Case: Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed); Australian Securities and Investments Commission v Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed) [2009] FCA 269
Outcome: considered
the matter of Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed); Australian Securities and Investments Commission v Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed) [2009] FCA 269 at [65] , I canvassed both learned academic authority as well as judicial decisions relating to the history and nature of the jurisdiction to wind up a company on the just and equitable ground. I shall not repeat what I there stated. It suffices to note that the just and equitable ground is one which provides for a very broad basis indeed upon which a company may be wound up. Further, it is neither necessary nor desirable to seek to place limits on language which Parliament has made deliberately broad in its purview. That said, Parliament has chosen, in a case where a winding up application is made by a contributory, to specify, in s 467(4), some relevant considerations. That subsection is in these terms: Where the application is made by members as contributories on the ground that it is just and equitable that the company should be wound up or that the directors have acted in a manner that appears to be unfair or unjust to other members, the court, if it is of the opinion that: (a) the applicants are entitled to relief either by winding up the company or by some other means; and (b) in the absence of any other remedy it would be just and equitable that the company should be wound up; must make a winding up order unless it also of the opinion that some other remedy is available to the applicants and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy. The salient facts are these: Victorian Families remains in the position of being without any directors. Further, there are no persons who are willing to act as directors. But for the appointment of the provisional liquidators, Victorian Families would, in all likelihood, remain what one might describe as "a rudderless ship." Victorian Families is not trading. Indeed, having regard to the absence of any disposition prior to the appointment of the provisional liquidators to fill the vacancy in the office of director and, further, having regard to the placement of the parent company into administration and, more latterly, into liquidation, there is a compelling inference that those who ultimately controlled Victorian Families prior to the appointment of external administration made a conscious decision to abandon its business and the management of that company. Victorian Families is in the following present financial position. It has: (a) unpaid trade creditors of between $5000 and $10,000; (b) outstanding liabilities to the Commonwealth in respect of taxation debts of $65,255.65; (c) outstanding superannuation liabilities in respect of employees of $3135, and other employee entitlement liabilities of $11,400; (d) assets comprising: (i) a bank account balance in credit to the extent of $370,000 and an indebtedness owed by Storm Financial to it of $169,187.28. Additionally, Victorian Families is presently subject to the contingency of claims in respect of margin loan losses by former clients. In some instances that contingency has become manifest; in others, claims are anticipated. One client has made a claim for $69,053 in relation to up-front fees paid to Victorian Families. The provisional liquidator's assessment is that more such claims are likely. In addition, Victorian Families has received notice of impending professional disciplinary proceedings.