In the matter of Payless Freight Solutions Pty Ltd
[2017] NSWSC 511
•01 May 2017
Supreme Court
New South Wales
Medium Neutral Citation: In the matter of Payless Freight Solutions Pty Ltd [2017] NSWSC 511 Hearing dates: 1 May 2017 Date of orders: 01 May 2017 Decision date: 01 May 2017 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: The proceedings be transferred to the Supreme Court of Victoria.
Catchwords: PROCEDURE – transfer of proceedings – related proceedings in Supreme Court of Victoria – duplication of proceedings not fault of either party – balance of factors point to Supreme Court of Victoria – held, proceedings transferred. Legislation Cited: (CTH) Corporations Act 2001 s 439A, s 440A, s 1337H(2), s 1337L Category: Procedural and other rulings Parties: Payless Freight Solutions Pty Ltd (plaintiff)
TTL Holdings Pty Ltd (defendant)Representation: Counsel:
Solicitors:
A Yogachandra (sol.) (plaintiff)
N Bender (defendant)
Shine Lawyers (plaintiff)
Johnson, Winter & Slattery (defendant)
File Number(s): 2017/90856
Judgment
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On 24 March 2017 the plaintiff, Payless Freight Solutions Pty Limited filed an application in this Court for the winding up of the company TTL Holdings Pty Limited. That winding up application is returnable before the Court today. On 30 March 2017, NGH Express Pty Limited filed an application in the Supreme Court of Victoria for the winding up of the company. Both applications rely on the ground of insolvency.
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Ordinarily, it is an abuse of process to file a second winding up application in respect of a company when there is one already on foot, particularly when it relies on substantially the same ground, here insolvency. That is because where winding up proceedings have been commenced all creditors and contributories who wish to be heard should join in the same proceedings, relevantly, as supporting creditors or opposing creditors, as the case may be.
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In this case, the duplication of proceedings is attributable to no one’s fault. The notice in Form 519 that a winding up application had been filed in respect of the company, though it was lodged in a timely manner on behalf of the present plaintiff, was not processed by ASIC and placed on the record until 30 March 2017, and accordingly would not have been discovered by those instituting the Victorian proceedings.
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The Victorian proceedings have already been before a Registrar of the Supreme Court of Victoria on 26 April 2017, when they were adjourned to 5 May 2017 to be heard before an Associate Judge. Meanwhile, on 3 April 2017, the company went into administration, and Liam William Bellamy and Glenn Anthony Crisp were appointed its joint and several administrators. A first creditors' meeting was held on 13 April 2017. A proposal for a DOCA was received on 19 April 2017. The administrators have not yet issued their s 439A report, but contemplate doing so tomorrow.
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As things stand, it seems that while the administrators recognise that there are potential preference actions and insolvent trading claims, they attribute little if any value to those claims, on account of doubt as to recoverability from the prospective defendants. Accordingly, it seems likely, although it is not yet certain, that the administrators will recommend to creditors that a deed of company arrangement may offer a better outcome for creditors than a winding up.
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It seems to me clear at this stage that it is at least preferable in the interests of creditors to await the issue of the s 439A report, which is imminent, and which will provide greater clarity as to what course of action offers the best outcome for creditors. It may well be in the interests of creditors that they be permitted to make that decision for themselves, rather than have the Court foist its judgment of what is in their best interests on them. That is a decision which they would normally make at the second creditors' meeting. As it seems to me, a strong case could be made that the proceedings should be adjourned pursuant to s 440A until after the second creditors' meeting. However, the company does not at this stage seek that but only an adjournment for seven days until a date after the s 439A report has issued, but before the second creditors’ meeting, and I am satisfied that, subject to the issue to which I shall come, it is appropriate, this being the first return date, to grant such an adjournment.
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However, the issue arises that a hearing is to take place in the Supreme Court of Victoria this Friday on the company’s s 440A application and apparently, if that application is unsuccessful, also in respect of the Victorian winding up application. Thus the company seeks an order transferring these proceedings to the Supreme Court of Victoria so that there will be only one court involved in managing the proceedings in respect of this company.
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It is plainly inappropriate that the matter continue in two separate courts. The question (under Corporations Act, s 1337H(2)) is which is the more appropriate court to deal with these proceedings in the light that there are related proceedings in the Supreme Court of Victoria. As I have said, the fact that these proceedings were commenced first, and that normally one would expect other creditors to join in these proceedings as supporting creditors, tells in favour of this Court; but the location of the company, the location of the administrators, the place of the company's registered office and principal place of business all tell in favour of the Victorian court being the more appropriate one. In addition, the Victorian court can deal with all issues this Friday and as, if these proceedings are transferred, they have already been advertised, then it would seem that, if appropriate, the winding up could proceed in that court this Friday.
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I am satisfied that in the unusual circumstances which have developed here the more appropriate court is the Supreme Court of Victoria essentially because that is the jurisdiction in which the registered office and principal place of business is: see Corporations Act, s 1337L.
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The Court therefore orders that these proceedings be transferred to the Supreme Court of Victoria.
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Decision last updated: 02 May 2017
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