In the matter of K.A.L Indents Pty Ltd CPS Housewares Pty Ltd v K.A.L (Indents) Pty Ltd

[1992] FCA 1078

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) No. NG 3016 of 1992

)

GENERAL DIVISION )

BETWEEN:CPS HOUSEWARES PTY LIMITED

Applicant

AND:K.A.L. (INDENTS) PTY LIMITED

Respondent

(IN THE MATTER OF K.A.L. INDENTS PTY LIMITED A.C.N. 009 948 663)

24 April 1992

REASONS FOR JUDGMENT

LOCKHART J.

This is an application by, the applicant, CPS Housewares

Pty Limited to wind up a company K.A.L. Indents Pty Limited

("the company"). The application was filed on 10 February 1992.

On

27 March the respondent filed an application in the same matter,

it being numbered 0016 as opposed to the primary application

which is 3016.

This applicant seeks an order relevantly for today that the

further hearing of the matter be transferred to the Brisbane

Registry of the Court and seeks an order that the Court convene

a meeting of the unsecured creditors of the company to determine whether the company should, according to the wishes of the creditors, be wound up by the Court.

The statutory source of authority for the latter order is said to be s. 547 of the Corporations Law. There is authority for the proposition that that power can be invoked before a

company has been wound up. It is authority of long standing and
is in my view correct.

There is evidence that a majority of the unsecured creditors of the company both in number and in value support the adjournment of the application to wind up so that the creditors can meet and consider what they think should happen to this company. But there is a curious absence of any positive proposal at this stage from the company to its creditors. I

have not the slightest idea of what it is that the company

proposes to do, save that it has represented to its creditors in

writing that it wishes to propound a scheme of arrangement amongst the creditors of the company under which the creditors may expect to receive:

"A substantially greater dividend than would ordinarily would be the case if the company was liquidated."

What that scheme is and what dividend would result is unclear. I am at present not disposed to order that there be a Court convened meeting of creditors and I do not think any such

meeting should be convened unless and until the company puts before the Court details of the proposed arrangement which it

seeks to have placed before its creditors at some stage in the future. I do not see how the creditors can make an informed decision as to the fate of this company in the absence of such a

proposal.

Nevertheless, the company has indicated that it does not wish the winding up to proceed at this stage and I think in the circumstances there should be an adjournment of the substantive application by the applicant to wind up the company on certain conditions.

Related to the application that there be a Court convened meeting of creditors under s. 547 of the Corporations Law is the request that the matter be transferred to the Queensland Registry of the Court. The company was incorporated in

Brisbane, it carries on business in Brisbane and has done so at

all material times. Most of its unsecured creditors have their offices in Brisbane. It would seem that the only real nexus with New South Wales is that it is the place where the applicant carries on its business and where its solicitors carry on their practice. In all the circumstances I think this is a matter

which has a real and substantial connection with Queensland and only a peripheral connection with New South Wales. Accordingly, the matter should be transferred to the Queensland Registry of

this Court.

Accordingly, I propose to make an order to that effect and to direct the company in the interim to file evidence of the proposed arrangement so that when the matter comes before a

Judge of the Court in Brisbane he will have before him not only

the evidence that is presently before the Court but this

additional evidence. Indeed, the Judge may, of course, himself

require other evidence to be filed.

Accordingly, the Court orders that:

1.The proceeding be transferred to the Queensland Registry of

the Court.

2.K.A.L. Indents Pty Limited file and serve an affidavit or affidavits stating fully and in detail any proposals or arrangements which it intends to put before its creditors and that the same be filed and served by 8 May 1992.

3.K.A.L. Indents Pty Limited do not deal with its assets

otherwise than in the usual course of business until the
determination of this proceeding or further order.

4.The costs of the proceeding to-day be costs in the principal

proceeding.

5.Liberty to any party to apply on two days notice.

I certify that this and the preceding three (3) pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart.

Associate

Dated: 24 April 1992

Solicitors for the Applicant :	Marshall Marks Kennedy
Solicitors for the Respondent :	Smits Leslie Barwick

Date of Hearing : 24 April 1992

Date of Judgment : 24 April 1992