Penrith City Council v Owston Nominees No 2 Pty Ltd

[2001] WASC 249

PENRITH CITY COUNCIL -v- OWSTON NOMINEES NO 2 PTY LTD [2001] WASC 249

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2001] WASC 249
Case No:	COR:98/2001	Heard:	6 SEPTEMBER 2001
Coram:	MASTER BREDMEYER	Delivered:	12/09/01
No of pages:	4	Judgment Part:	1 of 1
Result:	Application dismissed
Category:	B
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Parties:	PENRITH CITY COUNCIL OWSTON NOMINEES NO 2 PTY LTD (ACN 001 769 099)
Catchwords:	Corporations Application to wind up based on unpaid statutory demand Debt paid at last moment
Legislation:	Corporations Law, s 459A
Case References:	Deputy Commissioner of Taxation v Guy Holdings Pty Ltd (1994) 12 ACLC 966 Australian Mid-Eastern Club Ltd v Yassim (1989) 1 ACSR 399

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : PENRITH CITY COUNCIL -v- OWSTON NOMINEES NO 2 PTY LTD [2001] WASC 249 CORAM : MASTER BREDMEYER HEARD : 6 SEPTEMBER 2001 DELIVERED : 12 SEPTEMBER 2001 FILE NO/S : COR 98 of 2001 BETWEEN : PENRITH CITY COUNCIL

Plaintiff

AND

OWSTON NOMINEES NO 2 PTY LTD (ACN 001 769 099)
Defendant

Catchwords:

Corporations - Application to wind up based on unpaid statutory demand - Debt paid at last moment

Legislation:

Corporations Law, s 459A

Result:

Application dismissed

(Page 2)

Category: B

Representation:

Counsel:

Plaintiff : Ms H J Warlow-Shill
Defendant : In person (Mr W Anderson)

Solicitors:

Plaintiff : Gadens Lawyers
Defendant : In person (Mr W Anderson)

Case(s) referred to in judgment(s):

Deputy Commissioner of Taxation v Guy Holdings Pty Ltd (1994) 12 ACLC 966

Case(s) also cited:

Australian Mid-Eastern Club Ltd v Yassim (1989) 1 ACSR 399

(Page 3)

1 MASTER BREDMEYER: This is an application by the plaintiff to wind up the defendant, Owston Nominees No 2 Pty Ltd ("Owston"), in insolvency. Owston is the trustee for the Warren Anderson Family Trust. The defendant's solicitor has just got off the record and I gave Mr Anderson leave to represent his company. The plaintiff's application to wind up is based on an unpaid statutory demand which issued against Owston on 8 December 2000. The demand is for unpaid rates on a number of properties. The rates are set out in a schedule to the demand which covers six pages. The rates total $113,164.08 and cover a period from November 1998 through to August 2000. The total debt includes $18,330.88 for interest and $5,534 for legal charges. It would appear from the statutory demand that a judgment has been obtained for these debts, so the total of the judgment debts, plus interest and costs now equals $113,164.08.

2 I am told that, yesterday, the defendant tendered to the plaintiff's solicitor, a bank cheque for the debt the subject of the statutory demand, namely $113,164.08. I am told that the plaintiff is not minded to accept this cheque and intends to return it, the reason being that if the company is wound up this money would have to be returned anyway as a preferential payment. What is the likelihood of the company being wound up otherwise than as a result of this application? In COR 130 of 2001 Skea Nelson & Hager v Owston Nominees No 2 Pty Ltd, the plaintiffs, who are a firm of solicitors, have brought an application to wind up the company for insolvency. The application is based on a statutory demand issued for legal fees. I am told by Mr Anderson that he has entered into a written agreement with the plaintiff in that action to pay the debt in a compromised figure in 12 months time. The application in that action is presently adjourned sine die. It was lodged on 24 April 2001.

3 Section 459A of the Corporations Law provides that:

"On an application under section 459P, the Court may order that an insolvent company be wound up in insolvency."

The use of the word "may" gives a discretion. I propose to follow the analysis and the result achieved by Zeeman J in Deputy Commissioner of Taxation v Guy Holdings Pty Ltd (1994) 12 ACLC 966. I agree with the Judge at 969:

"The presumption that the respondent is insolvent does not require that the application be granted. The company being insolvent, s 459A authorises me, but does not require me to

(Page 4)

make an order that it be wound up in insolvency. There can be no doubt but that s 459A confers a discretion. ...

The status of the applicant to seek a winding up order is unaffected by the payment of the amount the subject of the statutory demand. That status is to be determined as at the time when the application was filed (s 459P(1) and see Re William Hockley Ltd [1962] 1 WLR 555). The question is whether it is appropriate to order that the respondent be wound up in insolvency when by s 459C(2) it is deemed to be insolvent but the amount of the statutory demand has been met and there is no evidence as to what the actual financial position of the respondent might be."

4 The plaintiff presses for a winding up because it says it has further rates outstanding of $54,875.03. I assume, from a reading of the statutory demand, that those are rates due and owing as from 1 September 2000.

5 I consider it would be most unjust to wind up this company in these circumstances. The debt, the subject of the statutory demand has been paid in full. That debt includes interest and legal costs which is some recompense to the plaintiff which has had to chase this company for payment of these debts. The company is seeking to obtain refinance and has two applications on foot; one, I am told, for $4.5 million from one lender and another for $36 million from another lender. An answer on the first and smaller of the two applications for finance is expected within two to three weeks. I have not seen the loan application documents, nor the requirements of the lender, but I can well imagine that the existence of a winding up application might well torpedo any attempt to get refinance. I consider it just that this application be dismissed. It is open to the plaintiff to issue another statutory demand immediately for the current rates outstanding. The application to wind up will be dismissed but I consider that the company should get the costs of the application and any reserved costs because it was the application which produced the payment.