Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness

Judgment -

1. By Amended Originating Process filed on 23 September 2015, the Plaintiffs, Mr Bradley Trent and Ms Eraina Trent apply for orders under relevantly, ss 232, 233 and 461(1)(k) of the Corporations Act 2001 (Cth) in respect of the affairs of A J Roberts Removals & Storage Pty Limited ("Company").
2. The Plaintiffs initially claimed an order under s 233 of the Corporations Act that the Defendants, Mr Kenneth Bolton and Ms Pauline Shumack, purchase the shares in the Company owned by the Plaintiffs at fair value. At the opening of this hearing, Mr Price, who appears for the Plaintiffs, indicated that they accept, for the purpose of the hearing, that the shares in the Company have no value. I assume an order for purchase of the shares, implicitly for no consideration, is no longer pressed, although the Plaintiffs accepted that those shares should be transferred to the Defendants if the other relief they sought was ordered. The primary relief now sought by the Plaintiffs is an order that Mr Bolton and Ms Shumack indemnify them in respect of any claim made against either or both of the Plaintiffs pursuant to a guarantee given by the Plaintiffs in respect of the Company. In the alternative, the Plaintiffs seek an order under s 233 or s 461 of the Corporations Act that the Company be wound up and an order that a liquidator be appointed. I was informed by Mr Price that a consent of liquidator had been obtained, although it was not tendered, and that consent would need to be established before a winding up order could be made.

