Vanis Capital Investments Pty Ltd (as trustee of the Vanis Capital Investment Trust) v Morris

introduction 1 The Applicants are minority shareholders (25%) of Tasman Logistics Services Pty Ltd (Tasman) (Third Respondent). The majority shareholder of Tasman (as to 75%) is Craig Morris & Associates Pty Ltd (as Trustee of the Morris Family Trust) (CMA) (Second Respondent), of which the shareholders and directors are Julie Morris (First Respondent) and Craig Morris (Fourth Respondent). 2 Ms Morris is party to a family law proceeding against Mr Morris in the Federal Circuit and Family Court (Division 1), seeking a property settlement of the assets of their marriage (family law proceeding). 3 The Applicants seek interlocutory relief on the basis of allegations that Ms Morris has acted in a manner which is oppressive in the affairs of Tasman, contrary to s 232 of the Corporations Act 2001 (Cth) (Act), by having: (a) stated and maintained her opposition and refusal to approve a component of a proposed transaction by Tasman, for the collateral purpose of procuring an advantageous resolution of her personal claims against Mr Morris for property settlement; (b) prevaricated in seeking and receiving information as to the proposed transaction, jeopardising the limited time in which Tasman can execute the transaction; and (c) actively sought to prevent Tasman from entering the transaction, including by precipitously making an application in her family law proceeding for orders restraining Mr Morris and the Applicants from enabling Tasman to carry out its proposed transaction. 4 The Applicants rely on the affidavits of Michael Oakley (Mr Oakley) made on 13 April 2023 (Oakley Affidavit) and 18 April 2023 and Ivan Vanis (Mr Vanis) made on 13 April 2023. Mr Oakley is the Chief Financial Officer and Secretary of Tasman and the director of M & M Oakley Investments Pty Ltd (Second Applicant). Mr Vanis is the Chief Executive Officer of Tasman and the director of Vanis Capital Investments Pty Ltd (as Trustee of the Vanis Capital Trust) (First Applicant). 5 Ms Morris disputes the Applicants' oppression claim against her. Further, by interlocutory application, Ms Morris seeks to have this proceeding cross-vested to the Federal Circuit and Family Court (Division 1). Ms Morris relies on her own affidavit (Morris Affidavit) and an affidavit of Greg McKenzie (Mr McKenzie), her solicitor, made on 18 April 2023 (McKenzie Affidavit). 6 Mr Morris has filed submissions opposing Ms Morris's application to have this proceeding cross-vested to the Federal Circuit and Family Court (Division 1). Mr Morris relies on his own affidavit made on 18 April 2023. 7 CMA has not participated in the proceeding to date. Tasman appeared at the hearing of the Applicants' and Ms Morris's respective claims, but did not make submissions in connection with those claims. 8 On 19 April 2023, I heard the interlocutory applications and made orders. These are my reasons for the orders made.

background 9 Mr Morris and Ms Morris were formerly married. Since 25 August 2021, Mr Morris and Ms Morris have been parties to the family law proceeding, which concerns the property settlement of their matrimonial pool of assets. 10 Mr Morris is the director of Tasman. He and Ms Morris are the shareholders and directors of CMA, each holding 50% of ordinary shares issued by CMA. There are three shareholders in Tasman: (a) Craig Morris & Associates Pty Ltd (CMA), holding 75% of the shares; (b) Vanis Capital Investments Pty Ltd (Vanis Capital), holding 17.5% of the shares; and (c) Oakley Investments, holding 7.5% of the shares. 11 Tasman is a transport and logistics company that provides haulage services by road, rail and shipping as well as warehousing and storage services. Tasman has agreed in principle to an acquisition of another company (Target Entity). The acquisition is structured such that Tasman will acquire 100% of the shares of the Target Entity, and all the assets of a related target entity (Acquisition Transaction). However, the terms of the agreement require Tasman to execute the transaction documents by 26 April 2023. Mr Oakley deposed that he believes that the Acquisition Transaction will substantially grow the revenue and profit of Tasman's business: Oakley Affidavit at [40]. 12 The structure of the proposed acquisition involves Tasman acquiring all the shares of the Target Entity (in part because of the cost and complexity involved alternatively in transfer of a large number of assets), and it will obtain a comprehensive funding package (enabling acquisition of the shares and broader capital funding of the business) on ordinary commercial terms that the group companies (including the Target Entity) give security for the borrowing. In the result, the proposed transaction involves the Target Entity providing financial assistance for the acquisition by Tasman of the shares. 