ASIC v Barrack Mortgage Managers Pty Ltd

[1999] NSWSC 272

CITATION:	ASIC v Barrack Mortgage Managers Pty Limited; ASIC v Credit Alliance Pty Limited; ASIC v W. G. Herle Pty Limited [1999] NSWSC 272
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	1642/99; 1643/99; 1644/99
HEARING DATE(S):	30 March 1999
JUDGMENT DATE:	30 March 1999
PARTIES :	Australian Securities & Investments Commission (P) Barrack Mortgage Managers Pty Limited (D) Credit Alliance Pty Limited (D) W. G. Herle Pty Limited (D)
JUDGMENT OF:	Master McLaughlin

COUNSEL :	Mr. R. J. Weber (P) No appearance for the Defendant
SOLICITORS:	Jan Redfern (P)
CATCHWORDS:
ACTS CITED:	Corporations Law
DECISION:

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SUPREME COURT OF
NEW SOUTH WALES
EQUITY DIVISION

MASTER McLAUGHLIN

Tuesday, 30 March 1999

1642/99 - AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION -v- BARRACK MORTGAGE MANAGERS PTY LIMITED

1643/99 - AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v CREDIT ALLIANCE PTY LIMITED

1644/99 - AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v W G HERLE PTY LIMITED

1 MASTER: In each of these three matters the Australian Securities and Investments Commission has filed a summons seeking the winding up of the defendant upon the ground set forth in section 461(1)(k) of the Corporations Law, that ground being that the Court is of opinion that it is just and equitable that the company be wound up.
2 I have been taken to the judgment of his Honour Justice Finn in the Federal Court of Australia in Australian Securities Commission v A S Nominees Limited (1995) 13 ACLC 1822. I would respectfully agree with the view expressed by his Honour in that decision that the just and equitable ground has an appropriate role to serve as an instrument of investor protection.
3 The Australian Securities and Investments Commission has a role of protecting the investing public as a matter of public interest. It therefore has the standing to bring about a winding up of a company upon the just and equitable ground.
4 His Honour in that case said that a court entertaining an application by the Australian Securities Commission (the statutory predecessor to the Australian Securities and Investments Commission), grounded on considerations of public interest, had to evaluate the reasons put forward by the Commission, in order to form a view on whether they did afford sufficient reasons for making a winding up order on the just and equitable ground.
5 In the instant case, none of the three defendants has seen fit to appear. The evidence discloses a consistently series of breaches of the Corporations Law in the case of each of the companies. Those breaches include improper dealings with moneys raised from the public, failure to keep or to produce appropriate records, and failure to provide that degree of basic public accountability as to the operations of each of the companies as is required under the Corporations Law.
6 It is clear from the evidence that one Damien Parkes, an undischarged bankrupt, has been involved in the management of all three companies. Indeed, it is clear that he has had the control of the three companies. The persons who nominally have been directors of the companies have, in fact, been denied the capacity to operate as such, and have on occasions even been refused by Mr Parkes access to the books and records of the companies.
7 At the present time none of the companies has any directors, none of the companies has filed annual reports. The records of Credit Alliance Pty. Limited are false. That company has ceased to trade, and its assets either have been or are to be transferred to W G Herle Pty. Limited, leaving Credit Alliance Pty. Limited only with debts. The records of Credit Alliance Pty. Limited are being destroyed. The plaintiff has been denied access to such books and records of Credit Alliance Pty. Limited as may exist. None of the three companies appears to have been operating at its registered office or to have been trading at its principal place of business.
8 It appears that the aforesaid Damien Parkes, an undischarged bankrupt, has been using for his own purposes moneys raised from the public by one or more of the three companies.
9 I am in entire agreement with the submissions made on behalf of the plaintiff that it is in the public interest that each of these three companies be wound up forthwith, so that the public can be protected from the conduct which has been perpetrated by the aforesaid Damien Parkes. Further, that an official liquidator be appointed, who will thoroughly investigate the affairs of the companies, to ascertain their assets and liabilities, to ascertain the whereabouts of their books and records, to ascertain whether any transactions into which the companies have purported to enter are capable of being challenged, and, most importantly, to ascertain whether any further or other breaches of the Corporations Law or of any other law have been committed by any person who has been involved in the management or control of the companies.
10 I propose to make an order in each case for the winding up of the company and for the appointment of an official liquidator.
11 In each matter I make the following orders:
1. I make an order as in paragraph 1 in the Notice of Motion filed by the plaintiff on 10 March 1999.

2. I order that the defendant be wound up pursuant to section 461(1)(k) of the Corporations Law .
3. I order that Steven John Sherman of Ferrier Hodgson, Level 17, 2 Market Street, Sydney, be appointed liquidator of the defendant.
4. I order that the defendant pay the costs of the plaintiff.

12 The exhibits should remain with the Court file.
I certify that this and the preceding
pages are a true copy of the reasons for
judgment of Master McLaughlin

Dated 30 March 1999
Associate
Mark Provera

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