WILLIAM BUCK (WA) PTY LTD -v- FAULKNER [No 6] [2013] WASC 342 (24 September 2013)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION : WILLIAM BUCK (WA) PTY LTD -v- FAULKNER [No 6] [2013] WASC 342

CORAM : KENNETH MARTIN J

HEARD : 18-22 & 25-27 MARCH, 24-27 JUNE, 10 & 17 SEPTEMBER 2013

DELIVERED : 24 SEPTEMBER 2013

FILE NO/S : CIV 2995 of 2011

BETWEEN : WILLIAM BUCK (WA) PTY LTD

First Plaintiff

WILLIAM BUCK HOLDINGS (WA) PTY LTD

Second Plaintiff

AND

CRAIG PETER FAULKNER

First Defendant

LEDGER FAULKNER PTY LTD

Second Defendant

CSF CORPORATE PTY LTD

Third Defendant

(BY ORIGINAL ACTION)

CRAIG PETER FAULKNER

Plaintiff

AND

WILLIAM BUCK (WA) PTY LTD

First Defendant

WILLIAM BUCK HOLDINGS (WA) PTY LTD

Second Defendant

MARK PETER COLLINS

Third Defendant

STEPHEN KENNETH BREIHL

Fourth Defendant

CHRISTOPHER JOHN BROWN

Fifth Defendant

FRANK DEL BORRELLO

Sixth Defendant

DAMON ALLAN HARRIS

Seventh Defendant

ROBIN BOYD JUDD

Eighth Defendant

(BY COUNTERCLAIM)

FILE NO/S : COR 174 of 2011

MATTER : WILLIAM BUCK HOLDINGS (WA) PTY LTD

BETWEEN : CSF CORPORATE PTY LTD

Plaintiff

AND

WILLIAM BUCK HOLDINGS (WA) PTY LTD

Defendant

Catchwords:

Statutory oppression - Minority shareholder oppressive exclusion from management - Payment of dividends to all other shareholders - No dividends paid to claimant shareholder - Unfairly prejudicial conduct by majority - Relief - Buy-out order for minority shareholding not appropriate or sought



Buy-back order inappropriate - Minority shareholding - Unmarketable parcel of shares - Winding up order



Employment agreement - Termination on notice of employee or director - Four weeks' notice given - Intervening alleged serious misconduct - Attempted summary termination and dismissal - Contested basis for summary dismissal - Alleged repudiation of employment agreement by employer - Repudiation accepted by employee



Employment agreement - Covenants against establishing a rival competitive business - Restricted Activity prohibited - Nominal damages - Causation of damage by loss of clients required to show a Restricted Activity - Not proved - Breach of restraint covenant not established

Legislation:

Corporations Act 2001 (Cth), s 232, s 233, s 234, s 467

Result:

Winding up orders

Category: B

Representation:

CIV 2995 of 2011

Original Action

Counsel:

First Plaintiff : Mr D H Solomon

Second Plaintiff : Mr D H Solomon

First Defendant : Mr M L Bennett

Second Defendant : Mr M L Bennett

Third Defendant : Mr M L Bennett

Solicitors:

First Plaintiff : Solomon Brothers

Second Plaintiff : Solomon Brothers

First Defendant : Bennett & Co

Second Defendant : Bennett & Co

Third Defendant : Bennett & Co

Counterclaim

Counsel:

Plaintiff : Mr M L Bennett

First Defendant : Mr D H Solomon

Second Defendant : Mr D H Solomon

Third Defendant : Mr D H Solomon

Fourth Defendant : Mr D H Solomon

Fifth Defendant : Mr D H Solomon

Sixth Defendant : Mr D H Solomon

Seventh Defendant : Mr D H Solomon

Eighth Defendant : Mr D H Solomon

Solicitors:

Plaintiff : Bennett & Co

First Defendant : Solomon Brothers

Second Defendant : Solomon Brothers

Third Defendant : Solomon Brothers

Fourth Defendant : Solomon Brothers

Fifth Defendant : Solomon Brothers

Sixth Defendant : Solomon Brothers

Seventh Defendant : Solomon Brothers

Eighth Defendant : Solomon Brothers

COR 174 of 2011

Counsel:

Plaintiff : Mr M L Bennett

Defendant : Mr D H Solomon

Solicitors:

Plaintiff : Bennett & Co

Defendant : Solomon Brothers

Case(s) referred to in judgment(s):

TABLE OF CONTENTS

KENNETH MARTIN J:

Introduction

1 Two actions were heard together across 12 hearing days in March and June this year. Broadly speaking, the opposing parties comprise two camps. First is the William Buck camp, comprising a parent company and its wholly owned or substantially controlled subsidiary corporations operating an accounting business from South Perth, and the six natural persons who are directors of all those William Buck companies. The individual directors are further tied to the parent holding company as they each control personal trustee companies that hold (equally) between themselves the shares of the parent company. The opposing camp comprises Mr Craig Faulkner (Mr Faulkner) and two corporations associated with or controlled by him. For convenience I will refer collectively to the opposing camps respectively as the 'William Buck parties', and the 'Faulkner parties'.

2 Mr Faulkner is a chartered accountant who was recruited in 2005 as an employee to work for William Buck (WA) Pty Ltd, the main accounting practice of the William Buck (WA) Group at South Perth. Initially, Mr Faulkner was recruited as an employee to work in the business advisory section. But a career path was explained to him when he joined in 2005 whereby he could become a William Buck 'partner' in the accounting practice: see exhibit 4, witness statement of Mark Peter Collins, par 39. The prospect of promotion to 'partner' was a significant factor influencing Mr Faulkner to shift to this William Buck employment in 2005.

3 By the middle of 2007 Mr Faulkner had become a 'salaried principal' in the business advisory section: see exhibit 4, witness statement of Mark Peter Collins, pars 51 - 53. It was around this time Mr Faulkner signed a formal employment agreement with one of the William Buck subsidiary corporations as his employer.

4 In mid2008, Mr Faulkner was elevated to the position of being a full 'equity director' of what is called the William Buck (WA) Group: see exhibit 4, witness statement of Mark Peter Collins, par 59. The use of the term 'equity director' carries a somewhat nebulous meaning. It provides little insight into understanding what was a complex business relationship comprising far more than just a bare employment agreement as between Mr Faulkner and one of the William Buck corporations.

5 There were eight William Buck 'equity directors' in mid2008. On occasion they referred to themselves, or were referred to within the accounting business by the staff, as 'partners': see exhibit 1, trial bundle, vol 1, page 320. For convenience in referring to documents within this trial bundle, I will refer to the volumes (of four) and then to page numbers, rather than a document number. Insight into the relationship between the William Buck parties or, as sometimes referred, the 'William Buck (WA) Group' can be obtained by a diagram (exhibit 38) depicting the corporate structure of the Group. From that group structure chart it can be discerned that William Buck Holdings (WA) Pty Ltd is the holding company of a series of subsidiary corporations, four of which were wholly owned. I will refer to the parent holding company in these reasons as 'WB Holdings'. One of its wholly owned subsidiary corporations is Mr Faulkner's former employer, William Buck (WA) Pty Ltd. I refer to this employer entity as 'WB (WA)'.

6 From the parties' pleadings, an early controversy appeared to arise over whether there existed a common law partnership between the socalled equity directors of the William Buck Group (WA). This generated some furious debate: see Faulkner Parties' Amended Statement of Claim in COR 174 of 2011, pars 1.1 and 5.4.1; William Buck Parties Defence in COR 174 of 2011, pars 1.1, 5.2. However, as the trial proceeded, this dispute subsided with an apparent concession on all sides that, on any view, there existed a 'quasipartnership' as between the eight natural person accountants concerned (see ts 310).

7 Shareholders in WB Holdings are identified by the group structure chart as corporations. These are invariably corporate trustees for the family trusts of each 'equity director'. In the case of Mr Faulkner, the corporate trustee entity concerned is CSF Corporate Pty Ltd. I will refer to this Faulkner corporate trustee shareholder entity in these reasons as 'CSF', who is the plaintiff in COR 174 of 2011.

8 The number of ordinary shares held by each corporate trustee in WB Holdings was, as between its various shareholders, always equivalent in each case. Each shareholder holds 300,000 ordinary shares.

9 In addition, each corporate trustee also held one unique class, single share that was allocated in accordance with the Constitution of WB Holdings. For CSF this was an H class share. As will be seen, the single shareholder class held by each corporate trustee shareholder has some relevance for understanding dividend distribution resolutions by WB Holdings, the resolutions being to pay out dividends by reference to that unique class of share held by members, rather than by reference to the ordinary shares held in equal numbers by its members. Dividend resolutions on that criterion happened after Mr Faulkner's end of September 2011 departure from the William Buck (WA) Group organisation: see exhibits 9, 11, 22 and 48.

10 To cut to the chase, there was a serious falling out between Mr Faulkner and his fellow equity directors which had been simmering for some time throughout 2011. The falling out had deep rooted origins, in part referable to the repercussions of the global financial crisis of around October 2008 and the consequent decline in revenues of the William Buck (WA) Group. Diminished returns to equity directors created unhappiness all around but particularly for the younger, more recently appointed equity directors, like Mr Faulkner.

11 Tensions between Mr Faulkner and others were exacerbated by various incidents in 2011. These included a failure by the WB (WA) Group to bring about a merger with another Perth based accounting practice and the departure of Mr Peter Hills (the equity director who had run the William Buck WA Tax Services Business Unit (TSBU)) to another Perth accounting firm, Grant Thornton. Mr Hills left at the end of June 2011: see exhibit 38, witness statement of Peter Hills, par 2. After Mr Hills' departure from around July 2011 approaches were made to Mr Faulkner, by his fellow equity directors, for him to leave the William Buck (WA) Group voluntarily. Mr Faulkner rebuffed these approaches. Matters came to a head during September 2011.

Termination of Mr Faulkner's employment

12 On 27 September 2011 WB (WA), as Mr Faulkner's employer, gave Mr Faulkner four weeks' written notice of the termination of his employment. He was further advised that he had been removed from office that day as a director of four corporate subsidiaries of WB Holdings. He was further informed that a general meeting of shareholders of WB Holdings was being convened in not less than 21 days' time to carry a motion removing him as a director of WB Holdings.

13 Notwithstanding being given four weeks' notice of the termination of his employment the day before, on the very next day (28 September 2011) Mr Faulkner was advised he was being summarily terminated. This was explained to him on the basis of Mr Faulkner having allegedly removed client files from WB (WA), purportedly making false claims about being unable to 'log in' to the William Buck computer system, and his refusal to comply with some directions in the first notice: see statement of claim par 8. Mr Faulkner refutes these allegations. They are the subject of Mr Faulkner's counterclaim for damages against WB (WA) for breach of his employment contract in the first action, CIV 2995 of 2011: see Faulkner Parties' Amended Defence and Counterclaim in CIV 2995 of 2011 par 8.

14 The origins of the 2011 falling out between Mr Faulkner and his fellow Perth equity directors are deeprooted and complex. They involve personality issues, adverse perceptions and cultural clashes over Mr Faulkner allegedly putting selfinterest ahead of the William Buck Group interests, as well as some personal resentments over Mr Faulkner's impolitic choices of language, either verbal or written in passing email communications within the William Buck WA Group.

15 Evaluating the root cause or causes of a business relationship breakdown is not a straightforward task. The interaction of diverse human relationships over some time (2008 - 2011) unfolding across a complex accountancy services business is not easily subjected to a black and white process of analytical fault evaluation, particularly after the event, as perceptions harden and positions entrench. Usually there are shades of grey and some responsibility on all sides. That is the case here in my assessment. I see minimal utility in an attempted fault attribution exercise between professional adults in the absence of identifying some egregious conduct on one or the other that warrants rebuke. I refer in that regard to the remarks of the plurality in Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 [176] and by Barrett J in Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343 [115].

16 The pragmatic reality is that a business relationship between participants requires a degree of mutual trust and confidence to be exhibited all round. On any view, in the present case, by the end of September 2011 there was, a serious breakdown in the business relationship between Mr Faulkner and his (by then) fellow six William Buck (WA) Group equity directors.

17 A fault attribution exercise stretching back years was urged on by the William Buck parties. That lengthy and costly invitation is distinctly unappealing. Especially in a context of a breakup dispute which at its outer limits (assessed at the last quarter of 2011) was of a magnitude of roughly $275,000, as claimed by the Faulkner parties. The disproportionate waste of everyone's resources, including the court's, in combing over an 'ancient history' of dealings and evaluating perceived slights is simply unjustifiable on an economic basis.

18 In October 2011, WB (WA) commenced proceedings by CIV 2995 of 2011 against Mr Faulkner and Ledger Faulkner Pty Ltd, a corporation which was formed as a part of Mr Faulkner's implementation of new business arrangements. Ledger Faulkner Pty Ltd subsequently changed its name to Faulkner & Co Pty Ltd.

19 Four days later, on 25 October 2011, CSF issued its originating proceedings seeking statutory oppression relief pursuant to the Corporations Act 2001 (Cth) against WB Holdings. As its chosen remedy, CSF applied for orders winding up WB Holdings or, as a less preferred option, an order that WB Holdings be required to purchase CSF's priority shareholding (ie a forced reduction of capital by WB Holdings).

20 The winding up order against WB Holdings was sought on a dual basis that this was 'just and equitable', within the meaning of s 467(4), or was the appropriate relief against alleged statutory oppression under s 232 Corporations Act and see s 233(1)(a). The less preferred order for compulsory buy-back of CSF's shares by WB Holdings was sought under s 233(1)(c), as an alternative remedy against oppression. However, it was not sought under the provisions in Corporations Act pt 2J.1. In closing, this led to some legal arguments in relation to whether an order under s 233(1)(c) should be made by reference to the rules set out in pt 2J.1 div 2 of the Corporations Act. I accept those provisions, especially as regards creditors, raise relevant considerations in assessing the opportunities of a buy-back order if that point is otherwise reached.

21 As matters developed, the statutory oppression action pursued by CSF against WB Holdings became the main event of this litigation. In particular, CSF contend a forced ejection of Mr Faulkner from William Buck Group management, at the end of September 2011 was, by reference to s 232, oppressive, unfairly prejudicial or unfairly discriminatory against CSF.

22 CSF also complained of an unfairly discriminatory payment of dividends to all shareholders of WB Holdings other than to CSF, by its conduct after September 2011. That discrimination contention is strongly pressed, particularly as even now CSF remains a minority shareholder holding 300,001 shares in WB Holdings. CSF says that no reasonable offer has been made to it to either buy out or buy back these shares. Yet dividends are being paid to all other shareholders. Effectively then, CSF sees itself as a nonrecipient of any dividends since 2011. In circumstances where its share capital is effectively frozen, but held and enjoyed by WB Holdings.

Initial action: CIV 2005 of 2011

23 By CIV 2995 of 2011, WB (WA) as Mr Faulkner's employer, originally sought damages against him for breach of his employment contract, by acts of alleged solicitation of former clients of the William Buck (WA) Group. WB (WA) alleged that some accounting services clients had terminated their business relationship with the William Buck Group and moved over to be serviced by Mr Faulkner, or his new structure. Commencement of this action saw a series of short term undertakings by consent offered by Mr Faulkner to forestall WB (WA)'s claims for urgent interlocutory injunctive relief against him. Those interlocutory issues were soon resolved.

24 For a time it then appeared a substantial damages claim for alleged breaches of an express nonsolicitation covenant in Mr Faulkner's 2007 employment agreement was pursued by WB (WA) against him. However, by the time the parties' witness statements came to be exchanged (around late 2012) and by the parties' written submissions WB (WA)'s damages claim had shrunk dramatically. WB (WA) now said it only pursued nominal damages against Mr Faulkner although WB (WA)'s allegation of breach of the covenant by Mr Faulkner was maintained (see ts 242).

25 However, the 2007 employment agreement does not provide any sustainable basis for even a nominal damages breach of contract claim against Mr Faulkner: see my reasons in William Buck (WA) Pty Ltd v Faulkner [No 5] [2013] WASC 206 particularly at [25] [48]. Those reasons were interlocutory at the time (delivered after eight days of the unfinished trial). However, nothing emerging in the course of the now completed 12day trial has occasioned any reason to deviate from the prima facie views I articulated in those earlier reasons. In the circumstances, I can now confirm that the problematic defined term 'Restricted Activity', as used within cl 14.2 of Mr Faulkner's employment contract with WB (WA), is not engaged. That term (as defined) requires the identification of a client that has ceased or reduced doing business with the William Buck parties (for the definition of 'restricted activity' see TB vol 1, page 271, cl 14.1(c)). Counsel for the William Buck parties eschewed taking up any lost client causation task as regards proving substantive damages: see par 3 of the William Buck Parties' Outline of Opening Submissions for the trial of both matters of 18 March 2013. His contention is that WB (WA) can still pursue nominal damages. I find to the contrary. On my assessment, WB (WA)'s basal failure to show that there has been any former WB (WA) client that was lost by the conduct of Mr Faulkner, means that there has been a failure to show any breach of cl 14.2 by Mr Faulkner. Accordingly, even a nominal damages case fails absent the proof of breach. This all arises, as the interlocutory reasons earlier explained, from the defective covenant drafted to function upon showing a satisfaction of the term 'Restricted Activity'.

