Dunn v CTK

The meeting then determined that Mr Cassegrain be authorised and empowered "to negotiate a settlement of the debt with the receivers as soon as possible". 18 In a letter to the receivers dated 25 September 2001, Mr Cassegrain, writing as the managing director of CTK, suggested that the amount owing by CTK could be as much as $500,000. In that letter, Mr Cassegrain informed the receivers of relevant background as follows: " Monies owed to GC & Co for Work Done to Develop CTK & Land The question of monies owed by CTK to GC & Co needs to be resolved and I see your view. History : In about 1983 CTK appointed persons to a committee to oversee the development of both GC & Co and CTK's contiguous land holdings. By about 1984 the committee was abandoned and a new committee was formed in about 1988 by GC & Co to continue with the objection of the first committee. The costs incurred by GC & Co to advance the proposal to develop GC & Co and CTK's land holdings was agreed to be shared on a per hectare basis. CTK acknowledges it has an outstanding obligation to GC & Co for costs incurred - however the amount has never been quantified or agreed. CTK acknowledges that the value of the work undertaken by GC & Co as at 31 July 1999 was $10 million. CTK also acknowledges that the land it owned represented 50 hectares or 5% of the land subjected to the expenditure of some $10 million by GC & Co. The above indicates that CTK owes GC & Co $500,000. GC & Co wants to avoid going to the expense of supplying details of the $10 million, because of the disarray of its records resulting from the 1992/93 proceedings with the CSIRO."

In the same letter, Mr Cassegrain said: "I have been authorised to negotiate a settlement of this debt with you and invite your early response." 19 Mr Hutton, a senior manager with KPMG and an assistant to the receivers, gave evidence of a telephone conversation with Mr Cassegrain on or about 22 November 2001 in which, he said, Mr Cassegrain confirmed that he had authority to settle the matter of the unallocated administration cost on behalf of CTK, said that $400,000 "would break CTK", and suggested that the receivers demand $150,000 and that there then be a settlement under which $75,000 was accepted in full satisfaction. The receivers did not accept CTK's proposal, conveyed by Mr Cassegrain as its authorised representative, to dispose of the matter in that way. 20 A letter of 4 December 2001 by the receivers to Mr Cassegrain (and addressed to him as managing director of CTK) said in part as follows: "Your letter of 25 September indicates that as much as $500,000 may be owing to CG & Co for consultancy and marketing costs associated with the development of various land holdings owned by GC & Co and CTK. The report as to affairs that you, as managing director of GC & Co, prepared for lodgment at the Australian Securities and Investments Commission indicated that $38,894 was owing by CTK to GC & Co and that a further $100,000 was recoverable for this previously unbilled consultancy."

The receiver then asked for payment of $138,894 by CTK (that, of course, being the aggregate of the two sums mentioned in the report as to affairs) and went on to ask for further information about the claims. 21 In a letter of 17 December 2001 to the receivers, Mr Cassegrain began to shift his ground. He said: "I am of the view that CTK is entitled to defend CG & Co's demands for costs incurred by GC & Co on CTK's behalf: GC & Co is the responsible entity that has resulted in the loss of opportunity to recover costs."

He also said: "As it has eventuated, circumstances involving GC&Co not CTK, denied GC&Co the opportunity of recovering the liability from the development of the land. It is arguable that GC&Co lost its rights to recover the costs from CTK from funds sourced other than those generated from the development of CTK's land, in accordance with the partnership plan, at the time of your appointment or in the alternative at the time the land ownership of GC&Co's land was fragmented." 22 After the second thoughts expressed in the letter of 17 December 2001, Mr Cassegrain had occasion to change his mind again on the question whether anything was owing by CTK to GC&Co by way of partial reimbursement of expenses incurred by GC&Co in pursuing the possible land development. Mr Dunn recorded that, at the annual general meeting of CTK held on 18 December 2001, Mr Cassegrain stated that "the directors of the company CTK have now concluded that the amount is now not owing as GC&Co have breached the contract". 23 Later still, Mr Cassegrain became aware (or, rather, had occasion to recall) that the matter had been the subject of a note to the accounts of CTK for the year which ended on 30 June 1997. The accounts are in evidence. The note is as follows: "8 CONTINGENT LIABILITIES A contingent liability exists relating to future claims which may be made against the company by Gerard Cassegrain & Co. Pty Ltd in relation to monies expended by Gerard Cassegrain & Co. Pty Ltd in a land use plan which has a potential benefit to CTK Engineering Pty Limited. There is no documentation to support the agreement. CTK Engineering Pty Limited have no obligation to pay Gerard Cassegrain & Co. Pty Ltd unless CTK Engineering Pty Limited benefits from the plan. Should CTK Engineering Pty Limited prevent Gerard Cassegrain & Co. Pty Ltd from realising the monies expended by that company on the land use plan, action would be taken by Gerard Cassegrain & Co. Pty Ltd to recover such costs. Monies expended by Gerard Cassegrain & Co. Pty Ltd on the land use plan will be recovered on a pro-rata hectare basis should the project proceed." 24 The accounts in which this note appears became Exhibit 6 in these proceedings, having been identified by Mr Cassegrain in the course of re-examination as the accounts for the relevant year. Another version of the accounts for the same year constitutes Annexure F to Mr Dunn's affidavit of 16 April 2001. I say "another version" deliberately. Although the figures in the balance sheet and profit and loss account are the same in each case, there are discrepancies in other aspects of the content. The Annexure F version contains six notes to the accounts, while the Exhibit 6 version contains eight. The six included in Annexure F (and numbered sequentially accordingly) appear in Exhibit 6 as Notes 1, 3, 4, 5, 6 and 7. Note 2 in Exhibit 6 ("Going concern") does not appear in Annexure F. Nor does the Note 8 in Exhibit 6. The directors' report, which purports to have been signed in accordance with a resolution of the directors, is dated 6 March 1998, in Exhibit 6, as is the statement of directors. In Annexure F, the directors' report is not dated and the statement by directors is dated 24 December 1997. 25 The explanation for these differences seems to be that Exhibit 6 is a subsequently audited version of Annexure F, as appears from the fact that Annexure F contains only a compilation report by Northcorp Accountants whereas Exhibit 6 contains a full audit report by that firm. The audit report contains a reference to inherent uncertainty regarding continuation as a going concern as referred to in Note 2, from which I infer that the appearance of that note which had not appeared in Annexure F was a result of discussion between the directors and the auditors. It is not clear to me that any similar inference is warranted in relation to Note 8 (not otherwise mentioned in the accounts) but I am inclined to think that it is. Nor is it clear whether copies of the Exhibit 6 version - which, by the dates of the directors' statement (6 March 1998) and the audit report (8 March 1998), appears to have been finalised more than eight months after year-end - were forwarded to members. The fact that Mr Dunn, a holder of B class shares, had and was able to annex to his affidavit a copy of the Annexure F version leads to an inference that that version was made available to shareholders. 