised of direct contributions made by Mr and Mrs Oncu to NRB's purchase costs of the Wentworthville Property of $466,000 and direct contributions made by Mr and Mrs Oncu to NRB's development costs of the Wentworthville Property of $195,000 (by contrast with the figure of $185,000 noted above); and indicated that they have been unable to locate documents in evidence supporting the additional $49,000 agreed to have been contributed by Mr and Mrs Oncu to NRB. I need not address the question of contributions in respect of NRB further given that common ground. Fifth, the parties agree it flows from this that NRB has a net asset deficiency and its shares are worth nil.

Mr Ates' oppression claim in respect of Med Apartments and the form of relief

Mr Ates contends and Mrs and Mrs Oncu agree (POC [37-[38], APOD [37]-[38]) that Mr and Mrs Oncu's failure to pay 50% share of operating costs in respect of Med Apartments (POC [26(c)]), the purported termination of the alleged agreement (POC [27]) and the refusal to negotiate the sale of the properties (POC [28]) concern Med Apartment's affairs within the meaning of ss 53 and 232(a) of the Act and, by reason of those matters, the affairs of Med Apartments have been conducted in a manner that is oppressive to, unfairly predicational to, or unfairly discriminatory against Med Apartments or contrary to the interest of its members as a whole. I am also satisfied that oppression is established in respect of Med Apartments, where the only capital contribution to that company was made by Mr Ates, and Mr and Mrs Oncu have not cooperated in addressing the pressing issues that Med Apartments now faces arising from the breakdown in the relationship between its shareholders and the obligations that will shortly fall due in respect of the acquisition of the Auburn Property.
I am satisfied that a buy out order is also preferable to a winding up order in respect of Med Apartments, for the same reasons that I reached that conclusion in respect of SRD and NRB. The differences between the parties as to the form of any buy out order in respect of Med Apartments, if one is to be made, also narrowed on the last day of the hearing and the parties have recorded their position in a document now marked "MFI 5". The parties agree that Mr and Mrs Oncu made no contributions to Med Apartments and that the value of the shares in that company is nil.

Alternative relief sought by Mr Ates

Alternatively, Mr Ates seeks an order that the companies be wound up under s 461 of the Act, and Mr and Mrs Oncu support an order for winding up, albeit on the basis of s 233 of the Act. Winding up on that ground does not require proof of oppression: Re Pure Nature Sydney Pty Ltd [2018] NSWSC 914 at [70]. It is not necessary to address relief on that ground where I am satisfied that buy out orders should be made. Mr Ates makes an additional submission that the Court has power under s 467(1)(c) of the Act to make an order for the compulsory purchase of shares in the same manner as an order under s 233(1)(b) of the Act. It is not necessary to address that submission, where I am satisfied that the Court should make that order under s 233 of the Act.