26 That leaves as the only live issue in CIV 2995 of 2011 Mr Faulkner's counterclaim, where he seeks breach damages against WB (WA) for alleged repudiatory breach of his 2007 employment agreement with WB (WA). The repudiation he contends was the wholly wrongful and unjustified summary termination of his employment, on 28 September 2011.

27 Mr Faulkner also accepts that his employment agreement contained a 'termination without cause' provision. This provision allowed WB (WA) to end his employment for any reason, upon giving four weeks' notice. That is, in fact, the basis upon which notice which was given to him by WB (WA) on 27 September 2011, ending Mr Faulkner's employment .

28 In these circumstances, Mr Faulkner accepts the most he can obtain, as damages, is approximately $11,546 as damages from WB (WA).

29 Despite the paltry monetary dimensions, the William Buck parties strongly resist Mr Faulkner's counterclaim. They contended that Mr Faulkner's alleged misconduct as an employee as at 28 September 2011 justified his summary termination. However, the wider forensic significance of this contention is not as a response to Mr Faulkner's counterclaim in the civil action. Rather, it is pressed doggedly by the William Buck parties to establish what is said to be relevant context for evaluating CSF's statutory oppression action. The William Buck parties effectively argue that taking the widest possible view of the events may bear upon a s 232 application, so showing employee misconduct by Mr Faulkner, bears upon negating the statutory oppression claim by CSF against WB Holdings. This wide view of context also includes pressing allegations about Mr Faulkner's client solicitation breaches, which I have now evaluated as contractually barren.

30 As these reasons show, it was open to WB (WA) to end Mr Faulkner's employment contractually without any cause being shown on the four weeks' notice that was given to him on 27 September 2011. However, the subsequent efforts to upgrade the basis for an employment termination to a summary dismissal grounded on serious employee misconduct, on my assessment, is wholly unsustainable.

31 Furthermore, even if there was a basis for a summary dismissal, that would have only a peripheral relevance, at best, towards evaluating whether Mr Faulkner's corporate trustee CSF, as a corporation and minority shareholder of WB Holdings, had suffered s 232 statutory oppression.

The main event: CSF's statutory oppression action

32 It is necessary to say a little more at the outset about CSF's statutory oppression action. When Mr Faulkner became an 'equity director' in mid2008 it was accepted that CSF would need to pay $300,001 in order to acquire 300,000 ordinary shares plus an extra one H class share (for $1) in the holding company. Another equity director, Mr Stephen Breihl, was admitted at the same time as Mr Faulkner in July 2008 . He likewise subscribed for 300,000 ordinary shares plus one H class share through his trustee corporation, Jestscol Pty Ltd as trustee for Jestscol Trust (see ts 507, Exhibit 14, Valuation Exercise Information Required Report dated March 2011, page 2016, Supplementary TB).

33 At mid 2008 there were two primary sources of remuneration for WB Holdings' equity directors. First, an employee's salary component paid to the equity director by WB (WA) and from which PAYG income tax instalments had been deducted. Second, regular shareholder dividends distributed to the corporate trustees (shareholders of WB Holdings) out of its parental profits. WB Holdings' profits were essentially its upstreamed receipts it got from the declared dividends of its corporate subsidiaries, which were then paid out to the shareholders of WB Holdings. These remuneration arrangements proceeded on a basis of equality between equity directors (and their corporate trustees) in terms of the WB (WA) salary and the WB Holdings dividends to be received. The equity directors had, through their corporate trustees, subscribed for equal shareholdings in WB Holdings.

34 Subsequent to Mr Faulkner's involuntary ejection from the William Buck organisation at the end of September 2011, CSF invoked s 232 Corporations Act to complain of oppressive or unfairly prejudicial conduct against it by WB Holdings.

35 That oppression contention is strongly resisted by WB Holdings. On the basis, as I mentioned, of taking the widest contextual view of the overall business relationship and a serious breakdown in the business relationship with Mr Faulkner, it is said not to be contextually unfair for WB Holdings to have taken steps to unilaterally remove Mr Faulkner from the William Buck entities, as undoubtedly occurred at the end of September 2011. To this end, it is contended that a close scrutiny of incidents transpiring between the equity directors, going back to the time Mr Faulkner was admitted in mid2008, and even before that, is required. This is necessary, it is said, because the principle of 'fairness' underlies the statutory relief sought, noting in particular the terminology used in s 232(e), 'unfairly prejudicial' and 'unfairly discriminatory'. The assessment of fairness requires everything to be looked at, so it is put. It is contended that Mr Faulkner will be assessed overall to have acted in a selfish or uncooperative manner within the William Buck WA Group and has been unamenable to negotiating reasonably to achieve a voluntary departure. On this basis, WB Holdings say there has been no statutory oppression of CSF, viewed in all the circumstances.

36 Furthermore, the William Buck parties say that since Mr Faulkner no longer provides any beneficial work product of value by way of accounting services to WB (WA), he has not contributed to any profitmaking by that subsidiary. This is the correlatively reflected in a reduction in profits upstreamed by WB (WA) to WB Holdings. Therefore, it is argued that it is more than fair that CSF not receive the same regular dividend distribution payments that the other shareholders all have received, since September 2011.

37 These reasons will show:

(i) WB (WA) and WB Holdings have failed to demonstrate that there was a legitimate basis for Mr Faulkner's attempted summary termination on 28 September 2011, or for their contentions that Mr Faulkner had breached his employment contract with WB (WA) by engaging in a 'Restricted Activity', contrary to cl 14.2.

(ii) By 27 September 2011, the level of mutual trust and confidence between Mr Faulkner and his six other remaining equity directors in the William Buck WA Group was negligible. It was then open to WB (WA) to end Mr Faulkner's employment on four weeks' notice. However, the Faulkner/WB Holdings employment relationship was simply one formal aspect of a much wider business and corporate relationship which had been in existence since July 2008.

(iii) Whilst no narrow view is ever to be taken of s 232 Corporations Act, as the High Court said in Campbell v Backoffice Investments Pty Ltd [59] (French CJ) [176] (Gummow, Hayne, Heydon & Kiefel JJ), nevertheless, the statutory oppression action is brought at root by a corporate shareholder, as a member, against a corporation. Any evaluation of surrounding context must respect the actual legal relationships that exist. See O'Neill v Phillips [1999] UKHL 24; [1999] 1 WLR 1092, 1104 (Lord Hoffman) referring to Lord Wilberforce's observation in Ebrahimi v Westbourne Galleries Ltd [1973] AC 360, 380 that 'a company, however small, however domestic, is a company not a partnership or even a quasipartnership'.

(iv) In the present s 232 statutory oppression action by CSF as a minority shareholder of WB Holdings, the employment relationship between Mr Faulkner and WB (WA) was one aspect of a picture to be considered in evaluating CSF's oppression grievances. Their grievances arise from the unilateral ejection from the William Buck Group of Mr Faulkner and subsequent acts of shareholder discrimination against CSF by the payments of dividends to all shareholders, save for CSF, post September 2011, go wider than that. Removal of Mr Faulkner as an employee for cause, or otherwise, is one thing. His forced removal from all directorships held in William Buck corporations is another aspect. However, beyond these events, CSF was left by October 2011 holding an essentially nontransferrable (in a proprietary corporation with the usual Constitutional fetters against an open market transfer of shares) unmarketable parcel of 300,001 shares in WB Holdings. Had CSF continued, post September 2011, to receive equal dividends along with the other shareholders, concerns over unfair shareholder discrimination may not arise with the same force notwithstanding Mr Faulkner's forced ejection. Likewise, had there been a reasonable offer made to CSF to buyout, or buyback CSF's shareholding, then s 232 concerns may recede.

(v) In a context of the disproportionate cost of a 12day Supreme Court trial, the narrow economic dimensions of the present dispute need to be kept in mind. At September 2011, around $270,000 probably represented the outer limit of the (net) worth to CSF of its shareholding in WB Holdings, as I will explain. Instead of sensibly resolving what was then a relatively small monetary business exit dispute, the parties' grievances have escalated to gargantuan proportions. Both camps need to carry some measure of responsibility for ignoring what is the disproportionate cost of this wholly uneconomic drawn out fight.

(vi) If it is here assessed that s 232 has been transgressed and a buy-back order for CSF's shares pursuant to s 233(1)(e) assessed as appropriate relief, then a gloomy prospect of even more expensive and bitterly fought out trial disputation over working out a value of CSF's shares in WB Holdings looms large on the horizon.

(vii) If a party has behaves unreasonably or irrationally in the context of corporate behaviour and this behaviour is assessed as likely to continue then, exceptional as such relief may be (particularly towards an ostensibly solvent corporation), extreme relief by a winding up order against an oppressor corporation may be the only viable solution since it is the only way to end an irrational, wholly resource disproportionate and wasteful conflict that otherwise shows no sign of abating any time soon.

The first action CIV 2995 of 2011: procedural history

38 This action was begun by WB (WA) as plaintiff against Mr Faulkner as first defendant and Ledger Faulkner Pty Ltd as second defendant, on 21 October 2011. Proceedings were commenced urgently in a context of WB (WA)'s application for interim injunctive relief to restrain both defendants from breaching a noncompetition covenant within Mr Faulkner's 2 July 2007 employment contract with WB (WA). On 25 October 2011, Mr Faulkner responded with his defence and counterclaim against WB (WA), WB Holdings and Messrs Collins, Judd, Brown, Del Borrello, Breihl and Harris his former fellow equity directors.

39 The interlocutory injunction sought by WB (WA) was strongly opposed. The noncompetition covenant breach dispute was resolved on a short term basis by undertakings offered by the Faulkner parties, filed on 27 October 2011.

40 The first action has since been case managed in my CMC list towards an eventual joint trial with the second action where, as I explained, CSF as plaintiff claims relief pursuant to s 232 and s 233 of the Corporations Act against WB Holdings.

41 Just before both trials were to commence, on 18 March 2013, the court learned WB (WA) was no longer pursuing a substantive damages remedy against Mr Faulkner or Ledger Faulkner Pty Ltd. The court was advised WB (WA), whilst still contending for breach of cl 14.2 of Mr Faulkner's 2 July 2007 employment contract, would only be seeking nominal damages. This was explained by counsel for the William Buck parties as his clients', had 'given up on proving causation'. By that, counsel presumably meant causation of loss or damage to WB (WA) arising from any alleged breach or breaches of cl 14.2. As I have explained in my reasons in William Buck (WA) Pty Ltd v Faulkner [No 5] [25] [28], the rather curiously worded cl 14.2 turns upon the definition of the term 'Restricted Activity'. That defined term is in cl 14(1)(c) to include '[causing] any client to cease doing business or reduce the amount of business it does with the Employer Group'. I repeat and confirm my observations at [25] [33] of those reasons.

42 In the present trial, a token effort was made to rely on two documents found within the trial bundle as establishing 'solicitation' (more correctly, to show, a 'Restricted Activity') by Mr Faulkner: TB vol 4, pages 1506 1510. Closing submissions of the William Buck parties as to this read (par 11, page 31):

The only breach of the employment contract contended for is based on TB 1506-10 and the appropriate unfavourable inferences to be drawn from those documents, namely, that Mr Faulkner caused that client to cease doing business with William Buck by preparing the documents.

43 Even allowing for and factoring into the calculations the circumstance that Mr Faulkner ultimately chose not to give evidence at these trials, the forensically barren nature of this correspondence, measured against a need for just a hint of a suggestion of causation as regards a loss of a William Buck client so as to meet the definition of 'Restricted Activity', is selfevident. Principles arising from Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 and its subsequent application in cases such as Kuhl v Zurich Financial Services [2011] HCA 11; (2011) 243 CLR 361 will not shore up what is a manifest evidentiary deficiency. The former William Buck clients ISA Group and Ms Noelene Merrey may unilaterally and without any element of input from Mr Faulkner have resolved commercially to have their future accounting work done by Mr Faulkner through Ledger Faulkner Pty Ltd from 29 September 2011 onward. It was their right to obtain accounting services from wherever they chose on the basis of merit. Confidence, trust, familiarity and perceived competence are important aspects of the business relationship between an accountant and client. It is a client's perfect right to choose for itself to have Mr Faulkner provide these services after he departed the William Buck organisation. There is absolutely no evidence to suggest these clients were improperly solicited away by Mr Faulkner and I will not draw that inference by reference to Jones v Dunkel principles.

44 A relatively minor aspect of CIV 2995 of 2011 is the standalone claim for repayment of a debt which is pursued by WB Holdings under amendments made to the writ of 24 November 2011. At that time WB Holdings joined the action as a second plaintiff, and also then joining Mr Faulkner's trustee corporation, CSF, as a third defendant. WB Holdings seeks to recover from CSF an outstanding component of a vendor finance loan it made in 2008 in the original amount of $100,000 by WB Holdings to CSF. This loan was advanced to CFS shortly after Mr Faulkner had been appointed an equity director of the WB (WA) Group at 1 July 2008.

45 Most of this vendor finance loan has been repaid by CSF out of the dividends paid out to shareholders by WB Holdings in the period between July 2008 and September 2011.

46 WB Holdings' liquidated debt claim against CSF at 24 November 2011 is only for $28,737.71, plus interest claimed at 10% per annum and capitalised monthly under the relevant loan agreement.

47 By reference to the board minutes for the WB (WA) Group of 26 August 2008, it is recorded that the balance of this (and some other) vendor finance loans would fall due for repayment, after three years (on 1 July 2011). However, the WB (WA) Group board minutes for the meeting first held on 19 April 2011 and which continued to 27 April 2011, at item 7.5 record an extension of time 'if needed' to 'CF/SB/DAH'. Presumably this meant an extension to their respective corporate trustees to repay the balances of their loans: see TB vol 3, page 784.

48 During July 2011 and thereafter there was no relevant attempt by WB Holdings to seek to have CSF make an immediate repayment of the relatively small balance of this vendor finance loan. It is open to be inferred, and I do infer, that there was in July 2011 an open ended extension of time granted for the repayment of any loan balances. Further, I infer that the prior methodology of allowed deduction out of WB Holdings dividends scenario, then applied in repayment of outstanding loan balances from time to time, was to continue.

49 Subsequent to the unilateral termination of Mr Faulkner's employment and of his directorships (in four corporate subsidiaries of WB Holdings) on 27 and 28 September 2011, there then issued, on 17 October 2011, a formal demand sent by the solicitors for WB Holdings to CSF seeking the repayment of the balance of this loan: see TB vol 4, page 1561.

50 The amendments of the writ of 24 November 2011, to add WB Holdings to the first action as a coplaintiff and to add CSF as third defendant manifested effectively another demand, in effect, for a repayment of these funds, with WB Holdings then claiming $28,879.22 from CSF, said to be due as at 12 December 2011, including interest: see pars 22 - 28 of the Amended Statement of Claim dated 12 December 2011.

51 The outstanding CSF balance of the vendor finance loan due to WB Holdings, demand for its repayment and its subsequent nonrepayment are all clearly established.

52 There should be judgment for WB Holdings in the loan balance amount as claimed, plus interest. However, CSF's obligation to repay that amount should be stayed pending a wider resolution as regards CSF and WB Holdings of the overarching s 232 Corporations Act shareholder oppression issues, which I have referred to as the main event of these trials under COR 174 of 2011.

Mr Faulkner's counterclaim in CIV 2995 of 2011: wrongful termination

53 A remaining aspect of the first action is the amended counterclaim of Mr Faulkner against WB (WA), WB Holdings and Messrs Collins, Breihl, Brown, Del Borrello, Harris and Judd, contending as to the breach of Mr Faulkner's 2007 employment contract with WB (WA), by reason of what Mr Faulkner asserts was his unjustified and wrongful summary termination as an employee of WB (WA) on 28 September 2011.

