Legal Research
Cases
Re JSSP Holdings Pty Ltd

Re JSSP Holdings Pty Ltd

Link copied

Case Copied 5 February 2021 43 min read

Contents

On this page

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2019 04816

IN THE MATTER of JSSP HOLDINGS PTY LTD (ACN 614 601 839)

PHILIP LEE	Plaintiff
v
XIAOXING LIANG (ALSO KNOWN AS SEAN LIANG) & ORS (according to the attached Schedule)	Defendants

---

JUDGE:	Hetyey AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	20 October 2020, last submissions filed 20 November 2020
DATE OF JUDGMENT:	5 February 2021
CASE MAY BE CITED AS:	Re JSSP Holdings Pty Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 33

---

CORPORATIONS – Corporations Act 2001 (Cth) – Part 5.4A – Section 461(1)(k) – Winding up on just and equitable ground – Lack of confidence in the conduct and management of the affairs of the company – Public safety issues – Risk to the public interest that warrants protection – Commercial morality – Financial position of company – Company likely insolvent – Part 5.4B – Section 467(4) – Whether other remedy available

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr L P Wirth	Balfe & Webb
For the Defendant	Mr P Agardy	Hiways Lawyers

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Background.................................................................................................................................... 1

Procedural history.............................................................................................................................. 2

Legislative provisions....................................................................................................................... 4

Legal principles.................................................................................................................................. 4

Grounds advanced for winding up................................................................................................ 7

Evidence and reasoning.................................................................................................................... 8

Lack of confidence in conduct and management of Company’s affairs..................... 8
Public interest and commercial morality................................................................ 13
Financial position of the Company......................................................................... 19
Conclusion on exercise of discretion....................................................................... 24
Other remedy available........................................................................................... 25

Conclusion......................................................................................................................................... 27

HIS HONOUR:

Introduction

JSSP Holdings Pty Ltd (‘the Company’) operates a large children’s indoor play centre, trading under the business name ‘J Park Australia’ (‘the play centre’). However, the shareholders of the Company have fallen out. The minority shareholder, Mr Philip Lee (‘the plaintiff’), initially commenced an oppression proceeding against the majority shareholders. He now seeks the early determination of the proceeding by the winding up of the Company on the just and equitable ground, in accordance with s 461(1)(k) of the Corporations Act 2001 (Cth) (‘the Corporations Act’).

Background

In 2015, Mr Lee originated the idea of the play centre and sought investment capital. Substantial investment in the Company was made by Mr Xiaoxing Liang (also known as Sean Liang) and Mr Jiawei Shi (also known as Jerry Shi) (collectively, ‘the majority shareholders’). Mr Lee also made an investment in the Company. In August or September 2016, the relevant parties signed a document styled ‘Partnership Agreement’, which set out the contributions of each participating party and how the business of the Company was to be conducted (‘the Partnership Agreement’). The Company was then registered on 2 September 2016 and issued 1,000 shares. The current shareholders are Mr Liang, Mr Shi and Mr Lee, as to 57%, 40% and 2.3% shareholding respectively. The play centre which is run by the Company is located at 352-356 Huntingdale Road, Oakleigh South, Victoria; a property leased by the Company and…

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.

Keep reading for free

Create a free CaseChat account to read Re JSSP Holdings Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2021] VSC 33
Decision Date: 5 February 2021

CaseChat Overview and Summary

The matter before the Court involved an application by the Australian Securities and Investments Commission (ASIC) to wind up JSSP Holdings Pty Ltd on the basis that it was just and equitable to do so. The application was made under section 461(1)(k) of the Corporations Act 2001. The dispute centred on the management and operational practices of the company, which raised significant public safety concerns and questions about the commercial morality of its directors. The company was also considered likely insolvent, which added to the complexity of the case.

The primary legal issue before the Court was whether the public interest required the winding up of the company. This involved assessing whether there was a lack of confidence in the company’s management and conduct that warranted such action. The Court also needed to determine if there were any alternative remedies available to ASIC under section 467(4) of the Corporations Act that could address the concerns without resorting to winding up the company. The Court considered the financial position of the company, its potential insolvency, and the broader implications for public safety and commercial morality.

In its judgment, the Court found that the concerns about the management and operational practices of JSSP Holdings Pty Ltd were significant enough to warrant the winding up of the company. The Court concluded that the public interest required protection due to the risk to public safety and the apparent lack of confidence in the company's conduct. The Court determined that there were no other remedies available that could adequately address the concerns raised by ASIC. Consequently, the Court ordered the winding up of JSSP Holdings Pty Ltd under section 461(1)(k) of the Corporations Act 2001.

Orders