26 The conclusions I have reached in relation to the content of Note 8 to the 30 June 1997 accounts are, first, that it was probably included in the audited accounts at the insistence of the auditors or at least after consultation with them and, second, that its content did not come to the notice of shareholders. Audited accounts were again prepared for the year ended 30 June 1998. The reports forming part of those accounts bore dates in December 1998. Those accounts contained no equivalent of Note 8 in Exhibit 6 and no other reference to the contingent liability. If circumstances at 30 June 1998 had been the same, in relevant respects, as those pertaining at 30 June 1997, it is unlikely that the auditors would have signed off on accounts omitting that note. I therefore infer that there had been a change of circumstances (perhaps the occurrence of the event mentioned in the note's third sentence) sufficient to produce in the auditors a sufficient degree of comfort that the contingent liability no longer existed. 27 If I am right in this, it does seem odd that Mr Cassegrain should, in August 1999, include in the report as to affairs an item referring to the contingent liability. He explained his initial inability to be definite about the possible magnitude of the liability by saying that he had not been able to go back and quantify the relevant expenses or the respective areas of land by reference to which the apportionment of expenses was to be made. It was only after he had had an opportunity to do some research that figures of the order of $400,000 and $500,000 came to the fore as more accurate estimates than the $100,000 included in the statement as to affairs. Yet that research apparently did not bring to light or jog Mr Cassegrain's memory with respect to the element referred to in the third sentence of Note 8 to the 30 June 1997 audited accounts. 28 Mr Cassegrain testified that it was only a few days before the hearing of these proceedings that he remembered that element. It returned to his mind as he looked at documents to prepare himself for the hearing, causing him to form an opinion that there was no amount potentially owing by CTK to GC&Co in the way he had previously described to the receivers. He also testified that he then took steps to inform the recivers accordingly. He did this by means of a handwritten note which is in evidence. By that note, he drew their attention to Note 8 and also to a part of the directors' report accompanying the accounts for the year ended 30 June 1996 (which are in evidence) referring to a common purpose between the two companies concerning their contiguous land holdings. There was also a reference to a 1996 memorandum to his mother which was not identified to me as being in evidence and which I therefore put to one side. 29 Mr Terp, the second director of CTK, said in evidence that he had never believed that any sum was owing by CTK to GC&Co in relation to costs of the abandoned development proposal. The trusts affecting the A class shares 30 There exist declarations of trust dated 12 December 1996 whereby each of the then holders of the three A class shares (Mr Cassegrain, his sister Ms Cameron and their mother Mrs Francoise Cassegrain who later died) acknowledged that the one A class share held by the holder was held in trust for GC&Co "by whom the purchase money for the said share(s) was provided". Background to this is provided by the following part of the directors' report in the accounts of CTK for the year ended 30 June 1996: "Mrs F. Cassegrain sold her three 'A' class shares to GC&C. There is common purpose between the two companies in regards to their contiguous landholdings and the work being undertaken to have both companies landholdings rezoned to permit a higher and better use. GC&C in turn has sold the 'A' class shares in trust to Claude Cassegrain, Anne-Marie Cameron and Francoise Cassegrain to comply with the Articles of the Company that require a Director to hold an 'A' class share."

31 The question whether the share now held by Mr Terp (apparently the share previously held by Mrs Francoise Cassegrain) is, in his hands, held subject to the same equitable interest of GC&Co was not referred to in the course of the hearing and, in the absence of any apparent reason why that should not be the case, I shall assume that it is - subject to the possibility about to be mentioned. 32 I have already referred to a view that these trusts may no longer subsist. That view proceeds from legal advice apparently given orally to Mr Cassegrain by Mr Cameron, the former Sydney barrister to whom reference has already been made. Again, it is desirable to set out in full a letter (also dated 13 March 2002) in which Mr Cameron recorded, some time after the event, the advice previously given by him: "Over a period of several weeks commencing in about September 2001, I was advised by Mr. Claude Cassegrain about a dispute that existed between him and the receivers/managers of GC and Co. as to legal ownership of the three issued 'A' class shares in CTK. By three unrevoked Deeds of Trust made on 12 December, 1996, the shares were declared by the holder, the late Francoise Cassegrain, to be held on trust by her as trustee for GC and Co. The shares confer the whole of the voting rights for CTK with no right of distribution. The latter rights are enjoyed by the 'B' class shareholders. The reason for that arrangement was to ensure that Claude Cassegrain retained full control over GC and Co. and CTK. That such a control was desirable was because GC and Co. and CTK owned contiguous lands which Mr. Cassegrain, on behalf of both companies, was very actively engaged in developing under what he called the 'Hastings Project 2000'. This included the re-zoning and use of a vast land holding accumulated by GC & Co. over many years around the existing township of Port Macquarie in a position such that if Port Macquarie was to expand, as it necessarily had to, then the land owned by CG and Co. and CTK would be the best and most suitable land for the purpose. Many millions of dollars had been expended by GC and Co. in pursuing the project. Some time after the trusts were declared by Francoise Cassegrain, Claude became aware that a director qualification of the CTK board was the holding of an 'A' class share. As none of the persons acting as such held such a share Mr. Cassegrain then arranged to have the shares transferred by the then Trustees to Francoise. Mr. Cassegrain and his sister Ann Marie Cameron as to one share each as trustee for GC and Co. Later, when Francoise died, her executors transferred her share to Mr. Troy Terp. On becoming aware of the trusts, the receivers insisted that they had the right to direct the three CTK directors as beneficial owners of the voting shares. Mr. Cassegrain asked me whether in my opinion the trusts were still binding. My advice was that the trust was no longer binding on the shareholders as the purposes of the trust was defeated by the appointment of the receivers. With their appointment down went the Hastings 2000 Project. Claude Cassegrain no longer controlled GC and Co. and the lands over which the Project was to operate were being sold off by the receivers. On 28 November, 2001, I was asked to provide a formal advice confirming that oral advice. I was unable to complete the advice due to the cancellation of my practising certificate with effect from 1 December, 2001." 