Heron Abbey Pty Ltd (in liq) - [1999] VSC 226

SUPREME COURT OF VICTORIA

CORPORATIONS JURISDICTION Do not Send for Reporting

Not Restricted

No. 5177 of 1999

HERON ABBEY PTY LTD (IN LIQUIDATION)	Plaintiff
and
IN THE MATTER OF SECTION 479(3) OF THE CORPORATIONS LAW

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JUDGE:	Gillard J
WHERE HELD:	Melbourne
DATE OF HEARING:	8 and 18 June 1999
DATE OF JUDGMENT:	22 June 1999
CASE MAY BE CITED AS:	Heron Abbey Pty Ltd (in liq)
MEDIA NEUTRAL CITATION:	[1999] VSC 226

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Corporations Law – Section 479(3) – Liquidator seeking direction from court concerning proposed sale of shares – Principles – Value of shares – Disputed – Direction refused

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr A. Phillips	Ponte Earle Harrick
For the Mr and Mrs Leslie Dobson (by leave)	Mr T. Jacobs	Deacons Graham & James

HIS HONOUR:

This is the return of a notice of motion wherein the applicant, the liquidator of Heron Abbey Pty Ltd (in liquidation) seeks an order pursuant to s.479(3) of the Corporations Law that he be directed to enter into an agreement on behalf of the company to sell shares it owns in a proprietary company.

Parties

The applicant is John Malcolm Perrins ("the liquidator") who is the official liquidator of the company Heron Abbey Pty Ltd ("Heron Abbey"), having been appointed by the Federal Court of Australia on 17 June 1996.

Heron Abbey owns a 20% shareholding in a company called Queensland Aged Care Pty Ltd ("Queensland Aged Care") which carries on the business of a nursing home in Burpengary in the State of Queensland.

The liquidator wishes to sell the shares to Nicholas and Sergio Masinello for $100,000. Mr Leslie and Mrs Rose Dobson are directors of Heron Abbey. Their son, Mr Keith Dobson, was formerly a director of the company.

The present shareholders of Heron Abbey are Mrs Dobson and Mr Keith Dobson. It would appear that Mr Leslie Dobson at some time held shares in Heron Abbey.

Messrs Nicholas and Sergio Masinello each own 40% of the shares in Queensland Aged Care.

Mr and Mrs Dobson and their son oppose the sale on the ground that the sale of the shares in Queensland Aged Care is at a substantial undervalue.

Proceeding

The notice of motion first came on for hearing before me on 30 April 1999 and Mr Keith Dobson attended and sought leave to address the court on behalf of his parents. He is an undischarged bankrupt. I permitted him to do so.

I ordered that the documents be served on Mr and Mrs Leslie Dobson and also their son. I gave directions with respect to the filing of affidavits.

Mr A. Phillips of counsel appears for the liquidator and Mr T. Jacobs of counsel appears for Mr and Mrs Dobson.

Mr Jacobs sought and was granted leave by the court for, Mr and Mrs Dobson as contributories and officers of Heron Abbey to be heard without becoming parties. I granted leave pursuant to Rule 3.17 of the Corporations Rules. Mr Phillips on behalf of…

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 Heron Abbey Pty Ltd (in liq)

Details

AGLC: Heron Abbey Pty Ltd (in liq) [1999] VSC 226
Case: [1999] VSC 226
Decision Date: 22 June 1999

CaseChat Overview and Summary

The case involved a liquidator seeking direction from the court concerning a proposed sale of shares. The liquidator, appointed to a company in liquidation, wanted the court to provide direction regarding the sale of shares to a related party. The value of the shares was disputed, leading to the liquidator seeking the court's guidance. The case was heard by the Federal Court of Australia, where the primary issue was the direction sought by the liquidator in relation to the sale of the shares.

The court was required to determine whether it should provide direction to the liquidator concerning the proposed sale of shares. The key legal issue was whether the court should intervene in the sale of shares when the value of those shares is disputed. The court had to consider the principles applicable to such cases, particularly in light of the relevant statutory provisions and the circumstances of the case.

The court examined the principles governing the sale of shares in a company in liquidation and the provisions of the Corporations Act. It concluded that the liquidator had not demonstrated sufficient grounds for the court to intervene in the sale of the shares. The court emphasised that the value of the shares was a matter to be determined by the parties involved and that the court should not interfere unless there were clear indications of unfairness or impropriety. Consequently, the court refused to provide the direction sought by the liquidator.

Orders