LUMEN NOMINEES PTY LTD -v- CONTROL CENTRE PTY LTD [2014] WASC 163

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2014] WASC 163
Case No:	COR:28/2014	Heard:	16 APRIL 2014
Coram:	CHANEY J	Delivered:	12/05/14
No of pages:	6	Judgment Part:	1 of 1
Result:	Winding up order made
Category:	B
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Parties:	LUMEN NOMINEES PTY LTD (ACN 124 369 660) CONTROL CENTRE PTY LTD (ACN 124 384 701) ANTHONY PALERMO
Catchwords:	Corporations Winding up Just and equitable Irretrievable breakdown of relationship between director and members
Legislation:	Corporations Act 2001 (Cth) s 461(1)(k)
Case References:	Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343 Palermo v Palermo [No 2] [2014] WASC 6

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION : LUMEN NOMINEES PTY LTD -v- CONTROL CENTRE PTY LTD [2014] WASC 163 CORAM : CHANEY J HEARD : 16 APRIL 2014 DELIVERED : 12 MAY 2014 FILE NO/S : COR 28 of 2014 BETWEEN : LUMEN NOMINEES PTY LTD (ACN 124 369 660)

Plaintiff

AND

CONTROL CENTRE PTY LTD (ACN 124 384 701)

First Defendant

ANTHONY PALERMO

Second Defendant

Catchwords:

Corporations - Winding up - Just and equitable - Irretrievable breakdown of relationship between director and members

Legislation:

Corporations Act 2001 (Cth) s 461(1)(k)

Result:

Winding up order made

Category: B

Representation:

Counsel:

Plaintiff : Mr H West

First Defendant : No appearance

Second Defendant : In person

Solicitors:

Plaintiff : Gadens Lawyers

First Defendant : No appearance

Second Defendant : In person

Cases referred to in judgment:

Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343
Palermo v Palermo [No 2] [2014] WASC 6

1 CHANEY J: The plaintiff, Lumen Nominees Pty Ltd, owns one of two issued shares in the first defendant, Control Centre Pty Ltd (Control Centre). It applies for an order under s 461(1)(k) of the Corporations Act 2001 (Cth) to wind up Control Centre on the ground that it is just and equitable that such an order be made. The plaintiff contends that that ground for winding up Control Centre is established by reason of the fact that there has been a complete breakdown of trust and of the working relationship between the directors of Control Centre, who are also respectively directors of the two equal shareholders of Control Centre.

2 One of the directors, Anthony Palermo, opposes the application. He does not dispute that there has been a complete breakdown of his relationship with the other director, who is his brother, John Palermo. He contends, however, that the order for the winding up should not be made for reasons which are discussed below.

The structure and activities of Control Centre

3 As already noted, there are two directors of Control Centre, John Palermo and Anthony Palermo. There are two issued shares in Control Centre. One is held by Gallant (WA) Pty Ltd. The sole director of Gallant (WA) Pty Ltd is Anthony Palermo. The sole shareholder is…

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: [2014] WASC 163
Decision Date: 12 MAY 2014

CaseChat Overview and Summary

Lumen Nominees Pty Ltd, a company, brought proceedings against Control Centre Pty Ltd, its director, alleging an irretrievable breakdown of the relationship between the director and the company's members. The case was heard in the Supreme Court of New South Wales, where the Court was required to determine whether the company could be wound up on the basis that it was just and equitable to do so. The legal issue at hand was whether there had been such a fundamental and irreparable breakdown in the relationship between the director and the shareholders that the company should be wound up.

The court examined the nature and extent of the relationship between the director and the shareholders. It was determined that the relationship had deteriorated to the point where it was no longer possible for the company to operate effectively. The court considered the evidence presented by both parties, including the conduct of the director and the impact on the company's operations. The Court found that the director's actions had caused significant harm to the company, leading to an irretrievable breakdown of trust and confidence among the members. Based on these findings, the Court concluded that it was just and equitable to wind up the company.

As a result, the Court made an order for the winding up of Control Centre Pty Ltd. This decision underscores the importance of maintaining a harmonious relationship between a company's director and its members, and highlights the Court's willingness to intervene when such a relationship irreparably breaks down.

Orders

Orders of the court

Winding up order made

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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