33 The substance of Mr Cameron's advice concerning subsistence of the trusts affecting the A class shares is stated in the penultimate paragraph of his letter. It is apparent that Mr Cameron had not been informed of the terms of the declarations of trust dated 12 December 1996. They state quite clearly that the circumstance which caused the trust to arise in each case was provision of the purchase money for the share by GC&Co. The trust was thus at its inception a resulting trust arising by operation of principles of equity. It was that resulting trust which was affirmed by the written declaration of trust in each case. By no stretch of the imagination was the trust any species of purpose trust (even if one could validly exist in the case of a non-charitable purpose) prone to lapse if and when the particular purpose became incapable of fulfilment. On the face of the documents, the status and rights of GC&Co as beneficiary arose from the purchase of the shares by it in the names of others (no doubt persons it wished to see qualified as directors under the constitution, there being a requirement that a director hold at least one A class share), with the consequence that the failure of the land development purposes mentioned in Mr Cameron's letter was irrelevant to the continuation of the trusts. 34 On this basis, the supposed lack of clarity or dispute as to the existence of the trusts and the right of GC&CO, through the agency of its receivers, to direct the manner of the exercise of the voting rights attached to the shares is very much beside the point. On the evidence before me, there is no reason to think that GC&CO has been deprived of that right or that the right cannot be exercised by the receivers as and when they consider it advantageous to GC&Co to exercise it. The fact that the receivers, on their own admission, have taken no steps in that direction says nothing about their continuing ability to do so at some future time. CTK's commercial future 35 Apart from cash and receivables, the only real asset of CTK is the residue of the land which was the subject of the joint development plan coordinated by GC&Co some years ago. Both the directors and the plaintiff, Mr Dunn are agreed that the only sensible future course is for the land to be sold and for the proceeds to find their way to shareholders by way of distribution in a winding up. There is, however, a difference of opinion as to when and how these broadly shared objectives should be achieved. Mr Dunn's desire - as evidenced by his initiation of these proceedings - is to see CTK wound up now, so that a liquidator takes control of the assets and, in due course of administration, effects a sale of the land, pays any creditors and distributes the residue to members. Mr Cassegrain and Mr Terp, on the other hand, believe that it will be more advantageous to seek a rezoning of the land as rural residential before further sales are effected as the rezoning is likely to enhance the value and the returns to shareholders. Their preferred course is to attempt to achieve the rezoning before attempting to sell. At the same time, however, Mr Cassegrain did confirm that if realistic offers were received at any time, the directors would be disposed to give them favourable consideration. 36 Evidence was given by Mr Coulter, the Director of Development and Environmental Services with Hastings Council. He outlined the procedures for obtaining a change in zoning, both generally and by reference to CTK's land. It is not necessary to go into details of this evidence. It is sufficient to say that the process is likely to take at least two years from the time when the first formal steps are taken and may well take more than three years. There is, of course, no assurance that any application for rezoning will be successful. In particular, the fact that the land was formerly zoned rural residential will have no real bearing on the prospects of success of any new application for that zoning. The plaintiff's contentions 37 The case advanced by Mr Colyer of counsel on behalf of the plaintiff, Mr Dunn, is essentially that Mr Cassegrain, as a director of CTK, is in a position of intolerable conflict in that the demands of the duties he owes to CTK are virtually irreconcilable with his personal interest in seeing the financial pressures upon GC&Co alleviated to the maximum possible extent so that risks to him as a guarantor of liabilities of GC&Co are avoided or reduced. Furthermore, it is said, a power vacuum at shareholder level exacerbates this undesirable situation because ordinary corporate disciplinary structures are absent. It is submitted on behalf of Mr Dunn that, on the evidence, Mr Cassegrain has chosen on several occasions to prefer his own interests and to relegate the requirements arising from his duties as a director of CTK. 38 Mr Cassegrain, it is conceded, is not only a guarantor of GC&Co's indebtedness to the Commonwealth Bank but also of its liability under the Stacks mortgage. The receiver of GC&Co has given evidence that there will likely be a shortfall of $1.5 million in recovery, through the receivership, on account of the Commonwealth Bank indebtedness. 39 It was in those circumstances, it was submitted, that Mr Cassegrain made a conscious decision to bring about the result that $38,894 of CTK funds was paid by CTK to the clients of Stacks in part satisfaction of moneys payable by GC&Co. Had that decision not been supplemented by the subsequent "reversal", it would have resulted in discharge of CTK's liability of $38,894 to GC&Co and reduction of CTK's cash resources by the same amount. It is true that, on the basis of subsequent legal advice, Mr Cassegrain caused the payment by CTK to be "reversed", in that the books of each company again came to reflect a debt due by CTK to GC&Co but the asset with which CTK had parted, namely $38,894 in cash, was replaced by an asset consisting of an unsecured debt of that amount due by Mr Cassegrain to CTK and carrying interest at the rate of 7% per annum. All this, it was submitted, resulted in detriment to CTK and benefit to GC&Co. The detriment to CTK was not in any realistic sense alleviated by the subsequent accrual to CTK of a right of action for a debt of $38,894 by CTK against Mr Cassegrain. In the light of the financial exigencies arising from Mr Cassegrain's guarantees of GC&Co liabilities, a debt owed by him must be regarded, from the CTK viewpoint, as a less desirable asset than the equivalent cash amount with which he caused CTK to part. The benefit to CG&Co was, in an immediate and direct sense, also a benefit to Mr Cassegrain in that it kept at bay a creditor of GC&Co who, if not satisfied, could have proceeded against Mr Cassegrain under his guarantee. 