The affidavit evidence, background and chronology of events

1. The Plaintiffs relied on Mr Trent's affidavit sworn 10 September 2015. Mr Trent was not cross-examined as to the large part of his evidence and no reason emerged not to accept that his evidence was truthful, albeit subject to the frailty of human recollection. However, I have regard, in respect of Mr Trent's and other affidavit evidence, 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 per McLelland CJ in Eq; Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 at [41] per Rares J; Varma v Varma [2010] NSWSC 786; (2010) 6 ASTLR 152 at [424]-[425] per Ward J.
2. The Defendants relied on Mr Bolton's affidavit sworn 20 July 2016. Mr Bolton was cross-examined and was an unsatisfactory witness, who claimed to have little recollection of events and was often unable or unwilling to respond to the simplest of questions. It is unnecessary to determine whether Mr Bolton's approach in cross-examination reflected a genuine lack of understanding of the questions he was asked or a genuine inability to focus adequately upon them, or was deliberately evasive, because it is not necessary to reach any general finding as to Mr Bolton's credit in order to determine the proceedings. In cross-examination, Mr Bolton's position was also that, in substance, he had no knowledge of the Company's financial affairs, although he is one of its directors, and now appears to leave financial matters to Ms Shumack.
3. The Defendants also relied on Ms Shumack's affidavit sworn 20 July 2016, although substantial parts of that affidavit were not read. Ms Shumack was cross-examined and her evidence in cross-examination was consistent with her having a limited role in respect of the Company's affairs in 2001 and again in the period from 2009. She fairly accepted in cross-examination that she had some conflict with Mr Trent in that period, although her evidence was that Mr Trent did not tell her, at least in terms, that he did not want her to be involved in the business (T67). No reason emerged not to accept that her evidence was truthful, but also subject to the frailty of human recollection, and there are issues as to which Mr Trent's and her evidence are in conflict.
4. Turning now to the chronology of events, the Company was incorporated in 2001, and acquired as a shelf company for Mr Bolton and Mr Trent to acquire and operate a removalist and storage business. Mr and Mrs Trent, Mr Bolton and Ms Shumack each hold 25 shares in the Company. Mr Bolton is a director of the Company and Mr Trent is a director and secretary of the Company, but his evidence is that he has not carried out that role since October 2009 (Trent [3]). Ms Shumack is Mr Bolton's de facto spouse (Trent [4]).
5. The Company borrowed the amount of $160,000 to acquire its removalist and storage business and by way of an overdraft facility from National Australia Bank Limited ("NAB") in 2001 (Trent [10]-[11]). The Company is party to a business mortgage overdraft dated 29 August 2001 with NAB (Ex P1) and it appears the Company presently has liabilities to NAB of $100,000 in respect of its overdraft and $55,000 in respect of a bank guarantee given by NAB to Toll Transport Pty Limited ("Toll Transitions"), for which it previously provided relocation and transportation services. Mr and Mrs Trent and Mr Bolton and Ms Shumack initially mortgaged their respective houses to secure the loan and overdraft (Trent [12]). Until June 2015, the Company conducted its business at premises at South Windsor owned by a company controlled by the former owner of the removalist and storage business that it had acquired (Trent [13]).
6. Mr Trent's affidavit evidence was that Mr Bolton's "primary role" was as operations manager of the Company and Mr Trent was in charge of trucks, staffing and truck maintenance (Trent [15], [16]). Mr Bolton's affidavit evidence was to similar effect, that Mr Trent was in charge of trucks and removalists and that decisions relating to staffing were made jointly, and that each consulted the other as to the employment of staff.
7. The Plaintiffs contend (Statement of Facts and Contentions, MFI 1) that the Company was established in 2001 by Mr Trent and Mr Bolton on the basis that their wives "were not to be involved in the management of the Company or its business" and that Mr Trent's participation in the Company as a director and shareholder and Mrs Trent's participation in the Company as a shareholder were induced by an agreement or common understanding to that effect. There is a degree of linguistic ambiguity in the formulation of that agreement, and the formulations of breach of it, but I understand the Plaintiffs' case to be that the alleged agreement was directed to precluding the wives' involvement in management of the Company or its business, and not as extending to prevent any involvement of, for example, a menial or trivial character in the Company or its business. That reading of the Plaintiffs' case is consistent with Mr Trent's evidence as to this matter.
8. Mr Trent's evidence was that he and Mr Bolton had a conversation in early 2001 where he agreed to participate in the Company "as long as no wives are involved in running the Company", and Mr Bolton accepted "that condition" (Trent [7]). Mr Bolton denied that conversation took place. I accept that a conversation to that effect took place, where Mr Trent was not cross-examined to test that evidence and Mr Bolton's evidence on cross-examination had the substantial difficulties to which I have referred above. The nature of the alleged agreement is clarified by an explanation which Mr Trent says he and Mr Bolton gave to the Company's accountant, in early 2001, that their wives would be involved "[o]nly as shareholders" and "won't be managing the company". It seems to me that, taken at its highest, Mr Trent's evidence goes no further than an agreement that the wives were not to be "involved in running" or "managing" the Company or the business and I do not read that agreement as extending to a prohibition on any involvement of any kind by Ms Shumack or Mrs Trent in the Company. The Plaintiffs' case, understood in that way, avoids the difficult question that would have otherwise arisen as to why it would have been of particular importance to Mr Trent, nearly 16 years ago, to ensure that Ms Shumack and Mrs Trent did not have any involvement of any kind in the Company, including a limited, menial or trivial involvement, as distinct from an involvement in the management of the Company or its business.
9. Mr Trent's evidence was that, in the period from 2001 to 2008, neither Mrs Trent nor Ms Shumack carried out any work for the Company as employees or in managing the Company and that Mr Bolton and he were each paid a wage of $1,000 per week after tax by the Company. There was a potential difficulty with Mr Trent's evidence in that respect, since there is evidence that Mrs Trent received a salary from the Company at least in May and June 2005, and an undated note prepared by Mr Trent refers to his wanting to "split" his pay to reduce tax and indicates that he should receive a lesser weekly salary and that Mrs Trent should be paid a weekly salary. That matter was addressed by a subsequent affidavit of Mr Trent dated 19 July 2017, read after the Plaintiffs were granted leave to reopen without objection. Mr Trent's evidence was that those payments reflected an attempt to split his income with his wife to reduce income tax, which he claims initially occurred after discussion with an accountant but was later reversed after he was informed he was not entitled to do so, and that he included the salary paid to his wife in his income tax returns in the relevant years. I am satisfied that this matter did not reflect any substantive involvement of Mrs Trent in the Company's business and it does not itself undermine the Plaintiffs' case that the relevant agreement prevented Mrs Trent's and Ms Shumack's involvement in running or managing the Company or its business.
10. The Company entered an agreement for the provision of removalist and storage services with Toll Transitions in July 2005 (Ex P3). The term of that agreement was initially for two years, but Toll Transitions had power to extend that term for further periods each not exceeding two years, and there is no evidence as to whether that agreement remains in place pursuant to such extensions. Clause 12.1 required the Company to provide security to Toll Transitions, defined as a bank guarantee in the amount of $55,000, and clause 12.4 required Toll Transitions to release that security on the expiry of the term or when the Company had complied with the last of its obligations under that agreement. It is unclear whether Toll Transitions would now be obliged to release that guarantee, if asked to do so, because there is no evidence as to whether the term of the agreement has expired or been extended by Toll Transitions or whether the Company has complied with the last of its obligations under that agreement.
11. By letter dated 19 November 2008 (Ex D1), NAB approved an application for a NAB Business Plus facility with a limit of $100,000, secured, inter alia, by a guarantee and indemnity for $260,000 given by Mr and Mrs Trent and Mr Bolton and Ms Shumack, supported by registered mortgages over their respective residential properties.
12. The Plaintiffs contend (Statement of Facts and Contentions, MFI 1) that Ms Shumack made various attempts to become "involved in the management" of the Company and its business prior to 2008. Mr Trent's evidence is that for a short period in September 2001, which he initially said was about two weeks and then corrected to two months, Ms Shumack attended the office each day with Mr Bolton; that he protested that course and advised Mr Bolton that his "buying into the Company was conditional upon no wives being involved"; and that Ms Shumack responded angrily to that matter and then stopped coming into the office (Trent [18]). Ms Shumack denies this conversation (Shumack [21]). It seems to me that, on Mr Trent's version of that conversation, the position that he then adopted overstated the effect of the agreement on which he relies, even on his evidence, which focused on involvement in "running" or managing the Company or its business, not on any involvement of any kind in the business.
13. Mr Bolton's evidence was that Ms Shumack was not an employee of the Company but had helped to set the Company up in 2001 while on leave from teaching (Bolton [8]). Ms Shumack's evidence was that she presently provided assistance to the Company but had not ever been an employee of it (Shumack [3]). She also gave evidence of the circumstances in which the Company acquired the removalist business in 2001 (Shumack [11]) and her evidence was that she was asked to provide assistance while office staff of the Company were on leave in the latter part of 2001 (Shumack [17]-[18]). Her evidence is that Mr Trent did not tell her that she should not be there or that there was any agreement "for no wives to be involved in the business". However, it is plain that a dispute as to Ms Shumack's involvement in the business arose about this time, since Ms Shumack refers to a conversation with Mrs Trent at about this time in which Mrs Trent told her to "fuck off out of the business" and she claims to have responded that Mr Bolton and Mr Trent had asked her to help and that her work was not paid (Shumack [25]). I accept that conversation took place, where Mr Trent led no evidence to deny it and Mrs Trent did not give evidence. Mr Bolton's evidence of the conduct of meetings between him and Mr Trent between 2003 and 2009 (Bolton [20]) also suggests that difficulties in their relationship had existed over a long period.
14. Mr Trent's evidence is that Ms Shumack retired from her previous employment as a teacher in mid-2006 and again began attending the Company's office from time to time and that he again complained to Mr Bolton that Ms Shumack was "not to be involved in the company" and Mr Bolton agreed to "fix it" (Trent [21]). Again, that proposition seems to me to overstate the agreement that Mr Trent says was originally formed between Mr Bolton and Mr Trent, taking Mr Trent's evidence of that agreement at its highest. Mr Trent also refers to the resignation of the Company's then office manager in about 2007, to the employment of another office manager, who then resigned in 2008 and to further conversations between Mr Trent and Mr Bolton in which Mr Trent told Mr Bolton that "[y]ou have to stop [Ms Shumack] interfering in the company" and Mr Bolton again committed to "fix it" (Trent [22]-[23]). Mr Bolton's evidence was that he asked for Ms Shumack's help after the Company's business manager resigned in 2007, where Mr Bolton did not have a great deal of contact with the Company's books (Bolton [10]-[11]). I have referred to Mr Bolton's evidence in cross-examination as to his lack of engagement with the Company's financial affairs above.