54 Mr Faulkner accepts that by his 2007 employment contract, WB (WA) as his employer, was entitled to invoke against him, without cause, a four weeks' notice employment termination right, under cl 11.1 of the employment contract. Clause 11.1 provided:

Subject to clause 11.2 the Employment may be terminated at any time by the Employer on the giving of 4 weeks written notice to the Employee or payment in lieu of notice.

55 Clause 11.2 then deals with a summary termination of employment.

56 The written notice given to Mr Faulkner by his employer, WB (WA), on Tuesday, 27 September 2011 would have functioned to bring about the termination of the employment four weeks later, at Tuesday, 25 October 2011. This would have transpired uncontestably had not the events of Wednesday, 28 September 2011 intruded upon that unfolding scenario. In the circumstances Mr Faulkner only pursues a level of damages for wrongful dismissal in the amount of $11,692.31: see par 195 of the closing submissions on behalf of Craig Peter Faulkner and CSF Corporate Pty Ltd, referring to ts 985 - 986.

57 By its defence to this counterclaim, WB (WA) defends its summary termination of Mr Faulkner's employment, at 28 September 2011. It does so on a threefold basis. Its first tier of defence is by reference to matters relied upon at the time, explained in an email to Mr Faulkner and an attached letter sent to him at 6.05 pm on Wednesday, 28 September 2011: see TB vol 4, pages 1487 1491.

58 The wider forensic significance of this full blown defence to the summary termination counterclaim for $11,692.31, as I have explained, is that the William Buck parties seek to rely upon Mr Faulkner's alleged misconduct as an employee to sustain both his summary dismissal, and to contend that this misconduct bears upon an evaluation of the statutory oppression action by CSF against WB Holdings. The William Buck parties contend that proper evaluation of the overall context visàvis the relevant shareholder (CSF) and a requirement to evaluate the underlying fairness of the relief sought, is a bulwark in the defence to the statutory oppression.

59 Evaluating the email and attached letter of 28 September 2011 sent by Ms Withers as 'General Manager' of WB (WA), it is apparent that a summary termination communication to Mr Faulkner, putting aside many irrelevancies in that communication, ultimately distils to a contention that an earlier email sent to Ms Withers by Mr Faulkner on that same day contained a 'deliberately false statement': see TB vol 4, page 1489, referring to the email found at page 1486.

60 After the turbulent events of the day before, when Mr Faulkner had been given four weeks' notice of his termination as an employee and removed as a director of four William Buck corporations, Mr Faulkner now emailed Ms Withers at 10.06 am on 28 September 2011 on the subject of his 'Computer Access'. He was, of course, still an employee. His four weeks' notice period had only begun to run. He wrote:

Hi Helen

I came in late yesterday evening and again early this morning to try and do some work and arrange to bring some work home as Sonia is still not well, however, I wasn't able to log in. George was in and working on the computer this morning, so it appears it must just be my computer/log in access. Can you please check for me and let me know.

...

Thanks

Craig

61 Arising out of Ms Withers' 6.05 pm email and her attached summary termination letter to Mr Faulkner of 28 September 2011, only one real substantive basis in alleged misconduct as an employee stands to support Mr Faulkner's summary termination. This is that he had made a false statement to Ms Withers about his asserted inability to 'log in', on his two out of hours visits to the South Perth office, the previous evening after 10.00 pm and then early the following morning, at around 6.30 am.

62 No legitimate criticism is or can be directed at Mr Faulkner over his attending at the South Perth offices of the William Buck Group on the evening of 27 September or early next morning. The four weeks' notice period which he had been given had only just started to run. He remained director of WB Holdings. He enjoyed, as a result, unfettered rights of access out of hours to the South Perth accounting practice building and as an accounting professional could come and go out of hours as he saw fit. Moreover, in this particular instance Mr Faulkner had a perfectly legitimate reason for attending after hours. His wife had been and remained unwell with a sustained chest infection at the time. In those difficult circumstances of her illness they also had a young child to look after.

63 There was no argument that at these times Mr Faulkner was not fully entitled to possess, for the purposes of his required accounting work, any client files he needed to have to work on. He was fully entitled to take them home to work on them. Likewise, he was entitled to remove or deal with any of his personal possessions which he kept at his South Perth office, as he saw fit. Axiomatically so, as they were his own property possessions.

64 Pejorative remarks about such issues found in Ms Withers' letter to Mr Faulkner of 28 September 2011 very much receded to irrelevance by the time of trial and properly so. They were always conceptually misconceived.

65 Nevertheless, a residual issue concerning whether or not Mr Faulkner 'lied' to Ms Withers by asserting, in his 28 September 2011 email to her, that he was not able to 'log in' on the occasions he mentioned, remains the key issue as regards summary termination. Ms Withers' email of 28 September 2011, as regards this issue, said to Mr Faulkner: see TB vol 4, page 1490.

Our system access log records indicate that you have successfully accessed our computer network system remotely and physically in the office on a regular basis and, in particular, during Tuesday afternoon, just after Tuesday midnight and again early Wednesday morning.

It is therefore obvious that your email referred to in point 9 above was false. In light of that false email being sent in the circumstances detailed above, your employment by William Buck (WA) Pty Ltd is hereby summarily terminated with immediate effect.

66 The trial evidence on this issue manifests a significant underlying uncertainty over whether or not the records as referred to show that Mr Faulkner actually accessed the accounting systems and records of the William Buck organisation. Or rather, they merely show that his account details were authenticated as being valid at these times: see TB vol 4, page 1568 - 1576, and ts 1063 1064.

67 But what is even more significant to my determination on this issue is that it is clear that prior to Ms Withers sending out her summary termination email and attached letter at 6.05 pm on 28 September 2011 her 'log in' concerns were never sought to be clarified with Mr Faulkner in terms of asking him what he could or could not log into at relevant times either whilst he was present at the South Perth office out of hours, or remotely seeking access from home. What transpired is that her summary termination communication to Mr Faulkner of 28 September 2011 was immediately dispatched that evening without seeking any input or clarification from him.

68 In my view, such action was premature and was not justified at the time. On my assessment, it reflected the level of high anxiety in Ms Withers and in the other equity directors over a prospect of clients or intellectual property being lost to Mr Faulkner, in illegitimate fashion. The tense and clearly stressful events of 27 and 28 September 2011, in my view, rendered Ms Withers and WB (WA) unduly 'trigger happy' over this 'log in' issue.

69 Subsequent scrutiny of the emails actually sent out by Mr Faulkner over the course of 27 and 28 September 2011 shows them all to be entirely mundane or benign. No submission was made to the contrary.

70 A proposition was put that because Mr Faulkner had sent out emails from his work account between 27 to 28 September 2011, that he necessarily was then able to 'log in' to the William Buck systems. I was left wholly unpersuaded by that argument. At the trial evidence to this effect was sought to be adduced from William Buck's retained computer consultant, a Mr Jim Hunter: see also par 5 of his supplementary witness statement (exhibit 43). But Mr Hunter was unable to provide sufficient reason as to why a sending of emails could have only been occasioned through Mr Faulkner being logged in to the William Buck system. I found Mr Hunter to be less than persuasive on this issue.

71 Moreover, I thought he lacked a requisite expertise in this particular area of computing. This deficiency was fully exposed under crossexamination as to his tests performed concerning Mr Faulkner's access to the system: see TB vol 4, pages 1568 - 1576 and ts 1063. Mr Hunter merely downloaded a free software product from the internet known as EventLog Analyser Number 7, which produced a report at TB vol 4, pages 1568 1576. Close analysis of that document indicates that pages 1572 1576 represent Mr Hunter's efforts to use EventLog Analyser Number 7 on 28 September 2011: see page 1572 as to 'report generated time'. Pages 1568 1571 look to represent further efforts by Mr Hunter to use the same software on 20 October 2011: see again 'report generated time'. Crossexamination only persuaded me Mr Hunter had little idea of what he was actually doing and, on my assessment, he could not satisfactorily explain the underlying foundation for these reports. Without an explanation from a suitably qualified witness, the reliability of their content is tainted and ultimately unhelpful. See, for instance, page 1576 and a notation, 'No data available for the selected time period'.

Other purported justifications for termination

72 Ordinarily the adverse conclusion to WB (WA) on that 'log in' issue would mean that the summary termination of Mr Faulkner's employment, as was attempted by WB (WA) on 28 September 2011 by Ms Withers' communication at 6.05 pm, would be proven as lacking in any proper justification. No doubt recognising that potential outcome, WB (WA) sought to advance two further supplementary justifications for this summary termination after the event, which were not raised in Ms Withers' email, in order to sustain the legitimacy of the dismissal.

73 The extra grounds raised in aid a contractual breach principle recognised by Sir Owen Dixon in Shepherd v Felt & Textiles of Australia Ltd [1931] HCA 21; (1931) 45 CLR 359, 377 378. In Sunbird Plaza Pty Ltd v Maloney [1988] HCA 11; (1988) 166 CLR 245, 262 Mason CJ said Shepherd v Felt stood as authority for a general proposition that a termination of a contract may be justified by reference to any ground that was valid at the time of termination, even though it was not relied on at the time and even though the ground actually relied on is found to be without substance.

74 In Downer EDI Ltd v Gillies [2012] NSWCA 333; (2012) 92 ACSR 373 [136] [137] Allsop P applied the observations from Sunbird Plaza. Allsop P observed at [137]:

The absence of substance of the ground actually relied on was not expressed by Mason CJ as a necessary element of the principle, but one circumstance in which the principle remains applicable. This is reinforced by the phrase 'any ground that was valid'.

75 The extra grounds raised by WB (WA) to support a summary termination of Mr Faulkner's employment are articulated at par 18 (read with particulars (a) and (b)) and par 19.1 of WB (WA)'s amended statement of claim in CIV 2995 of 2011.

76 The first extra ground contends for Mr Faulkner's serious breach of his employment contract by his retention of and failure to deliver 'documents containing Confidential Information', referring, for instance, to a trial balance to 30 June 2010 for the Deltaplex Unit Trust - a trust in which two of the equity directors held an interest. The confidential document retention (mis)conduct was argued to be contrary to express terms of Mr Faulkner's employment agreement as identified under pars 7.6 and 7.7 of the amended statement of claim.

77 However, it is clear at the outset that the first Shepherd v Felt ground is wholly misconceived. Viewed from a temporal perspective, even if document retention conduct was proven against Mr Faulkner, the acts of retention complained of would only arise after 28 September 2011. From this temporal perspective the retention conduct could not, even theoretically, rise to a level of constituting an arguable serious breach of Mr Faulkner's employment contract sufficient to provide, at 28 September 2011, a basis to support summary termination then. If there was a retention breach by Mr Faulkner concerning confidential documents, it only relevantly began after 28 September 2011. Accordingly, the first extra breach and misconduct allegation cannot conceptually align with the Shepherd v Felt criteria of being in existence at the required time. The argument is meritless.

78 The second extra ground is factually a lot more complicated, although the underlying acts raised in order to support the summary termination do not appear to be much in dispute as between the two camps.

79 It is uncontroversial that 'equity directors' of the William Buck Group had enjoyed as one of their benefits a privilege of being able to have a limited amount of free accounting work carried out by the personnel of the William Buck WA Group accounting practice, for the benefit of themselves, their close relatives or related entities. Time spent in carrying out this accounting work would be fully recorded. But the chargeable value of this incurred professional time, up to a fixed limit, would then be written off and not charged to an equity director or the beneficiary of the work. In other words, there would be no charge, up to a certain costed dollar level in respect of accounting work performed.

80 The equity directors' socalled related party work in progress (WIP) write off allowance had been set at a level of $10,000 per equity director, per financial year, before the allowance level was revised upwards to $20,000, just before 30 June 2011 arrived. Hence, the level of the related party write off allowance for the 2010/2011 financial year became raised to $20,000: see the minutes of a meeting of William Buck (WA) Group for 21 June 2011, TB vol 2, page 949.

81 For the next financial year ended 30 June 2012, the related party write off allowance remained at $20,000 per annum in the time value of any accounting work carried out for relatives or related parties. However, by reason of the events of 27 and 28 September 2011, Mr Faulkner effectively only worked professionally within the William Buck Western Australian accounting practice during the first quarter of the 2011/2012 financial year.

82 A rather factually dense second Shepherd v Felt point as contended for alleges that by his socalled 'false and fictitious accounting entries', in the 30 June 2011 financial year, Mr Faulkner, in effect, managed to manipulate the accounting system to write off more time than had actually been posted in that period concerning his relevant related entities (entities related to his parents' businesses): see TB vol 3, pages 1023 - 1024.

83 Putting a lot of the pejorative and very unhelpful rhetoric aside, it is argued that, by a first series accounting write off entries, Mr Faulkner effectively created a (false) negative value of WIP amount in dollar value for the 30 June 2011 year. The balance was then carried across into the next (30 June 2012) financial year, to his benefit, by the workings of the MYOB accounting software. The end result is said to be, in effect, an artificial increase in 2012 above the $20,000 maximum allowance in that financial year, owing to the carryover to that year of the negative time result into that financial year.

84 The core argument is that an artificial carryover allowance increase outcome, effectively pushing up Mr Faulkner's $20,000 cut off level maximum allowance for 2011/2012 by the amount of the carryover, was known to be prohibited to the equity directors.

85 This allowance issue is not dealt with (expressly at least) in the employment agreement between Mr Faulkner and WB (WA). But it is said that there was known to be in place a well appreciated 'use it or lose it' policy applicable to this related party allowance for each applicable financial year. The policy did not provide or allow for a carry over into a subsequent financial year.

86 Hence, it is finally said that Mr Faulkner had very seriously and wrongly manipulated the William Buck WA Group accounting system by writing off negative time in the period before he was dismissed in September 2011, so as to exceed his $20,000 maximum related party WIP write off allowance for the financial year ended 30 June 2012.

87 In the end, my assessment is that these related party write off allowance breach contentions do not provide a sustainable basis to support Mr Faulkner's summary termination of 28 September 2011, applying Shepherd v Felt principles, because:

(a) these write off allegations leading to the asserted violation of the 'use it or lose it' policy as regards these allowances were never put to Mr Faulkner as a charge of serious misconduct prior to 28 September 2011. This is not determinative, of course, but it means he has not been heard on the issue until after the events now raised against him;

(b) there is nothing express to be found in Mr Faulkner's 2 July 2007 employment agreement with WB (WA) addressing the subject matter of related party write offs, or for that matter the value of WIP which may be written off in any particular financial year. Nor is there found any reference to a 'use it or lose it' policy as regards these annual WIP write off allowances. This is not at all surprising, since the 2 July 2007 employment agreement pertains to Mr Faulkner's employment then as 'Principal - Business Advisory', a year prior to his ascension to become a socalled 'equity director' in 2008. The benefits of the related party writeoff allowance system, and the accompanying limitations, were incidental to Mr Faulkner reaching the position of equity director;

(c) the trial evidence clearly establishes that there was ample scope under the arrangements between equity directors for an approved increase of this allowance, above $20,000, for the related party WIP upper limit allowance. Provided that it was approved by the other equity directors once such a request was made (see below). In the circumstances which arose at the end of September 2011 there was no opportunity for a request for Mr Faulkner's allowance to be increased (if needed) to be made by him and evaluated by his fellow equity directors. That scenario was not able to ever be tested;

(d) if Mr Faulkner's WIP $20,000 write off allowance for the 2012 financial year had not been approved for increase then, as was related by Mr Damon Harris at trial concerning his own write off allowance arrangements, then other arrangements could nevertheless be made for any excess amount above the allowance limit of $20,000 written off, to be personally met and paid for by the equity director. That approach had been followed in Mr Harris' case on one occasion: see exhibit 54, responsive witness statement of Damon Harris, par 11; and

(e) Mr Collins on a previous occasion appears to have enjoyed the benefits of carrying over negative time to a subsequent financial year, so as to increase his allowance. Some (not full) reimbursement appears to have been made by him and this was all regarded as completely above board.

88 Nothing, therefore, in this WIP excess allowance write off conduct presents, on my assessment of it, as rising to a sinister or semisinister level (as contended) of being sufficiently serious misconduct by Mr Faulkner warranting or supporting an employee's immediate summary termination.

89 In all the circumstances, it has not been established that there was in existence any serious breach or repudiation by Mr Faulkner of his 2007 employment contract with WB (WA) as at 28 September 2011.

90 As a result, it must be concluded that WB (WA)'s attempted summary dismissal of Mr Faulkner on 28 September 2011 was entirely wrongful. This was a serious breach of Mr Faulkner's employment contract. So, Mr Faulkner, in turn, was then justified in accepting that repudiatory breach of his employment contract by WB (WA), as he did on 29 September 2011. Thereby himself terminating his employment contract at that point: see TB vol 4, page 1493.

