Re Property Project Marketing Pty Ltd - [2024] VSC 45

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2019 04817

June Chuin Wei Loh	Plaintiff
v
Ned Gerrard & others	Defendants

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JUDGE:	Nichols J
WHERE HELD:	Melbourne
DATE OF HEARING:	31 January, further submissions 21 March, 11 April and 21 April 2023
DATE OF JUDGMENT:	16 February 2024
CASE MAY BE CITED AS:	Re Property Project Marketing Pty Ltd
MEDIUM NEUTRAL CITATION:	[2024] VSC 45

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SUMMARY JUDGMENT — Winding up order — Just and equitable grounds — Interaction between winding up and summary judgment — Breakdown in relationship between shareholders — Management deadlock — Management of company’s financial records — Compliance with statutory obligations — Whether real defence to claim of relief — Triable issues arise — Application dismissed — Re Winter One Investments Pty Ltd [2020] QSC 233 discussed — Ebrahimi v Westbourne Galleries Ltd & Ors [1973] AC 360 cited — Civil Procedure Act 2010 (Vic), ss 61, 63 — Corporations Act 2001 (Cth), s 461(1)(k).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	P Caillard	Moray & Agnew
For the Defendants	H McAvaney

HER HONOUR:

Introduction

Property Project Marketing (PPM), the company the subject of these proceedings, has operated a real estate business selling off the plan properties in new developments and providing rental property management services. The plaintiff, June Loh, one of PPM’s four equal shareholders, commenced this proceeding alleging that she has been the subject of oppressive conduct for the purposes of ss 232 and 233 of the Corporations Act 2001 (Cth), seeking a buy‑out of her shares and alternatively, that the company be wound up. The fourth shareholder, Nandita Bangera, has commenced her own separate proceeding making similar allegations. The first and second defendants to this proceeding are Ned Gerrard and Joan Alcock, who are each shareholders of PPM.[1]
[1]PPM is the third defendant.

By the present application, Loh[2] seeks summary judgment on that part of her claim by which she seeks a winding up order, pursuant to ss 61 and 63 of the Civil Procedure Act 2010 (Vic) and Order 22 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules). Loh says that the defendants (Gerrard and Alcock) have no real prospect of defending the application for an order that the company be wound up on the just and equitable ground under s 461(1)(k) of the Corporations Act. Loh does not seek to have her oppression claims determined but says that she has established that it is just and equitable that PPM be wound up because, in summary:
[2]I will refer to the parties and principal actors by their surnames and intend no disrespect in so doing.

(a) PPM has not maintained its financial accounts and records as it is required to do by s 286 of the Corporations Act, and on that ground the Court can have no confidence in the ability of PPM’s directors to properly manage PPM going forward.…

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.

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Details

Case: [2024] VSC 45
Decision Date: 16 February 2024

CaseChat Overview and Summary

Property Project Marketing Pty Ltd was the plaintiff in a dispute against the defendant, with the case being heard in the Supreme Court of Victoria. The plaintiff sought a winding up order on the grounds that it was just and equitable to do so, due to a breakdown in the relationship between the shareholders and a resulting management deadlock. The plaintiff also claimed that the defendant had failed to manage the company's financial records and comply with statutory obligations.

The court had to decide whether the plaintiff's claims were supported by a real defence and if triable issues arose from the defendant's response. The court examined the interaction between winding up and summary judgment, considering whether the defendant's response raised genuine issues that could not be determined as a matter of law. The court also considered the applicability of the principles set out in Ebrahimi v Westbourne Galleries Ltd & Ors, in determining whether the winding up order was just and equitable.

The court found that the defendant's response raised triable issues and that the principles in Ebrahimi applied. The court held that the breakdown in the relationship between the shareholders and the resulting management deadlock were sufficient grounds for a winding up order. However, the court also found that the defendant's failure to manage the company's financial records and comply with statutory obligations did not provide a real defence to the claim for relief. The court ultimately dismissed the plaintiff's application for summary judgment, finding that there were triable issues that needed to be determined at a trial.

The court's decision was influenced by the case of Re Winter One Investments Pty Ltd, where similar issues were considered. The court held that the interaction between winding up and summary judgment meant that the defendant's response needed to be carefully considered to determine whether triable issues arose. The court also found that the principles in Ebrahimi were applicable in determining whether a winding up order was just and equitable. The court ultimately found that the defendant's response raised triable issues and that the application for summary judgment should be dismissed.

Orders