15. The Plaintiffs contend (Statement of Facts and Contentions, MFI 1) that, in 2008, Ms Shumack began involving herself in the Company's management and its business and began denying Mr Bolton access to the Company's books and records. The Plaintiffs contend that, following complaints by Mr Trent, Mr Bolton acknowledged the agreement or common understanding on which the Plaintiffs rely and removed Ms Shumack from participation in the Company's management and its business. The Plaintiffs sought to lead evidence, parts of which were not admissible and not admitted, that Ms Shumack attempted to involve herself in the business in a manner that adversely affected other staff's, including the Company's office managers, performance of their responsibilities. The Plaintiffs also contend (Statement of Facts and Contentions, MFI 1) that Ms Shumack has, since 2008, conducted herself as though she was a validly appointed director of the Company; Mr Bolton has failed to take steps to remove Ms Shumack from management of the Company and its business, despite complaints from Mr Trent; and Mr Bolton's refusal to remove Ms Shumack from management of the business of the Company resulted in a complete breakdown in the relationship between Mr Trent and Mr Bolton.
16. Mr Trent's evidence is that Ms Shumack began attending the Company's office on a regular basis in 2008, although he does not there address the nature of the work then being done by Ms Shumack (Trent [24]). I accept that Mr Bolton did not remove Ms Shumack from providing administrative assistance in the Company's business, as distinct from participating in the management of the Company and its business, prior to Mr Trent's withdrawal from that business, and requested and permitted Ms Shumack to provide that administrative assistance to the Company in 2008 over Mr Trent's and Mrs Trent's objections.
17. Mr Trent also refers to a conversation with Ms Shumack in 2008, after the password to the Company's MYOB accounting system had been changed, in which Ms Shumack declined to disclose the password to that system to Mr Trent or to change that password to an earlier password (Trent [26]). Ms Shumack's evidence was that the MYOB password was changed because the system had been accidentally locked and the bookkeeper could not access the system; she claims that a replacement password was written down and stored near the computer; but does not specifically address Mr Trent's evidence that she declined to provide him that password (Shumack [41]-[42]). It is not necessary to resolve the question of the circumstances in which the MYOB password was changed where I find, on the basis of Mr Trent's evidence, that the new password was not provided to Mr Trent. Mr Trent accepted in cross-examination that he had no control over the entry of data into the MYOB system (T14), but that is not an answer to the fact that access to that system would have been one means of allowing access to the Company's financial information. Mr Bolton's evidence was that Mr Trent and others had access to an open cupboard where the Company's profit and loss and balance sheet reports were held (Bolton [22]), although he also suggests that folder disappeared for a period and then reappeared, possibly seeking to imply that it was removed by Mr Trent (Bolton [23]). However, Mr Trent also accepted in cross-examination that he had access to the Company's back office, where any MYOB reports were kept (T14). I am not satisfied, in those circumstances that Mr Trent was deprived of financial information, before withdrawing from the Company's business, although I am satisfied that he was deprived of electronic access to the Company's MYOB system.
18. Mr Trent refers (Trent [27]) to a further conversation with Mr Bolton, presumably also in 2008, where he said: "Mate, this is not working. We need to resolve the situation one way or the other. I cannot work here with [Ms Shumack], she is not supposed to be involved at all. She is trying to take over and control everything." Mr Bolton denies that conversation in his affidavit evidence, although the focus of that denial appears to be on whether the Company's accountant was to be involved in resolving matters (Bolton [18]). I accept that a conversation to that effect took place.
19. It appears that there were meetings between the Company's accountant and Mr Trent to the end of January 2009, presumably in order to seek to resolve matters. Mr Trent's evidence (Trent [29]) was that: "By January 2009, I was concerned about the financial position of the Company. I did not know what debts the Company had, whether it was paying its creditors and what income the Company was earning. … The Company had not paid me wages for some months."
20. Mr Trent's evidence (Trent [30]), not challenged by cross-examination, was that, in late January or February 2009, he and Mr Bolton had a conversation to the effect that: Trent: "I can't do this anymore. I can't afford to work here. I am leaving as of 1 October 2009. I want the ownership question resolved by Christmas. I don't care how we do it." Bolton: "I don't want to buy the Company." Mr Martin, who appears for Mr Bolton and Ms Shumack, points out that Mr Trent there referred, not to Ms Shumack's involvement with the Company but to financial reasons for his ceasing to work with the Company. Mr Trent's evidence is that the Company had not paid him wages in 2009 and Mr Bolton's evidence is that there were "sometimes problems" with the Company paying him and Mr Trent their salaries from July to October 2009 but that Mr Bolton caused Mr Trent to be paid before Mr Bolton was paid, if insufficient funds were available (Bolton [24]).
21. Ms Shumack accepts that, since Mr Trent left the business in 2009, she has been helping Mr Bolton with running of the business and usually attends the business premises every day (Shumack [43]).
22. The Plaintiffs also contend (Statement of Facts and Contentions, MFI 1) that, following the breakdown of the relationship between Mr Trent and Mr Bolton, the Plaintiffs have sought to negotiate their departure from the Company and requested the provision of information relating to its financial position from Ms Shumack, and that Ms Shumack and Mr Bolton have refused or failed to provide information to the Plaintiffs. They contend that they remain liable to NAB for debts and obligations of the Company, where the Company has failed to meet at least some of its financial obligations.
23. Mr Bolton's evidence, not contested by Mr Trent, is that he made a verbal offer to buy Mr Trent's shares in 2009 for $15,000 which was not accepted by Mr Trent (Bolton [21]). I assume that offer was directed to both the shares of Mr Trent and Mrs Trent, although Mr Bolton's evidence did not make that clear.
24. Mr Trent's evidence is that he engaged a solicitor to assist him in resolving the matter with Mr Bolton in early 2010 and he engaged his current solicitors in 2012. On 27 February 2012, Mr Trent's solicitors wrote to Mr Bolton noting that Mr Trent had ceased to be actively involved in the Company's affairs in October 2009 and had not participated in its day-to-day management since that time; referring to the fact that Mr Trent had continued to provide security to the Company's bankers for its overdraft facility; referring to information provided by the lessor of the Company's premises that there were arrears of rent due in respect of the premises and to Mr Trent's concern about the Company's financial position; suggesting a meeting between Mr and Mrs Trent and Mr Bolton and Ms Shumack "in order to discuss the present situation and also to commence negotiations to properly sever the current involvement by them in the office holding and membership in the company"; and requesting access to the Company's books and records of the Company under ss 198F and 290 of the Corporations Act. Mr Trent's evidence, which I accept where he was not cross-examined to suggest the contrary, is that no response was received to that letter (Trent [33]).
25. By letter dated 8 April 2010, the then solicitors for Mr and Mrs Trent wrote to Mr Bolton and Ms Shumack stating that: "We understand that the communications between the directors and the running of the company has reached a point where [Mr and Mrs Trent] believe that the company should be wound up pursuant to Section 461 of the Corporations Act on the basis of just and equitable grounds. We are instructed that we are to proceed with that Application unless the matters can be resolved so that our clients resign as directors and transfer their shares to you as the continuing directors and are paid the cash equivalent of half the value of the company, which our clients assess at the amount of $30,000." That offer was left open for 14 days before Mr and Mrs Trent could take further action, although such action was not taken at that time (Bolton [31], Annexure "A").
26. By letter dated 3 May 2010, the solicitors for Mr and Mrs Trent wrote to the then solicitors for Mr Bolton and Ms Shumack advising that, unless a firm offer was received within 14 days, they would commence proceedings to wind up the Company, although that action was not then taken (Bolton Annexure "D"). Mr Martin submits, and I accept, that the Plaintiffs' claims for the importance of Ms Shumack's involvement with the Company, as an aspect of oppression, are not assisted by the fact that their solicitors made no reference to that matter in the earlier letters threatening a winding up application in respect of the Company.
27. By letter dated 21 May 2010 (Bolton Annexure "E"), the then solicitors for Mr Bolton and Ms Shumack made an offer to the then solicitors for Mr and Mrs Trent that: "Rather than our client's [sic] acquiring the shareholdings of your client [sic] they suggest that in order to resolve the dispute, your client's [sic] acquire our client's [sic] shareholdings and take over the running of the company. Our client's [sic] are prepared to offer their shares for sale at a price of $30,000.00 together with an allowance for the difference in salaries paid to your client and Mr Bolton over the past two years and an allowance for container rental."
28. By this point, an impasse had been reached over arrangements for the sale of the parties' shares, with each party seeking to be bought out by the other. Mr Trent's evidence is that his son was then killed in a motor vehicle accident and, understandably, he was then unable to concentrate on the issue with the Company until 2014 (Trent [31]-[32]).
29. In November 2012, Mr and Mrs Trent were required to lodge a term deposit with NAB, and provide letter of set-off as to that deposit to NAB (Ex P2) to secure the Company's liabilities to NAB in order to obtain NAB's consent to the release of the mortgage over their home to sell that home.
30. In 2013, a conversation took place between Mr Trent and Mr Bolton in which Mr Trent sought to have the bank guarantee in favour of Toll Transitions returned by it (Bolton [46]). Mr Bolton gives no explanation of why that guarantee has been left in place, where it appears that the Company is no longer undertaking work for Toll Transitions. It appears that difficulties also arose about that time between the Company and the lessor of the premises which it occupied, resulting in notices of termination of the lease of those premises in September 2013 and April 2015, and that there were issues as to payment of rent and the Company's office premises were relocated in that period.
31. Mr Bolton's evidence was that, in October 2015, he and Ms Shumack met with Mr and Mrs Trent's former solicitor and gave that solicitor the "company file" (Bolton [44]). It is not necessary to determine whether that evidence should be accepted, given the difficulties with Mr Bolton's evidence on cross-examination, since there is no evidence as to the extent to which financial information was contained in any such file.

The applicable legal principles

1. Before turning to the range of matters relied on to support the oppression claim, I should first refer to the applicable legal principles. I have drawn upon Counsels' submissions and my summary of those principles in Re Ledir Enterprises Pty Ltd [2013] NSWSC 1332; (2013) 96 ACSR 1 and Victory Projects Pty Ltd v AAA Self Storage Pty Ltd [2016] NSWSC 1758 in that respect.
2. Section 232 of the Corporations Act 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."
3. This section 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] HCA 68; (1985) 180 CLR 459. In Thomas v HW Thomas Ltd [1984] 1 NZLR 686; (1984) 2 ACLC 610, Richardson J observed (at 618) that "Fairness cannot be assessed in a vacuum or simply from one member's point of view. It will often depend on weighing conflicting interests of different groups within the company. It is a matter of balancing all the interests involved in terms of the policies underlying the companies legislation in general and s 209 [the NZ provision] in particular: thus to have regard to the principles governing the duties of a director in the conduct of the affairs of a company and the rights and duties of a majority shareholder in relation to the minority; but to recognise that s 209 is a remedial provision designed to allow the Court to intervene where there is a visible departure from the standards of fair dealing; and in the light of the history and structure of the particular company and the reasonable expectations of the members to determine whether the detriment occasioned to the complaining member's interests arising from the acts or conduct of the company in that way is justifiable."
4. Mr Martin refers to the observation of Young J in Morgan v 45 Flers Avenue Pty Ltd above at 704 that the phrases "oppressive, unfairly prejudicial or unfairly discriminatory" in s 232 of the Corporations 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."
5. Mr Price also refers to the observations of Barrett J in Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343 at [92]ff and to the principles applicable to exclusion from management in quasi-partnership cases, and particularly to the decision of the Court of Appeal of the Supreme Court of Victoria in Joint v Stephens [2008] VSCA 210 at [133]-[134].
6. The principles applicable to a claim for oppression were 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] NSWCA 104; (2011) 84 ACSR 121 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 …"
7. Mr Price also refers to a helpful summary of the principles applicable to an oppression claim by Stevenson J in Munstermann v Rayward [2017] NSWSC 133 at [22] 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."
8. The applicable principles were also recently considered and applied, in a somewhat different context, in Wilmar Sugar Australia Ltd v Mackay Sugar Ltd [2017] FCAFC 40 to which I have had regard. 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. While I will address each of the matters on which the Plaintiffs rely in turn, I bear in mind that I must also have regard to their collective impact.

