In the matter of Hillsea Pty Limited [2019] NSWSC 1152

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Hillsea Pty Limited [2019] NSWSC 1152 Hearing dates: 12 – 14 June 2019; 16 July 2019 Decision date: 04 September 2019 Jurisdiction: Equity - Corporations List Before: Black J Decision: Remaining claims in the Originating Process are either not pressed or fail; the Second Cross-Claim fails; orders validating certain transactions to be made; order that the Second Defendant be wound up to be made, that order to be stayed for 21 days; and the First Defendant's Notice of Motion filed on 14 May 2019 to be dismissed. The parties to bring in short minutes of order to give effect to this judgment and as to costs within 7 days. Catchwords: CONTRACTS – formation – intention to create legal relations – alleged oral agreement to pay interest on loans from family company at specified rate – where some interest payments were made – where evidence of conversations with deceased party to alleged oral agreement was unsatisfactory – whether legally binding obligation to pay interest at specified rate established.

CORPORATIONS – claim for overpayment of director's remuneration – family company – where informal arrangements for remuneration of directors –where no challenge to earlier informal arrangements in respect of another director – where director made payments from company funds to third parties – whether remuneration paid to director and payments to third parties should be validated under s 1322 of the Corporations Act 2001 (Cth).

CORPORATIONS – application for winding up – solvent company – where original purpose of company no longer implemented – where failure of personal relationships between shareholders – whether company should be wound up under ss 461(1)(c) or 461(1)(k) of the Corporations Act 2001 (Cth). Legislation Cited: - Civil Procedure Act 2005 (NSW) s 56 - Companies Act 1936 (NSW) s 361 - Corporations Act 2001 (Cth) ss 140, 199A(3), 201A, 249A, 461(1)(c), 461(1)(f), 461(1)(g), 461(1)(k), 1318, 1322, 1322(4), 1322(4)(a), 1322(4)(c), 1322(6) - Income Tax Assessment Act 1936 (Cth) Pt III Div 7A Cases Cited: - Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 - Bernhardt v Beau Rivage Pty Ltd (1989) 15 ACLR 160 - Blendell v Byrne [2019] NSWSC 583 - Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599 - Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 - Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 - Great Southern Finance Pty Ltd (in liq) v Rhodes [2014] WASC 431 - Hillam v Ample Source International Ltd (No 2) [2012] FCAFC 73; (2012) 202 FCR 336 - John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 - Morley v Australian Securities and Investments Commission (No 2) [2011] NSWCA 110; (2011) 83 ACSR 620 - Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343 - Ngarluma Aboriginal Corporation RNTBC v Ramirez [2018] FCA 1900 - Ormwave Pty Ltd v Smith [2007] NSWCA 210 - Pennimpede v Pennimpede [2009] NSWSC 85 - Re Continental Pacific Insurance Co (Australia) Ltd [2002] NSWSC 789 - Re Hillsea Pty Limited [2017] NSWSC 1870 - Re Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547 - Re Tivoli Freeholds Ltd [1972] VR 445 - Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418 - Sheahan v Londish [2010] NSWCA 270; (2010) 80 ACSR 337 - Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104 - Watson v Foxman (1995) 49 NSWLR 315 - Weinstock v Beck [2013] HCA 14; (2013) 93 ACSR 231 Category: Principal judgment Parties: Elizabeth Mary McIvor (First Plaintiff/First Cross-Defendant to First Cross-Claim/Second Cross-Defendant to Second Cross-Claim) Maureen Ann Joseph (Second Plaintiff/Second Cross-Defendant to First Cross-Claim/Third Cross-Defendant to Second Cross-Claim) Peter Anthony Joseph (First Defendant/Cross-Claimant to First Cross-Claim/First Cross-Defendant to Second Cross-Claim) Hillsea Pty Limited (Second Defendant/Third Cross-Defendant to First Cross-Claim/Cross-Claimant to Second Cross-Claim) Representation: Counsel: A J Grant (Plaintiffs) D A Smallbone/D Edney (First Defendant) M R Tyson (Second Defendant)