In the matter of Amazon Pest Control Pty Limited [2012] NSWSC 1568

In the matter of Amazon Pest Control Pty Limited [2012] NSWSC 1568

Due to the breakdown of mutual trust and cooperation between the two equal shareholders, exclusion of one from management, and systematic misuse and concealment of company funds for personal expenses, it is just and equitable to wind up the Company notwithstanding its purported solvency, as the deadlock and lack of trust frustrate the commercially sensible operation of the business and deny the applicant any reasonable expectation of benefit from his shareholding.

Parties
Plaintiff: Edward Ted Lakis; First Defendant: Amazon Pest Control Pty Limited; Second Defendant: Michael Victor Lardis; Third Defendant: Amazon Pest Management Pty Limited
Jurisdiction
Australia
Judgment Date
14 December 2012
Procedural Posture
Corporations Winding Up Application / Principal Judgment/decision on Application for Winding Up Order
Outcome
Orders made for winding up of First Defendant (Amazon Pest Control Pty Limited); appointment of liquidator; orders stayed to allow possibility of negotiated resolution; costs to be determined.
Legal Topics
Winding Up on Just and Equitable Ground, Breakdown of Relations Between Shareholders, Quasi Partnership, Corporate Governance, Solvency and Winding Up
Corporations Law Equity Winding Up on Just and Equitable Ground Breakdown of Relations Between Shareholders Quasi Partnership Corporate Governance Solvency and Winding Up

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Parties

Edward Ted Lakis

Plaintiff

Amazon Pest Control Pty Limited

First Defendant

Michael Victor Lardis

Second Defendant

Amazon Pest Management Pty Limited

Third Defendant

Procedural Posture

Corporations Winding Up Application / Principal Judgment/decision on Application for Winding Up Order

Legal Issues

  1. 1 Whether it is just and equitable to wind up the Company under s 461(1)(k) of the Corporations Act 2001 (Cth) due to breakdown of relations and loss of confidence between members
  2. 2 Whether the Company operates in the nature of a quasi-partnership
  3. 3 Whether the solvency or profitability of the Company is a bar to winding up on just and equitable grounds

Ratio Decidendi

Due to the breakdown of mutual trust and cooperation between the two equal shareholders, exclusion of one from management, and systematic misuse and concealment of company funds for personal expenses, it is just and equitable to wind up the Company notwithstanding its purported solvency, as the deadlock and lack of trust frustrate the commercially sensible operation of the business and deny the applicant any reasonable expectation of benefit from his shareholding.

Court Disposition

Orders made for winding up of First Defendant (Amazon Pest Control Pty Limited); appointment of liquidator; orders stayed to allow possibility of negotiated resolution; costs to be determined.

Orders

  • Order that the First Defendant be wound up.
  • Order that Mr Stewart Free be appointed as Liquidator of the First Defendant.