Fearnlake Pty Ltd, Re [1994] QSC 174

TRANSCRIPT OF PROCEEDINGS (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau.) SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION A.EE J Application No 210 of 1994 RE: FEARNLAKE PTY LTD BRISBANE .. DATE 27 I 05/94 JUDGMENT 1 4th Floor, The Law Courts, George Street, Brisbane. Q. 4000 Telephone: (07) 227 4360. Facsimile: (07) 227 5532 -- 1 of 3 -- 270594 T 1/LAM M/T4407/94 (Lee J) '', / ~ .../ ·~ - HIS HONOUR: In this matter I have concluded that the application to wind up satisfies the requirements of the Corporations Law and is not a nullity. However I have also formed the view that Julie and Jacqueline acted in a way which was tantamount to a breach of trust with regard to the equitable owner of shares, that is Mr McCulloch. As a matter of discretion I do not propose to proceed on the application on the basis on which it has been presented. However it is clear that the company is insolvent and also there isthejust and equitable ground on which counsel for the applicant wishes to rely. In view of these findings it is not necessary for me to consider the question of whether there was any irregularity in the presentation of the petition but only the quest1oh of whether or not there should be a substitution. Strictly speaking substitution is not essential but as I said, I do not propose to proceed on the application on the basis on which it was presented because of the way in which those two persons have acted. Insofar as substitution is concerned, there is clear power under rule 61 to substitute an applicant and I propose to 10 20 30 40 substitute Jacquelin~ as .. the.applicant for~the .. company in lieu of the company. She is a director, a contributory and a creditor. Having regard to the fact that the Corporations Law 50 now expressly authorises a director in her own right, apart from her role as contributory or creditor, to present a petition on the grounds of insolvency.with lea:Ye. of the Court it seems to_me that I should order that substitution be effected and that leave be given to the applicant to amend the 2 60 -- 2 of 3 -- ··,-2'"70594 T 1 /LAM M/T4407 /94 (Lee J) application by specifically raising the two grounds relied upon of insolvency and secondly, the just and equitable ground. That is the order I propose to make. The question which now arises is whether or not I should proceed in stanta to deal with the application to wind up or 10 whether any further directions are necessary under rule 61 sub-rule 2 or whether any further material is necessary. On those questions I invite further submissions. HIS HONOUR: In lieu of what I said before, the order will be to substitute Jacqueline as applicant with leave to amend the application to specify the two grounds relied upon, namely the company is unable to pay its debts and the just and equitable ground. 20 30 40 HIS HONOUR: It seems appropriate that Jacqueline be substituted as applicant in her own right so that she may prosecute the proceedings to the extent that she applies as a director and/or a contributory pursuant to the ground of insolvency. Leave is given pursuant to section 459(P)(2). An order is made accordingly with leave to amend to raise the two grounds. HIS HONOUR: The order for costs is as per amended draft. 3 JUDGMENT 50 60 -- 3 of 3 --