Nece Pty Ltd v Ritek Incorporation

Nece Pty Limited (Nece) and Ritek Incorporation (Ritek) are involved in two separate proceedings in the Federal Court of Australia. In the first proceeding, Nece has applied to set aside a statutory demand served on it by Ritek. Ritek has moved for orders dismissing Nece's application or striking it out and for costs. Nece has applied for various orders, including a declaration that its solicitors are properly retained. In the second proceeding, Ritek has applied for an order that Nece be wound up on the ground that its conduct is oppressive, and it has moved for orders that Nece's solicitors be struck out and for costs. Nece has applied for a declaration that its solicitors are properly retained. The central issue in both proceedings is whether Nece's solicitors are authorised to act on its behalf and, if not, whether the lack of authority can be remedied by an order under s 1322 of the Corporations Law. In the statutory demand proceedings, there is an additional issue of whether the managing director of Nece may maintain the proceedings as derivative proceedings. The court found that the managing director of Nece did not have the authority to instruct solicitors to commence the statutory demand proceedings or to resist Ritek's winding-up application. The court also found that the managing director could not maintain the statutory demand proceedings as derivative proceedings. The court refused to make orders under s 1322 of the Corporations Law, as the lack of authority resulted from deadlock between the 50% shareholders of Nece, and it was not in the public interest to remedy the situation. The court reserved the question of costs until the conclusion of the proceedings.