Matrix Global Investment Group [2021] NSWSC 80

Coffee and a Case Note

“You moved the Co’s money, so let’s wind it up!”
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The As, spouses and owners of 45% of the shares in a Co, came to Court to try to wind up the Co including pursuant to s461 of the Corporations Act 2001 (Cth).
One of the Rs owned the balance of the Co’s shares, being 55%: [4]
The As, as shareholders, had standing to bring the claim: [10]
They had the consent of a liquidator willing to accept an appointment: [8]
The Co was in the business of finding buyers for new property developments: [13]
The As (one of whom was a director) and one of the Rs participated in the business and took a commission: [14]
In December 2017, one of the Rs orally indicated (though never formalised in writing or with ASIC) that they would “quit” and created a new entity, NewCo: [15]
By Feb 2018, the Rs had ceased to work in the Co’s business: [16], [17]
Through 2018 the As continued to work on the Co’s business, and there were some talks about deregistering: [18], [19]
By the end of 2018, the Co had ceased taking on new business and had no current activities at the time of the hearing. Its bank account remained open to accept any further commissions that might be payable: [20]
In May 2020 one of the Rs represented that they “will quit”. That R’s shares were transferred, but their resignation as director was not registered with ASIC: [21]
In June 2020 the Co received a significant commission, paid into its bank account: [22]
The Rs purportedly (“purportedly” because arguably they had resigned as directors by this time by their earlier “quit” representations) resolved to commence proceedings against the As and remove them as bank account signatories: [23]
Rs in their (purported) capacity as directors met with the relevant A and resolved to pay the commission into NewCo’s bank account: [29]
In fact, the money had already been transferred to NewCo’s account a few days earlier: [30]
A provisional liquidator was appointed at the As’ application: [34]
The Co was ordered to pay the relevant funds into Court: [35]
The Court briefly retraced some fo the law relating to a “just and equitable” windup, noting that circumstances amounting to corporate oppression were not necessary: [41]
The Court was satisfied it was just and equitable to windup the Co including because: (i) complete breakdown in shareholder relations, (ii) majority shareholder transferring Co funds over objection of other shareholders thereby frustrating the Co’s operation, and (iii) the As having tried an alternative less drastic remedy of having funds paid into Court and the Co not complying: [42]
The Court ordered that the Co be wound up: [44]