Cox v T-D Joint Venture Pty Ltd
[2010] WASC 116
•31 MAY 2010
COX -v- T-D JOINT VENTURE PTY LTD [2010] WASC 116
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2010] WASC 116 | |
| 31/05/2010 | |||
| Case No: | COR:234/2009 | 22 DECEMBER 2009 | |
| Coram: | MASTER SANDERSON | 23/12/09 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Provisional liquidator offered chance to resign or be replaced | ||
| B | |||
| PDF Version |
| Parties: | PETER COX T-D JOINT VENTURE PTY LTD (ACN 124 308 685) GARY JOHN ANDERSON CTC MARINE PROJECTS LTD APC MARINE PTY LTD KENG SIONG THOMAS TAN DARWIN OFFSHORE CO |
Catchwords: | Liquidation Application by creditors to replace provisional liquidator appointed without their knowledge Turns on own facts |
Legislation: | Nil |
Case References: | T-D Joint Venture Pty Ltd v CTC Marine Projects Limited [2009] WASC 385 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
T-D JOINT VENTURE PTY LTD (ACN 124 308 685)
Defendant
GARY JOHN ANDERSON
Provisional Liquidator
Catchwords:
Liquidation - Application by creditors to replace provisional liquidator appointed without their knowledge - Turns on own facts
Legislation:
Nil
(Page 2)
Result:
Provisional liquidator offered chance to resign or be replaced
Category: B
Representation:
Counsel:
Plaintiff : Mr B G J Lynch
Defendant : No appearance
Provisional Liquidator : Mr M D Howard SC & Mr J D Steedman
First Intervenor : Mr P J Ward
Second Intervenor : Mr A J Thompson SC
Third Intervenor : Ms E C Hensler
Fourth Intervenor : Ms E C Hensler
Solicitors:
Plaintiff : Mony de Kerloy
Defendant : No appearance
Provisional Liquidator : Karp Steedman Ross-Adjie
First Intervenor : Blake Dawson
Second Intervenor : Redding & Associates
Third Intervenor : De Silva Hebron
Fourth Intervenor : De Silva Hebron
Case(s) referred to in judgment(s):
T-D Joint Venture Pty Ltd v CTC Marine Projects Limited [2009] WASC 385
(Page 3)
1 MASTER SANDERSON: To understand the nature of this dispute, it is necessary to provide some historical background. On 14 October 2009 CTC Marine Projects Ltd (CTC Marine) served a statutory demand on the defendant in a previous action. The defendant applied to set aside the demand. On 26 November 2009 I dismissed that application: T-D Joint Venture Pty Ltd v CTC Marine Projects Limited [2009] WASC 385. The defendant lodged an appeal. An application for an extension of time to comply with the demand until after the appeal was heard and determined was filed. I also dismissed that application. From that decision the defendant also appealed. The Court of Appeal dismissed the defendant's application but issued an injunction restraining CTC Marine from issuing winding up proceedings based on the statutory demand. The injunction was issued subject to the defendant providing an undertaking as to damages. No such undertaking was provided. As yet, CTC Marine have not issued proceedings in this court seeking to wind up the defendant.
2 On 14 December 2009 these present proceedings were issued. By an interlocutory application for the appointment of a provisional liquidator filed the same day the plaintiff sought the following orders:
1. Gary John Anderson be appointed provisional liquidator of the defendant until the making of a winding up order herein or until further order.
2. The duties to be performed by the provisional liquidator are as follows:
(a) to take possession of, collect and protect the assets of the company;
(b) to receive and collect debts to the company;
(c) to discharge rents, wages, salaries and other current expenses but so far only as may be necessary for the purpose of preserving the assets of the company or for the purposes of subparagraph (d) hereof;
(d) to carry on the business of the company until further order but only so far as is necessary for the beneficial disposal or winding up of that business;
(e) generally to exercise such of the powers conferred on the liquidator by s 477 of the Corporations Act 2001 as may be necessary for the foregoing purposes.
3. Costs of the application be paid by the defendant.
(Page 4)
- 4. The provisional liquidator to have liberty to apply on 24 hours notice.
