Johnson Winter & Slattery in the matter of Firepower Operations Pty Ltd

[2008] FCA 1227

FEDERAL COURT OF AUSTRALIA

Johnson Winter & Slattery in the matter of Firepower Operations Pty Ltd
[2008] FCA 1227

IN THE MATTER OF FIREPOWER OPERATIONS PTY LTD (ACN 112 074 549)

JOHNSON WINTER & SLATTERY v FIREPOWER OPERATIONS PTY LTD (ACN 112 074 549)

NSD 817 OF 2008

LINDGREN J
1 AUGUST 2008
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 817 OF 2008

IN THE MATTER OF FIREPOWER OPERATIONS PTY LTD (ACN 112 074 549)

BETWEEN:	JOHNSON WINTER & SLATTERY Plaintiff
AND:	FIREPOWER OPERATIONS PTY LTD (ACN 112 074 549) Defendant

JUDGE:	LINDGREN J
DATE OF ORDER:	1 AUGUST 2008
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Robert John Boylan be substituted as plaintiff in place of Johnston Winter & Slattery.

2.The filing of an amended originating process showing the substitution of Robert John Boylan as plaintiff be dispensed with and the giving of any further notice to the defendant of the substitution be dispensed with.

3.The proceeding be stood over to 2:00pm on Monday 4 August 2008 for the making of a inding up order and the appointment of liquidator.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 817 OF 2008

IN THE MATTER OF FIREPOWER OPERATIONS PTY LTD (ACN 112 074 549)

BETWEEN:	JOHNSON WINTER & SLATTERY Plaintiff
AND:	FIREPOWER OPERATIONS PTY LTD (ACN 112 074 549) Defendant

JUDGE:	LINDGREN J
DATE:	1 AUGUST 2008
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. Robert John Boylan applies by interlocutory process filed on 23 July 2008 under s 465B(1) of the Corporations Act 2001 (Cth) (the Act) for an order that he be substituted as plaintiff in place of Johnson Winter & Slattery in the winding up application of the defendant. Through their counsel, Johnson Winter & Slattery have indicated that arrangements have been made for the defendant’s indebtedness to them to be satisfied and that they did not wish to proceed as plaintiff. The defendant appears through its voluntary administrator who has instructed Mr N J Kidd of counsel. The order for substitution is not opposed by the defendant.

2. There is evidence before the Court that Mr Boylan is a creditor of the company.  He was employed by the defendant as its chief operating officer.  There is in evidence a Management Employment Agreement signed by him on 7 September 2006.  That Agreement also purports to have been signed on behalf of Firepower Group Holdings Limited on 3 October 2006.  However, the name of the party as typed in the Agreement as the employer is that of the present defendant, Firepower Operations Pty Ltd.  Other evidence to which I refer below makes it clear that Mr Boylan’s employer was the defendant. 

3. According to the Management Employment Agreement, Mr Boylan was to be paid remuneration, being a base salary (gross) per annum of $227,500 and a total gross remuneration of $250,000.  Annexed to Mr Boylan’s affidavit is a “pay slip for employee” issued by the defendant to Mr Boylan and also a PAYG payment summary showing the payer’s name as the defendant and the employee as Mr Boylan.  In his affidavit, Mr Boylan states that the company owes him for unpaid base salary $18,958.33 for May 2008, $18,958.67 for June 2008 and $18,958.33 for July 2008, making a total of $56,875.33.

4. Section 440A(2) of the Act provides that the Court is to adjourn the hearing of an application for an order to wind up a company if the company is under administration and the Court is satisfied that it is in the interests of the company’s creditors for the company to continue under administration rather than be wound up.  The creditors resolved yesterday not to continue with the administration.  In any event, there is no evidence before the Court to support a finding that it is in their interests for the company to continue under administration, rather than being wound up.  On the contrary, the evidence points in the opposite direction.

5. I note that there are a number of other interlocutory processes by other persons claiming to be creditors of the defendant, seeking to be substituted.  Lavan Legal, who represents Mr Boyland also represents those other creditors. 

6. In my view, Robert John Boylan should be substituted as plaintiff in place of Johnson Winter & Slattery; the filing of an amended originating process showing Robert John Boylan substituted as plaintiff should be dispensed with; and the giving of any further notice to the defendant of the substitution be dispensed with.

7. I now proceed to the question of the winding-up of the defendant.  There is read in support of the application an affidavit of Anthony Francis Johnson, who was the Chairman and a partner of the original plaintiff.  That evidence shows that the defendant company is, and was at all material times, indebted to the original plaintiff for $69,308.04.  A statutory demand was served calling for payment of that amount.  It was dated 7 April 2008 and was served by being sent by ordinary prepaid post to the defendant.  It was addressed to the defendant at its registered office at No 1 Chidley Way, Mosman Park, Western Australia, 6102 on 7 April 2008.  As well, copies of the statutory demand were sent by ordinary prepaid post to three other addresses which the defendant was known to have, also on 7 April 2008.  The evidence shows that the demand has not been complied with.  The provision of s 459C(2) is enlivened in these circumstances., that is to say, the Court must presume that the defendant is insolvent.

8. The defendant in administration, through counsel instructed by the voluntary administrator, does not object to the making of a winding-up order.  There should be an order pursuant to s 459A of the Act that the defendant, Firepower Operations Pty Ltd (ACN 112 074 549), be wound up in insolvency after resolving the dispute as to who is to be appointed as liquidator.

9. The question of the identity of the liquidator to be appointed will be the subject of Reasons for Judgment (No 2).

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Associate:

Dated:        13 August 2008

Counsel for the applicant for substitution; Robert John Boylan	Mr J T Johnson with Mr W Edwards
Solicitor for the applicant for substitution; Robert John Boylan	Lavan Legal
Counsel for the Defendant:	Mr N J Kidd
Date of Hearing:	1 August 2008
Date of Judgment:	1 August 2008