Just and equitable winding up requires no real prospect of commercial success; the petition failed on the evidence.

Compulsory winding up on the just and equitable ground depends on whether, at the date of the petition, there was any reasonable prospect that the company could achieve the commercial object for which it was formed. The existence of a preference-share guarantee was not treated as decisive, except insofar as it affected the evidence. In assessing a private venture formed to trade profitably in Australia and New Zealand, the court considered trading losses, external financial support, trade conditions, and prospects of recovery after the depression. On the evidence as a whole, there was still a real prospect of commercial success, so the petition for winding up was not justified.

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Issues: Whether the company ought to be compulsorily wound up on the ground that it was just and equitable to do so under section 84(e) of the New South Wales Companies Act, 1899 No. 565 of 1931.

Analysis: The relevant enquiry was whether, at the date of the petition, there was any reasonable hope that the company could attain the commercial object for which it was formed, namely to trade at a profit in Australia and New Zealand. The existence of the preference-share guarantee was not treated as the decisive consideration, save so far as it may have affected the evidence. The company was a private venture formed for a specific business purpose, and the court assessed the prospects of that business in light of the trading losses, the financial support available from the American companies, the evidence of trade conditions, and the practical prospects of recovery after the depression. On the evidence as a whole, the appellants failed to show that the company had no real prospect of commercial success.

Conclusion: The petition for compulsory winding up was not justified on the just and equitable ground.

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