Australian Securities Commission v Solomon, Emad Kamel
[1998] FCA 214
•20 FEBRUARY 1998
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
G3469 of 1994
BETWEEN:
AUSTRALIAN SECURITIES COMMISSION
ApplicantAND:
EMAD KAMEL SOLOMON
First RespondentTRANSPHERE (SOUTH PACIFIC) PTY LIMITED
(IN PROVISIONAL LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)
ACN 061 127 928
Second RespondentTHE EDDIE SOLOMON EMPORIUM PTY LIMITED (IN PROVISIONAL LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)
ACN 056 919 950
Third RespondentHOT CAKES PTY LIMITED (IN PROVISIONAL LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)
ACN 002 738 525
Fourth Respondent
JUDGE:
EMMETT J
DATE:
20 FEBRUARY 1998
PLACE:
SYDNEY
THE COURT ORDERS:
That leave be granted nunc pro tunc to amend the further amended application dated 2 March 1995 by including in the third further amended application orders in terms of prayers 2 and 3 of the amended notice of motion of 19 December 1995, such amendment to take effect from 31 January 1996.
That the second, third and fourth respondents be wound up.
That Brian Raymond Silvia be appointed as liquidator of the second, third and fourth respondents.
That the liquidator retain possession of all the property of the second, third and fourth respondents.
That the remuneration for the said Brian Raymond Silvia for having acted as provisional liquidator is to be paid out of the property of the second, third and fourth respondents and is to be fixed at the rate prescribed by the Insolvency Practitioners’ Association of Australia and able to be drawn on a monthly basis. Such time and costs of fees drawn to be detailed in a letter to the applicant and for the purposes of the provisional liquidator’s remuneration, the assets of each of the corporate respondents shall be viewed as pooled funds and such fees can be drawn from any account.
That the remuneration for the said Brian Raymond Silvia for acting as liquidator is to be paid out of the property of the second, third and fourth respondents and is to be fixed at the rate prescribed by the Insolvency Practitioners’ Association of Australia and able to be drawn on a monthly basis. Such time and costs of fees drawn to be detailed in a letter to the applicant and for the purposes of the provisional liquidator’s remuneration, the assets of each of the corporate respondents shall be viewed as pooled funds and such fees can be drawn from any account.
That liberty be reserved to any party to restore the matter to the Corporations List on 3 days notice.
That the third further amended application be otherwise dismissed.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
G3469 of 1994
BETWEEN:
AUSTRALIAN SECURITIES COMMISSION
ApplicantAND:
EMAD KAMEL SOLOMON
First RespondentTRANSPHERE (SOUTH PACIFIC) PTY LIMITED
(IN PROVISIONAL LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)
ACN 061 127 928
Second RespondentTHE EDDIE SOLOMON EMPORIUM PTY LIMITED (IN PROVISIONAL LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)
ACN 056 919 950
Third RespondentHOT CAKES PTY LIMITED (IN PROVISIONAL LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)
ACN 002 738 525
Fourth Respondent
JUDGE:
EMMETT J
DATE:
20 FEBRUARY 1998
PLACE:
SYDNEY
REASONS FOR JUDGMENT
HIS HONOUR: The proceedings presently before me were commenced on 15 September 1994 by the Australian Securities Commission (“the Commission”). On 21 September 1994 an amended application was filed. At that stage the proceedings involved an application for orders against Mr Emad Kamel Solomon that he deliver up his passport and that he be prohibited from leaving Australia and for orders, pending completion of an investigation by the Commission, that the persons named in the schedule to the amended application be prohibited from paying any money or otherwise parting with possession of the other property described in the schedule.
However, there are presently before me applications for winding up of three companies. The way in which those issues came to be involved in the proceedings is slightly unusual and it is desirable to recount the progress of the proceedings so far as relevant up to today.
On 21 September 1994 Lindgren J made certain orders requiring Mr Solomon to provide to the Commission a list of certain payments. On 30 September 1994 Lindgren J made an order that until further order or completion of the investigation, Mr Solomon and three companies, namely Eddie Solomon Emporium Pty Limited, Transphere (South Pacific) Pty Limited and Hot Cakes Pty Limited, shall not deal with, dispose of, transfer or otherwise part with possession of the money described in the schedule to the amended application.
On 24 February 1995 the Commission filed a notice of motion seeking an order that the three companies be joined as respondents to the proceedings and that the Commission have leave to file a further amended application. That motion was returnable on 2 March 1995 and on that day came before O'Loughlin J. The file is not entirely clear but it seems that a further amended application was in fact placed on the file although the notation does not indicate that it was actually formally filed. That further amended application shows the respondents as Mr Solomon and the three companies.
