Ian Robinson v Bruce Robinson

The conduct of the parties in the proceedings

1. By his Summons, Ian Robinson sought a declaration that the affairs of Radcoflex Australia Pty Limited were being conducted in a manner that was oppressive to him, and sought an order pursuant to s 233(1) of the Corporations Act 2001 (Cth) that Bruce Robinson and Patricia Hughes purchase all of the shares held by him in the four corporate defendants for fair value. Orders were sought in the alternative including orders that each of the corporate defendants purchase Ian Robinson's shares in them for fair value and reduce the capital of each company accordingly, and orders pursuant to either s 233(1) or s 461 of the Corporations Act that each of the corporate defendants be wound up.
2. The Commercial List Statement that accompanied the Summons identified the issues likely to arise as: 1. whether the affairs of Radcoflex Australia Pty Limited are being or have been conducted in a manner that is and was oppressive to, unfairly prejudicial to, or unfairly discriminatory against, Ian Robinson; 2. the fair value of Ian Robinson's shareholding in each of the corporate defendants; and 3. the identity of the party responsible for the breakdown of mutual trust and confidence between Ian Robinson and Bruce Robinson and the cause of the breakdown.
3. In March 2014 Bruce Robinson, Patricia Hughes, Radco Industries Pty Limited and Whitburn's Pty Limited (hereafter referred to as "the active defendants") filed a Commercial List Response, a Cross-Summons and Commercial List Cross-Claim Statement. The Commercial List Response contained a statement to the effect that Bruce Robinson and Patricia Hughes denied that Ian Robinson was entitled to orders that they purchase his shares in the corporate defendants, but would be prepared to purchase his shares in those companies for fair value.
4. The Cross-Summons sought declaratory relief to the effect that the affairs of Radcoflex Australia Pty Limited had been conducted in a manner oppressive to the active defendants, and that the affairs of Radcoflex Investments Pty Limited had been conducted in a manner oppressive to Bruce Robinson. Orders were sought to the effect that one or other of the active defendants would purchase Ian Robinson's shares in each of the corporate defendants. In relation to Radcoflex Investments Pty Limited, an order was sought in the alternative that the company be wound up. An order was also sought that Ian Robinson transfer certain shares he held in an Indian company (Radco Flex India Private Limited) to Radcoflex Investments Pty Limited. The Commercial List Cross-Claim Statement repeated the statement to the effect that whilst Bruce Robinson and Patricia Hughes deny that Ian Robinson is entitled to an order that they purchase his shares in the corporate defendants, they would be prepared to purchase his shares in those companies for fair value. The issues likely to arise were identified as: 1. whether Bruce Robinson and Patricia Hughes have conducted the affairs of Radcoflex Australia Pty Limited in a manner oppressive to Ian Robinson; 2. whether Ian Robinson has conducted the affairs of Radcoflex Australia Pty Limited in a manner oppressive to the active defendants; 3. whether an order should be made for Bruce Robinson and Patricia Hughes to purchase Ian Robinson's shares in the corporate defendants for fair value; and 4. the fair value of Ian Robinson's shares in the corporate defendants.
5. Ian Robinson was originally represented in the proceedings by Dibbs Barker Lawyers. On 30 April 2014 Mark Addison of that firm sent an email to Annika Anderson of Lander & Rogers Lawyers who were the solicitors for the active defendants. Mr Addison's email included the following: Our counsel has settled a very lengthy Commercial List Cross Response, and we are now awaiting final instructions from our client. We had hoped to have a final version completed by last week, however given the details in the document, that was not possible. I apologise for this delay. In order to ensure that the final document can be properly completed, it is likely that we shall seek a further 7 day extension from the Court at the directions hearing on Friday. Please confirm whether you consent to this course. If so, we will prepare the appropriate Short Minutes of Order. Once the pleadings are completed, given that it is now the position of all parties in the proceedings that (one or more) of the defendants should purchase Ian Robinson's shares in the various corporate entities in the Radcoflex Group, it will be our submission to the Court that the next step in the proceedings should be that the issue of the value to be paid for those shares should be referred to a court-appointed referee. This step should take place before the filing of any evidence, since the referee can direct the parties to provide the referee with whatever document or details the referee requires in order to determine the value. We do not consider that requiring all parties to file all their evidence in the proceedings before the referral would facilitate the just, quick and cheap resolution of the real issues in the proceedings (as per the language of s 56 of the Civil Procedure Act). We would welcome your view on this subject.
6. Annika Anderson responded by email on 1 May 2014. The email is in the following terms: I confirm that our client consents to the extension of time of 7 days (to 9 May 2014) for your client to file the response to the Commercial List Cross-Statement. We propose having the matter stood over for a further two weeks (to 23 May 2014) in order for the defendants to consider your client's response and next steps. Can you please forward to us the Short Minutes of Order reflecting the above. We are happy for this to be dealt with in chambers.
7. Later on 1 May 2014 Mr Addison sent signed Consent Orders to the Associate to Hammerschlag J which provided, inter alia, for the matter to be listed for further directions on 23 May 2014.
8. On 9 May 2014, Ian Robinson filed a Commercial List Cross Response. In this document, it was noted that by their Cross Claim, Bruce Robinson and Patricia Hughes: agree that the appropriate outcome in these proceedings is an order that Bruce and Patricia purchase, for fair value, Ian's shares in Radcoflex Australia, Radcoflex Investments, Radco Industries and Whitburn's, but assert that the appropriate basis for such an order (which Bruce and Patricia seek against Ian pursuant to ss. 232 and 233 of the Corporations Act) is alleged oppressive conduct by Ian.
