Hu v H & Q Café Pty Ltd - [2024] VSCA 283

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2023 0115

RAYMOND BING HU	Applicant
v
H & Q CAFÉ PTY LTD (ACN 624 852 179) & ORS (according to the attached schedule)	Respondents

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JUDGES:	NIALL and KAYE JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	22 November 2024
DATE OF JUDGMENT:	22 November 2024
MEDIUM NEUTRAL CITATION:	[2024] VSCA 283
JUDGMENT APPEALED FROM:	Re H & Q Café Pty Ltd (Supreme Court of Victoria, Efthim AsJ, 19 July 2023)

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PRACTICE AND PROCEDURE – Appeal – Costs – Application for stay on order for costs –Applicant brought winding up application against first respondent – Oppression – Applicant allegedly denied access to company records and deprived from participating in management of company by second respondent – Applicant claimed management of company not in interests of all shareholders – Applicant claimed employment unlawfully terminated – Applicant not a reliable witness – Judge found conduct of second respondent not oppressive – Not just and equitable to wind up company – Judge dismissed application with order for costs against applicant – Respondents’ costs taxed and allowed – Applicant served bankruptcy notice – Respondents sought winding-up application against applicant’s company – Applicant filed application for leave to appeal against lower court decision – Whether appeal would be rendered nugatory without stay because of pending bankruptcy proceedings against applicant – Grounds of appeal sufficiently arguable to grant stay – Application for stay granted subject to undertaking.

Corporations Act 2001 (Cth), ss 232, 233, 461; Fair Work Act 2009 (Cth), ss 45, 293; Supreme Court (General Civil Procedure) Rules 2015, rr 57.12, 64.39, 66.16, 77.05, referred to.

Cross Country Realty Victoria Pty Ltd v Ubertas 350 William Street Pty Ltd [2015] VSCA 347; Maher v Commonwealth Bank of Australia [2008] VSCA 122; Cellante v G Kallis Industries Pty Ltd [1991] 2 VR 653; Neate v Thoroughbred International Marketing Pty Ltd (2012) 34 VR 318; ASEA 1 Pty Ltd v Rudyard Pty Ltd [2020] VSCA 122; Warren v Coombes (1979) 142 CLR 531; Fox v Percy (2003) 214 CLR 118, considered.

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Counsel
Applicant:		In person
Respondents:		Mr S Rubenstein (pro bono)
Solicitors
Applicant:	In person
Respondents:	In person

NIALL JA
KAYE JA:

This is an application for the stay of an order for costs against the applicant and HGPY Pty Ltd (‘HGPY’), which is the trustee of the applicant’s family trust.
In March 2018, the first respondent, H & Q Café Pty Ltd, was incorporated as the vehicle by which, as trustee of the H&Q Unit Trust, the applicant and the second respondent, Ms Qiu, were to purchase and conduct the Parkville Café, which was located at the Royal Children’s Hospital, Parkville, Melbourne.
On 30 April 2018, the first respondent entered into a binding agreement to purchase the café for $2.4 million. The applicant contributed $360,000, and the second respondent contributed $640,000. The balance of the purchase price was financed by a loan of $1.5 million by the…

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: [2024] VSCA 283
Decision Date: 22 November 2024

CaseChat Overview and Summary

Hu commenced proceedings in the Supreme Court of Victoria against H & Q Café Pty Ltd, alleging oppression and other claims related to his management of the company. Hu sought an order to wind up the company, claiming he was denied access to company records and prevented from participating in the company’s management by another shareholder. Hu further alleged that his employment was terminated unlawfully and that the company’s management was not in the interests of all shareholders. The Supreme Court dismissed Hu’s application, finding his conduct not oppressive and that it was not just and equitable to wind up the company. The court ordered Hu to pay the company’s costs.

The appeal raised issues concerning the applicant’s reliability as a witness and the oppressive nature of the respondents' conduct. Hu sought to appeal the lower court's decision, arguing that the appeal would be rendered nugatory if not stayed due to pending bankruptcy proceedings against him. The court considered whether the grounds for appeal were sufficiently arguable to grant a stay of the winding-up application against Hu's company.

The court found that the appeal had sufficiently arguable grounds to warrant a stay of the winding-up application. The application for a stay was granted subject to an undertaking. The court noted that Hu’s reliability as a witness was questionable, and the alleged oppressive conduct did not meet the statutory threshold. The appeal court concluded that the lower court’s findings were not manifestly unjust, and the stay was appropriate to allow the appeal to proceed. The court ordered that Hu provide an undertaking in relation to the stay of the winding-up application.

Orders