91 Accordingly, Mr Faulkner, under his counterclaim, is entitled to damages for breach of his employment contract amounting to $11,538.46. He should also receive simple interest at the rate of 6% as from 1 November 2011 on that damages amount.

92 These conclusions upon the aspects of CIV 2995 of 2011 establish a platform for me now to move to evaluate the more substantive 'main event', namely CSF's shareholder statutory oppression action for alleged infringement of s 232 of the Corporations Act against WB Holdings.

COR 174 of 2011: the s 232 Corporations Act statutory oppression action

93 CSF issued an originating summons commencing Corporations Act proceedings against WB Holdings as the exclusive defendant on 25 October 2011. CSF as an undoubted member (shareholder) of WB Holdings seeks orders pursuant to s 233(1)(a) or s 467(4) of the Corporations Act that WB Holdings be wound up or, alternatively, that WB Holdings be ordered to purchase CSF's 300,001 shares under s 233(1)(e).

94 Winding up of WB Holdings is sought on the basis that this is either 'just and equitable', or that 'the conduct of the affairs of [WB Holdings] is and has been oppressive to, unfairly prejudicial to or unfairly discriminatory against [CSF] as a minority shareholder'.

95 Corporations Act actions routinely proceed purely by affidavit evidence. However, for this action I thought it appropriate the parties proceed on the basis of exchanged pleadings. I made a direction to that effect on 1 November 2011. CSF's further amended statement of claim was filed on 21 February 2013. Paragraph 6 of this pleading contends for the existence of a 'quasipartnership' relationship between the equity directors of the William Buck (WA) Group at various alternative times leading up to 28 September 2011. I note par 11 of CSF's pleading concludes on the basis that 'the relationship referred to in paragraph 6 had broken down'. As I have already indicated, I have no doubt of that position at that time. Paragraph 12 of CSF's pleading then asserts:

At all material times subsequent to termination of the partnership or quasi partnership pleaded in paragraph 6 [WB Holdings]:

12.1 has continued to carry on business using the goodwill and capital of the William Buck WA Group including the name, logo, good will, client lists and other confidential information belonging to the partnership and quasi partnership comprising each of the equity partners referred to in paragraph 6.6.2(c);

12.2 has used the property referred to in the previous subparagraph without the consent of Mr Faulkner or the plaintiff and in breach of the fiduciary obligations arising by reason of the matters pleaded in paragraph 6 herein, in circumstances where Mr Craig Faulkner remains a guarantor of the Macquarie Bank Facility and [CSF] remains a contributor to 1/7th of the equity in the William Buck WA Group;

12.3 has made dividend payments to each of the shareholders of the defendant, except for [CSF];

12.4 has excluded Mr Faulkner from taking part in or participating in the conduct and management of the William Buck WA Group's business;

...

12.6 has excluded Mr Faulkner from, and by email from Helen Withers to Zurich Finance dated 18 November 2011 cancelled, the life insurance and keyman insurance policies ... applicable to Mr Faulkner.

96 WB Holdings strongly refutes that there is any just or equitable basis to support its winding up. It disputes the existence of any basis for relief against it, pursuant to s 233 of the Corporations Act.

97 By par 5 of its defence, WB Holdings refutes the existence of a common law partnership between the equity directors. The plea (responding to pars 5 and 6 of the statement of claim) ordinarily would be read as a denial not only of a common law partnership, but also of 'quasipartnership'. However, counsel for the William Buck parties at the trial made it explicit this was not the intent of the general denial under that plea. Counsel said an existence of a 'quasipartnership' as between the William Buck equity directors, was accepted (ts 310).

98 However, the terminology 'quasipartnership' has not, at least by reference to the case law authorities, been met with a universal endorsement. I will mention later some curial observations about the term 'quasipartnership' in a component of these reasons dealing with legal principles.

99 Parts of the defence of WB Holdings (particularly pars 9 10) seek to traverse across a grand history of the past dealings between the equity director accountants of the William Buck (WA) Group. This looks to be attempted from a perspective of seeking to portray Mr Faulkner as a brash and unreasonable person who was largely responsible for the 2011 fallings out with his fellow equity directors. They would portray Mr Faulkner as someone who acted childishly by refusing to negotiate or even talk to them as they made their reasonable efforts to have him depart voluntarily. Finally, leaving the other equity directors no real choice but to eject him as an equity director and end his employment by WB (WA) at the end of September 2011.

100 Strenuous endeavours are made by WB Holdings, in its defence of the oppression action, to align the position of CSF as a member and minority shareholder in WB Holdings, to underlying reasons for the breakdown in the relationship between the equity directors of the William Buck parties and Mr Faulkner. Hence, the suggested link to why Mr Faulkner, as an employee, was first given four weeks notice of a termination of his employment by WB (WA) on 27 September 2011, then summarily terminated the next day. I have already concluded that justification for Mr Faulkner's summary termination as an employee of WB (WA), was wholly lacking.

101 A wide view advocated is all part of a forensic stance adopted by the William Buck parties.

102 I do not deprecate the touchstones of examining proper 'context' and 'fairness'. But the reality here is that in the context of an exit dispute that is, in financial terms, relatively minor, a need to minutely traverse the complexities of a past business relationship in great detail at the behest of the William Buck parties has significantly increased the magnitude of materials under consideration and the overall duration of these proceedings with, in the end, little gained from the exercise.

103 The William Buck parties advocate a faultbased approach to the statutory oppression action. They blame Mr Faulkner for a business relationship breakdown at the end of September 2011. But my view is that an approach grounded in fault is unduly simplistic and ultimately unrewarding. I am reminded of observations by Lord Hoffmann in O'Neill v Phillips, where his Lordship said (1104):

There are cases, such as In re A Company (No. 006834 of 1988), Ex parte Kremer [1989] BCLC 365, in which it has been said that if a breakdown in relations has caused the majority to remove a shareholder from participation in the management, it is usually a waste of time to try to investigate who caused the breakdown. Such breakdowns often occur (as in this case) without either side having done anything seriously wrong or unfair. It is not fair to the excluded member, who will usually have lost his employment, to keep his assets locked in the company. (my emphasis in italics)

104 In the instant case, Mr Faulkner has not done anything seriously wrong or unfair as an employee of WB (WA). There was no sufficient basis to summarily dismiss Mr Faulkner as an employee on 28 September 2011. Nor has it been shown that he engaged in any 'Restricted Activity' contrary to cl 14.2 of his employment agreement. Even taking the broad view of context, it is an inescapable conclusion that CFS minority shareholding in WB Holdings is essentially a frozen, nonperforming asset, particularly as CSF is the only shareholder not receiving any dividends from WB Holdings postSeptember 2011.

105 Accordingly, Lord Hoffmann's above reference to the excluded member's assets being 'locked in the company' is wholly apposite, in my view, to the shares of CSF which, by the constitution of proprietary provisions of WB Holdings' Constitution, cannot be readily transferred and are accordingly unmarketable as a readily saleable asset: see in general TB vol 4, pages 919 920.

106 I have not lost sight of the fact that Lord Hoffmann went on after the above passage, to observe:

But that does not mean that a member who has not been dismissed or excluded can demand that his shares be purchased simply because he feels that he has lost trust and confidence in the others. I rather doubt whether even in partnership law a dissolution would be granted on this ground in a case in which it was still possible under the articles for the business of the partnership to be continued. And as Lord Wilberforce observed in In re Westbourne Galleries Ltd [1973] AC 360, 380, one should not press the quasipartnership analogy too far: "A company, however small, however domestic, is a company not a partnership or even a quasipartnership ..." (1104)(f) (h).

107 In due course I will mention some further observations by Lord Hoffmann in O'Neill v Phillips concerning ramifications regarding the excluded member's assets, in a context of what is reasonable conduct by the excluding parties answering an oppression or unfair prejudice complaint.

Legal principles

108 In approaching s 232 and s 233 of the Corporations Act it is appropriate to recall as well some observations were recently made in Campbell v Backoffice Investments Pty Ltd by French CJ and the majority (Gummow, Hayne, Heydon & Kiefel JJ), as regards general principles. In particular, I would discern at least these bedrock oppression principles:

(a) Section 232 of the Corporations Act should not be read narrowly and so, any 'judgemade limitation' emerging from prior cases, which must invariably be fact dependent, should be 'approached with caution': see [72] (French CJ), and [176] (Gummow, Hayne, Heydon & Kiefel JJ).

(b) The term 'unfairly prejudicial' then used towards the conduct of a company's affairs would appear to subsume oppressive conduct. But s 232 encapsulates three heads of conduct which may provide a basis for relief, namely, oppressive, unfairly prejudicial or unfairly discriminatory conduct: see [59] (French CJ).

(c) Wrongful exclusion from management may be a form of oppression: see [176] (Gummow, Hayne, Heydon & Kiefel JJ).

(d) Merely because conduct is otherwise lawful would not, for the purposes of s 232, mean that it will not meet the touchstone for showing the existence of statutory oppression: see [176] (Gummow, Hayne, Heydon & Kiefel JJ).

(e) Merely because a person acting on behalf of a corporate defendant substantively believes they are acting properly or correctly will not thereby preclude a finding as to the existence of statutory oppression. An examination of the alleged oppressor's motives for acting as they did, are usually not to the point: see again [176] (Gummow, Hayne, Heydon & Kiefel JJ).

(f) Powers afforded a court under s 233 should not be hedged about by 'implied limitations': again see [178] (Gummow, Hayne, Heydon & Kiefel JJ).

109 Since the essential underlying facts at issue between the parties are largely clear and mostly uncontroversial, as I shortly explain, I propose next to render some observations concerning further legal principles. Then render findings of fact in the oppression action by reference to a chronological narrative of the underlying facts.

110 As I will seek to explain, there only appear to be three controversial areas of genuinely disputed fact arising in the case. One area I have already resolved, that is concerning whether or not Mr Faulkner could 'log in' to the William Buck accounting system on 27 and 28 September 2011. After addressing the two remaining areas of factual disputation, I will move to my determinations and conclusions.

Further legal principles

(a) Summary termination

111 The underlying law applicable to the evaluation of conduct by an employee from a perspective of assessing whether a summary termination is justified is plentiful. It was not in dispute between the parties at trial. See for instance Downer EDI v Gillies [83] (Allsop P), referring to Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 176 ALR 693 [25]; and Blyth Chemicals Ltd v Bushnell [1933] HCA 8; (1933) 49 CLR 66, 72 73, 81 82. In Downer EDI v Gillies Allsop P said [83]:

From these cases, it can be taken that the conduct must be incompatible with the due or faithful discharge of the employee's duty or inconsistent with the relationship of trust and confidence between employer and employee. Repugnance between the conduct and the relationship must be found. ... The expression of the matter thus recognises that, to a significant degree, the assessment or characterisation of the conduct is to be made objectively: see especially Malik v BCCI at 35 and 47.

112 (Allsop P was referring to Malik v Bank of Credit & Commerce International SA (in liq) [1997] UKHL 23; [1998] AC 20.)

113 Special leave to appeal in Downer EDI v Gillies was refused by the High Court: Gillies v Downer EDI Ltd [2013] HCATrans 81 (12 April 2013).

114 It is necessary to closely examine the actual employment contract between WB (WA) and Mr Faulkner (see TB vol 1, page 262). See cl 11 (at page 269) under the heading at 11.2 'Immediate termination'. I have set out earlier in these reasons cl 11.1 as regards a termination without cause on notice. It will be remembered cl 11.1 is made subject to cl 11.2. Relevantly, cl 11.2 provides:

(a) at any time, the employer may by notice in writing terminate the Employment of the Employee if the Employee:

(i) engages in any act or omission which, in the reasonable opinion of the employer constitutes misconduct in respect of the Employment.

'Misconduct' is not defined in the employment agreement of 2 July 2007. In the circumstances the relevant clause adds little to the common law. In particular, the employer WB (WA), carries an evidentiary obligation to show some misconduct on the part of Mr Faulkner, which could provide a basis for it to hold a 'reasonable opinion' to that end.

115 As I have already concluded the basis communicated on behalf of WB (WA) by Ms Helen Withers on 28 September 2011 for Mr Faulkner's summary termination on that day, does not support a conclusion of misconduct on Mr Faulkner's part as an employee. Nor does it provide a basis for a 'reasonable opinion' to that effect. Likewise, the two Shepherd v Felt points raised after 28 September 2011 to buttress the attempted summary termination equally fail - for reasons already given.

(b) Breach of a restraint of trade covenant by an employee (accountant)

116 I have already dealt with the ineffectiveness of cl 14.2 of Mr Faulkner's employment agreement with WB (WA), the ineffectiveness caused by reason of its use of a defined term 'Restricted Activity' and the problems thrown up by a causative factor embodied in that term, which is not met. In the context of restraint of trade clauses applicable to employees, I refer generally to a recent coverage of that issue by the Victorian Court of Appeal in Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 by Warren CJ and Davies AJA. At [62] of their Honours' reasons they also considered Birdanco Nominees Pty Ltd v Money [2012] VSCA 64 [10], [83] which appeal had assessed a restraint of trade clause in the context of the provision of accounting services by an employee accountant. See also Ausdale Enterprises Pty Ltd v Sandford [2006] WASCA 191.

(c) Statutory oppression: further legal principles

117 I return to the law concerning s 232 of the Corporations Act and to orders open to the court pursuant to s 233. In this quarter, a vast number of case authorities were mentioned on both sides. But I repeat from Campbell v Backoffice Investments Pty Ltd that both French CJ and the plurality, Gummow, Hayne, Heydon and Keifel JJ, were at pains to emphasise that the text of s 232 is broadly expressed and that '[t]he imposition of judgemade limitations on their scope [of s 232 and s 233] is to be approached with caution' [72]; see also [182] (Gummow, Hayne, Heydon & Kiefel JJ).

118 Bearing in mind a need for caution against judgemade limitations fettering the language of s 232 and s 233 of the Corporations Act and an injunction that these provisions should be read broadly, I will set out s 232, then some components of s 233 and s 234.

119 Section 232 provides:

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.

120 Section 233 provides:

(1) The Court can make any order under this section that it considers appropriate in relation to the company, including an order:

(a) that the company be wound up;

...

(d) for the purchase of any shares by any member or person to whom a share in the company has been transmitted by will or by operation of law;

(e) for the purchase of shares with an appropriate reduction of the company's share capital;

(f) for the company to institute, prosecute, defend or discontinue specified proceedings;

...

(2) If an order that a company be wound up is made under this section, the provisions of this Act relating to the winding up of companies apply:

(a) as if the order were made under section 461; and

(b) with such changes as are necessary.

121 Section 234 provides:

An application for an order under section 233 in relation to a company may be made by:

(a) a member of the company, even if the application relates to an act or omission that is against:

(i) the member in a capacity other than as a member.

122 The legislative history of statutory relief against corporate oppression in Australia is found in the reasons of the Chief Justice in Campbell v Backoffice Investments Pty Ltd [58] [65], particularly as to s 86 of the Uniform Companies Act 1961 (Cth); then s 320 of the Companies Codes established in Australia under the cooperative scheme in 1981; then s 246AA and s 260 of the Corporations Law (by a 1989 cooperative scheme); and finally, s 232 and s 233 of the Corporations Act.

123 Generally speaking, courts have taken a position that oppression 'must result from some overbearing act or attitude on the part of the oppressor'. I refer in that respect to principle L in John J Starr (Real Estate) Pty Ltd v Robert R Andrew (Australasia) Pty Ltd (1991) 6 ACSR 63, 65 67 (Young J), citing Re Jermyn Street Turkish Baths Ltd [1971] 1 WLR 1042, 1060; Re Tivoli Freeholds Ltd [1972] VicRp 51; [1972] VR 445, 453. The principles were recently applied in Harding Investments Pty Ltd v PMP Shareholdings Pty Ltd (No 2) [2011] FCA 567; (2011) 282 ALR 229 [8] (Gordon J). For another comprehensive statement of the relevant principles concerning s 232/s 233 see William McCausland v Surfing Hardware International Holdings Pty Ltd [2013] NSWSC 902 [643] [654], [665] (Slattery J).

124 Courts are, generally speaking, reluctant to interfere with the responsibility for the management of a company, which is committed to its board of directors. Decisions made by a board adversely affecting an applicant will be insufficient to show oppression. Ordinarily, there needs to be a lack of good faith shown by the board, or that no reasonable board could have come to a decision reached: see Re Broadcasting Station 2GB Pty Ltd [1964 1965] NSWR 1648, 1662; and Wayde v New South Wales Ruby League Ltd [1985] HCA 68; (1985) 180 CLR 459, 466 (Mason ACJ, Wilson, Deane & Dawson JJ), 472 (Brennan J).

