Supreme Court
New South Wales
Medium Neutral Citation: In the matter of Open Plains Wholesale Meats Pty Limited [2012] NSWSC 1156 Hearing dates: Monday 24 September 2012 Decision date: 24 September 2012 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Grant leave to the plaintiff to discontinue the proceedings
Catchwords: PRACTICE & PROCEDURE - leave to discontinue - plaintiff seeks leave to discontinue application to wind up in insolvency for failure to comply with creditor's statutory demand - factors to be considered when granting leave to discontinue - where there is no evidence of solvency of the defendant Category: Principal judgment Parties: Reid Administration Services Pty Limited (in liq) (plaintiff)
Open Plains wholesale Meats Pty Ltd (defendant)Representation: Counsel:
Mr S Vuleta (plaintiff)
Ms C Perry (defendant)
Solicitors:
Wyndham Prem P/L (plaintiff)
Pure Legal (defendant)
File Number(s): 2012/ 186105
Judgment (ex tempore)
By originating process of 13 June 2012 the plaintiff Reid Administration Services Pty Ltd (in liquidation) seeks an order that the defendant Open Plains Wholesale Meats Pty Ltd be wound up in insolvency on the basis of failure to comply with a Creditor's Statutory Demand. The originating process was first made returnable on 25 July before the Registrar, when it was adjourned to 11 August, with the defendant being directed to file and serve a Notice of Appearance and/or grounds for opposition by 30 July 2012. None appears to have been filed.
On 1 August 2012, the proceedings were again before the Registrar, when they were adjourned by consent to 3 September, with directions that the defendant serve evidence concerning service of the Creditor's Statutory Demand by 14 August 2012, and the plaintiff to serve its evidence in reply by 28 August 2012. It thus seems that a central issue was to be service of the Demand.
On 3 September, the proceedings were before me in the Corporations List, when they were adjourned to 10 September for directions, the court being informed that there were negotiations on foot between the parties. On 10 September, the proceedings were adjourned to today, when the plaintiff sought leave to file a Notice of Discontinuance, to which the defendant consented.
The proceedings had been advertised: an affidavit of publication of 12 July deposes to advertisement in the Gazette on 29 June, and the Daily Telegraph on 3 July, 2012
Ordinarily, when winding up proceedings have been before the court on more than one occasion, and in particular when they have been advertised, and it is proposed that they be dismissed by consent, the court expects to receive evidence of the solvency of the corporation and evidence - that is to say, on affidavit - deposing to what, if any, notices of intention to appear, and support or oppose the application, have been received from creditors or contributories. No such evidence has been provided in this case.
The court, however, was informed that notice had been received from a creditor, being SNSH Pty Limited (in liquidation), and, after an adjournment this morning, has been provided with evidence of a communication with the liquidators of that company to the effect that they are not in a position to be substituted as plaintiff, as their claim against the defendant in the District Court is defended, and liability disputed.
The court has not been provided with evidence of solvency of the defendant. However on this occasion I have regard to the circumstance that there appears to have been a dispute as to service of the Demand, and that the amount of the debt claimed was only in the order of $20,000.
With considerable misgivings, therefore, I will grant the plaintiff leave to discontinue the proceedings.
Orders
I make the following orders:
(1) Grant leave to the plaintiff to file in court the affidavit of Sundip Ghedia of 24 September 2012;
(2) Grant leave to the plaintiff to discontinue the proceedings upon the terms contained in the Notice of Discontinuance dated 24 September 2012, a copy of which is initialled by me, dated this day and placed with the papers, including that there be no order as to costs.
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- AGLC
- In the matter of Open Plains Wholesale Meats Pty Limited [2012] NSWSC 1156
- Case
- [2012] NSWSC 1156
- Decision Date
CaseChat Overview and Summary
The primary legal issue the court had to address was whether the plaintiffs were entitled to discontinue the winding-up application despite their failure to comply with the creditor's statutory demand. The court needed to consider the factors relevant to granting leave to discontinue, including the presence of any evidence of the defendant's solvency and the likelihood of the company being able to pay its debts if the application were to be discontinued.
The court held that the plaintiffs were not entitled to discontinue the winding-up application without providing evidence of solvency. In the absence of such evidence, the court was not satisfied that the company could pay its debts if the application were to be discontinued. The court emphasised the importance of ensuring that creditors are not prejudiced by the discontinuance of winding-up applications, especially when there is no proof of the company's ability to meet its financial obligations. Consequently, the plaintiffs' application to discontinue the winding-up application was dismissed.
The final orders of the court were that the application by the plaintiffs to discontinue the winding-up application was dismissed. The court further directed that the winding-up application by the creditor be heard and determined on its merits.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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