13 Financial assistance is now conditionally authorised by s 260A of the Act with the consequence that it requires approval by special resolution passed at general meetings of the Target Entity and of the ultimate holding company of Tasman, being CMA (Financial Assistance Resolution): s 260B(3). For compliance of the transaction, Tasman and its stakeholders need certainty (prior to 26 April 2023) that the Financial Assistance Resolution will be provided. Accordingly, Tasman has sought confirmation from Ms Morris that she will not oppose and will approve the Financial Assistance Resolution. 14 In the course of correspondence over several months, Ms Morris has maintained that she will not approve the Financial Assistance Resolution until such time as her family law proceeding is satisfactorily resolved. Ms Morris has not responded to correspondence from the Applicants' solicitors on 5 April 2023, nor to correspondence from Tasman's solicitors on 6 April 2023 which provided draft materials in support of a Financial Assistance Resolution and offered times for a meeting to explain transaction details. The Applicants contend that as a consequence of Ms Morris's position, Tasman stands to suffer irreparable loss and damage by reason of Ms Morris's collateral purpose. 15 Returning to the family law proceeding, Ms Morris deposed that the proceeding will be listed for trial if it is not able to be resolved at mediation. Ms Morris deposed that there are various steps which must be taken before Mr Morris and Ms Morris can participate in a mediation: Morris Affidavit at [11]. On 6 April 2023, Ms Morris filed an interlocutory application in the family law proceeding. In that interlocutory application, Ms Morris seeks to restrain Mr Morris from entering into the Acquisition Transaction or any transaction similar in nature, and seeks to restrain Mr Vanis, Mr Oakley, Vanis Capital Investments Pty Ltd (as Trustee of the Vanis Capital Trust) and M & M Oakley Investments Pty Ltd from issuing any oppressive conduct proceeding against her in another court other than the Federal Circuit and Family Court or as part of the family law proceeding (Ms Morris's Restraining Order Application). 16 On 13 April 2023, the Applicants commenced a proceeding in this Court alleging oppressive conduct by Ms Morris. 17 Following the commencement of this proceeding, a mention was held on 17 April 2023 before Alstergren CJ in the family law proceeding. His Honour made orders (among others) that the family law proceeding be transferred to Division 1 of the Federal Circuit and Family Court of Australia and listed the matter for further mention before himself on 21 April 2023. Mr McKenzie deposed that he was informed that, at the 17 April 2023 mention, Alstergren CJ: (a) listed the family law proceeding for further mention on 21 April 2023 to set a timetable for the determination of Ms Morris's application concerning the Acquisition Transaction if the issue is not dealt with by this Court; (b) informed the parties that, on Friday, subject to the outcome of the hearing before this Court, the parties should bring a set of orders that would provide for an urgent hearing of Ms Morris's Restraining Order Application.

relief sought in amended originating application 18 By amended originating application dated 19 April 2023, the Applicants seek, on an interlocutory basis, primary relief pursuant to s 233 and/or 1324 of the Act on the ground that Ms Morris's conduct in opposing the Financial Assistance Resolution constitutes oppression in the affairs of Tasman for the purposes of s 232 of the Act. In particular, the relief targeted to her allegedly oppressive conduct is: (a) an injunction restraining Ms Morris from voting against (or voting altogether on) the Financial Assistance Resolution at a general meeting of CMA; (b) alternatively, an order appointing a receiver to Ms Morris's shares in CMA for the limited purpose of considering and voting on the Financial Assistance Resolution (Matthew Caddy of McGrathNicol has consented to being appointed); and (c) alternatively, a mandatory order that Ms Morris vote in favour of the Financial Assistance Resolution. 19 The Applicants seek, on an interlocutory basis, ancillary relief including: (a) an order pursuant to ss 232, 233 and/or 1324 of the Act that Mr Morris or CMA give notice and convene a general meeting of CMA for consideration of, and if thought fit, passing the Financial Assistance Resolution; (b) an order pursuant to s 1322 of the Act that a special meeting of CMA convened to consider the Financial Assistance Resolution, and such resolution if passed at the meeting, is not invalid for non-compliance with the Constitution of CMA or the Act by reason of: (i) Ms Morris not being present at the meeting or voting upon the Financial Assistance Resolution; or (ii) less than 21 days' notice of the meeting being given. 20 As set out further at paragraph [76] below, the Applicants also seek an injunction to prevent Ms Morris from pursuing relevant parts of an interlocutory application in the family law proceeding, which seek to restrain Mr Morris from causing Tasman to enter into the proposed transaction, and to restrain the Applicants from pursuing this Application.

