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Melluish v Underwood Development Pty Ltd

Melluish v Underwood Development Pty Ltd

Case [2004] NSWSC 429 17 May 2004

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CITATION: Melluish v Underwood Development Pty Ltd [2004] NSWSC 429

HEARING DATE(S): 17/05/04

JUDGMENT DATE:
17 May 2004

JURISDICTION:
Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Orders for reinstatement of registration and winding up

CATCHWORDS: CORPORATIONS - reinstatement of registration of deregistered company - whether trustee in bankruptcy of both shareholders is "person aggrieved" by deregistration - where company had assets exceeding liabilities - whether trustee in bankruptcy is "contributory" with standing to seek winding up on just and equitable ground - where former shareholders attempting to divert company property

LEGISLATION CITED: Corporations Act 2001 (Cth), ss.462(2), 529, 601AB, 601AH
Real Property Act, s.57(2)(b)

CASES CITED: Casali v Crisp (2001) 165 FLR 79
Re Meyer Douglas Pty Ltd [1965] VR 638
Re Peter Conyers Holdings Pty Ltd (1996) 14 ACLC 1835

PARTIES :
John Melluish - Plaintiff
Underwood Development Pty Limited - Defendant

FILE NUMBER(S): SC 2566/04

COUNSEL: Mr D M Crompton, Solicitor - Plaintiff

SOLICITORS: Church & Grace - Plaintiff

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

BARRETT J

MONDAY 17 MAY 2004

2566/04 - MELLUISH v UNDERWOOD DEVELOPMENT PTY LTD

JUDGMENT

1 This is an application by Mr John Melluish for an order under s.601AH of the Corporations Act 2001 (Cth) directing ASIC to reinstate the registration of Underwood Development Pty Ltd which I shall call “the Company”. Mr Melluish also seeks a winding up order.

2 The Company was registered on 28 April 1999. From inception, its sole director and sole secretary was John Michael Higgins and the shareholders were John Michael Higgins and his wife, Diane Jean Higgins, as to one share each. The Company was deregistered on 18th February 2002 pursuant to s.601AB. That section empowers ASIC to deregister a company in defined circumstances concerning failure to effect lodgments under the Corporations Act.

3 The evidence shows that, at the time of deregistration, the Company was the registered proprietor of a property at Forster. According to a title search in evidence, the property is subject to a mortgage to G E Commercial Finance Australia Pty Ltd. There is also a caveat lodged by June Evelyn Cranefield. A contract for sale of this property for a price of $838,000 was purportedly made on 29 August 2003. The supposed contract was executed on behalf of the Company by Mr Higgins and Mrs Higgins. Correspondence between the solicitors for the supposed vendor, being the Company, and the purchasers named in the contract indicated that, at settlement, moneys would be payable to creditors such as ANZ Bank and the Office of State Revenue for land tax and the local council for rates. There was no reference to the registered mortgagee, G E Commercial Finance, which, on 10 March 2004, served notice under s.57(2)(b) of the Real Property Act notifying its intention to exercise its power of sale. That notice referred to secured moneys of $505,000.

4 Mr Higgins and Mrs Higgins are bankrupts, a sequestration order having been made in relation to…

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 Melluish v Underwood Development Pty Ltd

Details

AGLC: Melluish v Underwood Development Pty Ltd [2004] NSWSC 429
Case: [2004] NSWSC 429
Decision Date: 17 May 2004

CaseChat Overview and Summary

Melluish v Underwood Development Pty Ltd involved a dispute between the plaintiff, Melluish, a shareholder and director of Underwood Development Pty Ltd, and the defendant, the company's trustee in bankruptcy. The plaintiff sought the reinstatement of the company's registration, which had been deregistered by the Australian Securities and Investments Commission. The case was heard in the Supreme Court of New South Wales.

The central legal issues before the court were whether the trustee in bankruptcy, who was also the trustee for both shareholders, qualified as a "person aggrieved" by the deregistration and whether the trustee, as a "contributory," had standing to petition for the winding up of the company on just and equitable grounds. The court had to determine if the trustee's interests were sufficiently affected by the deregistration to grant the relief sought and whether the actions of the former shareholders constituted a diversion of company property that warranted such an order.

The court held that the trustee in bankruptcy was not a "person aggrieved" by the deregistration as the company had assets exceeding its liabilities, thus there was no financial prejudice to creditors. Additionally, the court found that the trustee did not have standing to petition for the winding up of the company on just and equitable grounds, as the actions of the former shareholders did not constitute a diversion of company property. The court dismissed the plaintiff's application for the reinstatement of the company's registration and for the winding up of the company on the grounds that no just and equitable cause was demonstrated.

No further orders were made by the court.

Orders