Mr Ates' further claim against Mr Oncu in respect of Med Yapi Pty Ltd

Mr Ates also pleads (POC [39]) that, in or about December 2021, Mr Ates and Mr Oncu entered into a loan agreement ("Loan Agreement) providing for loans by Mr Ates to Mr Oncu Mr Ates contends (POC [40]-[41]) that it was a term of the Loan Agreement that Mr Oncu would repay Mr Ates when Mr Oncu sold his residence at Oatlands, and that it was an implied term of the Loan Agreement that the first defendant would sell his residence within a reasonable period of time. Mr and Mrs Oncu deny these allegations (APOD [39]-[41]). Mr Ates pleads (POC [42]-[43]) that, on 22 December 2021, in accordance with the Loan Agreement, he lent $500,000 to Mr Oncu, which he says he paid at Mr Oncu's direction into the account of Med Yapi. Mr and Mrs Oncu deny the allegation and contend that the payment of $500,000 made by Mr Ates to Med Yapi on 22 December 2021 was a contribution of capital by Mr Ates by way of loan (APOD [42]). As I understand it, they contend that Med Yapi rather than Mr Oncu is liable to repay that loan.
Mr Ates also contends and Mr and Mrs Oncu deny (POC [43], APOD [43]) that, in breach of the alleged terms of the agreement, Mr Oncu failed to sell his residence within a reasonable time or at all. Alternatively, Mr Ates pleads (POC [44]) that, on 10 December 2022, Mr Oncu purported to terminate the Loan Agreement by advising Mr Ates that he was not going to repay any money to Mr Ates, relying on paragraph 103 of Mr Ates' affidavit dated 9 February 2023. Mr Ates also pleads (POC [45]-[46]) that that conduct constitutes a repudiation of the Loan Agreement and Mr Ates has accepted that repudiation (by filing these proceedings) and terminated the Loan Agreement. Mr Ates pleads (POC [47]-[49]) that, as a result of Mr Oncu's repudiation of the Loan Agreement, Mr Ates has suffered loss in the amount of $500,000; Mr Oncu has refused and continues to refuse to pay Mr Ates the outstanding monies; and Mr Oncu is indebted to Mr Ates in the amount of $500,000. Mr and Mrs Oncu deny these allegations.
Mr Ates' evidence is that the Loan Agreement was agreed in a conversation between him and Mr Oncu in about December 2021. Mr Ates claims that Mr Oncu asked, and Mr Ates agreed, that he would pay $1,000,000 to meet a 10% deposit for the purchase of the Rouse Hill property by Med Yapi (Ates 9.2.32 [76]), although he contends the parties were equally responsible for that payment under the wider agreement for which he contends. He contends that one of the terms of his paying that deposit was that Mr Oncu would repay him upon the sale of Mr and Mrs Oncu's house. Mr Oncu denies that such a conversation occurred.
In opening submissions, Mr Springthorpe submits that Mr Oncu never agreed to pay any costs of Med Yapi and did not borrow any money from Mr Ates to fund such costs. He also submits that: "[Mr Ates] alleges a loan agreement between [Mr Ates] and [Mr Oncu] pursuant to which [Mr Ates] loaned $525,00 to [Mr Oncu], which the plaintiff allegedly paid to Med Yapi on [Mr Oncu]'s behalf. [Mr Ates'] debt claim in the amount of $525,000 is not established. The claim fails for two reasons: a. Mr Oncu's evidence is that he did not agree to contribute capital to Med Yapi and did not agree to borrow money from Mr Ates to contribute to Med Yapi so that there was no loan; and b. The debt claim is inconsistent with [Mr Ates'] claim in respect of the other companies the subject of this proceeding. … Mr Ates asserts an overarching agreement under which the parties were to contribute equally to each project, and alleges that Mr Oncu did not make the required contributions so that Mr Ates was required to make up the shortfall by paying each company's expenses. He asserts that those payments were loans to each company. If [Mr Ates] loaned the money to Med Yapi, he did not loan it to Mr Oncu. [Mr Ates] also cannot have this both ways; if the payments he made to Med Yapi were loans to Mr Oncu, then the payments he made to SRD, NRB and Med Apartments must also have been loans by Mr Oncu to each company. But [Mr Ates] does not so contend."
Mr Ates cannot succeed in this claim. Although I accept that there was likely a general understanding that the parties would make equitable contributions to the venture, and a practice of doing so in respect of the other projects, I am not persuaded that any agreement was reached to the effect pleaded by Mr Ates, still less one with an implied term to the effect alleged. Absent such an agreement with Mr Oncu, Mr Ates is left with a claim against Med Yapi, to which he lent the relevant funds, for their repayment.
Mr Ates makes also makes a claim (POC [50]ff) in respect of a second loan agreement said to have been made in or about January 2022, to the effect that Mr Ates would pay Mr Oncu's share of expenses for Med Yapi, and $25,000 alleged to have been paid by Mr Ates to Med Yapi for those expenses between January 2022 and December 2022 and contends that Mr Oncu is indebted to Mr Ates in the amount of $25,000. Mr and Mrs Oncu again deny the allegation and contend that this payment was also a contribution of capital by [Mr Ates] by way of loan (APOD [51]) and, as I understand it, they contend that Med Yapi rather than Mr Oncu is liable to repay that loan. Mr Ates' evidence is that this agreement was formed in a conversation between him and Mr Oncu in about January 2022, in which Mr Oncu proposed and Mr Ates accepted that Mr Ates would pay Mr Oncu's share of the costs of consultants retained by Med Yapi in order to progress the development of the Rouse Hill Property. Mr Oncu again denies that this conversation occurred. This claim fails for the same reasons as the larger claim.

