Stephen Richard O'Ryan v Greg Ray Golding

[2019] NSWSC 1229

Supreme Court

New South Wales

Medium Neutral Citation:	Stephen Richard O’Ryan v Greg Ray Golding [2019] NSWSC 1229
Hearing dates:	12 and 13 September 2019
Date of orders:	12 September 2019
Decision date:	12 September 2019
Jurisdiction:	Equity - Technology and Construction List
Before:	Hammerschlag J
Decision:	Third defendant placed under winding up order
Catchwords:	WINDING UP – just and equitable – deadlock – where owners of shares in a company title apartment block are and have been in a state of warfare for years – agreement to convert to a strata scheme not implemented – building in need of repair – building contract not executed; HELD: winding up appropriate on the just and equitable basis – winding up order stayed for a short time to give the warring factions an opportunity to reach accommodation
Legislation Cited:	Corporations Act 2001 (Cth)
Category:	Principal judgment
Parties:	Stephen Richard O’Ryan - First Plaintiff Jane Anne O’Ryan - Second Plaintiff Greg Ray Golding - First Defendant Deborah Anne Golding - Second Defendant Wentworth Place Pty Ltd - Third Defendant Melanie Freyberg - Fourth Defendant
Representation:	Counsel: F.C. Corsaro SC - First and Second Plaintiffs   Solicitors: Chambers Russell Lawyers - First and Second Plaintiffs First Defendant - Self-Represented Second to Fourth Defendants - No Appearance
File Number(s):	2015/98239

Judgment

1. HIS HONOUR:   What follows under the heading “Reasons” are abbreviated ex tempore reasons which I gave on 12 September 2019 for ordering that the third defendant company (the company) should be placed under a winding up order but that the order be stayed for a brief period to allow the parties to avoid winding up by coming to a consensual resolution.

2. The proceedings were referred to me by Sackar J sitting as the Expedition List Judge, on 6 September 2019 because of the obvious necessity for them to be resolved quickly in circumstances where the Commercial List was able to accommodate an urgent hearing. On that day, I fixed the motion for hearing on Thursday, 12 September 2019, and made directions to get it ready. I received written submissions from the plaintiffs and from the first defendant.

3. The original motion sought the appointment of a receiver, but it was amended to include a prayer for the appointment of liquidators. Affidavits were read on the motion from both sides.

4. The plaintiffs are Mr Stephen Richard O’Ryan and his wife, Jane Anne O’Ryan (the O’Ryans).

5. The first defendant is Mr Greg Ray Golding and the second defendant is his wife, Mrs Deborah Anne Golding (the Goldings). I was told from the Bar table that Mr Golding is a solicitor of this Court. Mr Golding appeared for himself. Although he did not appear for his wife, I inferred that what he put was on her behalf as well.

6. The third defendant is Wentworth Place Pty Ltd (the company).

7. The fourth defendant is Ms Melanie Freyberg. She did not participate in the contest, save to have it conveyed that she would abide the decision of the Court. I infer that she is on the side of the O’Ryans.

8. The animosity between the parties in Court was palpable.

reasons

9. They are shareholders in the company, which is what used to be called a “share block company” or company title company, which owns a property at Point Piper consisting of four apartments, of which the O’Ryans occupy one, the Goldings occupy two, and Ms Freyberg occupies the fourth, pursuant to rights which attach to their shares. The O’Ryans and the Goldings have gardens.

10. The dispute between the plaintiffs and the Goldings goes back years.

11. The parties have been to Court on more than one occasion. The deadlock between them is manifest and appears irresolvable to the naked eye.

12. There have been undertakings given to the Court on earlier occasions.

13. They entered into a Deed on 23 October 2015 to convert the company title to strata title. This has not happened. The building is in need of repair. A building contract has been prepared but not been signed. The parties cannot agree on its terms. It is not necessary to delve into the reasons why this is so. It is plain that the O’Ryans and the Goldings are in a state of warfare (in legal terms, deadlock).

14. Mr Golding informed me from the Bar table that from the Goldings side, lack of money is not the inhibiting factor.

15. It was obvious that the only feasible solution was a winding up order, unless, contrary to lengthy history, the parties came to their senses and reached some accommodation which would enable the conversion to strata to occur and the building to be repaired.

16. This was confirmed by the following exchange between the Court and Mr Golding:

HIS HONOUR:    By the way, I take it that you agree that the only reason why, if a winding up order is not to be made, is if the parties are able to reach some form of accommodation that allows this company to a survive in a manner which is logical and rational. Am I right?

FIRST DEFENDANT: Yes, you are correct, your Honour.

17. In the circumstances, I made an order winding up the company and appointing Messers John Edgar McInerney and Philip Campbell-Wilson to be liquidators. I stayed the operation of the order until 2.05 pm on Thursday, 12 September 2019, to enable the parties to come to some resolution and stood the matter down until 2.00 pm. Not unexpectedly, they did not come to one. But they asked for additional time to do so.

18. I stayed the operation of the order further to 12.45 pm on Friday, 13 September 2019, on the footing that if they did not come to a consensus, it would follow from Mr Golding’s concession that the winding up would be unavoidable and unimpeachable.

19. The matter was called at 12.30 pm on 13 September 2019. It transpired that less than two hours earlier the O’Ryans had put a proposal to the Goldings which they had not had sufficient time to consider. Why it was made so late was not explained. Mr Golding asked for more time to consider the proposal. I extended the stay until 10.15 am on Tuesday, 17 September 2019.

conclusion

20. Notwithstanding having given them more than adequate opportunity, the parties have unfortunately, but somewhat predictably, failed to come to an agreement as to the way forward. Winding up on the just and equitable basis under section 461(1)(k) of the Corporations Act 2001 (Cth) is appropriate, indeed necessary. That section provides that the Court may order the winding up of a company if the Court is of opinion that it is just and equitable that the company be wound up. The Court is of that opinion.

21. I observe that a liquidator will be able to convert the company share title to strata title and, perhaps, preserve the substance of the parties’ proprietary interests by, for example, distributing the strata units so created in specie. A liquidator would also have power (perhaps subject to the Court) to carry out what are obviously necessary repairs to a building falling into dilapidation. The building is in a highly desirable part of Sydney and no doubt very valuable.

22. I observe further that I indicated that I would give truncated reasons and provide more comprehensive reasons if Mr Golding asked for them. Mr Corsaro did not require reasons. On reflection, there is nothing of substance I would add to my reasons.

23. Finally, I observe that all that they needed to agree in the immediate term was a way forward to have the strata conversion done and to sign a building contract. They could not even achieve this.

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Decision last updated: 17 September 2019