Sibley Investments Pty Ltd v Oldfields Advance Scaffold Pty Ltd

Adelaide Scaffold Solutions was not a dormant company. It sold and hired scaffolding across South Australia and Western Australia, turned over about $11 million a year and employed 55 to 60 people.

Oldfields Advance owned 60% and Sibley Investments owned 40%. Their relationship was governed by a shareholders agreement signed in 2005. The agreement gave both sides a role in major decisions, including loans above $50,000, which required approval by shareholders holding at least 75% of the votes.

Before mid-2020, the shareholders sometimes agreed to short-term loans or larger dividends when the Oldfields group needed cash. The pattern changed in August 2020. Money began moving more often and in larger amounts from Adelaide Scaffold Solutions to Oldfields group companies without Sibley Investments' consent or a shareholder resolution.

The balance owing grew from $59,238 in August 2020 to $661,830 by February 2021, $1,295,124 by the end of 2021 and $1,805,933 by May 2024. It peaked at $1,957,804.20 in February 2025. Mr Sibley objected repeatedly in emails, but the transfers continued.

On 28 March 2025, Sibley Investments served a written loan default notice at Oldfields Advance's registered office. It identified the agreement and the breach, stated that about $1.9 million was outstanding, and required the balance to be reduced to nil within ten days.

The money was not repaid. The Court held that the notice was sufficiently clear, had been served using a method permitted by the agreement and validly started the default sale process. The agreement did not require Sibley Investments to send a second default notice after the ten-day cure period expired.

A PPSR search in March 2025 revealed that Oldfields Advance had granted an all-property security interest in 2022. That security extended to its shares in Adelaide Scaffold Solutions. Sibley Investments served a separate security default notice because the shareholders agreement restricted dealing with or encumbering those shares.

A deed poll was later used in an attempt to change the security position. The Court held that this did not undo the default right. Under the agreement, the right to acquire the shares arose immediately when the prohibited encumbrance existed. It was not a breach with a later cure period.

Oldfields Advance argued that damages were enough. The Court disagreed. These were private-company shares that could not be bought on an open market. The transfer of the 60% holding would also give Sibley Investments full ownership and management control.

The agreement valued the shares using an EBITDA-based formula, but that formula did not include the special value of control. An ordinary damages award would therefore not deliver the same commercial result as the agreed share transfer.

The Court ordered specific performance. That means the transfer obligation itself was enforced, rather than replaced with a damages award. The detailed form of the transfer orders was left for further submissions.

The decision does not turn every governance failure into a compulsory sale. It shows what can happen when a carefully drafted default mechanism meets a serious, continuing breach and the required procedural steps are followed.