Re Advanced Controls Pty Ltd - [2018] VSC 639

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S CI 2018 02314

IN THE MATTER of Advanced Controls Pty Ltd (ACN 005 434 515)

GORDON MCKAY PTY LTD (ACN 005 147 160)	Plaintiff
v
ADVANCED CONTROLS PTY LTD (ACN 005 434 515)	Defendant

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JUDICIAL REGISTRAR:	Matthews JR
WHERE HELD:	Melbourne
DATE OF HEARING:	24 October 2018
DATE OF RULING:	24 October 2018
CASE MAY BE CITED AS:	Re Advanced Controls Pty Ltd
MEDIUM NEUTRAL CITATION:	[2018] VSC 639 Revised 14 March 2019

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CORPORATIONS – Application for winding up in insolvency – Application by supporting creditor to be substituted as plaintiff – Whether genuine dispute about debt – Whether Court should order winding up if supporting creditor not substituted – Corporations Act 2001 (Cth), s 465B – Building and Construction Industry Security of Payment Act 2002 (Vic) – Tokich Holdings v Shearton Constructions (2004) 185 FLR 130 – Re C2C Investments Pty Limited [2012] NSWSC 1443.

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APPEARANCES:	Counsel	Solicitors
For the Defendant	Mr D Harrison	Mahons with Yuncken & Yuncken Lawyers
For Nilsen (Vic) Pty Ltd, supporting creditor	Mr P Miller	Piper Alderman

MATTHEWS JR:

This is an application by Nilsen (Vic) Pty Ltd pursuant to an interlocutory process filed 29 August 2018 to be substituted as plaintiff in the originating process filed 19 June 2018. By the originating process, the plaintiff sought orders that the defendant company, Advanced Controls Pty Ltd, be wound up in insolvency. The plaintiff’s debt has been resolved and the plaintiff has withdrawn from the proceeding. Nilsen’s application for substitution as plaintiff is made under s 465B(1) of the Corporations Act 2001 (Cth) (‘the Act’).

At the conclusion of the hearing, I delivered my ruling and made orders, and indicated that brief written reasons would be provided in the next day or two. These are those reasons.

The following affidavits have been filed in relation to the application:

(a) affidavit of Greg Naughton sworn 29 August 2018. Mr Naughton is a commercial manager of Nilsen;

(b) second affidavit of Greg Naughton sworn 25 September 2018;

(c) affidavit of Antony Victor Clencie sworn 12 September 2018. Mr Clencie is the director of Advanced Controls; and

(d) second affidavit of Mr Clencie sworn 10 October 2018.

Nilsen contends that it is a creditor of Advanced Controls in the amount of $195,942.06 excluding GST (‘Alleged Debt’). The Alleged Debt is said to arise as a result from the non-payment of an invoice issued on 19 January 2018 by Nilsen to Advanced Controls (‘Invoice’). That invoice was in the sum of $199,970.89, however an adjustment of $4,028.83 was subsequently made in July 2018. Nilsen says that the Alleged Debt is for variations owing pursuant to a building contract entered into by it and Advanced Controls in 2016 (‘Building Contract’). The variations are said to be the following:

(a) $76,670.00 for extension of time related matters;

(b) $19,697.00 for an additional cable ladder;…

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 Re Advanced Controls Pty Ltd

Details

AGLC: Re Advanced Controls Pty Ltd [2018] VSC 639
Case: [2018] VSC 639
Decision Date: 24 October 2018

CaseChat Overview and Summary

Advanced Controls Pty Ltd was the subject of a winding up application by a creditor, with another creditor seeking to be substituted as the plaintiff. The matter was before the Federal Circuit Court of Australia. The primary dispute concerned whether there was a genuine dispute about the debt claimed by the supporting creditor, and if the court should proceed with the winding up application even if the supporting creditor was not substituted.

The court was tasked with determining if there was a genuine dispute about the debt, and whether the application for winding up should proceed in the absence of the supporting creditor. This involved examining the requirements under the Corporations Act 2001 and considering the implications of the Building and Construction Industry Security of Payment Act 2002. The court also assessed the principles set out in previous cases such as Tokich Holdings v Shearton Constructions and Re C2C Investments Pty Limited.

The court concluded that there was no genuine dispute about the debt claimed by the supporting creditor. Despite this finding, the court determined that the application for winding up should not proceed without the supporting creditor being substituted as the plaintiff. This decision was based on the need for the supporting creditor to have a direct interest in the proceeding and the statutory requirements under the Corporations Act 2001. Consequently, the application was dismissed.

No further orders were made beyond the dismissal of the winding up application.

Orders