In the matter of NH International Trade Pty Ltd

[2018] NSWSC 1985

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of NH International Trade Pty Ltd [2018] NSWSC 1985
Hearing dates:	13 December 2018
Decision date:	13 December 2018
Jurisdiction:	Equity - Corporations List
Before:	Black J
Decision:	The application to stay or terminate the winding up of the First Defendant is dismissed.
Catchwords:	CORPORATIONS – winding up – application to stay or terminate winding up of company – where solvency of the company has not been established – where remuneration of liquidator has not been addressed – whether order staying or terminating the winding up should be made.
Legislation Cited:	- Corporations Act 2001 (Cth) s 482 - Uniform Civil Procedure Rules 2005 (NSW) rr 36.15, 36.16
Cases Cited:	- Double Bay Newspapers Pty Ltd v Fitness Lounge Pty Ltd [2006] NSWSC 226; (2006) 57 ACSR 131 - Labraga v Pomfret [2005] NSWSC 654 - Re Glass Recycling Pty Ltd [2014] NSWSC 439 - Re Hunter Valley Dental Surgery Pty Ltd [2017] NSWSC 1144 - Re SNL Group Pty Ltd (in liq) [2010] NSWSC 797 - Re Teca Pty Limited [2011] NSWSC 686
Category:	Principal judgment
Parties:	Shu Xian Liang (Applicant) The Owners – Strata Plan No 81407, Ian Purchas as liquidator of NH International Trade Pty Ltd (Respondents)
Representation:	Counsel: S X Liang (Director - Applicant) D Radman (Solicitor – Plaintiff and liquidator)   Solicitors: Grace Lawyers (Plaintiff and liquidator)
File Number(s):	2018/307541

Judgment – ex temore (revised 14 december 2018)

1. Application is made by Ms Liang to set aside the winding up of NH International Trade Pty Ltd (“Company”), or, in substance, terminate the winding up. I dismissed that application in an ex tempore judgment, and have set out the relevant provisions and applicable case law somewhat more fully in this revised judgment.

2. There were some difficulties in following Ms Liang’s submissions, since she did not comply with orders made by the Court requiring her to provide a written outline of submissions and retain an interpreter to assist the Court in following her oral submissions. Ms Liang seeks to have the winding up of the Company set aside or terminated, and that, given time to pay, she would then pay, or possibly pay part of, the strata levies that founded a judgment against the Company in the Local Court of New South Wales, a creditor’s statutory demand and the winding up order made against it. I do not understand Ms Liang to have committed to pay all of that judgment, whether now, or in a 42 day period to which she referred, since she also appears to contend that that judgment, or the strata levies on which it was based, was not justified.

3. Ms Liang has not established the basis for setting aside the winding up order or terminating the winding up. I have regard to her affidavit, in the form filed in Court today, dated 13 December 2018, which appears to substantially coincide with the form of her affidavit filed on 23 November 2018, other than for a correction of the title page. She indicates that she is able to obtain a loan from a bank, if she had access to certificates of title for the property, and she may be able to obtain loans from other companies. She refers to the circumstances in which documents were sent to her, and also addresses a dispute concerning the rental of her parking space at the relevant property. She refers to the circumstances in which she sought to open a restaurant for business, and to her consultation with multiple solicitors who have not, she considers, given her the "right advice".

4. In a further affidavit which is undated, but has been served today, she advances allegations against the strata title agent, the local council, the Local Court of New South Wales and staff of this Court, as well as, possibly, the ANZ Bank and the National Australia Bank, all of which she claims have "cheated” her or the Company. She also contends that all of the solicitors which she consulted have also been party to organising that the Company be liquidated. She refers to disputes with the ANZ Bank, National Australia Bank, Westpac Bank and the Commonwealth Bank. The Court is not in a position to determine the merits of Ms Liang's several disputes with third parties.

5. Those matters do not, however, support setting aside the winding up order or terminating the winding up. A winding up order that is obtained through a fundamental irregularity may be set aside under rr 36.15 or 36.16 of the Uniform Civil Procedure Rules 2005 (NSW) , without necessarily requiring proof of solvency: Double Bay Newspapers Pty Ltd v Fitness Lounge Pty Ltd [2006] NSWSC 226; (2006) 57 ACSR 131. However, where a winding up order is regularly obtained, even in the absence of a party, proof of solvency will ordinarily be required to set it aside: Labraga v Pomfret [2005] NSWSC 654 at [44]; Re Teca Pty Limited [2011] NSWSC 686.

6. Section 482 of the Corporations Act 2001 (Cth) provides for the circumstances in which the winding up of a company may be terminated, and relevant matters include the protection of creditors whose interests might be prejudiced if the company were released from the winding up. It will also be relevant to have regard to whether the company's debts have been discharged, its trading position and its general solvency, and solvency is likely the most critical feature in the termination of a winding up: Re SNL Group Pty Ltd (in liq) [2010] NSWSC 797 at [24]. Ordinarily, an applicant to terminate a winding up must show the nature and extent of creditors, and that all debts have been discharged, and must also show that the liquidator's interests have been protected, particularly with regard to remuneration. These matters have been helpfully summarised, for example, by Brereton J in Re Glass Recycling Pty Ltd [2014] NSWSC 439 at [15], [18]–[19], and I followed the same approach in Re Hunter Valley Dental Surgery Pty Ltd [2017] NSWSC 1144.

7. Here, Ms Liang has not established the matters necessary to show that a winding up order that was apparently regularly made should be set aside establish or that the winding up should be terminated. A judgment of the Local Court remains in effect, for strata levies that are apparently unpaid. Ms Liang makes no attempt to establish the solvency of the Company, beyond a general assertion that it has assets that exceed its liabilities or that she has assets which exceed her liabilities. No attempt has been made to address the position of the liquidator, including in respect of remuneration. The Court can have no satisfaction that, if the winding up was terminated, and the Company returned to Ms Liang's control, it would not continue to incur debts, most obviously in respect of continued strata levies arising through continued occupancy of the property, which it would not pay. In these circumstances, none of the matters necessary to establish a termination of the winding up have been established.

8. Accordingly, I order that the Interlocutory Process filed on 23 November 2018 be dismissed. Ms Liang must pay the liquidator's costs of the application, as agreed or as assessed.

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Decision last updated: 18 December 2018