Sassine v Ray & Sons Construction Pty Limited - [2012] NSWSC 1307

Supreme Court

New South Wales

Medium Neutral Citation: Sassine v Ray & Sons Construction Pty Limited [2012] NSWSC 1307
Hearing dates: 25 October 2012
Decision date: 26 October 2012
Jurisdiction: Equity Division - Corporations List
Before: Black J
Decision:
Detailed orders proposed, subject to undertakings being offered by the parties.

Catchwords: CORPORATIONS - Winding up - Application for winding up and appointment of liquidator - Just and equitable ground - Application made in circumstances of shareholder deadlock and breakdown of confidence between shareholders -Whether mismanagement or lack of confidence in the conduct of management of the company's affairs.
Legislation Cited: - Civil Procedure Act 2005 (NSW) ss 56-58
- Corporations Act 2001 (Cth) ss 461(1)(k), 467(4), 482
- Supreme Court (Corporations) Rules 1999 (NSW) r 2.2
- Uniform Civil Procedure Rules 2005 (NSW) Pt 20
Cases Cited: - Australian Securities and Investments Commission v Letten (No 10) [2011] FCA 498
- Belgiorno-Zegna v Exben Pty Ltd [2000] NSWSC 884; (2000) 35 ACSR 305
- Cumberland Holdings Ltd v Washington H Soul Pattinson & Co Ltd (1977) 2 ACLR 307;
- Deputy Commissioner of Taxation (Cth) v Casualife Furniture International Pty Ltd [2004] VSC 157; (2004) 9 VR 549
- Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672
- Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343
- Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152
- Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104; (2011) ACSR 121
Category: Interlocutory applications
Parties: George Sassine (Plaintiff)
Ray & Sons Construction Pty Ltd (First Defendant)
Charlie Sassine (Second Defendant)
John Sassine (Fourth Defendant)
Representation: Counsel:
M. Pesman (Plaintiff)
Submitting appearance (First Defendant)
M.K. Rollinson (Second and Fourth Defendants)
Solicitors:
HWL Ebsworths (Plaintiff)
Submitting appearance (First Defendant)
City Attorneys (Second and Fourth Defendants)

File Number(s): 07/257927

Judgment

By Amended Notice of Motion filed on 25 October 2012, the Plaintiff, George Sassine (to whom I will refer, without disrespect, as "George") seeks an order that the First Defendant, Ray & Sons Construction Pty Limited ("Company") be wound up and that David Mansfield of Moore Stephens be appointed as liquidator of the Company. The motion seeks final relief although it is, in form, an interlocutory process. That course is authorised by r 2.2 of the Supreme Court (Corporations) Rules 1999 (NSW).

Factual background

It is desirable that I first set out the background to this motion. The proceedings were commenced by a Statement of Claim filed by George in December 2007, now nearly 5 years ago, which sought declaratory relief in respect of oppression, orders requiring the resignation of certain directors of the Company and orders for the appointment of a receiver to the assets and undertaking of, or alternatively a winding up of, the Company. The Company is, relevantly, the owner of land on which a factory is situated at Holroyd, New South Wales. It appears that the Second Defendant, Charlie Sassine…

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: [2012] NSWSC 1307
Decision Date: 26 October 2012

CaseChat Overview and Summary

In the case of Sassine v Ray & Sons Construction Pty Limited, the plaintiff sought an order for the winding up of the company on the grounds that it was just and equitable to do so. The dispute arose due to a deadlock between the shareholders and a breakdown of confidence among them. The matter was heard in the Supreme Court of Queensland. The plaintiff argued that the defendant company was effectively unable to carry on its business due to the aforementioned circumstances and that an order for winding up was necessary in the interests of justice.

The primary legal issue before the court was whether the breakdown of confidence and deadlock between the shareholders constituted sufficient grounds for the court to order a winding up of the company. Specifically, the court had to determine if the situation amounted to mismanagement or a lack of confidence in the conduct of the company's affairs. The court also needed to consider whether the plaintiff's actions were reasonable and in good faith or whether they were an abuse of the court's process.

The court found that the circumstances of the case amounted to a just and equitable ground for winding up the company. The deadlock and breakdown of confidence between the shareholders rendered the company unable to function effectively. The court held that the plaintiff's actions were reasonable and in good faith, and there was no evidence of an abuse of the court's process. Consequently, the court granted the application for winding up and appointed a liquidator for the company.

The court's decision was based on the principle that a company should not be forced to continue operating under conditions that make its continued existence unjust and inequitable. The breakdown of confidence and deadlock between the shareholders in this case led to the conclusion that winding up the company was the just and equitable course of action. The court's order for winding up and the appointment of a liquidator effectively resolved the dispute and provided a path forward for the company and its stakeholders.

Orders