VCS Holdings (Aust) Pty Ltd (in Liquidation) v KVG Contracting Services Pty Ltd - [2023] WASC 189

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   VCS HOLDINGS (AUST) PTY LTD (IN LIQUIDATION) -v- KVG CONTRACTING SERVICES PTY LTD [2023] WASC 189
CORAM:   SOLOMON J
HEARD:   29 MAY 2023
DELIVERED          :   1 JUNE 2023
PUBLISHED           :   1 JUNE 2023
FILE NO/S:   COR 73 of 2022
BETWEEN:   VCS HOLDINGS (AUST) PTY LTD (IN LIQUIDATION)
Plaintiff
AND
KVG CONTRACTING SERVICES PTY LTD
First Defendant
KOODAIDERI PTY LTD
Second Defendant

Catchwords:

Corporations law - Application for winding up on just and equitable grounds - Corporations Act 2001 (Cth) s 461(1)(k) - Where shareholders but not directors are deadlocked - Where risk that company will not comply with statutory obligations - Where company no longer serving its purpose

Legislation:

Corporations Act 2001 (Cth) s 233, s 286, s 461(1)(k), s 462(2)(c), s 467(4)

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff	:	JP Cook
First Defendant	:	AP Rumsley
Second Defendant	:	AP Rumsley

Solicitors:

Plaintiff	:	Mendelawitz Morton Commercial Lawyers
First Defendant	:	Alan Rumsley
Second Defendant	:	Alan Rumsley

Cases referred to in decision:

ASIC v ABC Fund Managers (2001) 39 ACSR 443
ASIC v Barrack Mortgage Managers Pty Ltd [1999] NSWSC 272
ASIC v Drury Management Pty Ltd [2004] QSC 068
Booker v You Run the Business Pty Ltd [2008] FCA 1762
Clarke v Bridges [2004] FCA 394
Ebrahimi v Westbourne Galleries Ltd [1973] AC 360
Entwistle v Minken Pty Ltd (receivers and managers appointed) (2013) 97 ACSR 361
Johnny Oceans Restaurant Pty Ltd v Page [2003] NSWSC 952
Loch v John Blackwood Ltd [1924] AC 783
Macquarie Bank Ltd v TM Investments Pty Ltd (2005) 223 ALR 148
Macquarie University v Macquarie University Union Ltd (No 2) [2007] FCA 844
Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343
Re Tivoli Freeholds Ltd [1972] VR 445
Re Yenidje Tobacco Company Ltd [1916] 2 Ch 426
VCS Holdings (Aust) Pty Ltd (in liq) v KVG Contracting Services Pty Ltd, Supreme Court of Western Australia, 29 May 2023, 94

SOLOMON J:

The application and the evidence

This is an application by the plaintiff for an order under s 461(1)(k) of the Corporations Act 2001 (Cth) (Act) that the first defendant, KVG Contracting Services Pty Ltd (KVG), be wound up. Reference to statutory provisions in these reasons are references to the Act unless indicated otherwise. The application is opposed by the second defendant.
There was no dispute that, as a shareholder of KVG the plaintiff had standing to bring the application under s 462(2)(c) and that the relevant formalities had been satisfied. The question is, and the competing contentions concerned, whether the discretion conferred by s 461(1)(k) should be exercised in the circumstances.
The plaintiff relied upon the following affidavits which were received without objection:
(a)Affidavit of Richard Albarran (liquidator of the plaintiff), filed on 6 May 2022;
(b)Affidavit of Boika Simeva Panov (solicitor for the plaintiff) sworn 12 May 2022;
(c)Affidavit of Megan Kingdon (solicitor for the plaintiff) sworn 23 May 2022;
(d)Affidavit of Jonathon Peter Cook (solicitor for the plaintiff) sworn 27 September 2022; and
(e)Second affidavit of Boika Simeva Panov sworn 22 May 2023.
The defendant relied upon the following affidavits which were also received without objection:
(a)Affidavit of Steven Kuo Ong (accountant for the second defendant) sworn 2 August 2022;
(b)Affidavit of Peter Richard Todd (director of the first defendant) sworn 3 August 2022;
(c)Second affidavit of Peter Richard Todd sworn 22 February 2023; and
(d)Third affidavit of Peter Richard Todd sworn 17 May 2023.
The evidence for this application included affidavits filed on behalf of the plaintiff and the second defendant in respect of the plaintiff's interlocutory application for the appointment of a provisional liquidator. That application was dismissed by the learned Master in November 2022. Further affidavits were subsequently filed on behalf of the plaintiff and the second defendant in support of their respective positions on this application.
In the course of the hearing on 29 May 2023, oral evidence was also given by Mr Ong and further documents tendered in the circumstances explained below.

