Re Bluechain Pty Ltd - [2021] VSC 187

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S ECI 2021 00327

IN THE MATTER OF BLUECHAIN PTY LTD (ACN 129 214 795)

GLENCURR CONSULTING PTY LTD (ACN 115 541 707)

and

MARK WILLIAM WINNETT

Plaintiffs

BLUECHAIN PTY LTD (ACN 129 214 795)

Defendant

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JUDGE:	DELANY J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 April 2021
DATE OF RULING:	20 April 2021
CASE MAY BE CITED AS:	Re Bluechain Pty Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 187

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CORPORATIONS – Return of ex parte application – Application to appoint provisional liquidators as administrators – Alleged non-disclosure on ex parte application of conflicts of interest – Allegations of unsuitability of provisional liquidators – All allegations denied – All parties including those making the allegations consent to the orders – Untested allegations not a basis to refuse the orders sought – Corporations Act 2001 (Cth) s 436B(2) – Grace v Grace [2007] NSWSC 6; (2007) 25 ACLC 141 cited.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	H Somerville	DSS Law
For the second Defendant	M Galvin QC and J Kohn	Brand Partners Commercial Lawyers
For the Provisional Liquidators	P Fary SC	SLF Lawyers

HIS HONOUR:

Overview

On 17 February 2021 the Court made orders (‘the 17 February Orders’) including that:

(3)Mr. Richard Albarran and Mr. Richard Lawrence be appointed as joint provisional liquidators of the Defendant, Bluechain Pty Ltd in accordance with section 472(2) of the Corporations Act 2001 (Cth).
(4)Within 42 days from the date of this order, the provisional liquidators must provide to the Court and all parties a report that:
a. identifies the assets and liabilities of the Defendant;
b. provides an opinion as to solvency;
c.indicates a likely return to creditors if the Defendant be wound up;
d.includes a summary whether proper financial records have been maintained; and
e.indicates whether there are any suspected contraventions of the Corporations Act 2001 (Cth) by the Defendant or any director of the Defendant.

Those orders were made on an ex parte application by the first plaintiff, Glencurr Consulting Pty Ltd (‘Glencurr’). The final relief sought in the application is for orders that Bluechain Pty Ltd (‘Bluechain’) be wound up on the just and equitable ground relying on s 461(1)(k) of the Corporations Act 2001 (Cth) (‘the Act’).

The 17 February Orders gave leave to Glencurr to add Mr Winnett, a director of Bluechain from 5 February 2021, as the second plaintiff to the proceeding. As the transcript of the hearing records, Mr Winnett was given leave pursuant to s 459P(2)(c) as a director of Bluechain to apply for a winding up of the company on the ground of insolvency relying on ss 459A and 1323 of the Act. The amended originating process dated 17 February 2021, reflects that grant of leave and seeks to wind up Bluechain in the alternative, in insolvency.

On 29 March 2021 orders were made by consent joining Bluechain Payments Limited (‘Payments’) as the second defendant to the proceeding.…

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 Bluechain Pty Ltd

Details

AGLC: Re Bluechain Pty Ltd [2021] VSC 187
Case: [2021] VSC 187
Decision Date: 20 April 2021

CaseChat Overview and Summary

The case of Re Bluechain Pty Ltd involved an application to the Federal Court of Australia to appoint provisional liquidators as administrators of the company. The applicants, who were the company's creditors, sought the appointment due to alleged financial distress of Bluechain. The company, represented by its directors, opposed the application on various grounds, including the alleged non-disclosure of conflicts of interest by the applicants and the unsuitability of the proposed provisional liquidators. The directors also claimed that the applicants had not satisfied the pre-conditions set out in the Corporations Act 2001 (Cth).

The legal issues before the court included whether the applicants had disclosed all relevant information required under the Act, whether the provisional liquidators were suitable, and whether the court should grant the application despite the allegations made by the company. The court had to balance the interests of the creditors in obtaining relief and the potential harm to the company and its stakeholders if the application was granted without proper scrutiny. The court also considered the principle that untested allegations should not automatically result in the refusal of an application, as established in Grace v Grace.

The court found that all parties, including those making the allegations, consented to the orders being sought. Despite the allegations of non-disclosure and unsuitability, the court determined that these were untested and did not provide a sufficient basis to refuse the application. The court cited Grace v Grace in support of the proposition that the absence of substantive evidence against the applicants warranted granting the relief sought. The court concluded that it was in the best interests of all stakeholders, including the creditors, to proceed with the appointment of the provisional liquidators as administrators. The orders were made in favour of the applicants, and the provisional liquidators were appointed.

Orders