9. By that document, Ian Robinson also admitted that he was the registered holder of 60% of the shares in Radcoflex India Private Limited and that those shares are beneficially owned by Radcoflex Investments Pty Limited. In relation to those shares, he further admitted that the shares remain registered in his name but denied that he had been requested to transfer the shares to Radcoflex Investments Pty Limited as alleged. The document also contained a general denial that the cross claimants were entitled to the relief they sought.
10. Ms Anderson deposed that on the afternoon of 22 May 2014 she had a telephone discussion with Mr Addison which included conversation to the following effect: Mr Addison: The Robinson matter is in court tomorrow. The last correspondence was our emails on 1 May 2014. I don't have crystal clear instructions, other than the next stage is to be a referral, and there needs to be agreement regarding protocols for that. I don't think we can refer the matter until those issues are sorted. I am seeking advice from counsel regarding what sort of orders we are likely to get from Justice Hammerschlag regarding a referral. We also still haven't considered who we have in mind. Ms Anderson: Ok, thanks. Just to be clear, we still don't have instructions regarding whether our clients agree to a referral or not. Mr Addison: Ok. I will wait to hear from you.
11. Shortly before 9:00am on 23 May 2014 Ms Anderson sent an email to Mr Addison which included the following: Further to our telephone discussion yesterday afternoon, attached are the first, second, fifth and sixth defendant's proposed orders for the directions hearing this morning. We are instructed that, rather than a court-appointed referee, a more appropriate course of action will be for the shares to be valued by a single expert jointly appointed by the parties (in accordance with UCPR r 31.37) before evidence is filed. The benefit for the parties in appointing a single expert rather than a court-appointed expert is that a single expert will, in our client's view, likely be significantly more cost effective. Given the extensive history of this matter and the number of issues in dispute, the exercise involved in relation to a court-appointed referee could end up being time consuming and costly. On the other hand, a single expert would be provided with written instructions agreed by the parties, as reflected in the attached proposed orders, which would likely be more cost effective, in our view.
12. The attached Short Minutes included orders as follows: 1. By 13 June 2014, the plaintiff and the first and second defendants are to agree on a single expert to be engaged jointly by them to value the shares of the plaintiff in: 1. Radcoflex Australia Pty limited ACN 004 376 989 (the third defendant); 2. Radcoflex Investments Pty Limited ACN 092 671 997 (the fourth defendant) 3. Radco Industries Pty Limited ACN 000 051 909 (the fifth defendant); and 4. Whitburn's Pty Limited ACN 008 417 098 (the sixth defendant), with the values to be determined as at the date of the valuation. 1. The plaintiff and the first and second defendants are to agree on written instructions to be provided to their single expert concerning the issues arising for the expert's opinion and concerning the facts, and assumptions of fact, on which the expert's report is to be based in accordance with rule 31.38 (1) of the Uniform Civil Procedure Rules by 4 July 2014.
13. At the directions hearing before Hammerschlag J on 23 May 2014, Mr A Cornish of counsel appeared for Ian Robinson and Mr T Kerr, solicitor, appeared for the active defendants. The transcript of the proceedings records the following: KERR: The third and fourth defendants are corporations not represented. They are inactive in these proceedings. This is a dispute between siblings relating to shares. My friend and I are in some furious agreement about what needs to occur in this matter, but how to achieve it is in issue. HIS HONOUR: What is the furious agreement, you want a quick hearing? KERR: No, your Honour, we propose a joint valuer be appointed to value the shares. My friend seeks a referee. HIS HONOUR: What is the difference, one is binding upon you and one is not? KERR: As we see it, a valuer will be significantly more cost-effective. HIS HONOUR: But a referee can be a valuer. KERR: There are a number of disputes that are foreshadowed and it could lead to a mini hearing in front of a referee. It is acknowledged that one of the defendants or more of the defendants will buy the shares. HIS HONOUR: Is it just really a question of price? KERR: As we see it. HIS HONOUR: So the other possibility is we could just fix it for a hearing for one day and I will appoint one joint expert. KERR: I am in your Honour's hands. CORNISH: Your Honour, my friend seeks the appointment of a joint expert. It is the plaintiff's position and submission that the appropriate order is for a reference. There is a long history in this matter. HIS HONOUR: By joint expert he means some person who is going to fix the value and you are not going to be bound by it. That is not what I mean by joint expert. CORNISH: I understand there is to be a joint expert witness appointed and I think it is reflected in the orders. HIS HONOUR: And then a hearing. CORNISH: And then a hearing. That is the proposal I understood. It is our submission that the appropriate approach is for there to be a reference. The reasons for that are that there is a long history of disagreement. HIS HONOUR: Who is going to be the referee? CORNISH: The proposed order is that there be a period of time for the parties to nominate three and attempt to agree and also to attempt to agree upon any variations to the order for variance [sic-reference?] HIS HONOUR: Do you mean a valuer or a lawyer? CORNISH: Your Honour, there will be a valuer. There are a number of issues that arise. It is a valuation of shares, but there are also some underlying issues as to the value of asset classes. In our submission, a reference to a referee would provide the necessary flexibility to allow that to proceed. HIS HONOUR: Do you mean having a Part 20 reference, the referee being not a lawyer, but a valuer? CORNISH: That is so. HIS HONOUR: A forensic accountant type valuer. CORNISH: That is so, your Honour. HIS HONOUR: I don't like that because it just means I will have to hear the case