In addition to the relief already sought in the amended application, relief was also sought in the form of orders and declarations against all of the respondents. The orders were in the nature of orders restraining the respondents from offering for subscription any right to participate in any interest, undertaking, scheme or common enterprise operated or managed by any of the respondents. The declarations concerned contraventions of sections 1064 and 1065 of the Corporations Law and other related provisions of the Corporations Law.
On 2 March 1995 orders were made by O'Loughlin J in terms of short minutes which were expressed to be by consent. The orders restrained the respondents from inviting or offering for a subscription rights to participate in any interest, undertaking, scheme or common enterprise operated or managed by any of the respondents and also restrained the respondents from offering invitations to subscribe or buy debentures within the meaning of the Corporations Law.
There were also orders restraining the respondents from carrying on any securities business and any investment advice business. In addition there was an order that Brian Raymond Silvia (“the Receiver”) be appointed as receiver and manager of certain assets in the nature of bank accounts, share script, safe deposits and the like. The respondents were ordered to deliver up to Mr Silvia certain accounting and financial records.
The Receiver was given the powers set out in section 420 of the Corporations Law, together with power to ascertain the assets and liabilities of and pertaining to the property and assets to which he was appointed, power to require Mr Solomon to produce verified reports concerning the affairs of himself and the three companies and the power to realise the property and assets which were the subject of the orders. There were also certain undertakings given on behalf of the respondents.
In December 1995 a notice of motion was filed, showing Mr Solomon and the three companies as respondents, seeking the appointment of Mr Silvia provisionally as liquidator. On 22 December 1995 an amended notice of motion was filed, seeking orders that the three companies be wound up pursuant to section 461(h)(i) and 461(h)(ii) of the Corporations Law and also for orders for the appointment of Mr Silvia as provisional liquidator.
That notice of motion came on for hearing before Tamberlin J on 31 January 1996. His Honour reserved his decision and on 8 February 1996, for reasons which he then published, made orders confirming that Mr Silvia remain as receiver and manager of the assets of Mr Solomon noted in paragraph 4 of the orders made on 2 March 1995, and that Mr Silvia be appointed as provisional liquidator of the three companies and that he retain or be given possession of all of the property of the three companies.
From those orders, leave was sought to appeal to the Full Court. That leave was refused and subsequently an application was made for special leave to appeal to the High Court of Australia. That leave was also refused. The Full Court's orders were made on 17 September 1996 and the High Court dismissed the special leave application on 6 June 1997.
Nothing further was done by the Commission until a notice of motion was filed by the respondents on 20 November 1997, seeking orders that the orders made on 8 February 1996 be discharged. It appears that that action was prompted by observations made by McHugh J in the course of the hearing of the special leave application to the effect that, even though leave was refused, it was always open to the respondents to move for variation of the interlocutory orders appointing the provisional liquidator.
That motion was originally returnable on 27 November 1997 and was heard by Hill J on 4 December 1997. For reasons which his Honour gave ex tempore, he declined to terminate the appointment of the provisional liquidator. However, his Honour made some comments concerning the unsatisfactory state of affairs which then existed, where a liquidator had been appointed provisionally to the three companies, but there was no hearing fixed for the determination of any winding up application.
His Honour then adjourned the matter for directions on 18 December 1997. On 12 December 1997, the Commission filed a further notice of motion seeking orders substantially similar but not identical to those sought in the amended notice of motion filed on 22 December 1995. Hill J then directed that the question of the winding up of the three companies be fixed for hearing on 20 February 1998 and gave directions for affidavits to be filed in relation to that matter.
There is thus for hearing before me today the Commission's application for the winding up of the three companies sought in the notices of motion filed on 22 December 1995 and 12 December 1997. It is anomalous that there is no relief sought in the application in the nature of winding up of the three respondents.
The fact that documents have been filed and proceedings have been prosecuted on the basis that the three companies are respondents, indicates that they must be treated as parties to the proceedings and also parties to the notices of motion. I understand that some issue arose as to the standing of Mr Solomon, who appears in person, to represent the companies in the two leave applications to which I have referred. However, those matters proceeded on the basis that Mr Solomon was representing the three companies or that no point would be taken as to that matter.
In the circumstances, I am satisfied that the three companies have adequate notice of the fact that the proceedings were listed before me for the purpose of making winding up orders. Indeed, it was noted during the course of the day that Mr Solomon would be permitted to ask questions of witnesses and to address in the proceedings. That may well be something he was entitled to do, being a party to the proceedings, but it is clear that Mr Solomon has, in effect, sought to represent the interests of the three companies.
Nevertheless there is still the anomaly that the further amended application makes no mention of a winding up. Mr Solomon contended that there was a failure to comply with Order 4 Rule 1 of the Federal Court Rules and that that in some way affected the Court's jurisdiction to deal with the winding up. Order 4 Rule 1 simply provides that, except as where otherwise provided in the rules, all proceedings in the Court's original jurisdiction shall be commenced by filing an application and any such application is to be in, or substantially in, the form of Form 5 in the First Schedule.
The contention was that a winding up application is a proceeding in the Court's original jurisdiction separate from the proceeding constituted by the further amended application. Therefore, there should have been either an amendment to the further amended application or fresh proceedings. That question, if it has substance, would of course have rendered the proceedings before Tamberlin J futile or at least would have cast doubt on his jurisdiction to make the orders which he made. The orders were based on section 472(2) of the Corporations Law which provides that the Court may appoint an official liquidator provisionally at any time after the filing of a winding up application and before the making of a winding up order.
If there was no proper winding up application then it would not have been open to Tamberlin J to have appointed Mr Silvia provisionally as liquidator of the three companies. That point has not previously been raised and it is clear that, since December 1995, the parties have proceeded on the basis that a winding up application had been properly made in accordance with the Corporations Law and the rules. Insofar as there is any doubt about that matter it seems to me that it can be remedied by granting leave nunc pro tunc for the further amended application filed on 2 March 1995 to be amended further by inclusion of the prayers contained in the notices of motion. That amendment of course would take effect from the time of the filing of the notice of motion in December 1995, or at latest, from the time when Tamberlin J heard the application to appoint a liquidator provisionally.
Counsel for the Commission has asked me to make that order on the basis that there could be no prejudice to any of the parties since they have acted at all times on the basis that the notice of motion was adequate. Accordingly, I am prepared to make an appropriate order. That then brings me to the substance of the winding up application.
The application for winding up in the December 1995 notice of motion, was based on section 461(h) of the Corporations Law. Section 461(h) provides that the Court may order the winding up of a company if the Commission has stated in a report prepared under Division 1 of Part 3 of the Australian Securities Commission Law (“ASC Law”) that, in its opinion: (i) the company cannot pay its debts and should be wound up; or (ii) it is in the interests of the public, of the members, or of the creditors, that the company should be wound up. Under section 462(2)(e) the Commission may apply for an order to wind up a company pursuant to section 464. Under section 464(1), where the Commission is investigating, or has investigated, under Division 1 of Part 3 of the ASC Law, matters being, or connected with, affairs of a company or matters including such matters, the Commission may apply to the Court for the winding up of the company.
By file note dated 8 March 1994, Mr Ron Dunlop, who is described as an authorised officer of the Commission, noted that, having read the information on certain ASC files concerning the activities of Mr Solomon and of Transphere South Pacific Pty Limited and the Eddie Solomon Emporium Pty Limited, he had formed the view that there is reason to suspect that there may have been committed contraventions of the Corporations Law. The file note records that on 24 February 1994 Mr Dunlop approved an investigation into certain suspected contraventions of the Corporations Law covering the period from 1 January 1992 to the date of that approval. On 20 April 1994, 18 August 1994, 6 February 1995 and 21 March 1995, Mr Dunlop, after approving the inclusion of a reference to Hot Cakes Pty Limited as the subject of the investigation, approved of the extension of the terms of the investigation covering additional periods.
Division 1 of Part 3 of the ASC Law is entitled “Investigations”. Section 13(1) provides that the Commission may make such investigation as it thinks expedient for the due administration of a national scheme law where it has reason to suspect that there may have been committed a contravention of a national scheme law or a contravention of a law of the Commonwealth, being a contravention that concerns the management or affairs of the body corporate or involves fraud or dishonesty and relates to a body corporate.
Section 16(1) of the ASC Act provides that where, in the course of an investigation under that Division, the Commission forms the opinion that a serious contravention of a law of the Commonwealth has been committed or that to prepare an interim report about the investigation would enable or assist the protection, preservation or prompt recovery of property, then the Commission must prepare an interim report that relates to the investigation and sets out in the first case its findings about the contravention and the evidence and other material on which the findings are based and in the second case such matters as, in its opinion, would so enable or assist the protection, preservation or prompt recovery of property.
