Create Environment Pty Ltd v Renex Founder Hold Co Pty Ltd [2026] VSCA 103
In an oppression proceeding under the Corporations Act 2001 (Cth), the Victorian Court of Appeal refused leave to appeal from a trial judge's refusal to adjust a buy-out price for payments that the applicant first relied on for that purpose in closing submissions, without pleading that use.
What the court decided
Create Environment Pty Ltd (Create), the applicant, and MSA Renex Corp Pty Ltd (MSA), the second respondent, each held one of the two issued shares in the first respondent, Renex Founder Hold Co Pty Ltd (Founder), which took no active part [1], [17]. Create alleged oppression by MSA under section 232 of the Corporations Act 2001 (Cth) [2]. A judge of the Trial Division agreed and ordered a buy-out under section 233, giving MSA the first option to buy Create's share [3], [21]. Create sought leave to appeal, contending that the judge should have taken into account $4.735 million paid by a group company to a company controlled by MSA's representative director [1], [4], [24]. Lyons and Kenny JJA and J Forrest AJA, in joint reasons, refused the application [5], [111].
The pleadings referred to the payments only in Create's reply, as the alleged source of a payment relied on in MSA's defence [29]–[30], [89]. On the fifth day of the trial, when Create's counsel raised adjustments to value, the judge said any such use would need a basis in the pleaded claim and allowed the questions on credit [90]–[92]. Only in its written closing submissions did Create make plain that it relied on the payments for an adjustment to the price [95], [103]. The judge used the evidence on credit in giving little weight to MSA's expert valuation, but declined the adjustment because it had not been pleaded and would be unfair to MSA [44], [47]–[48].
The Court considered that the judge was exercising her discretion under section 136 of the Evidence Act 2008 (Vic) to limit the use of evidence, a point not argued, but proceeded on the parties' analogy with the principles on amendment and new issues [87].
The Court set out its own recent statement that, where a party objects to a departure from the pleadings and no amendment is sought or allowed, the parties are held to their pleadings unless they expressly or impliedly agree otherwise [81]. A new issue may be raised by express agreement, such as in an agreed list of issues, or by implied agreement, for example where a party on notice of the issue and how it is to be relied on does not object, the trial is run on that basis and that party had the opportunity to address it properly [82].
Create relied on the decision of Ferguson J in Wain v Drapac (No 2) [2013] VSC 381 as showing that valuation matters need not be pleaded [37], [83]. The Court noted that the issue there, though not expressly raised in the pleadings, was made clear by them, by the joint list of issues and by the way the case was opened and run [85].
By way of guidance, the Court said that valuation issues often arise only with the expert evidence, but that any matter relating to valuation, or an adjustment to it, ought to be raised as soon as reasonably practicable, and that it would be appropriate to plead it if it arises by the time of pleading [84]. Create's reliance on the payments for an adjustment to the price, by contrast, did not go to valuation as such, and it was incumbent on Create to plead an adjustment based on an act of oppression [96].
In refusing leave, the Court found the judge correct, having regard to the late emergence of the issue, MSA's maintained objection and the lack of clarity about how the issue was relied on [103]–[104]. MSA had no proper chance to meet the issue, the evidence was incomplete and Create never applied to amend [100], [103]–[104]. It said that whether a new issue may be raised is not decided solely or primarily by the claimed interests of the party raising it [102]. The Court rejected Create's procedural fairness argument, finding that Create had more than adequate opportunity to raise or investigate the payments by interlocutory procedures [105]–[106]. It also rejected the contention that the judge should have adjourned to defer fixing the price, an option first put in oral argument on the application [107].
Why it matters
This was a leave application from a discretionary ruling [93], [111]. Much of the Court's reasoning turns on how the trial was run [103]–[104]. Its value lies in the statement that it was incumbent on Create to plead an adjustment based on an act of oppression [96], and in the guidance that a valuation matter should be raised as soon as reasonably practicable, and that pleading it is appropriate if it arises by the time of pleading [84].
Solicitors for a member seeking a buy-out should plead any act of oppression on which an adjustment to the price is to rest, and raise other matters said to affect value early, in the list of issues and the expert briefs. If an objection is taken at trial to a new issue, a prompt application for leave to amend is better than relying on evidence admitted on credit, although the judge decides whether to allow the amendment [81]. In an observation on a point not argued, the Court said that objections to relevance, credibility and unfairness should generally be dealt with when the evidence is sought to be adduced, by reference to the Evidence Act 2008 (Vic) [112].
Numbers in square brackets are paragraph numbers of the judgment. This note summarises a decided case for education and is not legal advice. See how the notes are written.