twice. Someone will say, I want to have another go, after he gives his or her report and then we will just have another hearing as to whether the report should be adopted. Why don't you get a joint expert report? Nominate somebody. It can be the same person who would have been the referee. Nominate somebody to produce a single expert without prejudice to any application the parties may make for further evidence to be led. See what he or she says, then just bring it back for directions. CORNISH: I will just take some instructions if I may, your Honour. KERR: The defendants, my clients, would be in agreement with that and that is accommodated in some Short Minutes which I would seek to hand up. Copies have been provided to my friend. CORNISH: Your Honour, our approach in thinking was in circumstances where there was an appropriate ventilation before an appropriately appointed referee - HIS HONOUR: But, you see, that is the question. CORNISH: Yes, it would be unlikely for the Court to depart from that unless there were very good reason. HIS HONOUR: If you were prepared to give an undertaking for your client that if I send this out to a Part 20 that the valuation which the valuer reaches won't be the subject of an application not to adopt I will take your course. CORNISH: Yes, I think I am unlikely to receive those instructions, your Honour. Yes, I think that those are unlikely. HIS HONOUR: That proves the point, you see. CORNISH: Yes, I take that point, your Honour. In that result, your Honour's suggestion would be an appropriate suggestion. In my submission, we would take that approach. Perhaps the parties could be given a moment to agree an appropriate form of order - HIS HONOUR: Is there something wrong with this one? CORNISH: Your Honour, we would require the addition of your Honour's suggestion as to - HIS HONOUR: I make the Short Minutes which I have initialled, dated today's date and placed with the papers. I specifically note that in these particular proceedings the appointment of a single witness is not to be taken as to preclude any appropriate application by either party to rely on further expert evidence with such application to be determined if and when it arises. I stand the matter over for directions to 11 July with liberty to apply on three days' notice.
14. Orders were thereupon made in accordance with the Short Minutes that had been prepared by Ms Anderson, including orders 1 and 2 which are set out above. The record of the orders made also includes the following: Specifically note that in these particular proceedings the appointment of a single witness is not to be taken as to preclude any appropriate application by either party to rely on further expert evidence. Such application will be determined if and when it arises.
15. Aaron Goonrey of Lander and Rogers deposed that on 5 June 2014 he had a telephone conversation with Mr Addison which included conversation to the following effect: Mr Addison: Ian wants to know if he can have another crack at them working this out. He is willing to fly out here. Mr Goonrey: There is a high level of distrust given what has occurred. Mr Addison: I agree. Also, there are no current financial accounts for Australia. Mr Goonrey: Nor for Singapore or India. Mr Addison: I have seen accounts for Singapore up to 30 June 2013. Mr Goonrey: I am not sure if we have seen them, or any others for that matter. Mr Addison: Before we go to the valuers, we will need a set of accounts for each company. Mr Goonrey: I agree. Mr Goonrey: I will get instructions from Bruce regarding a meeting with Ian. If they meet, each of the parties will need to prepare current accounts for all the companies, including Singapore and India. Mr Addison: Yes I agree. Mr Goonrey: Then if the parties agree to meet, we can in the interim arrange for the proposed valuers to provide scope and fee estimates. If the meeting does not work then we can go straight back to the valuers.
16. On 11 June 2014, Mr Addison sent an email to Mr Goonrey enquiring whether Mr Goonrey had instructions from his clients that they were prepared to attend a settlement conference prior to the appointment of the joint expert, and whether up to date management accounts were available for the Australian companies to assist with such conference.
17. Later on 11 June 2014 Mr Goonrey responded to Mr Addison by email. The email included a statement to the effect that he had instructions that, given the lengthy history of the matter, the active defendants were disinclined to attend a conference as proposed. The email otherwise dealt with matters concerning the engagement of a valuer, and the obtaining of corporate information which would be provided to the potential valuers for the purpose of providing fee estimates.
18. On 13 June 2014 Lander and Rogers sent letters to various potential valuers requesting estimates of fees. Each of those letters included, in the Background section, the following statement: Without detailing the various pleadings which have been filed and served in this matter, the parties agree that one (or more) of the defendants should purchase Ian Robinson's shares in the various corporate entities for fair value.
19. By 12 August 2014 Ian Robinson had appointed new solicitors to act for him in the proceedings, namely, Stevens Vuaran Lawyers. On 12 August 2014 Angus MacInnis of that firm telephoned Ms Anderson about the matter. Ms Anderson informed Mr MacInnis that the parties had agreed on a valuer but had not agreed on the instructions to go to the valuer. There followed a discussion about how to proceed in preparing such instructions. Later on 12 August 2014 Mr MacInnis sent an email to Ms Anderson in relation to those issues.
20. On 20 August 2014 Ms Anderson sent an email to Mr MacInnis which attached draft instructions to the selected valuer, Mr Ian Douglas of RSM Bird Cameron. The draft instructions included, in the Background section, the statement that had earlier appeared in the requests for fee estimates, namely: Without detailing the various pleadings which have been filed and served in this matter, the parties agree that one (or more) of the defendants should purchase Ian Robinson's shares in the various corporate entities for fair value.
21. The draft instructions for the valuation task itself did not employ the term "fair value". The instructions were simply to value the relevant shares.
