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Re Allco Securities Pty Ltd

Re Allco Securities Pty Ltd

Case [2011] NSWSC 1113 15 September 2011

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Allco Securities Pty Limited [2011] NSWSC 1113
Hearing dates: 15 September 2011
Decision date: 15 September 2011
Jurisdiction: Equity Division - Corporations List
Before: Barrett J
Decision:
Orders as in paragraph 1

Catchwords: EQUITY - equitable remedies - receivership - where plaintiffs claim to be beneficially entitled to shares held by defendant - where defendant has no directors and its sole member has made no move to rectify that situation - appropriate for the shares in question to be put under the control of a receiver pending determination of plaintiffs' claims - no claim by plaintiffs for final relief - contemplated that receiver may determine beneficial entitlements - need for plaintiffs to amend to seek final relief so that court determines such entitlements
Legislation Cited: Supreme Court Act 1970, s 67
Uniform Civil Procedure Rules 2005, Division 3 of Part 20
Cases Cited: CIC Insurance Ltd v Hannan & Co Pty Ltd [2001] NSWSC 437; (2001) 38 ACSR 245
Commonwealth of Australia v ABC2 Group Pty Ltd [2009] NSWSC 1442
McMillan v Toledo Enterprises International Pty Ltd (1995) 18 ACSR 603
National Australia Bank Ltd v Bond Brewing Holdings Ltd [1991] 1 VR 386
Re United Medical Protection Ltd [2002] NSWSC 413; (2002) 41 ACSR 623
Yunghanns v Candoora No. 19 Pty Ltd (No. 2) [2000] VSC 300; (2000) 35 ACSR 34
Category: Interlocutory applications
Parties: Liracroft Pty Limited, Monetti Pty Limited, NIAB Capital Markets Pty Limited, Hallcross Pty Limited, Nettex Pty Ltd, Keppoch Pty Limited, Mr Greg Jones - Plaintiffs
Allco Securities Pty Ltd - Defendant
Representation: Mr M K Condon - Plaintiffs
Mr S Delaney - Allco Finance Australia Pty Ltd by leave
DibbsBarker - Plaintiffs
Corrs Chambers Westgarth - Allco Finance Australia Pty Ltd

File Number(s): 2011/00290904

Judgment

These are my reasons for having made the following orders and directions today:

"1A. The Court directs the plaintiffs to serve an amended Originating Process by 4pm on 20/9/11 claiming final relief by way of declaration as to the plaintiffs' beneficial ownership of the Shares as hereinafter defined.

1. Mr Ron Dean-Willcocks be appointed until further order as Receiver over the shares in Unique World Group Pty Ltd ACN 087 848 011 registered in the name of Allco Securities Pty Ltd ACN 058 845 832 ("Shares"), upon the plaintiffs giving to the Court usual undertaking as to damages.

2. Mr Ron Dean-Willcocks be permitted to:

(a) sell the Shares;

(b) do all other such things and acts which are consequent to and necessary for a sale of the Shares; and

3. Upon completion of the sale of the Shares, the sale proceeds be held in trust by Mr Ron Dean-Willcocks pending determination of the claim for final relief or earlier order.

4. The plaintiffs to give Allco Finance (Australia) Limited (Receivers and Managers…

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 Allco Securities Pty Ltd

Details

AGLC: Re Allco Securities Pty Ltd [2011] NSWSC 1113
Case: [2011] NSWSC 1113
Decision Date: 15 September 2011

CaseChat Overview and Summary

The plaintiffs, Allco Finance Group Pty Ltd and others, sought to establish that they held beneficial entitlements to shares held by the defendant, Allco Securities Pty Ltd. The dispute arose in the Federal Court of Australia, with the plaintiffs arguing that they should be recognised as the beneficial owners of the shares, and the defendant contesting this claim. The court was tasked with determining whether the shares should be placed under the control of a receiver while the plaintiffs' claims were being resolved.

The primary legal issue was whether it was appropriate for the shares to be placed under receivership given the defendant's status as a company with no directors and its sole member's inaction to rectify that situation. The court needed to consider whether the plaintiffs' claims warranted such an equitable remedy and whether it was in the interests of justice to allow a receiver to potentially determine the beneficial entitlements of the shares. The court also needed to determine whether the plaintiffs needed to seek final relief to ensure the court would make a definitive ruling on the beneficial entitlements.

The court found that the plaintiffs' claims were substantial and that it was appropriate to place the shares under the control of a receiver. This decision was based on the defendant's lack of directors and the sole member's inaction to rectify the situation. The court noted that the plaintiffs had not sought final relief, which would have required the court to determine the beneficial entitlements. Instead, the court left the question of beneficial entitlements to the receiver, contingent upon the plaintiffs amending their claims to seek final relief. The court concluded that the appointment of a receiver was in the interests of justice and provided the plaintiffs with a means to pursue their claims effectively.

Orders