125 In Campbell v Backoffice Investments Pty Ltd the plurality noticed that a court may make orders, 'even if the act, omission or conduct complained of has yet to occur or has ceased' [182]. It was also observed that power given to the court under s 233(1)(d) 'should not be hedged about by implied limitations' [178]. I bear this in mind particularly in evaluating concepts such as 'legitimate expectation', 'quasi-partnership' and 'reasonable offer' which, although often referred to by courts in carrying out a s 232/s 233 evaluation, in no sense are a substitute for the more precise language of the statute.

126 In O'Neill v Phillips Lord Hoffmann, in considering s 145 of the Companies Act 1985 (UK) (in terms not identical, but conceptually similar to s 232 and its predecessors) made what I assess to be some pertinent observations applicable to the present circumstances, upon the concept of 'fairness' as a governing criterion, underlying the court's jurisdiction to grant relief. This was intended to 'free the court from technical considerations of legal right and to confer a wide power to do what appeared just and equitable' (1098(d) (e)). His Lordship continued:

But this does not mean that the court can do whatever the individual judge happens to think fair. The concept of fairness must be applied judicially and the content which it is given by the courts must be based upon rational principles. As Warner J said in Re J E Cade & Son Ltd [1992] BCLC 213 at 227: 'The court ... has a very wide discretion, but it does not sit under a palm tree.'

127 The key arguments at trial for proving statutory oppression, advanced by CSF, in essence, presented as being grounded upon:

(a) Mr Faulkner's involuntary exclusion from the management of WB Holdings, culminating in the events of 27 28 September 2011; and

(b) subsequent conduct by WB Holdings in the allocation and payment of dividends to all its other shareholders, save for CSF.

I note that there was no complaint or suggestion that the impugned conduct of WB Holdings as regards its unequal payment of dividends to its shareholders, by excluding only CSF from regular distributions, was conduct that had occurred only after the issue of CSF's originating process in this court on 25 October 2011. The breadth of s 232/s 233 permit consideration of this conduct. In my assessment, it is proper to scrutinise that conduct.

128 Wrongful exclusion from participation in management of a company has been held to be a species of oppressive conduct. I refer again to the plurality in Campbell v Backoffice Investments Pty Ltd [175], in turn referring to Re HR Harmer Ltd [1959] 1 WLR 62. The position was summarised by the Court of Appeal of Western Australia in Smolarek v Liwszyc [2006] WASCA 50; (2006) 32 WAR 101 [77] in these terms:

A common understanding between members, outside the company's constitution, which gave rise to a legitimate expectation of an entitlement to participate in the management of the company: see Quinlan v Essex Hinge Co Ltd [1996] 2 BCLC 417; Hogg v Dymock (1993) 11 ACSR 14 and Ebrahimi v Westbourne Galleries Ltd [1973] AC 360. The words 'legitimate expectation' have been used, in this context, to describe an understanding or expectation of a member which, because of equitable considerations, can make it unfair for a party to exercise legal rights (although see the criticism of that expression by Lord Hoffman, in O'Neill v Phillips [1999] UKHL 24; [1999] 1 WLR 1092). The cases to which we have referred demonstrate that, in a case such as this, where the company is formed by a majority and minority shareholder (respectively Ms Smolarek and Mr Liwszyc) on the basis that both will participate in the management of the company and that each will be a director (that, on the face of the evidence as it stands, seemingly having been the understanding between Ms Smolarek and Mr Liwszyc when Eznut was incorporated on 15 October 2002), the court can restrain the exercise of the majority shareholder's legal right to remove the minority shareholder as a director upon the ground that it breaches the understanding that both will be involved in management as directors and is oppressive (see also Austin and Ramsay at [11.450]).

129 I mention that passage bearing in mind a caveat of Lord Hoffmann about the term 'legitimate expectation' - which does not refer to a ground of relief independent of the language of s 232. Rather, the term simply describes a type of factual scenario in which courts have often found that an exclusion of a member or a member's representative (such as Mr Faulkner as the relevant key representative of CSF) from management, to be oppressive.

130 As here, the term 'quasi-partnership' is sometimes used in describing the relationship between participants in a business enterprise. But that phrase has also been criticised on occasions. In Ebrahimi v Westbourne Galleries Ltd Lord Wilberforce said 'quasipartnership' was an expression which:

may be confusing if those words obscure, or deny, the fact that the parties (possibly former partners) are now co-members in a company, who have accepted, in law, new obligations. A company, however small, however domestic, is a company not a partnership or even a quasi-partnership (380).

131 Lord Wilberforce there observed that 'quasipartnership' was a shorthand term used to encapsulate the idea that relations of probity, trust and good faith, common to partnerships in the common law sense, can be superimposed upon the formal legal structure of a corporation. However, this does not somehow superimpose the law of partnership upon corporations. In that regard, see MMAL Rentals Pty Ltd v Bruning [2004] NSWCA 451; (2004) 63 NSWLR 167, where Spigelman CJ preferred to speak of a 'majority controlled business requiring mutual cooperation and a level of trust', at [71]. See also Byrne v A J Byrne Pty Ltd [2012] NSWSC 667 [76] (Black J). The fundamental distinction of law between the common law partnership and a corporation was also emphasised in Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 513. Justice Barrett concluded that no partnership existed. The company's members had not assumed the type of obligations entailed in a partnership - particularly unlimited personal liability for business debts, at [75]. Nevertheless, shareholders (members) were not merely traders in shares brought together by 'the vicissitudes of the stock exchange'. In Nassar the shareholders 'elected to associate together through and by means of shareholdings in and directorships of three companies, in circumstances where they looked to the companies alone for their financial rewards', at [78]. In that situation, there was potential for a corporation's members to have a so-called 'legitimate expectation' about the conduct of a company's affairs, violation of which could contravene pt 2F.1 (containing s 232 s 235) of the Corporations Act. Justice Barrett emphasised, as would I, that in its proper usage 'legitimate expectation' is a reference to 'what the parties, by words or conduct, have actually agreed' at [91]; citing Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 [420] (Priestley JA). Exclusion from management contrary to such agreement may be oppressive in the circumstances.

132 A member's participation in overall corporate management may be via a natural person representing the interests of the corporate shareholder. The underlying facts of Campbell v Backoffice Investments Pty Ltd concerned the breakdown of a relationship as between Messrs Campbell and Weeks. But it was their respective corporations, rather than those men personally, that comprised the membership of the alleged oppressor corporation. Here, there can be no serious argument that CSF as the corporate trustee of the Faulkner Trust was singularly represented by Mr Faulkner. His forced exclusion at 28 September 2011 from the William Buck WA Group sets a foundation for the arguments that follow upon CSF's wrongful exclusion from management of the parent corporation, WB Holdings.

Statutory oppression: post exclusion of Mr Faulkner and retention of the CSF's share capital

133 O'Neill v Phillips also concerned the breakdown of a relationship between natural persons in a corporate environment. Lord Hoffmann there considered how the statutory oppression principles applied to the retention of the excluded member's capital in the corporation. He observed:

[T]here may be some event which puts an end to the basis upon which the parties entered into association with each other, making it unfair that one shareholder should insist upon the continuance of the association. The analogy of contractual frustration suggests itself. The unfairness may arise not from what the parties have positively agreed but from a majority using its legal powers to maintain the association in circumstances to which the minority can reasonably say it did not agree ... It is well recognised that in such a case there would be power to wind up the company on the just and equitable ground (see Virdi v Abbey Leisure Ltd [1990] BCLC 342) and it seems to me that, in the absence of a winding up, it could equally be said to come within s 459 (1101(h)).

134 So, following the breakdown of a working relationship between a small proprietary corporation's shareholders, correlative rights may arise in circumstances where it would be regarded as unfair for a majority to exercise a power conferred under the corporation's constitution to a member's prejudice. Referring in particular to a scenario of exclusion from management, Lord Hoffmann referred to his earlier decision in Re Saul D Harrison & Sons Plc [1995] 1 BCLC 14, 19, and continued:

I gave as an example the standard case in which shareholders have entered into association upon the understanding that each of them who has ventured his capital will also participate in the management of the company. In such a case it will usually be considered unjust, inequitable or unfair for a majority to use their voting power to exclude a member from participation in the management without giving him the opportunity to remove his capital upon reasonable terms. The aggrieved member could be said to have had a 'legitimate expectation' that he would be able to participate in the management or withdraw from the company (1102(b) (e)). (my emphasis added in italics)

135 By reference to the criteria and characteristics earlier identified by Lord Wilberforce in Ebrahimi v Westbourne Galleries Ltd (particularly factor 3; namely restrictions on the transfer of shares so a member cannot take out his stake and go elsewhere), Lord Hoffmann continued in O'Neill v Phillips:

It follows that it would have been unfair of Mr Phillips to use his voting powers under the articles to remove Mr O'Neill from participation in the conduct of the business without giving him the opportunity to sell his interest in the company at a fair price (1102(h)). (my emphasis added in italics)

136 As regards invested share capital Lord Hoffman observed (after referring to In re A Company; Ex parte Kremer [1989] BCLC 365):

[I]f a breakdown in relations has caused the majority to remove a shareholder from participation in the management, it is usually a waste of time to try to investigate who caused the breakdown. Such breakdowns often occur (as in this case) without either side having done anything seriously wrong or unfair. It is not fair to the excluded member, who will usually have lost his employment, to keep his assets locked in the company. But that does not mean that a member who has not been dismissed or excluded can demand that his shares be purchased simply because he feels that he has lost trust and confidence in the others (1104(f)-(h)). (my emphasis added in italics)

And:

Usually, however, the majority shareholder will want to put an end to the association. In such a case, it will almost always be unfair for the minority shareholder to be excluded without an offer to buy his shares or make some other fair arrangement. ... But the unfairness does not lie in the exclusion alone but in exclusion without a reasonable offer. If the respondent to a petition has plainly made a reasonable offer, then the exclusion as such will not be unfairly prejudicial and he will be entitled to have the petition struck out. It is therefore very important that participants in such companies should be able to know what counts as a reasonable offer (1107(a) (b)). (my emphasis added in italics)

(See also my citation from O'Neill at [103] where italicised.)

137 At (1107 1108) in O'Neill v Phillips Lord Hoffmann identified five factors going to assessing the reasonableness of an offer from a majority which he identified in reference to the overall fairness regarding an excluded member, including:

(a) offering fair value without discount for the minority holding;

(b) the offer of determination by a competent expert in the absence of agreement;

(c) the offer to purchase being at a value determined by an expert as an expert and the importance of the objectives of economy and expedition even if this carries a possibility of 'rough edge for one side or the other';

(d) the importance of equality in terms of rights of access to information about a company, where that information bears upon the value of shares; and, lastly

(e) the payment of costs where appropriate.

His Lordship concluded:

As I have said, the unfairness does not usually consist merely in the fact of the breakdown but in failure to make a suitable offer. And the majority shareholder should have a reasonable time to make the offer before his conduct is treated as unfair. The mere fact that the petitioner has presented his petition before the offer does not mean that the respondent must offer to pay the costs if he was not given a reasonable time (1108(b) (c)). (my emphasis in italics)

138 In the context of the present dispute, I find the observations by Lord Hoffmann in O'Neill v Phillips to be pertinent. This is so, even bearing in mind an injunction not to impose judgemade limitations on the statutory text of s 232/s 233.

139 Nevertheless, it is important to note some more recent observations of Campbell JA in Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104; (2011) 288 ALR 310. Campbell JA referred to further passages in Lord Hoffmann's reasons. At another point his Lordship said:

The offer is only material to the outcome at the trial if the court considers that the petitioner is otherwise entitled to succeed. So the fact that he was made an earlier offer of the relief to which the court has now held him entitled after trial can logically go only to the question of costs (1106).

140 Campbell JA assessed that this passage dealt with an offer made after the litigation had commenced, rather than to offers made before proceedings commenced, at [228]. His Honour contrasted Lord Hoffman's earlier observations at (1107) (cited above). He said:

There, his Lordship was talking about an offer made before the petition had been presented, because the effect of making a reasonable offer at that time is said by his Lordship to be 'the exclusion [from management] as such will not be unfairly prejudicial and he will be entitled to have the petition struck out' [230].

141 Campbell JA observed that Lord Hoffmann's observations were made in the context of a point which did not need to be decided (since the House of Lords allowed the appeal of majority shareholder Mr Phillips and declined to grant Mr O'Neill relief for oppression) [231].

142 Campbell JA also referred to Campbell v Backoffice Investments Pty Ltd, and the High Court's caution as regards 'judge made limitations', which I have referred to previously. His Honour observed (and I accept) that although remarks such as those of Lord Hoffmann in O'Neill v Phillips might provide some assistance to a judge in seeking to apply s 232 that:

[T]hey cannot be treated as either an addition to, or a substitute for, the statutory text. ... [and] the application of s 232 is not properly approached by seeking to create rules containing terms that are not found in the legislation, like 'exclusion from management' and 'reasonable offer' [234].

Campbell JA also observed:

[T]he making of a reasonable offer is merely one factor that, in some (but not all) types of situations where oppression is alleged can be relevant to whether oppression is made out. A party who wished to assert that a reasonable offer had been made would bear an onus of adducing evidence of the making of an offer, and an onus of persuading the court that it was reasonable, and that because it had been made there was no oppression [235].

143 His Honour noted that even an exclusion from management may not be the only relevant factor under consideration [237]. Those observations are appropriate to present circumstances.

Winding up as a remedy for statutory oppression

144 Bearing in mind s 232 and s 233 are in broad terms, I should note some comments of the Full Court of the Federal Court (Emmett, Jacobson & Buchanan JJ) in Hillam v Ample Source International Ltd (No 2) [2012] FCAFC 73; (2012) 202 FCR 336 regarding the role of a court in deciding whether to award relief for statutory oppression:

It is for the trial judge to consider the alternative remedies that are put before the judge by the parties: cf John J Starr (Real Estate) Pty Ltd v Robert R Andrew (Australasia) Pty Ltd (1991) 6 ACSR 63 at 74 per Young J. It is not incumbent upon a judge hearing an oppression suit to devise a remedy for the parties that was not advanced by then [sic].

Furthermore, in our view the appeal should not be entertained by reference to any proposal of the kind advanced at the appeal. As counsel for Ample Source pointed out on the appeal, if any such proposition had been advanced at the trial it would have required consideration of a number of possible factors, none of which were the subject of evidence, or any opportunity to call evidence. ... It is too late to raise issues of that kind on the appeal. The appeal does not provide an opportunity to simply elect to put a new or different case in the hope of a better result, relying on matters not shared with the trial judge [64] - [65].

145 Of the statutory oppression remedies pressed by CSF at this trial, the most severe is clearly that of a compulsory winding up of WB Holdings. Winding up is generally a remedy of last resort, especially for an ostensibly solvent corporation. See in that regard observations by von Doussa J in Coombs v Dynasty Pty Ltd [1994] FCA 1193; (1994) 14 ACSR 60 [25] (particularly [25.2] [25.3], [25.7] and [25.16]).

146 Nevertheless, as stated in Hillam v Ample Source International Ltd (No 2) that there is no general principle to the effect a court will not order the winding up of a solvent company. I mention Kokotovich Constructions Pty Ltd v Wallington [1995] NSWSC 54; (1995) 17 ACSR 478, 494 (Kirby ACJ), where an order was made to wind up a solvent company. There his Honour observed that the court had to balance the gravity of the (winding up) remedy against the impasse between the parties (see 481):

Given the continuing animosity which exists between the two shareholders, the real risk, as I would judge, of further oppression, and the very limited nature of the company's present activities, the order would seem to be soundly based.

147 I mention as well Schum Yip Properties Developments Ltd v Chatswood Investment and Development Company Pty Ltd [2002] NSWSC 13; (2002) 166 FLR 451 [241] (Austin J), where a winding up order was made. No other remedy was considered by the court to be appropriate. See as well Re Back 2 Bay 6 Pty Ltd (1994) 12 ACSR 614, 615 (Thomas J) as to a winding up order in the face of difficulties confronting the court in resolving an impasse.

148 In Hillam v Ample Source International Ltd (No 2) at [8], [70], [80], it was observed that if there is no realistic prospect of a commercially viable solution involving the acquisition of a shareholder's interest for value, it may be 'virtually inevitable' that an order is made for the winding up of a company and the sale of its various interests on the open market leaving it open to the parties to participate in that process at [80].