22. On 28 August 2014, Mr MacInnis sent an email to Ms Anderson concerning her draft letter of instructions. He raised the question of valuation of the real property assets owned by the companies. His email included the following: It occurs to us that it is open to the parties either jointly or independently to obtain independent valuations of the properties. Given the time and costs involved, one alternative may be for the parties to agree for Mr Douglas to be authorised to instruct valuers to undertake valuations of the relevant properties and then adopt those valuations as assumptions in his process of valuation (on the basis that each party is not bound by those assumptions but may in due course instruct their own valuers, if so advised). Please confirm whether your client would be prepared to proceed on this basis.
23. Communications continued between the solicitors in relation to the letter of instruction, and revised drafts were prepared and considered, until about 24 September 2014 when the finalised letter of instruction, in terms agreed by the parties, was sent to Mr Douglas. The letter of instruction (as had all draft versions) contained the statement in the Background section which is set out above, and the instruction for the valuation task itself did not employ the term "fair value" but simply called upon Mr Douglas to value the relevant shares. In relation to the real property owned by the companies, Mr Douglas was instructed to obtain valuations from real property valuers and adopt such valuations as assumptions in his own report. It was noted that the parties would not be bound by those assumptions and may in due course instruct their own valuers. Mr Douglas was given similar instructions in relation to other items of property that may require independent valuation in order to ensure accuracy.
24. The process of obtaining the valuation report extended over many months. Mr Douglas issued a draft report to the parties on 17 March 2015 and invited them to undertake a factual accuracy review. A deal of correspondence followed, and on 13 May 2015 Mr Douglas released his final valuation report.
25. Whilst the valuation report was being prepared, the matter was listed for directions on a number of occasions. One such occasion was 10 April 2015 when the matter was listed before Ball J. Prior to the directions hearing there was a conversation between Ms Anderson and Mr MacInnis. They set out their respective versions of the conversation in affidavits. It does not appear that either of them took a note of the conversation. Mr MacInnis was briefly cross examined about the conversation, but Ms Anderson was not. Certain aspects of Ms Anderson's version were put to Mr MacInnis. He maintained that his recollection was correct, although in respect of one of the matters put to him he was not prepared to say with any certainty that Mr Anderson's version was incorrect.
26. It is clear that Ms Anderson said words to the effect that once the expert report was finalised, the parties would need to finalise the remaining issues. It is also clear that Mr MacInnis asked the question "What remaining issues?". It seems that Ms Anderson (or perhaps Mr Docker of counsel) then cited, by way of example, the need for Ian Robinson to vacate a property in Singapore, and transfer his shares in, and resign his directorship of, the Indian company. It further seems that Ms Anderson raised the prospect of a mediation, and Mr MacInnis stated, in effect, that his client's preferred position was for the respective solicitors and parties to meet rather than move directly to a formal mediation.
27. On 16 April 2015, Ms Anderson sent a letter to Mr MacInnis which included the following: We also note your discussions with Annika Anderson at the directions hearing on 10 April 2015, in which you advised that your client's preference is to attempt to initially resolve this matter by way of direct discussions between the parties and their legal representatives, in preference to formal mediation. On this basis, after the Report is finalised, we propose arranging a time for us to meet, with or without our instructors present, to discuss the potential resolution of this matter.
28. On 30 April 2015, Mr Vuaran of Stevens Vuaran told Ms Anderson that Ian Robinson did not want to engage in negotiations. By an email sent later that day to Mr Vuaran, Ms Anderson sought written confirmation of Ian Robinson's position in relation to the future conduct of the matter. A directions hearing listed for 1 May 2015 was vacated, with the matter listed for further directions on 15 May 2015.
29. On 7 May 2015, Mr Vuaran sent an email to Ms Anderson marked "without prejudice except as to costs". The email stated that Ian Robinson agreed with the figure referred to in the valuer's draft report. Proposed Short Minutes of Order were attached. The proposed orders included dismissal of the Summons and the Cross-claim with no order as to costs, together with a notation of the agreement of the parties as to the fair value of Ian Robinson's shares in the corporate defendants, payment of such sum by Bruce Robinson and Patricia Hughes to Ian Robinson, and the transfer of the shares by Ian Robinson to Bruce Robinson and Patricia Hughes. Mutual releases were also proposed.
30. On 14 May 2015, after the release of the final valuation report which included a slightly reduced valuation figure, Mr Vuaran sent an email to Lander and Rogers marked "without prejudice" stating that Ian Robinson accepted that the fair value of his shareholdings in the various companies was the amount stated in paragraph 47 of the final report. Proposed Short Minutes of Order were attached. These were in the same form as those which accompanied the 7 May 2015 email save that the lower valuation figure was now included.
31. Later on 14 May 2015 Mr McKaysmith of Lander and Rogers sent an email to Mr Vuaran stating that instructions were being sought, and noting that there were some issues, apart from the valuation of the relevant companies, that needed to be addressed between the parties such as:

• the current occupancy of the Bayshore Park apartment in Singapore;
• the relevant directorships the plaintiff has in the Radcoflex Group companies; and
• the transfer of the shares in the Indian company the plaintiff holds on trust (for Radcoflex Investments Pty Ltd).

1. Prior to the directions hearing on 15 May 2015 Mr McKaysmith sent an email to Mr Vuaran stating that the proposed Short Minutes of Order were not agreed. Instead, McKaysmith proposed orders to adjourn the proceedings for a period to enable the parties to undertake a mediation.
2. On 15 May 2015, Hammerschlag J stood the proceedings over for further directions on 5 June 2015, noting that the parties were attempting to resolve the proceedings.
