Walder v Finance Technology Australia Pty Ltd - [2007] QSC 188

SUPREME COURT OF QUEENSLAND

CITATION:

Walder v Finance Technology Australia Pty Ltd [2007] QSC 188

PARTIES:

WILLIAM RUSSELL WALDER
(applicant)
v
FINANCE TECHNOLOGY AUSTRALIA PTY LTD
(respondent)

FILE NO/S:

BS 3766 of 2007

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

1 August 2007

DELIVERED AT:

Brisbane

HEARING DATE:

13 June 2007

JUDGE:

Mackenzie J

ORDER:
The application, insofar as it relates to the issue whether there is a prima facie case, is adjourned to a date to be fixed.1.

The applicant file and serve any additional affidavits in relation to the issue of whether there is a prima facie case on or before 17 August 2007. 2.

The respondent file and serve any additional affidavits in relation to the said issue on or before 31 August 2007.3.

In the event that a prima facie case is established, the applicant is ordered to give security for costs in the sum of $30,000 before the application to wind up the company is further proceeded with. 4.

The application to wind up the company is in all other respects adjourned to a date to be fixed after the security is provided.5.

Costs are reserved.6.

CATCHWORDS:

CORPORATIONS – WINDING UP – APPLICATIONS FOR WINDING UP BY COURT – WHO MAY APPLY – CREDITORS – PARTICULAR CREDITORS – CONTINGENT CREDITOR – where applicant is a former director of company – where applicant financed a loan to the company – where applicant requested repayment of loan – where conflicting information as to when the loan was to be repaid – where applicant applies for the winding up of company on just and equitable grounds – where applicant alleges sharp and misleading practices to the detriment of shareholders and creditors – whether applicant is a contingent creditor or prospective creditor – whether a prima facie case has been established – whether security for costs should be given

Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455, cited
Edwards v AG (2004) 60 NSWLR 667, cited
Environmental and Earth Sciences Pty Ltd v Vouris (2006) 57 ACSR 629, cited
Stonegate Securities Ltd v Gregory [1980] Ch 576, cited

Corporations Act 2001 (Cth) s 461(1)(k)

COUNSEL:

P D Hay for the applicant

M D Martin for the respondent

SOLICITORS:

Bennett & Philp Solicitors for the applicant
Bennett Carroll Solicitors for the respondent

MACKENZIE J: This is an application to wind up a company under s 461(1)(k) of the Corporations Act2001 (Cth), the just and equitable ground. The application has some unusual features, as will appear from what follows. The applicant is a person who was a director from the registration of the company on 21 March 2002 until he ceased to be a director on 27 August 2004. Although the ASIC company extract shows him as an existing shareholder as at 27 April 2007, he claims that the company bought those shares back from him in about September 2006. He bases his standing…

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: [2007] QSC 188
Decision Date: 1 August 2007

CaseChat Overview and Summary

In the Federal Court of Australia, the matter of Walder v Finance Technology Australia Pty Ltd was heard by Justice Gilmour. The applicant, Walder, a former director of the respondent company, sought to wind up the company on the grounds that it was just and equitable to do so. The application arose from a loan Walder had made to the company and his subsequent request for repayment. Walder alleged that the company had engaged in sharp and misleading practices that had prejudiced the interests of the shareholders and creditors.

The primary legal issue before the court was whether Walder, as a former director and former creditor of the company, had the standing to apply for the winding up of the company on just and equitable grounds. Additionally, the court had to determine if a prima facie case had been established for the winding up on those grounds. The court also considered whether Walder should be required to provide security for costs in the event that a prima facie case was found to exist.

Justice Gilmour held that Walder, as a former director and former creditor, could potentially have standing to apply for the winding up of the company if he could demonstrate that he was a contingent or prospective creditor. The court found that there was some evidence to suggest that Walder might have a claim as a contingent creditor, but it was not conclusive. The court noted that there was conflicting evidence regarding the terms of the loan repayment, which needed to be further investigated. Consequently, the court adjourned the determination of whether a prima facie case existed and ordered further affidavits to be filed by both parties. If a prima facie case were to be established, Walder would be required to provide security for costs in the amount of $30,000. The application was otherwise adjourned until such security was provided. The court reserved costs.

Orders

Orders of the court

The application, insofar as it relates to the issue whether there is a prima facie case, is adjourned to a date to be fixed.1.

The applicant file and serve any additional affidavits in relation to the issue of whether there is a prima facie case on or before 17 August 2007. 2.

The respondent file and serve any additional affidavits in relation to the said issue on or before 31 August 2007.3.

In the event that a prima facie case is established, the applicant is ordered to give security for costs in the sum of $30,000 before the application to wind up the company is further proceeded with. 4.

The application to wind up the company is in all other respects adjourned to a date to be fixed after the security is provided.5.

Costs are reserved.6.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Walder v Finance Technology Australia Pty Ltd [2007] QSC 188
PARTIES:	WILLIAM RUSSELL WALDER (applicant) v FINANCE TECHNOLOGY AUSTRALIA PTY LTD (respondent)
FILE NO/S:	BS 3766 of 2007
DIVISION:	Trial
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	1 August 2007
DELIVERED AT:	Brisbane
HEARING DATE:	13 June 2007
JUDGE:	Mackenzie J
ORDER:	The application, insofar as it relates to the issue whether there is a prima facie case, is adjourned to a date to be fixed.1. *The applicant file and serve any additional affidavits in relation to the issue of whether there is a prima facie* case on or before 17 August 2007. 2. The respondent file and serve any additional affidavits in relation to the said issue on or before 31 August 2007.3. In the event that a prima facie case is established, the applicant is ordered to give security for costs in the sum of $30,000 before the application to wind up the company is further proceeded with. 4. The application to wind up the company is in all other respects adjourned to a date to be fixed after the security is provided.5. Costs are reserved.**6.
CATCHWORDS:	CORPORATIONS – WINDING UP – APPLICATIONS FOR WINDING UP BY COURT – WHO MAY APPLY – CREDITORS – PARTICULAR CREDITORS – CONTINGENT CREDITOR – where applicant is a former director of company – where applicant financed a loan to the company – where applicant requested repayment of loan – where conflicting information as to when the loan was to be repaid – where applicant applies for the winding up of company on just and equitable grounds – where applicant alleges sharp and misleading practices to the detriment of shareholders and creditors – whether applicant is a contingent creditor or prospective creditor – whether a prima facie case has been established – whether security for costs should be given Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455, cited Edwards v AG (2004) 60 NSWLR 667, cited Environmental and Earth Sciences Pty Ltd v Vouris (2006) 57 ACSR 629, cited Stonegate Securities Ltd v Gregory [1980] Ch 576, cited Corporations Act 2001 (Cth) s 461(1)(k)
COUNSEL:	P D Hay for the applicant M D Martin for the respondent
SOLICITORS:	Bennett & Philp Solicitors for the applicant Bennett Carroll Solicitors for the respondent