application for transfer of proceeding to the federal circuit and family court of australia (division 1) 21 On 18 April 2023, Ms Morris issued an interlocutory application seeking orders that: (1) Pursuant to section 5(1)(b) of the Jurisdiction of Courts (Cross-Vesting Act) 1987 (Cth), the Applicants' originating application be transferred to the Federal Circuit and Family Court of Australia (Division 1). (2) The costs of the proceeding in the Federal Court of Australia are reserved. (3) The Applicants pay the First Respondent's costs of this application. (Cross-Vesting Application). 22 Ms Morris's Cross-Vesting Application is opposed by the Applicants and Mr Morris. 23 I understand the substance of Ms Morris's submissions on her Cross-Vesting Application to be that the Applicants' oppression claim in this proceeding, including their claim for interlocutory relief, should not be determined by this Court, and instead should be transferred to the Federal Circuit and Family Court of Australia (Division 1). 24 Ms Morris contends that the proceeding before this Court should be dealt with by the Federal Circuit and Family Court. In support of this submission, Ms Morris notes that, at the time this proceeding was commenced, there was an existing proceeding in the Federal Circuit and Family Court dealing with, amongst other things, the central issue of whether the Acquisition Transaction should proceed. Ms Morris submits that the Federal Circuit and Family Court has jurisdiction to hear actions under ss 232 and 233 of the Act, that it regularly deals with such disputes, and is equally well-equipped to deal with this proceeding. Further, Ms Morris contends that the dispute concerning the Acquisition Transaction sits within the wider dispute before the Federal Circuit and Family Court, namely the division of the matrimonial assets of Mr Morris and Ms Morris. In these circumstances, Ms Morris submits that justice can best be served by the Federal Circuit and Family Court resolving the whole of that controversy. 25 As a preliminary matter, s 5(1) of the Jurisdiction of Courts (Cross-Vesting Act) 1987 (Cth) sets out the bases on which a Supreme Court of a State or Territory may transfer proceedings to this Court or to the Federal Circuit and Family Court of Australia. It has no application in this proceeding. Section 5(5) of the Jurisdiction of Courts (Cross-Vesting Act) 1987 (Cth) sets out the bases on which this Court may transfer a matter to the Federal Circuit and Family Court. However, Pt 9.6A, Div 1 of the Act also prescribes a regime for the transfer of proceedings by the Federal Court and State and Territory Supreme Courts, and this regime operates to the exclusion of the Jurisdiction of Courts (Cross-Vesting Act) 1987 (Cth): see s 1337A(2)(a). If a proceeding meets the criteria specified in s 1337H(1) of the Act, it will fall within the regime for the transfer of proceedings prescribed in Pt 9.6A, Div 1 of that Act. In turn, s 5(5) of the Jurisdiction of Courts (Cross-Vesting Act) 1987 (Cth) will have no relevant application. 26 Section 1337H provides: (1) This section applies to a proceeding (the relevant proceeding) in a court (the transferor court) if: (a) the relevant proceeding is: (i) a proceeding with respect to a civil matter arising under the Corporations legislation; or (ii) a subsection 1337B(3) proceeding; and (b) the transferor court is: (i) the Federal court; or (ii) a State or Territory Supreme Court. (2) Subject to subsections (3), (4) and (5), if it appears to the transferor court that, having regard to the interests of justice, it is more appropriate for: (a) the relevant proceeding; or (b) an application in the relevant proceeding; to be determined by another court that has jurisdiction in the matters for determination in the relevant proceeding or application, the transferor court may transfer the relevant proceeding or application to that other court. 27 In this proceeding, the Applicants raise oppression claims under the Act and seek injunctive relief under the Act. I am therefore satisfied that this proceeding concerns a civil matter arising under the Act. Consequently, Ms Morris's application falls for consideration under s 1337H and not under the Jurisdiction of Courts (Cross Vesting) Act (Cth). Nonetheless, the test is largely the same and is concerned with whether it is more appropriate for the proceeding to be determined by the transferee court having regard to the interests of justice. The one potentially relevant distinction between the two statutes is that under Jurisdiction of Courts (Cross Vesting) Act (Cth), transfer is mandatory when the court forms the view that the other court is the more appropriate forum, whereas under s 1337H any transfer appears to be discretionary, albeit this distinction is rarely relevant in practice: Re HIH Insurance Ltd (in liq) (2014) 104 ACSR 240; NSWSC 545 at [6]. 28 In the present case, neither the Applicants nor Mr Morris took issue with Ms Morris's reliance on s 5(5) of the Jurisdiction of Courts (Cross Vesting) Act (Cth). Given this, and the similarity of the tests prescribed in s 5 of the Jurisdiction of Courts (Cross Vesting) Act (Cth) and s 1337H of the Act, I will consider Ms Morris's Cross-Vesting Application as though it was made under s 1337H of the Act. 29 The reasoning of McKerracher J in Yara Pilbara Fertilisers Pty Ltd v Oswal (No 8) [2015] FCA 49 is instructive as to the principles relevant to determining a cross-vesting application under s 1337H. McKerracher J observed that there is a reasonably wide discretion involved: at [23]. McKerracher J stated that the Court must conduct a balancing exercise between relevant factors that inform as to whether or not it is in the interests of justice to transfer a proceeding: at [24]. McKerracher J identified the following non-exhaustive list of factors potentially relevant to a court's decision (at [26]): (1) the stage of the proceedings in the respective courts; (2) the commonality or diversity of the parties; (3) the nature of the proceedings; (4) the commonality or diversity of issues; (5) the risk of conflicting findings of fact or conflicting orders; (6) a costs benefit analysis; (7) the potential unnecessary drain on judicial and other public and private resources; and (8) whether there is any particular judicial expertise residing in one court of the other. 