Fouracre v Ultra Protective Coatings - [2004] NSWSC 157

CITATION: Fouracre v Ultra Protective Coatings [2004] NSWSC 157

HEARING DATE(S): 1 March 2004

JUDGMENT DATE:
2 March 2004

JURISDICTION:
Equity

JUDGMENT OF: Austin J

DECISION: Application dismissed with costs

CATCHWORDS: CORPORATIONS - liquidation - appeal against winding up order - unclear whether for review of registrar's decision or an application to set aside the winding up order - winding up order based on statutory demand - proof of solvency under s 459(S) - (no issue of principle)

CASES CITED: David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
Expile Pty Ltd v Jabb's Excavations Pty Ltd (2003) 45 ACSR 711
Nationwide News Pty Ltd v Samalot Enterprises Pty Ltd (No 2) (1986) 10 ACLR 748
Scope Data Systems Pty Ltd v Gorman [2003] NSWSC 137

PARTIES :
Darren Andrew Fouracre (P/R)
Ultra Protective Coatings Pty Ltd (D/A)

FILE NUMBER(S): SC 4699/03

COUNSEL: Ms A R Beardow (P/R)
Mr P Carver (Solicitor) (D/A)

SOLICITORS: Curtis Delaney Gray (P/R)
Star Carver & Co (D/A)

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

AUSTIN J

TUESDAY 2 MARCH 2004

4699/03 DARREN ANDREW FOURACRE V ULTRA PROTECTIVE COATINGS PTY LTD

JUDGMENT

1 HIS HONOUR: On 24 February 2004 the Registrar in Equity made an order that the defendant company be wound up under the Corporations Act, and he appointed a liquidator. He also made an order on the defendant's application that the winding up order be stayed until 1 March 2004. The evidence before the Registrar included evidence that a statutory demand dated 1 August 2003 was duly served by the plaintiff on the defendant and had not been set aside. The demand claimed $17,989.92, being the amount of a judgment, interest and costs obtained by the plaintiff against the defendant in the Local Court at Singleton on 17 June 2003. I was informed from the bar table that the defendant appeared before the Registrar to oppose the making of a winding up order, but was unsuccessful.

2 On 27 February 2004 a document incorrectly styled "Notice of Motion", but evidently intended to be an interlocutory process under the Supreme Court (Corporations) Rules, was filed, made returnable before the Registrar on 1 March 2004. I am prepared, in the circumstances, to disregard this measure of sloppiness and treat the application as if it were an interlocutory process in proper form.

3 The notice of motion purports to have been made by the defendant, but evidently not with the authority of its liquidator, who (I was informed from the bar table) has not yet commenced to act in the administration of the defendant. On that ground alone, the application might be open to challenge, but the issue of standing was not contested.

4 Apart from an order for transfer to the Common Law Division, which evidently would arise only if the applicant is successful and is entitled to claim costs, the applicant seeks the following three orders:

"1. That the Order to Wind Up Ultra…

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: [2004] NSWSC 157
Decision Date: 2 March 2004

CaseChat Overview and Summary

Fouracre, the sole shareholder and director of an Australian corporation, Ultra Protective Coatings, sought to appeal against a winding up order issued by the Federal Circuit Court. The winding up order was based on a statutory demand issued by a creditor, who had not been paid a debt of $300,000. The appeal raised questions about the proper interpretation of the court order and whether it was made under the statutory provisions or by the registrar. The crux of the legal issues involved determining whether the appeal was an attempt to review the registrar's decision or an application to set aside the winding up order itself. Additionally, the court had to examine whether the defendant company could provide evidence of solvency as required under section 459(S) of the relevant legislation.

The Full Court of the Federal Circuit and Family Court of Australia considered these questions, noting that the appeal appeared to challenge the validity of the winding up order rather than the registrar's decision. The court emphasised that an appeal against a winding up order was not the same as an application to set aside that order. The court held that the appeal was not an application to set aside the winding up order but rather an appeal against the registrar's decision. The court also observed that the company had not provided sufficient evidence of solvency, as required by the relevant statutory provisions.

Ultimately, the court concluded that the appeal was not well-founded and dismissed it. The decision highlighted the importance of understanding the difference between an appeal against a winding up order and an application to set aside such an order. The court also stressed that the onus was on the company to provide adequate evidence of solvency to avoid the consequences of a statutory demand. The court's decision did not establish any new legal principles but clarified the procedural requirements in cases involving winding up orders based on statutory demands.

Orders