40 In relation to the unknown and unallocated administration expense included by Mr Cassegrain in GC&Co's report as to affairs as an asset provisionally quantified at $100,000, Mr Colyer submitted that the facts justify a conclusion that Mr Cassegrain pursued a consistent purpose of preferring his interests (allied as they are with the financial welfare of GC&Co) by keeping CTK alive in the consciousness of the receivers of GC&Co as a source of cash for GC&Co. 41 Mr Cassegrain, having alerted the receivers to the possibility of a $100,000 claim by GC&Co against CTK, proceeded to adopt markedly different positions on the matter as time went on. At one stage, he maintained that there would have to be some independent assessment of the amount to be paid by CTK. This was because of his multiple roles. Later, the CTK board purported to authorise Mr Cassegrain to negotiate an agreed position with the receivers on a matter which, in ways not explained, had somehow grown to $400,000 or $500,000. During that phase, he attempted to solicit a settlement proposal of $75,000 from the GC&Co receivers, indicating, in effect, that if they were willing to settle for that figure, he would cause CTK to pay accordingly. Yet only two months later, without apparent articulation of reasoning (save that GC&Co "have breached the contract"), Mr Cassegrain adopted the position that CTK owed nothing to CG&Co on account of the particular item. Eventually, on the eve of the hearing, he reacquainted himself with the second version of the accounts for the year ended 30 June 1997 and became firm in the view that, for several years past, there had been no liability at all. Mr Dunn's assertion is essentially that here as well there was a purpose (albeit, in the end, a purpose not realised) of sacrificing the interests of CTK by causing its funds to be made available to GC&Co, thus relieving pressure upon Mr Cassegrain under his guarantees. 42 As for the second director, Mr Terp, it is the plaintiff's contention that, by and large, he acquiesces in Mr Cassegrain's actions. Answers given by both Mr Terp and Mr Cassegrain in the course of their evidence was consistent with Mr Terp's generally being content to accept assurances from his co-director, Mr Cassegrain, on matters relevant to board decisions. 43 The plaintiff then points to the configuration of shareholder power within CTK, with the voting rights, according to the register, in the hands of the two directors and the sister of one of them, and with GC&Co, assuming it has power to direct the manner of exercise of shareholders' voting rights, being supine in the hands of its receivers whose concern, understandably and properly, is to pursue avenues productive of funds for the benefit of creditors rather than involving themselves in issues from which either no return or perhaps speculative long term return may be gained. In these circumstances, the plaintiff maintains, the normal disciplines upon directors represented by the possibility of removal by action of shareholders are effectively absent in this case, so that the case for intervention by the court in the way he seeks is even more compelling. The defendant's contentions 44 The defendant admits that Mr Cassegrain is and has been in a position where he faces conflicts between his duty as a director of CTK and his interest in promoting the interests of GC&Co, particularly on occasions on which threats from its creditors holding his personal guarantee arise. On those occasions, his personal interest in avoiding what are for him adverse consequences under his guarantees comes into particularly sharp focus. However, the law does not forbid the existence of such conflicts, it just requires that directors deal with them in the appropriate way. 45 In relation to the particular circumstances concerning the payment of $38,894 by CTK to the mortgagees under the Stacks mortgage, the defendant says two things. First, it says that Mr Cassegrain made a mistake but did so in good faith and in reliance on the advice he obtained from Mr Cameron, added to which, when Mr Cameron advised him as to the "reversal", he proceeded to act in accordance with that advice as well. Furthermore, Mr Cassegrain thought that the receivers would not object to the course taken. Second, Mr Jackman of counsel, who appeared for the defendant, pointed to the rules in both CTK's constitution and the Corporations Act concerning directors' conflicts and submitted that there had been compliance with them. 46 Section 191(1) of the Corporations Act (which came into effect as a provision of the Corporations Law on 13 March 2000) requires a director of a company who has "a material personal interest in a matter that relates to the affairs of the company " to give the other directors notice of the interest unless s.191(2) "says otherwise". Section 191(2)(b) "says otherwise" in a case where, as here, the company is a proprietary company and, in addition, "the other directors are aware of the nature and extent of the interest and its relation to the affairs of the company". Mr Terp, it was submitted, was aware of Mr Cassegrain's interest as a director of GC&Co and, more pertinently, as a guarantor of GC&Co's obligations. On that basis, it was said, there was no contravention of s.191 by Mr Cassegrain in relation to the events concerning the payment of $38,894 by CTK. 47 Mr Jackman next took me to article 96 of CTK's constitution which says that any contract entered into by or on behalf of the company in which a director is in any way interested is not avoided by reason of the director's office or the fiduciary relationship it entails "but the nature of his interest must be declared by him at the meeting of the directors at which the contract or arrangement is first taken into consideration if his interest then exists or in any other case at the first meeting of the directors after the acquisition of his interest". By virtue of s.193(b), s.191 operates in addition to and not in derogation of this provision of the constitution. Mr Jackman submitted that, because Mr Terp, the only other director, was aware of Mr Casegrain's interests related to GC&Co, this requirement should be regarded as having been satisfied, even though there was no formal declaration of interest by Mr Cassegrain until the board meeting of 19 September 2001 at which the "reversal" was minuted. This submission was based on the judgments of Samuels and Mahoney JJA in Woolworths Ltd v Kelly (1991) 22 NSWLR 189. 48 As to Mr Cassegrain's actions in relation to the $38,894, Mr Jackman emphasised that Mr Cassegrain had taken and acted on legal advice. Whether the advice was right or wrong is, in his submission, beside the point. On the basis of that advice, Mr Cassegrain believed that, in the absence of any decision by the receivers of GC&Co, the directors could act. Mr Cassegrain also believed that, as the sum of $38,894 was payable by CTK on demand made by GC&Co, there was nothing wrong with causing GC&Co to call it up: CTK would have to pay sooner or later. The problem arose when, contrary to Mr Cassegrain's expectations (which he considered to be reasonable), the receivers did not agree with what he had done. Again with the assistance of legal advice, Mr Cassegrain proceeded to undo, as best he could, what he had done. 49 Turning to the unallocated administrative expense, Mr Jackman submitted, in essence, that Mr Cassegrain had been the victim of unreliable memory. When he recorded the figure of $100,000 in the report as to affairs, he had forgotten the details of the note to the 30 June 1997 accounts. Moreover, when, in September 2001, he wrote to the receivers in his capacity as managing director of CTK saying that "CTK owes GC&Co $500,000", he was not stating a position accepted by CTK but, rather, describing a basis of calculation. This is said to be made clear by the full context: "CTK acknowledges that the value of the work undertaken by GC & Co as at 31 July 1999 was $10 million. CTK also acknowledges that the land it owned represented 50 hectares or 5% of the land subjected to the expenditure of some $10 million by GC & Co. The above indicates CTK owes GC & Co $500,000."

