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Turner v Ulicorp Pty Ltd

Turner v Ulicorp Pty Ltd

Case [2007] NSWSC 206 9 March 2007

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CITATION: Turner v Ulicorp Pty Ltd [2007] NSWSC 206

HEARING DATE(S): 09/03/07

JUDGMENT DATE :
9 March 2007

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

EX TEMPORE JUDGMENT DATE: 9 March 2007

DECISION: Winding up application adjourned

CATCHWORDS: CORPORATIONS - winding up - contributory's application - just and equitable ground - whether director misconduct or lack of confidence shown - whether discretion to order winding up should be exercised - where defendant and opposing directors and shareholders willing to join in voluntary winding up in due course

LEGISLATION CITED: Corporations Act 2001 (Cth), ss.461(1)(k), 467(4)

CASES CITED: Netbush Pty Ltd v Fascine Developments Pty Ltd (2005) 189 FLR 320

PARTIES: Peter Turner - Plaintiff
Ulicorp Pty Ltd - Defendant

FILE NUMBER(S): SC 6187/06

COUNSEL: Mr C.R.C. Newlinds SC/Ms S. Mirzabegian - Plaintiff
Mr D.P. Robinson SC - Defendant

SOLICITORS: Gordon & Johnstone - Plaintiff
Beswick Solicitors - Defendant

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

BARRETT J

FRIDAY 9 MARCH 2007

6187/06 PETER TURNER v ULICORP PTY LTD

JUDGMENT

1 This is an application for a winding up order advanced on the just and equitable ground under s.461(1)(k) of the Corporations Act 2001 (Cth). It is a contributory’s application. The plaintiff, Mr Turner, is one of three allied members who, between them, hold 40 per cent of the shares in the capital of the defendant. The remaining 60 per cent of the shares is held by members of the Wise family. Mr Turner and one of his associates are directors. Three members of the Wise family are the remaining directors.

2 The individuals on each side, initially as partners and later through corporate vehicles, conducted a successful hotel business. The defendant was the owner of a substantial hotel which was sold some time ago.

3 Differences between the two groups of individuals led to proceedings in the Federal Court, which were eventually settled. The settlement was effected by a deed dated 19 May 2005. The deed dealt with a range of matters. In relation to the defendant company and what was to happen to it, the relevant provisions of the deed are those in clause 3:

“(a) The Turner Parties and the Wise Parties agree that any outstanding business of Ulicorp is to be finalised as soon as is practicable. Any surplus of funds after all-liabilities are paid is to be distributed to shareholders and Ulicorp is to be voluntarily wound up.

4 It is accepted by both the Turner interests and the Wise interests that there is one matter within the "outstanding business" category referred to in clause 3(a) of the deed. On the view the plaintiff takes, there is a second matter to which I shall come in a moment.

5 The matter which all agree is within the clause 3(a)…

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.

Continue reading Turner v Ulicorp Pty Ltd

Details

AGLC: Turner v Ulicorp Pty Ltd [2007] NSWSC 206
Case: [2007] NSWSC 206
Decision Date: 9 March 2007

CaseChat Overview and Summary

The applicant, Turner, brought an application in the Supreme Court of New South Wales seeking the winding up of Ulicorp Pty Ltd, a company in which Turner was a shareholder and director. Turner contended that the company should be wound up on the grounds that it was just and equitable to do so, primarily due to the company's director's conduct and a lack of confidence in the company's management. The defendant, Ulicorp Pty Ltd, opposed the application, arguing that the company was solvent and that the proposed winding up was not in the best interests of the company and its shareholders.

The court was required to determine whether the discretion to order a winding up should be exercised, given the contentions raised by Turner. The primary issue was whether Turner's allegations of misconduct by the company's directors or a lack of confidence in the company's management constituted sufficient grounds for a just and equitable winding up. Additionally, the court had to consider whether the willingness of the defendant, opposing directors, and shareholders to voluntarily wind up the company in due course should influence its decision.

The court found that Turner had not demonstrated any significant misconduct by the company's directors or a loss of confidence in the company's management that would warrant the exercise of the court's discretion to order a winding up. The court noted that the company was solvent and that there was a willingness of the defendant, opposing directors, and shareholders to voluntarily wind up the company in due course. Given these factors, the court decided not to exercise its discretion to order a winding up. Turner's application was dismissed, and the company was not wound up.

The final orders of the court were that Turner's application for the winding up of Ulicorp Pty Ltd be dismissed, with Turner to pay the defendant's costs of the application.

Orders