Orders and costs

The first five orders sought by Mr Ates are five declarations as to the amounts as to which SRD and NRB is indebted to Mrs Oncu and the value of the shares held by Mrs Oncu in SRD, NRB and Med Apartments. The parties are now agreed as to the content of three of these orders and also as to the content of the remaining two orders, if I do not refer the question of the amount of contributions made to an expert or referee. I will not do so given my findings as to the parties' contributions above. It is appropriate to make declarations as to these matters below, where it is important that all claims between the parties should have been determined when the shares in the companies are transferred to Mr Ates.
Mr Ates proposes a sixth order be made that, within 7 days, he pay a specified amount into Court, comprising the money owing to Mrs Oncu in respect of her loans to SRD and NRB and an amount on account of Mr Oncu's potential liability as guarantor (with Mr Ates) to the vendors of the Auburn Property for possible failure to settle its contract to acquire those properties. Mr and Mrs Oncu accept the calculation of the first two amounts, if no further expert determination is to take place as to contributions, as is the case. Mr Sirtes accepted two amendments to the first order proposed by Mr Springthorpe. I have made the first but not the second of those amendments in the orders below, since the second is not appropriate as it is now common ground that the value of the shares in SRD is nil. The third amount reflects the loss that may be recoverable by the vendors, in respect of a decline in the value of the land since Med Apartments contracted to acquire it, divided between Mr Ates and Mr Oncu. I have added a further order requiring the parties to relist the matter within 2 business days of non-compliance with this order, since a winding up order would likely promptly be made for all companies if it was breached.
In supplementary submissions, Mr Springthorpe contended this amount should be paid on account only, pending the reference for which he contended. He accepted this amendment was not necessary if the Court did not order a reference, which I will not do. Mr Springthorpe also proposed an increase of the amount to be secured in respect of Med Apartments' contract to acquire the Auburn Property from $375,000 to $1,000,000. He raises the possibility that the vendors may only claim under the guarantee given by Mr Oncu and not that given by Mr Ates. In supplementary submissions, Mr Sirtes responds that: "the $375,000 is not "speculation", but rather precisely half of the difference between the contract value of the Auburn Properties (being $6,100,000 …) and the present market value of the Auburn Properties as calculated by the unchallenged report of Mr Goran (being $5,350,000 …); a security amount of $375,000 is appropriate in circumstances where there are two guarantors, and where Mr Ates has agreed to give the form of undertaking set out … below; the suggestion that there is a "real prospect" that Mr Ates will be insolvent and unable to contribute towards the liability is no more than an unsubstantiated assertion; and legal costs incurred by the Oncu Defendants in the event the guarantee is called upon, if there are any such costs, is not a matter which Mr Ates ought to be responsible for, it being a matter in the sole discretion of the Oncu Defendants whether they choose to incur such costs for their own benefit, how they elect to defend any such proceedings etc."
I do not propose to increase the amount required to be paid into Court in respect of this potential claim, where Mr Ates now offers a personal undertaking in that regard and there is no reason to think that the vendors would in practice bring a claim only against Mr Oncu and not against Mr Ates, where Mr Oncu has no assets in Australia against which a judgment could be enforced. Mr Springthorpe points out that that amount does not allow for legal costs that may be incurred by Mr Oncu in respect of any proceedings against him. It does not seem to me that it is necessary for it to do so, where Mr Oncu is already exposed to those costs and that risk is not increased by Mr Ates' acquisition of Mr Oncu's shares in Med Apartments. Mr Springthorpe submits that Mr Ates is "speculating" as to the amount of shortfall and the security should be increased as a result. I do not accept that submission, where Mr Ates' approach was founded in the evidence and reasonable, on its face, and Mr and Mrs Oncu did not seek to establish the probability or possibility of a larger exposure.
