In the matter of Young Fruitgrowers Cool Stores Rural Co-Operative Society Ltd [2021] NSWSC 886

In the matter of Young Fruitgrowers Cool Stores Rural Co-Operative Society Ltd [2021] NSWSC 886

The Court held that r 102 of the Co-Operative's Rules is to be interpreted as applying to the last five years of business conducted between the Co-Operative and its members prior to the cessation of the Co-Operative's business activities (in late 2011), not the five years prior to surplus distribution. Consequently, special leave should be granted to the liquidator to distribute the surplus accordingly under s 488(2) of the Corporations Act 2001 (Cth).

Parties
First Plaintiff: Young Fruitgrowers Cool Stores Rural Co-Operative Society Ltd (in liq); Second Plaintiff: Steven Priest in his capacity as Liquidator of the Young Fruitgrowers Cool Stores Rural Co-Operative Society Ltd (in liq)
Jurisdiction
Australia
Judgment Date
23 June 2021
Procedural Posture
Corporations – Winding Up of Co Operative / Application for Special Leave to Distribute Surplus in Liquidation
Outcome
Special leave granted to liquidator to distribute surplus
Legal Topics
Winding Up, Distribution of Surplus, Interpretation of Co Operative Rules
Corporations Law Equity Winding Up Distribution of Surplus Interpretation of Co Operative Rules

Case Brief

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Parties

Young Fruitgrowers Cool Stores Rural Co-Operative Society Ltd (in liq)

First Plaintiff

Steven Priest in his capacity as Liquidator of the Young Fruitgrowers Cool Stores Rural Co-Operative Society Ltd (in liq)

Second Plaintiff

Procedural Posture

Corporations – Winding Up of Co Operative / Application for Special Leave to Distribute Surplus in Liquidation

Legal Issues

  1. 1 Whether special leave should be granted to the liquidator to distribute the surplus in respect of the liquidation of the co-operative under s 488(2) of the Corporations Act 2001 (Cth)
  2. 2 Proper interpretation of r 102 of the Co-Operative's Rules regarding distribution of surplus

Ratio Decidendi

The Court held that r 102 of the Co-Operative's Rules is to be interpreted as applying to the last five years of business conducted between the Co-Operative and its members prior to the cessation of the Co-Operative's business activities (in late 2011), not the five years prior to surplus distribution. Consequently, special leave should be granted to the liquidator to distribute the surplus accordingly under s 488(2) of the Corporations Act 2001 (Cth).

Court Disposition

Special leave granted to liquidator to distribute surplus

Orders

  • Pursuant to s 488(2) of the Corporations Act 2001 (Cth) and s 488 of the Co-Operatives National Law (NSW), Mr Steven Priest as liquidator of the Young Fruitgrowers Cool Stores Rural Co-Operative Society Ltd be granted special leave to distribute the surplus in respect of the liquidation of the Co-Operative.
  • Reserve liberty to the liquidator to apply, on one business days' notice.