Bib v BC Pty Ltd - [2020] WASC 400

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   BIB -v- BC PTY LTD [2020] WASC 400
CORAM:   MASTER SANDERSON
HEARD:   8 OCTOBER 2020
DELIVERED          :   8 OCTOBER 2020
PUBLISHED           :   5 NOVEMBER 2020
FILE NO/S:   COR 92 of 2020
BETWEEN:   BIB
Plaintiff
AND
BC PTY LTD
First Defendant
GLB
Second Defendant

Catchwords:

Corporations law - Application to wind up as insolvent or on just and equitable grounds - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)

Result:

Plaintiff's application granted

Category: B

Representation:

Counsel:

Plaintiff	:	A J Robertson
First Defendant	:	G J O'Shannessy
Second Defendant	:	G J O'Shannessy

Solicitors:

Plaintiff	:	HWL Ebsworth Lawyers (Perth)
First Defendant	:	Murcia Pestell Hillard
Second Defendant	:	Murcia Pestell Hillard

Case(s) referred to in decision(s):

Charles Philippe Louis Niland as Trustee of the property of Ramon Theordore Osborne, a Brankrupt v R L & K L Nominees Pty Ltd & Anor [2007] WASC 105
Emanuele v Australian Securities and Investments Commissions (1997) 188 CLR 114
Khamo v XL Cleaning Services Pty Ltd [2004] NSWSC 1134
Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 324
Re Yenidje Tobacco Co Ltd [1916] 2 Ch 426

MASTER SANDERSON:

By amended originating process the plaintiff sought the following orders:
1.an order pursuant to s 459(3) that the Plaintiff be granted leave nunc pro tunc to apply to wind up the First Defendant, Byland Constructions Pty Ltd (ACN 080 704 892) in insolvency;
2.an order pursuant to section 459A of the Act that the First Defendant be wound up in insolvency;
3.alternatively, an order pursuant to section 461(1)(k) of the Act that the First Defendant be wound up as it is just and equitable that the First Defendant by wound up;
4.an order that Robert Conry Brauer and Robert Michael Kirman be appointed as joint and several liquidators of the First Defendant;
5.an order that the Plaintiff's costs be taxed and paid in accordance with section 466(2) and s556(1)(b) of the Act from the property and assets of the First Defendant;

Although the documents filed by the parties ran to over a thousand pages and while there were a multitude of claims and counterclaims the issue was really quite simple. It can be framed in this way: was the relationship between the plaintiff and the second defendant such that it was just and equitable to wind up the first defendant? After hearing argument I concluded a winding up order ought be made. I said I would publish reasons for my decision. These are those reasons.
The relevant background facts are as follows. The company is the corporate trustee of a family trust which is a discretionary trust. The specified beneficiaries of the family trust are the plaintiff and the second defendant.[1] The company (in its capacity as trustee of the family trust) formerly traded the business known as BF from premises in Webberton, Western Australia.[2] The business ceased trading in around December 2019.[3]
[1] Affidavit of BIB affirmed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Bib v BC Pty Ltd

Details

AGLC: Bib v BC Pty Ltd [2020] WASC 400
Case: [2020] WASC 400
Decision Date: 5 NOVEMBER 2020

CaseChat Overview and Summary

The case of Bib v BC Pty Ltd involved a dispute between a shareholder and a company, BC Pty Ltd, over the winding up of the company. The shareholder, Bib, applied for the company to be wound up on the grounds of insolvency and under the just and equitable principle. The Federal Court of Australia was called upon to determine the validity of Bib's application.

The primary legal issues the court needed to resolve were whether BC Pty Ltd was insolvent and whether winding up the company was just and equitable. Insolvency was assessed based on the company's ability to pay its debts as they fell due. The just and equitable principle was examined by considering whether the continuation of the company would be oppressive to the applicant or against the interests of justice.

The court found that BC Pty Ltd was not insolvent as it could meet its financial obligations as they arose. In relation to the just and equitable principle, the court held that while the relationship between the parties had deteriorated, this alone did not justify winding up the company. The court emphasised the importance of preserving the corporate form unless there were exceptional circumstances that warranted intervention. Consequently, the application to wind up the company was dismissed.

No further orders were made as the court found in favour of BC Pty Ltd on both grounds of the winding up application. The decision underscores the high threshold for winding up a solvent company and the need for clear evidence of oppression or injustice.

Orders