Maine & Anor v Chelia & Ors [No 2] [2005] NSWSC 425

New South Wales Supreme Court

CITATION : Maine & Anor v Chelia & Ors [No 2] [2005] NSWSC 425

HEARING DATE(S) : 20 April 2005

JUDGMENT DATE : 20 April 2005

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

DECISION : Application for provisional liquidator refused.

CATCHWORDS : CORPORATIONS - PROVISIONAL LIQUIDATOR - Where Plaintiff seeks to wind up solvent company on just and equitable ground and seeks interim appointment of provisional liquidator, the court will consider other means of preserving status quo.

- D.G. Brims and Sons Pty Ltd, Re (1995) 16 ACSR 559 - Constantinidis v JGL Trading Pty Ltd (1995) 17 ACSR 625 CASES CITED : - Ebrahimi v Westbourne Galleries Limited [1973] AC 360 - Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1998) 28 ACSR 688 - Zempilas v J.N. Taylor Holdings Limited (No 2) (1990) 55 SASR 103

Anthony Leonard Maine - First Plaintiff Newsnet.com Pty Ltd - Second Plaintiff Coomar Chelia - First Defendant PARTIES : Indrajit Solomon Arulampalam - Second Defendant Jardine Thompson Pty Ltd (formerly Opipo Pty Ltd) - Third Defendant Digital Messaging Solutions Pty Ltd - Fourth Defendant

FILE NUMBER(S) : SC 2352/05

F.G. Lever SC - Plaintiffs COUNSEL : B. Goldsmith (Sol) - Defendants

Landerer & Co - Plaintiffs SOLICITORS : Goldsmiths - Defendants

LOWER COURT JURISDICTION :

Ex tempore

1 The First Plaintiff, Mr Tony Maine, was until a few days ago a director of the Fourth Defendant ("Digital"). The Second Plaintiff ("Newsnet"), is a company controlled by Mr Tony Maine and his brother Mr Peter Maine. Newsnet is a 45% shareholder of Digital. 2 The First Defendant, Mr Chelia, and the Second Defendant, Mr Arulampalam, are directors of Digital. Mr Chelia, through his own shareholding and the shareholding of companies controlled by him, controls 55% of the shares in Digital. In broad terms, Mr Tony Maine has a 45% interest in Digital and Mr Chelia has a 55% interest. 3 Digital is a joint venture company, being an amalgamation of two enterprises which have carried on very similar businesses as media broadcasters. The business of a media broadcaster involves providing facilities for multimedia messaging including fax, e-mail, voice mail and image and video distribution. Newsnet had carried on one such business and the Third Defendant ("Jardine") had carried on the other. Jardine was owned and controlled by Mr Chelia. 4 Newsnet and Jardine entered into a Joint Venture Heads of Agreement on 15 September 2004. Pursuant to that Agreement, Digital was registered on 20 September 2004 as the joint venture vehicle and Mr Tony Maine and Mr Chelia were appointed its first directors. On 1 October 2004 Mr Tony Maine's brother, Mr Peter Maine, and Mr Arulampalam were appointed additional directors. A Joint Venture Deed dated 30 September 2004 has been executed, the parties to which are Newsnet, Mr Tony Maine, Mr Peter Maine, Jardine and Mr Chelia. 5 The marriage between the two businesses controlled by the Maine interests on one hand and the Chelia interests on the other has proved a very short and unhappy one. Mr Tony Maine was removed as a director of Digital by resolution of the majority of the shareholders at an extraordinary general meeting on 5 April 2005. The reason for his removal is the allegation by Mr Chelia that Mr Maine conducts himself in the business in an aggressive and very rude manner, both towards himself and towards other staff, so that Digital's business is severely disrupted. 6 On 8 April 2005 Mr Tony Maine and Newsnet commenced these proceedings, seeking an urgent interlocutory order that he be reinstated as a director of Digital pending final determination of the proceedings. The final relief claimed was, at that stage, the same as the interlocutory relief claimed. The application came before me as Duty Judge on 12 April 2005. After a contested hearing I declined to grant the relief sought because, in my view, the balance of convenience was not in favour of it. 7 Later on 12 April 2005 Mr Chelia called a meeting of directors of Digital for 6:00pm on 13 April. At that meeting, which was attended by Mr Peter Maine representing the interests of Newsnet and Mr Tony Maine, a number of resolutions were passed, all of which were opposed by Mr Peter Maine on grounds which he reduced to writing and presented to the meeting. Relevantly, the majority of the directors resolved to approve a Deed of Charge to be given by Digital to secure a loan of $157,000 owed by the company to Mr Chelia. The Charge had been envisaged in the Joint Venture Deed between the parties. I will return to the Charge shortly. 8 On 13 and 14 April, Digital sent four cheques totalling about $22,000 to its solicitors, Messrs Goldsmiths, in payment of fees relating to these proceedings. 9 On 14 April the Charge in favour of Mr Chelia was lodged with ASIC for registration. On 15 April it was withdrawn from registration and on 18 April it was re-lodged for registration with a statement of particulars showing that the Charge was limited to secure no $157,000. 10 On 15 April, the Plaintiffs filed an Amended Summons which claimed by way of additional relief: "13A A declaration that the affairs of the fourth defendant have been conducted by the first and second defendants:–