The Commission tendered a report dated 14 December 1995 which purports to be an interim report of the Commission. The report bears the signature of Mr Alan J. Cameron, the Chairman of the Commission. It is expressed to be prepared pursuant to section 16(1)(a) of the ASC Law. The report is expressed to be prepared on the basis that the Commission has formed an opinion that a serious contravention of the Corporations Law has been committed. Its conclusion is that, in the opinion of the Commission, the three companies which I have identified cannot pay their debts and have been unable to do so at least since 2 March 1995 and should be wound up on the basis that the companies are insolvent.
In the report, it is stated that the Commission has formed that view on the basis that the overall parlous condition of the three companies and the fact of the intermingling of funds make it in the interests of the public or the members or the creditors that each of the three companies should be wound up. The report is, on the material before me, a report prepared under Division 1 of Part 3 of the ASC Law and in it the Commission states opinions which fall within paragraphs (i) and (ii) of section 461(h) of the Corporations Law.
The evidence before me also supports the conclusion that the Commission has investigated, under Division 1 of Part 3, matters being or connected with affairs of a company, namely, the three companies. Accordingly, I am satisfied that grounds under section 461(h) for the winding up of the three companies have been made out and that the Commission has standing to make an application for the winding up of the three companies.
However, the winding up applications were opposed by Mr Solomon appearing both for himself and, by leave, on behalf of the three companies. The basis upon which he opposed the applications is not entirely clear.
The evidence of the report of the Commission was supplemented by a report of the provisional liquidator’s firm dated 11 December 1997. The report, on the evidence before me, was prepared by Mr Brian John Walton on behalf of Mr Silvia.
The evidence in the Commission's interim report and Mr Walton's report indicates that there has been considerable intermingling of the funds of the three companies. In Mr Walton's report, he expresses the view that at this stage it is appropriate to treat the assets and liabilities of what he refers to as the Solomon Group as merged or consolidated. He sets out in a section of his report detailed banking arrangements of the group which clearly show, as he says, little regard for separate entities whereby funds and, in particular, investors funds, were utilised and expended by all entities. He expressed the view that, in the absence of adequate accounting records in the conduct of the affairs of the group, consolidation appears to be the only equitable method of resolving their affairs.
Mr Solomon himself swore an affidavit which was tendered by the Commission. The affidavit is dated 16 March 1995 and discloses personal assets and liabilities of Mr Solomon as of 2 March 1995 as follows:
Deposits in bank accounts $22,320 Loans to the three companies $1,053,787 Loan to Kamel Michael $30,000 Personal effects $5,000 Copyright in books $400,000 Copyright export/import course $29,250
Total assets: $1,540,357
It also shows liabilities totalling $1,076,107 as loans from lenders. It is the loans from lenders which apparently give rise to the interest of the Commission in the affairs of Mr Solomon and of the three companies.
The assertion on behalf of the Commission is that the evidence of the reports of the Commission and Mr Walton is that Mr Solomon conducted an investment management business. There appears to be no dispute on Mr Solomon's part but that he received substantial funds by way of investment from a number of investors. It is also apparent from Mr Solomon's own evidence that substantially all of the money which he received from lenders was applied by way of loans to the three companies.
The conclusion which Mr Walton reaches in his report is that the three companies were hopelessly insolvent and were unable to pay creditors more than 50 cents in the dollar on the claims likely to be made. In the report Mr Walton says that in the absence of adequate accounting records he had endeavoured to determine the reason for the shortfall by examination of bank account receipts and payments detailed elsewhere in the report.
He says that, in summary, the reason for the shortfall to creditors, which he said were largely investors, was expenditure on items which he characterised as improper expenditures. The material in the Commission's report indicates that there was substantial material which would justify such conclusions. It is not for me to make any findings one way or the other about the accuracy of the conclusions reached by Mr Walton. It is sufficient for me to be satisfied that, having regard to the fact that there are grounds for winding up and that the Commission seeks winding up orders, there is no reason why I should not make the orders.
As I have said, the opposition from Mr Solomon on his own behalf and on behalf of the companies is not totally clear. One can perhaps understand fully Mr Solomon's desire not to have companies with which he is connected wound up in insolvency. Nevertheless, he has been unable to put forward to me material which satisfies me that it is not appropriate for me to make winding up orders. I shall deal with the matters to which he took me in opposition to the winding up orders.
