Rachel Francois
In the matter of Pellarini v Bicher & Son Pty Ltd [2024] NSWSC 223, Ms Rachel Francois of 11 St James Hall Chambers appeared for the defendants before Cavanagh J in the Supreme Court of NSW.
Pellarini, the plaintiff, was the minority shareholder in the defendant company which runs the well-known Sydney eatery, Machiavelli Ristorante Italiano.
The plaintiff sought an order for the preliminary discovery of documents including the defendant company’s “Z tapes” and GST returns over a three-year period pursuant to r5.3(1) of the Uniform Civil Procedure Rules 2005 (NSW). The plaintiff wanted to determine whether he could commence proceedings against the defendant company on the grounds of oppression or winding up.
The plaintiff alleged (incorrectly) that purported discrepancies in the defendant company’s cash income recorded on their monthly BAS returns resulted in a breach of income disclosure obligations to the ATO under s421 of the Corporations Act 2001 (Cth) which would form the basis for an oppression claim or winding up.
Cavanagh J held:
“There is no evidence that would suggest that the defendant has been withholding large sums of cash or is not reporting such sales to the ATO, that is large sums in addition to the amounts that it banked in May and June 2023. Further, when the sum of $168,000 is included in the monthly accounts, the takings are generally consistent with other periods. This tends to negate any suggestion that there may be other cash sales not being recorded on a monthly basis.”
His Honour, citing Hatfield v TCN Channel Nine Pty Ltd [2010] NSWCA 69; (2010) 77 NSWLR 506 and Moreton v Nylex [2007] NSWSC 562, observed that the plaintiff’s mere “suspicion” of cash discrepancies was insufficient for justifying making an order under r5.3(1) of the UPCR.
His Honour also noted that even if there were cash disclosure discrepancies in the company’s BAS returns, amended versions of the BAS correcting those issues had been lodged before the end of the relevant financial year. In addition, the “level” of these discrepancies (resulting in $12K more BAS) could not warrant a winding up order.
Accordingly, his Honour dismissed the plaintiff’s application and ordered the plaintiff to pay the defendant’s costs as he was not satisfied that production of the relevant documents would allow for “…any prospect of the application for the winding up of the defendant being successful on the grounds suggested”.
Link to the case: Pellarini v Bicher & Son Pty Ltd – NSW Caselaw
