Business Law Case Study: Pure Nature Sydney Pty Ltd [2018] NSWSC 914

This case study analyzes the legal issues in the matter of Pure Nature Sydney Pty Ltd [2018] NSWSC 914, focusing on shareholder disputes and alleged oppressive conduct under sections 232 and 233 of the Corporations Act 2001 (Cth). The case involves a dispute between shareholders seeking buy-out orders. The court examined the principles of shareholder oppression, discrimination, and unfair prejudice. The decision highlights the importance of cooperation among shareholders and the potential for company winding up when irreconcilable differences exist. The judgment emphasizes that when both parties are found to be oppressive, the breakdown of cooperation is evident and winding up of the company is the appropriate solution. The case study includes relevant case laws, journal articles, and legislation, providing a comprehensive understanding of the legal principles and their implications for businesses.

Running Head: CASE STUDY
Re Pure Nature Sydney Pty Ltd [2018] NSWSC 914
Name of the Student
Name of the University
Author’s Note

1CASE STUDY
LEGAL ISSUES:
The legal issue in the case is whether the plaintiff or defendant could buy the other party
out in situations where all the parties had been involved in oppressive conduct as defined by
sections 232 and 233 of the Corporations Act 2001 (Cth).
MATERIAL FACTS:
The plaintiff and the defendant are both the shareholders of the company. It has been
alleged by the parties against each other that one is engaged in oppressive acts against another.
Therefore, the suit has been brought by the parties seeking buy-out order under section 232 and
233 of the Corporations Act 2001 (Cth).
LEGAL PRINCIPLES:
Section 232 of the Corporations Act 2001 (Cth) lays down the provisions for the court to
order if the performance of the company’s affairs, the commission of an act or the proposed act
or omission of an act of the company, or a resolution that has been passed by a company or
proposed to be passed related to the matters of the officers or a class of officers of the company
resulting in contradictory heed of the members (not individually but as a whole), or oppressive,
unfair or discriminatory against any member in any capacity.

2CASE STUDY
Section 233 of the Act lays a varied range of extensive powers and remedies to address
oppression and provide relief against the same1. The section entitles the court to intervene in the
matters relating to oppression in the company including the acts of discrimination and prejudice2.
There have been numerous cases about oppression by the shareholders including
discrimination and unfair prejudice3. But irreconcilable differences may amount to liquidation of
the company but it shall not be founded on the basis of oppression, discrimination or unfair
prejudice4.
Section 461 of the Act lays down the provision related to the liquidation of the company.
If the company chooses to be wound up, it shall give a written notice to ASIC at least not less
than 1 month notice of its intention to apply for the same.
DECISION:
The Supreme Court of New South Wales refused to make an order in favor of the relief
sought by the parties. Instead, the court found that in circumstances where both the parties are
found to be oppressive, the prima facie of breakdown of cooperation between the parties is
evidenced to the court’s satisfaction. Hence, the court decided for winding up of the company.
1 Re Spargos Mining NL (1990) 3 ACSR 1, 50–1.
2Ari Bergman, Unitholder Rights Compared to Shareholder Rights in the Context of Oppression (SJD Thesis,
Monash University, forthcoming) 119–20
3 Brockett, Richard. "The Valuation of Minority Shareholdings in an Oppression Context-A Contemporary
Review." Bond L. Rev. 24 (2012): 101.
4 Fexuto Pty Ltd vs. Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672, [89].

3CASE STUDY
SIGNIFICANCE OF DECISION ON PEOPLE DOING BUSINESS:
People doing business are assumed to share equal interests in the tradings of the company
and its outcome. Hence, the decision laid down in the case study, imbibes the shareholders of a
company to work with unity and conformity towards the interest of the company. Such unity and
conformity determines the cooperation of the shareholders towards each other and hence, the
future statuses of the company.

4CASE STUDY
BIBLIOGRAPHY:
CASE LAWS:
Fexuto Pty Ltd vs. Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672, [89].
Re Spargos Mining NL (1990) 3 ACSR 1, 50–1.
Re Pure Nature Sydney Pty Ltd [2018] NSWSC 914
JOURNALS AND SCHOLARS:
Ari Bergman, Unitholder Rights Compared to Shareholder Rights in the Context of
Oppression (SJD Thesis, Monash University, forthcoming) 119–20
Brockett, Richard. "The Valuation of Minority Shareholdings in an Oppression Context-A
Contemporary Review." Bond L. Rev. 24 (2012): 101.
LEGISLATIONS:
The Corporation Act 2001 (Cth).