All CTK says here is that the value of the work carried out by GC&Co was $10 million, that CTK owed 5% of the total land and that 5% of $10 million is $500,000. 50 Mr Cassegrain's subsequent conversation with Mr Hutton about the possibility of settling for $75,000 took place, in Mr Jackman's submission, before Mr Cassegrain had remembered the full import of the note to the 1997 accounts. 51 The change in Mr Cassegrain's position reflected in the letter of 17 December 2001 to the GC&Co receivers was, Mr Jackman said, consistent with the position in the note to the 1997 accounts and with Mr Cassegrain's having re-familiarised himself with that position. That was a position Mr Cassegrain reiterated the following day at the annual general meeting of CTK as recorded in Mr Dunn's notes. It is also the position he later conveyed to the receivers. 52 In summary, it is submitted that, once Mr Cassegrain's memory had been refreshed, he consistently maintained that there was no liability on CTK's part and took steps to correct what he had previously said to the contrary. The relevant legal principles 53 The question the court must address as a prelude to deciding whether a winding up order should be made (that being the only relief Mr Dunn seeks) is whether any of the following propositions is sufficiently established by the evidence, namely (a) that directors of CTK have acted in its affairs in their own interests rather than the interests of CTK's members as a whole; (b) that directors of CTK have acted in its affairs in a manner prejudicial to the interests of CTK's members as a whole; (c) that affairs of CTK are being conducted in a manner that is oppressive; (d) that affairs of CTK are being conducted in a manner that is (i) unfairly prejudicial to; or (ii) unfairly discriminatory against a member or members; (e) that affairs of CTK are being conducted in a manner that is contrary to the interests of the members as a whole; (f) that an act or omission by or on behalf of CTK was oppressive; (g) That an act or omission by or on behalf of CTK was (i) unfairly prejudicial to; or (ii) unfairly discriminatory against a member or members; (h) that an act or omission by or on behalf of CTK was contrary to the interests of the members as a whole; and (i) that, whether by reason of any of the above or independently, there are adequate grounds for an opinion that it is just and equitable that CTK be wound up. 54 This list represents those of the criteria specified in the paragraphs of s.461(1) upon which the plaintiff relies - being paras (e), (f), (g) and (k) - which are capable of applying in the circumstances. Omitted from consideration, because, on any view of the facts, they simply cannot be relevant, are the elements concerned with "a proposed act or omission" and "a resolution, or a proposed resolution, of a class of members of the company". The plaintiff's complaints all relate to past conduct. There is no suggestion that there is any particular proposal in view or in train to which exception is taken. 55 I should record that all the matters the subject of complaint are properly regarded as forming part of the "affairs" of CTK as that expression is to be understood in the light of s.53(a) to (k). Furthermore, to the extent that the complaints concern the episode involving the $38,894 and the events in relation to the unallocated administration expense, they are complaints in relation to an act or omission (or several acts or omissions) "by or on behalf of" CTK, although the same cannot be said of the elements of complaint centred upon the exercise of power (or, perhaps, the power vacuum) in relation to the A class shares. 56 I should also record that, although I have set out the relevant considerations separately and individually in items (a) to (i) above, none of them should be viewed in isolation from the others, each element being but one facet of an overall inquiry in which the conduct complained of must be measured against s standard of conduct which embraces all of the separate elements. Speaking of s.232 which creates jurisdiction exercisable in a variety of situation described in terms similar to those now under discussion, gathered together under a general heading of "Oppressive conduct of affairs", Spigelman CJ said in Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672: "The statutory formulation has been extended over the years to confer on the court a wide-ranging remedial jurisdiction. The addition of the words 'unfairly prejudicial to' and 'unfairly discriminate against', to the original statutory reference to 'oppressive', indicates an intention that the jurisdiction should not be confined by technical distinctions: see eg Re Saul D Harrison & Sons plc [1995] 1 BCLC 14 at 17-20; Re a Company (No 00709 of 1992); O'Neill v Phillips [1999] 2 All ER 961; [1999] 1 WLR 1092 at 1098-1101."

The co-existence of the several elements in the statutory formulation based on oppression, unfair prejuduce and unfair discrimination occurs "with each helping to explain the other": Thomas v H W Thomas Ltd [1984] 1 NZLR 686. The same message comes through from the judgment of Young J in Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 where it was said that the provisions are looked at as a composite whole, with the individual elements seen as "merely different aspects of the essential criterion, namely commercial unfairness": see also Dosike Pty Ltd v Johnson (1996) 16 WAR 241. 57 The following summation appears in the judgment of Bergin J in Liasotos v Kefalinian Brotherhood 'O Kefals' of NSW [2000] NSWSC 1138: "The parties are ad idem that the totality of the conduct and all the circumstances of the case must be assessed to determine whether there is oppression: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1998) 28 ACSR 688 at 739. A finding of oppression may be made in circumstances in which the conduct complained of involves a visible departure from the standards of fair dealing and a violation of the conditions of fair play: Re Ingleburn Horse & Poney Club & The Companies Act [1973] 1 NSWLR 641 at 646. The Court may intervene if a decision has been made so as to impose a disadvantage, disability or burden on the plaintiff that, according to ordinary standards of reasonableness and fair dealing are unfair: Wayde v New South Wales Rugby League Club Ltd (1985) 180 CLR 459 per Brennan J at 472." It is clear from the context that her Honour was here referring to the composite oppression, unfair prejudice and unfair discrimination formula. 58 In this particular case, I think all the individual elements and their summation come down to the question whether there has been, in the company's affairs and by virtue of the conduct of Mr Cassegrain (and, to the extent relevant, Mr Terp) of which complaint is made, such a disregard for or neglect of the interests of the B class shareholders - being the group to which the plaintiff belongs - as to justify a conclusion of injustice, unfairness or oppression. Only if that question is answered "yes" can it be said that grounds envisaged by any of s.461(1)(e), (f) and (g) have been made out. And if those grounds are made out, it will probably follow that the "just and equitable" ground in s.461(1)(k) is also made out (O'Neill v Phillips [1997] 2 All ER 961), although, clearly enough, that ground has additional and distinct dimensions of its own. 59 Any positive answer, it seems to me, must be reached by reference not merely to some abstract characterisation the directors' conduct (including whether they have lived up to "a standard of reasonable directors possessed of any special skill, knowledge or acumen possessed by the directors": Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459 per Brennan J) but also to the legitimate expectations of the B class shareholders and the plaintiff as a member of that group. What is unjust, unfair or oppressive can only be judged by reference to what people are entitled to expect. This is recognised in Aqua-Max Pty Ltd v MT Associates Pty Ltd [2001] VSCA 104.