3. On 25 May 2015, Mr McKaysmith wrote to Mr Vuaran raising an issue concerning the Indian company. Mr Vuaran responded on 27 May 2015. He concluded his letter with a statement that the issue raised provided no basis for the active defendants "to continue to delay the provision of instructions in relation to the resolution of the proceedings".
4. On 29 May 2015, Mr McKaysmith sent a letter to Mr Vuaran marked "without prejudice" which contained an offer of settlement. A response to the letter was requested by 3 June 2015.
5. On 2 June 2015, Mr Vuaran sent a letter to Lander and Rogers proposing that the question of the fair value of the shares held by the first defendant in the corporate defendants be determined separately from and in advance of all other issues in the proceedings. I assume, although the matter was not the subject of any comment during the hearing, that the reference to the first defendant was an error and that it was intended to refer to the shares held by the plaintiff.
6. On 4 June 2015, Ms Anderson (who had been on leave) sent an email to Mr Vuaran stating that her clients declined to consent to the proposed separate question. The email attached proposed amended pleadings. The proposed amended pleadings identified various new issues including the issue that had recently been raised concerning the Indian company. The proposed amended Commercial List Response maintained that Bruce Robinson and Patricia Hughes would be prepared to purchase Ian Robinson's shares in the corporate defendants for fair value, but such preparedness was now stated to be subject to Ian Robinson being required to purchase the shares he held in the Indian company for fair value as if they were beneficially owned by Radcoflex Investments Pty Ltd, and other conditions.
7. At the directions hearing on 5 June 2015, Hammerschlag J made the order for hearing of the separate question which is now before the Court.

Accord and satisfaction

1. There was no dispute about the principles applicable to accord and satisfaction. In the leading case of McDermott v Black (1940) 63 CLR 161 Dixon J (with whom Rich and McTiernan JJ agreed) stated at 183-185: The essence of accord and satisfaction is the acceptance by the plaintiff of something in place of his cause of action. What he takes is a matter depending on his own consent or agreement. It may be a promise or contract or it may be the act or thing promised. But, whatever it is, until it is provided and accepted the cause of action remains alive and unimpaired. The accord is the agreement or consent to accept the satisfaction. Until the satisfaction is given the accord remains executory and cannot bar the claim……An executory promise or series of promises given in consideration of the abandonment of the claim may be accepted in substitution or satisfaction of the existing liability. Or, on the other hand, promises may be given by the party liable that he will satisfy the claim by doing an act, making over a thing or paying an ascertained sum of money and the other party may agree to accept, not the promise, but the act, thing or money in satisfaction of his claim. If the agreement is to accept the promise in satisfaction, the discharge of the liability is immediate; if the performance, then there is no discharge unless and until the promise is performed. (see also Starke J at 176).
2. Later, in Ballantyne v Phillott (1961) 105 CLR 379 Dixon CJ, in the course of his dissenting judgment, observed that a question of accord and satisfaction is "seldom easy". In that case, Menzies J, who formed the majority with Windeyer J, noted (at 397) that if it could be inferred that the parties were composing their differences by each promising to give up claims against the other, it would not matter that the language used was not promissory. Nevertheless, it was recently stated by Bathurst CJ in Ashton v Pratt [2015] NSWCA 12 at [173] that in order for an agreement to constitute an accord and satisfaction, the agreement in question must clearly demonstrate an intention to release claims in consideration of that which is to be provided in satisfaction of the claims.
3. There is no doubt that the question whether an accord and satisfaction exists depends upon an objective assessment of the conduct of the parties, viewed in the context in which such conduct took place (see, for example, Ermogenous v Greek Orthodox Community of SA Inc (2002) 2009 CLR 95; [2002] HCA 8 at [25]; Pacific Carriers Limited v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 at [22]).

Summary of submissions

1. Mr Harding, who appeared with Ms Sathanapally for Ian Robinson, relied upon the entirety of the conduct of the parties from March 2014 to June 2015. His primary contention was that a binding accord and satisfaction had arisen by the time the pleadings had closed. He submitted in the alternative that a binding accord and satisfaction had emerged by the time of the directions hearing on 23 May 2014 or at the latest when the parties settled upon the final instructions to the valuer, Mr Douglas. Mr Harding, whilst initially framing his arguments around an offer and acceptance analysis, ultimately placed greater reliance upon the cases that establish that binding contracts may be found to exist even if it is not possible to clearly discern the acceptance of an offer, and that a binding contract may be inferred from conduct that manifests mutual assent (see, for example, Brambles Holdings Limited v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [71]-[81] per Heydon JA; Branir Pty Limited v Owston Nominees (No 2) Pty Limited (2001) 117 FCA 424; [2001] FCA 1833 at [369] per Allsop J). Mr Harding submitted that the pleadings show that the parties (that is, Ian Robinson and the active defendants) accepted that the ultimate outcome of the proceedings would involve the acquisition of Ian Robinson's shares in the four corporate defendants for fair value. To that end, the parties agreed that those shares would be valued. Moreover, the active defendants acknowledged to the Court that one or more of them would buy the shares and that it was "just really a question of price". Mr Harding further pointed to the parties' subsequent communications with valuers (including the final letter of instructions to Mr Douglas) which made reference to an agreement that one or more of the defendants would purchase Ian Robinson's shares in the companies for fair value.
