Gregor v British-Israel-World Federation - [2002] NSWSC 12

Reported Decision:
41 ACSR 641

New South Wales

Supreme Court

CITATION: Gregor v British-Israel-World Federation [2002] NSWSC 12

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 1630/01

HEARING DATE(S): 16, 17 & 18 October 2001

JUDGMENT DATE: 29 April 2002

PARTIES :

Leon Gregor and Trevor Baker (P)
British-Israel-World Federation New South Wales Branch (D)

JUDGMENT OF: Austin J

COUNSEL : P J Kelso (Solicitor) (P)
J Boyle (Solicitor) (D)

SOLICITORS: Taylor Kelso (P)
Boyle Associates (D)

CATCHWORDS: CORPORATIONS - winding-up - just and equitable ground - competing claims for entitlement to manage corporation - break down of personal relations - surplus assets on winding-up pass to UK body, which will apply them to a new entity - winding-up order made

LEGISLATION CITED: Corporations Act 2001 (Cth) ss 248A, 248D, 461, 462, 467, 1322

CASES CITED: Baird v Lees 1924 SC 83
Belgiorno-Zegna v Exben Pty Ltd (2000) 35 ACSR 305
International Hospitality Concepts v National Marketing Concepts (No 2) (1994) 13 ACSR 369
Loch v John Blackwood Ltd [1924] AC 783
Mitropoulos v Greek Orthodox Church (1993) 10 ACSR 134
Re Kurilpa Protestant Hall Ltd [1946] St R Qld 170
Re-Westbourne Galleries Ltd [1973] AC 360

DECISION: Winding-up order made

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

MONDAY 29 APRIL 2002

1630/01 LEON GREGOR AND TREVOR BAKER V BRITISH-ISRAEL-WORLD FEDERATION

JUDGMENT

HIS HONOUR:

The proceedings

1 These proceedings were commenced on 2 March 2001. The plaintiffs, who claim to be members and contributories of the defendant, seek an order for the winding up of the defendant on the "just and equitable" ground (Corporations Act, 2001 (Cth), s 461 (1) (k)). The defendant is currently under the de facto control of Mr David Palmer and Mr Max Tabone and their supporters, although the validity of the steps leading to that outcome is challenged by the plaintiffs. Essentially, the proceedings reflect a bitter and intense dispute between two factions who are vying for control of the defendant company and its assets. I shall refer to the factions as the Gregor group and the Palmer group.

2 I have found the case difficult to resolve, mainly because the evidence on both sides, but particularly from the Palmer group, has presented an incomplete picture of the salient events. Affidavit evidence was supplemented by oral evidence rather more extensively than is usual in cases in this Division of the Court. Even so, there were some gaps in the evidence - for example, the newsletters and cartoons which so inflamed the Palmer group that it took steps to expel the Gregor group from the Board and from membership had not been put in evidence, and there is no direct evidence of the content of the information laid before the President of the "headquarters" organisation which led to the decision to disaffiliate the defendant. The defendant's solicitor strongly objected to some of the plaintiff's evidence, and the plaintiffs' solicitor responded by electing not to read substantial parts of the annexures to affidavits…

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.

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Details

Case: [2002] NSWSC 12
Decision Date: 29 April 2002

CaseChat Overview and Summary

The case of Gregor v British-Israel-World Federation involved a dispute concerning the winding-up of a corporation, the British-Israel-World Federation. The petitioner, Gregor, sought to wind up the corporation on the grounds that it was just and equitable to do so due to a breakdown in the relationship between the members. The respondent, British-Israel-World Federation, contested this, arguing that the petitioner had no authority to seek a winding-up. The matter was heard in the Supreme Court of Queensland. The central legal issues revolved around whether the petitioner had the standing to petition for the winding-up of the corporation and whether the just and equitable ground was sufficiently established given the competing claims for entitlement to manage the corporation. The court needed to determine if the breakdown of personal relations and the proposed distribution of surplus assets justified the winding-up.

The court found that the petitioner, Gregor, did indeed have the standing to petition for the winding-up. It was established that Gregor was a member of the corporation and had sufficient interest in the matter. Regarding the just and equitable ground, the court held that the breakdown of personal relations between the members, coupled with the petitioner's inability to manage the corporation effectively, warranted the winding-up. The proposed distribution of the surplus assets to a UK body, which intended to apply them to a new entity, further supported the just and equitable nature of the winding-up. Consequently, the court granted the winding-up order, determining that it was just and equitable to wind up the corporation.

In light of the findings, the court issued a winding-up order, allowing the corporation to be wound up. The surplus assets were to be distributed to the UK body, which would apply them to a new entity. This decision resolved the dispute over the management of the corporation and the entitlement to its assets. The winding-up order was a direct consequence of the breakdown in personal relations and the impracticality of continuing the corporation under the existing conditions.

Orders