In the matter of A Twins Spare Parts Pty Ltd

[2020] NSWSC 156

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	In the matter of A Twins Spare Parts Pty Ltd [2020] NSWSC 156
Hearing dates:	24 February 2020
Date of orders:	02 March 2020
Decision date:	02 March 2020
Jurisdiction:	Equity - Corporations List
Before:	Gleeson J
Decision:	Winding up order made
Catchwords:	CORPORATIONS – external administration – whether appropriate to wind up company on the just and equitable ground – Corporations Act 2001 (Cth) s 461(1)(k) – where acknowledgment that irretrievable breakdown of relationship between members – company wound up.
Legislation Cited:	Corporations Act 2001 (Cth), ss 461(1)(k), 462(c), 465A, 466(2), 467(3)(b) Supreme Court (Corporations) Rules 1999 (NSW), r 5.6
Cases Cited:	Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343
Category:	Principal judgment
Parties:	Oreste Bercich (Plaintiff) A Twins Spare Parts Pty Ltd (First defendant) Giovanni Bercich (Second defendant) Dino Bercich (Third defendant)
Representation:	Counsel: Mr D Stewart (Plaintiff) Mr C D Wood SC (Second and third defendants)   Solicitors: Matthews Dooley & Gibson (Plaintiff) Shad Partners (Second and third defendants)
File Number(s):	2019/211253

Judgment

1. GLEESON J: Application is made by Mr Oreste Bercich (Oreste) by originating process filed 8 July 2019 for a variety of relief, including an order that the first defendant, A Twins Spare Parts Pty Ltd (the Company), be wound up under s 461(1)(k) of the Corporations Act 2001 (Cth). Section 461(1)(k) provides that the Court may wind up a company if it is of the opinion that it is just and equitable that it be wound up. It is not in dispute that Oreste has standing to seek such an order having regard to his position as a contributory of the Company: s 462(c).

2. The proceedings subsequently continued on pleadings. By statement of claim filed 9 August 2019, Oreste pleaded that the Company had carried on business of a supplier of spare parts for motor vehicles from premises at Girraween which was subject to a mortgage in favour of the National Australia Bank Limited, that Oreste and his brothers, the second defendant, Giovanni Bercich (Giovanni), the third defendant, Dino Bercich (Dino), and Giulio Bercich (Guilio), who died in about August 2016, had all worked in the family business for either the Company or another company known as Riverside Spares Pty Ltd (Riverside Spares). Riverside Spares was wound up under s 461(1)(k) by an order made by Black J on 18 November 2019.

3. In his statement of claim, Oreste alleged that he left his employment with the Company in about December 2017, having been excluded by Giovanni and Dino from being involved in the financial affairs of the Company and the related entity, Riverside Spares. Oreste alleged that Giovanni had made decisions in relation to the companies on his own, or in consultation with Dino and Giulio, to the exclusion of Oreste. It was alleged that the conduct of the Company’s affairs was oppressive for a number of reasons, which it is not necessary to detail.

4. By their defence filed 2 September 2019, Giovanni and Dino denied many of the relevant allegations, admitted that the market value of the Girraween property is significantly greater than the amount of $1,750,000 shown in the financial statements and denied the alleged oppression.

5. The proceedings were referred to court-ordered mediation and settled at a mediation held on 19 February 2020.

6. At a directions hearing on 24 February 2020, the parties handed up consent short minutes of order which provided for the winding up of the Company under s 461(1)(k) of the Corporations Act, that Barry Anthony Taylor be appointed as liquidator of the Company, and for certain costs orders. The short minutes also noted the parties’ agreement that the relationship between the members of the Company has irretrievably broken down. The history of these proceedings provides support for that acknowledgement. The parties requested the Court to defer making those orders for a short time pending execution and exchange of a deed recording the terms of the settlement agreed at the mediation. The Court acceded to that request.

7. On 27 February 2020, the parties confirmed their request that the Court make orders reflecting their agreement in the short minutes of order.

8. I am satisfied that it is appropriate to make the proposed consent orders.

9. This is a classic case for the making of a winding up order on the ground that an irretrievable breakdown of the relationship between the members makes the winding up just and equitable: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 at [89]; Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343 at [132]. It is in the interests of the Company, its creditors and members that an independent person assume control of the affairs of the Company for the purpose of ensuring that all creditors’ claims are appropriately dealt with in the liquidation.

10. Evidence has been tendered of a consent given by the proposed liquidator.

11. There is no evidence of the advertising of the application to wind up the Company or that notice of the application has been lodged with ASIC. Orders should be made under s 467(3)(b) of the Corporations Act and the Supreme Court (Corporations) Rules 1999 (NSW), r 5.6(1) dispensing with the requirements to advertise or publish notice of the application under s 465A and r 5.6 and the requirement that the application be served on the Company under s 465A. No substantive purpose would be achieved by compliance with those requirements and they would involve unnecessary costs orders.

Orders

12. The Court makes the following notation and orders:

1. Note the parties agree that the relationship between the members of the first defendant has irretrievably broken down.

2. Pursuant to s 461(1)(k) of the Corporations Act 2001 (Cth) (the Act), that the first defendant, A Twins Spare Parts Pty Ltd, be wound up.

3. That Barry Anthony Taylor of HLB Mann Judd be appointed as the liquidator of the first defendant.

4. That the plaintiff’s costs be paid pursuant to s 466(2) of the Act.

5. That the second and third defendant’s costs of the proceedings be paid by the first defendant on the ordinary basis as agreed or assessed by the liquidator from the funds of the first defendant on the winding up.

6. That pursuant to s 467(3)(b) of the Act and r 5.6(1) of the Supreme Court (Corporations) Rules 1999 (NSW), the requirement to advertise, or publish notice of, the application under s 465A of the Act and r 5.6 of the Corporations Rules be dispensed with.

7. That pursuant to s 467(3)(b) of the Act, the requirement that the application be served on the Company under s 465A of the Act be dispensed with.

8. These orders be entered forthwith.

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Amendments

17 March 2020 - Amendment to jurisdiction - not visible.

Decision last updated: 17 March 2020