By Originating Process filed 7 November 2023, the Plaintiff, Ms Jamila Maxwell, sought an order under s 461 of the Corporations Act 2001 (Cth) (the Act) that the First Defendant, Plassey Pty Limited, be wound up.
The Second Defendant, Mr Marius Maxwell, and Third Defendant, Mr Ian Maxwell, are the Plaintiff's brothers. The Fourth Defendant is her mother.
As at the date that the proceeding was commenced, each of the Plaintiff and her two brothers held approximately one third of Plassey's shares and one voting preference share. The Plaintiff's mother also held a small amount of Plassey's shares, but no voting preference share.
Mr Ian Maxwell is Plassey's sole director.
Plassey is a family company which was incorporated by the Plaintiff's late father for the purpose of holding the family's investments, primarily real property and gold bullion. It currently holds only gold bullion. It does not otherwise trade. It was common ground between the parties that the value of a shareholding in Plassey can be measured as approximately equal to the corresponding proportion of the gold bullion held by Plassey.
The Plaintiff confirmed in opening submissions that the only basis on which her winding up application was advanced was the just and equitable ground in s 461(1)(k) of the Act.
The proceeding was initially heard over two days, on 10 and 12 September 2024. On the day between those two hearing days, 11 September 2024, the Defendants made the Plaintiff an offer to buy-back her shares in Plassey, with the Plaintiff able to elect to receive either gold bullion (in which case she would receive a third of the balance of Plassey's gold, after part was sold to meet the estimated capital gains tax (CGT) liability) or, alternatively, cash (in which case one third of Plassey's gold would be sold, with an amount of cash being held to cover the estimated CGT liability and the balance being paid to the Plaintiff). The letter also included a proposal that each party bear their own costs of the proceeding.
On 12 September 2024, the Plaintiff indicated that she had not had an opportunity to consider and take instructions on this offer. I reserved judgment on the basis that, if the offer was not accepted, the parties would have an opportunity to make further submissions on the offer and its significance for the relief sought.
The parties subsequently informed my Associate that the offer had been accepted. Following acceptance of the offer, the Plaintiff became self-represented in these proceedings.
A settlement meeting took place on 12 November 2024, at which the Plaintiff provided a signed share transfer form and in return received gold bullion in the agreed quantity. She also received a cash contribution from her brothers to her CGT liability.
Accordingly, the Plaintiff is no longer a member of Plassey.
The matter is back before me today because the parties have not been able to agree on the terms of a settlement deed or the terms of final orders to resolve the proceeding. The parties were given leave to adduce further evidence regarding the course of events since the share buyback offer was made and to make further submissions in relation to those matters.
The Defendants seek an order, in terms of s 91(1) of the Civil Procedure Act 2005 (NSW), that the Plaintiff be barred from "bringing fresh proceedings or claiming the same relief in fresh proceedings". Otherwise, if the Court considers that it cannot or should not make such an order, the Defendants seek that the Court proceed to determine the merits and dismiss the Plaintiff's proceeding.
The Plaintiff's position is that there is no obligation on her to agree to such a condition and that it is a matter for the Court what orders should be made to finalise the proceedings.
Section 91(1) of the Civil Procedure Act provides that an order for the dismissal of proceedings (or part thereof) does not, subject to the terms on which such an order is made, prevent the plaintiff from bringing fresh proceedings or claiming the same relief in fresh proceedings. However, this provision is subject to s 91(2), which provides that where the Court makes an order for the dismissal of proceedings (or part thereof) following a determination on the merits, then the effect of such an order is that "the plaintiff is not entitled to claim any relief in respect of the same cause of action in any subsequent proceedings commenced in that or any other court".
In circumstances where the parties have taken steps since the proceedings to resolve the substance of the dispute between them, but have not agreed on the terms of an order resolving the proceedings (in particular, because the Plaintiff has not agreed to the terms of a proposed consent order barring her from bringing claims in the future), the appropriate course is for the Court to determine, in light of the events since the hearing, the orders that should now be made.
Having regard to those events and, in particular, the completion of a buy-back of the Plaintiff's shares in Plassey, I have determined that an order should be made dismissing the Plaintiff's application.
That is for two main reasons.
First, the Plaintiff is no longer a member of Plassey. Because she was previously a member, she had standing to commence the proceeding: s 462(2)(c) of the Act. However, it would be an abuse of process for the Plaintiff to continue to pursue her application after the point in time when the Plaintiff ceased to be a member: see In the matter of Indoor Climate Technologies Pty Ltd - Daher v Indoor Climate Technologies Pty Ltd [2018] NSWSC 1203 at [13] per Ward CJ in Eq (where the issue was the continuation of a winding up application after the applicant ceased to be a creditor). In saying that such conduct would be an abuse of process, I note that the Plaintiff did not, in the material which she has filed following leave to reopen, indicate any intention to continue to press for the substantive relief in her application after she ceased to be a member, that is, after 12 November 2024.
Secondly, the Plaintiff sought the winding up order, on the just and equitable ground, on the basis that Plassey was a closely held family company and the relationship between herself and the other shareholders of Plassey had broken down. In advancing this submission at the hearing in September 2024, the Plaintiff recognised that the winding up of a solvent company is a last resort, and submitted that this relief was being pursued in this case only because the Plaintiff had no other means to extract herself from Plassey and to realise the value of her shareholding and, in particular, because she had not been given any share buy-back offer.
At the hearing, the Plaintiff's Counsel put the basis of her application for a winding up order as follows:
"as the plaintiff explained in the course of her cross-examination, she has pursued two objectives: firstly to obtain the value that she owns in Plassey; and secondly to end her involvement altogether in the company. She made plain that relations with the other company members, her brothers in particular, had deteriorated so significantly that her continued association with them through Plassey was untenable. …
… The difficulty was, for the plaintiff, that despite her efforts she was never able to successfully obtain an explicit share buy back offer from the first defendant, nor was she successful in obtaining a share purchase proposal from the other defendants. …
… Ultimately, I make the submission that the evidence demonstrates intractable conflict between the shareholders who are unable to resolve the Plassey situation, if I can call it that, and in all the circumstances, it's submitted that the Court ordered winding up is the only feasible option. The plaintiff has not acted unreasonably in pursuing it as an option of last resort, after having pursued the other alternatives reasonably available to no avail and that simply put is the plaintiff's application and case …"
The Plaintiff's objectives, as stated in those submissions, have been met. She has received and accepted a share buy-back offer, and she has thereby obtained the value that she owned in Plassey and has ended her involvement in the company. In those circumstances, there is no continued basis for the winding up application.
For those reasons, I have made a determination on the merits that the Plaintiff's application must be dismissed. Accordingly, the consequence pursuant to s 91(2) of the Civil Procedure Act of making an order to dismiss the proceedings will be that the Plaintiff is not entitled to claim any relief in respect of the same cause of action in any subsequent proceeding.
The parties have agreed that there should be no order as to costs.
[2]
ORDERS
For those reasons, I make the following orders:
1. The Originating Process filed 7 November 2023 is dismissed.
2. There be no order as to the costs of the proceeding.
[3]
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Decision last updated: 06 December 2024
Parties
Applicant/Plaintiff:
In the matter of Indoor Climate Technologies Pty Ltd - Daher