Xu v Megaward Pty Ltd - [2018] NSWCA 232

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Xu v Megaward Pty Ltd [2018] NSWCA 232
Hearing dates: 4 October 2018
Decision date: 17 October 2018
Before: McColl JA; Meagher JA; Leeming JA
Decision:
1. Respondent’s notice of motion filed 24 July 2018 dismissed.

2. Summons seeking leave to appeal dismissed.

3. Appeal dismissed.

4. Respondent to pay the appellant’s costs of its notice of motion filed 24 July 2018 objecting to the competency of the appeal, and of the summons seeking leave to appeal.
5. Appellant to pay the respondent’s costs of the appeal.
Catchwords:
CORPORATIONS – winding up – presumption of insolvency following failure to comply with statutory demand – primary judge found that company had discharged onus of displacing presumption – no error shown – consideration of whether presumption of insolvency applied to appeal – construction of “three months ending on the day when the application was made” in Corporations Act 2001 (Cth), s 459C(2) considered
PRACTICE – appeal – requirement of leave – appeal by petitioning creditor from judgment dismissing winding up application – whether appeal was from “judgment or order ... for the winding up of a corporation” – whether appeal involved directly or indirectly any claim demand or question to or respecting property amounting to the value of $100,000 – held that appeal lay as of right – Supreme Court Act 1970 (NSW), s 101(2)(n) and (r) considered
Legislation Cited: Corporations Act 2001 (Cth), ss 95A, 459C, 459S
Courts Legislation Further Amendment Act 1995 (NSW)
Judiciary Act 1903 (Cth), s 35(1)(a)(2)
Supreme Court Act 1970 (NSW), ss 75A, 101
Cases Cited: Aetna Properties Pty Ltd v G A Listing & Maintenance Pty Ltd (1994) 12 ACLC 404
Anfrank Nominees Pty Ltd v Connell (1989) 1 ACSR 365
Coates Hire Operations Pty Ltd v D-Link Homes Pty Ltd [2011] NSWSC 1279
Commonwealth Bank of Australia v Begonia (1993) 11 ACLC 1075
Deputy Commissioner of Taxation v Bayconnection Property Developments Pty Ltd [2012] FCA 363
Deputy Commissioner of Taxation v De Simone Consulting Pty Ltd [2007] FCA 548
Ebert v The Union Trustee Company of Australia Ltd (1957) 98 CLR 172; [1957] HCA 88
Expile Pty Ltd v Jabb’s Excavations Pty Ltd [2003] NSWCA 163; 45 ACSR 711
In re Diamond Fuel Company (1879) 13 Ch D 400
In the matter of Megaward Pty Ltd [2018] NSWSC 444
Kiriwina Investment Company Pty Ltd v Green Lees Developments Pty Ltd [2018] NSWCA 210
Oertel v Crocker (1947) 75 CLR 261; [1947] HCA 40
Re Rick Wilson Pty Ltd and the Companies Act (1982) 7 ACLR 354
Robert H Barber & Co Ltd v Simon (1914) 19 CLR 24; [1914] HCA 69
Rock Bottom Fashion Market Pty Ltd v HR & CE Griffiths Pty Ltd [2000] 2 Qd R 573; [1997] QCA 399
South Western Sydney Local Health District v Gould [2018] NSWCA 69
Category: Principal judgment
Parties: Zongqing Xu (Appellant)
Megaward Pty Ltd (Respondent)
Representation:
Counsel:
M K Condon SC,…

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: [2018] NSWCA 232
Decision Date: 17 October 2018

CaseChat Overview and Summary

The appeal concerned a winding up application brought by the appellant, Xu, against the respondent, Megaward Pty Ltd. The primary judge had dismissed the winding up application, finding that Megaward Pty Ltd had discharged the onus of displacing the presumption of insolvency that arose from its failure to comply with a statutory demand. Xu sought to appeal this decision.

The Court of Appeal was required to determine two principal issues. Firstly, whether the presumption of insolvency under section 459C(2) of the *Corporations Act 2001* (Cth) had been displaced by the primary judge's findings, and if so, whether the primary judge had erred in law in reaching those findings. Secondly, the Court considered the competency of the appeal, specifically whether it lay as of right or required leave, by reference to section 101(2)(n) and (r) of the *Supreme Court Act 1970* (NSW).

The Court held that the primary judge had correctly applied the principles relating to the presumption of insolvency and had not made any error of law in concluding that Megaward Pty Ltd had discharged its onus. The Court further determined that the appeal lay as of right, as it involved a claim or question respecting property amounting to more than $100,000, and was not an appeal from a judgment or order for the winding up of a corporation in the sense that would require leave.

Ultimately, the appeal was dismissed. The respondent's notice of motion and summons seeking leave to appeal were dismissed, and the respondent was ordered to pay the appellant's costs of those proceedings. However, the appellant was ordered to pay the respondent's costs of the appeal itself.

Orders

Orders of the court

1. Respondent’s notice of motion filed 24 July 2018 dismissed.

2. Summons seeking leave to appeal dismissed.

3. Appeal dismissed.

4. Respondent to pay the appellant’s costs of its notice of motion filed 24 July 2018 objecting to the competency of the appeal, and of the summons seeking leave to appeal.

5. Appellant to pay the respondent’s costs of the appeal.

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.

Medium Neutral Citation:	Xu v Megaward Pty Ltd [2018] NSWCA 232
Hearing dates:	4 October 2018
Decision date:	17 October 2018
Before:	McColl JA; Meagher JA; Leeming JA
Decision:	1. Respondent’s notice of motion filed 24 July 2018 dismissed. 2. Summons seeking leave to appeal dismissed. 3. Appeal dismissed. 4. Respondent to pay the appellant’s costs of its notice of motion filed 24 July 2018 objecting to the competency of the appeal, and of the summons seeking leave to appeal. 5. Appellant to pay the respondent’s costs of the appeal.
Catchwords:	CORPORATIONS – winding up – presumption of insolvency following failure to comply with statutory demand – primary judge found that company had discharged onus of displacing presumption – no error shown – consideration of whether presumption of insolvency applied to appeal – construction of “three months ending on the day when the application was made” in Corporations Act 2001 (Cth), s 459C(2) considered PRACTICE – appeal – requirement of leave – appeal by petitioning creditor from judgment dismissing winding up application – whether appeal was from “judgment or order ... for the winding up of a corporation” – whether appeal involved directly or indirectly any claim demand or question to or respecting property amounting to the value of $100,000 – held that appeal lay as of right – Supreme Court Act 1970 (NSW), s 101(2)(n) and (r) considered
Legislation Cited:	Corporations Act 2001 (Cth), ss 95A, 459C, 459S Courts Legislation Further Amendment Act 1995 (NSW) Judiciary Act 1903 (Cth), s 35(1)(a)(2) Supreme Court Act 1970 (NSW), ss 75A, 101
Cases Cited:	Aetna Properties Pty Ltd v G A Listing & Maintenance Pty Ltd (1994) 12 ACLC 404 Anfrank Nominees Pty Ltd v Connell (1989) 1 ACSR 365 Coates Hire Operations Pty Ltd v D-Link Homes Pty Ltd [2011] NSWSC 1279 Commonwealth Bank of Australia v Begonia (1993) 11 ACLC 1075 Deputy Commissioner of Taxation v Bayconnection Property Developments Pty Ltd [2012] FCA 363 Deputy Commissioner of Taxation v De Simone Consulting Pty Ltd [2007] FCA 548 Ebert v The Union Trustee Company of Australia Ltd (1957) 98 CLR 172; [1957] HCA 88 Expile Pty Ltd v Jabb’s Excavations Pty Ltd [2003] NSWCA 163; 45 ACSR 711 In re Diamond Fuel Company (1879) 13 Ch D 400 In the matter of Megaward Pty Ltd [2018] NSWSC 444 Kiriwina Investment Company Pty Ltd v Green Lees Developments Pty Ltd [2018] NSWCA 210 Oertel v Crocker (1947) 75 CLR 261; [1947] HCA 40 Re Rick Wilson Pty Ltd and the Companies Act (1982) 7 ACLR 354 Robert H Barber & Co Ltd v Simon (1914) 19 CLR 24; [1914] HCA 69 Rock Bottom Fashion Market Pty Ltd v HR & CE Griffiths Pty Ltd [2000] 2 Qd R 573; [1997] QCA 399 South Western Sydney Local Health District v Gould [2018] NSWCA 69
Category:	Principal judgment
Parties:	Zongqing Xu (Appellant) Megaward Pty Ltd (Respondent)
Representation:	Counsel: M K Condon SC,…