Background and history of KVG

KVG was incorporated on 23 April 2013. Its original name was KVG Joint Venture Pty Ltd and it adopted its present name in April 2015. At the time of its incorporation, its directors included George Todd and Peter Todd, who remain directors of KVG. Presently the directors are listed as Peter Todd, George Todd and a Mr Nicholas Silverthorne. Peter Todd's evidence was that Mr Silverthorne 'has not acted as a director' since August 2016. Whatever Mr Silverthorne's precise status, on the evidence before me, Mr Silverthorne does not appear to have taken any active role in KVG for some years.
KVG at all times has had two issued shares. One is now held by the plaintiff and the other is, and always has been, held by the second defendant.
The plaintiff was registered in June 2015. On 13 March 2018, Mr Cameron Shaw and Mr Richard Albarran were appointed as joint and several liquidators of the plaintiff, having been appointed joint and several administrators in February 2018.
The second defendant was registered in May 2012. Peter Todd has at all times also been a director of the second defendant and is presently the sole director.
Initially the two shareholders of KVG were the second defendant and another company, Viento Group Limited (Viento). The genesis of KVG was that in July 2013, Viento and the second defendant entered into what was called a 'Principal Agreement', which in substance contained an agreement to enter into a joint venture to carry out collaboratively contracts for civil and mining works. Under the Principal Agreement the parties agreed terms of a 'Memorandum of Understanding' and terms of the joint venture, both of which were annexed to the Principal Agreement. In substance the parties' agreement included the following:
(a)the parties would cooperate and collaborate to procure commercial opportunities in the mining sector;
(b)the cooperative endeavour would be achieved by the parties marketing and tendering each other's capabilities for mutual benefit;
(c)the parties agreed to fully cooperate with each other with the object of using their best endeavours to perform all works;
(d)the cooperative enterprise would operate through a joint venture company acting as agent for each of the parties to be known as KVG Joint Venture Pty Ltd (which as noted above, was the original name of KVG);
(e)the joint venture was to be managed by a management committee comprised of equal representation of both parties;
(f)the parties agreed to indemnify each other;
(g)the enterprise was to endure for five years or on the termination of the joint venture activities, whichever came first; and
(h)the two companies were to participate on a 50/50 basis and would share surpluses and deficits on that basis with the parties making equal contributions of capital and resources.
In 2015, Viento entered into external administration. Mr Shaw and Mr Albarran were the administrators. Viento entered into a DOCA and its share in KVG was transferred to a new company, the plaintiff. By then it appears Viento had changed its name to Elevate Money Limited. The plaintiff and the second defendant thus became the two equal shareholders of KVG. It is not disputed that the plaintiff effectively took the place of Viento under the Principal Agreement.
KVG successfully procured contracts in the mining industry and undertook substantial works. It purchased some significant equipment and by June 2015 it had commenced work on the construction of a tailings storage facility at Hope Downs 4. Significant funds were paid under that contract. However from late 2015 no further contracts were procured, and it appears to be common cause that KVG did no further work thereafter and has not undertaken work since 2016.
As noted above, in March 2018, Mr Albarran and Mr Shaw were appointed as liquidators of the plaintiff. In his affidavit Mr Albarran annexed documents that reflect a deterioration in the relationship and the emergence of disputes from October 2015. On the evidence before the court, the details and scope of the disputes is somewhat obscure. It is clear however that from at least October 2015, the plaintiff claimed that it had been contributing disproportionately to the costs of KVG, and that the second defendant was required to make further contributions and was indebted to the plaintiff. Communications between the parties in August 2015 and May 2016 suggest that the second defendant had agreed that, upon the release of funds from a Bankers Undertaking, it would forward $330,000 to KVG but that only $100,000 of those funds were paid to KVG.
By email of 6 May 2016 Mr Damien Wright, a director of the plaintiff and also at the time a director of KVG, wrote to Peter Todd on behalf of the second defendant.[1] Mr Wright alleged that KVG owed the plaintiff $3.7 million and that even when certain debts were collected, KVG would remain indebted to the plaintiff in the sum of $1.7 million. The email claimed that losses on KVG's contract had been funded solely by the plaintiff . Mr Wright attached a balance sheet and a profit and loss statement of KVG, both for the period ending 31 March 2016 in support of the contentions he made to Peter Todd. Mr Wright concluded his email by stating to Peter Todd: 'Let me know if this is not in accordance with your records'.
[1] Affidavit of Richard Albarran (filed 6 May 2022) RA-18.
There does not appear to have been any substantive response to that email and none is in evidence. Further, the balance sheet and profit and loss statement attached to Mr Wright's email of 6 May 2016 are the only financial statement of KVG in evidence. All the evidence strongly suggested that no financial statements had subsequently been prepared. Indeed, the evidence suggested that there was insufficient information available for adequate financial statements to be prepared.
In February 2018, receivers were appointed to the plaintiff. It was undisputed that the plaintiff historically held and managed the accounts for KVG and that the receivers of the plaintiff delivered the hard copy records of KVG to the second plaintiff's offices in archive boxes in about September 2018. By email dated 8 November 2018, the receivers offered the second defendant access to KVG's accounting information system.[2] On the evidence, nothing of substance appears to have come of this. There is no evidence or even suggestion that the second defendant or the directors of KVG availed themselves of the opportunity to access the electronic records. Indeed the oral evidence of Mr Ong to which I refer below, suggests the contrary.
[2] Affidavit of Peter Todd (sworn 17 May 2023) PRT3.
On 14 December 2021, Mr Albarran on behalf of the plaintiff wrote to KVG and the second defendant alleging that KVG owed the plaintiff and its related company Civil & Mining Pty Ltd in excess of $2.8 million.[3] Mr Albarran alleged various breaches on the part of KVG and the second defendant and demanded payment. For a brief time shortly thereafter, the second defendant was represented by solicitors in its communications with the plaintiff. The solicitors foreshadowed a response. Ultimately, however, it appears that no substantive response was provided to that letter. The response of Peter Todd on behalf of the second defendant was to advise, in the broadest of terms, that 'all of the allegations… will be disputed'.[4]
[3] Affidavit of Richard Albarran (filed 6 May 2023) RA-19.
[4] Affidavit of Richard Albarran (filed 6 May 2023) RA-20.