30 Balancing the above considerations so far as they are relevant, I am not satisfied that it is appropriate for this proceeding to be transferred to the Family Court. 31 As to the stage of the proceedings, as submitted by the Applicants, Ms Morris's family law proceeding is in the pre-trial stage. Ms Morris has deposed that there are various steps which must be taken before Mr Morris and Ms Morris can participate in a mediation, and the proceeding will only be listed for trial if it does not resolve at mediation. After this proceeding was filed, on 17 April 2023, Chief Justice Alstergren made orders transferring the family law proceeding to Division 1 of the Federal Circuit and Family Court of Australia, and listed the matter for further mention on 21 April 2023. Mr McKenzie deposed that he had been informed that Chief Justice Alstergren had listed the family law proceeding for a further mention on 17 April 2023 to set a timetable for the determination of Ms Morris's Restraining Order Application concerning the Acquisition Transaction if the issue was not dealt with by this Court. There is therefore nothing about the stage of the family law proceeding which makes it inconvenient or burdensome for this Court to determine the Applicants' oppression claims. 32 As to the commonality of the parties and issues, I accept Ms Morris's submission that, at the time the Applicants commenced this proceeding (that is, on 13 April 2023), Ms Morris's proceeding in the Federal Circuit and Family Court was already on foot and, further, that Ms Morris had already filed an application to restrain the Acquisition Transaction. Consequently, Ms Morris correctly observes that there is a substantial overlap in the issues litigated in this proceeding and her family law proceeding. Ms Morris is also correct to press that there is now a substantial commonality of parties in this proceeding and the family law proceeding - in both proceedings, the Applicants and Mr Morris are parties. I also accept Ms Morris's submission that the matters litigated in this proceeding are a subset of a wider dispute being litigated in the family law proceedings of the Federal Circuit and Family Court. The prospect of a single court with jurisdiction to determine all matters in dispute between the parties weighs in favour of Ms Morris's Cross-Vesting Application: Valceski v Valceski (2007) 70 NSWLR 36 at [85]. 33 However, the characterisation of Ms Morris's family law proceeding as naturally encompassing the Applicants' oppression claims is somewhat artificial. Ms Morris's family law proceeding was commenced on 25 August 2021. That proceeding relates to the split of assets in which Mr Morris and Ms Morris have an interest, including CMA's shares in Tasman. It was only on 6 April 2023 that Ms Morris filed the Restraining Order Application and sought interim orders, amongst other things, joining the Applicants, Mr Vanis and Mr Oakley to that proceeding. It follows that, although the proceeding before the Federal Circuit and Family Court now directly engages issues overlapping with the Applicants' oppression proceeding in this Court, and there is a substantial commonality in the parties to both proceedings, this is the result of a relatively recent change to the nature and scope of the proceeding arising solely from the conduct of Ms Morris. 34 As to the cost-benefit analysis, Mr Morris submitted that there is a benefit in this Court determining the Applicants' oppression claims, as this will avoid questions about the commercial decisions relating to the Acquisition Transaction intruding on the family law proceeding. I accept those submissions. There is a real possibility that if the Applicants' oppression claim is transferred to the Federal Circuit and Family Court, the progress of the family law proceeding will be delayed. 35 I also consider that this Court has the judicial expertise to determine the Applicants' oppression claims. The Federal Circuit and Family Court clearly has jurisdiction to make appropriate orders under the Act, but the determination of claims under that Act, including oppression claims, is part of the core functions of this Court: cf Liquidator's of UUB Pty Ltd v NWO [2020] SASC 121 at [102]. 36 There is one further matter which I consider relevant to my determination of Ms Morris's Cross-Vesting Application. Ms Morris's Restraining Order Application in the family law proceeding seeks an order that she be relieved of any and all obligations to provide an undertaking as to damages in favour of the Applicants. Where a family law dispute involves or affects other parties, the Federal Circuit and Family Court will ordinarily decline to make the interlocutory injunction sought by the applicant, unless an applicant proffers the usual undertaking as to damages: see Holder & Holder [2020] FamCA 347 at [65]. In contrast, in the proceeding before this Court, the Applicants informed the Court that they would give the usual undertaking as to damages. This is a further reason for the Court to determine the Applicants' oppression claim, and not transfer that claim to the Federal Circuit and Family Court. 37 For the above reasons, I refuse Ms Morris's Cross-Vesting Application.

