Lean v Banning Holdings Pty Ltd - [2017] WASC 353

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: LEAN -v- BANNING HOLDINGS PTY LTD [2017] WASC 353

CORAM: SMITH AJ

HEARD: 20 NOVEMBER 2017

DELIVERED : 20 NOVEMBER 2017

PUBLISHED : 6 DECEMBER 2017

FILE NO/S: COR 140 of 2017

MATTER :Banning Holdings Pty Ltd

BETWEEN: GRAHAM TREVOR LEAN
Plaintiff
AND
BANNING HOLDINGS PTY LTD
Defendant

Catchwords:

Corporations law - Application to wind up a company by the court - Standing - Whether plaintiff is a 'contributory' of the company within the meaning of s 9 Corporations Act 2001 (Cth) - Plaintiff holder of an equitable lien expressly limited by order of the court

Legislation:

Civil Judgments Enforcement Regulations 2005 (WA), reg 57
Corporations Act 2001 (Cth), s 9, s 9(a)(i), s 9(a)(ii), s 9(a)(iii), s 461(1), s 461(1)(e), s 461(1)(f), s 461(1)(k), s 462, s 462(5), s 478, s 478(1), s 478(1A), s 480, s 480(a), s 515, s 516

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr C P Stokes
Defendant: Mr T R Stephenson

Solicitors:

Plaintiff: Chris Stokes & Associates
Defendant: Eastwood Sweeney Law

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

Computer Accounting and Tax Pty Lt (in liq) v Professional Services of Australia Pty Ltd [No 2] [2010] WASC 318
Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia [No 11] [2016] WASC 365
Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [2008] WASC 133
Frigger v Campbell‑Smith [2010] WASC 353
In Re Savoy Estate Ltd (1949) Ch 622
Maddocks v DJE Constructions Pty Ltd (1982) 148 CLR 104
Mellor v Mellor [1992] 4 All ER 10
Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Re Lawrenson Light Metal Die Casting Pty Ltd (1999) 33 ACSR 288
Re Scottish Properties Pty Ltd (1977) CLC 40‑307
Re Van Reesema; Ex parte Australian Growth Resources Corporation Pty Ltd (Receivers and Managers Appointed) [1987] FCA 336
Shirlaw v Taylor (1991) 102 ALR 551
Viola v Anglo‑American Cold Storage Company [1912] 2 Ch 305
Yara Australia Pty Ltd v Oswal [No 2] [2013] WASCA 187

SMITH AJ: On 20 November 2017, I made an order dismissing this proceeding. Having heard preliminary argument, I was not satisfied the plaintiff, Graeme Trevor Lean, had standing to make the application. These are my reasons for making the order.
This is an application by Mr Lean brought pursuant to s 461(1) of the Corporations Act 2001 (Cth) for the court to wind up Banning Holdings Pty Ltd (BH).
BH is owned by the deceased estate of Martin Paul Banning. BH is incorporated as a proprietary company limited by shares.
Whilst the application is made under s 461(1)(e), s 461(1)(f) and s 461(k) of the Corporations Act, the ground relied upon by Mr Lean to wind up BH is as provided for in s 461(k), that…

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

Case: [2017] WASC 353
Decision Date: 6 DECEMBER 2017

CaseChat Overview and Summary

The matter of Lean v Banning Holdings Pty Ltd was before the Federal Court, where the plaintiff sought to wind up the company on the basis that it was unable to pay its debts. The plaintiff claimed to hold an equitable lien over the company's assets and, therefore, was a creditor with standing to apply for the winding up of the company. The defendant company argued that the plaintiff did not meet the criteria of a 'contributory' under section 9 of the Corporations Act 2001 (Cth), as the plaintiff's interest was held in equity and had been expressly limited by a court order. The court was required to determine whether the plaintiff's equitable lien was sufficient to establish the plaintiff as a creditor with standing to apply for the winding up of the company.

The court examined the meaning of 'contributory' under section 9 of the Corporations Act 2001 (Cth) and considered the nature of the plaintiff's interest in the company's assets. The court noted that the plaintiff held an equitable lien, which is a right to retain possession of property until a debt or obligation is satisfied. However, the court found that the plaintiff's equitable lien had been expressly limited by a prior court order, which meant that the plaintiff's interest was no longer sufficient to establish the plaintiff as a creditor with standing to apply for the winding up of the company. The court held that the plaintiff's interest was too uncertain and speculative to meet the requirements of a 'contributory' under section 9 of the Corporations Act 2001 (Cth).

Consequently, the court dismissed the plaintiff's application to wind up the company. The court found that the plaintiff did not have the requisite standing to apply for the winding up of the company, as the plaintiff's equitable lien had been expressly limited by a prior court order. The court held that the plaintiff's interest was too uncertain and speculative to establish the plaintiff as a creditor with standing to apply for the winding up of the company. The orders of the court were that the plaintiff's application to wind up the company be dismissed with costs.

Orders