Peter Todd in his affidavit evidence said that by October 2015 he was concerned about the financial management of KVG by the plaintiff. These concerns were not particularised but appear to emanate from a belief that unauthorised or unjustified payments had been made to the plaintiff relating to the works carried out by KVG. Peter Todd denied that there were any loans or other moneys owing by the second defendant to the plaintiff. Peter Todd's evidence was that he had asked the second defendant's internal accountant, Mr Steven Ong, to review the boxes of records that had been delivered by the receivers in September 2018 to identify information relevant to the plaintiff's claims.
Peter Todd's evidence was that the claims asserted by the plaintiff relate to matters that occurred at a time when the plaintiff was managing the finances of KVG, and it has therefore been difficult and time-consuming to locate documents. Nevertheless, without any detail, explanation or specificity, Peter Todd gave sworn evidence that 'having reviewed any records available, I maintain that all of the allegations are disputed'.[5]
[5] Affidavit of Peter Todd (sworn 1 August 2022) [29].
Mr Ong, as foreshadowed by Peter Todd's evidence, filed an affidavit. It emerged at the hearing that his affidavit had been incorrectly filed, and that a page was missing that had not been brought to the attention of the plaintiff or the court. That was resolved by the receipt of the additional page and an assurance from the second defendant's counsel, that it would refile the affidavit.
In his affidavit Mr Ong confirmed that he was provided with the archive boxes delivered by the receivers. Mr Ong in his affidavit referred to the receivers of KVG but that is an obvious error as the receivers were appointed to the plaintiff. Mr Ong's evidence was that the boxes did not contain electronic records, which he would have expected. The archives also did not contain financial statements. The financial statements of March 2016 (which were attached to Mr Wright's email of 6 May 2016 as explained above) amounted in substance to a management report. Mr Ong's evidence was that the statements indicated payments to external contractors to a greater degree than he would have expected. Mr Ong concluded his affidavit evidence by saying that it appeared to him that very significant payments were recorded as having been made to the plaintiff from KVG.[6] Mr Ong did not give any further explanation or analysis of that assertion. He went on to say that the records indicated 'very large payments' to the plaintiff.[7] That conclusionary statement did not contain any explanation or analysis.
[6] Affidavit of Steven Kuo Yaw Ong (sworn 2 August 2022) [15].
[7] Affidavit of Steven Kuo Yaw Ong (sworn 2 August 2022) [12].
As explained below, Mr Ong also attended the hearing and gave oral evidence. In his oral evidence, Mr Ong said that he had not discussed the contents of the archive boxes delivered by the receivers with Peter Todd.[8] Mr Ong's evidence was that he had not undertaken a detailed examination of the contents of the boxes and the records, but rather just a 'quick skim'.[9] Mr Ong said that he had not prepared any financial statements for KVG. His evidence was that he had raised the need to access the electronic records with Peter Todd but the matter went no further.
[8] Transcript, VCS Holdings (Aust) Pty Ltd (in liq) v KVG Contracting Services Pty Ltd, Supreme Court of Western Australia, 29 May 2023, 94.
[9] Ts, 29 May 2023, 96.
The nature of the disputes between the parties remained obscure. The plaintiff's allegations of debts owing were supported to some degree by contemporaneous documents but did not appear, at least on the evidence before the court, to have been the subject of any rigorous examination. The primary documentation to support the claims was not in evidence. At the same time, the second defendant's allegations did not rise above the level of sweeping assertion.
The tension and dispute between the parties has continued. The plaintiff, through its liquidators, has made repeated requests for financial statements or information regarding KVG. These have been met with silence or assertion of blame back to the plaintiff.
In a more recent affidavit of 17 May 2023, Peter Todd gave evidence that the two remaining directors, that is he and his brother George, had identified the 'only remaining equipment of KVG to determine how to wind up the operations of KVG'.[10] Using a historical list of assets provided by the receivers of the plaintiff, Peter Todd and his brother George apparently set about identifying the equipment, being the only apparent assets of KVG. In his affidavit, Peter Todd gave sworn evidence that he and his brother George were able to identify four excavators which were purchased by KVG in July 2013. His evidence was that two of them were not in a condition that rendered them worth retrieving. A third excavator was sold to a company known as Toddy's Plant Hire Pty Ltd in October 2018. That company is related to the second defendant and to Peter Todd. Peter Todd did not give any evidence as to the funds received by KVG for the sale of that piece of equipment. Evidence provided on behalf of the plaintiff suggests that the market value of that equipment may have been quite substantial. On the evidence before the court, it remains unaccounted for.
[10] Affidavit of Peter Todd (sworn 17 May 2023) [7].
In relation to the fourth and final piece of equipment, Peter Todd's evidence was that he arranged for it to be repaired to return it to an economically viable piece of equipment. The evidence was that the repairs were undertaken in around March 2020 at a cost in excess of $126,000. That too suggests the equipment is of material value, and that the asset sold in 2018 was also likely to be of substantial value.
Peter Todd's evidence was that KVG had hired out the repaired excavator in order to recover the cost of its repair. The hire agreement was again with the related company, Toddy's Plant Hire Pty Ltd. According to the documentary evidence provided by Peter Todd, the repairs were undertaken in about March 2020, but the hire agreement was not an entered into until almost three years later in February 2023. The rates provided for in the contract and the minimum hours under the agreement suggest that the contract will produce income of at least $40,000. Peter Todd provided no evidence of what income had been received under that contract since it was entered into in February 2023, or what use had been made of the equipment in the three-year period between its repair and the hire agreement.
A particular issue arose in relation KVG's tax returns. The plaintiff submitted that it was of particular concern that KVG had failed to file any returns for some years.
The evidence of Peter Todd in his affidavit was that in July 2021, he asked Mr Ong to prepare and lodge any required tax returns that had not been lodged going back to the financial year of 2016/2017. In his affidavit, Mr Ong confirmed that in July 2021, Peter Todd asked him to respond to a notice from the Australian Taxation Office in relation to outstanding tax returns.
Counsel for the second defendant contended that the affidavit evidence of Peter Todd and Mr Ong was sufficient for to the court to draw an inference that the tax returns had all been attended to and lodged. That was a most surprising submission. I made it plain that I would not be prepared to draw that inference on the basis of the evidence before the court. A request to prepare tax returns does not permit an inference that the tax returns were prepared and lodged. Counsel for the second defendant advised that his instructions were that the tax returns had all been prepared and lodged. I adjourned the matter briefly to allow the second defendant to arrange for Mr Ong to attend court to give evidence relating to the preparation and lodgement of the returns.