The position of B class shareholders 60 The A class shares carry voting rights to the exclusion of the B class shares; while the B class shares carry dividend rights to the exclusion of the A class shares. The company's basic configuration is therefore one in which B class shareholders have no right or expectation to participate in decisions about how the board of directors is constituted or who is elected to it. Nor do they have any right or expectation to participate in decisions about the content of the corporate constitution or whether the company should go into liquidation by way of members' voluntary winding up. Anyone who becomes a B class shareholder does so on the express footing that none of those matters is a matter in relation to which he or she is able to exercise influence in the ordinary decision making forums of the company. The A class shareholders alone exercise that influence. In that sense, the B class shareholders are very much akin to sleeping partners. 61 The B class shareholders do, however, enjoy to the exclusion of the A class shareholders the rights to receive dividends and, in that way, to enjoy the financial fruits of any success the company enjoys. But the B class shareholders do not, either directly or indirectly, have any ability to participate in decisions that dividends should or should not be paid. They will receive only such dividends as the general meeting declares under art 130 (with A class shareholders only voting) and such interim dividends as the directors (themselves A class shareholders) determine should be paid under art 133. Unless and until non-payment of dividends itself enlivens the provisions about oppression, unfair prejudice and unfair discrimination (see, for example, Re D G Brims & Sons Pty Ltd (1995) 16 ACSR 559), the B class shareholder must be content with such dividends, if any, as the A class shareholders and the directors see fit to give them. 62 These particular features of CTK's constitution and structure set this case apart from those in which a shareholder complains of exclusion from management in a company which is effectively a partnership in corporate form: see, for example, Belgiorno-Zegna v Exben Pty Ltd (2000) 35 ACSR 305. In CTK, B class shareholders are passive investors with no expectation of participating in management and, so far as general meetings are concerned, a right to attend and probably to speak (it being clear from the evidence that Mr Dunn was in the habit of speaking at such meetings) but with no right or ability otherwise to shape corporate decision making. 63 I mention these aspects of the position occupied by B class shareholders not to suggest that they do not deserve or enjoy legal protections but to show that the protections to which they are entitled can only be commensurate with the rights they enjoy; and, as a corollary, that factors which might in other companies be relevant to findings of oppression, unfair prejudice and unfair discrimination, such as exclusion from management, play no part here. 64 It goes without saying that the B class shareholders, as part of the general body of shareholders, are entitled to expect that the directors of the company will well and faithfully perform their duties as directors. If anything, the inability of the B class shareholders, as a group, to influence the composition of the board in a situation where it is only the A class shareholders, being those possessing voting rights, who can either be directors or elect directors, sharpens expectations that the directors will be attentive to their duties as they affect the non-voting members. 65 The law places in the hands of every member of a company the ability to set that company in motion to recover loss or damage it suffers at the hands of directors who are themselves unwilling to cause the company to pursue such claims. This is the effect of the provisions in Part 2F.1A of the Corporations Act which became operative on 13 March 2000. If a member can show that there is a serious question to be tried, that the member is acting in good faith , that the company itself will probably not pursue the claim and that it is in the best interests of the company that the claim be pursued, a court is compelled to allow the member to pursue the claim for the company. That avenue is available to all members of a company, regardless of the rights and disabilities arising from the constitution. It is available to B class shareholders of CTK. Characterisation of Mr Cassegrain's conduct 66 The complaint that Mr Cassegrain is, in some abstract sense, in a position of intolerable conflict does not, to my mind, withstand scrutiny. It is true that he is a director and shareholder of GC&Co, as well as of CTK, and that, as a guarantor of very substantial debts of GC&Co, he bears a heavy contingent liability. But the various positions he occupies within and in relation to GC&Co are, of themselves, largely irrelevant to his ability to function effectively as a director of CTK. It has been recognised for more than a century that no legal principle precludes the holding of multiple directorships: London and Mashonaland Exploration Co Ltd v New Mashonaland Exploration Co Ltd [1891] WN 165. The real challenge and responsibility faced by persons holding multiple directorships or having multiple interests is to deal properly with conflicts between duty and duty or between duty and interest as an when they arise: see, for example, Fitzsimmons v R (1997) 23 ACSR 355. It is thus meaningless to speak of "intolerable conflict" by virtue of the holding of multiple offices or interests except by reference to a particular factual context. 67 Here, there were, at material times, two points of contact or overlap between the affairs of CTK and those of GC&CO, leaving to one side matters of structure such as shareholdings and directorships. One was the debt of $38,894 owing by CTK to GC&Co and payable on demand, the other the co-operation in earlier years in the proposal to develop land. Today, only the latter remains and, in relation to that, it has been established that there is no longer any financial tie or responsibility, so that the contact is properly regarded as a matter of history unless and until some possibility of property joint venture re-emerges. That being so, it is simply no more possible to say of Mr Cassegrain that he is in a position of intolerable conflict because of his relationships with CTK and GC&Co than it is to make that statement of a professional company director who sits on the boards of several public companies which, by and large, lead separate lives in their own spheres. Such a person must remain attuned to the possibility that different allegiances will come into collision and, when that happens, he or she must take appropriate evasive action. Mr Cassegrain occupies, in relation to CTK and GC&Co, a position of that kind. 68 But what of Mr Cassegrain's past conduct? As regards the unallocated administration expense, I must say that I regard him as having been guilty of muddle-headedness but nothing more. I do not accept that he set about sowing seeds in the minds of the GC&Co receivers from which he hoped to see grow a compromise in which CTK paid $75,000 to GC&Co. I accept that his recollection of the arrangement about sharing of the costs of the work done towards the earlier development project was faulty, that he refreshed his memory as time went on and that, when full recollection had been achieved, he took steps to correct what he had said in the first place and at subsequent stages. In particular, I accept that he did not at any time intend to admit on CTK's behalf that it was indebted to GC&Co in the sum of $500,000 and that he made no such admission. I accept the characterisation of the letter of 25 September 2001 advanced by Mr Jackman. 