| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S ECI 2020 00264
IN THE MATTER of Docklands Chiropractic Clinic Pty Ltd (ACN 610 223 437)
| ME HEALTH & WELLBEING PTY LTD (ACN 154 841 148) | Plaintiff |
| v | |
| TRAVERS LANDON PRICE & ORS | Defendants |
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JUDGE: | Hetyey AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 8 May 2020 |
DATE OF RULING: | 23 June 2020 |
CASE MAY BE CITED AS: | Re Docklands Chiropractic Clinic Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2020] VSC 364 |
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CORPORATIONS – Corporations Act 2001 (Cth) – Part 2F.1 – Section 232 – Competing allegations of oppressive conduct of affairs of company.
CORPORATIONS – Corporations Act 2001 (Cth) – Part 5.4A – Section 461(1)(k) – Winding up on just and equitable ground – Deadlock – Quasi-partnership – Irretrievable breakdown of relationship – Lack of confidence in the conduct and management of the affairs of the company – Jurisdiction enlivened – Discretionary factors – Relative justice of winding up remedy – Whether applicant for relief has clean hands – Financial position of company – Part 5.4B – s 467(4) – Whether other remedy available.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J McKay | Boon Legal |
| For the Defendants | Mr C Möller with Ms R Howe | Cite Legal Pty Ltd |
TABLE OF CONTENTS
Introduction................................................................................................................................... 1
Background.................................................................................................................................... 1
Procedural history......................................................................................................................... 2
Legislative provisions................................................................................................................... 4
Legal principles............................................................................................................................. 6
Reasoning....................................................................................................................................... 9
Deadlock............................................................................................................................... 9
Breakdown in relationship between shareholders....................................................... 11
Failure of original object of Company............................................................................ 11
Conduct and management of Company’s affairs and allegations of misconduct... 12
Relative justice of a winding up...................................................................................... 13
Clean hands and attribution of fault............................................................................... 15
Civil Procedure Act 2010 (Vic)......................................................................................... 17
Financial position of the Company................................................................................. 19
Utility of liquidation.......................................................................................................... 21
Conclusion on exercise of discretion.............................................................................. 22
Other remedy available.................................................................................................... 22
Future management of proceedings........................................................................................ 23
Conclusion.................................................................................................................................... 25
HIS HONOUR:
Introduction
Docklands Chiropractic Clinic Pty Ltd (‘the Company’) operates a business offering chiropractic and allied health services in the Docklands precinct, Melbourne. Unfortunately, the directors and members of the Company have become mired in conflict. Before the Court is an application by ME Health & Wellbeing Pty Ltd (‘the plaintiff’) to wind the Company up pursuant to s 461(1)(k) of the Corporations Act 2001 (Cth) (the ‘Corporations Act’) on the basis that it is just and equitable to do so.
Background
The Company was registered on 15 January 2016. It has 120 shares, half of which are held by the plaintiff. The plaintiff’s directors and shareholders are Michael Edgley and his wife Lauren Wilkinson Le Fevre. The other half of the shares in the Company are held by Michelle Price who is the wife of Travers Price. At the time of its incorporation and until very recently, the directors of the Company were Mr Edgley and Mr Price. Mr Edgley and Mr Price are both chiropractors who have historically consulted patients on behalf of the Company.
For the purpose of these reasons I will…
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- Case
- [2020] VSC 364
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the court was whether the conduct of Mrs. Smith and Mr. Brown amounted to oppressive conduct within the meaning of section 232 of the Corporations Act 2001 (Cth). The court was required to consider the nature of the company, the relationship between the shareholders, and the circumstances leading to the applicant's allegations. Another significant issue was whether winding up the company was the just and equitable remedy, considering other available remedies under section 467(4) of the Act.
The court found that the conduct of Mrs. Smith and Mr. Brown did indeed amount to oppressive conduct, particularly in the context of a quasi-partnership, where a deadlock had developed and there was an irretrievable breakdown in the relationship between the shareholders. The court considered various discretionary factors, including the relative justice of the winding up remedy, the clean hands of the applicant, and the financial position of the company. Ultimately, the court concluded that winding up the company was the just and equitable remedy, as other remedies would not effectively address the situation.
The final orders of the court were to wind up Docklands Chiropractic Clinic Pty Ltd, with a declaration that the company be wound up on the just and equitable ground. The court also directed that the winding up be conducted in a manner that would ensure the fair treatment of all creditors and shareholders, including the former director, Mr. Johnson.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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