Legal Research
Cases
Peter Joint v Program It Pty Ltd

Peter Joint v Program It Pty Ltd

Case [2020] VSC 486 10 August 2020

Abuse of Process

Fiduciary Duty

Unjust Enrichment

Corporate Law & Governance

No judgment structure available for this case.

Type to search within this case.

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2019 01008

IN THE MATTER of PROGRAM IT PTY LTD

PETER JOINT	Plaintiff
v
PROGRAM IT PTY LTD & ORS	Defendants

---

JUDGE:	SIFRIS JA
WHERE HELD:	Melbourne
DATE OF HEARING:	5 August 2020
DATE OF JUDGMENT:	10 August 2020
CASE MAY BE CITED AS:	Peter Joint v Program IT Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2020] VSC 486

---

CORPORATIONS – Appointment of administrators – Whether company insolvent - Whether appointment made by sole director in good faith or for a collateral purpose – Whether appointment constitutes an abuse of process – Whether appointment should be set aside or terminated; s 447A(1) and (2) Corporations Act 2001 (Cth) – Company not liable for legal costs relating to oppression claim between shareholders – Company solvent and appointment constitutes an abuse of process. Resolution and appointment set aside and terminated.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G McCormick	Goldsmiths Lawyers
For the Defendants	Mr A Segal	Rigby Cooke Lawyers

HIS HONOUR:

A Introduction

The first defendant, Program IT Pty Ltd, (Program IT or the Company) is a company incorporated pursuant to the Corporations Act 2001 (Cth) (Act).

The plaintiff, Peter Joint (Joint) is the holder of 49 shares in Program IT. The third defendant, Sandia Kam Lin Rose (Sandia Rose) is the holder of 51 shares in Program IT.

During the period 31 October 2002 to 12 May 2009 Joint was a director of Program IT. Since 2009 he has not had much to do with the Company but still retained his shares. The second defendant, John Zing San Tan (Tan) was appointed a director on 18 March 2002 and remains the sole director of Program IT. Tan is the husband of Sandia Rose.

In the circumstances set out in detail hereunder, Joint alleges that the affairs of the Company have not been conducted in the best interests of the Company as a whole and that such conduct, mainly by Tan, but also by Sandia Rose has discriminated against his interests. Joint alleges that the parties have lost all trust and confidence in each other and that the relationship has irretrievably broken down. He seeks orders that his shares be acquired alternatively such other orders as may be appropriate under the oppression provisions of the Act (s 233 of the Act) (the Oppression Proceeding).

Tan and Sandia Rose deny any oppressive conduct. They admit that Joint retains a 49% interest in Program IT. The court was informed at a directions hearing on 13 July when the Oppression Proceeding was fixed for trial on 5 August, that they were content for such holding to remain and that they were running the Company without any involvement by Joint. They denied that there was any deadlock. They opposed any relief. No mention was made of any solvency issues.

The matter was fixed for…

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 Peter Joint v Program It Pty Ltd

Details

AGLC: Peter Joint v Program It Pty Ltd [2020] VSC 486
Case: [2020] VSC 486
Decision Date: 10 August 2020

CaseChat Overview and Summary

Peter Joint brought a claim against Program It Pty Ltd in relation to the appointment of administrators to the company. The company contended that the appointment was invalid and should be set aside. The dispute was heard in the Federal Circuit and Family Court of Australia. The primary issue before the court was whether the appointment of administrators was made in good faith or for a collateral purpose, and whether the company was insolvent. A secondary issue was whether the appointment constituted an abuse of process under section 447A(1) and (2) of the Corporations Act 2001.

The court found that the company was solvent and that the appointment of administrators was not made in good faith, but for a collateral purpose. The court was satisfied that the appointment constituted an abuse of process. The court held that the appointment should be set aside and terminated. The company was not liable for the legal costs relating to the claim for oppression between the shareholders. The court found that the company had acted improperly and in bad faith, and that the appointment was not in the best interests of the company or its creditors.

The court ordered that the resolution and appointment of administrators be set aside and terminated. The court also ordered that the company was not liable for the legal costs relating to the claim for oppression between the shareholders. The decision highlights the importance of acting in good faith and for the proper purpose when making decisions on behalf of a company. The decision also reinforces the court's power to set aside or terminate appointments of administrators where there has been an abuse of process.

Orders