3 The plaintiff certified the application was urgent. It was supported by an affidavit of the plaintiff sworn 14 December 2009. The interlocutory application was heard on 15 December 2009. After hearing argument I made the orders sought by the plaintiff. The orders were made ex parte. No other party had been served with this application. It is worth considering in some detail the plaintiff's application and the evidence upon which the appointment of the provisional liquidator was made.
4 The plaintiff is a director of the defendant and brought the application in his capacity as a contributory within the meaning of s 462(2)(c) of the Corporations Act 2001 (Cth). The other director of the defendant is Keng Siong Thomas Tan. There are two shareholders in the defendant, Cox Energy Pty Ltd as trustee for the Cox Energy Trust (Cox Energy) and Darwin Offshore Logistics Base Pty Ltd (DOLB). The plaintiff is a director of Cox Energy and Mr Tan is a director of DOLB. DOLB is the major shareholder of the defendant and has control of its funds. As at November 2009 the plaintiff estimated there was $800,000 in funds in the defendant's bank account.
5 In April 2007 the defendant entered into a contract with Nexus Energy Corporate Pty Ltd (Nexus) to develop and perform engineering procurement and installation services of a subsea pipeline system for part of a Nexus project in the Bass Strait called the Longtom Development Project (the Longtom Project)
6 In August 2007 the defendant entered into a services agreement with Trident Australasia Pty Ltd (Trident). Pursuant to the services agreement, Trident was engaged by the defendant to manage the Longtom Project for and on behalf of the defendant including the management of disputes relating to the Longtom Project. Since August 2007 Trident has dealt with all disputes and claims involving subcontractors and suppliers of the Longtom Project for and on behalf of the defendant. Over time the relationship between the plaintiff and Mr Tan broke down. The plaintiff says in his view that rendered the defendant unmanageable. He sought the appointment of an administrator. Mr Tan would not agree. As a minority shareholder, Cox Energy could not unilaterally force the appointment of an administrator. That led to the plaintiff applying to appoint a provisional liquidator.
7 The plaintiff said the Longtom Project is effectively completed. However, a dispute has arisen with Nexus as to what amount is owing by
(Page 5)
- Nexus to the defendant. The plaintiff says that after lengthy negotiation he agreed Nexus would pay the defendant $11.5 million to settle all outstanding matters. As a condition of this settlement, both DOLB and Kim Heng Shipbuilding Pty Ltd (Kim Heng), a company related to DOLB and Mr Tan, were to give releases. Mr Tan, on behalf of both companies, refused to provide such releases. The effect was the defendant did not have sufficient funds to pay its creditors. It is clear from the plaintiff's affidavit this inability to pay those creditors included creditors whose claims were not disputed.
8 The plaintiff then goes on to detail a number of proceedings in various jurisdictions involving the defendant. He first refers to the Western Australia proceedings brought by CTC Marine. He says the undertaking required by the Court of Appeal as a condition of the grant of the injunction against CTC Marine could not be provided because DOLB would not cooperate.
9 The plaintiff also refers to proceedings on foot in the Northern Territory. These proceedings were also brought by CTC Marine and sought to have the defendant wound up. The proceedings were to be heard on 17 December 2009. In South Australia, K & S Freighters Pty Ltd commenced a winding up application against the defendant in August 2009. K & S Freighters Pty Ltd were paid out by the defendant and so withdrew their application but two other creditors stepped in. One was TEK Ocean Energy Services Pty Ltd and the other was Kim Heng. The South Australian proceedings were due to return to court on 22 December 2009 but hearing of the winding up application was unlikely before January 2010.
10 The plaintiff also referred to two other sets of proceedings. One was proceedings commenced in New York by CTC Marine in October 2009. It was not clear from the plaintiff's affidavit as to how these proceedings would develop. What he did say was that neither DOLB nor Mr Tan would confirm they would support any defence to the action.
11 In July 2009 the defendant and a company known as APC Marine Pty Ltd (APC Marine) entered into arbitration proceedings in relation to the Longtom Project. APC Marine was claiming a total of $6,405,456.89. The defendant was claiming $47,266,997. The plaintiff says that 'recently' but on an otherwise unspecified date the defendant had been ordered to provide $333,000 as security for its costs on the arbitration. As at the date of swearing his affidavit the security had not been provided and the plaintiff did not anticipate that it would be provided.
