Private Services Corporation Pty Ltd v G Squared Enterprises Pty Ltd
[2009] WASC 313
•3 NOVEMBER 2009
PRIVATE SERVICES CORPORATION PTY LTD -v- G SQUARED ENTERPRISES PTY LTD [2009] WASC 313
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2009] WASC 313 | |
| Case No: | COR:124/2009 | 10 SEPTEMBER 2009 | |
| Coram: | MASTER SANDERSON | 3/11/09 | |
| 5 | Judgment Part: | 1 of 1 | |
| Result: | Company wound up | ||
| B | |||
| PDF Version |
| Parties: | PRIVATE SERVICES CORPORATION PTY LTD (ACN 104 516 574) G SQUARED ENTERPRISES PTY LTD (ACN 131 049 824) |
Catchwords: | Corporations law Application to windup in insolvency Turns on own facts |
Legislation: | Nil |
Case References: | Missing Link Network Integration Pty Ltd v Keene Consulting International Pty Ltd [2007] NSWSC 1377 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
G SQUARED ENTERPRISES PTY LTD (ACN 131 049 824)
Defendant
Catchwords:
Corporations law - Application to windup in insolvency - Turns on own facts
Legislation:
Nil
Result:
Company wound up
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr M W Hutchings
Defendant : Mr H J Paiker
Solicitors:
Plaintiff : Murray Hutchings
Defendant : Paiker & Overmeire
Case(s) referred to in judgment(s):
Missing Link Network Integration Pty Ltd v Keene Consulting International Pty Ltd [2007] NSWSC 1377
(Page 3)
1 MASTER SANDERSON: This is the plaintiff's application to wind-up the defendant. It is based upon a statutory demand served on or about 25 May 2009. No application to set aside the demand was made by the company. However, the company did oppose the winding-up application.
2 In its original submissions in opposition to the application the defendant raised a number of objections to the winding-up application. These objections were largely as to form and alleged that the plaintiff had not complied with various rules in initiating the winding-up application. I will deal with each of these objections in turn.
3 First, it was said the originating process was not supported by an affidavit stating the facts in support of the originating process as required by Supreme Court (Corporations) (WA) Rules 2004, r 2.14(1). The affidavit in support of the originating process, it was alleged, was not made within seven days before the originating process was filed. This was said to offend Corporations Rules, r 5.4(4).
4 Second, it was said there was no affidavit verifying that the debt was due and payable by the defendant as required by s 459Q(c) of the Corporations Act 2001 (Cth).
5 Third, it was said there was no affidavit filed annexing a record of a search of the records maintained by the Australian Securities and Investments Commission (ASIC) in relation to the defendant which was carried out at least seven days before the originating process was filed. This was said to offend Corporations Rules, r 2.4(2).
6 Fourth, it was alleged there was no affidavit in support of the originating process seeking an order that the defendant be wound up, such affidavit being made by the plaintiff or by a person with the authority of the plaintiff as required by Corporations Rules, r 5.4(1).
7 Fifth, it was said no notice of the winding up application had been given to ASIC as required by s 465A(a) of the Corporations Act.
8 It was also said the application had not been advertised in the manner prescribed by the Corporations Rules or at all as is required by s 465E(a) of the Corporations Act and Corporations Rules, r 5.6(1).
9 It is not necessary to go through all of these objections. It is sufficient if I say that in all respects the plaintiff had complied with its statutory obligations and with its obligations under the Corporations Rules. The application was supported by three affidavits filed on behalf
(Page 4)
- of the plaintiff. These were three affidavits of Robin Gerard Kingdon sworn 12 June 2009, 11 August 2009 and 1 September 2009. Taken together these three affidavits show there was no substance to the defendant's argument.
10 In opposition to the application the defendant relied upon an affidavit of Andre Grobler sworn 5 August 2009. Effectively that affidavit disputed that the defendant was indebted to the plaintiff. It raised arguments which would have been relevant to an application to set aside the statutory demand. That being so the defendant ran up against the difficulties provided by s 459S. That section reads as follows:
(1) In so far as an application for a company to be wound up in insolvency relies on a failure by the company to comply with a statutory demand, the company may not, without the leave of the Court, oppose the application on a ground:
(a) that the company relied on for the purposes of an application by it for the demand to be set aside; or
(b) that the company could have so relied on, but did not so rely on (whether it made such an application or not).
(2) The Court is not to grant leave under subsection (1) unless it is satisfied that the ground is material to proving that the company is solvent.
11 There is some divergence in the authorities on the proper interpretation of this section. Assaf F, Statutory Demands: Law and Practice (1st ed, 2008) puts the position this way:
The question of the proper interpretation of section 459S(2) is a finely balanced one but one that has important ramifications. On the one hand, the New South Wales Court of Appeal has held that in order for leave to be granted under section 459S(2), the ground sought to be relied upon must be a ground that is the difference between establishing solvency and insolvency. On the other hand, the Full Court of the Western Australia Supreme Court, albeit in obiter, suggests that the proper approach under section 459S(2) is to grant leave simply whether the ground is 'material' to the issue of solvency but not necessarily determinative. On this view, leave will be granted if the company shows that the ground raised might turn out to be determinative of the company's solvency. Regardless of what one may consider to be the better view, the balance of authority now supports the interpretation of section 459S(2) adopted by the New South Wales Court of Appeal and is to be considered good law [10.10].
(Page 5)
12 A number of authorities are referred to by the learned author with the decision in Missing Link Network Integration Pty Ltd v Keene Consulting International Pty Ltd [2007] NSWSC 1377 as the most helpful.
13 In this case, further consideration of the authorities is unnecessary. There is only one paragraph of Mr Grobler's affidavit which is in any way relevant to this issue. That is par 38 and he simply makes the bold assertion that the defendant is not insolvent and annexes, as annexure AG20 to his affidavit, 'a true copy of a payable reconciliation for the defendant as at 28 July 2009'. This document appears to show that the defendant has debts of just $77. But it does not purport to be a set of accounts for the defendant. Based upon this largely meaningless document no assessment can be made of the financial position of the defendant. There is no attempt to set out the assets and liabilities of the defendant, nor is there any reference to its recent trading history and there is certainly no basis upon which a determination could be made as to whether or not the debt the subject of the demand is material in determining the solvency or otherwise of the defendant.
14 That being the case there is a presumption of insolvency based upon the defendant's failure to comply with the statutory demand. As that presumption has not been displaced, the defendant should be wound up on the grounds of insolvency.
15 I will hear the parties as to the precise form of orders and as to costs.
0
1
1