Peter Turner v Ulicorp Pty Ltd - [2006] NSWSC 1445

CITATION: Peter Turner v Ulicorp Pty Ltd [2006] NSWSC 1445

HEARING DATE(S): 13/12/06

JUDGMENT DATE :
13 December 2006

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: White J

EX TEMPORE JUDGMENT DATE: 12/13/2006

DECISION: See Paras 22-27 of judgment.

CATCHWORDS: CORPORATIONS – Winding-up – Liquidators – Provisional liquidators – Appointment – Application by plaintiff, a shareholder of defendant, for orders that provisional liquidator be appointed to defendant and defendant be wound up pursuant to s 461(1)(e) or 461(1)(k) Corporations Act 2001 (Cth) – Plaintiff complains that defendant preparing to declare dividend which would leave defendant unable to pay remuneration and expenses of any liquidator appointed to defendant – Whether provisional liquidator should be appointed – Where defendant proffers undertaking not to declare any dividend or make any other payment to shareholders – Where application brought despite existing agreement that defendant be wound up voluntarily – Where appointment of provisional liquidator likely to be less timely and cost-efficient than voluntary winding-up – Application dismissed.

LEGISLATION CITED: Corporations Act 2001 (Cth)

CASES CITED: Zempilas & Ors v JN Taylor Holdings (in prov liq) (No. 3) (1990) 3 ACSR 518

PARTIES: Peter Turner
v
Ulicorp Pty Ltd

FILE NUMBER(S): SC 6187/06

COUNSEL: Plaintiff: S Golledge
Defendant: J Choy

SOLICITORS: Plaintiff: Gordon & Johnstone Solicitors
Defendant: N/A

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

WHITE J

Wednesday, 13 December 2006

6187/06 Peter Turner v Ulicorp Pty Ltd

JUDGMENT

1 HIS HONOUR: This is an application for the appointment of a provisional liquidator to the defendant company. The plaintiff is a shareholder in the company. He seeks an order pursuant to s 461(1)(e) or (k) of the Corporations Act 2001 (Cth) that the company be wound up. That is to say, the application for winding-up is made on the ground that the affairs of the company are being conducted in a manner that is oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member, or in a manner contrary to the interests of the members as a whole, or on the ground that it is just and equitable that the company be wound up.

2 On 19 May 2005, the shareholders of the defendant, together with the defendant itself and another company, entered into a deed to settle disputes between them, which had led to the institution of proceedings against the plaintiff and proceedings associated with him in the Federal Court. The shareholders of the defendant are said to be divided into two camps called the “Turner Parties” and the “Wise Parties”. The plaintiff, of course, is in the former camp.

3 The Turner Parties held between them 40% of the issued shares. The Wise Parties held the balance. By clause 3 of the deed of settlement it was agreed as follows:

3(a) The Turner Parties and the Wise Parties agree that any outstanding business of Ulicorp [the defendant] is to be finalised as soon as is practicable. Any surplus of funds after all liabilities are paid…

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 Turner v Ulicorp Pty Ltd

Details

AGLC: Peter Turner v Ulicorp Pty Ltd [2006] NSWSC 1445
Case: [2006] NSWSC 1445
Decision Date: 13/12/2006

CaseChat Overview and Summary

In the case of Peter Turner v Ulicorp Pty Ltd, the plaintiff, Peter Turner, a shareholder of Ulicorp Pty Ltd, sought the appointment of a provisional liquidator for the defendant company, and its winding-up under sections 461(1)(e) or 461(1)(k) of the Corporations Act 2001 (Cth). Turner alleged that Ulicorp Pty Ltd was preparing to declare a dividend which would leave the company unable to pay the remuneration and expenses of any liquidator appointed. The defendant, however, provided an undertaking that it would not declare any dividend or make any other payment to shareholders. The application for a provisional liquidator was made despite an existing agreement that the defendant company would be wound up voluntarily. The court had to decide whether, given these circumstances, a provisional liquidator should be appointed.

The legal issues before the court involved the interpretation and application of sections 461(1)(e) and 461(1)(k) of the Corporations Act 2001 (Cth), which pertain to the winding-up of a company. The court considered whether the application for a provisional liquidator was warranted, especially given the defendant's undertaking and the pre-existing agreement for a voluntary winding-up. Furthermore, the court examined the efficiency and timeliness of appointing a provisional liquidator compared to a voluntary winding-up, given the financial constraints and the potential for unnecessary costs.

The court concluded that, considering the defendant's undertaking and the pre-existing agreement for a voluntary winding-up, the appointment of a provisional liquidator would likely be less timely and cost-efficient. The court found that the application for a provisional liquidator was not justified under the circumstances. Consequently, the court dismissed the application. The decision underscored the importance of considering the practicalities and efficiency of the winding-up process, especially when there are alternative, more efficient mechanisms available.

Orders