Hume v Carey - [2022] WASC 256

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   HUME -v- CAREY [2022] WASC 256
CORAM:   HILL J
HEARD:   5 AUGUST 2022
DELIVERED          :   5 AUGUST 2022
PUBLISHED           :   9 AUGUST 2022
FILE NO/S:   COR 68 of 2022
BETWEEN:   ALISTAIR DAVID HUME
Plaintiff
AND
NORMAN PHILLIP CAREY
First Defendant
GOLDBLAZE NOMINEES PTY LTD
Second Defendant
HHA ARCHITECTS PTY LTD (IN LIQ)
Third Defendant

Catchwords:

Corporations – Application to terminate winding up of company – Whether defendants had standing to seek winding up of company – Whether defendants were contingent or prospective creditors – Whether person with untried claim for unliquidated damages is a prospective creditor – Requirement to consider matters in s 462(4) on application

Corporations – Application to terminate winding up of company – Whether evidentiary onus to prove solvency where winding up ordered on grounds other than insolvency – Whether material change since order for winding up made – Winding up stayed until further matters

Legislation:

Corporations Act 2011 (Cth), s 461(1)(k), s 462(2), s 462(4), s 482(1), s 482(1A)

Result:

Winding up stayed until further order
Matter relisted for further directions

Category: B

Representation:

Counsel:

Plaintiff	:	In Person
First Defendant	:	S M Radovanovic
Second Defendant	:	S M Radovanovic
Third Defendant	:	No appearance

Solicitors:

Plaintiff	:	In Person
First Defendant	:	Mony De Kerloy
Second Defendant	:	Mony De Kerloy
Third Defendant	:	No appearance

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

Browne-Kerr v Woods (in his capacity as liquidator of Thoroughbred Consultants Pty Ltd) [2021] VSC 627
Community Development Pty Ltd v Engwirda Construction Company (1969) 120 CLR 455
Druin Pty Ltd v Caporale Designs Pty Ltd [2009] NSWSC 739
Gerblich v Smart World Enterprises Pty Ltd (No 2) [2012] SASC 5
Goldblaze Nominees Pty Ltd as Trustee for The Goldblaze Unit Trust v HHA Architects Pty Ltd [2021] WASC 189
Hume v Goldblaze Nominees Pty Ltd as Trustee for The Goldblaze Unit Trust [2021] WASCA 177
Mann v Goldstein [1968] 1 WLR 109; [1968] 2 All ER 769
Roy Morgan Research Centre Pty Ltd v Wilson Market Research Pty Ltd (1996) 39 NSWLR 311
Stonegate Securities Ltd v Gregory [1980] Ch 576; [1980] 1 All ER 241
Treadtel International Pty Ltd v Cocco [2016] NSWCA 360; (2016) 316 FLR 318

HILL J:

(This judgment was delivered extemporaneously and has been edited from the transcript.)

The plaintiff by originating process dated 13 April 2022 seeks orders pursuant to s 482(1) and s 482(1A) of the Corporations Act2001 (Cth) (Act) for the winding up of HHA Architects Pty Ltd (HHA Architects) to be terminated. The basis for the application is set out in the originating process. The grounds include that HHA Architects has no debt and no contingent creditors and does not have any current PI insurance cover.
The application is opposed by the first and second defendants who appeared by counsel at the hearing of the application. Essentially, counsel for the defendants contends that there is no relevant change in…

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 Hume v Carey

Details

AGLC: Hume v Carey [2022] WASC 256
Case: [2022] WASC 256
Decision Date

CaseChat Overview and Summary

Hume v Carey was a case in the Supreme Court of Western Australia in which the plaintiff, Alistair Hume, sought to terminate the winding up of HHA Architects Pty Ltd, a company in which he was a shareholder. The winding up was ordered on the basis that it was just and equitable, following an application by Norman Carey and Goldblaze Nominees, who claimed to be prospective creditors of the company. The central legal issues in the case were whether Carey and Goldblaze Nominees had the standing to seek the winding up of HHA Architects and whether there had been a material change in circumstances warranting the termination of the winding up.

Justice Hill found that Carey and Goldblaze Nominees did not have the standing to apply for the winding up of HHA Architects as they were not creditors of the company but merely had an untried claim for professional negligence. This conclusion was based on the requirement under s 462(4) of the Corporations Act 2001 (Cth) that a contingent or prospective creditor must establish a prime facie case for winding up before the court would hear their application. The court also considered the requirement under s 462(5) that a person is not entitled to apply for an order to wind up a company unless permitted by the Act. Given that HHA Architects was not wound up on the basis of insolvency, the court found that solvency was not a prerequisite to terminating the winding up. The court emphasised the importance of ensuring commercial morality and the proper administration of justice.

The court concluded that the winding up should be stayed until further order, pending the assessment of liquidators' costs and determination of who should bear those costs. If Hume could secure or pay these costs, the winding up would be terminated; otherwise, the stay would be lifted, and HHA would remain in liquidation. The decision highlighted the importance of proper procedure and standing in applications for the winding up of companies, as well as the discretionary nature of the court's power to terminate a winding up.

Orders