Brott, Isaac Alexander (t/as Isaac Brott and Co) Mingara Pty Ltd (ACN 004 653 463)
[1997] FCA 1270
•12 NOVEMBER 1997
| IN THE FEDERAL COURT OF AUSTRALIA | |
| VICTORIA DISTRICT REGISTRY | VG 3187 of 1997 |
BETWEEN: | ISAAC ALEXANDER BROTT |
AND: | MINGARA PTY LTD (ACN 004 653 463) |
JUDGE: | RYAN J |
DATE: | 12 NOVEMBER 1997 |
PLACE: | MELBOURNE |
EX TEMPORE REASONS FOR JUDGMENT
HIS HONOUR: There is before the Court an application that Mingara Pty Ltd (“the company”), be wound up, and there is also a motion seeking the appointment of a provisional liquidator of the company. A statutory demand on behalf of the applicant pursuant to s 459E of the Corporations Law was served on 26 May 1997 claiming an amount of $93,452.59 based on a judgment obtained in the County Court at Melbourne on 23 May 1997.
Since this matter was last before the Court the company has successfully applied to the County Court to set aside the judgment on which the statutory demand was based, and the action in which that judgment was entered has been fixed for re-hearing on 5 May 1998. Had the debt allegedly due to the applicant been the only liability disclosed on an examination of the company’s affairs, I would have been minded to allow that re-hearing to be concluded to resolve the dispute between the company and the applicant, Mr Brott. However, the evidence before the Court is far from satisfying me that the company is otherwise solvent.
There is some evidence embodied in a letter dated 11 November 1997 from Pearce Webster Dugdales, solicitors for Mrs Day, the executrix under the will of Ronald Bryant, who is apparently, in that capacity, in control of the affairs of the company. That letter is in these terms:
Re: Mingara
We wish to confirm exchange of contract in this matter a copy of which we enclose.
The arrangement with the bank is that they take a net share of the purchase price of $150,000.00 and you and Mrs Aspin take the balance on account of the principal mortgage debt to you of $135,000.00
There will still be a deficiency of $45,000.00 approximately in principal alone to say nothing of interest, and we see no hope of recovery of this deficiency.
We believe that the Law Institute has effected a sale of 30 acres across the river and of other assets belonging to Mingara Pty Ltd/Bryant Lots 2 & 3 are mortgaged to Hunt who is owed $79,189.52 as at 14/8/97.
On current prices a sale of these blocks is not likely to recover the amount owing to the mortgagee.
We believe that the mortgagee of Lot 7 may also be at risk of full recovery.
Please note that settlement of the sale is due on 22/1/98, but may be earlier.
There is also evidence of a demand dated 10 October 1997, pursuant to s 76 of the Transfer of Land Act by the Commonwealth Bank of Australia (“the CBA”) as first mortgagee of the land comprised in Certificate of Title volume 9713 folio 772, which it appears related to the land referred to in Pearce Webster Dugdales’ letter in respect of which it is said that the CBA has agreed to take “a net share of the purchase price of $150,000.00”.
Putting to one side the debt claimed by the applicant, it seems that the company has other liabilities including an amount of $1,709 for municipal rates, $3000 for water rates; an amount claimed by Saccuzzo Larsen and Co, Accountants, of $31,941.27, which I have been told from the bar table by Mrs Bryant, who has been granted leave to represent the company, is disputed, and an amount due to the Law Institute of Victoria which, on the present state of the evidence, I am unable to quantify. That liability is tangentially referred to in the letter of Pearce Webster Dugdales which I have already quoted.
I have also been told from the bar table by Mrs Bryant that the company owns a further unencumbered parcel of land which has been zoned for development as a service centre, and in respect of which a prospective sale at a price of $750,000 failed to materialise. However, Mr Broberg, the solicitor for the applicant, contends that title searches of land registered in the name of the company do not indicate the presence of any unencumbered land.
When this matter was last before the Court I acceded to a request for an adjournment to enable the financial affairs of the company to be clarified in the hope of achieving an arrangement whereby the company’s affairs might be administered without the need to incur the expense involved in the appointment of a provisional liquidator. On that occasion I said to Mrs Bryant, who then also represented the company:
And I indicate now, Ms Bryant, that I consider if it is desired to avoid on the adjourned hearing of this matter when it comes back on 12 November this year, the appointment of a liquidator, that there be a comprehensive and detailed proposal put before the Court as to how the affairs of the company are managed and how its debts are to be paid. In the absence of that I simply indicate that there is a high likelihood notwithstanding the cost that might be incurred, that a liquidator will be appointed.
On the state of the evidence as it is presently disclosed, I consider that the purpose for which that adjournment was granted has not been achieved, and the Court does not have before it a satisfactory account of the present state of the finances of the company or how it is proposed that its affairs should be conducted in the future.
With some regret I have reached the conclusion that the only way in which the Court can achieve that degree of satisfaction is by the appointment of a provisional liquidator. I propose to accede to the motion dated 29 August 1997 and make the appointment of Mr Taylor directing him to take possession of the whole of the property of the company. I shall adjourn this application to a date to be fixed in the expectation that the provisional liquidator will be able to furnish a report to the Court which will enable it to decide whether or not the application for winding up should be granted. I shall order that the applicant’s costs of this day be reserved.
| I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. |
Associate:
Dated: 12 November 1997
| Counsel for the Applicant: | Mr R Broberg |
| Solicitors for the Applicant: | Irlicht & Broberg |
| Counsel for the Respondent: | Nil |
| Solicitors for the Respondent: | Nil Mrs G Bryant appeared by leave on behalf of the respondent |
| Date of Hearing: | 12 November 1997 |
| Date of Judgment: | 12 November 1997 |
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