In the matter of David Lahood Pty Ltd

[2013] NSWSC 1244

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of David Lahood Pty Ltd [2013] NSWSC 1244

Hearing dates:

2 September 2013

Decision date:

02 September 2013

Jurisdiction:

Equity Division - Corporations List

Before:

Brereton J

Decision:

Declare that the plaintiff is entitled to be registered as the owner of all shares in the defendant held in the name of David Lahood.

Order pursuant to Corporations Act s 461(1)(a) that the defendant be wound up.

Order that Simon John Cathro and Philip Campbell-Wilson be appointed liquidators of the defendant.

Order that the defendant do all things necessary to cause the plaintiff to be registered as the owner of the shares referred to in order 1 and to cause such registration to be notified to the Australian Securities and Investments Commission.

Order that the plaintiff's costs be paid out of the assets of the defendant.

Catchwords:

CORPORATIONS - Winding up - order sought for winding up of defendant under s 461(1)(a) of the (Cth) Corporations Act 2001 on the ground that the company has by special resolution resolved it be wound up by the court - no good reason to do other than what the company has so resolved.

Legislation Cited:

(Cth) Bankruptcy Act 1966
(Cth) Corporations Act 2001 s 249B, s 461, s 1072C

Category:

Principal judgment

Parties:

Paul Andrew Leroy as trustee in the bankrupt estate of David Lahood (plaintiff)
David Lahood Pty Limited ACN 079 981 838 (defendant)

Representation:

Counsel:
R Marshall (plaintiff)
D Mitchell (defendant)
D Lahood (in person)
Solicitors:
Bartier Perry (plaintiff)

File Number(s):

2013/145558

Judgment - EX TEMPORE

1. HIS HONOUR: By originating process filed on 10 May 2013, the plaintiff Paul Andrew Leroy as trustee of the bankrupt estate of David Lahood seeks an order that the defendant David Lahood Proprietary Limited be wound up on the ground referred to in s 461(1)(a) of the (Cth) Corporations Act 2001, namely that the company has by special resolution resolved it be wound up by the court, and consequential relief.

1. Mr Leroy was appointed Mr Lahood's trustee in bankruptcy by a sequestration order made in the Federal Magistrates Court on 14 February 2013. Mr Lahood was the sole shareholder in the company, holding one issued A class share, being the only issued share in the company. After the sequestration order was made, Mr Lahood made a number of applications in the Federal Court with a view to impugning the sequestration order; none of those applications was successful.

1. On 9 May 2013, Mr Leroy purported to execute a transfer of Mr Lahood's share in the company to himself, he says pursuant to s 1072C(4) of the Corporations Act. Subsequently on the same day, as the sole shareholder in the company, he resolved pursuant to Corporations Act, s 249B, that the company be wound up pursuant to s 461(1)(a) of the Act.

1. Notice of the application has been lodged with ASIC and published in the Sydney Morning Herald. All formal prerequisites to the making of a winding up order have been satisfied.

1. Corporations Act, s 1072C, applies where, because of the (Cth) Bankruptcy Act 1966 a share in a company, being part of the property of a bankrupt, vests in the trustee of the bankrupt's estate, and the bankrupt is the registered shareholder of that share. Subsection (2) provides that on producing such information as the company's directors properly require, the trustee is entitled inter alia to the same rights as the bankrupt would be entitled to if he or she were not a bankrupt, including rights in relation to meetings of the company and voting. Subsection (3) provides that the trustee has the same rights to transfer the share as the bankrupt would have if he or she were not a bankrupt, and subsection (4) provides that if the trustee transfers the share, the transfer is as valid as if the trustee had been registered as the holder of the share when the trustee executed the instrument of transfer.

1. The effect of subsection (2) is that, quite apart from executing any transfer of the share, the trustee was entitled to exercise the voting rights of the bankrupt. In those circumstances, the company having resolved by special resolution that it be wound up by the court, there is no good reason to do other than what the company has so resolved.

1. In addition, the plaintiff seeks a declaration that he is entitled to be registered as the owner of the shares issued in the defendant. As the transfer that the plaintiff has executed gives effect to the sequestration order by causing the legal title to be vested in the trustee in bankruptcy, it necessarily follows that the plaintiff is entitled to be so registered.

COUNSEL ADDRESSED

1. For the foregoing reasons, I make the following orders:

(1)   Declare that the plaintiff is entitled to be registered as the owner of all shares in the defendant held in the name of David Lahood;

(2) Order pursuant to Corporations Act s 461(1)(a) that the defendant be wound up;

(3)   Order that Simon John Cathro and Philip Campbell-Wilson be appointed liquidators of the defendant;

(4)   Order that the defendant do all things necessary to cause the plaintiff to be registered as the owner of the shares referred to in order 1 and to cause such registration to be notified to the Australian Securities and Investments Commission;

(5)   Order that the plaintiff's costs be paid out of the assets of the defendant.

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Decision last updated: 24 February 2014