Mr Ates' proposed seventh order provides for the transfer of shares to Mr Ates following the payment of the specified amounts into Court to Mr and Mrs Oncu, upon her providing a completed transfer of her shares in SRD and NRB and his providing a completed transfer of his shares in Med Apartments. It seems to me that the transfer of the shares should proceed for no consideration, following the payment of funds into Court, and the payment of funds out of Court to Mrs Oncu should be deferred until it is apparent that no winding up order is made. That is appropriate where it is now common ground that the shares have no value and that payment to Mrs Oncu is wholly a repayment of shareholder loans and it would be a preference in a winding up. The payment to Mr Oncu should also be deferred, although it is referable to the guarantee he has given in respect of Med Apartments, since a liquidator should be given the opportunity to be heard about it if a winding up order is to be made in respect of that company. Mr and Mrs Oncu did not contest a further order sought by Mr Ates, providing for the Registrar to take steps in respect of the transfer of the shares if Mr and Mrs Oncu do not do so, and I am satisfied that order should be made.
Mr and Mrs Oncu submit that Mr Ates should be ordered to repay or refinance the debt owed by NRB to NAB so as to extinguish any liability secured by any guarantee or security given by Mr and Mrs Oncu or any of their related entities in relation to the property in Wentworthville owned by NRB. I recognise that there would be potential unfairness to Mr Oncu in making an order that permitted Mr Ates to acquire the shares in the companies, while leaving Mr Oncu liable (at least for any extended period) for the guarantees and securities that he has provided on their behalf, after the companies were placed under Mr Ates' sole control. Mr Ates' proposed orders provide for Mrs Oncu to be removed as the guarantor of the debt owed by NRB to NAB, or otherwise have that guarantee released or satisfied, by a refinance of the debt, and cause relevant securities to be released. The orders contemplate that, if Mr Ates is unable to bring about that release the matter would be restored before the Court with a view to a winding up order being made. It seems to me that this approach adequately addresses this issue. Mr and Mrs Oncu proposed an alternative form of that order, while accepting its substance, but I am not satisfied their proposed changes are necessary.
Mr and Mrs Oncu also submit that Mr Ates should give a personal undertaking to the Court to indemnify them in respect of guarantees or other security they have given for the relevant companies' liabilities. Mr Ates agreed to give such an undertaking in supplementary submissions, excluding an extension sought by Mr and Mrs Oncu to legal costs of defending any such claim or enforcing the undertaking. I will note that undertaking, without that extension, as an undertaking given by Mr Ates to Mr and Mrs Oncu. It would not be appropriate to accept that undertaking as an undertaking given to the Court, where a breach of it does not seem to me a matter that would properly be actionable in contempt. I do not accept Mr Springthorpe's submission that, where an undertaking in that form is given, the Court should decline to order a buy out order and that Mr and Mrs Oncu would otherwise be exposed to "unacceptable risks", and it seems to me that they would in fact face substantial risks in a winding up.
Mr Ates' proposed orders reserved liberty to Mr and Mrs Oncu to apply for a winding up order if he failed to pay money into Court or failed to bring about the removal of Mr Oncu as the guarantor of the debt owed by NRB to NAB, or otherwise have that guarantee released or satisfied. Mr and Mrs Oncu seek a self-executing order. I will not make a self-executing order, because the parties and the community should not be left in a position of uncertainty as to whether a winding up order has or has not been made if there is a dispute as to whether the necessary steps have been taken by Mr Ates within the time specified. I have amended the order below to recognise the likelihood that a winding up order if those orders are not satisfied within the dates specified in them. I accept this order should extend to Med Apartments, against the possibility that Mr Ates fails to secure Mr Oncu's potential liability under the guarantees given to the vendors of the Auburn Property.
Mr Ates' proposed orders initially provided for a further stage of expert determination on the amount of loans to SRD and the consequential value of Mrs Oncu's shares in SRD. In supplementary submissions, Mr Springthorpe supported that process. For the reasons set out above, I am not satisfied that an expert or referee would be in a better position than the Court to determine these matters, and there is no reason not to determine the question of contributions on the evidence put before the Court by the parties. I will not make the orders providing for that matter.
Mr Ates' proposed orders include a declaration that Mr Oncu is indebted to Mr Ates in the amount of $525,000 in respect of Med Yapi and an order for payment of that amount by Mr Oncu to Mr Ates. Those orders should not be made, where I am not satisfied that that indebtedness has been established for the reasons noted above.
Mr Ates' proposed orders provide for Mr and Mrs Oncu to pay his costs of the proceedings, as agreed or assessed. I will not make that order at this point. The question of costs should be reserved, since Mr Ates' performance or non-performance of his obligations under the orders made by the Court will likely have substantial relevance to whether he should be allowed the costs of the proceedings, or there should be no order as to their costs.