Sources of evidence and the narrow range of the primary factual disputation

149 There were two main sources of evidence in these two trials heard together. I note that the evidence in one trial stood as evidence in the other and vice versa.

150 The primary source of materials was the very substantial volumes of trial bundle documents tendered on behalf of the William Buck parties or the Faulkner parties.

151 The second source was the viva voce evidence from 11 witnesses, given on behalf of the William Buck parties at the trial. I note that there was also a witness statement of Ms Sharyn Rodriguez tendered (exhibit 32) but Ms Rodriguez was not required for cross-examination at trial. I mention each in turn.

Documentary evidence

152 Between them, the respective camps tendered, at commencement of the trial, four lever arch volumes as a trial bundle. That four volume trial bundle became exhibit 1. Throughout the course of these reasons I refer to documents within the trial bundle by a reference 'TB', then volume number followed by a page number for a particular document within the trial bundle.

153 Exhibit 2 is the index to the trial bundle, identifying approximately 300 distinct documents comprising almost 1,900 pages.

154 At commencement of the trial there was some disputation about the status of the documents within the trial bundle. However, by the morning of day three this disputation had been substantially resolved. The parties' agreement as to the status of almost all trial bundle documents is recorded in a letter from the solicitors for the William Buck parties to the solicitors for the Faulkner parties of 19 March 2013. This became exhibit 3. I subsequently resolved a handful of residual objections concerning the few further contentious documents on the morning of day three of the trial.

155 For the most part this very plentiful documentation, including large numbers of emails contemporaneously circulating between equity directors of the William Buck entities, would provide, if needed, the primary and most reliable source of information for the purpose of factfinding in the two trials. However, most of the relevant underlying facts, as emerged from the parties' exchanges of opening chronologies, presented as largely uncontroversial. See day one of the trial where Mr Solomon addressed his limited corrections by way of his responses to the Faulkner parties' chronology: ts 271 281.

156 In addition to the four volume trial bundle a series of further ad hoc documents tendered as exhibits emerged as the trial progressed. Importantly, these included Mr Faulkner's answers, and his supplementary answers to interrogatories which were tendered by the William Buck parties at the close of their case: see exhibits 55 and 56.

157 The substantial component of the ad hoc exhibits is constituted by the tendered witness statements from 13 witnesses called on behalf of the William Buck parties. I have already observed Mr Faulkner did not, in the end, elect to give evidence at the trial. That decision was definitively communicated by Mr Faulkner's counsel on day 11 of the trial. Such a potentiality had earlier been foreshadowed by his counsel on day eight, but not then confirmed. I refer in that regard to my reasons in William Buck (WA) Pty Ltd v Faulkner [No 5] [1] - [3].

158 All witnesses called at the trials were crossexamined. It is convenient to identify the witnesses' evidenceinchief in the next section dealing with the viva voce evidence at the trials.

Witness evidence at the trials

159 The 11 witnesses who gave evidence were led as to their evidenceinchief adduced primarily by the tendering of their written statements. There was invariably a primary witness statement followed a responsive witness statement (save for Mr Peter Hills) both tendered.

160 This process, albeit cumbersome, meant that each witness, and particularly all of Mr Faulkner's former fellow equity directors, enjoyed the fulsome opportunity before entering the witness box to respond by writing, to the witness statement of Mr Faulkner exchanged prior to trial (and ultimately, by reason of his decision not to give evidence, not tendered). By this process of responsive statements whatever perceived forensic prejudice to the William Buck parties that might otherwise have arisen through Mr Faulkner's ultimate decision not to give evidence at these trials, was reduced in my opinion. Those responsive statements, to the extent relevant, stand uncontradicted by reason of Mr Faulkner's decision not to give evidence at the trials.

161 For the sake of completeness, I record that the socalled 'equity directors' called as trial witnesses were:

(a) Mark Peter Collins - whose primary witness statement and responsive witness statement became respectively exhibits 4 and 5.

(b) Robin Boyd Judd - whose primary witness statement and responsive witness statement became respectively exhibits 29 and 30.

(c) Peter Hills - whose only witness statement became exhibit 37.

(d) Franco (Frank) Del Borrello - whose primary witness statement and responsive witness statement became respectively exhibits 46 and 47.

(e) Stephen Kenneth Breihl - whose primary witness statement and responsive witness statement became respectively exhibits 49 and 50.

(f) Dr Christopher John Brown - whose primary witness statement and responsive witness statement became respectively exhibits 51 and 52.

(g) Damon Harris - whose primary witness statement and responsive witness statement became respectively exhibits 53 and 54.

162 Of those seven William Buck WA Group equity director accountant witnesses, Mr Hills only had ceased to be an equity director in mid2011. That was when he and the balance of the William Buck WA Tax Services Unit TSBU departed to join Grant Thornton. In return, WB Holdings received $1 million dollars consideration, from the acquisition of the TSBU.

163 As had been foreshadowed, Mr Breihl ultimately did return to Sydney, around March or April 2013, although he retains his directorship of WB Holdings. The resolution as to the share capital position for Mr Breihl's corporate trustee by that member's 300,001 shares in WB Holdings remains unresolved, pending the outcomes of these proceedings.

164 In September 2011 these equity directors, save for Mr Hills, who had left, were the essential decisionmakers in bringing about the unilateral ejection of Mr Faulkner.

165 I assessed Mr Judd, Mr Hills, Mr Del Borrello and Mr Breihl to be basically straightforward witnesses who did their best to answer questions truthfully. I also assessed Mr Harris as a straightforward witness, although it seemed that he played a minimal role during 2011 in decisionmaking. I find he usually tended to go along with what was proposed to him by key decisionmakers, namely Messrs Collins, Judd, Del Borrello or Breihl. Significantly, in this case, I repeat that most underlying facts presented as either uncontroversial, or at least very well documented. The substantive controversy arises over what is made of these underlying facts.

166 I found Mr Collins' evidence to be less reliable, particularly in his crossexamination where it seemed he seized every opportunity to spin facts in a way he thought would be interpreted as adverse to Mr Faulkner, or conversely to show up the other equity directors in a more positive light (ts 501). Mr Collins' significant and ongoing immersion as William Buck WA Group's managing director in these events looked to me to have taken a toll. I assessed his perspective as somewhat jaundiced, against Mr Faulkner. Again, however, that assessment of Mr Collins' evidence is, in the end, not so significant in circumstances where the underlying facts are largely uncontroversial, or significantly documented. A good number of the contemporaneous documents tendered were the longhand notes of Mr Collins, made at meetings with various persons, frequently with Mr Faulkner. Mr Collins appears to have been a prodigious note taker. I find his contemporaneous longhand records to be generally reliable.

167 Further, evidence was adduced at the trial from Ms Helen Withers, the Company Secretary of WB Holdings and the Chief Financial Officer (CFO) of the William Buck (WA) Group. Her primary witness statement and responsive witness statement respectively became exhibits 40 and 41. She was subjected to a long crossexamination. I found her evidence to be broadly reliable, if also a little jaundiced in its negative perspective against Mr Faulkner (ts 943 - 1020).

168 The written witness statements (evidenceinchief) of all these equity director witnesses and Ms Withers and the structure of their respective witness statements do present on my assessment as heavily spun against Mr Faulkner in their assembly. Crossexamination neutralised most of that spin.

169 The remaining trial witnesses were Mr Jim Eric Hunter, and two employees of the William Buck accountancy practice in Western Australia: Mr Allan Chiew (Chee Fatt Chiew) and Ms Cherrie Li (Xu Qing Li).

170 I have already made mention of Mr Hunter's evidence in the earlier context of resolving the disputed factual issue with which he is concerned. This was the controversy over whether or not Mr Faulkner had made a false statement to Ms Withers on 28 September 2011 when he stated in his email to her that he could not 'log in'. As I have said, I assessed Mr Hunter to be deficient in expertise in the forensic task he attempted. On my assessment, he was heavily reliant upon downloaded software from the internet (which he did not sufficiently understand) in undertaking a task of preparing two reports investigating whether or not Mr Faulkner could 'log in' or not. Mr Hunter presented at trial to me as strangely argumentative (for a socalled computer expert) and was frequently unresponsive under crossexamination (ts 1060 1075). On my assessment, his evidence was to be treated with caution.

171 For the particular issue concerning whether or not Mr Faulkner could 'log in' or not, and what that term meant, I did not accept Mr Hunter's evidence. In particular, I did not accept his assertion in chief at par 5 of his supplementary witness statement (exhibit 43) about his 'log in' conclusion being supported by the attached emails he identified Mr Faulkner as having sent. That conclusion seemed to me to be exposed by his overall crossexamination concerning the reports Mr Hunter had caused to be prepared (using downloaded software). Mr Hunter's conclusions upon this point were exposed as lacking a reliable empirical foundation in personal expertise.

172 Two remaining trial witnesses were called exclusively to address another of the controversial issues. That was the equity partners' related party WIP write off allowance issue. I have also now resolved this issue as the second Shepherd v Felt point unsuccessfully invoked by WB (WA) to support Mr Faulkner's summary termination of 28 September 2011.

173 Mr Chiew's primary witness statement and responsive witness statement respectively became exhibits 33 and 34. I assessed Mr Chiew's evidence to be reliable, but relatively limited in scope (ts 870 - 881). Even if all contended for facts were established, I still conclude this Shepherd v Felt extra point does not provide any sufficient basis to support a summary termination of Mr Faulkner as an employee of WB (WA).

174 Ms Li's evidence I must only assume was directed towards the same related party WIP writeoff issue (ts 884 - 895). Crossexamination quickly exposed her evidence as shaky and unresponsive. In the end, her evidence counts little, given the conclusions which I have otherwise reached. To the extent it ever became necessary to embark upon a detailed assessment of her evidence, in the light of her destructive crossexamination, I would assess her evidence as unreliable and not accept it.

Areas of factual disputation

175 I am now in a position to proceed to setting down my findings of fact for the two actions. I will do that chronologically and working significantly from the parties' respective event chronologies, which were mostly sourced in uncontroversial documents or evidence.

176 As I embark upon that exercise I mention again what I assessed to be the limited areas of factual disputation, as between the parties. I have already resolved two of these areas. The three areas concerned:

(a) Whether Mr Faulkner made a false statement at 10.06 am on 28 September 2011 by his email to Ms Withers, when he advised that he could not 'log in' to the William Buck system the previous evening or that morning. I have resolved this issue, concluding it provides no proper foundation to sustain a finding of misconduct against Mr Faulkner. Nor is it sufficient to justify a purported summary termination of Mr Faulkner as an employee of WB (WA) on 28 September 2011.

(b) The issue I have also now resolved concerning the equity directors WIP related party write off allowance and Mr Faulkner's conduct in this regard as a Shepherd v Felt issue.

(c) That leaves only the one remaining unresolved area of factual disputation. This concerns whether or not Mr Faulkner had, by his words and conduct during March and April 2011, told his fellow equity directors he was resigning as a 'partner' from the William Buck Group, at 31 December 2011. This issue turns heavily upon Mr Collins' longhand notes of meetings he participated in with Mr Faulkner, particularly during March 2011, and in particular the repeated reference to certain 'deal breaker' conditions, as identified by Mr Faulkner. The core issue here is whether failure to meet all Mr Faulkner's socalled 'deal breaker' conditions after April 2011, had the effect of crystallising Mr Faulkner's resignation, to be effective at the end of the 2011 calendar year. The Faulkner parties contend to the contrary.

The William Buck parties seem to contend that because all 'deal breaker' conditions were not satisfied in full, Mr Faulkner unequivocally indicated, as of March or June 2011, that he would be leaving at the end of 2011. This issue is all said to be relevant to the William Buck parties' basal position (refuting exclusion from management and thereby, as to statutory oppression by WB Holdings) that the equity directors were only seeking during July, August and September 2011 to bring forward Mr Faulkner's crystallised resignation, effective otherwise at 31 December 2011. The advancement in timing of the resignation was only by approximately three months and thus to the end of September 2011.

The exercise requires an analysis of documentation which I find, in the end, to be the most reliable determinant upon this disputed area of fact, particularly:

(i) Mr Collins' notes of meetings where Mr Faulkner's 'deal breaker' contentions for him to stay were discussed;

(ii) subsequent emails circulated between the equity directors, in which Mr Faulkner participated;

(iii) the significance of what is recorded in minutes of an extended meeting of the William Buck (WA) Group board which ran on 19 and over to 27 April 2011. These minutes were then confirmed as accurate and signed off by the Chairman as a true record on 21 June 2011;

(iv) item 7.2 of the minutes of the extended board meeting spanning 19 and 27 April 2011 is particularly relevant.

(v) the minutes of 21 June 2011 that also addressed the issue of Mr Faulkner's resignation. However, Mr Faulkner, by an email sent on 10 September 2001 (see TB vol 3, page 1429), disputed the accuracy or completeness of the draft minutes which had been sent to him for comment. In fact, these draft minutes had been confirmed at a subsequent William Buck (WA) Group board meeting held in Mr Faulkner's absence on 30 August 2011. At the time, Mr Faulkner was overseas on a family holiday in Thailand. Although he had been invited to participate in a directors' meeting by telephone, he did not. Item 3.1 of the draft 21 June 2011 minutes was confirmed on 30 August 2011, as part of a confirmation of all the minutes of the previous meeting.

This aspect of the case occupied an extraordinary amount of time during trial, particularly in the crossexaminations of all the equity directors and Ms Withers. I deal with the issue in the narrative after the lead up context has been more fully described.

My ultimate assessment, in overall context as emerges, is that Mr Faulkner talked loosely on occasions about his intention to resign at an indeterminate future time if things did not improve. But he had not formally or definitively given a notice of his resignation.

177 I proceed to set out findings of fact for the two actions as a chronological narrative.

Findings of fact: chronological narrative

178 Most facts found below were either uncontroversially accepted by the parties exchange of chronologies prior to commencement of the trials, or are uncontroversially established by tendered documents.

179 I have on occasion augmented the parties exchanged event chronologies by referring to the contents of a document from the trial bundle or some witness evidence.

Residual disputed factual issue

180 I need to resolve the remaining issue of factual disputation (of the three which I earlier identified) concerning the accuracy of the draft minutes of 21 June 2011 for the William Buck (WA) Group board meeting. The accuracy of these minutes was disputed by Mr Faulkner by email of 10 September 2011, using terms which offended at least some of his fellow equity directors: see TB vol 3, page 1429.

181 These draft minutes had been confirmed at the subsequent board meeting which was held in Mr Faulkner's absence while he was overseas at 1.00 pm Tuesday, 30 August 2011: see TB vol 3, page 1419.

182 The 21 June 2011 minutes were confirmed that day (over two months later) as a 'true and correct record'. It is clear, however, that six pages of minutes can only summarise what was a lengthy meeting that exceeded in duration over four and a half hours (1.00 pm to 5.30 pm). Mr Faulkner was sent by Mr Judd (whilst on leave) the draft minutes of the meeting of 30 August 2011 on 8 September 2011.

183 The 30 August 2011 draft minutes showed that the 21 June 2011 draft minutes of the prior meeting had been approved. Much was made of that approval at the trial as being effectively conclusive as to their correctness. But in my view that submission is artificial and overblown. It is quite clear as I observed within the chronological narrative that, by 30 August 2011, a subcommittee of equity partners had been formed. They, with legal input, were actively engaged in a task of setting out to achieve Mr Faulkner's exit from the William Buck WA Group, preferably by 30 September 2011. Mr Breihl's email observation about never having issued the 16 August 2011 letter and 'minutes' if his fellow equity directors were not prepared to act before December 2011, is highly revealing (TB vol 4, page 1431). It is clear Mr Faulkner was going to be removed 'come hell or high water'. In that context, selfserving written documentation such as minutes must fall to be closely scrutinised, as potentially manufactured to achieve an end.

184 Mr Faulkner asked to have the draft 21 June 2011 minutes amended by the addition of words 'unless things improve' to qualify what was recorded as having been said concerning him at item 4.2 (about Mr Faulkner not seeing himself staying on with WB beyond 31 December 2011). The improvement which he was referring to was increasing the general level of remuneration being received by equity directors which he thought (indeed no one disagreed with him) was then inadequate.

185 At the trial, a number of the equity directors were prepared to accept, during crossexamination, that Mr Faulkner at the 21 June 2011 meeting may well have said the words which he has suggested that he used that qualified what was otherwise attributed to him by the draft minutes at item 4.2. I refer in particular to what was said during the crossexaminations of Mr Judd (ts 798) and Mr Harris (ts 1267 - 1268).