First, I should say that he accepted that there is in fact sufficient evidence to satisfy me that jurisdiction exists under section 461(h) and that the only way in which the three companies could repay the amount which is owing to him is by continued trading. The gravamen of his opposition however was that, had the provisional liquidator never been appointed and had there been no receivership of his assets, the present parlous state of the three companies would have been avoided.
He began by making an assertion that the liquidator had disposed of assets of the three companies without authority. However, section 472(4) of the Corporations Law provides that a liquidator of a company appointed provisionally also has the powers that a liquidator of the company would have under subsection 477(2), except paragraph 477(2)(m). Section 477(2)(c) provides that a liquidator of a company may sell or otherwise dispose of, in any manner, all or any part of the property of the company. I am satisfied that insofar as the liquidator disposed of assets of the three companies, he had power to do so.
The real complaint which Mr Solomon made was that in exercising those powers and other powers vested in him, the liquidator apparently did not act in the best interests of the companies. He first referred to the sale by the liquidator of shares in Seven Network, his assertion being that the shares were sold at an undervalue in that the shares were sold when the market was depressed. The basis for that assertion was that the shares were sold for a price in the vicinity of $2.70 but they are now worth $5.40 and that the three companies had paid a price higher than that for which they were sold. However, there is no other evidence of any impropriety on the part of the liquidator in the exercise of the power of sale. It was not suggested that the market price at the time of sale was higher than the sale price.
A similar allegation was made in relation to shares in Mosaic Oil. In the absence of any evidence of rash conduct in selling at the time he did, I do not consider that the complaint made against the liquidator by Mr Solomon is made out. Even if it were, that would not be a ground for dismissing the winding up application.
A second complaint in relation to the administration of the affairs of the three companies by the liquidator concerns the sale or taking of possession of two home units apparently purchased by the three companies. The evidence before me indicates that one of the companies owned two units which it had purchased from Meriton Apartments and had borrowed money from Meriton Apartments on the security of the units. The evidence also indicated that there was no default up to September 1994 when the receiver was first appointed and that interest payments were made up to the end of December 1994. The secured loans were apparently repayable in April 1995 but, before that time, Meriton entered into possession and exercised powers of sale as mortgagee.
There is no evidence before me as to the terms of the contract between the company which owned the units and Meriton Apartments which indicates that anything which Meriton Apartments did was in breach of contract. The assertion made by Mr Solomon was that it was incumbent upon Mr Silvia in some way to borrow money from bankers in order to repay the amount owing to Meriton Apartments and thereby avoid the sale of the home units. However, as I have said, there is no evidence before me of any steps which it was reasonably open for the liquidator to take at that stage.
Much of the argument before me from Mr Solomon and a considerable part of the evidence before me related to Mr Solomon's own financial position. As I have said, the evidence makes clear that Mr Solomon had received substantial advances from various people described as investors. There was some evidence that letters had been written on behalf of the Commission to many of those investors urging them in the light of information disclosed in the letter, being information relating to the matters referred to in the Commission report, to make demand for repayment of their loans.
A number of investors, apparently following receipt of that correspondence from the Commission, demanded repayment from Mr Solomon. Mr Solomon, on the other hand, referred to evidence indicating that in November 1994 substantial numbers of the investors attended an informal meeting in which they indicated some support for his continuing to carry on business. More specifically, there is evidence before me that a substantial depositor, Mr Hunkin, who was owed about $450,000, was not pressing for repayment.
The relevance of this material appears to be that the substantial creditor of the companies is Mr Solomon himself and Mr Solomon, as he says, is not pressing for liquidation of the companies. Be that as it may, his parlous financial position indicates that there must be a real prospect that one of his creditors may make an application for a sequestration order, although there is no evidence of one having been foreshadowed at this stage. Even so, it seems that there is a real risk that such an application might be made, in which case it would not be up to Mr Solomon to decide whether or not to demand repayment of the moneys owing to him by the companies. Instead it might depend upon the views of a Trustee in Bankruptcy, acting with the concurrence of the creditors of Mr Solomon. In any event, there was no satisfactory evidence as to the terms of the loans by Mr Solomon to the three companies.
Mr Solomon was unable to indicate to me any prejudice which he himself would suffer in consequence of the winding up of the three companies other than that the publicity could be harmful to him in his endeavours to carry on his publishing business and generate funds that might enable him to discharge his liabilities. It is quite clear that the three companies now have virtually no assets. The prospect of Mr Solomon being repaid any part of the moneys owing to him is slight.