Whether oppression is established by breach of the alleged agreement that the wives were not to be involved in management of the Company or its business was breached

1. The acts of oppression identified in the Plaintiffs' Statement of Facts and Contentions (MFI 1) are that, first, Mr Bolton improperly refused to remove Ms Shumack from participating in the management of the Company and its business. Mr Price indicated in oral submissions that the Plaintiffs did not seek to establish oppression arising from Mrs Trent's involvement with the Company in 2001, and that events in that period are primarily relevant to establishing that Mr Bolton knew of Mr Trent's opposition to Ms Shumack's involvement with the business. Mr Price submits that oppression was established because Mr Bolton acted unilaterally in bringing Ms Shumack into the Company to perform work for it, and refused to end her involvement in the Company in the period from 2006 until Mr Trent left the Company in 2009, and thereby excluded Mr Trent from management.
2. Mr Price also submits that Mr Bolton and Ms Shumack improperly allowed Ms Shumack to take control of the Company's administration and its business although the directors had not agreed that she do so. I do not accept that submission, where the evidence has not established that Ms Shumack in fact took "control" of the Company's administration or its business prior to Mr Trent's ceasing involvement in that business. So far as Ms Shumack assisted with the Company's administration, the agreement on which the Plaintiffs rely did not exclude any involvement by Ms Shumack with the Company's administration, and, even if it had done so, the Plaintiffs' claim for oppression is weakened by the fact that Mr Trent's insistence on his own view did not allow a reasoned assessment of the merits of Ms Shumack's providing at least some assistance with the Company's administrative needs. Although there was a difference of view between Mr Bolton and Mr Trent as to whether Ms Shumack should be permitted to assist with the Company's business, which it appears was incapable of resolution, that does not establish that Mr Trent's view should necessarily be preferred to Mr Bolton's view as to that matter.
3. Mr Price also submits that: "The refusal of Mr Bolton to remove Ms Shumack from taking over administration of the Company's business or requiring her to remove herself constitutes an act of oppression with s 232 of the Corporations Act. Mr Bolton's conduct as a director of the company was against the wishes of Mr Trent as the other director of the company, and advanced the interests of himself and his wife (by providing her with employment). Ms Shumack then took control of the administration of the company and Mr Trent was excluded from management."
4. The first aspect of that submission, that Ms Shumack "took over" the administration of the Company's business, at least prior to Mr Trent withdrawing from that business, has not been established. The proposition that Ms Shumack's assisting in the Company's administration advanced Mr Bolton's or her interests by providing her with employment was also not established, since it has not been shown that Ms Shumack was remunerated for her services, at least prior to Mr Trent's withdrawal from the Company. It has also not been established that Ms Shumack's involvement with the Company's administration was of an extent that could reasonably have required Mr Trent to withdraw from involvement with the Company, still less to have amounted to "excluding" him from such involvement. There is no evidence that Mr Trent has in fact sought to be involved with the Company since 2009 or that Mr Bolton or Ms Shumack has taken any step to prevent such involvement.
5. Mr Martin responds that any agreement of the kind alleged by the Plaintiffs was not included in the Company's constitution. I would have given little weight to that matter, had oppression otherwise been established, where that constitution was plainly in standard form, and informal agreements reached between the shareholders of a small proprietary company would often not be recorded in the Company's constituent documents.
6. Mr Martin also submits, and I accept, that the evidence establishes only that Ms Shumack helped out in the Company's office during the relevant period, and not that she was involved in making management decisions on behalf of the Company at that time, although it is plain that her involvement has substantially expanded in scope in the period since Mr Trent ceased involvement with the Company. Mr Martin also refers to Mrs Trent's involvement with the business by the receipt of a salary for a period, to which I have referred above, and submits that Ms Shumack's involvement in the business, such as it was, could not amount to unfairness for the purposes of s 232 of the Corporations Act.
7. Mr Martin also submits that Mr Trent was not excluded from a role in management, so far as there is no suggestion that there was any interference with the performance of his responsibilities in respect of trucks, staffing and truck maintenance. As I noted above, I do not accept that Mrs Trent's receipt of a salary, by way of income splitting without her working in the business, is inconsistent with the agreement on which the Plaintiffs rely or undermines their case.
8. Mr Martin also submitted that Mr Trent took no active steps to remove Ms Shumack from her role with the Company, by way of direct complaint to her about her involvement, or convening a meeting of directors or shareholders to bring about that removal. In oral submissions, Mr Martin also submitted that I should infer that Mrs Trent made no complaint about Ms Shumack's involvement with the Company, where Mrs Trent had not given evidence in the proceedings (T97). I do not draw that inference, where Mrs Trent had made her attitude to Ms Shumack's involvement clear in the conversation to which I referred above. I would have given limited weight to these matters, if I had found that Ms Shumack's limited involvement with the Company had otherwise given rise to oppression.
9. It seems to me that the proposition that Ms Shumack was involved in or participated in the management of the Company or its business, prior to Mr Trent's withdrawal from the Company, has not been established. In my view, involvement in "management" of a company or its business, as a matter of general usage, would generally involve an element of decision-making as to the company's direction, which distinguishes managerial tasks from those of a company's non-managerial staff. It is not necessary to give that concept any narrow reading to conclude that purely administrative tasks, undertaken under the direction of others, would not fall within it. That view is consistent with, although it does not depend upon, the concept of being "involved in the management" of a Company used in the corporations legislation. For example, in Cullen v CAC (NSW) (1988) 14 ACLR 789; 7 ACLC 121 at 126, Young J characterised a person involved in the management of a corporation as one who made decisions as to the direction of the corporation, although not necessarily at the highest level, and not necessarily without being subject to obtaining the approval of a higher officer, and observed that a person's activities would not amount to taking part in management of the corporation if that person was "merely carrying out the policy of the corporation in charge of a branch or division of the business not making decisions as to its direction"; see also Holpitt Pty Ltd v Swaab (1992) 33 FCR 474; 105 ALR 421; 6 ACSR 488 at 491; Australian Securities and Investments Commission v Vines [2005] NSWSC 738; (2005) 55 ACSR 617 at [1049], on appeal Vines v Australian Securities and Investments Commission [2007] NSWCA 75; (2007) 73 NSWLR 451; 62 ACSR 1; 25 ACLC 448. The limited involvement of Ms Shumack in the Company that has been established, in the period prior to 2009, does not seem to me to amount to involvement in managing or running the Company or its business as the Plaintiffs contended or to constitute oppression on that basis.
10. If the Plaintiffs' case had been put on the basis that, and (contrary to my view) the evidence had established that, there was an agreement that Ms Shumack was not to be involved in the Company or its business in any way, as distinct from an agreement that she was not to be involved in managing or running the Company or its business, I would have held that Ms Shumack's involvement in the Company's business in 2008 amounted to an involvement of substance which breached that agreement. However, I would also not have held that oppression was established on that basis. The evidence does not indicate that Mr Trent articulated a reasoned basis for his objection to Ms Shumack providing assistance in the Company's office prior to and in 2008, beyond relying on the alleged agreement to object to that involvement without discussion of its merits. It seems to me that that approach was unreasonable so far as it assumed that, if agreement had been reached several years before that Mrs Trent and Ms Shumack should not be involved in managing or running the Company or its business (or, on a wider view, having any involvement in the business), he could prevent Ms Shumack's providing administrative assistance while, for example, other staff members were on leave by objecting to that involvement, irrespective of the merit of that involvement in the particular circumstances. While Mr Bolton and Ms Shumack may have also been unreasonable in giving too little weight to Mr Trent's views and the earlier agreement, it does not seem to me that these matters are sufficient to establish oppression.
11. I also do not accept Mr Price's submission that Ms Shumack's involvement was oppressive because it was not approved by a formal board meeting, where there is no evidence that decisions as to other administrative or staffing matters were made by a board meeting.
12. It does not seem to me that the Plaintiffs have established their case of oppression in respect of Ms Shumack's limited involvement in the Company, prior to Mr Trent's withdrawal from the Company in 2009, or that Mr Trent can establish oppression because Ms Shumack provided a higher level of assistance to Mr Bolton after Mr Trent abandoned any active role in the Company.