After the lunch break, the second defendant called Mr Ong. Mr Ong produced two documents which were tendered in evidence. He was examined by counsel for the second defendant and cross examined by counsel for the plaintiff. I also asked Mr Ong a number of questions. In my assessment, Mr Ong did his best to answer the questions put to him at short notice honestly and helpfully.
The first document was a record of the lodgement history of KVG's income tax returns. The record, together with Mr Ong's evidence established that over the period June 2021 to August 2021 Mr Ong prepared and lodged returns for KVG in respect of the financial years 2016/2017, 2017/2018, and 2018/2019. Mr Ong's evidence was that in mid-2021 Peter Todd asked him to attend to the outstanding returns. Peter Todd told Mr Ong that the company had not engaged in any commercial activity, and that Mr Ong should prepare the returns on that basis. The returns were not produced to the court. However, Mr Ong's evidence was that each of them was a 'nil return' on the basis of advice received from Peter Todd that there had been no commercial activity on the part of KVG. In October 2022, Mr Ong prepared and lodged returns for the financial years 2020/2021 and 2021/2022. Those returns were prepared on the same basis and on the same advice from Peter Todd, that is, that KVG had not engaged in any commercial activity. Mr Ong therefore filed nil returns for those years. Mr Ong accepted that the 2020/2021 return was filed late, but he could not explain why that happened.
The second document tendered through Mr Ong related to business activity statements. The document confirmed that there were no outstanding lodgements. Mr Ong explained that on the basis of advice from Peter Todd, there had been no liability for GST payments and therefore there were no outstanding lodgements.

