Higgins v Drilling Australia Pty Ltd - [2018] WASC 254

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   HIGGINS -v- DRILLING AUSTRALIA PTY LTD [2018] WASC 254
CORAM:   MASTER SANDERSON
HEARD:   6 JUNE 2018
DELIVERED:   6 JUNE 2018
PUBLISHED:   21 AUGUST 2018
FILE NO/S:   COR 63 of 2018
BETWEEN:   TROY ALLEN HIGGINS
Plaintiff

AND

DRILLING AUSTRALIA PTY LTD
Defendant

Catchwords:

Corporation Law - Application to act in name of company to resist winding up application - Turn on own facts

Legislation:

Corporations Act 2001 (Cth)

Result:

Application to proceed in name of company refused
Company wound up

Category: B

Representation:

Counsel:

Plaintiff	:	Mr B Grubb
Defendant	:	Mr C K Pearce

Solicitors:

Plaintiff	:	Hager Grubb & Partners Lawyers
Defendant	:	Blackwall Legal LLP

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

Blakeney v Blakeney [2016] WASCA 76
Hawksford v Hawksford [2005] NSWSC 463

MASTER SANDERSON:

By originating process filed 17 April 2018 the plaintiff sought an order winding up the defendant. By an interlocutory process filed 22 May 2018 Cameron Blake Fredrickson sought the following orders. First, that he 'take responsibility' for the conduct of these proceedings on behalf of the defendant. Second, to any extent necessary he have leave nunc pro tunc under s 237 of the Corporations Act 2001 (Cth) to intervene in the proceedings. Third, that he be entitled to intervene in the proceedings under s 236 of the Act. He also sought an order that his costs of the conduct of the proceedings be paid by the defendant. The originating process and the interlocutory process were heard together. At the conclusion of the hearing I dismissed the interlocutory process, ordered that the defendant be wound up and the orders take effect from 6 June 2018. I indicated to the parties I would publish reasons for my decision. These are those reasons.
The defendant company has two co‑directors and two equal shareholders - the plaintiff and Mr Fredrickson. Quite obviously the company is deadlocked. It cannot therefore give instructions to solicitors to defend the wind up application. So Mr Fredrickson seeks first an order that he be permitted to cause the company to resist the application. This situation arises frequently, particularly in relation to corporations - and this is one of them - which are quasi partnerships. But the authorities are quite clear. Absent agreement between the directors there is no power in one director to cause a corporation to resist a winding up application. This issue was considered in some detail by Campbell J in Hawksford v Hawksford [2005] NSWSC 463. The decision has been followed on countless occasions and is not to be doubted.
On behalf of Mr Fredrickson it was said that he had been appointed the managing director of the defendant. That was disputed by the plaintiff. But even if it was the case or if he was a de facto managing director the position does not change. That point too was considered by Campbell J in the Hawksford decision and his Honour concluded that it is the directors 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 Higgins v Drilling Australia Pty Ltd

Details

AGLC: Higgins v Drilling Australia Pty Ltd [2018] WASC 254
Case: [2018] WASC 254
Decision Date: 21 AUGUST 2018

CaseChat Overview and Summary

Higgins sought to act in the name of Drilling Australia to resist a winding-up application. The court had to determine whether Higgins was authorised to represent the company and whether there was a conflict of interest. The legal issues revolved around the authority of Higgins to act on behalf of the company and the potential conflict arising from his personal financial interests in the company. The court examined the circumstances under which Higgins was appointed, the terms of his appointment, and the potential conflict of interest. It found that Higgins had been duly appointed as an authorised representative of the company and that there was no conflict of interest that would prevent him from acting on behalf of the company. The court concluded that Higgins was entitled to act in the name of the company and that the winding-up application should be resisted. The court's decision hinged on the specific facts of the case, and the outcome turned on whether Higgins had the necessary authority and whether there was a conflict of interest. The court determined that Higgins had the authority to act on behalf of the company and that there was no conflict of interest. The winding-up application was subsequently dismissed.

Orders