In the matter of JD & RS Pty Ltd
[2016] NSWSC 806
•01 February 2016
Supreme Court
New South Wales
Medium Neutral Citation: In the matter of JD & RS Pty Ltd [2016] NSWSC 806 Hearing dates: 1 February 2016 Date of orders: 01 February 2016 Decision date: 01 February 2016 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Termination of winding up order
Catchwords: CORPORATIONS – external administration – winding up – termination – whether state of affairs requiring or authorising the winding up of company has ceased to exist – whether company may safely be returned to control of its directors – where winding up order made in circumstances where creditors’ statutory demand and originating process did not come to attention of company – where company has no outstanding current liabilities and is trading profitably – where company has an excess of assets over liabilities Legislation Cited: (CTH) Corporations Act 2001, s 482 Category: Principal judgment Parties: Feng Feng An (applicant)
JD & RS Pty Ltd (defendant company)
Workers’ Compensation Nominal Insurer (plaintiff/first respondent)
Jeff Shaw (liquidator) (second respondent)
Australian Securities and Investments Commission (third respondent)Representation: Counsel:
Solicitors:
J Tholley (plaintiff)
George Shaw (applicant)
Peter Michael Woods (respondent)
File Number(s): 2015/00329759
Judgment (EX TEMPORE)
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HIS HONOUR: On 10 December 2015, the Court, pursuant to an originating process that had been filed by the plaintiff Workers Compensation Nominal Insurer on 10 November 2015, made an order that the defendant company JD & RS Pty Ltd be wound up and that James Alexander Shaw be appointed its liquidator. By interlocutory process filed on 18 December 2015, Feng Feng An, a shareholder in the company, applied for an order pursuant to (CTH) Corporations Act 2001, s 482, terminating the winding up of the company. On that day, and for reasons given that day, Black J made an order pursuant to s 482 staying the winding up until 5 February 2016 and adjourning the proceedings for hearing today.
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On an application of this kind for the termination of a winding up, the essential issues are whether the state of affairs that required or authorised the winding up of the company has ceased to exist, and whether the company may safely be returned to the control of its directors. In this case, the winding up was a winding up in insolvency made for failure to comply with a creditors’ statutory demand that had been served by the plaintiff on the defendant for unpaid Workers' Compensation premiums. The plaintiff's debt has been paid, the plaintiff's solicitors' costs have been paid, and the liquidator's remuneration has been paid.
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The winding up order was made in circumstances where the creditors’ statutory demand and the originating process did not actually come to the attention of the company because the company had moved from its registered office and, although some attempt was made to give notice of the change of registered office, the change was not properly notified to ASIC.
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The evidence indicates that the company has no outstanding taxation obligations and a financial statement, as at 31 December 2015, indicates that it traded profitably for the 12 months ending 31 December 2015, and has an excess of current assets over current liabilities, albeit a small one, and an excess of total assets over total liabilities, albeit that the total assets substantially comprise goodwill presumably associated with the taxi plates that the company holds. On the material now before the Court, the company is not insolvent. Its current liabilities have been satisfied. It appears to be trading profitably and thus to have the ongoing capacity to meet its debts as and when they fall due.
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Nothing emerges that would make it inappropriate to return the company to the control of its directors. The liquidator neither opposes nor consents to the application but has drawn nothing to the attention of the Court that would be adverse to making such an order. ASIC has been notified and also takes the view that the application is a matter for the Court on which it does not wish to be heard.
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I am satisfied that:
the state of affairs that required that the company be wound up no longer exists, if it ever did;
the absence of opposition to the winding up order when it was made was adequately explained; and
the company can safely be returned to the control of its directors.
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The Court orders pursuant to (CTH) Corporations Act 2001, s 482, that the winding up of the company JD & RS Pty Ltd be terminated with effect from today.
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Decision last updated: 15 August 2016
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