principles for grant of interlocutory relief 38 The general principles governing the grant of an interlocutory injunction are well established: Comserv (No 210) Pty Ltd v Robert Ristevski [2022] NSWSC 821 at [73]-[75]. An applicant must establish that: (a) its claim for final relief raises a serious question to be tried in the sense that, if the evidence remains as it is, there is a probability that at the trial of the action the applicant will be entitled to relief; (b) if the interim injunction is not granted, it will suffer irreparable harm for which damages will not be an adequate remedy; and (c) the balance of convenience favours the grant of the interim injunction. See Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153. Cited by subsequent High Court decisions in Australian Broadcasting Corp v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at [13], and Australian Broadcasting Corp v O'Neill (2006) 227 CLR 57, at [2]. 39 In the case of an application for interlocutory relief which is tantamount to final relief, the applicant's case must be "relatively strong": Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238 at [87]; Martin & Pleasance Pty Ltd v A Nelson & Co Ltd [2021] FCAFC 80 at [48]. 40 The Applicants contend that: (a) there is a real and serious probability that at trial Ms Morris will be found to have engaged in conduct that constitutes oppression in the affairs of Tasman for the purposes of s 232 of the Act, entitling the Applicants to the relief sought; (b) Tasman, and thereby the Applicants, will suffer irreparable harm by being prevented from pursuing a valuable transaction for which damages will not suitably be ascertained or recovered; and (c) the balance of convenience lies with granting the relief because Ms Morris's claims to obtain a settlement of assets of the marriage are readily met by an award of damages.

oppression in conduct of affairs of tasman 41 Section 232 of the Act provides that if the conduct of a company's affairs is contrary to the interests of the members as a whole, or oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members, the Court may make an order under s 233 of the Act. The relief available under s 233 of the Act includes any order the Court considers appropriate in relation to the company, including restraining a person from engaging in specified conduct or from doing a specified act. 42 In Re Ledir Enterprises Pty Ltd [2013] NSWSC 1332, Black J held at [178] that the expression "oppressive to, unfairly prejudicial to, or unfairly discriminatory against" is concerned with "commercial unfairness" or "a departure from the standards of fair dealing, or where 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". His Honour went on to state: 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; and that, as French CJ noted in Campbell v Backoffice Investments Pty Ltd above at [72], the language and history of the sections indicate that they should be read broadly and the imposition of judge-made limitations on their scope should be approached with caution. 43 The High Court of Australia in Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 903 at [176] held s 232 of the Act: "should not be read narrowly". An oppression claim is not to be considered in isolation: Hylepin Pty Ltd v Doshay Pty Ltd [2021] FCAFC 201, at [137].

ms morris's alleged oppressive conduct 44 The Applicants submit that in the circumstances of Tasman's proposed transaction, its affairs include the requirement under s 260B(3) of the Act for approval, in a general meeting of CMA as the holding company, of the financial assistance to be provided to Tasman by the Target Entity. 45 The Applicants submit that Ms Morris's conduct affects the affairs of Tasman because it is directed to obstructing the approval satisfying the requirement of s 260B(3). The Applicants submit it is oppressive in the manner described as follows. 46 The Applicants most prominently rely upon Ms Morris's consistent stance that she will not approve the Financial Assistance Resolution on the ground that it may impede a favourable settlement of her claims to division of matrimonial assets. 47 The Applicants submit that Ms Morris's purpose has been made explicit in the correspondence by Ms Morris's representatives on 17 February 2023: Oakley Affidavit [71]. The Applicants submit that that purpose is not directed at or proportionate to the pertinent issue of the Target Entity giving security for the borrowings to be undertaken by Tasman. Nor is it even relevant to an assessment by CMA of the advantages for the Morris family's interest held in Tasman, much less faithful to the proper consideration of beneficiaries' interests under the Morris Family Trust. 48 The Applicants submit that Ms Morris's conduct in affecting the conduct of CMA also falls to be considered in the context of the Shareholders' Deed in respect of Tasman, where CMA promised to be just and faithful in its dealings with the other shareholders: Oakley Affidavit [12], Annexure MRO-1 at p 57 (cl 2.1 of the Shareholders Deed). 49 The Applicants submit that Tasman is not responsible for meeting Ms Morris's or Mr Morris's obligations or entitlements under a family law property division. 50 The Applicants accept that an asset of the Morris's marriage includes at least some of CMA's shareholding in Tasman, and Ms Morris may seek an alteration of her and Mr Morris's interest with respect to that shareholding. The Applicants submit that Ms Morris's conduct seeks to reach beyond any dealing with CMA's shareholding, into the affairs of Tasman itself, and to sterilise the commercial dealings of Tasman for personal advantage. The prejudice to Tasman, the Applicants submit, is immediate and obvious. 51 The Applicants submit that the evidence discloses that Ms Morris has made belated and superficial inquiries of the transaction, confined to the security arrangements which are central to her purpose of enabling Mr Morris to raise funds to provide her with a favourable property settlement: Oakley Affidavit [75] and [78]. 