69 A particular factor which has influenced me in reaching these conclusions with respect to the unallocated administration expense is the apparent lack of any cogent reason why Mr Cassegrain would want to divert $75,000 from CTK to GC&Co. He and members of his family are shareholders of CTK. They hold not only voting (A class) shares but also substantial numbers of the B class shares which enjoy financial participation. Mr Cassegrain and his family interests thus have something to gain from the financial health of CTK. The position in relation to GC&Co is different. It is in receivership. The likely deficiency (for which Mr Cassegrain is admittedly contingently liable as a guarantor) is estimated by the receivers to be of the order of $1.5 million. GC&Co is also indebted under the Stacks mortgage. But as the events in relation to the $38,894 showed, the receivers are not going to allow funds which come into their hands to go towards payments due under the Stacks mortgage in such a way as would relieve the pressure on Mr Cassegrain as a guarantor of the mortgage debt. One therefore asks rhetorically what Mr Cassegrain could possibly have hoped to achieve from some deliberate plot to divert $75,000 of CTK's funds into the hands of the GC&Co receivers who would have applied it in such a way as to reduce a looming shortfall of $1.5 million. Any answer that he would benefit by the reduction in the shortfall from $1.5 million to $1.425 million no doubt has theoretical merit but overlooks the reality that, from his point of view, each sum means the same kind of financial ruin. 70 The same analysis does not hold good in relation to the $38,894. In that case, Mr Cassegrain took action which can only be characterised as having been for the benefit of GC&Co and Mr Cassegrain himself. From the perspective of CTK's interests, retention of $38,894 in the bank and continuation of the liability in that amount to GC&Co would have been preferable to either absence of the cash resource and relief from the liability or, as eventually happened, absence of the cash resource and its replacement by a debt owing by a person contingently liable for a shortfall estimated at $1.5 million, with the debt to GC&Co reinstated. 71 Mr Cassegrain's view of these matters appears from the following part of his cross-examination: "Q. And do you say that when acting in your capacity as a director of CTK in that series of transactions, that you were acting honestly and without the purpose of advancing the interests of yourself at the expense of the company? A. I - I can say that. Q. And what interests of the company have been taken into account when you made those decisions, in particular the decision to pay the sum away? A. The company owed a debt and it was paying its debt and there was no - there is - the company, you know, CTK, had to repay the money that it owed. Q. Were you not more concerned to ensure that GC and Co paid its obligations under the various mortgages? A. I was concerned that GC and Co recover the money that was owed by CTK to enable it to pay its urgent debts. That, in turn - that's what made the debt urgently required. Q. And that was the only urgency involved, wasn't it? A. To pay its debt? Q. Yes? A. The moneys - GC and Co demanded from CTK that it repay its money urgently. It was due to be paid and CTK was satisfying that requirement. There was - the - there is no reason why it would not." 72 Mr Cassegrain's attitude was thus that, as CTK was required to pay the particular sum on demand, it was, as it were, ripe for the picking at any time. Putting this another way, he saw the on-demand character of the debt as depriving CTK of any right to be concerned about timing, its duty being simply to pay as and when GC&Co required, so that no interest of CTK was compromised or overridden when Mr Cassegrain, in his GC&Co capacity, demanded payment by CTK at a time which suited the exigencies of GC&Co's position, as well as his own. 73 There is some measure of substance in this. It is true that CTK would have had to pay sooner or later and that, as the debt was on-demand, the timing lay entirely in the hands of GC&Co. To that extent, it is understandable that Mr Cassegrain may have seen CTK's interests in the matter as minimal. But in playing the role of sole decision maker on the matter of timing, Mr Cassegrain fell into the error of making a decision with respect to a matter in which he had not only a conflict of duty and duty - his duty to CTK in relation to the preservation of its assets versus the duty to GC&Co to see it avoid the unfavourable consequences of failure to meet its financial commitments - but also a conflict between that duty to CTK and his personal interest in avoiding a call under his guarantee in repect of payments under the Stacks mortgage. In the result, Mr Cassegrain failed in his duty to CTK by causing the payment demand to be made. 74 Mr Jackman emphasised that Mr Cassegrain acted in relation to the $38,894 on legal advice. But the advice he sought and which Mr Cameron gave went only to his ability to act for GC&Co in circumstances where the receivers were in office. He did not seek, and therefore did not act upon, any legal advice as to the due discharge of the duties owed by him as a director of CTK. Conclusions on s.461(1)(e), (f) and (g) grounds 75 My assessment of the matters relevant to these grounds is that only one relevant circumstance has been shown, namely, the single breach of duty as a director by Mr Cassegrain to which I have just referred. In terms of the gravity of the consequences, it must be said that the net result of replacement of cash of $38,894 by a debt of the same amount owing by Mr Cassegrain did entail detriment to the company. The evidence does not allow me to draw any firm conclusions about Mr Cassegrain's capacity to pay but, given the guarantees to which he is party, I infer that he finds himself in circumstances of financial stress, so that, for CTK, a debt owing by him is less attractive and secure than a debt owing by the company's bank. 76 But does this single default, not forming part of any pattern of behaviour or continuing course of conduct, add up to a case within one of the relevant paragraphs of s.461(1) particularly where, as I have said, Mr Cassegrain's failure to appreciate that what was done was contrary to the interests of CTK may have been understandable in a subjective sense? The answer, I think, depends on the same kind of considerations as would be applied in deciding whether, under s.1318, a court would excuse Mr Cassegrain. It is not clear to me that such relief would be given. I therefore conclude that the single default is, in theory at least, capable of grounding an order for winding up the general rubric of paras (e), (f) and (g) of s.461(1) and, more particularly, under that part of paragraph (g) concerned with a single past act which was contrary to the interests of the members as a whole. Should a winding up order be made? 77 In deciding whether a winding up order should be made, I start from the position enunciated by the Privy Council in Cumberland Holdings Ltd v Washington H Soul Pattinson & Co Ltd (1977) 2 ACLR 307: "Indeed the statutory provisions are widely expressed and effect should be given to them in accordance with their terms whenever the court comes to the conclusion that there has been a lack of fairness, or oppression, or lack of probity on the part of the majority, or of the directors representing the majority. But to wind up a successful and prosperous company and one which is properly managed must clearly be an extreme step and must require a strong case to be made." 78 It is significant that winding up is the only remedy the plaintiff seeks. He bases his claim on the various paragraphs of s.461, not on ss.232 and 233 which give the court jurisdiction to make a range of remedial orders in cases of conduct of the kind covered by those paragraphs of s.461. The jurisdiction under ss.232 and 233 enables the court to deal with cases of oppression, unfair prejudice or unfair discrimination by means of such orders as are just. The jurisdiction is thus both comprehensive and remedial. In Re Bird Precision Bellows Ltd [1986] 1 Ch 658, Oliver LJ said of the analogous United Kingdom provision: "It seems to me that the whole framework of the section, and of such of the authorities as we have seen, which seem to me to support this, is to confer on the court a very wide discretion to do what is considered fair and equitable in all the circumstances of the case, in order to put right and cure for the future the unfair prejudice which the petitioner has suffered …" 79 The flexibility of the section is such that virtually any order necessary to rectify the situation may be made. An order that the plaintiff's shares be purchased by the party guilty of the conduct in question, or by the company itself, is one that is expressly mentioned in the section and frequently made. An order authorising a member to institute proceedings in the name and on behalf of the company is another possibility recognised by s.233. An order that a person cease to be a director of the company was sought in Edwards v Idaville Pty Ltd (1996) 19 ACSR 556. 