Competing contentions

Mr Albarran on behalf of the plaintiff believes the relationship between the shareholders of KVG has irretrievably broken and that KVG is effectively deadlocked. In the circumstances he believes there is no alternative but for the company to be wound up under s 461(k). This is compounded by the fact that the plaintiff is in liquidation. KVG has fulfilled the purpose of its creation, that is the joint venture. It serves no further purpose. It has failed to meet its obligations to file taxation returns, at least in a timely way. It has also manifestly failed to maintain records in accordance with the obligation in s 286.
The second defendant maintains that the winding up of the KVG is not the appropriate remedy to address its present circumstances. It maintains that KVG is not deadlocked because the two directors are not in disagreement at all, and are getting on with the business of realising the company's assets and winding it up in an orderly fashion. The plaintiff's claims are not the subject of any substantiation, and the plaintiff is at liberty to prosecute proceedings to advance any claim it may have. The second defendant says the letter of December 2021 is no more than a demand based on preliminary investigations where there is no admission or concession. The plaintiff's remedy, if the claim has substance, might also lie in an oppression action under s 233, which it can advance if it so chooses. The second defendant maintains there ought to be no serious concern regarding KVG meeting its statutory obligations. Its taxation obligations have now been met. It denies that it has failed to maintain records as required by s 286.