2. Mr Harding submitted that the conduct of the parties evinced an intention to accept, in substitution for their underlying causes of action, mutual promises for the purchase and sale of Ian Robinson's shares in the companies for fair value. It was noted that at no time between May 2014 and May 2015 was it suggested that the causes of action would continue to be litigated. It was put that no real issue remained concerning Ian Robinson's shares in the Indian company because he had acknowledged in his pleading that these shares were beneficially owned by Radcoflex Investments Pty Limited.
3. Mr Docker, who appeared for the active defendants, contended that the pleadings did not give rise to any accord and satisfaction. He submitted that an analysis of the pleadings showed that the parties were making competing claims of oppression, albeit that both sides were seeking relief that included the purchase for fair value of Ian Robinson's shares in the corporate defendants. It was pointed out that relief of that kind is discretionary relief that may be given pursuant to the Corporations Act when the Court finds that oppressive conduct has occurred within the meaning of section 232 of that Act. He further submitted that in the context of oppression cases, fair value was something that had to be determined having regard to all the circumstances of the case including the effect of the oppressive conduct (see E S Gordon Pty Limited v Idameneo (No 123) Pty Limited (1994) 15 ACSR 536 at 540 per Young J; Rankine v Rankine (1995) 15 ACSR 725 at 727 per McPherson JA). Mr Docker also noted that Ian Robinson, by his Commercial List Cross Response, denied the active defendants' claims for relief, including that his shares in the Indian company be transferred to Radcoflex Investments Pty Limited.
4. Mr Docker then submitted that no accord and satisfaction was reached leading up to or in the course of the directions hearing that took place before Hammerschlag J on 23 May 2014. It was put that the language of the communications between the solicitors did not show that any agreement was struck, and was rather concerned with procedural not substantive matters. It was pointed out that the solicitors were considering "the next step" in the proceedings, being the valuation of Ian Robinson's shares, and were contemplating that this should occur before the parties filed all their evidence. He submitted that it was never suggested that any of the various allegations made in the proceedings would be withdrawn.
5. In relation to the directions hearing itself, Mr Docker submitted that the "furious agreement" was merely that Ian Robinson's shares in the corporate defendants would be valued, and there was debate about how that should occur procedurally. As for Mr Kerr's statement that it was "acknowledged" that one or more of the defendants would buy the shares, Mr Docker submitted that this should be taken as a statement of the active defendants' intentions about what would happen at the end of the proceedings, rather than as evidence of an intention to be contractually bound to purchase the shares. It was submitted that the statement later made to valuers, that the parties agreed that one or more of the defendants should purchase Ian Robinson's shares for fair value, should be seen in the same light.
6. Finally, Mr Docker submitted that various aspects of the parties' conduct after the directions hearing was inconsistent with the existence of the accord and satisfaction contended for by Ian Robinson. For example, Mr Docker cited the discussions between the solicitors in April 2015 during which reference was made to certain unresolved issues, and the possibility of a mediation. Mr Docker also cited the failure of Ian Robinson's solicitors to assert the existence of any binding agreement until the directions hearing held on 5 June 2015.

Determination

1. The alleged accord and satisfaction arises in the context of the litigation of a dispute concerning the management of companies in which the three siblings hold directorships and shareholding interests. The dispute has existed for a considerable time, from about mid-2007. It appears that since that time various attempts have been made to reach a settlement (including a mediation held in 2009), without success. The parties have throughout engaged lawyers. The litigation itself commenced in late 2013.
2. The nature of the litigation is described in some detail in the Summons, Cross Summons and List Statements that have been filed. Those documents make it clear that a central issue concerns whether Ian Robinson on the one hand, or the active defendants on the other, has been subject to conduct that is oppressive to, unfairly prejudicial to, or unfairly discriminatory against them (see s 232 of the Corporations Act). A number of other issues are raised in the pleadings. These include whether the corporate defendants should be wound up pursuant to s 461(1)(k) of the Corporations Act, and whether Ian Robinson should be ordered to transfer his shares in the Indian company to Radcoflex Investments Pty Limited.
3. Ian Robinson, by his Summons and List Statement, sought orders that Bruce Robinson and Patricia Hughes purchase his shares in the four corporate defendants for fair value. I do not regard the service of those pleadings as constituting or containing an offer by Ian Robinson to enter into a contract to sell those shares for fair value. The primary purpose of those pleadings was to state the nature of the case to be pursued and the relief claimed. For the reasons which follow, I also do not think that the statements contained in the active defendants' pleadings that Bruce Robinson and Patricia Hughes would be prepared to purchase Ian Robinson's shares in the corporate defendants for fair value can be considered to constitute an offer to enter into a contract to purchase Ian Robinson's shares in the four corporate defendants for fair value.
4. Those statements must be read in the context of the pleadings as a whole. In particular, such statements have to be considered in conjunction with the active defendants' denials that Ian Robinson was entitled to orders for the purchase of his shares for fair value, and their own claims to such orders based on allegations concerning Ian Robinson's conduct in the management of the companies. In the context of claims and counter-claims concerning oppression, the statements should be regarded as an acceptance by the active defendants that if conduct within s 232 of the Corporations Act was found, Bruce Robinson and Patricia Hughes would be prepared to purchase Ian Robinson's shares in the corporate defendants for fair value. In effect, the statements indicate the active defendants' agreement that in those circumstances an order that they purchase Ian Robinson's shares would be appropriate. Moreover, in the context of an oppression case, the notion of fair value should be regarded as a reference to a fair value as determined by the Court after taking into account any oppressive conduct found. Such a determination is not merely a matter of valuation; it is a matter of fixing an appropriate price to be paid for the shares (see Smith Martis Cook & Rajan Pty Limited v Benjamin Corporation Pty Limited [2004] FCAFC 153 at [70]-[78]).
