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McConnochie v Lopez

McConnochie v Lopez

Case [2006] WASC 206 20 September 2006

Corporate Liquidation

Insolvency

Rights of Indemnity

Claims and Counterclaims

Corporate Law & Governance

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McCONNOCHIE & ANOR -v- GEORGE AUBREY LOPEZ AS LIQUIDATOR OF MCJ PTY LTD & ANOR [2006] WASC 206

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2006] WASC 206
Case No:	COR:89/2006	Heard:	18 AUGUST 2006
Coram:	MASTER NEWNES	Delivered:	20/09/06
No of pages:	13	Judgment Part:	1 of 1
Result:	Application dismissed
Category:	B
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Parties:	ROBIN FRANK McCONNOCHIE NIGEL LESLIE FLEET GEORGE AUBREY LOPEZ AS LIQUIDATOR OF MCJ PTY LTD (ACN 103 302 343) MICHAEL CHARLES PAUL JOHNSTON AS TRUSTEE FOR THE JOHNSTON FAMILY TRUST
Catchwords:	Corporations Termination of winding up Relevant principles Turns on own facts
Legislation:	Corporations Act 2001 (Cth), s 263, s 266, s 482
Case References:	Anderson v Palmer [2002] NSWSC 192 Dubolo Pty Ltd v Codrington Investment Corporation Pty Ltd (1998) 26 ACSR 723 Maamari v Ringwood & Ply Pty Ltd (2005) 52 ACSR 370 Metledge v Bambakit Pty Ltd (In Liq) [2005] NSWSC 160 Re Warbler Pty Ltd (1982) 6 ACLR 526 Re Calgary & Edmonton Land Co Ltd (In Liq) [1975] 1 WLR 355 Re Nicholls Pty Ltd (1982) 7 ACLR 76 Sutherland v Rahme Enterprises Pty Ltd (In Liq) (2003) 46 ACSR 458

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : McCONNOCHIE & ANOR -v- GEORGE AUBREY LOPEZ AS LIQUIDATOR OF MCJ PTY LTD & ANOR [2006] WASC 206 CORAM : MASTER NEWNES HEARD : 18 AUGUST 2006 DELIVERED : 20 SEPTEMBER 2006 FILE NO/S : COR 89 of 2006 MATTER : MCJ PTY LTD (ACN 103 302 343) (IN LIQ) BETWEEN : ROBIN FRANK McCONNOCHIE

NIGEL LESLIE FLEET

Plaintiffs

AND

GEORGE AUBREY LOPEZ AS LIQUIDATOR OF MCJ PTY LTD (ACN 103 302 343)

First Defendant

MICHAEL CHARLES PAUL JOHNSTON AS TRUSTEE FOR THE JOHNSTON FAMILY TRUST

Second Defendant

Catchwords:

Corporations - Termination of winding up - Relevant principles - Turns on own facts

(Page 2)

Legislation:

Corporations Act 2001 (Cth), s 263, s 266, s 482

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiffs : Mr A Metaxas

First Defendant : No appearance

Second Defendant : Mr L Christensen

Solicitors:

Plaintiffs : Arthur Metaxas & Co

First Defendant : No appearance

Second Defendant : Wilson & Atkinson

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

Anderson v Palmer [2002] NSWSC 192
Dubolo Pty Ltd v Codrington Investment Corporation Pty Ltd (1998) 26 ACSR 723
Maamari v Ringwood & Ply Pty Ltd (2005) 52 ACSR 370
Metledge v Bambakit Pty Ltd (In Liq) [2005] NSWSC 160
Re Warbler Pty Ltd (1982) 6 ACLR 526

Case(s) also cited:

Re Calgary & Edmonton Land Co Ltd (In Liq) [1975] 1 WLR 355
Re Nicholls Pty Ltd (1982) 7 ACLR 76
Sutherland v Rahme Enterprises Pty Ltd (In Liq) (2003) 46 ACSR 458

(Page 3)

1 MASTER NEWNES: This is an application under s 482 of the Corporations Act 2001 (Cth) ("the Act") to stay and terminate the winding up of MCJ Pty Ltd ("MCJ"). The plaintiffs are the shareholders of MCJ.

2 The current application arises out of a long…

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.

Continue reading McConnochie v Lopez

Details

AGLC: McConnochie v Lopez [2006] WASC 206
Case: [2006] WASC 206
Decision Date

CaseChat Overview and Summary

The matter before the Supreme Court of Western Australia was an application by the shareholders of MCJ Pty Ltd, Robin Frank McConnochie and Nigel Leslie Fleet, to stay and terminate the winding up of their company under s 482 of the Corporations Act 2001 (Cth). The application arose from a long-standing dispute between the shareholders and Michael Charles Paul Johnston, as trustee for the Johnston Family Trust, regarding a business transaction and subsequent litigation. The shareholders sought to pursue legal claims against Johnston and the company's former solicitors but argued that the winding up should be terminated to facilitate this process.

The legal issues for the court to decide included whether the shareholders had made out a positive case for the termination of the winding up and whether there were compelling reasons to prefer the shareholders' proposed course of action over resolving the matters through the winding up. The court considered the relevant principles governing such applications, including the discretionary nature of the decision, the necessity of demonstrating solvency, and the importance of ensuring that the winding up serves the interests of creditors and the public.

The court found that the shareholders had not demonstrated a change in the company's solvency position since the winding up order or provided satisfactory evidence of their financial capacity to meet any potential liabilities. The primary purpose of the winding up, according to the court, was to resolve outstanding claims, a task for which the liquidator was well-suited. The court was not persuaded that the shareholders' proposed litigation would be significantly more costly or that the winding up should be terminated to allow the company to become a "vehicle for litigation." The application was dismissed, and the winding up was to continue under the liquidator's oversight.

Orders