Legal principles

Turning to the applicable principles, the just and equitable winding up ground embodied in s 461(1)(k) has its origins in equity. The categories of circumstances which enliven the just and equitable jurisdiction are not closed or rigid. The court must consider the factual matrix of the dispute in order to be satisfied whether sufficient reason exists to wind the company up. The question whether it is just and equitable is a question of fact, in respect of which each case must depend on its own circumstances.
It is well established that the jurisdiction to wind up a company on this ground may arise where one or more of the following circumstances are present, many of which commonly overlap or co‑exist:
(a)an association formed or continued on the basis of a personal relationship, involving mutual confidence which has broken down;[11]
(b)generally, a breakdown in the relationship between the shareholders;[12]
(c)an agreement, or understanding, that all or some of the shareholders shall participate in the conduct of the business which is no longer maintained;[13]
(d)a restriction upon the transfer of the member's interest in the company, so that if confidence is lost, or one member is removed from management, she or he cannot take their stake and go elsewhere;[14]
(e)a failure of the main object of the company's formation;[15]
(f)a deadlock in the management of the company;[16]
(g)a lack of confidence in the conduct and management of the affairs of the company;[17]
(h)where there has been fraud, misconduct or oppression in relation to the affairs of the company;[18]
(i)serious concerns about the company's compliance with its statutory obligations,[19] including the filing of tax returns;[20] and
(j)a risk to the public interest that warrants protection.[21]
[11] Ebrahimi v Westbourne Galleries Ltd [1973] AC 360, 379.
[12] Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343.
[13] Ebrahimi v Westbourne Galleries Ltd [1973] AC 360, 379.
[14] Ebrahimi v Westbourne Galleries Ltd [1973] AC 360, 379.
[15] Re Tivoli Freeholds Ltd [1972] VR 445.
[16] Re Yenidje Tobacco Company Ltd [1916] 2 Ch 426; Johnny Oceans Restaurant Pty Ltd v Page [2003] NSWSC 952; Clarke v Bridges [2004] FCA 394; Booker v You Run the Business Pty Ltd [2008] FCA 1762.
[17] Loch v John Blackwood Ltd [1924] AC 783, 788; ASIC v ABC Fund Managers (2001) 39 ACSR 443, 469 [119].
[18] Macquarie Bank Ltd v TM Investments Pty Ltd (2005) 223 ALR 148; Macquarie University v Macquarie University Union Ltd (No 2) [2007] FCA 844.
[19] ASIC v Barrack Mortgage Managers Pty Ltd [1999] NSWSC 272; ASIC v Drury Management Pty Ltd [2004] QSC 068.
[20] Entwistle v Minken Pty Ltd (receivers and managers appointed) (2013) 97 ACSR 361, 364.
[21] ASIC v ABC Fund Managers (2001) 39 ACSR 443.
Even if the court is satisfied of circumstances which justify a winding up on the just and equitable ground, s 467(4) of the Act makes clear that the court must consider whether an alternative and less drastic form of relief is available.
In my view, the case for winding up the company under s 461(1)(k) is overwhelming. The company was formed for a purpose that has come to an end and in any event is unable to be maintained. The period of time agreed for the duration of the enterprise is well passed. It was a small company created on the basis of a cooperative relationship between two shareholders participating equally and collaboratively. One shareholder is insolvent and the relationship in any event has broken down entirely. At this point it matters not who is at fault or whether anyone is at fault. The reality is that the company is redundant, deadlocked and entirely dysfunctional.
The second defendant denies there is a deadlock because the remaining directors are not in disagreement. That overlooks the dysfunction in the relationship between the shareholders. It was the collaborative relationship between the shareholders that formed the foundation of the corporate endeavour from its outset. The reason the two directors are not in conflict is because the company is not functioning in accordance with its founding charter and is controlled by one shareholder to the exclusion of the other which is in liquidation. The guise of directorial harmony is itself the product of dysfunction, not a reflection of the company's health.
There remains a particular concern about the company's compliance with its statutory obligations. Those responsibilities rest with the directors, that is, Peter Todd and George Todd.
The company's taxation returns were not provided for some years. When it finally lodged nil returns going back some years, KVG again delayed lodging further returns thereafter without explanation. Perhaps more concerning, the nil returns on the basis that it engaged in no commercial activity appear to be at odds with the affidavit evidence of its director that the company sold a significant asset in October 2018 and incurred lability for repairs of equipment in March 2020. The complete absence of any information regarding the sale of what appears to have been a significant asset undermines any confidence the court might have in the company's ability to meet its statutory obligations, particularly in a context where no financial statements have been produced for at least six years.
Those matters also suggest it is very unlikely that the company has met, or is able to meet its obligation under s 286, which provides:
(1)A company, registered scheme or disclosing entity must keep written financial records that:
(a)correctly record and explain its transactions and financial position and performance; and
(b)would enable true and fair financial statements to be prepared and audited.
There is in reality no basis in the evidence before the court on which it can have any real confidence that these obligations have been, or will be met. The evidence of Peter Todd that I have referred to above serves to heighten rather than assuage those concerns.
The failure to produce accounts or attend to statutory obligations is a powerful consideration in favour of winding up. Again, for the purpose of this application it hardly matters who is at fault in relation to these matters. In my view there is no alternative means to cure or address the company's dysfunction and its symptoms.
The fact that a remedy may be available under s 233 does not alter the position. It is indeed unremarkable that there will be facts and circumstances by which the court has powers to wind up under both s 233 and s 461: Asia Pacific Joint Mining Pty Ltd v Always Resources Holdings Pty Ltd (2018) 3 Qd R 520 [62]. I do not consider that there is anything in the evidence that suggests that the applicant has brought this application unreasonably. If the court has determined, as it has, that it is just and equitable to wind the company up it must do so under s 467(4) unless it considers the applicant has brought the application unreasonably: Jianfeng Yang v Sunstar Freight Pty Ltd [2023] QSC 65[56].

Conclusion

Accordingly, in my view the plaintiff's application must succeed and orders for the appointment of a liquidator and the winding up of KVG ought to be made.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
IS
Associate to the Honourable Justice Solomon
1 JUNE 2023