In the matter of Bromesley Pty Limited (Receiver and Manager Appointed) - [2017] NSWSC 295

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: In the matter of Bromesley Pty Limited (Receiver and Manager Appointed) [2017] NSWSC 295
Hearing dates: 21 March 2017
Date of orders: 21 March 2017
Decision date: 21 March 2017
Before: Gleeson JA
Decision:
(1) Pursuant to s 461(1)(k) of the Corporations Act 2001 (Cth) (the Act), an order that the first defendant Bromesley Pty Limited (Receiver and Manager Appointed) (ACN 605 618 022) be wound up.
(2) Pursuant to s 472(1) of the Act, an order that Graeme Beattie be appointed liquidator of the Company.
(3) Second and third defendants to pay the plaintiffs’ costs.
(4) These orders shall be taken out forthwith.

Catchwords: CORPORATIONS – external administration – whether appropriate to wind up company on the just and equitable ground – where irretrievable breakdown between directors and shareholders and the affairs of the company are deadlocked – where solvency of company doubtful – where earlier assertion that some other remedy apart from winding up available not pressed.
Legislation Cited: Corporations Act 2001 (Cth), ss 459A, 461(1)(k), 462(c), 467(4), 472(1),
Cases Cited: Brooker v You Run the Business Pty Ltd [2008] FCA 1752
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
Shenouda v Work Safe Medics Pty Ltd [2011] NSWSC 45
Category: Principal judgment
Parties: Kieu Thien Hanh Dang (First Plaintiff)
Jean-Dominique Huynh (Second Plaintiff)
Bromseley Pty Ltd (Receiver and Manager Appointed) (ACN 605 618 022) (First Defendant)
Teresa Wang (Second Defendant)
Xiuying Yang (Third Defendant)
Representation:
Counsel:
J Giles SC/ PJ Byrne (Plaintiff)
A Kaylinger (Defendants)

Solicitors:
Edrison Lawyers (Third Defendant)

File Number(s): 2016/330221

Judgment

Ex tempore (revised 24 March 2017)

GLEESON JA: By originating process filed on 4 November 2016, the plaintiffs, Ms Dang and Mr Huynh, apply for orders to wind up the first defendant Bromesley Pty Limited (Receiver and Manager appointed) under s 461(1)(k) or alternatively s 459A and to appoint a liquidator under s 472(1) of the Corporations Act 2001 (Cth). On the hearing of the application Mr Kaylinger of counsel appeared for the second and third defendants, Ms Wang and Ms Yang. The company, by its receiver, filed a submitting appearance. It is not in dispute that Ms Dang has standing to seek an order for the winding up of the company on the just and equitable ground under section 461(1)(k) having regard to her position as a contributory of the company: s 462(c). “Contributory” is defined in s 9 to include “for a company with share capital - a holder of fully paid shares in the company”.
Having initially filed written submissions opposing the winding up of the company and contesting the proceedings until the matter had progressed to submissions, counsel for the second and third defendants informed the Court after the morning adjournment that he was instructed not to oppose the winding up application on the just and…

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

AGLC: In the matter of Bromesley Pty Limited (Receiver and Manager Appointed) [2017] NSWSC 295
Case: [2017] NSWSC 295
Decision Date: 21 March 2017

CaseChat Overview and Summary

Bromesley Pty Limited, a company in external administration, was the subject of an application by a creditor seeking its winding up on the just and equitable ground. The application was heard in the Supreme Court of Victoria. The dispute centred on the irretrievable breakdown between the company's directors and shareholders, resulting in a deadlock in the company's affairs. Additionally, there were doubts about the company's solvency, and the creditor argued that winding up was the appropriate remedy.

The court was required to determine whether the circumstances warranted winding up the company on the just and equitable ground. The key legal issue was whether the breakdown in relations and the deadlock in the company's affairs, combined with the doubtful solvency, justified winding up the company. The court also needed to consider whether any alternative remedies had been proposed or whether the applicant had abandoned any previous assertions of the availability of other remedies.

The court found that the irretrievable breakdown between the directors and shareholders, along with the deadlock in the company's affairs, supported the application for winding up on the just and equitable ground. The court noted that the applicant had not pressed any earlier assertion that some other remedy apart from winding up was available. Given the doubts about the company's solvency, the court concluded that winding up was the appropriate course of action. The court ordered the winding up of Bromesley Pty Limited on the just and equitable ground.

Orders