5. On 30 April 2014 Mr Addison for Ian Robinson sent an email to Ms Anderson for the active defendants. The email referred to the impending filing of a lengthy Commercial List Cross Response and noted that it was "the position of all parties in the proceedings that (one or more) of the defendants should purchase Ian Robinson's shares in the various corporate entities in the Radcoflex Group". That statement, at least in so far as it encompassed shares in entities other than the four corporate defendants, was not strictly accurate. In any event, I would not regard the statement as anything more than an attempt to summarise the positions of the parties, as revealed in the pleadings that had been served to date, concerning final relief in respect of the oppression claimed.
6. It is noteworthy that the statement was accompanied by commentary about the future conduct of the litigation, including how "the value to be paid" for the shares should be determined, in terms which contemplated that such step could take place before the parties filed all their evidence in the proceedings. It seems that, based on the positions revealed by the pleadings, Mr Addison saw merit in the parties proceeding with a valuation exercise in advance of the general filing of their evidence. I do not see Mr Addison's email as consistent with a mutual withdrawal by the parties of their respective claims in exchange for promises to buy and sell Ian Robinson's shares for a fair value.
7. This is emphasised by the subsequent filing of the Commercial List Cross Response, an event foreshadowed in Mr Addison's email itself. The Cross Response noted that by their Cross Claim Bruce Robinson and Patricia Hughes agreed that "the appropriate outcome in these proceedings" is an order that they purchase for fair value Ian Robinson's shares in the corporate defendants "but assert that the appropriate basis for such an order (which Bruce and Patricia seek against Ian pursuant to ss 232 and 233 of the Corporations Act) is alleged oppressive conduct by Ian". Again, the position is not consistent with a mutual withdrawal by the parties of their respective claims in exchange for promises to buy and sell Ian Robinson's shares for a fair value. Further, as noted earlier, the Cross Response went on to deny that the Cross Claimants were entitled to the relief they sought.
8. Whether the matter is considered in terms of offer and acceptance analysis, or more broadly as to whether the conduct of the parties manifests mutual assent, it is my view that no binding contract, let alone an accord and satisfaction as propounded by Ian Robinson, was made through the service of the pleadings.
9. Nothing was said or done in the lead up to the directions hearing of 23 May 2014 to suggest that the parties were contemplating a mutual withdrawal of their claims. There was a consensus that, in one way or another, the next stage in the proceedings would involve the valuation of Ian Robinson's shares in the corporate defendants. Mr Addison favoured a Court appointed referee. Ms Anderson favoured an expert jointly appointed by the parties "before evidence is filed". She evidently considered that a hearing before a Court appointed referee might become time consuming and costly "given the extensive history of this matter and the number of issues in dispute".
10. The difference in approach between Mr Addison and Ms Anderson was carried in to the directions hearing. As Mr Kerr put it, whilst there was "furious agreement" about what needed to occur (likely to be a reference to a valuation of Ian Robinson's shares), there was an issue about how to achieve it. In the course of the discussion with Hammerschlag J that followed, Mr Kerr spoke of "a number of disputes that are foreshadowed" that could lead to a mini-hearing in front of a referee. He also acknowledged that one or more of the defendants "will buy the shares", and he agreed with his Honour that, as the active defendants saw it, it was "just really a question of price".
11. Viewed in isolation, that acknowledgment and agreement might be seen as a recognition that there were now no issues between the parties, other than a question of the price at which one or more of the defendants will purchase Ian Robinson's shares. It is of course necessary to view those statements in their proper context as part of what was said in Court on that occasion, and more broadly as part of what passed between the parties. When the context is considered, the statements take on a somewhat different complexion.
12. I have referred already to Mr Kerr's earlier statement to the Court about a number of disputes that are foreshadowed. In addition, as set out above, the conduct of the parties leading up to the directions hearing was not consistent with a mutual withdrawal by the parties of their respective claims in exchange for promises to buy and sell Ian Robinson's shares for a fair value. As Mr Docker submitted, no suggestion was ever made that any of the various allegations made in the proceedings would be withdrawn. There was no discussion about the terms upon which any such withdrawal may occur. Further, the communications between Mr Addison and Ms Anderson seemed to proceed on the basis that the valuation of the shares would take place before the parties filed their evidence. There was no suggestion that the scope of such evidence would be confined in any way, or restricted to particular issues.
13. When these matters are considered, Mr Kerr's statements ought to be seen as reflections of the parties' positions as set forth in their pleadings. In particular, they should be seen as reflections of the common (or agreed) position that the appropriate remedy in respect of any conduct found within s 232 of the Corporations Act would be the purchase by Bruce Robinson and Patricia Hughes of Ian Robinson's shares in the corporate defendants for fair value. I would take the acknowledgment referred to by Mr Kerr as a reference to the acceptance of that position by the active defendants in their pleadings. Mr Kerr's assent to the proposition that it was "just really a question of price" appears to me to be a statement reinforcing that the active defendants did not contest that the appropriate remedy for oppression would be a purchase of Ian Robinson's shares, but that the question of price (or fair value) remained in issue.