Whether oppression is established in respect of exclusion of Mr Trent from management

1. The second particular of oppression on which the Plaintiffs relied was that Mr Bolton and Ms Shumack conducted the Company's management and its business to Mr Trent's exclusion.
2. Mr Martin submits that Mr Trent's evidence suggests that his withdrawal from the Company's business was, at least primarily, prompted by the lack of a financial return from the business rather than by any question of Ms Shumack's then assistance with aspects of its administration. Mr Martin also submits that no share purchase order should be made where the evidence does not establish that the alleged oppressive conduct brought about Mr Trent's lack of involvement in the business. Ultimately, the Plaintiffs did not press for a share purchase order, where the case was conducted on the common basis that the shares had no value, and such an order would only be made if it were consequential upon another order being made.
3. It does not seem to me that Mr Trent was in fact excluded from any decision as to whether Ms Shumack worked in the Company's business, within the limited capacity in which she was engaged in the period to 2009. The evidence suggests Mr Bolton and Mr Trent discussed that matter, although Mr Trent expressed one view in protesting Ms Shumack's involvement, and Mr Bolton, whether or not he accepted Mr Trent's position in conversation, in practice took a different view by acquiescing in that involvement. That seems to me to be a matter that contributes to the deadlock between the parties, rather than a matter which indicates any exclusion of Mr Trent from management of the Company. It also seems to me that none of the conduct of Mr Bolton or Ms Shumack prior to Mr Trent's withdrawal could reasonably be treated as having required that withdrawal, and the evidence suggests that that withdrawal was prompted by the fact that Mr Trent was receiving less income than he required from the Company, not by Ms Shumack's limited involvement in its administration.
4. I have not neglected the principle that, in an appropriate case, exclusion from a legitimate expectation of participation in a company's management may be oppressive, when combined with a failure to make a reasonable offer to buy the plaintiff's shares: O'Neill v Phillips [1999] 2 All ER 961; 1 WLR 1092 at 1104; Nassar v Innovative Precasters Group Pty Ltd above at [109]-[110]; Tomanovic v Argyle HQ Pty Ltd above per Austin J at [42]. That principle here is not applicable where it has not been established that Mr Trent was excluded from the business, as distinct from withdrawing from it, and, although Mr Bolton and Ms Shumack did not wish to acquire Mr and Mrs Trent's shares, they offered to sell their shares to Mr and Mrs Trent at the price the latter had valued the shares.

Whether oppression is established by refusal of access to financial information

1. The third particular of oppression was that Mr Bolton and Ms Shumack have improperly refused to provide access to the Company's financial information to Mr and Mrs Trent. I have referred above to the evidence that Mr Trent was not provided with the password to access the Company's MYOB system. There may be a question as to the adequacy of the financial records maintained by the Company, but the evidence suggests that Mr Trent was permitted access to them in paper form, to the extent they existed.
2. Mr Martin refers to the Defendants' version of the circumstances in which the MYOB password was changed, to which I have referred above, and to the limited evidence of requests by Mr Trent for access to financial information, and submits that these matters are insufficient to establish oppression.
3. I have held above that Mr Trent was not deprived of access to all financial information before he withdrew from the business in 2007. However, on balance, I accept that the refusal to provide Mr Trent with access to the MYOB system from 2007, by depriving him of the password to that system, amounted to oppression, and that conclusion is reinforced by Mr Bolton's and Ms Shumack's failure to provide continuing financial information to Mr Trent and Mrs Trent since 2009. I am not satisfied, for the reasons I set out below, that that matter warrants the primary relief sought by Mr and Mrs Trent that they be indemnified in respect of liabilities under the securities given to NAB.

