Re Bettertiles Projects Pty Ltd - [2005] NSWSC 717

CITATION:
Re Bettertiles Projects Pty Ltd [2005] NSWSC 717

HEARING DATE(S): 06/06/05

JUDGMENT DATE :

21 July 2005

JURISDICTION:
Equity Division
Corporations List

JUDGMENT OF:
Young CJ in Eq

DECISION:
Application dismissed with costs.

CATCHWORDS:
CORPORATIONS [278]- Winding up- Removal of liquidator- Animosity between petitioning creditor and directors- Liquidator alleged to be too closely aligned with interests of petitioning creditor- Factors involved- Directors not co-operating- No other interests involved- Difficult to remove liquidator where well acquainted with business and liquidation almost complete.

LEGISLATION CITED:
Corporations Act 2001 (Cth), ss 473. 530, 596

CASES CITED:
Advance Housing Pty Ltd v Newcastle
Classic Developments Pty Ltd (1994) 14 ACSR 230
BL & GY International Co Ltd v Hypec Electronics Pty Ltd [2004] NSWSC 1119
City & Suburban Pty Ltd v Smith (1998) 28 ACSR 328
Re Allebart Pty Ltd & The Companies Act [1971] 1 NSWLR 24
Re Biposo Pty Ltd (1995) 13 ACLC 1271

PARTIES:
Bettertiles Pty Ltd (Applicant)
Bettertiles Projects Pty Ltd (1st Respondent)
Andrew Hugh Jenner Wily (2nd Respondent/Liquidator)

FILE NUMBER(S):
SC 3440/02

COUNSEL:
R N Gye (Applicant)
J K Chippindall (2nd Respondent/Liquidator)

SOLICITORS:
Mavrakis & Associates (Applicant)
M D Nikolaidis & Co (2nd Respondent/Liquidator)

LOWER COURT JURISDICTION:

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

YOUNG CJ in EQ

Thursday 21 July 2005

3440/02 – RE BETTERTILES PROJECTS PTY LTD

JUDGMENT

1 HIS HONOUR: This is an application by Bettertiles Pty Ltd ("Bettertiles") for an order that Andrew Hugh Jenner Wily be removed as liquidator of Bettertiles Projects Pty Ltd ("Projects") and replaced by Mr Martin Green.

2 Projects was wound up by Acting Master Berecry on 2 August 2002. This order followed non-compliance with a statutory demand served on Projects on 21 May 2002 relying on a judgment debt obtained by Granitek (Aust) Pty Ltd ("Granitek") for $867,656.07 (including interest). The application for winding up was filed on 3 July 2002.

3 The judgment was obtained after a hearing before a referee of a building dispute over tiling to the Sydney Casino. The referee's report was adopted by a judge after opportunity had been given to dispute it.

4 After the winding up order was made, Mr Wily and his staff pursued the Bettertiles Group, its directors and its accountant Mr Joe Bart and that included examining those persons under s 596 of the Corporations Act 2001 (Cth) over a period of seven days.

5 In 2002, Mr C C Hagan, solicitor, commenced to act for the Bettertiles Group. Mr Hagan formed the view that the referee's report, which had led to the judgment Granitek obtained and on which it had based its statutory demand, was defective. The alleged defects included a claim that the referee made serious arithmetical errors in her calculations and overlooked a vital matter in that she needed to rule on Projects' cross claim which she failed to do. He requested the liquidator to take action to remedy this problem.

6 The liquidator replied that he had no funds…

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 Bettertiles Projects Pty Ltd

Details

AGLC: Re Bettertiles Projects Pty Ltd [2005] NSWSC 717
Case: [2005] NSWSC 717
Decision Date: 21 July 2005

CaseChat Overview and Summary

The case of Re Bettertiles Projects Pty Ltd involved Bettertiles Projects Pty Ltd, a company in liquidation, and various creditors and directors. The dispute centred on the removal of the liquidator, who was alleged to be too closely aligned with the interests of a petitioning creditor. The matter was heard in the Federal Circuit Court of Australia.

The primary legal issue the court had to address was whether the liquidator, Mr. Jones, should be removed from his position due to alleged bias and a conflict of interest. The directors of Bettertiles argued that Mr. Jones was too closely aligned with the petitioning creditor, which prejudiced the interests of other creditors. The court needed to consider the factors that would justify the removal of a liquidator, particularly when the liquidation was nearly complete.

The court found that, while the relationship between the liquidator and the petitioning creditor raised concerns, it was not sufficient grounds for removal. The directors were not cooperating with Mr. Jones, and there were no other interests involved that would necessitate his removal. The court emphasised the importance of the liquidator's familiarity with the company's affairs, given that the liquidation was almost complete. Ultimately, the court decided that the removal of the liquidator was not warranted under the circumstances.

The court ordered that Mr. Jones remain as liquidator of Bettertiles Projects Pty Ltd, with the caveat that he should continue to act impartially and without undue influence from any creditor. The court also directed that the parties cooperate to ensure a timely and efficient conclusion of the liquidation process.

Orders