Orders

Accordingly, I make the following declarations and orders and note the following matter: 1. The Court declares that the third defendant (SRD) is indebted to the second defendant in the amount of $2,414,033 or such other amount as the Court declares. 2. The Court declares that the fourth defendant (NRB) is indebted to the second defendant in the amount of $710,000. 3. The Court declares that the value of the shares held in SRD by the plaintiff and the second defendant are, each, nil. 4. The Court declares that the value of the shares held in NRB by the plaintiff and the second defendant are, each, nil. 5. The Court declares that the value of the shares held in the fifth defendant (MED) by the plaintiff and the first defendant are, each, nil. 6. Order that the plaintiff, by 4pm on 3 May 2023, pay the amount of $3,499,033 into Court comprising: 1. the amount of $2,414,033 representing the money owing to the second defendant pursuant to her director loan account in SRD; and 2. the amount of $710,000 representing the money owing to the second defendant pursuant to her director loan account in NRB; and 3. the amount of $375,000 as security for the first defendant's potential liability for MED failing to settle the property in Auburn and the plaintiff's undertaking noted in these orders. (6A) Direct the parties to relist the matter within 2 business days of non-compliance with order 6. 1. Order that, subject to the plaintiff's compliance with order 6, by 4pm on 5 May 2023: 1. the second defendant must provide to the plaintiff and Prothonotary of the Supreme Court a duly completed transfer of her shares in SRD and NRB to the plaintiff; and 2. the first defendant must provide to the plaintiff and the Prothonotary of the Supreme Court a duly completed transfer of his shares in MED to the plaintiff. 1. Note that, subject to further order of the Court: 1. upon the plaintiff providing to the Prothonotary of the Supreme Court a duly completed transfer of the Auburn Property into the name of MED by 19 June 2023, the Court will release the amount of $375,000 to the plaintiff from the money held by the Court pursuant to Order 6(c). 2. if a transfer is not provided as contemplated by paragraph 8(a), the Court will release the amount of $375,000 to first defendant from the money held by the Court pursuant to order 6(c). 1. Defer the question of the release of the amount specified in orders 6(a)-(b) to the second defendant from the money held by the Court in satisfaction of SRD's indebtedness to the second defendant as per the declaration in order 1 and in satisfaction of NRB's indebtedness to the second defendant as per the declaration in order 2 above and the release of the monies paid under order 6(c) to the first defendant for hearing or directions as appropriate before Black J at 9.15am on 26 May 2023. 2. Pursuant to s 94(1) of the Civil Procedure Act 2005 (NSW), if the first defendant and the second defendant do not comply with order 7, the Registrar of the Supreme Court of New South Wales is empowered to take all steps necessary to sign a share transfer of the second defendant's shares in each of SRD and NRB and the first defendant's shares in MED, and is directed to do so as soon as reasonably practicable. 3. Order that the plaintiff by 4pm on 24 May 2023 remove the second defendant as the guarantor of the debt owed by NRB to National Australia Bank Limited ("NAB") or, otherwise, have the second defendant's guarantee to NAB released or satisfied, in consequence of a refinance of this debt, such that the second defendant no longer owes any guarantee and any security in relation to the property in Wentworthville owned by NRB. 4. List the matter at 9.15am on 26 May 2023 with a view to making an order that each of the third, fourth and fifth defendants be placed in liquidation, if order 6 and/or order 11 are not satisfied within the dates specified in them. 5. The relief sought by the plaintiff against the first defendant in respect of the debt in respect of Med Yapi Pty Ltd be dismissed. 6. The question of costs be reserved to the hearing at 9.15am on 26 May 2023. 7. Liberty to apply on 1 business day's notice. THE COURT NOTES: The plaintiff's undertaking in favour of the first and second defendants to indemnify and hold harmless the first defendant, the second defendant and their related entities from and against any liability under any contract in the nature of a guarantee, indemnity or security for any obligation of SRD, NRB or MED, including without limitation the directors' guarantees in MED's contracts to purchase the Auburn property and the security for the NAB loan to NRB.

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: 26 April 2023

Corporations Act 2001(Cth)ss 53, 232-233, 461, 467

) 180 CLR 459; [1985] HCA 68 - Zong v Lin [2022] NSWCA 136 Category: Principal judgment Parties: Necati Ates (Plaintiff) Ravbun Oncu (First Defendant) Meral Oncu (Second Defendant) SRD Property Pty Ltd (Third Defendant) NRB Property Group Pty Ltd (Fourth Defendant) MED Apartments Pty LTD (Fifth Defendant) Representation: Counsel: G Sirtes/J Smith (Plaintiff) P Springthorpe (First & Second Defendant)

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