Li v Ye [2024] NSWSC 1176

Supreme Court New South Wales

Medium Neutral Citation: Li v Ye [2024] NSWSC 1176 Hearing dates: 3, 4, 6, 11, 12, 24 June, 12 August 2024; further written submissions 23, 26 & 27 August 2024 Decision date: 18 September 2024 Jurisdiction: Equity - Commercial List Before: Stevenson J Decision: Oppression alleged by plaintiffs for the most part not established; oppression alleged by defendant established; companies in the Shield Group to be wound up Catchwords: CORPORATIONS – members' rights and remedies – oppression – power of court to order remedy – where group of companies engaged in the timber industry – where irretrievable break down in the relationship between various shareholders and directors of those companies – where competing allegations of oppression – plaintiffs' allegations for the most part not made out – defendant undoubtedly locked out of management of companies since November 2023 CORPORATIONS – winding up – where the group of companies is in a parlous financial state – where the principal trading company in the group is likely, or is actually, insolvent – where remedy sought by the plaintiffs would enable the group to trade and incur debts where there are reasonable grounds to suspect insolvency – where appropriate course to wind up the companies Legislation Cited: Corporations Act 2001 (Cth) Work Health and Safety Act 2012 (SA) Cases Cited: Ananda Marga Pracaraka Samgha Ltd v Tomas (No 6) (2013) 300 ALR 492; [2013] FCA 284 Australian Securities and Investments Commission v Plymin (No 1) (2003) 175 FLR 124; [2003] VSC 123 BAM Property Group Pty Ltd as trustee for the BAM Property Trust v Imoda Group Holdings Pty Ltd [2019] FCA 1192 Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567 Bentley Smythe Pty Ltd v Anton Fabrications (NSW) Pty Ltd (2011) 248 FLR 384; [2011] NSWSC 186 Bideena Pty Ltd as trustee for Bideena Pty Ltd Superannuation (2016) 334 ALR 146; [2016] NSWSC 735 Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 Campbell v BackOffice Investments Pty Ltd (2008) 66 ACSR 359; [2008] NSWCA 95 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 Cassegrain v CTK Engineering Pty Ltd [2005] NSWSC 495 Cowling v Mekken [2015] VSC 196 Elliott v Australian Securities and Investments Commission (2004) 10 VR 369; [2004] VSCA 54 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1998) 28 ACSR 688; [1998] NSWSC 413 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97 First Strategic Development Corporation Ltd (in liq) v Chan [2014] QSC 60 Food Improvers Pty Ltd v BGR Corporation Pty Ltd (No 4) [2007] FCA 220 French v Smith; French v Quarry Quip Engineering Pty Ltd [2004] VSCA 207 Gerard Cassegrain & Co Pty Ltd v Cassegrain [2011] NSWSC 1156 Helton v Allen (1940) 63 CLR 691; [1940] HCA 20 In the matter of Bias Boating Pty Limited (receivers and manager appointed) (in liquidation) [2018] NSWSC 1977 In the matter of Custom Bus Australia Pty Limited (in liq) [2021] NSWSC 1036 In the matter of JGS Investment Holdings Pty Ltd [2014] NSWSC 1532 In the matter of Pacific Plumbing Group Pty Ltd (in liq) [2024] NSWSC 34 In the matter of Swan Services Pty Limited (in liq) [2016] NSWSC 1724 International Cat Manufacturing (in liq) v Rodrick [2013] QCA 372 John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 Joint v Stephens [2008] VSCA 210 Lewis (as liquidator of Doran Constructions Pty Ltd (in liq)) v Doran (2005) 219 ALR 555; [2005] NSWCA 243 LPD Holdings (Aust) Pty Ltd v Phillips (2013) 281 FLR 227; [2013] QSC 225 Lucy v Lomas [2002] NSWSC 448 Lukaszewicz v Polish Club Ltd [2019] NSWSC 446 Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 Munstermann v Rayward; Rayward v Munstermann [2017] NSWSC 133 Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342 Patterson v Humfrey [2014] WASC 446 Quick v Stoland Pty Ltd (1998) 87 FLR 371; 157 ALR 615; [1998] FCA 1200 Re a company; ex parte Shooter (No 2) [1991] BCLC 267; [1991] BCC 44 Re Brenfield Squash Racquets Club Ltd [1996] 2 BCLC 184 Re Enterprise Gold Mines NL (1991) 3 ACSR 531; (1991) 9 ACLC 168 Re Quest Exploration Pty Ltd (1992) 6 ACSR 659 Smith Martis Cork & Rajan Pty Ltd v Benjamin Corporation Pty Ltd (2004) 207 ALR 136; [2004] FCAFC 153 Southern Cross Interiors Pty Ltd (in liq) v Deputy Commissioner of Taxation (2001) 53 NSWLR 213; [2001] NSWSC 621 SX Projects Pty Ltd (in liq) v Battaglia [2018] NSWSC 1830 Taxa Australia Pty Ltd v Wang [2016] NSWSC 1913 Tzavaras v Tzavaras & Sons Pty Ltd [2023] NSWCA 168 United Rural Enterprises Pty Ltd v Lopmand Pty Ltd (2003) 47 ACSR 514; [2003] NSWSC 910 Watson v Foxman (1995) 49 NSWLR 315 Wayde v NSW Rugby League Ltd (1985) 180 CLR 459; [1985] HCA 68 White Constructions (ACT) Pty Ltd (in liq) v White (2004) 49 ACSR 220; [2004] NSWSC 71 Zhong v Shield Resources Pty Ltd [2023] NSWSC 1611 Texts Cited: ASIC, Regulatory Guide 217, "Duty to prevent insolvent trading" Category: Principal judgment Parties: Xuxu Li (First Plaintiff) Kevin Ross Waters-Marsh (Second Plaintiff) Xiaosi Chaney Qian (Third Plaintiff) Mana Assets Management Pty Ltd (Fourth Plaintiff) XCQ Holdings Pty Ltd (Fifth Plaintiff) Phoenix Group Australia Pty Ltd (Sixth Plaintiff) Feng Ye (First Defendant) Thomas Gem Stone Pty Ltd in its own right and in its capacity as trustee of the Ye Family Trust (ABN 39 218 802 573) (Second Defendant) Shield Formply Australia Pty Ltd (Third Defendant) Shield Resources Pty Ltd (Fourth Defendant) Shield Holdings Australia Pty Ltd (Fifth Defendant) Shield Holdings South Australia Pty Ltd (Sixth Defendant) Shield Hardwood Pty Ltd (Seventh Defendant) Shield Intermodal Pty Ltd (Eighth Defendant) Shield Equipment Qld Pty Ltd (Ninth Defendant) Shield Timber SA Pty Ltd (Tenth Defendant) Shield Biomass Energy Pty Ltd (Eleventh Defendant) Shield Equipment Pty Ltd (Twelfth Defendant) Shield Construction Material Group Pty Ltd (Thirteenth Defendant) Oz Plantation and Hewer Pty Ltd (Fourteenth Defendant) Representation: Counsel: M R Elliott SC / B Goodyear (Plaintiffs) J C Kelly SC / A E Maroya (Defendants)