FEDERAL COURT OF AUSTRALIA

Great Australian Resources Pty Ltd; In the matter of Platinum Mining Ventures Limited [2011] FCA 1472

IN THE MATTER OF PLATINUM MINING VENTURES LIMITED ACN 109 097 261

THE COURT ORDERS THAT:

1.    Platinum Mining Ventures Limited ACN 109 097 261 (Company) be wound up by the Court pursuant to the Corporations Act 2001 (Cth).

2.    Christopher Michael Williamson and David Ashley Norman Hurt, both of Level 10, 111 St George’s Terrace, Perth, Western Australia, be appointed the joint and several liquidators of the Company.

3.    The plaintiff’s costs of the application be costs of the winding up.

4.    The plaintiff, Mr Williamson, Mr Hurt or any other person interested may apply for further orders and directions.

5.    The name of the plaintiff in these proceedings be amended to read ‘Great Australian Resources Pty Ltd’.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

IN THE MATTER OF PLATINUM MINING VENTURES LIMITED ACN 109 097 261

REASONS FOR JUDGMENT

application for winding up OF THE DEFENDANT

1    This is a proceeding in which the plaintiff sought an order that the defendant be wound up pursuant to s 461(1)(a) and s 461(1)(k) of the Corporations Act 2001 (Cth) (the Act). The plaintiff commenced proceedings seeking the winding up of the defendant on the basis of special resolution and ‘just and equitable grounds’.

2    The proceeding was initially listed as a directions hearing on 14 December 2011 and I allowed a substantive and final hearing of the matter on the same day. There was no appearance by the defendant.

Corporate structure and liabilities

3    The defendant is an Australian registered company incorporated on 14 May 2004. It is a wholly-owned subsidiary of the plaintiff.

4    In turn, the plaintiff is a wholly-owned subsidiary of Sylvania Resources Limited, an Australian registered company, which is a wholly-owned subsidiary of Sylvania Platinum Limited, a Bermudan registered company (collectively referred to as the ‘Sylvania Group’). The plaintiff was acquired by Sylvania Resources Limited on or about 16 October 2009 by way of an off-market takeover bid. Accordingly, the defendant was drawn into the Sylvania Group at that time.

5    This proceeding is essentially an application by the plaintiff parent company. The plaintiff has standing to bring the application pursuant to s 462(2)(c) of the Act as a contributory of the defendant.

6    The defendant does not have any material assets or liabilities. Following the review of the defendant’s accounts and records the defendant company does not have any assets and has not traded since it was acquired by Sylvania Group in 2009: see the affidavit of Mr Grant Button filed 3 November 2011 at [15].

7    There is no evidence of the defendant’s company statements before the Court. The plaintiff submitted that no accounts have ever been prepared in relation to the defendant since it was acquired by the Sylvania Group: see the affidavit of Mr Button filed 3 November 2011 at [16].

8    The only exception regarding the defendant’s material liabilities is a joint venture entered into by the defendant. The defendant was involved in a mineral exploration joint venture in South Africa called the ‘Mooiplaats Project’ (Project) whereby it had the right to acquire a 74% interest in the prospecting licence of the Project which it entered into with the South African Mining Development Company. The joint venture agreement was terminated on or about September 2010: see the affidavit of Mr Button filed 3 November 2011 at [14].

statutory considerations

9    Sections 461(1)(a) and (k) of the Act provides as follows:

461 General grounds on which company may be wound up by Court

    (1)    The Court may order the winding up of a company if:

(a)    the company has by special resolution resolved that it be wound up by the Court; or

…

(k)    the Court is of opinion that it is just and equitable that the company be wound up.

10    The plaintiff seeks the winding up of the defendant on the ground that it has been resolved by special resolution: see s 461(1)(a) of the Act.

11    The plaintiff passed a written resolution on 9 December 2011, as the sole shareholder of the defendant, to have the defendant wound up by this Court. A copy of the special resolution was lodged with the Australian Securities and Investments Commission (ASIC) on 13 December 2011. A ‘special resolution’ is defined by s 9 of the Act as resolution of which certain notice is given and which has been passed by at least 75% of the votes cast by members entitled to vote. I find that the plaintiff’s action satisfies the requirements of s 461(1)(a) of the Act.

12    Further or in the alternative, the plaintiff seeks the winding up of the defendant on the ground that it is ‘just and equitable that the company be wound up’: see s 461(1)(k) of the Act.

13    When determining whether to make an order for the winding up of a company on ‘just and equitable grounds’ the Court must evaluate the factual matrix in order to form a view as to whether a sufficient reason for making the order is demonstrated: Australian Securities and Investments Commission v Green Pacific Energy Ltd [2006] FCA 1254; (2006) 59 ACSR 142 at [139].