Whether oppression is established by a refusal to release the security given to NAB

1. The fourth particular of oppression on which Mr and Mrs Trent rely is that Mr Bolton and Ms Shumack have conducted themselves and the management of the Company in such a way to prevent Mr and Mrs Trent from recovering the security provided to NAB. It does not seem to me that oppression is established on that basis, where there is no evidence that NAB has ever indicated a willingness to, or is likely to, release that security if Mr Bolton and Ms Shumack consented to its doing so, or that Mr Bolton and Ms Shumack have refused consent to any step that NAB proposed to take or would likely take in that regard. I am not satisfied that this matter establishes oppression, where it is not apparent why Mr Bolton and Ms Shumack should assume sole responsibility for the security given to NAB where I have held that they did not exclude Mr Trent from the Company and they do not wish to own the whole of the Company, and it is unclear whether Toll Transitions could presently be required to return the bank guarantee in its favour.
2. I note, however, that there remains a real difficulty that, as matters stand, Mr and Mrs Trent have no continuing involvement in and little access to information about the Company but are left exposed into the indeterminate future under the security given to NAB. I will address that difficulty further in dealing with the winding up application below.

Whether the conduct has come to an end

1. In oral submissions, Mr Martin also submits (T90) that, even if oppression had occurred, it came to an end in October 2009 by the voluntary departure of the Plaintiffs from the business as a result of financial reasons, and not by reason of unfairness, and they had not sought to involve themselves in the management of the business after that time. I accept that submission, at least to the extent that Ms Shumack's increased involvement in the business, after 2009, is a matter which provides little support for an oppression claim by the Plaintiffs where Mr Trent had ceased involvement in the business by that time. However, the issues to which I have referred above as to access to financial records and the continuance of the securities given to NAB are continuing.
2. Mr Martin also submits, by reference to the Court of Appeal's decision in Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359 that there will ordinarily be no occasion for a buy-out order under s 233(1)(d) of the Corporations Act if the oppression has been brought to an end, providing that was not a consequence of the conduct complained of. Mr Price responds that the High Court, in Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304, left open the possibility that relief in respect of oppression may be granted although the oppressive conduct had ended, and submitted that that position is also open where the consequences of oppression continue even if the oppressive conduct had ended.
3. It seems to me that relief may well be available, where Mr Trent is not presently involved in the Company's business, but neither the position as to the Plaintiffs' shareholding nor as to the security to NAB has been resolved over an extended period. However, I do not consider that I can properly grant the relief now primarily sought by the Plaintiffs, for the reasons noted below, and the parties seek no relief that could address the continuing issues other than the winding up of the Company.

The relief sought by the Plaintiffs

1. In oral submissions, Mr Price made clear that Mr and Mrs Trent's primary claim for relief was that Mr Bolton and Ms Shumack should indemnify them against any claim made by NAB against cash deposited by them as security for the Company's liability to NAB (T74-75). Mr Price submits that: "[I]n the circumstances, and given that the loan from [NAB] has been discharged, and the Company has not conducted any business with Toll Holdings Limited for a number of years, the Court should also order Mr Bolton and Ms Shumack to indemnify Mr and Mrs Trent in respect of any claim that National Australia Bank may make under the guarantee provided to the Bank by Mr and Mrs Trent. The Court should also direct Mr Bolton and Ms Shumack to consent to the Bank releasing the security provided by Mr and Mrs Trent."
2. In oral submissions, Mr Price reformulated the order sought by Mr and Mrs Trent as an order that Mr Bolton and Ms Shumack should use all reasonable endeavours (to the intent that they consent to the release of funds deposited by Mr and Mrs Trent with NAB) to procure the release of the funds deposited by Mr and Mrs Trent with NAB and that, unless and until those funds are released, they should indemnify Mr and Mrs Trent against any and all claims made by NAB against the funds deposited by them as security for the Company's liabilities to NAB (T86). Mr Price referred to the Court of Appeal's decision in Tomanovic v Global Mortgage Equity Corporation Pty Ltd above as authority for the Court's power to make such an order. Mr Martin submits that an order that Mr Bolton and Ms Shumack indemnify Mr and Mrs Trent in respect of the liabilities to NAB should not be made simply because Mr and Mrs Trent wish to extract themselves from obligations arising out of the Company's business. Mr Martin also submits that Mr and Mrs Trent arguably obtained some benefit from the accommodation advanced by NAB and the guarantees given.
3. I accept that the Court has power to make the order sought by Mr and Mrs Trent, in an appropriate case, but it seems to me that the decision in Tomanovic v Global Mortgage Equity Corporation Pty Ltd above provides no support for the making of such an order in this case. In Tomanovic v Global Mortgage Equity Corporation Pty Ltd above, that order was made in circumstances that the defendant would acquire the plaintiff's shares in a company that were of substantial value. That position is not analogous with this case, where it is common ground that the Company's shares have no value and there would be little or no benefit to the Defendants in a transfer of those shares to them. While the evidence establishes that Mr Bolton and Ms Shumack have sufficient equity in their residence to assume responsibility for the full liability under the guarantee given to NAB in respect of the Company (although there was a difference in their evidence in cross-examination as to the value of that property), it does not follow from the fact that they have the capacity to assume that liability that they should be required to do so.
4. I do not consider that I should make the order for indemnification that is sought by Mr and Mrs Trent. It also seems to me that there would be no utility in directing Mr Bolton and Ms Shumack to consent to NAB releasing the security provided by Mr and Mrs Trent, where there is no reason to think that NAB would do so, at least without looking to Mr Bolton and Ms Shumack to bear the relevant liability to the exclusion of Mr and Mrs Trent, in circumstances that the overdraft remains in place and the bank guarantee to Toll Transitions apparently also remains in place. As I noted above, there is no evidence that the Company presently has the capacity to require Toll Transitions to return that bank guarantee, where it is unclear whether the term of its agreement with Toll Transitions has expired, or it has performed the last of its obligations under that agreement.
5. It does not seem to me that the evidence of Ms Shumack's involvement in assisting in the Company's administration, prior to Mr Trent's withdrawal from the Company in 2009, or the finding that I have made that Mr Trent was deprived of access to the Company's MYOB system and ongoing access to the Company's financial information since he withdrew from the Company in 2009, is sufficient to warrant an exercise of discretion that would undermine the parties' original agreement that each of them would guarantee the liability to NAB in respect of the Company, presumably with rights of contribution against each other if that liability is called, and impose that liability on Mr Bolton and Ms Shumack to the exclusion of Mr and Mrs Trent.

