In the matter of Gearhouse BSI Pty Ltd (No 2)

In the matter of Gearhouse BSI Pty Ltd (No 2), the court was asked to decide the issue of who should bear the costs of a successful winding up application made on the just and equitable ground. The applicant, Gearhouse BSI Pty Ltd, had sought to wind up a joint venture company on the basis that it was just and equitable to do so, due to the conduct of the defendant shareholder. The primary judge ruled that the costs should be borne by the company’s assets. The defendant shareholder appealed the decision, arguing that the costs should be borne by them instead.

The court was required to decide whether the costs of the winding up application should be paid out of the company’s assets or by the defendant shareholder, given that the just and equitable ground was principally established due to the conduct of the defendant shareholder. The court considered the principles of equitable relief, the conduct of the defendant shareholder, and the general principles of costs in winding up proceedings. The court also examined relevant case law and statutory provisions.

The court found that the principles of equitable relief and the conduct of the defendant shareholder warranted that the costs of the winding up application should be borne by the defendant shareholder. The court held that the defendant shareholder’s conduct had been a significant factor in establishing the just and equitable ground, and therefore it was appropriate for them to bear the costs. The court also noted that the general principles of costs in winding up proceedings support the imposition of costs on the party who caused the winding up. The court dismissed the appeal, affirming the primary judge’s decision that the costs should be borne by the company’s assets.

The court made no further orders. The defendant shareholder was ordered to bear the costs of the appeal.