Wily v Cenepro Pty Ltd [2000] NSWSC 347

New South Wales Supreme Court

CITATION : Wily v Cenepro Pty Ltd [2000] NSWSC 347 CURRENT JURISDICTION: Equity Division Corporations List FILE NUMBER(S) : SC 3979/99 HEARING DATE(S) : 17/04/2000 JUDGMENT DATE : 17 April 2000

PARTIES : Andrew Hugh Jenner Wily (P) Cenepro Pty Limited (D) JUDGMENT OF : Young J

COUNSEL : F Gleeson (P) C R C Newlinds (D) SOLICITORS : The Walker Law Group (P) Kemp Strang (D) CATCHWORDS : CORPORATIONS [219]- Winding up- Just and equitable ground- Complaint that directors failed to pursue legal action- Such allegations not precluded by ss 236 and 237 of Corporations Law LEGISLATION CITED : Corporations Law, ss 236, 237 Re Co-operative Development Funds of Australia (No 3) (1978) 3 ACLR 437 CASES CITED : Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1998) 28 ACSR 688 Foss v Harbottle (1843) 67 ER 189 DECISION : See paras 19-23

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST YOUNG J MONDAY 17 APRIL 2000

3979/99 - ANDREW HUGH JENNER WILY v CENEPRO PTY LIMITED

JUDGMENT 1 HIS HONOUR: This is a motion to strike out paragraphs 25 to 36 of the statement of claim filed 13 December 1999. 2 The statement of claim was filed after pleadings were ordered in a suit to wind up the defendant company, Cenepro Pty Ltd (the "Company") on the just and equitable ground. The statement of claim sets out under headings B, C, D and E four distinct groups of allegations as to why it is just and equitable to wind the Company up. 3 Paragraphs 25 through to 36 under heading E deal with what is referred to as the "Lot 7A Gap Road transaction". 4 The pleader pleads that the Company purchased the property known as 7 Gap Road Watsons Bay in 1993, that it subdivided the property, and in December 1996 transferred what is now known as Lot 7A Gap Road to Jennifer Jamieson for a purported consideration of $1,032,000, which Mrs Jamieson did not pay to the Company. Three months later Mrs Jamieson transferred Lot 7A to another person for over double the notional consideration in her transfer. The pleader puts that in the premises, it is just and equitable that the Company be wound up under the Corporations Law. 5 The defence, filed on 17 February 2000, admits most of the allegations that were made under heading E, but pleads that there was a trust set up by an agreement made in January 1993 whereby Mrs Jamieson was to have half the property held on trust for her in consideration of her forbearing certain things and doing certain things. 6 The amended reply, which is still in draft form, asserts, though with respect to the pleader not completely satisfactorily, that the alleged agreement is not admitted, but that, even if it was in place, Mrs Jamieson was in breach of her obligations under it and that the Company was, therefore, entitled to recover from Mrs Jamieson various amounts. There are then particulars given which suggest that the then directors of the Company, William Jamieson (currently a bankrupt whose trustee is the plaintiff) and Nancy Weeks, breached their duties of care and diligence in transferring the property to Mrs Jamieson. This was because it was unnecessary for the Company to do so in view of Mrs Jamieson's breach of the agreement, or, in any event, there was no legitimate advantage to the Company in doing this, or that there was no consideration. It is further put in the particulars that Mrs Jamieson "ought to have acquired, either by observation or inference, knowledge of the said breaches of duty by William Jamieson and Nancy Weeks". 7 Mr Newlinds for the defendant essentially puts that the relevant paragraphs of the statement of claim should be struck out: