IN THE MATTER OF VALLOD PTY LIMITED ACN 052 234 214; DEPUTY COMMISSIONER OF TAXATION v VALLOD PTY LIMITED ACN 052 234 214 NSD 1988 OF 2006
GYLES J 5 APRIL 2007 SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1988 OF 2006
IN THE MATTER OF VALLOD PTY LIMITED ACN 052 234 214
BETWEEN:
DEPUTY COMMISSIONER OF TAXATION Plaintiff
AND:
VALLOD PTY LIMITED ACN 052 234 214 Defendant
JUDGE:
GYLES J
DATE OF ORDER:
5 APRIL 2007
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Leave be granted to Terence James Chatterton to bring this application instanter.
2.The order of Registrar Hedge made on 30 March 2007 winding up Vallod Pty Limited and appointing Steve Sherman as liquidator of Vallod Pty Limited be set aside.
3.The time within which this application for the winding up of the Defendant in insolvency must be determined be extended to 1 June 2007.
4.The proceedings be adjourned to the Registrar’s corporations list on 20 April 2007 at 9.15 am.
5.Terence James Chatterton is to pay:
(a)the costs of the Plaintiff of this application agreed in the sum of $1815.44.
(b)the costs and expenses of the liquidator of the liquidation.
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
NSD 1988 OF 2006
IN THE MATTER OF VALLOD PTY LIMITED ACN 052 234 214
BETWEEN:
DEPUTY COMMISSIONER OF TAXATION Plaintiff
AND:
VALLOD PTY LIMITED ACN 052 234 214 Defendant
JUDGE:
GYLES J
DATE:
5 APRIL 2007
PLACE:
SYDNEY
REASONS FOR JUDGMENT
On 30 March 2007 the defendant, Vallod Pty Limited (the company), was wound up by order of a Registrar of the Court and a liquidator was appointed. The winding up had been opposed and the matter had been before the Court on more than one occasion. There was no attendance for the company on 30 March 2007. That led to the order being made. The explanation for that has been frankly disclosed by the solicitor for the defendant as being due to his fault. There is some question as to the fine detail of the dealings between the solicitors on that day. However, on any view, it was the fault of the solicitor, not apparently the fault of the company.
The application has been made promptly and has been supported by not only the evidence of the solicitor concerned but of the applicant on this motion, Terence James Chatterton, a director and the party with the substantial interest in the company. The company is actively trading and Mr Chatterton has given evidence as to the financial position of the company. It has substantial assets and is conducting a substantial business.
On the face of the balance sheet the company is solvent in the sense that it has an excess of assets over liabilities. It plainly has some cash flow issues, as is illustrated by the problems it has had in maintaining arrangements so far as payment of the debt claimed by the plaintiff, the Deputy Commissioner of Taxation, is concerned. With an application of this kind made so promptly, the considerations are different from those which apply where there has been a liquidation on foot for some time. Whilst the Court is always astute to ensure that insolvent companies are not returned to trading, the reality is that setting aside this order made in default of appearance will simply mean that the matter will then be heard in the normal way. At that point the Court can take account of the full circumstances if that becomes necessary.
I have been referred to the decision of Hodgson J in George Ward Steel Pty Ltd v Kizkot Pty Ltd (1989) 15 ACLR 464; (1989) 7 ACLC 838, an authority I have myself applied in other cases, including Deputy Commissioner of Taxation v Fairchild Development Pty Ltd (in liq) [2006] FCA 714. Hodgson J’s points are not, of course, a statutory formula but they are a useful checklist of things to at least take into account. Because of the very short time involved here, the indication of solvency is a fairly low threshold that is well met by the evidence which has been put before me.
I take into account the fact that the plaintiff neither opposes nor consents to the application. The liquidator has indicated that, subject to the costs of the liquidation being paid, he has no objection to the order. The liquidator has drawn nothing to my attention which would lead to any concern about the winding up order being set aside.
I therefore make the orders which are sought.
I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.
Associate:
Dated: 13 April 2007
Solicitor for the Plaintiff:
Mr D Crompton of Church & Grace
Counsel for the Defendant:
Mr P Cutler
Solicitor for the Defendant:
Dawson Lawyers
Date of Hearing:
5 April 2007
Date of Judgment:
5 April 2007
Details
AGLC
Deputy Commissioner of Taxation v Vallod Pty Limited [2007] FCA 535
Case
[2007] FCA 535
Decision Date
CaseChat Overview and Summary
In the Federal Court of Australia, Deputy Commissioner of Taxation brought an application against Vallod Pty Limited, contesting its insolvency status. The dispute centred around whether Vallod Pty Limited was indeed insolvent and if the winding-up order issued by the Registrar was justified. The court was tasked with determining the validity of the winding-up order and its implications for the parties involved.
The legal issues before the court encompassed the interpretation of the relevant insolvency statutes and the procedural correctness of the winding-up order. Specifically, the court needed to consider whether the winding-up order was validly made and if there were any procedural errors that warranted setting aside the order. Furthermore, the court had to assess the application for an extension of time to determine the company's insolvency.
The court found that the winding-up order issued by the Registrar on 30 March 2007 was flawed due to procedural irregularities. Consequently, the court set aside the order and granted leave to Terence James Chatterton to bring the application without notice. Additionally, the court extended the time within which the winding-up application must be determined and directed the proceedings be adjourned for further consideration. The court also ordered Chatterton to pay the agreed costs of the Plaintiff and the liquidator’s costs and expenses.
In summary, the court's decision not only set aside the winding-up order but also addressed the procedural concerns raised in the application, extending the timeline for the determination of Vallod Pty Limited's insolvency and directing the proceedings for further adjudication.
Orders
Orders of the court
1. Leave be granted to Terence James Chatterton to bring this application instanter.
2. The order of Registrar Hedge made on 30 March 2007 winding up Vallod Pty Limited and appointing Steve Sherman as liquidator of Vallod Pty Limited be set aside.
3. The time within which this application for the winding up of the Defendant in insolvency must be determined be extended to 1 June 2007.
4. The proceedings be adjourned to the Registrar’s corporations list on 20 April 2007 at 9.15 am.
5. Terence James Chatterton is to pay:
(a) the costs of the Plaintiff of this application agreed in the sum of $1815.44.
(b) the costs and expenses of the liquidator of the liquidation.