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ARTICLE · 08 MARCH 2021

Deficient Deadlock: Winding Up On Just And Equitable Grounds Refused

Corrs Chambers Westgarth
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While disagreements often occur in the course of operating a company, much more is needed before a wind up is justified.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Cameron Cheetham
Cameron Cheetham
Mark Wilks
Mark Wilks
Craig Ensor
Craig Ensor
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This week's TGIF considers an application to wind up a company on just and equitable grounds. The Court declined to make the order, finding the suggested deadlock had an air of artificiality and the application was infused with self-interest.

Key takeaways

  • Placing a company into liquidation on just and equitable grounds is a remedy of last resort and relief may not be granted if alternative and less drastic remedies available.
  • While a deadlock is a common case for winding up, more than a mere breakdown or loss of confidence is required before such an order is justified.
  • A court will be less likely to exercise its discretion if the person seeking relief was responsible for the breakdown of the relationship.

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