There were some hints that the three companies could have claims against the liquidator based upon the matters of complaint to which I have already referred. I am certainly not satisfied that there is any likelihood that the three companies have assets in the nature of such claims. It follows that it is virtually impossible that Mr Solomon will be paid any part of the moneys now owing. Accordingly, it seems to me that the fact that Mr Solomon may be harmed by the publicity attendant upon the winding up of a hopelessly insolvent company is not a matter which would persuade me to decline to make the orders.
Mr Solomon also referred to the harm which has been occasioned by the delay. His assertion was that, by reason of the appointment of Mr Silvia as receiver in September 1994 and the subsequent appointment as provisional liquidator of the companies, he has been deprived of the opportunity of carrying on business. Be that as it may, it seems to me that Mr Solomon's own personal position is not relevant. No order is presently sought against him in these proceedings. So far as the proceedings are concerned, counsel for the Commission has indicated that, once the winding up matters have been dealt with, the proceedings can be otherwise dismissed, it not being intended to seek any further orders in the proceedings.
It seems to me, therefore, that the position of Mr Solomon in relation to his own creditors has a bearing on the winding up application only insofar as it may mean that Mr Solomon, or somebody claiming through him, does or does not seek recovery of the moneys owing.
The real concern, however, that I have is that there are three companies which, on the evidence before me, are hopelessly insolvent. I do not know whether, had a winding up application been proceeded with shortly after Tamberlin J appointed the liquidator provisionally, the three companies would have been in different position. However, there is no evidence before me to suggest that the position would have been any different.
Hill J, in his reasons for judgment in December 1997, expressed some concern at the delay between the appointment of the provisional liquidator and the pressing on with the winding up application. I also expressed some concern in the course of argument and it is that delay to which Mr Solomon refers as suggesting that he has suffered some harm. However, the only criticism that can be directed against the conduct of the Commission in relation to the winding up proceedings is the lack of action from 6 June 1997 when the High Court dismissed the special leave application until it responded to Mr Solomon's application for the discharge of the provisional liquidator.
There is no evidence to explain that five month delay, although it may well be that an inference can be drawn that the time was taken in the preparation of the report dated 11 December 1997. It would, of course, have been open to the Commission to press on with a winding up application notwithstanding the application made for leave to appeal to the Full Court. On the other hand, no complaint has ever been made by the three companies or Mr Solomon in relation to a failure to press on with the winding up application pending the hearing of Mr Solomon’s applications for leave to appeal. Indeed, one could expect Mr Solomon to have been highly critical if the Commission had pressed on with winding up while the leave applications were outstanding.
There is no evidence that any delay from the dismissal of the special leave application until now, has caused any greater harm to Mr Solomon. Indeed, there is no evidence before me which persuades me that there were any assets available to the companies in February 1996 which have not been realised whatever would have been realised had a winding up application been brought on at that stage. Accordingly, I do not consider that the delay in the proceedings is a matter which should preclude me from making a winding up order.
Finally, Mr Solomon referred to the fact, as appears from his affidavits, that he is visually impaired. He referred me to provisions of the Disability Discrimination Act 1992 (Cth) but, when invited to do so, he was unable to explain how the provisions of that legislation bear on the present position. He made the assertion that he believed he had been discriminated against because of his visual impairment, but he was unable to formulate any basis upon which his visual impairment should have any bearing on the making of the orders.
I asked him whether he had had an opportunity to consider the material available to him, bearing in mind that he has had the Commission's interim report for over two years. He expressly acknowledged that he was not asking for any further time and that no further time would have put him in a better position to deal with the application. In the circumstances, I do not regard Mr Solomon's impairment as bearing on the question which is before me.
In all of the circumstances I am satisfied that the grounds for the winding up have been made out and, in circumstances where the three companies have no assets and owe in excess of $1 million to Mr Solomon who himself has substantially greater liabilities than assets, it seems to me that the interests of the community are best served by the making of a winding up order in respect of the three companies. Nothing has been advanced which satisfies me that there is any prejudice to anybody in making those orders.
Accordingly, I propose to make orders for the winding up of the three companies and the appointment of Mr Silvia as liquidator. It follows from what I have said that I would also order that the proceedings number NG 3469 of 1994 be otherwise dismissed.
I certify that this and the preceding fourteen (14) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett
Associate:
Dated: 20 February 1998
Counsel for the Applicant: J.T. Gleeson Solicitor for the Applicant: Australian Securities Commission Date of Hearing: 20 February 1998 Date of Judgment: 20 February 1998
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