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Issues:
1. Locus standi of a contributory to present a winding-up petition. 2. Whether the petitioner has made out a case for a winding-up order. Analysis: Issue 1: Locus standi of a contributory to present a winding-up petition The judgment discusses the principle that a fully paid shareholder petitioning for winding-up must show a likelihood of assets available for distribution. The petitioner, in this case, was found to lack locus standi as there would be no surplus for distribution among shareholders upon winding up. The court cited the rule established in In re Rica Gold Washing Co. [1879] and emphasized that the petitioner must demonstrate a tangible interest beyond a mere probable surplus. The judgment also rejected the argument that partnership cases constitute an exception to this rule, highlighting the distinction between partnerships and limited companies in terms of liability and dissolution procedures. The court further referenced the decision in In re Othery Construction, Ltd. [1966] where it was reiterated that a contributory must show the existence of assets for distribution or the need for an investigation likely to produce such a surplus. Despite arguments to the contrary, the court upheld the general rule and dismissed the petition due to the absence of a surplus for distribution among shareholders. The judgment emphasized the importance of the evidence presented, which negated the existence of any surplus, thereby reinforcing the rule's applicability even in partnership cases. Issue 2: Case for a winding-up order Regarding the specific complaints justifying a winding-up order, the judgment analyzed the alteration of power dynamics within the company through director appointments and the chairman's casting vote. The court examined whether these actions were carried out bona fide in the company's best interests. It was determined that the decisions, made within the company's regulatory framework, were justifiable and not indicative of bad faith. The petitioner's argument that resolving a deadlock constituted grounds for winding-up was dismissed, as the decisions were viewed as legitimate and in the company's interest. The judgment highlighted the importance of establishing a lack of probity in the company's affairs, as per the precedent set in Loch v. John Blackwood Ltd. [1924]. Since no evidence of misconduct or lack of probity was presented, the petition was deemed to lack merit on both grounds. Consequently, the court dismissed the petition based on the failure to establish a case for a winding-up order. In conclusion, the judgment underscored the necessity for contributories to demonstrate a tangible interest in seeking a winding-up order and the requirement for evidence of misconduct or lack of probity to justify such a petition.
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