52 The Applicants submit that the evidence discloses that Ms Morris's inquiries lack genuine substance, because there has been no cogent engagement with the information provided to her, nor any response to the invitation for a briefing to advisors: Oakley Affidavit [83]-[85]. The Applicants point to Tasman's advisors offering to arrange meetings with Ms Morris on 24 March 2023, 28 March 2023 and 4 April 2023, to address any questions or concerns she has about the transaction, to which Ms Morris did not reply or engage: Oakley Affidavit Annexure MRO-1 at p 182, [177] and [197]. 53 The Applicants contend that Ms Morris has not even provided an assessment based on the detailed information that the proposed transaction by Tasman would impede in turn a potential property settlement by Mr Morris which requires him to pay a liquid sum. The Applicants submit that Ms Morris's resistance remains generally at the level of speculation. 54 The Applicants submit that the evidence discloses that Ms Morris has not sought to inquire into the commercial merits of the proposed transaction, and that she does not have any direct involvement in the management or affairs of Tasman: Oakley Affidavit [29] and [78]. The Applicants submit that the evidence of those involved with the business of Tasman namely Messrs Morris, Vanis and Oakley together with Tasman's external advisers all consider the proposed acquisition to be in the best interests of Tasman: Oakley Affidavit [37]-[47]. 55 The Applicants rely upon the evidence that Tasman has also obtained approved finance arrangements from four of Australia's major banks, which collectively corroborate the strength of the proposed transaction and the wider commercial position of the business after the transaction: Oakley Affidavit [50]. 56 The Applicants rely upon the evidence of Mr Oakley that Tasman's gross revenue and EBITDA will increase by approximately 30-40% following the Acquisition Transaction, and which in his opinion are conservative: Oakley Affidavit [48]-[49]. Mr Oakley also gives evidence that Tasman anticipates being able to continue paying dividends at around historical levels post transaction: Oakley Affidavit [55]. 57 The Applicants submit that Ms Morris's conduct is calculated to impede the commercial affairs of Tasman. The Applicants submit that there is a clear and strong case that her conduct is oppressive for the purposes of s 232 of the Act entitling the Applicants to the relief sought. 58 The Applicants submit that the evidence discloses that if the interlocutory relief is not granted, the Applicants will suffer irreparable harm. The Applicants submit that the evidence discloses that if Tasman is unable to proceed with the acquisition by 26 April 2023, by reason of not sufficient certainty as to the Financial Assistance Resolution, the Target Entity will likely not proceed with the transaction: Oakley Affidavit Annexure MRO-6 at [103].

ms morris's evidence 59 Ms Morris relies upon her affidavit made on 19 April 2023 and an affidavit of Gregory James McKenzie made on 18 April 2023. 60 The Morris Affidavit at [24]-[31] deposes to the circumstances in which in November 2022 she first because aware of the proposed transaction for Tasman to acquire the Target Entity. Ms Morris states that she was shocked and immediately concerned about the value of the proposed transaction of between $23-$26 million. This is substantially more than previous acquisitions which Tasman had made which involved capital raising of approximately $3-$4 million. 61 Ms Morris deposes to having her solicitors Lander & Rogers request information on the proposed transaction and, as a consequence, she learnt in March 2023 that: (a) the Acquisition Transaction would be 100% debt funded; (b) Tasman would have to borrow approximately $25 million to meet the proposed acquisition price; and (c) together with other substantial borrowings by Tasman that will result in Tasman's debt drastically increasing from about $4.6 million to around $38 million. 62 Ms Morris's evidence is that she considers this to be an extremely large increase in the overall debt of Tasman. Ms Morris is concerned that the acquisition is intended to be 100% debt funded in an uncertain economic climate. Ms Morris is concerned that this presents a very significant risk to Tasman and therefore to CMA. Ms Morris deposes to not being willing to agree to put at risk CMA's substantial investment in Tasman by consenting to Tasman being saddled with a large amount of debt just so it can acquire another business through 100% debt. Ms Morris's evidence is that this is the reason (along with the consequences of that risk for her family) why she did not consent to Tasman entering into the Acquisition Transaction. 63 Whilst this is an interlocutory hearing, the relief sought by the Applicants is tantamount to final relief. I have not had the benefit of deponents to affidavits filed being cross-examined. As a consequence, I am not in a position to go behind the affidavits of the various deponents; nor am I in a position to reject what they have deposed. Ms Morris has provided an explanation in the correspondence from her solicitors Lander & Rogers and in her affidavit which on its face is a reasonable and credible explanation for not supporting the Acquisition Transaction. I reject the invitation by the Applicants' counsel, Mr Archibald KC, to infer that Ms Morris is acting for an ulterior purpose because, in the Applicants' submission, she has not sought to engage with the commercial rationale for Tasman proceeding with the Acquisition Transaction. The Applicants invite me to reject that Ms Morris has a genuine concern about the level of debt that Tasman will incur as a result of completing the Acquisition Transaction. I refuse to do so as there is no basis for me to go behind what Ms Morris has deposed to in her affidavit. The explanation given by Ms Morris in her affidavit as to her opposition to voting in favour of the Financial Assistance Resolution at a meeting of shareholders of CMA is, in my view, plausible and rational.

