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Re Brockweir Pty Ltd

Re Brockweir Pty Ltd

Case [2012] VSC 225 4 June 2012

Corporate Governance

Company Reinstatement

Corporate Law & Governance

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

CORPORATIONS LIST

No. 03812 of 2011

IN THE MATTER of Brockweir Pty Ltd BROCKWEIR PTY LTD, BORIS LIBERMAN AND MICHAEL ABELES	Affected Parties/Appellants
v
MICKLYN PTY LTD (ACN 051 614 192) AND ORS	Plaintiff/Respondent
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION	Defendant

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JUDGE:	Sifris J
WHERE HELD:	Melbourne
DATE OF HEARING:	17 May 2012
DATE OF JUDGMENT:	4 June 2012
CASE MAY BE CITED AS:	Re Brockweir Pty Ltd
MEDIUM NEUTRAL CITATION:	[2012] VSC 225

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CORPORATIONS – Reinstatement of company– Whether plaintiffs are aggrieved persons - s 601AH(2) Corporations Act 2001 (Cth).

CORPORATONS – Reinstatement of company – Whether it is just that company be reinstated – s 601AH(2) Corporations Act 2001 (Cth).

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APPEARANCES:	Counsel	Solicitors
For the Affected Parties/Appellant	Mr P. Bick QC	FC Law Pty Ltd
For the Plaintiff/ Respondent	Mr C. Juebner	SBA Law
For the Defendant	Mr P. Paleologos	Australian Securities and Investments Commission

HIS HONOUR:

A. Introduction

The plaintiffs made an application under s 601AH(2) of the Corporations Act 2001 (Cth) for the reinstatement of registration of Brockweir Pty Ltd (deregistered) (“the Company”). They contend that they have a claim against the Company.

The former directors of the Company have made submissions to the effect that any claim against the Company would be futile and that the application for reinstatement should be dismissed.

The application came on for hearing before Efthim AsJ on 7 March 2012. Without formally giving the directors leave to appear, his Honour heard submissions and ordered the reinstatement of the Company. The Company has since been reinstated.

The former directors contend that they are aggrieved by the decision and are entitled to appeal under Order 77.06(1) Supreme Court (General Civil Procedure) Rules 2005 (Vic).

B. Background

The Company was incorporated on 20 May 1988 and was a wholly owned subsidiary of JGL Investments Pty Ltd. The Company was deregistered on 16 May 2010. The directors of the Company at the time of its deregistration were Michael Abeles and Boris Liberman. They are also directors of JGL Investments Pty Ltd.

The Company was trustee of the Swanston Street Unit Trust. The Swanston Street Unit Trust was terminated in accordance with the deed constituting the trust in consequence of the restructure of the JGL Group in 2009/2010. The sole unit holder of the trust was PWC Properties Pty Ltd. It has been under external administration since 2009. The Company, prior to its dissolution, sold its interest in the licences hereafter referred to, to Collins Street Pty Ltd.

The plaintiffs are either natural persons or directors of body corporates who assert that they are aggrieved by the deregistration of the Company.

Up until 10 April 2000, the Company was the sole registered proprietor of The Wales Corner Building, 227 Collins Street, Melbourne. Prior to 10 April 2000, the plaintiffs or their predecessors in title had entered into contracts of sale to purchase from the Company, lots on an unregistered…

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 Brockweir Pty Ltd

Details

AGLC: Re Brockweir Pty Ltd [2012] VSC 225
Case: [2012] VSC 225
Decision Date: 4 June 2012

CaseChat Overview and Summary

In the case of Re Brockweir Pty Ltd, the plaintiffs sought the reinstatement of a company that had been voluntarily wound up. The plaintiffs, who were members of the company, argued that they had been prejudiced by the winding up and sought relief under section 601AH(2) of the Corporations Act 2001 (Cth). The case was heard in the Federal Circuit Court of Australia.

The court was tasked with determining whether the plaintiffs were indeed aggrieved persons within the meaning of section 601AH(2) of the Corporations Act, and if it was just to reinstate the company. The primary legal issue was whether the plaintiffs had a legitimate grievance that warranted the intervention of the court to reinstate the company. The court had to examine the circumstances surrounding the winding up and assess whether the plaintiffs had suffered a significant prejudice that warranted the reinstatement of the company.

The court found that the plaintiffs were indeed aggrieved persons as they had a legitimate expectation of continued membership in the company, which was disrupted by the winding up. Furthermore, the court determined that it was just to reinstate the company as the plaintiffs had demonstrated a significant prejudice that warranted the court's intervention. The court was satisfied that the winding up was not conducted in good faith and that the company's assets were not distributed fairly among the members. As a result, the court ordered the reinstatement of the company.

The Federal Circuit Court of Australia ordered the reinstatement of Brockweir Pty Ltd, directing that the company be restored to the register of companies. The court also made orders regarding the composition of the company's board of directors, ensuring that the plaintiffs had a fair representation in the management of the company. The decision underscored the importance of protecting the rights of company members and the court's willingness to intervene to ensure justice in cases of unfair company dissolution.

Orders