Luu v 888 Links Group Pty Ltd and 888 Management Pty Ltd

[2005] NSWSC 1018

CITATION:	Luu v 888 Links Group Pty Ltd and 888 Management Pty Ltd [2005] NSWSC 1018
HEARING DATE(S):	04/10/05, 07/10/05
JUDGMENT DATE :	7 October 2005
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
DECISION:	Applications for appointment of provisional liquidator dismissed by consent. Plaintiff to pay defendants' costs of those applications.

CATCHWORDS:	PROCEDURE - costs - where plaintiff, having elected to press interlocutory applications, later agrees to dismissal upon the giving of undertakings previously proferred but not accepted by him
CASES CITED:	Caplice v Aroogah Investments Pty Ltd [2004] NSWSC 516 Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 Triulcio v Chase Property Investments Pty Ltd [2003] NSWSC 861 Zempilas v J N Taylor Holdings Ltd (No 2) (1990) 55 SASR 103
PARTIES:	(1) Tang Hung Luu - Plaintiff 888 Links Group Pty Limited - First Defendant Lee Lieng San - Second Defendant Bao San - Third Defendant (2) Tang Hung Luu - Plaintiff 888 Management Pty Ltd - First Defendant Lee Lieng San - Second Defendant Bao San - Third Defendant
FILE NUMBER(S):	SC 5141/05; 5142/05
COUNSEL:	Mr G.P. George - Plaintiff Mr R.D. Marshall - Defendants
SOLICITORS:	Holding Redlich - Plaintiff Carroll & O'Dea - Defendants

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

FRIDAY 7 OCTOBER 2005

5141/05 - TAN HUNG LUU v 888 LINKS GROUP PTY LIMITED (ACN 089 009 147) & 2 ORS

5142/05 - TAN HUNG LUU v 888 MANAGEMENT PTY LIMITED (ACN 106 161 782) & 2 ORS

JUDGMENT

1 The plaintiff Mr Luu has filed two originating processes – one in each proceeding - seeking an order for the winding-up of the corporate defendant to the proceeding. He has also filed, in each case, an interlocutory process seeking the appointment of a provisional liquidator in the first instance. I began to hear the interlocutory processes on Tuesday of this week in the Corporations List. When certain affidavits were filed by the defendants, the plaintiff sought and was granted an adjournment. The matter came back before the court this morning at 10 o'clock. It is now after 3.30pm. The plaintiff, having spent some time under cross-examination, now does not wish to pursue his application for the appointment of a provisional liquidator. I am asked to make by consent an order that each interlocutory process be dismissed.

2 There is, however, a controversy as to the order that should be made as to costs. The defendants maintain that the plaintiff should pay the defendant's costs of each interlocutory process. The plaintiff says costs of the interlocutory processes should be reserved.

3 It is of particular relevance that, in advance of the matter first coming before the court on Tuesday, the individual defendants in each case (being the persons who are the directors of the particular company and the plaintiff’s co-shareholders) had indicated their willingness to enter into an interim regime which, if accepted, would have avoided the need for any hearing at all. Under that regime, the interlocutory processes would have been dismissed and the second and third defendants, being the directors and co-shareholders, would have given to the court undertakings ensuring due and regular administration of the company's affairs pending the hearing of the winding-up application, with restrictions on the disposal of assets except in the ordinary course of business and restrictions upon the undertaking of new commercial activity without 14 days notice to the plaintiff. The defendants’ offer to have the matter resolved on the basis of such undertakings pending the final hearing was not accepted by the plaintiff who elected to press on with the applications for the appointment of a provisional liquidator.

4 The basis on which the court is now asked to dismiss the interlocutory processes by consent entails the very undertakings to which I have referred plus, in the case of one of the companies, two additional undertakings (being an undertaking to continue certain monthly payments to the plaintiff to enable him to meet certain loan payments and an undertaking to continue certain payments in respect of a bank loan to the company). Those additions were not something which the plaintiff saw fit to raise when the proposal based on undertakings was first forthcoming, his preference being simply to reject the undertakings regime altogether.

5 Had the interlocutory processes come to be determined by the court and had the relevant defendants proffered the undertakings in question, it is virtually certain that the court would have accepted those undertakings and dismissed the application for the appointment of a provisional liquidator accordingly. This is because the court will not appoint a provisional liquidator if some other satisfactory means of preserving the status quo pending final hearing can be put in place: see Zempilas v J N Taylor Holdings Ltd (No 2) (1990) 55 SASR 103, Triulcio v Chase Property Investments Pty Ltd [2003] NSWSC 861, Caplice v Aroogah Investments Pty Ltd [2004] NSWSC 516.

6 The plaintiff says that there has been a total breakdown of trust and confidence between himself and the natural person defendants and that that would have militated against any solution based on undertakings. Yet having said that, he now joins in a request that the court dismiss the application on the basis of the very same undertakings. He complains that unspecified allegations of wrongdoing were levelled against him when they should have been particularised and that particularisation of them began to be forthcoming only in the course of his cross-examination. That complaint is seen to be without foundation when one has regard to the paragraph commencing “Your comments” on the first page of the letter of 15 September 2005 from Carroll & O'Dea to Holding Redlich at p 115 of Exhibit TAGLL 1 where it is made clear that the natural person defendants were willing – indeed keen - to give particulars of the alleged wrongdoing as long ago as 13 September 2005 but the plaintiff did not want to hear them.

7 This is one of those cases referred to by McHugh J in Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 in which the court can conclude that one of the parties has acted so unreasonably that the other party should have costs even though there has been a resolution by consent. In all the circumstances, the case can be seen to be one in which the interlocutory applications should not have been pursued by he plaintiff: he should have accepted the holding mechanism based on the undertakings that the natural person defendants were willing to give to the court before the first hearing, being undertakings which form the basis on which the interlocutory applications were eventually disposed of by consent. That being so, I order that not only that the interlocutory process in each case be dismissed, but that it be dismissed with costs, that being Order 1 in the short minutes in each proceeding which I now initial and date.

8 I note, in each proceeding, the undertakings given to the court by the second and third defendants in the proceeding as set out in the short minutes of order.

9 In 5142/05 I make order 2 in the short minutes. In 5141/05, I make orders 2 and 3 in the short minutes.

10 I order that any document filed in proceedings 5141/05 be taken also to have been filed in 5142/05 (and vice-versa) to save duplication.

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