the applicants have failed to establish a relatively strong case 64 I consider that the Applicants have not, on the evidence, established their case to entitle them to interlocutory relief for the reasons that follow. 65 As the interlocutory relief which the Applicants seek is tantamount to final relief, I must be satisfied that the Applicants' case is "relatively strong": Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238; FCAFC 156 at [87]; Martin & Pleasance Pty Ltd v A Nelson & Co Ltd [2021] FCAFC 80 at [48]. 66 Having regard to the above standard, the Applicants have not positively satisfied me that they have standing to bring these claims. Section 232 of the Act provides as follows: The Court may make an order under section 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. 67 Section 233 of the Act provides: (1) The Court can make any order under this section that it considers appropriate in relation to the company, including an order: … (h) appointing a receiver or a receiver and manager of any or all of the company's property; (i) restraining a person from engaging in specified conduct or from doing a specified act; (j) requiring a person to do a specified act. 68 Section 234 of the Act sets out the persons who are entitled to make an application under s 233. Those persons include, relevantly, only current or former members of "the company". 69 The Applicants allege that Ms Morris's conduct constitutes oppressive conduct in the "affairs of Tasman, under s 232 of the Act. An application can only be brought by relevantly a current or former member of the company whose affairs are concerned. While the Applicants contend that they seek relief in respect of the affairs of Tasman, of which they are members, I am not persuaded that this is the case, nor is it sufficiently strong to support the interlocutory relief they seek. It seems to me that there is a good case that the Applicants seek relief in respect of Ms Morris's personal conduct in the affairs of CMA, of which they are not members. 70 Further, on the Applicants' case, s 232 of the Act will only be engaged where the conduct of the company's affairs is "contrary to the interests of the members as a whole", or "oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity". I am not satisfied that there is a sufficiently strong case that the mere failure of CMA to pass a resolution, upon which reasonable minds may differ, can properly be characterised as "contrary to the interests of the members [of Tasman] as a whole" or "oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members [of Tasman] whether in that capacity or in any other capacity". 71 The orders the Court can make under s 233 of the Act are "in relation to the company", that is the company whose "affairs" give rise to the claim of oppressive conduct under s 232 of the Act. Here, the relief sought by the Applicants is injunctive relief to restrain Ms Morris from voting against, alternatively voting at, the general meeting of CMA upon the Financial Assistance Resolution. It was accepted by the Applicants during the hearing that Tasman is the Company whose "affairs" give rise to their claim of oppressive conduct. The Applicants' position is that, as the interlocutory relief they seek concerns CMA's vote on the Financial Assistance Resolution, and the Financial Assistance Resolution concerns the financial assistance to be provided to Tasman, their claim for interlocutory relief is "in relation to" Tasman (and the Court is therefore empowered to grant them interlocutory relief under s 233 of the Act). Again, I am not persuaded that this case is sufficiently strong to support the interlocutory relief sought by the Applicants. In reality, it seems to me that the true complaint which the Applicants have, and in respect of which they seek relief, concerns only conduct engaged in by Ms Morris in the affairs of CMA, and this cannot give rise to relief in favour of the Applicants as minority shareholders of Tasman under the oppression provisions in ss 232, 233 and 234 of the Act. 72 Even if the Applicants were able to establish a relatively strong case that they have standing to seek relief under s 233 of the Act, which I have found they do not, there is still a strong case that Ms Morris's decision not to vote in favour of the Financial Assistance Resolution at the general meeting of CMA would not fall within the terms of either s 232(d) or s 232(e) of the Act. 73 Section 232(d) empowers the Court to make an order under s 233 where relevantly the conduct of a company's affairs is "contrary to the interests of the members as a whole". 74 The learned authors of Ford's Principles of Corporations Law state: As to the meaning in s 232(d) of "contrary to the interests of members as a whole", the Court of Appeal of the Supreme Court of New South Wales has equated this to the phrase "benefit of the company as a whole": New South Wales Rugby League Ltd v Wayde (1985) 1 NSWLR 86 at 96; … . The phrase "benefit of the company as a whole" when used in the context of fraud on the minority is discussed at [10.100]. Conduct or a decision by a board of directors will be contrary to the interests of the members as a whole if no board, acting reasonably, could have engaged in that conduct or made that decision: Sandy v Yindjibarndi Aboriginal Corp RNTBC (No 4) (2018) 126 ACSR 370; [2018] WASC 124 at [102]-[103]. 