Gilsenan v Trussted Frames and Trusses (Holdings) Pty Ltd

[2009] NSWSC 993

CITATION:	Gilsenan & anor v Trussted Frames & Trusses (Holdings) Pty Ltd & ors [2009] NSWSC 993
HEARING DATE(S):	10 September 2009
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	10 September 2009
DECISION:	Company wound up on just and equitable ground – liquidator nominated by cross-claimants appointed
CATCHWORDS:	CORPORATIONS – winding up – company wound up on just and equitable ground – liquidators – where ordinarily liquidator nominated by the applicant is appointed – where no reason to depart from ordinary course – PROCEDURE – costs – general rule – costs follow the event – where plaintiffs have totally failed on their summons and the defendants totally succeeded on their cross-claim – where no reason to depart from general rule
CATEGORY:	Principal judgment
PARTIES:	Norman Gilsenan (first plaintiff/second cross-defendant) Lyn Gilsenan (second plaintiff/third cross-defendant) Trussted Frames & Trusses (Holdings) Pty Ltd (first defendant/first cross-defendant) Trussted Frames & Trusses (Tamworth) Pty Ltd (second defendant) Comtao Pty Ltd (third defendant) Steven John Veale (fourth defendant/first cross-claimant) Lana Sue Veale (fifth defendant/second cross-claimant) Hilton James Smith (sixth defendant/third cross-claimant) Ann Smith (seventh defendant/fourth cross-claimant)
FILE NUMBER(S):	SC 2162/09
COUNSEL:	Mr C Harris SC (plaintiffs/cross-defendants) Mr S Gollege (D4-D7/cross-claimants)
SOLICITORS:	Matthews Folbigg (plaintiffs/cross-defendants) Mullane & Lindsay (D4-D7/cross-claimants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BRERETON J

Thursday 10 September 2009

2162/09 Norman Gilsenan and Anor v Trussted Frames & Trusses (Holdings) Pty Limited & 6 Ors

JUDGMENT (ex tempore)

1 HIS HONOUR: The plaintiffs no longer press for any of the relief claimed in the summons. They consent to the order proposed by the defendants in the cross-claim, that the first defendant be wound up on the just and equitable ground. The affidavits of Anthony David Cavanagh of 7 September 2009 establish compliance with the requisite formal matters. On the evidence, and having regard to the consents of all the relevant parties, I am satisfied that it is just and equitable that the first defendant be wound up and a liquidator appointed.

2 The relief claimed in the summons was, as has been submitted by the defendants, misconceived. It was framed in terms of a taking of accounts appropriate to a partnership, but that there was no relevant accounting relationship.

3 The basis of the relief sought was explained in subsequent correspondence as a claim to be paid the value of the plaintiff’s shares; but there was never any obligation to pay the plaintiffs the value of their shares, in the absence of an agreement for sale and purchase that never eventuated.

4 I accept that the plaintiffs appear to have been denied access to documents which might have facilitated their investigation of the circumstances at an earlier stage, but the relief sought by them in their summons did not address that issue. In short, I do not see any basis upon which they could have succeeded in obtaining the relief claimed in the summons.

5 The defendants proposed a voluntary liquidation as a solution to the issues between the parties on 4 June 2009. That was not accepted by the plaintiffs, who indicated that they would oppose any application for a winding up; indeed, in a letter of 26 June 2009, their solicitors said that they were instructed vigorously to defend the winding up application.

6 Further costs of the proceedings after 4 June 2009 could have been avoided by acceptance of the proposal that there be a members voluntary winding up.

7 As the plaintiffs have totally failed on their summons, and the defendants totally succeeded on their cross-claim, it seems to me that there is insufficient reason to depart from the usual order in those events, that the unsuccessful plaintiffs pay the successful defendants’ costs.

8 Yet again there is dispute as to who should be appointed liquidator. The plaintiffs have obtained a consent of Graeme Robert Beattie of Jirsch Sutherland, a Sydney based official liquidator who is said to have a Newcastle office. The defendants/cross-claimants, upon whose application the winding up order is made, have obtained the consent of James Shaw, a Newcastle based liquidator. There is not much between them in terms of hourly remuneration rates.

9 As I have repeatedly said, the practice of the Court is that where a liquidator receiver or the like is appointed, the Court appoints the nominee of the applicant where all other considerations are equal, unless there is something to be said against the fitness of the applicant’s nominee. The reason for this rule is to discourage baseless disputes as to who should be appointed. In this case, there is no evidence whatsoever to reflect adversely on the fitness of Mr Shaw. The only basis put forward for not appointing him is that he is the cross-claimants’ nominee. On that basis, in circumstances where the rules require that the applicant for the appointment of a liquidator obtain and file a consent, the result would be that that would be a useless process, because the cross-claimants’ nominee would be disqualified for having been nominated by the cross-claimant. If there were evidence of some prior connection between Mr Shaw and the cross-claimants that would be quite another matter, but there is no hint of that.

10 In respect of the summons, I think the position is intractable, in that the offer of 24 August 2009 offered the plaintiffs a result no less satisfactory than they have ultimately obtained, foreshadowed a claim for indemnity costs, and set out accurately reasons why the plaintiffs must fail. On the other hand, the offer did not address the cross-claim. It seems to me that in respect of the summons only, a case for indemnity costs is made out from 31 August 2009, being seven days after the date of the offer. The indemnity costs order will not extend to the costs of the cross-claim.

11 I order that the summons be dismissed with costs, such costs to be assessed on an indemnity basis from 31 August 2009 and otherwise on a party/party basis.

12 On the cross-claim, I order that Trussted Frames & Trusses (Holdings) Pty Limited be wound up on the just and equitable ground. I order that James Shaw of 3/2 Market Street, Newcastle, an official liquidator, be appointed as liquidator. I order that the plaintiffs pay the cross-claimants’ costs of the cross-claim.

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