Minh Tan Tran v Nicols - [2015] NSWSC 1635

Supreme Court

New South Wales

Medium Neutral Citation: Minh Tan Tran v Nicols [2015] NSWSC 1635
Hearing dates: 28 – 29 October 2015
Date of orders: 05 November 2015
Decision date: 05 November 2015
Jurisdiction: Equity - Corporations List
Before: Bergin CJ in Eq
Decision:
Applications dismissed

Catchwords: LIQUIDATORS – failure by company to pay amount demanded by Deputy Commissioner of Taxation – application for winding up filed – where two weeks before winding up order $110,000 transferred out of company’s accounts – where three days before order registration of eleven motor vehicles in company’s fleet transferred into name of another company controlled by one of the applicants - where liquidator repossessed two of the motor vehicle – where liquidator retained funds paid to company by contractor – whether cause shown for removal of liquidator
Legislation Cited: Corporations Act 2001 (Cth)
Income Tax Assessment Act 1997 (Cth)
Road Transport Act 2013
Cases Cited: Apple Computer Australia Pty Ltd v Wily [2003] NSWSC 719
Camilla Holdings Pty Limited v International Task Pty Limited (in liquidation) (1987) 5 ACLC 972
Domino Hire Pty Ltd v Pioneer Park Pty Ltd [2003] NSWSC 496
In the matter of St Gregory’s Armenian School (in liq) [2012] NSWSC 1215
SingTel Optus Pty Limited & Ors v Weston [2012] NSWSC 674
Category: Principal judgment
Parties: Minh Tan Tran (First Applicant)
Minh Tam Tran (Second Applicant)
Steven Nicols in his capacity as liquidator of T&T Air Conditioning Pty Ltd (First Respondent)
T&T Air Conditioning Pty Ltd (Second Respondent)
Representation:
Counsel:
M Rosenblatt (solicitor) (Applicants)
EW Young (Respondents)
Solicitors:
Somerset Ryckmans (Applicants)
Swaab Attorneys (Respondents)

File Number(s): 2015/124251
Publication restriction: Nil

Judgment

By Amended Interlocutory Process the applicants, Minh Tan Tran (Tan), and Minh Tam Tran (Tam), seek an order that Steven Nicols, appointed by the Court as liquidator of T&T Air Conditioning Pty Ltd (T&T) be removed and that another liquidator be appointed in his stead.
The application was heard on 28 and 29 October 2015 when Mr M Rosenblatt, solicitor, appeared for the applicants and Mr EW Young, of counsel, appeared for the liquidator.
The basis upon which the applicants seek the liquidator’s removal relates to the liquidator’s conduct in repossessing two motor vehicles and in retaining certain funds in T&T’s account. It is necessary at this point to refer to the background to put the applicants’ claims in context.

Background

T&T was established on 15 January 2007. Two other companies, T&T Airconditioning Assets Pty Limited (Assets) and T&T Airconditioning (Aust) Pty Limited (Aust) were established on 10 September 2013. Each of T&T, Assets and Aust have their registered office at the offices of Bruzzano & Associates, the accountant for each of the companies. Since the establishment of Assets and Aust each of the three companies’ principal place of business has been at Whyalla Place, Prestons NSW 2170 (the Prestons address).
Tam was a director of T&T from 15 January 2007 to 10 September 2013. Tan has been a director of T&T since 15 January 2007. Each…

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: [2015] NSWSC 1635
Decision Date: 05 November 2015

CaseChat Overview and Summary

In the case of Minh Tan Tran v Nicols, the liquidators of a company sought to wind up the corporation due to its inability to pay an amount demanded by the Deputy Commissioner of Taxation. Two weeks prior to the winding up order, $110,000 was transferred from the company’s accounts, and three days before the order, eleven motor vehicles from the company’s fleet were registered in the name of another company controlled by one of the applicants. The liquidators repossessed two of these vehicles and retained funds paid to the company by a contractor. The applicants challenged the removal of the liquidators, arguing there was no cause shown for their dismissal.

The court examined whether there was sufficient cause for the removal of the liquidators, considering the circumstances surrounding the transfer of funds and assets prior to the winding up order. The applicants argued that the actions of the liquidators in retaining funds and repossessing vehicles amounted to misconduct or improper conduct warranting their removal. The court needed to determine if the liquidators' actions were within the scope of their duties and whether their conduct justified their dismissal.

The court found that the liquidators' actions were reasonable and within the scope of their duties. The transfer of funds and assets prior to the winding up order raised concerns, but the court concluded that these actions did not constitute cause for the removal of the liquidators. The court held that the liquidators had acted properly in retaining funds to meet the company's debts and in repossessing the vehicles to prevent further dissipation of assets. The applicants' challenge to the removal of the liquidators was dismissed.

The final orders of the court were that the liquidators were to remain in their positions, and the applicants were to bear their own costs of the proceedings. The court found no cause to support the removal of the liquidators and affirmed their authority to manage the winding up of the company.

Orders