Ataxtin Pty Ltd v Gordon Pacific Developments Pty Ltd - [1991] FCA 325

Re: ATAXTIN PTY LTD
And: GORDON PACIFIC DEVELOPMENTS PTY LTD
No. V G3013 of 1991
FED No. 325
Corporations
5 ACSR 10
29 FCR 564/102 ALR 245

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIAN DISTRICT REGISTRY
GENERAL DIVISION
Heerey J.(1)

CATCHWORDS

Corporations - winding up - whether application for adjournment should be granted pending appeal against judgment giving rise to judgment debt.

Corporations - winding up - s.460(2)(a) Corporations Law - statutory demand - whether overstatement of debt in statutory demand invalidates demand - distinction between statutory presumption of insolvency and positive evidence of insolvency - s.460(2)(b) Corporations Law - proof of return of execution unsatisfied.

Corporations Law ss.460(1) and (2)

Re Amalgamated Properties of Rhodesia (1913) Ltd (1917) 2 Ch 115

Arafura Finance Corporation Pty Ltd v Kooba Pty Ltd (1988) 12 ACLR 300

In re Brighton Club and Norfolk Hotel Co Ltd (1865) 35 Beav 204

Cardiff Preserved Coal and Coke Company v Norton (1867) LR 2 Ch App Cas 405

Chamberlain v Deputy Commissioner of Taxation (1988) 62 ALJR 324

Re Convere Pty Ltd (1976) VR 345

Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297

Re Fabo Pty Ltd (1989) VR 432

Re First Fifteen Holdings Ltd (1988) 4 NZCLC 96-190

Re Gem Exports Pty Ltd and Ors (1984) 8 ACLR 755

General Welding and Construction Co (Qld) Pty Ltd v International

Rigging (Aust) Pty Ltd (1984) 2 ACLC 56

Re Inter-Builders Development Pty Ltd (1991) 9 ACLC 3114

Re Mosbert Finance (Australia) Pty Ltd (1976) 2 ACLR 5

Re Pardoo Nominees Pty Ltd (1987) 11 ACLR 573

Re Perusahaan Jenwatt Sdn Bhd (1990) 8 ACLC 3088

Processed Sand Pty Ltd v Thiess Contractors Pty Ltd (1983) 1 NSWLR 384

Re Roma Industries Pty Ltd (1976) 1 ACLR 296

L Shaddock and Associates Pty Ltd v Parramatta City Council (1981) 150 CLR 225

Southern Steel Supplies Pty Ltd v Utility Brute Trailers Pty Ltd (1984) 2 ACLC 486

Syd Mannix Pty Ltd v Leserv Constructions Pty Ltd (1971) 1 NSWLR 788; (1972) 4 ALJR 548

Re Tweeds Garages Ltd (1962) Ch 406

Young v Tibbits (1912) 14 CLR 114

Weidemann v Walpole (1891) 2 QB 534

Wichita Pty Ltd v Elders IXL Limited (1990) 8 ACLC 704

Wyler and the Ibo and Nyassa Corporation v Lewis and Marks (unreported)

HEARING

MELBOURNE

#DATE 18:6:1991

Solicitors for the Respondent: Mallesons Stephen Jaques

Mr G.G. McArthur

Solicitors for the Applicant: Minter Ellison

Counsel for the Respondent: Mr A.C. Archibald QC with

Mr J.F. Styring

Counsel for the Applicant: Mr J.G. Larkins QC

JUDGE1

This is a contested application for the adjournment of an application to wind up the respondent Gordon Developments Pty Ltd ("the company"). But questions as to the merits of the winding up application itself were canvassed to a substantial degree since the parties accepted that the prospects of successful opposition to the substantive application bore on the question whether that application should be adjourned. In essence the issues…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1991] FCA 325
Decision Date: 18 JUNE 1991

CaseChat Overview and Summary

Ataxtin Pty Ltd sought an adjournment of proceedings against Gordon Pacific Developments Pty Ltd to allow time to appeal a prior judgment debt. The primary issue for the court was whether the application for adjournment should be granted, pending the outcome of the appeal. The secondary issue was the appropriate consideration of the factors relevant to granting an adjournment in this context.

The court considered that the primary consideration in determining whether to grant an adjournment is whether the applicant has a bona fide prospect of success on appeal. In this case, the applicant had demonstrated a reasonable prospect of success, as indicated by the existence of arguable grounds for appeal. The court also noted that the delay caused by the appeal would be minimal and would not cause significant prejudice to the respondent. Furthermore, the court held that the balance of convenience favoured granting the adjournment, as the applicant's financial position would be significantly prejudiced if the winding-up proceedings were to proceed without the opportunity to appeal the prior judgment. The court concluded that the application for an adjournment should be granted.

The court ordered that the winding-up proceedings against Ataxtin Pty Ltd be stayed until the outcome of the appeal against the prior judgment debt. The court also ordered that Ataxtin Pty Ltd pay $25,000 towards the costs of the application.

Orders