Whether the Company should be wound up on the just and equitable ground

1. In the alternative, Mr and Mrs Trent seek an order that the Company be wound up on the just and equitable ground. Mr Martin responds that the existence of irreconcilable differences between the Plaintiffs and the Defendants is not in itself sufficient for a winding up order to be made under s 233 or s 461 and refers to Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 at [89]-[90] in that regard.
2. Section 461(1)(k) of the Corporations Act relevantly provides that the Court may order the winding up of a company if it is of the opinion that it is just and equitable that the company be wound up. Such an order can be made where a company was formed on the basis of a personal relationship involving mutual confidence or requiring material co-operation between the shareholders, and that confidence or co-operation has broken down: Ebrahimi v Westbourne Galleries Ltd [1973] AC 360; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd above; Re Amazon Pest Control Pty Ltd [2012] NSWSC 1568 at [17]-[19]. In Re Catombal Investments Pty Ltd [2012] NSWSC 775 at [19], Brereton J observed that a deadlock or disagreement in the management of the company's affairs was a common case for a winding up on this basis, and also that the words "just and equitable" were general words and an applicant could rely on any circumstances of justice or equity that affect him or her in his or her relationships with a company in support of such an application.
3. I am satisfied that there has been a fundamental breakdown in the relationship between Mr Trent and Mr Bolton, which has existed now for a substantial period, and that Mr Bolton and Ms Shumack now conduct the Company's affairs without Mr and Mrs Trent's participation and without having made any serious attempt to address the difficulty which arises where Mr and Mrs Trent remain liable on security given in respect of a business over which they have had no influence and limited if any access to financial information for several years. It is apparent that there would be a deadlock in the conduct of directors' meetings, although there is no evidence that such meetings are held, since article 25.2 of the Company's constitution confers a casting vote on the chairman, but there is no mechanism for a chairman to be appointed. As matters stand neither party is prepared to buy the other's shares, the parties have proceeded on the basis those shares now have no value and there is no mechanism for Mr and Mrs Trent to bring their exposure under the security given to NAB to an end without the cooperation of Mr Bolton and Ms Shumack which has not been forthcoming.
4. In oral submissions, Mr Martin took issue with the submission that there had been a breakdown in the relationship between the parties, at least to the extent that there had been an apparently peaceful separation between them in 2009 (T98). It seems to me that there has been a breakdown in that relationship, where the evidence indicates that there was then and now a significant difference between them as to the extent to which Ms Shumack should be involved in the Company, which is incapable of resolution, and a deadlock as to what is to be done to dispose of the respective parties' shares in the Company or the security given by them to NAB. Mr Martin also points to the long period of time that has passed since Mr Trent withdrew from the Company (T101). That delay is partly explained by the evidence of Mr Trent as to the effect of the loss of his son and I give weight to that matter. In any event, the delay in resolving the issues between the parties, both as to the ownership of the Company's shares and as to the securities given to NAB, is a matter it seems to me to support the need for relief, on the just and equitable ground, rather than the contrary.
5. Mr Martin also relies on the existence of a mechanism for the sale of one shareholder's shares to the other under schedule 11 of the Company's constitution as an alternative to a winding up order. That matter provides no assistance in these circumstances, where each of the parties have offered to sell their shares to the other party, that neither party has accepted the other's offer, and where a sale of the shares in the Company will not resolve the position as to the continuing securities provided by both parties to NAB.
6. Mr Martin submitted, in closing submissions, that the Court would be reluctant to wind up a successful company. He submitted that there was no evidence that the Company was insolvent, although the evidence generally, including as to its difficulties in paying wages to its directors in 2009 and its subsequent dealings with its lessor, suggests that it has, at best, suffered periods where its liquidity has been challenged. I recognise that a winding up may not be ordered under the just and equitable ground on the application of contributories if other less drastic relief is appropriate: s 467(4). However, the case law establishes that there is no absolute rule that the Court will not wind up a solvent company in a proper case: Hillam v Ample Source International Ltd (No 2) [2012] FCAFC 73; (2012) 202 FCR 336 at [68]-[70]; Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness (Vic/Tas) Pty Ltd (No 3) [2015] NSWSC 1639; (2015) 109 ACSR 369 at [111].
7. The matters to which I have referred above seem to me to be sufficient to support a winding up order on the just and equitable ground. In some cases, an order short of a winding up order might be appropriate, and the Court may then not make such a winding up order: Belgiorno-Zegna v Exben Pty Ltd [2000] NSWSC 884; (2000) 35 ACSR 305 at 330. In my view, no such alternative available in this case, given the matters to which I refer above.

Orders and costs

1. Accordingly, I will order that the Company be wound up and a liquidator be appointed, subject to proof of a liquidator's consent to that appointment, although I would be prepared to stay that order for a period to allow a further opportunity for the parties to seek to achieve a negotiated resolution which will not expose them to the risk that any remaining value in the Company is dissipated in a liquidator's remuneration and expenses. I will hear the parties as to costs.

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