Merrett v Autumn Solar Installations Pty Ltd
[2011] NSWSC 542
•06 June 2011
Supreme Court
New South Wales
Medium Neutral Citation: Merrett v Autumn Solar Installations Pty Ltd [2011] NSWSC 542 Hearing dates: 6 June 2011 Decision date: 06 June 2011 Jurisdiction: Equity Division - Corporations List Before: Windeyer AJ Decision: Winding up of the defendant to be terminated pursuant to s 482 of the Corporations Act 2001 (Cth)
Catchwords: CORPORATIONS - application for termination of liquidation - company returned to solvency after deed of company arrangement Category: Principal judgment Parties: Stephen Lawrence Merrett (first plaintiff)
Amanda Merrett (second plaintiff)
Autumn Solar Installations Pty Ltd (first defendant)
Australian Securities and Investments Commission (second defendant)
Michael Jones, trading as Jones Partners Insolvency and Business Recovery (third defendant)Representation: E Finnane (plaintiff)
Uther Webster & Evans (plaintiff)
File Number(s): SC 2011/162740
EX TEMPORE Judgment
This case concerns an originating process under which the plaintiffs, who are the directors of the defendant company, seek an order that the winding up of that company be terminated.
The company was placed into liquidation by order of the Federal Court of Australia in the Victorian registry on 24 May 2010. The liquidator appointed was Mr Craig Bolwell. Mr Bolwell appointed Mr Michael Jones as administrator of the company on 18 June 2010 and shortly thereafter at a meeting of creditors on 23 July 2010, it was resolved that the company execute a proposed deed of company arrangement, which it did. Mr Jones became the deed administrator.
All requirements under that deed have been met and the creditors have been paid the amount of 76.2171 cents in the dollar to which they were entitled under the deed of company arrangement.
There is evidence that the company is solvent and has been trading successfully. The figures which are before the Court, in essence, show that there has been a trading loss but I am satisfied that has arisen because of costs and expenses incurred as a result of the winding up and the administration.
Mr and Mrs Merrett, who have provided moneys to the company, have agreed to capitalise the debts due to them totalling $236,775 in exchange for shares of $1 in the company. The only additional amount which is due to them is for employee entitlements which I do not think they should be asked to or required to capitalise.
The major creditors of the company have not opposed the order made for termination. The creditors at the date of the winding up are of course bound by the deed of company arrangement and have been paid out pursuant to that.
There was an explanation given as to why the original winding up order was made. It was opposed by Mr and Mrs Merrett but apparently the judge who heard the matter was not satisfied that there was sufficient evidence before him to find that the company was solvent. The application to set aside the statutory demand had failed and in those circumstances, it was necessary to show actual solvency. Nevertheless, the company is now trading and is able to pay the creditors which they fall due, and the liquidator and the deed administrator both consent to this application. I am of the view that the evidence is sufficient to enable the order sought to be made.
I make the orders sought in paragraph 1 of the originating process.
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Decision last updated: 08 June 2011
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