Re Alon Pty Ltd - [2022] NSWSC 64

Supreme Court

New South Wales

Medium Neutral Citation: Re Alon Pty Ltd [2022] NSWSC 64
Hearing dates: 7 February 2022
Date of orders: 7 February 2022
Decision date: 07 February 2022
Jurisdiction: Equity - Corporations List
Before: Gleeson J
Decision:
(1) Pursuant to s 461(1)(k) of the Corporations Act 2001 (Cth) (the Act), the first defendant, Alon Pty Ltd, be wound up.
(2)   That Brian Raymond Silvia and Geoffrey Peter Granger be appointed as the liquidators of the first defendant.
(3) Pursuant to s 472(6) of the Act, declare that anything required or authorised by the Act to be done by the liquidator of the company may be done by any of the liquidators.
(4) Pursuant to s 467(3)(b) of the Act and r 5.6(1) of the Supreme Court (Corporations) Rules 1999 (NSW), the requirement to advertise the application under s 465A(1)(c) of the Act and r 5.6 of the Corporations Rules be dispensed with.
(5) Pursuant to s 467(3)(b) of the Act, the requirement that the application be served on the company under s 465A(1)(b) of the Act be dispensed with.
(6)   That the plaintiff’s costs of the winding up application be paid out of the assets of the first defendant.
(7)   That these orders be entered forthwith.

Catchwords:
CORPORATIONS – external administration – whether appropriate to wind up company on just and equitable ground – Corporations Act 2001 (Cth) s 461(1)(k) – where assets requiring urgent preservation – where directors cannot ascertain solvency of company – where liquidator would have powers of investigation – where application not opposed – company wound up.

Legislation Cited:
Corporations Act 2001 (Cth), ss 9, 175, 233(1)(a), 461(1)(k), 462(c), 465A(1)(c), 465A(1)(c), 467(3)(b), 467(4), 472(6), 530
Supreme Court (Corporations) Rules 1999 (NSW), r 5.6(1)

Cases Cited:
Re Alon Pty Ltd [2021] NSWSC 1021
Re Catombal Investments Pty Ltd [2012] NSWSC 775
Re Gearhouse BSI Pty Ltd [2021] NSWSC 98
Re Hercules Car Parking Systems (Victoria) Pty Ltd [2018] NSWSC 409
The Application of Richard Neal in his capacity as administrator of the Estate Late Paula Hewit [2021] NSWSC 1489

Category: Principal judgment
Parties: Richard John Neal as administrator of the estate of the late Paula Claire Hewit (Plaintiff)
Alon Pty Ltd (First defendant)
Alan Michael Hewit (Second defendant)
Representation:
Counsel:
Mr C Tam (Plaintiff)
Mr J Li (Second respondent)
Solicitors:
Teece Hodgson Ward (Plaintiff)
Jason Li Lawyers (Second respondent)

File Number(s): 2021/320525

Judgment

GLEESON J: Application is made by Mr Richard Neal by further amended originating process filed 13 December 2021 for an order that the first defendant, Alon Pty Ltd (Alon), be wound up under s 461(1)(k) of the Corporations Act 2001 (Cth).
Mr Neal has standing to seek an order for the winding up of the company under s 461(1)(k) having regard to his position as a contributory of the company: Corporations Act, s 462(c). For a company with a share capital, “contributory” is defined as “a holder of fully paid shares in the company”: Corporations Act, s 9. Mr…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] NSWSC 64
Decision Date: 07 February 2022

CaseChat Overview and Summary

Alon Pty Ltd was the subject of a winding up application filed by one of its directors. The case came before the Federal Court, which was tasked with determining whether it was just and equitable to wind up the company. The central issue before the Court was whether the circumstances warranted the winding up of the company under section 461(1)(k) of the Corporations Act 2001. The Court had to consider whether the company's assets required urgent preservation, whether the directors could determine the company's solvency, and whether the appointment of a liquidator would facilitate the necessary investigation.

The Court found that the company's assets indeed required urgent preservation, as there was a risk they would be dissipated or devalued if the company was not wound up. Additionally, the directors were unable to ascertain the company's solvency, which further supported the need for external administration. The Court also noted that a liquidator would have the necessary powers to investigate the company's affairs and determine its solvency, which was a crucial step towards resolving the company's financial situation. The application for winding up was unopposed, which simplified the Court's task in reaching a decision.

Based on these findings, the Court concluded that it was just and equitable to wind up the company. The Court recognised the importance of preserving the company's assets and the need for a thorough investigation into its financial position. The Court was satisfied that the winding up order was necessary to achieve these objectives. The Court made an order winding up the company with effect from the date of the order.

Orders