80 Yet the plaintiff here seeks no remedy but winding up. He avoids any claim under ss.232 and 233. He aspires to nothing less than supplanting of the board of directors by a liquidator who will proceed to realise assets, pay creditors and distribute any surplus. This indicates that the plaintiff's purpose is to produce the result he believes to be the appropriate one for CTK commercially, rather than to vindicate what he considers to be an invasion of his rights. I have already referred to the consensus within CTK that it should be wound up and the difference of opinion as to whether this should happen immediately or after further attempts have been made to secure rezoning of the land. The court, of course, will not enter into any debate about what is commercially desirable and, for that reason, will not have regard to the competing contentions - except to the extent of noting that these commercial considerations rather than vindication of legal rights may well be at the bottom of the plaintiff's claim for a winding up order. 81 From there I move to the question whether this is an instance where the "strong case" referred to by the Privy Council has been made. Apart from the commercial difference of opinion to which I have just referred, there is no evidence that CTK is in a situation of continuing impasse or where real risk of further oppression exists, these being indicators of the appropriateness of a winding up order identified by the Court of Appeal in Kokotovich Constructions Pty Ltd v Wallington (1995) 17 ACSR 478. On the contrary, the configuration of power within the company means that the board of directors can continue to perform its functions by making all necessary decisions. The B class shareholders, including the plaintiff, have no part to play at that level. Views contrary to those of the board that any B class shareholder may hold are simply beside the point when it comes to decision-making by the directors. 82 I turn next to the supposed power vacuum at the general meeting level - that is, the circumstance that the three issued A class shares, two held by Mr Cassegrain and one by Mr Terp, appear still to be held in trust for GC&Co which, since the appointment of its receivers, has not been active in the affairs of CTK. I refer to this as a "supposed" power vacuum because I am not satisfied that it exists. So far as the Act and the constitution are concerned, the two A class shareholders are quite able to exercise their powers so as to effect valid resolutions of the company in general meeting. The express covenant in the declarations of trust in favour of GC&Co which I take to be binding upon those shareholders is: "That the Trustee shall not vote at any meetings of the Company in respect of the said share contrary to any direction of the Owner."

The covenant does not prevent exercise of the voting rights by the trustee as the trustee thinks appropriate in the interests of the beneficiary where that beneficiary has not seen fit to give any direction as to voting. This is the position that would prevail in the absence of the covenant: see R P Meagher and W M C Gummow, "Jacobs' Law of Trusts in Australia", 6th edition (1997) at para [2051]. There is accordingly no power vacuum at all, even if the receivers of GC&Co are inactive. 83 A consequence of what I have just said is that, unless and until the GC&Co receivers do become active in the sphere of voting at general meetings of CTK, voting rights at shareholder level will be exercised by the directors, given the coincidence in the identity of the A class shareholders and the directors. But that is not a matter for either comment or concern in this particular company. Its constitution affirmatively requires that the directors to be chosen from the ranks of the A class shareholders and excludes all other persons from eligibility. It is therefore part of the members' compact that there should be at least some measure of coincidence between membership of the board and membership of the A class shareholder group; and, if the A class shareholders so desire, there may be complete coincidence. 84 The inability of a company to carry on because of effective and permanent destruction of one of its decision making organs may warrant the making of a winding up order: see CIC Insurance Ltd v Hannan Pty Ltd (2001) 38 ACSR 245. For the reasons given, this is not a case in which such destruction has occurred or inability to carry on has been shown. 85 In FAI Insurances Ltd v Goldleaf Interior Decorators Pty Ltd (1988) 14 NSWLR 643, it was held by both Mahoney JA and McHugh JA that, where grounds for the making of a winding up order are shown, s.461 reserves to the court a discretion whether actually to make the order. The same approach was taken in the particular context of the just and equitable ground in International Hospitality Concepts Pty Ltd v National Marketing Concepts Inc (No 2) (1994) 13 ACSR 368. Proof of grounds does not lead to the conclusion that an order must be made. Generally speaking, winding up is appropriate where it is shown that relevant prejudice will occur if the company is allowed to carry on under its existing controllers. A situation where the company is insolvent and continuation will prejudice the interests of creditors is the most commonly encountered example. The nature of the discretion as it applies to winding up on the just and equitable ground (and, in my view, on the composite oppression, unfair prejudice and unfair discrimination ground) was explained thus in Loch v John Blackwood Ltd [1924] AC 783: "It is undoubtedly true that at the foundation of applications for winding up, on the 'just and equitable' rule, there must lie a justifiable lack of confidence in the conduct and management of the company's affairs. But this lack of confidence must be grounded on conduct of the directors, not in regard to their private life or affairs, but in regard to the company's business. Furthermore the lack of confidence must spring not from dissatisfaction at being outvoted on the business affairs or on what is called the domestic policy of the company. On the other hand, wherever the lack of confidence is rested on a lack of probity in the conduct of the company's affairs, then the former is justified by the latter, and it is under the statute just and equitable that the company be wound up." 86 In this case, there has been lack of probity, if at all, only to the extent of one instance of breach of duty by a director in circumstances where he believed his actions to be justified. Members who hold the view that the company should pursue the director for redress have at their disposal the procedures provided by Part 2F.1A. The one instance does not, of itself, warrant an order for winding up. It has not been shown that the one episode centred upon calling of an on-demand debt is likely to be repeated or should be viewed as part of some wider course of deleterious conduct warranting winding up of the company.

Conclusion 87 This is not a case in which an order for winding up should be made. The claims in the amended summons are dismissed with costs.

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