Wilmar's continuing commercial interests
53 The appellants submitted that the Judge had overlooked, or failed to give adequate weight, to five considerations when he had concluded (at [120]) that Wilmar has "a very real and significant continuing commercial interest in the way in which [QSL's] affairs are conducted". The Judge had expressed a similar conclusion at [125].
54 The appellants submitted, first, that Wilmar had itself elected to terminate its contractual and supply relationship with QSL "in order to" become its competitor in the export market from 30 June 2017.
55 In so far as this is a complaint that the trial Judge overlooked evidence as to Wilmar's purpose in giving notice that it did not wish to extend its RSSA, it is not soundly based. There was no evidence at trial that Wilmar's purpose was to compete with QSL and it is far from self-evident that that was so. Wilmar may have thought only that it could obtain a better return for its raw sugar than is presently being obtained by QSL.
56 However, the submission seemed to be that Wilmar had brought the conduct found to be oppressive on itself, by giving notice that it did not wish to extend its RSSA. The appellants submitted that this was an important element of context. They referred to some of the authorities which indicate that allegations of oppressive conduct require an examination of the conduct, not in isolation, but in the context in which it takes place; see in this regard, Reid v Bagot Well Pastoral Co Pty Ltd (1993) 12 ACSR 197; (1993) 61 SASR 165 at 212. The relevant context includes the conduct of all parties, including the conduct of the plaintiff: Joint v Stephens [2008] VSCA 210 at [136]; Hunter v Organic & Natural Enterprise Group Pty Ltd [2012] QSC 383, (2012) 92 ACSR 183 at [105]. The appellants emphasised in particular, the exercise required of the Court in balancing the competing considerations disclosed by the evidence, noting the approval by Black J in Re Ledir Enterprises [2013] NSWSC 1332; (2013) 96 ACSR 1 at [179] of the observation of Richardson J in Thomas v HW Thomas Ltd [1984] 1 NZLR 686 at 694-5 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 company's 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.
(Emphasis added)
57 It cannot be said that the Judge overlooked the circumstance that it was Wilmar's service of the notice of termination of the RSSA which created the context in which the resolutions of 8 December 2015 were passed. Plainly, Wilmar had given the notice of termination of its RSSA in the context that QSL's Constitution had, since November 2010, the effect of precluding it from participating in the election of the Board Selection Committee once it gave the notice of termination. This was undoubtedly part of the context in which QSL's conduct was to be considered. However, contrary to the appellants' submission, these circumstances did not limit the nature of Wilmar's continuing commercial interest to at least 30 June 2017. That commercial interest remained unaffected.
58 The appellants emphasised that the QSL Board is now very much concerned with post-1 July 2017 issues. The Judge did not overlook this consideration. He set out in his reasons the passages in the CEO's affidavit concerning the matters which QSL's Board is presently addressing, at [32]-[33]. These matters have been repeated in these reasons.
59 Next, the appellants submitted that the effect of the resolutions was not to deprive Wilmar of the ability to appoint directors to the Board of QSL but instead, to deprive it of its ability to veto Mill Owner Directors being appointed to the Board by the BIM Mills. The Judge had overlooked, the appellants submitted, the commercial reality that what Wilmar was losing in practice was the right of veto, and not a right of appointment. This consideration is not persuasive. Under the Constitution as it stood before 8 December 2015, Wilmar could have exercised its voting power to ensure the appointment of four Mill Owner Directors of whom it approved. It had, however, not done so. Instead, it had exercised the influence given to it by the extent of its voting power so as to ensure that QSL had an independent board. It is undoubtedly the case that it has now lost that power. In our opinion, the distinction which the appellants sought to draw between the loss of a power to appoint, on the one hand, and the loss of a power to veto, on the other, is, in the circumstances of the present case, illusory.
60 Next, the appellants submitted that there should not, in any event, be an adverse effect on Wilmar's commercial interests in the period to 30 June 2017 because Wilmar's interests are aligned with those of the BIM Mills. That is because all will be selling sugar through QSL and all would wish QSL to maximise sales. This submission seemed to have, as an unstated premise, the proposition that unity of interest in a desired outcome will necessarily be reflected in unity of judgment as to the way or ways in which that outcome is to be achieved. That proposition is, self-evidently, unsound. It is obvious that Wilmar, on the one hand, and the BIM Mills, on the other, might reasonably adopt divergent views about the way in which the goals they have in common until 30 June 2017 are to be achieved.
61 Finally, in relation to these grounds of appeal, the appellants emphasised the impact of the Growers Choice Legislation and in particular, that sugar growers are now able to nominate the marketer to whom they wish to have their GEIS sugar supplied. That has had the consequence that QSL and Wilmar are now in competition to attract grower nominations for GEIS supply. It also has the consequence, so the appellants contended, that, contrary to the conclusion of the trial Judge, Wilmar will not have a continuing commercial interest in the conduct of QSL's affairs.
62 One may accept that the first of these propositions is true. However, the trial Judge's conclusion that it is another form of competition of the kind which existed between Wilmar and QSL in the past in relation to the SEIS was reasonably open to him. It has not been shown to be in error. The appellants' submissions did not indicate how the introduction of GEIS changed, qualitatively, the potential conflicts of interest which may arise.
63 There are also difficulties with the second of the appellants' propositions. Wilmar will have a continuing commercial interest in the growers who supply it obtaining the optimum price for their sugar. That may be because Wilmar will like its growers to be content with the contractual arrangements they have with it, or because it does not wish its own market for the sugar it sells to be undermined. During the course of submissions, the appellants seemed to acknowledge that this was so, but emphasised that Wilmar and QSL will be in competition after 1 July 2017 for grower nominations of GEIS. That may be so, but it does not indicate error in the Judge's conclusion that Wilmar's commercial interest in the sugar supplied to QSL is continuing and may, to some extent, continue after 1 July 2017.
64 The appellants also submitted that it was the combined effect of these matters which should be considered. We accept that that is so but will defer doing so until we have completed consideration of the remaining contentions of the appellants.