14    A company may be wound up on ‘just and equitable grounds’ where a company no longer has any directors and there is no prospect of new directors being appointed: CIC Insurance Limited (prov liq appointed) v Hannan & Co Pty Ltd (2001) 38 ACSR 245 (CIC Insurance).

15    In the present case the defendant does not currently have any directors, evidenced by the defendant’s ASIC company extract. The defendant did not have any directors at the time it was taken over by the Sylvania Group and has had no directors since 2008: see the affidavit of Mr Button filed 3 November 2011 at [16]. The plaintiff further submits that no new directors can be arranged to join the board. The practical reality is that without further directorship the defendant company cannot continue to operate.

16    In CIC Insurance, the sole shareholder of the defendant, CIC Insurance Limited applied to the court for orders that the defendant be wound up and that liquidators be appointed on the basis that CIC resolved by way of special resolution that the defendant ought to be wound up and there were ‘just and equitable grounds’. The Supreme Court of New South Wales found it appropriate for the company to be wound up in circumstances where the directors had resigned and the financial circumstances of the company were such that CIC could not find any persons willing to act as directors. Barrett J at [13] found that:

the absence of directors and of the prospects of any being appointed should be regarded as furnishing a basis for winding up on the just and equitable ground. The fact that directors are unable or unwilling to act so that there is a power vacuum at board level is probably not, of itself, sufficient to justify winding up on the just and equitable ground since it is always open to the members to appoint directors who can function as a board: Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692.

17    CIC Insurance makes reference at [13] to Re Vision Image (Aust) Pty Ltd; Cheng v Yeo [1998] WASC 38 where an additional requirement of ‘corporate paralysis’ was said to be required to satisfy the ‘just and equitable grounds’ component of s 461(1)(k) of the Act. Corporate paralysis may exist where there is an absence of any prospect of the company continuing to operate.

18    In the present case the plaintiff satisfies this additional requirement given there is an absence of directors and it is unlikely that new directors will be appointed. Winding up is appropriate given that, practically, the defendant is in an advanced state of corporate paralysis, if not totally lifeless.

OTHER considerationS

19    The plaintiff, the parent company of the defendant, intends to appoint liquidators. Mr Christopher Williamson and Mr David Hurt of WA Insolvency Solutions Pty Ltd have consented to act as joint and several liquidators in winding up the defendant in the event that the Court orders the defendant be wound up.

20    It is not apparent on the evidence that any party would be prejudiced by an order that the defendant be wound up. If potential interests do arise upon further investigation by the appointed liquidators, the liquidators have the power to apply for the necessary directions. Should the defendant again become viable, the concerned parties may seek the assistance of the Court through s 482 of the Act by way of order terminating the winding up.

21    I consider that all the requirements under the Act for winding up have been satisfied save for those relating to service of the plaintiff’s application. I note that the plaintiff has resolved by special resolution that the defendant be wound up by the Court, that the plaintiff lodged an application with ASIC on 4 November 2011 to wind the company up and that the notice of the application was published in The Australian on 18 November 2011.

22    Service of the application for winding up was unsuccessful as the defendant has no directors and does not occupy its registered office: see the affidavit of Ms Alice Margaret Commander filed 30 November 2011 at [17]. Furthermore, service of the application could not be effected by post as the plaintiff’s mailed correspondence was marked ‘return to sender’. However, copies of the application were forwarded to a director of the plaintiff, which is also the parent company of the defendant. I am satisfied in the circumstances that the plaintiff made reasonable attempts to make the defendant aware of the application.

23    There are no prescribed circumstances which must exist before the Court can make an order terminating the winding up of a company. I consider that this is an appropriate case for the exercise of the Court’s discretion to wind the defendant up on just and equitable grounds because the defendant has limited material liabilities and corporate activity. The defendant is empty, lifeless and practically unable to operate. The company does not trade, has no assets, accounts, sources of revenue, directors, officers and is merely a legacy of the Sylvania Group takeover. There is nothing at present to suggest that the defendant is likely to be revived.

conclusion

24     The plaintiff has demonstrated sufficient reasons and it is appropriate in all the circumstances for the defendant be wound up under both s 461(1)(a) and s 461(1)(k) of the Act.

THE COURT ORDERS THAT:

1.    Platinum Mining Ventures Limited ACN 109 097 261 (Company) be wound up by the Court pursuant to the Corporations Act 2001 (Cth).

2.    Christopher Michael Williamson and David Ashley Norman Hurt, both of Level 10, 111 St George’s Terrace, Perth, Western Australia, be appointed the joint and several liquidators of the Company.

3.    The plaintiff’s costs of the application be costs of the winding up.

4.    The plaintiff, Mr Williamson, Mr Hurt or any other person interested may apply for further orders and directions.

5.    The name of the plaintiff in these proceedings be amended to read ‘Great Australian Resources Pty Ltd’.

Associate:

Dated:    16 December 2011