186 This disputed issue must in the end overwhelmingly be determined in favour of Mr Faulkner's position. The evidence of Mr Damon Harris, whose primary witness statement (evidenceinchief) strongly aligns to Mr Faulkner's position as regards item 4.2 and the qualification he seeks to have made. I refer to Mr Harris' witness statement (exhibit 53, par 23). Mr Harris refers to attending the 21 June 2011 board meeting. Mr Harris concludes with this observation in the last two sentences of this paragraph:

Mr Faulkner said he would not sign any documents with Macquarie unless he got a distribution. I also remember him saying at the meeting words to the effect that if earnings didn't improve, he would be leaving William Buck.

187 During closing submissions, I pointed out to counsel for the WB parties that he in fact had led this evidenceinchief as part of his case. Counsel sought to dismiss this reality as irrelevant on a basis of a reference to par 5 in the pleaded Reply in COR 174 of 2011 (see ts 1429 – 1432). I did my best to understand this argument, but in the end found it incomprehensible. Mr Solomon appeared to be suggesting by drawing a fine distinction between the draft minutes being pleaded to be false, as opposed to being deficient, by the omission of the words of qualification sought to be added by Mr Faulkner. On that basis, the evidence that Mr Solomon had deliberately led, and was not objected to, out of the mouth of Mr Harris, was irrelevant and so to be ignored. I reject the attempted rationalisation. Further, the same evidence largely emerged from Mr Judd in crossexamination. Mr Harris confirmed what he had said in chief whilst in crossexamination.

188 Accordingly, I conclude the minutes for the 21 June 2011 meeting lacked an important qualification to item 4.2, which Mr Faulkner had indeed articulated at that meeting and which he wished to have the draft minutes more accurately reflect. I do not find that at all to be an unreasonable position to take by Mr Faulkner. Nor do I conclude any law or rule of evidence requires me to reach a different conclusion discordant with the reality of what I find transpired. That is so irrespective of whether draft minutes were subsequently confirmed on 30 August 2011 as accurate or not. Truth is not a plaything for lawyers' tactics.

189 In his email to his fellow directors on 10 September 2011 making his point above, Mr Faulkner did express himself in strong terms, using the phrase 'patently false'. That terminology may have been infelicitous, even offensive. But in the daytoday running of a business relationship between adults, which bears some hallmarks of partnership (but is in law something else) there is surely room for frank exchanges between the principals. Common sense dictates that there must be a realistic allowance made for some robust cut and thrust in those exchanges. The point Mr Faulkner was then making was entirely correct, albeit expressed in less than diplomatic fashion. The point was understandably very important to Mr Faulkner. He was firmly of the view (correctly so) that he had not yet resigned from the William Buck organisation, as of 31 December 2011, or at all. He wanted his position unequivocally communicated and understood. It was. This was a serious matter and no occasion for his fellow equity directors to be unduly precious over Mr Faulkner's language. By then they had set up a subcommittee charged with a task of securing Mr Faulkner's early removal from the organisation. This was no occasion for a soft response.

190 Moreover, I assess the so called 'hurt' and 'offence' said to have been caused by Mr Faulkner's email of 10 September 2011 to be artifice. It was essentially manufactured offence crafted, I conclude, as a pretext to secure some better tactical position in what, in the end, was to be unilateral action taken against Mr Faulkner. I do not suggest the employer corporation WB (WA) was unable to end Mr Faulkner's employment without cause by giving four weeks' notice. However, summarily terminating Mr Faulkner's employment the very next day significantly overstepped the mark by a wide margin. Furthermore, as I understood WB (WA)'s arguments, it did not ever seek to rely upon Mr Faulkner's description of the draft minutes of 21 June 2011 as being 'patently false', as a basis to sustain the summary termination of Mr Faulkner, at 28 September 2011.

191 In the end, hours of trial disputation over the correctness of the 21 June 2011 draft minutes really only provides some background to what later happened.

Statutory oppression: Evaluations

192 With all issues of fact now resolved, I return to the core issue of alleged statutory oppression. Particularly I am concerned with whether, in all the circumstances, the position taken by the William Buck parties, as regards whether overall context and 'fairness', present here some antidote to what, on the face of it, appears to be oppressive and unfairly discriminatory conduct against CSF as a shareholder in WB Holdings (at least from 27 September 2011) onward, by reason of:

(a) the unilateral exclusion from management of Mr Faulkner both as an employee of WB (WA), then as a director of the four William Buck corporate subsidiaries and also as a director of WB Holdings achieved by effectively forcing his resignation from the parent company, with the writing on the wall, as of 5 October 2011 of a convened meeting of shareholders called for the sole objective of voting him out as a director of the parent company;

(b) calculated and ongoing decisions to pay dividends to all shareholders of WB Holdings post September 2011 save for CSF. This was supported on a basis that Mr Faulkner was no longer working in the William Buck (WA) organisation (having been unilaterally ejected) and the WB Holdings dividend policy was that only working directors would receive dividends. This approach offends basic corporations law principles under which dividends are paid out to shareholders, not to directors (working or otherwise); and

(c) a correlative failure, having ejected Mr Faulker, to make a reasonable offer to CSF to acquire its share capital in WB Holdings after September/October 2011. That effectively left CSF frozen as to its share capital contribution to the William Buck WA Group organisation, whilst receiving nothing at all in return post September 2011. This issue requires an evaluation of two written exit proposals put to Mr Faulkner, first on 16 August 2011 (TB vol 3, pages 1271 1272; and then substantially reiterated by a second communication of Monday, 19 September 2011 TB vol 4, pages 1436 1439).

193 I first need to reiterate some basic underlying factual conclusions bearing upon this evaluation.

194 On any view:

(a) CSF remained an (equal) 300,001 minority shareholder in WB Holdings after 28 September 2011 and even up to the present;

(b) Since September 2011, regular dividend payments to WB Holdings' shareholders at aggregate level exceeding $1 million (going beyond the 30 June 2012 financial year) have been paid out to all other shareholders in equal proportions, save for CSF. CSF has received no dividends since the events of 27 and 28 September 2011. Dividends have been paid to the six corporate trustees of the six remaining equity directors, directed there by reference to their unique one share, in a distinct class, as allocated in accordance with WB Holdings' Constitution;

(c) At trial, there was no live 'offer proposal' to CSF for me to evaluate made by WB Holdings (or for that matter by anyone) concerning any commercial proposal to either acquire or, specific to the position of WB Holdings, to buy back CSF's 300,001 shares for an ascertainable amount of money. To the contrary, the overall position presented as one of total inertia regarding an ongoing likely continuance of CSF's minority shareholding position with WB Holdings, with it being firmly resolved that CSF was never to receive any future dividends;

(d) I have made mention to two 'offer proposals' put to Mr Faulkner, first by letter on 16 August 2011, then substantially repeated by letter on 19 September 2011. These two proposals had time limits for acceptance and now have lapsed. They have not been renewed, at least openly, on the evidence before me at present. Both offers to Mr Faulkner can be seen to be expressed as being highly conditional on Mr Faulkner agreeing to terms in relation to 'purchasing' clients and with CSF receiving any repayment of its share capital over a longish time, rather than immediately; and

(e) (I afford negligible importance to this last matter as it concerns Mr Faulkner personally not CSF. Nevertheless, it has not escaped my attention.) I observe that apart from a return of CSF's share capital - the other substantive loose end arising from Mr Faulkner's unilateral exit at the end of September 2011 is his ongoing status as a several coguarantor to Macquarie Bank in respect of borrowings of WB Holdings (which in aggregate look to approach approximately $2 million along with the other several guarantors Messrs Collins, Judd, Brown, Del Borrello, Harris and Breihl). Subsistence of this personal guarantee is an irritant Mr Faulkner would obviously like cleaned up and resolved. However, for my evaluation of statutory oppression considerations, the continuing unresolved guarantee exposure of Mr Faulkner does not directly bear upon CSF's position as a minority shareholder and therefore it is something of a side note.

Resolution of the s 232/s 233 oppression/unfair discrimination action of CSF against WB Holdings

195 The William Buck parties defend CSF's oppression grievance first by tactically seeking to widen the horizon of the underlying context well beyond the core corporate consideration of the residual shareholding by CSF of 300,001 shares still held in WB Holdings, notwithstanding the expulsion of Mr Faulkner from the William Buck (WA) Group at the end of September 2011. The expulsion was, I have concluded, a unilateral and calculated exclusion of Mr Faulkner from future management in that group at the time. It was effective to that end.

196 Given conclusions I have now reached, this exclusion conduct was in my view oppressive conduct against the shareholders' (CSF's) key decisionmaker (Mr Faulkner) and, therefore, conduct directed against CSF as shareholder. After September 2011, there has followed an undeniably prejudicial payment regime of substantial dividends paid to all WB Holdings shareholders in equal proportions by WB Holdings, save for CSF. The critical question is whether that conduct, which is ongoing, is unfair or not? The expressed defence rationale for this dividend payment discrimination is that it was justifiable, in effect, because Mr Faulkner no longer provided his accounting services to the William Buck (WA) organisation, and therefore contributes nothing, and that some former William Buck clients have followed him to a new business.

197 The justification advanced to support the dividend discrimination against CSF is wholly misconceived, on my assessment. First, Mr Faulkner was unilaterally expelled. He therefore could hardly continue to provide his accounting services to the group in such circumstances. Second, clients of accounting practice are entitled to seek out an accountant to perform computer accounting services for them in whatever new organisation Mr Faulkner might establish to service them. Provided that Mr Faulkner did not infringe any restraint of trade covenant binding him (which itself does not infringe the general policy of the law invalidating such covenants, unless they are reasonable). I have concluded he has not infringed any such covenant. In the end, WB (WA) only pursued nominal damages against Mr Faulkner for breach of cl 14.2 of his employment agreement. But even that limited exercise failed, as WB (WA), in the end, could not show Mr Faulkner had engaged in any 'Restricted Activity' involving former clients of William Buck. Not only were there no damages suffered, a claim to nominal damages wholly failed as well, because cl 14.2 was not infringed from a causation of loss perspective. Accordingly, the expressed rationale for a prejudicial payment of dividends to all shareholders, bar CSF, post September/October 2011 is unconvincing.

198 The William Buck parties also invoked in their defence the precepts of:

(a) taking a wide view of the overall context in which the minority shareholding by CSF in WB Holdings was, and remains, held; and

(b) the concept of overall fairness as a cardinal principle embodied as a matter of policy within s 232 of the Corporations Act.

199 From that broad horizon, the William Buck parties argue the statutory oppression grievance of CSF, as a shareholder in WB Holdings, must be evaluated, albeit the exercise mooted is time consuming and hugely expensive (as regards the cost of litigation in the context of the initial financial parameters of what was in dispute perspective). The court was asked to scrutinise the past daytoday activities of the William Buck (WA) organisation in which Mr Faulkner participated from July 2008. Taking that wide perspective is said to capture argued (mis)conduct by Mr Faulkner as an employee of WB (WA). Argument was also advanced as to Mr Faulkner's allegedly selfish, unreasonable or petulant behaviour in WB Group dealings over time with fellow equity directors, including an alleged unreasonable refusal to negotiate over the terms of a forced exit, unilaterally fixed at no later than 30 September 2011. The William Buck parties assert that they have gone to lengths to put very reasonable offers to Mr Faulkner (and thereby to CSF) under the terms of letters of 16 August 2011 and 19 September 2011. These offers they say were rebuffed by an unresponsive Mr Faulkner. It is put that all this should all be weighed against him (and CSF) ultimately against any finding of statutory oppression against CSF.

200 I accept that an evaluation of alleged acts of statutory oppression complained of by CSF needs to happen in proper context. This requires an examination of where CSF, as an entity and shareholder in WB Holdings, came to be positioned as part of a complex, no doubt tax effective, corporate structure and the relationships surrounding Mr Faulkner's admission as an equity director in the William Buck (WA) Group, from July 2008. Nevertheless, as Lord Wilberforce observed in Ebrahimi v Westbourne Galleries (380) (as noted by Lord Hoffman in O'Neill v Phillips (1104)) the residually unique character of a corporation and the equally unique position of a shareholder (member) in such a corporate body cannot be ignored.

201 On the facts, what I assess primarily as a deterioration and eventual breakdown in the overall working relationship between Messrs Collins, Brown, Judd, Del Borrello, Breihl and Harris and Mr Faulkner, unfolded across 2011. The Grant Thornton TSBU purchase negotiations of June 2011 effecting the exit of Peter Hills crystallised the existing tensions over Mr Faulkner's not unjustified array of expressed grievances to the other equity directors.

202 After the Hills and TSBU sale issue was resolved in mid 2011, Mr Collins, Mr Judd, and Mr Del Borello in particular, then resolved that Mr Faulkner needed to be dealt with and brought to a head. Mr Faulkner was perceived by them to have acted in an unreasonable and selfish way by raising and elevating his personal position in the TSBU negotiations and so, by effectively not behaving as a 'team player'. This, in the end, is all a matter of perspective. It was nothing unusual in a business relationship. Engaging in fault attribution over a clash of perspectives is unhelpful to the exercise at hand. In my view, the concerns and points Mr Faulkner raised at the time over his personal guarantee to Macquarie Bank, about getting a reasonable return out of the sale of the TSBU and his questioning the need for restraint of trade covenants as required by Grant Thornton, evaluated by reference to all the materials, was not unreasonable. Mr Faulkner had a point of view and legitimately expressed it. His remaining equity directors took different views. This happens in business, as well as in life.

203 In that overall context, I assess the end position to be that the exercise in attempted fault attribution one way or the other here against Mr Faulkner is both naïve as an objective, and ultimately not reliably achievable. Human interactions in relationships are complex things, particularly in business relationships. This William Buck (WA) Group business relationship was under some stress, including financial stress, during 2011. Everyone agreed the profits being derived in the organisation had bottomed to unacceptably low levels. This particularly affected the younger, less financially secure, equity directors, like Messrs Breihl, Hills and Faulkner.

204 Mr Faulkner had openly expressed his unhappiness about his lot throughout 2011, particularly over a perceived poor level of financial remuneration when measured against a high level of professional commitment expected of, and given by, him in the organisation. He had a legitimate point of view and expressed it strongly. That was his right. Issues concerning the ongoing GNS perceived conflict of interest and related director inequities generated out of that offshore relationship, did not help.

205 Mr Faulkner took a strong, but not unreasonable position at the 21 June 2011 directors' meeting in not voluntarily accepting a greater level of personal guarantor exposure to the Macquarie Bank, following Mr Hills' departure. His stance effectively forced the remaining equity directors to 'pick up any guarantee slack' left by Mr Hills' 1 July 2011 departure and the agreed release of his guarantee. The extra amount was not great in financial terms but his stance won Mr Faulkner no friends and effectively brought matters to a head.

206 I conclude that once drawn out issues associated with the departure of Mr Hills and sale of the TSBU to Grant Thornton were resolved, the next issue, driven primarily by Mr Collins, Mr Judd and Mr Del Borello, was to secure the earliest achievable removal of Mr Faulkner, preferably consensually, but in the absence of his assent, then unilaterally. His other equity directors hoped that Mr Faulkner would agree to depart voluntarily. But he did not. Mr Faulkner effectively played 'hard ball', saying that he would leave at a time of his choosing and on his terms. From midAugust 2011 both sides dug in. Each was now taking private legal advice about its tactical position. Mr Faulkner rebuffed attempts to negotiate his exit. His failure to respond with his own counteroffer to the conditionally qualified offers in the letters of 16 August 2011 and 19 September 2011 only further irritated and frustrated the objectives of his fellow equity directors, particularly the subcommittee charged with securing his exit by no later than 30 September 2011. To an outsider, however, the dispute is a rather typical business conflict which would normally be sensibly resolved by negotiation or mediation. These are not crash through at all costs situations in which one side can implement a unilateral position, particularly if that side lacks the capacity to act unilaterally, in terms of achieving an intended exit objective, as was the case here.

207 From no later than midAugust 2011, but probably earlier, there was an active subcommittee of equity directors comprising at least Messrs Collins, Judd, Del Borrello and Breihl (with participation by Ms Withers), dedicated to the aim of the removal of Mr Faulkner from the William Buck (WA) organisation, no later than 30 September 2011.