75 In Sandy v Yindjibarndi Aboriginal Corp RNTBC (No 4) (2018) 126 ACSR 370, Pritchard J stated: [99] The meaning of the phrase 'contrary to the interests of the members as a whole' in the corporations legislation has been equated with 'the benefit of the company as a whole'. [100] The interests of the members, considered as a whole, are 'circumscribed by, and found within, the constituting documents of the company'. So, for example, to exclude a member from membership of a corporation, contrary to its articles, may be contrary to the interests of the members of the company as a whole. [101] The requirement that an exercise of a corporation's powers be for the benefit of the members as a whole is to exclude their exercise for 'ulterior special and particular advantages'. The provision is directed to 'purposes foreign to the association's operations, affairs and organizations'. [102] Conduct by a board of directors will be contrary to the interests of the members as a whole if no board, acting reasonably, could have engaged in that conduct. It is not necessary to show bad faith on the part of the directors. In other words, conduct may be contrary to the interests of the members as a whole even though the board of directors does not act in bad faith. [103] In considering an allegation that conduct was contrary to the interests of the members as a whole, the courts will not assume the management of corporations, so as to substitute their decisions and assessments (about the merits of particular management decisions) for those of the directors. Consequently, in order to show that a decision was not in the overall interests of the members as a whole, it has to be shown that the decision of the board of directors was such that no board acting reasonably could have made it. 76 The mere fact that Ms Morris disagrees with the Applicants (and Mr Morris), concerning the commercial merit and risk of entering into the Acquisition Transaction is not oppressive conduct. The mere fact that there are irreconcilable differences between the parties is not sufficient to establish oppressive conduct: Ubertini v Saeco International Group Spa (No 4) (2014) 98 ACSR 138 at [497]; Tomanovic v Global Mortgage Equity Corp Pty Ltd (2011) 288 ALR 310 at [331(b)] (Young JA); Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672. There is a strong case that, in this case, there is simply a difference between the Applicants' (and Mr Morris's) and Ms Morris's respective appetites for risk. Given the financial character of the proposed transaction, in my view, it cannot be said that Ms Morris's decision not to consent to it is such that no shareholder acting reasonably could have made it. 77 Section 232(e) of the Act empowers the Court to make an order under s 233 where relevantly the conduct of a company's affairs is "oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity". In a commercial company, whether certain conduct is oppressive is decided by asking if there has been commercial unfairness judged objectively as by a commercial bystander: Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 at 704; Pellarini v Bicher & Son Pty Ltd (2020) 147 ACSR 108 at [76]. In a non-commercial company, the test is from the viewpoint of a hypothetical reasonable person associated with the type of company in question: Ananda Marga Pracaraka Samgha Ltd v Tomas (No 6) (2013) 300 ALR 492 at [418]. 78 CMA is the corporate trustee of a family trust - The Morris Family Trust. It is a non-commercial company. The family structure is closely held. The directors of CMA are Mr Morris and Ms Morris, and the beneficiaries of the Morris Family Trust are themselves and their children along with one corporate beneficiary Jaybrooke Pty Ltd: Morris Affidavit at [9]. 79 Ms Morris in her affidavit has deposed to her view that the Acquisition Transaction is not in the best interests of CMA because the necessary debt levels would pose an unacceptable risk to its assets. As a director and shareholder of CMA, Ms Morris is entitled to form that view. The Applicants and Mr Morris may have a different view but it cannot be said on the state of the evidence at present, and in particular in the absence of cross-examination, that Ms Morris's view is plainly wrong or illogical. Ms Morris's view may be more conservative than the Applicants and Mr Morris. That is readily understandable in circumstances where the shares in Tasman are a major asset of CMA and a major asset of the family trust. I am far from persuaded on the evidence before me that a hypothetical reasonable person associated with CMA would consider Ms Morris's conduct to be commercially unfair.

balance of convenience 80 The Applicants have delayed in bringing this application for interlocutory relief which is, in reality, final relief. The Applicants have been on notice since at least 2 December 2022 that Ms Morris may not consent to the Acquisition Transaction. Notwithstanding this, the Applicants did not issue this application until 14 April 2023, being four months later and two business days before the final date upon which Tasman can "realistically" obtain Ms Morris's consent: Oakley Affidavit [82]. 81 I accept the Applicants' submission that, if this Court does not grant the interlocutory relief sought, and at trial Ms Morris is found to have engaged in oppressive conduct, the Applicants may be prevented from pursuing a valuable transaction for which damages will not suitably be ascertained or recovered. However, given the Applicants' interlocutory claim effectively requires me to make final orders and that the Applicants have not established a relatively strong case of oppression, I consider that the balance of convenience does not favour the grant of the injunctive relief sought by the Applicants.

applicants' restraining order application 82 By their amended originating application dated 19 April 203, the Applicants seek an order restraining the First Respondent from taking any step, directly or indirectly, in the Federal Circuit and Family Court of Australia or elsewhere, to restrain or seek to restrain: (a) the prosecution by the Applicants of their proceedings before this Court, whether by way of an application for an anti-suit injunction or other form of relief; (b) the Fourth Respondent from causing the Third Respondent to enter into the Acquisition Transaction. (Applicants' Restraining Order Application) 83 Having dismissed the Applicants' claim for interlocutory relief, I do not consider that it is appropriate to grant the Applicants' Restraining Order Application. The merits of Ms Morris Restraining Order Application are better dealt with by the judge in the Federal Circuit and Family Court of Australia seized of the proceeding in which that application is made. I exercise my discretion to refuse the Applicants' Restraining Order Application. 84 For the above reasons, I made the orders set out in this judgment on 19 April 2023. I certify that the preceding eighty-four (84) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anderson.