Starr Investments (Australia) Pty Limited v Mecafree Pty Limited - [1999] NSWSC 938

CITATION: Starr Investments (Australia) Pty Limited v Mecafree Pty Limited [1999] NSWSC 938

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): 2809/99

HEARING DATE(S): 14 September 1999

JUDGMENT DATE:
16 September 1999

PARTIES :

Starr Investments (Australia) Pty Limited (P)
Mecafree Pty Limited (D)

JUDGMENT OF: Acting Master Berecry

COUNSEL : Mr. M. Green (P)
Mr. W. Marler (D)

SOLICITORS: Bruce & Stewart (P)
Jack Rigg (D)

CATCHWORDS: Winding up proceedings; Strike out; Abuse of process; Collateral purpose; Solvency.

CASES CITED: Bank of Boston Conneticut v European Grain and Shipping [1989] 1 AC 1056
Popular Homes Limited v Circuit Developments Limited [1979] 2 NZLR 642
Hunter v Chief Constable for the West Midlands Police [1982] AC 529

DECISION: See paragraph 21

SUPREME COURT OF
NEW SOUTH WALES
EQUITY DIVISION
ACTING MASTER BERECRY
Thursday, 16 September 1999
2809/99 STARR INVESTMENTS (AUSTRALIA) PTY LIMITED -v- MECAFREE PTY LIMITED
JUDGMENT
1 ACTING MASTER: These proceedings are one in a number of proceedings in a number of Courts between the two parties. Some background is required in order to understand the current relationship of the two parties and, therefore, the defendant’s notice of motion which was filed on 27 July 1999. 2 That notice of motion sought three orders although, at the commencement of the hearing of the motion, Counsel for the defendant advised that he would no longer be pressing for order 3 in the motion. 3 The notice of motion seeks an order that the proceedings be dismissed on the ground that they are an abuse of process or alternatively that proceedings be stayed pending the determination of common law proceedings 10722 of 1999. 4 On 28 February 1997 a contract of sale was executed between the plaintiff and the defendant whereby the defendant purchased Lot 102, 16 Bermill Street, Rockdale. The price was $500,000. On 11 April 1997 vendor finance was provided by the plaintiff to the defendant in the amount of $135,000 and secured by way of second mortgage over the property. On 11 July 1997 the loan was due and payable and, together with interest, totalled $139,050. In January 1999 the plaintiff served a statutory demand on the defendant. That demand was served on 14 January. Thereafter a number of proceedings have been commenced in the Local Court and the Supreme Court. In March 1999 the defendant commenced proceedings in the Local Court for recovery of money alleged to be owed by the plaintiff in relation to supervision and certification of works performed by the defendant and in relation to (it would seem but it is not clear) payments made by the defendant to various companies and tradespeople for work performed during 1997 on the property. 5 On 9 March 1999 the defendant in proceedings 1628 of 1999 sought to set aside the statutory demand. On 28 March 1999 the plaintiff commenced proceedings in the Common Law Division in proceedings 10722 of 1999 seeking possession of the property and the repayment of the amount due under the mortgage. Subsequently on 4…

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

AGLC: Starr Investments (Australia) Pty Limited v Mecafree Pty Limited [1999] NSWSC 938
Case: [1999] NSWSC 938
Decision Date: 16 September 1999

CaseChat Overview and Summary

Starr Investments (Australia) Pty Limited brought winding up proceedings against Mecafree Pty Limited, alleging that Mecafree was unable to pay its debts as they fell due. The nature of the dispute centred around the solvency of Mecafree and whether Starr had standing to bring the proceedings. The matter was heard in the Supreme Court of New South Wales. The court was tasked with determining whether Starr had standing to bring the winding up petition and whether the proceedings should be struck out for abuse of process due to Starr's alleged collateral purpose.

The legal issues that the court had to resolve included whether Starr had standing to bring the winding up petition, as it was alleged that Starr was acting for its own benefit rather than in the public interest. The court also had to determine whether there was an abuse of process and whether there was evidence of a collateral purpose that would warrant striking out the proceedings. The court considered the statutory requirements for bringing winding up proceedings and the principles relating to abuse of process.

The court found that Starr had standing to bring the winding up petition as it was a creditor of Mecafree and had a legitimate interest in the proceedings. The court rejected the argument that Starr had a collateral purpose and concluded that the winding up proceedings were not an abuse of process. The court held that Mecafree was unable to pay its debts as they fell due, and therefore, the winding up order was made in favour of Starr. The court did not find it necessary to strike out the proceedings as there was no evidence of abuse of process or a collateral purpose.

In conclusion, the court determined that Starr Investments (Australia) Pty Limited had standing to bring the winding up proceedings against Mecafree Pty Limited. The court found that the proceedings were not an abuse of process and that Mecafree was unable to pay its debts as they fell due. The court made a winding up order in favour of Starr and did not strike out the proceedings.

Orders