M&v International Pty Limited v Francis Hedley Horwood Junior
[2015] NSWSC 2089
•06 August 2015
Supreme Court
New South Wales
Medium Neutral Citation: M&V International Pty Limited v Francis Hedley Horwood Junior; In the matter of M&V International Pty Limited [2015] NSWSC 2089 Hearing dates: 6 August 2015 Date of orders: 06 August 2015 Decision date: 06 August 2015 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Notice of motion dismissed.
Catchwords: CORPORATIONS – winding up – stay of winding up proceedings – where stay sought to enable recovery of property which would return company to solvency – more appropriate to appoint administrators and execute deed of company arrangement – stay sought essentially to permit company to continue trading in insolvency – held, stay denied. Legislation Cited: (CTH) Corporations Act 2001, s 459G, s 459H Category: Principal judgment Parties: In proceedings 2015/176504:
In proceedings 2014/296043:
M&V International Pty Ltd (ACN 140 717 246) (plaintiff)
Francis Hedley Horwood (first defendant)
Donna Vida Horwood (second defendant)
Khidmatgar (No 3) Pty Ltd (ACN 001 766 178) t/a Agritech Australia (ABN 44 001 766 178) (third defendant)
Francis Hedley Horwood and Donna Vida Horwood (plaintiffs)
M&V International Pty Ltd (ACN 140 717 246) (defendant)Representation: Counsel:
Solicitors:
D Dudderidge (solicitor) (M&V International))
T Lynch (Francis Hedley Horwood and Donna Vida Horwood)
Ahmed (Deputy Commissioner of Taxation)
Wyndham Lawyers (Francis Hedley Horwood and Donna Vida Horwood)
Bolton & Swan Lawyers (M&V International)
File Number(s): 2015/176504; 2014/296043
Judgment (ex tempore)
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HIS HONOUR: By notice of motion filed in Court today, the defendant seeks an order staying the winding up proceedings against it pending the outcome of proceedings which it has commenced in this Division against the plaintiffs for orders for delivery up of plant, stock and equipment which it alleges have been detained or converted by the present plaintiff, and damages in respect thereof. Those proceedings were instituted by statement of claim filed on 15 June 2015. Arguably, they identify a claim which might be quantified, if it succeeds in all respects, in the order of $360,000 or thereabouts. The time for filing a defence has not yet expired.
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The claims are claims which would fall within the definition of an offsetting claim for the purposes of (CTH) Corporations Act 2001, s 459H. The present plaintiffs, who are substituted plaintiffs, served a statutory demand on the defendant which was not complied with within time or at all, and in respect of which no application was made under s 459G.
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Essentially, the purpose of the stay sought is to enable the defendant to recover property to enable it to resume trading, and/or damages, in the hope that that course will put it in a position to pay its considerable outstanding debts. What is sought is for the Court to authorise the company to continue in a condition of what appears to be an inability to pay its creditors, in order to enable it to do so at some distant time, if the other proceedings come to hearing, are successful, and return the company to solvency.
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In my view, an application for a stay of winding up proceedings to enable a trade-out of that kind over an indefinite period with ambivalent prospects of success is not a proper ground on which to stay winding up proceedings. If the company wished to embark on some such course, the appropriate course was for it to appoint administrators and potentially seek the approval of a deed of company arrangement. It has not done so.
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The notice of motion is dismissed with costs.
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Decision last updated: 19 August 2016
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