208 On my assessment, the 16 August 2011 letter's proposed exit conditions manifest a rather amateurish effort to unilaterally lever Mr Faulkner out. Reference to a decision to 'bring forward' an acceptance of Mr Faulkner's resignation, was disingenuous. Mr Faulkner had not yet offered his resignation either conditionally or at all, at that time. He had simply flagged a prospect as a future potentiality if things (essentially his remuneration) did not improve. But Mr Breihl had similarly flagged his future exit, as regards a return to Sydney, at an unspecified time in the future. Efforts to suggest a nonsatisfaction of Mr Faulkner's and Mr Hills' six 'deal breakers' earlier talked over at informal meetings during March 2011 somehow constituted Mr Faulkner's formal notice of resignation, effective as of 31 December 2011, was an exercise in invention. It was a wholly wrong proposition adopted for tactical reasons to lever Mr Faulkner out.

209 Equally hamfisted was the circulation of draft minutes for the 21 June 2011 board meeting at 30 August 2011, some two and half months after that meeting. The minutes were only issued 42 minutes prior to the next meeting of 31 August 2011, where they were confirmed. This was all taking place while Mr Faulkner was overseas with his family on holiday in Thailand. The suggestion from Mr Judd that Mr Faulkner should call in from overseas by telephone to the 30 August 2011 meeting to discuss terms of his exit, whilst on holiday overseas, was a proposition that is hard at any objective level to view as seriously proposed.

210 During August 2011 efforts were being made by the subcommittee to manufacture a platform to use to get rid of Mr Faulkner. Work included issuing carefully crafted draft minutes of 21 June 2011 with its item 4.2 and then securing the confirmation of those minutes at a 30 August 2011 meeting of directors of the William Buck (WA) Group. These inept efforts were tactical. They manifested a desperate effort to either break an exit impasse or bring it to a head.

211 The letter of 19 September 2011 was little better. Again, there was a threat in what was foreshadowed for a week's time. The letter largely foreshadowed unilateral action by the other equity directors.

212 I cannot assess either the 16 August 2011 or the 19 September 2011 communications to Mr Faulkner as being fair or reasonable exit proposals. Such highly qualified proposals as are found in those communications were not firm or definitive enough. I assess this from a perspective of a reasonable offer needing to unconditionally put a discernible level of funds on the table for CSF to then accept, in exchange for a return of, or buy-out of CSF's shares in WB Holdings.

213 Deficiencies in the 16 August 2011 and 19 September 2011 proposal communications are not answered by contending Mr Faulkner would not respond or negotiate. Mr Faulkner was the party unfairly threatened with unilateral expulsion if he did not agree to terms. He was not under an obligation to respond to what were unreasonable, unilateral terms. He kept working.

214 There was, by August 2011, as serious business relationship breakdown between the equity directors and Mr Faulkner. Aside from terminating Mr Faulkner's WB (WA) employment without cause, on four weeks' notice, it was not open to the other equity directors to force a unilateral result upon Mr Faulkner, or upon CSF.

215 The efforts to manufacture a basis for Mr Faulkner's summary termination as a WB (WA) employee on 28 September 2011 were hamfisted pressure tactics. It is true Mr Faulkner in due course resigned as a director of WB Holdings on 5 October 2011. In reality, he had no option. That is bearing in mind a looming general meeting of shareholders set for 31 October 2011 and convened with a limited and dedicated agenda of securing Mr Faulkner's removal as a director of WB Holdings. The numbers were well and truly cast against Mr Faulkner. The writing was 'on the wall' for him, after the events of 27 September 2011.

216 Mr Faulkner was unilaterally forced out of the William Buck WA Group at the end of September 2011. His exclusion from management in the organisation and as a representative of CSF in WB Holdings was unilateral, unjustified and oppressive.

217 Even more significantly, since September 2011 CSF has not received any dividends as a shareholder of WB Holdings, although all other shareholders have. Counsel for the William Buck Group contends this demonstrably prejudicial conduct against CSF was entirely appropriate, bearing in mind that Mr Faulkner no longer contributes to the revenues of WB (WA). Hence, there were no profits attributable to him to be upstreamed to WB Holdings and then to be subsequently distributed to corporate trustee shareholders. I have rejected this attempted gloss. Irrespective of any rights or wrongs concerning Mr Faulkner's forced expulsion, there is independently seen from this conduct alone an ongoing and blatantly prejudicial course of shareholder discrimination against CSF as a minority shareholder. Dividends are paid out to shareholders, not directors. By WB Holdings' Constitution, a resolution to declare (final) dividends strictly ought be by a resolution of a general meeting of shareholders: see TB vol 24, page 929, cl 86; see also exhibits 9 and 11. The constitutional approach does not appear to have been the procedure implemented by WB Holdings' board whose function, under the Constitution, appears to be to make a recommendation about dividends to a general meeting.

218 On my assessment WB Holdings, by its board, post September 2011 has implemented calculated decisions to effectively freeze CSF's subscribed share capital of $300,001, but otherwise to ignore CSF, from a dividend perspective. I do not find that this is fair or acceptable by reason of the prior proposals to Mr Faulkner of August and September 2011. Those offers were formulated on highly qualified terms and had lapsed by 27 September 2011. Nothing new is before me to assess.

219 By reference to passages I earlier cited from Lord Hoffman's observations in O'Neill v Phillips (1104), I conclude that here Mr Faulkner has been expelled and the share capital of CSF effectively been 'locked up' by WB Holdings subsequent to his ejection from the William Buck (WA) Group, at the end of September 2011. Even so, his ejection may not alone have been enough to show oppression if a reasonable offer had been made to CSF. At bottom here (personal feelings aside) there was what is, overall, a rather paltry monetary amount at issue ($300,001 less $28,879.22) in commercial terms (viewed particularly from a proportionality of resources perspective, measured against the overwhelmingly greater expense of 12 days of trial in the Supreme Court of Western Australia). The wholly uneconomic and disproportionate character of the exit dispute cried out for an unconditional buy-out or a buy-back offer of a reasonable amount, unconditionally put on the table to CSF and proximate to the time Mr Faulkner was ejected. Alternatively, dividends payments in equal amounts to that received by all other WB Holdings shareholders post September 2011, could still have been made to CSF. In that case, a conclusion of statutory oppression would have been less discernible.

220 In earlier reasons I delivered in William Buck (WA) Pty Ltd v Faulkner [No 5], I referred to the paltry economic scope of the amounts at issue at that uncompleted stage of this litigation, measured by Supreme Court or even District Court standards. That observation is only further entrenched after 12 days of trial. To have incurred such expense in a heavily contested battle over (roughly) $270,000, in my view, approaches almost the level of commercial lunacy. This is conduct by persons who hold themselves out to the West Australian business community as professionals and as sensible business advisers to others. That last observation bears heavily upon appropriate end relief here, in what is a bizarre scenario of unusual hostility and lack of commercial judgment from persons who should be exhibiting far more rational commercial behaviour.

221 The conduct of WB Holdings for the purposes of s 232/s 233 of the Corporations Act should also be assessed under this oppression action in light of conclusions I reach, that:

(a) The attempt at achieving Mr Faulkner's summary termination as an employee of WB (WA) on 28 September 2011 was wholly unsupportable, although his employment could lawfully be ended by four weeks' notice without cause.

(b) Highly qualified offers of 16 August 2011 and 19 September 2011 lapsed and were not fair proposals even when made. This was due to their heavily conditional nature, including conditions such as to Mr Faulkner purchasing William Buck clients or the like.

(c) Mr Faulkner's employment contract with WB (WA) has not been shown to have been infringed, as regards it being shown he engaged in any conduct which was 'Restricted Activity', for a purpose of proving a breach of cl 14.2 therein.

222 In the end, I conclude that CSF, as a shareholder of WB Holdings, has very clearly been subjected to oppression and unfairly prejudicial conduct by WB Holdings, thereby infringing s 232 of the Corporations Act.

Relief: 'Proud people breed sad sorrows for themselves', Emily Brönte, 'Wuthering Heights' (1847)

223 What relief should follow for CSF pursuant to s 233 of the Corporations Act against WB Holdings? CSF advocates the extreme step of a winding up order. But as a lesser preferred option it would also pursue a 'buy-back' order for its minority shareholding against WB Holdings.

224 In what are most unusual presenting circumstances of economic irrationality displayed by WB Holdings, I am not attracted by the lesser proposition. Following that course, on my assessment, will only lead to further ongoing disproportional legal expenditures and more delays in finally resolving a dispute which has been a festering sore over an entirely uncommercial underlying amount of money. A buy-back order against WB Holdings would, in effect, require a valuation process to unfold for CSF's 300,001 shares to be carried out. If a valuation exercise is to be carried out, I would assess the appropriate time to be for the WB Holdings shares to be valued, as being, prima facie 30 September 2011. That is the end of that first quarter of the 2011/2012 financial year.

225 However, such a share valuation exercise would still be complicated. It would require valuations of the worth of WB Holdings' subsidiary entity corporations which form the significant underlying component of its assets. None of this is likely to unfold quickly, or cheaply. I assess there to be significant potential for ongoing and highly contested arguments over both the valuation exercise process and its results. All this looms in a context of a dispute which at September 2011 was by reference to (at the outer) $300,001 being the value of the CSF share subscription paid out in July 2008 for the shareholding less $28,879.22 as a residual amount due by CSF in respect of its vendor finance loan left unrepaid. Effectively then, this began a dispute of a magnitude approaching roughly $270,000. There is, of course, the side issue of Mr Faulkner's continuing personal guarantee to Macquarie Bank. But that is not a consideration for me, particularly relevant to the position of CSF as a minority shareholder. Likewise, Mr Faulkner raises some issue over retained profits but in the scheme of things this looks to be of a magnitude of a few thousand dollars only: see TB vol 4, page 1760, 1761 and 1769, note 12.

226 Mr Solomon (correctly) pointed out in closing submissions, that a buy-back order would effectively be a reduction of capital by WB Holdings. That would ordinarily require notice to be given to creditors of such a proposal. Reductions of a corporation's capital may be approved by the court in appropriate circumstances. However, depending on the circumstances a multitude of considerations could complicate the proposal.

227 A buy-back order against WB Holdings under s 233(1)(e) for CSF's shares therefore presents as something of an open ended long term scenario carrying potential exacerbations of this unfinished battle that would be likely to continue for as long as the money lasts. That looming prospect renders the option of a share 'buy-back' relief order to be an unacceptable path. Nor is it sensible or appropriate to suggest (see ts 1473) that as a matter of direction that no relief be granted, even in the face of demonstrable statutory oppression.

228 I fully recognise that winding up is an option of last resort and, as well, an option not usually deployed where there presents an ostensibly solvent corporation. In the end, however, I am reluctantly, but inevitably, driven to a position where I assess the proper and appropriate relief in all the present circumstances for CSF is an order that WB Holdings be wound up. I reach this end point by what I assess to be an uncommercial and, indeed, wholly irrational hostility against Mr Faulkner now buried deep somewhere within the decisionmakers or advisers to WB Holdings. Inflexible battle tactics followed by WB Holdings in the face of what presented as a fairly obvious oppression case against CSF, look so entrenched against Mr Faulkner that only immediate and forceful shorter term relief is appropriate. This is in order to staunch the undoubted haemorrhaging of legal costs otherwise involved in the further battles which loom on the horizon.

229 Subject to what I say below as to one final (brief) opportunity for WB Holdings to act rationally, I propose to order that WB Holdings be wound up. That order will only be made after the private and confidential publication of these reasons to the parties. A winding up order for WB Holdings would issue upon these reasons then, unless the final opportunity which I will allow to WB Holdings under [231](B) below is taken up and voluntary undertakings provided to the Court in acceptable terms securing that position. My reasons shall remain confidential as between the parties within this period.

230 By this approach, the parties will be effectively afforded one last short, but final opportunity to reach a sensible resolution, otherwise the winding up order will issue. At the time of a winding up order these reasons will (absent any revision by me in the interim) then be published generally.

Summary of conclusion and proposed orders

231 In the end, therefore, in respect of the two actions, I foreshadow orders as to each as follows:

(A) As to CIV 2995 of 2011

(1) WB (WA) fails as first plaintiff on its claim (for nominal damages) against Mr Faulkner;

(2) WB Holdings succeeds as second plaintiff for a liquidated amount against CSF for the outstanding balance of a vendor finance loan in the amount of $28,879.22 plus interest at 10% per annum, calculated from 12 December 2011 (see [52] of these reasons). However, repayment of this sum is stayed pending its potential set-off and extinguishment against greater amounts to be paid to CSF by WB Holdings in COR 174 of 2011;

(3) Mr Faulkner succeeds on his counterclaim against WB (WA) for $11,538.46 for breach damages concerning Mr Faulkner's employment contract, and together with interest at 6% per annum as from 25 September 2011(see [91] of these reasons);

(4) Of the 12 days of this trial, my assessment is that one (1) day thereof should be assessed as and attributed to CIV 2995 of 2011. In light of the financial substance of this action diminishing to a very large degree only just prior to the trial beginning, Mr Faulker should have all his legal costs to be taxed (including reserved costs) against WB (WA) for the preparation phases of this trial (with all scale ceiling limits removed) on the taxation. Otherwise, there should be no order as to the costs of the one day of its trial, bearing in mind; first, the very small monetary amounts at issue; second, some mixed financial outcome success on each side; and third, a significant incorporation of the same underlying issues into COR 174 of 2011, as to which a distinct costs order will be made concerning the remaining 11 days of the trial.

(B) As to COR 174 of 2011

(1) WB Holdings is to be wound up and ancillary orders made to that end pursuant to s 233(1)(a) and (2) of the Corporations Act 2001 (Cth), unless within seven days of the provision of these reasons to the parties, or such further time as CSF and WB Holdings mutually agree, and the Court allows, WB Holdings:

(a) undertakes to provide to the Court an unconditional banker's guarantee in favour of the Principal Registrar of this Court to abide the payments upon the guarantee under (b) below; and

(b) unconditionally and irrevocably undertakes, both to CSF and to this Court, to authorise and abide the payment to CSF upon the banker's guarantee from the said security amount of $600,000, the following amounts to CSF:

(i) first, $190,750 being an amount equivalent to the total of the individual shareholder dividend payments as have been received by the other WB Holdings shareholders in the period between 30 September 2011 to the present, but less the deduction of the amount assessed as being due by CSF to WB Holdings in (A)(2) herein;

(ii) second, all fees incurred by the parties' jointly nominated independent valuer, Mr Duncan Calder in preparing the valuation report in (b)(iii) below for CSF's shares in WB Holdings;

(iii) third, whatever sum is finally assessed by Mr Duncan Calder as an independent valuer nominated by CSF and WB Holdings, by his written valuation report to be prepared and submitted to this Court and to WB Holdings, as the fair market value of CSF's 300,001 shares held in WB Holdings, assessed as at 30 September 2011 and assessed without discount for being a minority parcel; and

(iv) fourth, from any balance, any amount of costs assessed in favour of CSF Corporate by taxation or agreement against WB Holdings for this action.

(2) In the event the opportunity by way of voluntary undertakings offered to the Court as specified under (B)(1) herein is accepted by the Court and implemented then:

(a) WB Holdings has liberty to move for an order that CSF's 300,001 shares now held in WB Holdings, be delivered up and cancelled at the time of the payment to CSF of the amount under (1)(b)(iii) above; and

(b) being now reserved, the parties' costs in COR 174 of 2011 will be determined by the Court

(3) In the event the opportunity afforded under (B)(1) above is not accepted or implemented, then CSF prima facie should have all its legal costs of COR 174 of 2011 to be taxed (including as to 11 days of trial) and to be recovered in the liquidation of WB Holdings.

(4) Further or other ancillary relief.

232 These reasons were published confidentially to the parties on 10 September 2013. The matter was then adjourned for seven days to allow the parties to consider their positions and in particular for WB Holdings to consider the last opportunity afforded to it at [231](B)(1) and (2) regarding the sum of $600,000. On 17 September 2013 the parties attended to speak to minutes of orders submitted in both actions and as to costs. At that time I adjourned both actions to 23 September 2013, to allow a period of a further three working days to WB Holdings to confer with the Faulkner parties over certain issues that might avert a winding up order, including the provision of an unconditional bank guarantee in the amount of $600,000 (rather than a payment into court) and other possible voluntary undertakings to the court in harmony with the conceptual import of [231](B)(1)(b) and (c) herein. Both actions were then stood over for judgment at 10.30 am on 24 September 2013, upon the foreshadowed provision of voluntary undertakings to the Court by WB Holdings. At 6.29 pm on 23 September 2013 my Associate was advised by an email from the solicitors for WB Holdings that its board had resolved 'this afternoon', 'not to provide a voluntary undertaking to the Court'.

233 There will be, as a result, judgment in CIV 2995 of 2011, broadly in accord with [231](A). In COR 174 of 2011 a winding up order is now appropriate. The confidentiality order as to these reasons (now amended) was lifted at this time.

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