14. The discussion that followed was largely concerned with how the valuation of Ian Robinson's shares would proceed. No statemetns were made to the effect that the parties had reached some form of settlement or compromise. On more than one occasion Mr Cornish referred to the "long history" of the matter. In the course of the discussion, Hammerschlag J suggested that if a joint expert valuation report was obtained, it would be without prejudice to any application by the parties to adduce further evidence. The further evidence so contemplated by his Honour may have been confined to expert evidence going to matters of valuation. The order ultimately made on that day was to that effect. Nevertheless, neither party gave any indication that they were no longer proceeding on the basis that the valuation of the shares would take place before the parties filed their evidence. It was not suggested that the only evidence to be adduced would be the joint expert report and any further expert evidence permitted to be relied upon.
15. The conduct of the parties up to and including 23 May 2014, viewed objectively, does not in my opinion support a conclusion that an accord and satisfaction had been reached whereby the parties agreed to surrender their respective claims in consideration of an exchange of promises for the sale and purchase of Ian Robinson's shares in the corporate defendants for fair value.
16. Turning now to the conduct of the parties after 23 May 2014, it is true that on numerous occasions in the course of communications with valuers, statements were made by the solicitors for the parties in the following terms: Without detailing the various pleadings which have been filed and served in this matter, the parties agree that one (or more) of the defendants should purchase Ian Robinson's shares in the various corporate entities for fair value.
17. However, I do not think that the making of those statements leads to a conclusion that an accord and satisfaction as alleged was entered into. The statements, which formed part of the background information provided to the valuers, essentially do no more than highlight the existence of the common (or agreed) position contained in the pleadings to the effect that the appropriate remedy in respect of conduct found under s 232 of the Corporations Act would be a purchase of Ian Robinson's shares in the four corporate defendants for fair value. The statements reflect that the parties were in agreement that in those circumstances there should be a purchase of Ian Robinson's shares. The statements, in their terms, do not deal with the other aspects of the various pleadings. There is no suggestion that those other aspects no longer had any significance. It seems to me that the parties, whilst focusing upon the task of having Ian Robinson's shares valued, were continuing to conduct themselves in a manner consistent with the maintenance of their respective claims in the proceedings. Once again, no suggestion was ever made that such claims would be withdrawn, and there was no discussion about the terms upon which any such withdrawal may occur. The discussions in June 2014 about a possible settlement conference do not clearly reveal the scope of what the parties saw as the issues between them. However, mention was made of the existence of a high level of distrust. No statement was made that the only outstanding issue was the value of Ian Robinson's shares.
18. It is correct, as pointed out by Mr Harding, that there was no discussion between May 2014 and May 2015 about further litigating the various causes of action described in the pleadings. Nonetheless, during that period, the parties were focused upon the "next step" in the proceedings, namely, the valuation of Ian Robinson's shares.
19. I am unable to see this case as one in which it can be inferred that the parties have composed their differences by each promising to give up claims against the other (see Ballantyne v Phillott (supra) at 397 per Menzies J). The conduct of the parties, viewed objectively, indicates that any consensus reached was of a more limited character, essentially confined to agreement concerning the appropriate remedy in respect of any conduct under s 232 of the Corporations Act, and agreement that Ian Robinson's shares in the four corporate defendants be valued.
20. Moreover, in the context of commercial litigation of this type, where experienced lawyers have been engaged, it is objectively unlikely that an agreement involving the mutual surrender of claims and counter-claims would be made without the terms of the proposed agreement being spelt out with some care. A separation of the interests of Ian Robinson from those of his siblings would entail steps additional to the acquisition of his shares in the four corporate defendants. A transfer of the shares in the Indian company is an example. Ian Robinson ceasing to be a director of various companies is another. It is objectively unlikely that those parties, with their lengthy history of disputation, would have been content to withdraw their respective claims without explicitly dealing with such matters.
21. Finally, I consider that some aspects of the conduct of the parties in May 2015 (after Mr Douglas had provided his valuation) tends against the existence of the accord and satisfaction alleged. It is clear that on 14 May 2015 the solicitors for the active defendants were asserting the existence of issues aside from the valuation of the four corporate defendants (see Mr McKaysmith's email to Mr Vuaran). On the following day, Mr McKaysmith proposed that orders be made to enable the parties to attend a mediation. There was no response from Ian Robinson's solicitors to the effect that the only issue was the fair value of the shares which were to be purchased from Ian Robinson.
22. More significantly, on 2 June 2015 Ian Robinson's solicitors sent a letter enclosing draft Short Minutes which provided for a question concerning the fair value of the first defendant's shares in the four corporate defendants to be determined "as a separate question, separately from and in advance of all other issues in the proceedings". Regardless of whether the reference to the first defendant's shares is an error (which I think is likely), the communication apparently proceeds on the basis that there are issues in the proceedings, aside from the fair value issue, that remain to be determined. It seems to me that this communication is inconsistent with the accord and satisfaction now contended for, which appears to have been first advanced at the directions hearing on 5 June 2015.
23. For the various reasons set out above, I am not satisfied that an accord and satisfaction was reached as alleged by Ian Robinson. It has not been demonstrated that the parties reached an agreement whereby they would give up their respective claims in consideration of mutual promises for the purchase and sale of Ian Robinson's shares in the corporate defendants for fair value.
24. Accordingly, the question whether Ian Robinson and the active defendants reached an accord and satisfaction, whereby one or more of the active defendants would purchase his shares in the four corporate defendants for fair value, will be answered "No".
25. The court will further order that Ian Robinson pay the active defendants' costs of the determination of the separate question.

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