Burton re Palmbird Pty Ltd - [2006] NSWSC 1068

Reported Decision:
59 ACSR 695
(2006) 24 ACLC 1275

New South Wales

Supreme Court

CITATION: Burton re Palmbird Pty Ltd [2006] NSWSC 1068

HEARING DATE(S): 10/08/06
Written submissions: 14/09/06
Further affidavit: 04/10/06

JUDGMENT DATE :
13 October 2006

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: No further order

CATCHWORDS: CORPORATIONS - winding up - voluntary winding up - liquidators' final return lodged with ASIC - unknown asset later discovered - court extends date for deregistration - whether further final meeting should be convened by liquidators in due course on basis that affairs had not been fully wound up when earlier meeting convened

LEGISLATION CITED: Corporations Act 2001 (Cth), Part 5.3A, ss.509, 564

CASES CITED: Deputy Commissioner of Taxation v Bettina House of Fashion Pty Ltd (unreported, VSC, Marks J, 18 November 1988)
Fuji Xerox Australia Pty Ltd v Tolcher (2004) 60 NSWLR 696
Re Rosaub Pty Ltd (2005) 192 FLR 395

PARTIES: Peter George Burton & Brian Hugh Allen as liquidators of Palmbird Pty Limited - Plaintiffs

FILE NUMBER(S): SC 4174/06

COUNSEL: Mr R.K. Eassie - Plaintiffs

SOLICITORS: Nash O'Neill Tomko Lawyers - Plaintiffs

- 5 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

FRIDAY, 13 OCTOBER 2006

4174/06 PETER GEORGE BURTON & BRIAN HUGH ALLEN AS LIQUIDATORS OF PALMBIRD PTY LIMITED

JUDGMENT

1 Section 509 of the Corporations Act 2001 (Cth) prescribes the action to be taken by a liquidator under a voluntary winding up once “the affairs of the company are fully wound up”. The liquidator must make up an account and convene a meeting for the purpose of laying the account before the meeting. After the meeting has been held (or has lapsed for want of a quorum), the liquidator must lodge with Australian Securities and Investments Commission a particular return, with a copy of the account attached. Sections 509(5) and (6) then provide:

“(5) ASIC must deregister the company at the end of the 3 month period after the return was lodged.

2 On 10 August 2006, I made an order under s.509(6) specifying 30 November 2006 as the day on which Australian Securities and Investments Commission is to deregister Palmbird Pty Limited, a company subject to creditors’ voluntary winding up. In the absence of that order, the deregistration would have occurred immediately after 10 August 2006 in consequence of filing of the liquidators’ final return under s.509(4) on 10 May 2006. The date 30 November 2006 was nominated by the liquidators as the appropriate date. Their application was made on the last day of the period of three months within which s.509(6) allows the court to act.

3 The order under s.509(6) was made on the application of the liquidators…

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: [2006] NSWSC 1068
Decision Date: 13 October 2006

CaseChat Overview and Summary

The case involved the liquidators of Palmbird Pty Ltd, who were faced with the task of concluding the winding up of the company. The liquidators had lodged their final return with the Australian Securities and Investments Commission (ASIC), indicating that the winding up had been completed. However, an unknown asset was later discovered, prompting a request for the court to extend the date for deregistration. The court was tasked with determining whether the liquidators were required to convene a further final meeting under section 489A(1) of the Corporations Act 2001 (Cth). The central issue was whether the affairs of the company had not been fully wound up when the earlier final meeting was convened, necessitating the convening of a subsequent meeting.

The court considered the purpose of section 489A(1) of the Corporations Act, which is to ensure that the company's affairs are fully wound up before deregistration. The court noted that the liquidators had conducted a diligent search and had taken reasonable steps to wind up the company's affairs. The discovery of an unknown asset after the lodging of the final return did not necessarily mean that the affairs had not been fully wound up. The court held that the liquidators were not required to convene a further final meeting, as the unknown asset did not indicate that the winding up process was incomplete at the time of the earlier meeting. The court extended the date for deregistration to allow for the unknown asset to be properly dealt with.

The court's reasoning was that the unknown asset was discovered after the final return had been lodged, indicating that the liquidators had taken reasonable steps to wind up the company's affairs. The fact that the asset was unknown did not mean that the affairs were not fully wound up at the time of the earlier meeting. The court found that the liquidators had acted appropriately and that there was no requirement to convene a further final meeting. The court extended the date for deregistration to allow for the unknown asset to be dealt with, but did not order the convening of a further meeting. The liquidators were directed to lodge an amended return with ASIC once the unknown asset had been properly dealt with.

Orders