Financialstrategy.com.au Pty Ltd v Bailey Roberts Group Pty Ltd

2025/00144303

CORPORATIONS – Financialstrategy.com.au Pty Ltd (the appellant, also referred to as FPL), Bailey Roberts Financial Management Pty Ltd (BRFM), and LAT Wealth Holdings Pty Ltd (LAT) were shareholders of Bailey Roberts Group Pty Ltd (in liq) (the first respondent, referred to as BRG) – Mr Roberts was the director of FPL – Mr Bailey was the director of BRFM – Mr Thomas was a director of LAT – Mr Roberts, Mr Bailey, and Mr Thomas were directors of BRG until 1 October 2020, when Mr Roberts resigned – BRG provided financial services to clients under an Australian Financial Services Licence – FPL was authorised by BRG to act as one of its representatives under a written agreement dated 1 December 2006 (the Agreement) – the Agreement ended when FPL was served with a notice of termination in early September 2020, following the alleged discovery of actual and attempted misuse by Mr Roberts of BRG’s confidential information, as part of an effort to transfer clients and business to a competitor he was seeking to join – FPL claimed that BRG’s affairs were conducted oppressively and that BRG breached the Agreement – the pleaded acts of oppression included the denial of Mr Roberts’ access to his BRG email account and client records, the suspension of FPL as an authorised representative, and the exertion of illegitimate pressure on FPL to surrender its clients and shares to BRG for nominal consideration – FPL sought relief under s 233 of the Corporations Act 2001 (Cth) (the Act), in the form of a buy-out order against certain corporate defendants who were or are shareholders in BRG (the 2021 Proceedings) – FPL also sought an order under s 233 of the Act for compensation against the two directors of BRG at the time its affairs were wound down to eventual liquidation – BRG went into liquidation on 24 October 2022 – in later proceedings, FPL sought an order under ss 233(1) or 233(1)(j) of the Act that Mr Roberts and Mr Thomas pay compensation to FPL, along with interest under ss 100 and 101 of the Civil Procedure Act 2005 (NSW) (the 2023 Proceedings) – although the 2021 and 2023 proceedings were heard together, and evidence in one was admissible in the other, the claims were determined separately by the primary judge – in the 2021 Proceedings, the primary judge held that although FPL’s own misconduct triggered much of BRG’s actions, BRG’s conduct was oppressive because it went beyond what was justified to retain clients – despite the finding of oppression, FPL’s claim for compensation failed because it was unable to prove the loss of its client book or quantify the value of that loss – the primary judge was also not satisfied that a buy-out order should be made in the 2021 Proceedings – while the judge found that BRG breached the Agreement with FPL, his Honour did not find that the breach caused substantive loss or damage to FPL, and therefore the 2023 Proceedings also failed – whether the primary judge erred in finding that the appellant failed to establish or quantify loss and damage suffered as a result of the conduct of the respondents – whether the primary judge erred in not making an order pursuant to ss 233(1), 233(1)(d) and/or 233(1)(j) of the Act.

In the matter of Bailey Roberts Group Pty Ltd (in liq) [2025] NSWSC 227