(Page 6)
12 The overall picture that emerged from the evidence was of a company in crisis. It was dysfunctional and unmanaged. The appointment of an administrator seemed the obvious course to adopt but in the light of Mr Tan's refusal to take that step, in my view, there was no option by to appoint a provisional liquidator. I made orders accordingly.
13 By interlocutory application lodged 17 December 2009 CTC Marine, a creditor of the defendant, applied for the following orders:
1. CTC Marine be given leave under r 2.13 of the Supreme Court (Corporations) (WA) Rules 2004 (WA) to be heard in these proceedings;
2. CTC Marine by its solicitors and counsel be permitted to inspect and copy documents filed in this honourable court and relied upon by the plaintiff in support of its application for the appointment of a provisional liquidator of the defendant;
3. the order of this honourable court made 15 December 2009 appointing Gary John Anderson as provisional liquidator of the defendant be set aside;
4. in lieu thereof, an order that Christopher John Munday and Vincent Anthony Smith be appointed as joint and several provisional liquidators pursuant to s 472(2) of the Corporations Act;
5. such further order as this honourable court deems fit.
14 This application was first returned on 18 December 2009. At the hearing APC Marine sought to be included and I amended par 2 to include them and made an order in terms of par 2 and adjourned the matter to 22 December 2009. At the resumed hearing three other parties applied to be heard. They were APC Marine, Mr Tan and Darwin Offshore Company. Each of these parties supported the application of CTC Marine. Submissions were made on behalf of each of these parties (who I will refer to as 'the interveners'). Further, counsel appeared for Mr Gary John Anderson the provisional liquidator of the defendant, and together with counsel for the plaintiff they opposed the orders being sought.
15 There was no real opposition by the plaintiff to the interveners bringing the interlocutory application and being heard. Equally, no party objected to Mr Anderson being represented and opposing the application.
(Page 7)
16 As can be seen from the nature of the orders sought in the interlocutory process there was no argument about the appointment of a provisional liquidator. What was at issue was the identify of the provisional liquidator. The interveners raised a number of matters which they said should lead to their application being granted. At first it was said there had been non-disclosure by the plaintiff of material matters which would justify Mr Anderson being replaced. This argument can be disposed of quite shortly. It was not in issue that a provisional liquidator ought be appointed. To vitiate Mr Anderson's appointment there would need to have been something in relation to him personally which had not been disclosed. That was not the case at all. In my view there was nothing to suggest that Mr Anderson was not independent and would not properly discharge his duties.
17 Nonetheless I was satisfied that the interveners' application ought be granted. I reached this conclusion for two reasons. The first has to do with resources. Mr Anderson is based in Perth and has no national or international connections. That is not to say that he could not have fulfilled his duties from Perth, but the defendant company was engaged in prosecuting or defending actions in the Supreme Courts of Victoria, South Australia, Western Australia and the Northern Territory. It was also engaged in arbitration proceedings in Victoria and Singapore and could potentially become involved in an arbitration in London. I was satisfied it would be a more efficient way to conduct the liquidation for the liquidator to have staff and offices in these various jurisdictions. It could potentially amount to a saving to the company in both time and money.
18 Second, the interveners represented substantial creditors of the company. While the plaintiff stood to lose as a contributory the interveners were creditors who ranked in front of the contributories. In my view there was much to be said for the creditors determining who should conduct the liquidation. While a liquidator is a court officer and independent of any particular creditor it is in everyone's interest that the major creditors have confidence in the liquidation being carried out in a professional manner. They are far more likely to have that confidence if it is their liquidator of choice who is conducting the liquidation.
19 For these reasons I was satisfied the orders sought by the interveners should be made. At the request of counsel for Mr Anderson I delayed making those orders to give Mr Anderson the chance to resign his position. There was no suggestion in any way that Mr Anderson had acted in anything other than a thoroughly professional fashion and that he
(Page 8)
- would have continued to do so. It would not then have been appropriate to order his removal without giving him the chance to resign.
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