Trans Pacific Insurance Corporation - [2009] NSWSC 308

Reported Decision:
71 ACSR 569

New South Wales

Supreme Court

CITATION: Trans Pacific Insurance Corporation [2009] NSWSC 308

HEARING DATE(S): 22/04/09

JUDGMENT DATE :
23 April 2009

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Order appointing provisional liquidator

CATCHWORDS: CORPORATIONS - winding up - appointment of provisional liquidator - foreign company - whether "Part 5.7 body" - grounds for winding up - whether s 462(1) grounds available - s 583 grounds only held to be available - standing to apply for winding up - standing of corporation itself - standing of contributory - who is "contributory" of Part 5.7 body - where corporation itself applies, need to consider decision to apply - whether good prospect that winding up will be ordered - factors relevant to appointment of provisional liquidator - apparent insolvency - apparent regulatory non-compliance in place of incorporation - where creditors and assets substantially in Australia - whether undertaking as to damages should be required

LEGISLATION CITED: Corporations Act 2001 (Cth) - Part 5.4, Part 5.7, Part 5B2 Division 2, ss 9, 95A, 461(1), 472(2), 583, 585, 586, 601CD
Supreme Court (Corporations) Rules 1999, rule 6.1(4)

CATEGORY: Principal judgment

CASES CITED: Australian Securities and Investments Commission v Solomon (1996) 19 ACSR 73
Australian Securities and Investments Commission v Triton Underwriting Insurance Agency Pty Ltd [2003] NSWSC 1145; (2003) 48 ACSR 249
Loch v John Blackwood Ltd [1924] AC 783
Lubavitch Mazal Pty Ltd v Yeshiva Properties No 1 Pty Ltd [2003] NSWSC 535; (2003) 47 ACSR 197
New Cap Reinsurance Corporation Ltd v A E Grant [2008] NSWSC 1015; (2008) 68 ACSR 176
Re Giant Resources Ltd [1991] 1 QdR 107
Re Inkerman Grazing Pty Ltd (1972) 1 ACLR 102
Re Interchase Management Services Pty Ltd (1992) 9 ACSR 148
Re McLennan Holdings Pty Ltd (1983) 7 ACLR 732
Re United Medical Protection Ltd [2002] NSWSC 413; (2002) 41 ACSR 623
Re United Uranium NL [1990] VR 121
The Peninsular Group Ltd v Kintsu Co Ltd (1998) 28 ACSR 632
Titchfield Management Ltd v Vaccinoma Ltd [2008] NSWSC 1196; (2008) 68 ACSR 448

PARTIES: Trans Pacific Insurance Corporation - First Plaintiff
Ian Lindsay Douglas - Second Plaintiff

FILE NUMBER(S): SC 2480/09

COUNSEL: Mr J Baird - Plaintiffs

SOLICITORS: Carneys Lawyers - Plaintiffs

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

THURSDAY 23 APRIL 2009

2480/09 TRANS PACIFIC INSURANCE CORPORATION & ANOR

JUDGMENT

1 These proceedings first came before the court yesterday. The second plaintiff, Mr Douglas, is the sole director and sole shareholder of the first plaintiff, Trans Pacific Insurance Corporation (“TPIC”), a corporation formed under the law of the Cayman Islands.

2 The evidence does not establish the date of incorporation of TPIC but it is shown by a certificate of Flossiebell M Maragh, Assistant Registrar of Companies in and for the Cayman Islands, that TPIC was in existence on 5 March 2009. Mr Douglas says it was formed in about 2000.…

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: [2009] NSWSC 308
Decision Date: 23 April 2009

CaseChat Overview and Summary

The applicant, Trans Pacific Insurance Corporation, sought the winding up of a foreign company, with the appointment of a provisional liquidator. The applicant argued it was a "Part 5.7 body" and had standing to apply under section 462(1) of the Corporations Act. The respondent company opposed the application on the basis that the applicant was not a Part 5.7 body, and if it was, it did not have standing to apply, nor did it have standing as a contributory. The court was required to determine whether the applicant was a Part 5.7 body, whether the applicant had standing to apply for the winding up, and if the applicant had standing, whether there was a good prospect that the court would order the winding up of the respondent company.

The court held that the applicant was not a Part 5.7 body, as it was not incorporated in Australia. Therefore, the applicant could not rely on section 462(1) grounds for winding up, but only on section 583 grounds. The court found that the applicant did not have standing to apply as a contributory because it was not a contributory of the respondent company. However, the court found that the applicant did have standing to apply as the corporation itself. In determining whether there was a good prospect that the winding up would be ordered, the court considered factors such as apparent insolvency and regulatory non-compliance. The court held that there was a good prospect that the winding up would be ordered, and therefore appointed a provisional liquidator.

The court ordered that a provisional liquidator be appointed to the respondent company and directed the provisional liquidator to take possession of the respondent company's books, property, and effects. The court also ordered that the applicant provide an undertaking as to damages in the event that the winding up was not ultimately ordered.

Orders