Re U-Nited Warranties Pty Ltd
[2012] NSWSC 1087
•06 August 2012
Supreme Court
New South Wales
Medium Neutral Citation: In the matter of U-Nited Warranties Pty Ltd [2012] NSWSC 1087 Hearing dates: 6 August 2012 Decision date: 06 August 2012 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Leave granted nunc pro tunc for Defendant to be wound up voluntarily. Leave granted for Plaintiff's application filed 25 June 2012 to be discontinued. Costs of Plaintiff's application be costs of the winding up payable following liquidator's costs and expenses.
Catchwords: CORPORATIONS - Winding up - Creditor's petition to wind up - Whether there is any advantage to the appointment of a liquidator by the court - Whether leave should be granted to the company to resolve that it be wound up voluntarily. Legislation Cited: - Corporations Act 2001 (Cth) ss 490, 490(1)(a)
- Supreme Court (Corporations) Rules 1999 (NSW) r 5.8Cases Cited: - Progress Printers and Distributors Pty Ltd v Production and Graphics Communications Pty Ltd (1996) 21 ACSR 241
- Re Horsham Kyosan Engineering Co Ltd [1972] VFR 403
- Re North Western Fruitgrowers Pty Ltd [1965] VR 306
- Re Pendonna Pty Ltd [2012] NSWSC 631Category: Interlocutory applications Parties: TNT Australia Pty Ltd (Plaintiff)
U-Nited Warranties Pty Ltd (Defendant)Representation: Counsel:
D. Solomons (sol.) (Plaintiff)
R. Carter (sol.) (Defendant)
Solicitors:
Ashurst Australia (Plaintiff)
Middletons (Defendant)
File Number(s): 12/198314
Judgment - EX TEMPORE
The Defendant, U-Nited Warranties Pty Limited ("Company") seeks an order that leave be granted nunc pro tunc pursuant to s 490(1)(a) of the Corporations Act 2001 (Cth) for it to be wound up voluntarily. The Plaintiff, TNT Australia Pty Limited ("TNT") also seeks orders that leave be granted under rule 5.8 of the Supreme Court (Corporations) Rules 1999 (NSW) for a winding up application filed by TNT on 25 June 2012 to be discontinued and for certain consequential cost orders.
The fact situation in this case is very similar to that which was considered by Brereton J In Re Pendonna Pty Ltd [2012] NSWSC 631. In summary, TNT filed an application for winding up of the Company on 25 June 2012 and served that application. By inadvertence, notice of the application for the winding up was not lodged by TNT with the Australian Securities and Investments Commission ("ASIC") until 12 July 2012 although, as I have noted above, that application had previously been served on the Company. Prior to the lodgement of notice of that application with ASIC, the Company had passed a resolution for a creditors' voluntary winding up, in circumstances that the liquidators to be appointed to the Company had properly undertaken searches with ASIC to determine whether there was any winding up application under way.
Section 490 of the Corporations Act has the result that a company cannot, without leave of the court, resolve that it be wound up voluntarily once an application has been filed with the court for an order that it be wound up in insolvency. Such leave may be granted retrospectively: Re Horsham Kyosan Engineering Co Ltd [1972] VR 403; Progress Printers and Distributors Pty Limited v Production & Graphics Communications Pty Ltd (1996) 21 ACSR 241; Re Pendonna above at [2]. It will generally be necessary to show that it is preferable that a company be wound up voluntarily, rather than compulsorily, before such leave is granted retrospectively: Re North Western Fruitgrowers Pty Ltd [1965] VR 306; Re Pendonna above at [3].
A number of relevant factors were identified in Re Pendonna above. In this case, as in Re Pendonna, the winding up is a creditor's voluntary winding up, not a members' voluntary winding up, and the powers of the liquidator will not differ significantly from those of a court-appointed liquidator. There is evidence that the liquidators have undertaken work since their appointment to progress the winding up. Mr Byrnes (who with his partner, Mr Hewitt, have been appointed as joint and several liquidators) gives evidence of work including visiting company sites, engaging former employees of the Company to assist with work necessary in respect of the administration of its affairs, contacting relevant stakeholders, including regulatory bodies, conducting initial investigations, liaising with GEERS in relation to employee entitlements and convening a meeting of creditors and preparing relevant statutory notifications.
In this case, as in Re Pendonna, I am satisfied that there will be duplication of work and additional expense which would ultimately reduce the return to the Company's creditors if the appointment of Messrs Byrnes and Hewitt was not validated and a court-appointed liquidator was appointed. There may also be, although this is to some extent speculative, disruption to the efforts applied by the liquidators to deal with stakeholders if confusion is now introduced by a change of liquidators.
The question for the Court is whether there is any advantage to the appointment of a court-appointed liquidator which would warrant those disadvantages. Here, the result of a winding up would be to bring about an earlier relation-back date, by about two weeks, being 25 June 2012 rather than 9 July 2012. Mr Byrnes gives evidence, based on his preliminary review of the Company's books and records, that he has not yet identified any potential voidable transactions which would be affected by a change in the relation-back day and it is unlikely that such voidable transactions exist, given the relatively small period by which the relation-back day would change, and the fact that a six-month relation-back period would extend to the period between Christmas and New Year. I am satisfied, on the basis of this evidence, that the advantage of an earlier relation-back day would be minimal and that advantage would not outweigh the disadvantages which would arise from a change of liquidator at this point.
I also give weight, as Brereton J did in Re Pendonna, to the fact that the petitioning creditor, TNT, does not oppose the relief sought. As Brereton J observed, that is an important factor in the circumstances and indicative of the view of an interested creditor that its interest will be at least as well served by the voluntary winding up continuing as by the alternative of a court-appointed liquidator being appointed in a compulsory winding up.
For these reasons, I will grant leave to the Company to resolve that it be wound up voluntarily, notwithstanding that an application for the Company to be wound up in insolvency had been filed on 25 June 2012 nunc pro tunc. TNT seeks costs orders of a similar kind to those made in Re Pendonna. I consider that those orders are properly made.
I therefore make the following orders:
1. Leave be granted nunc pro tunc, pursuant to section 490(1)(a) of Corporations Act 2001 (Cth), for the Defendant to be wound up voluntarily.
2. Leave be granted, pursuant to rule 5.8 of the Supreme Court (Corporations) Rules 1999 (NSW), for the Plaintiff's application filed on 25 June 2012 to be discontinued.
3. The costs of the Plaintiff's application be costs of the winding up payable following payment of the liquidator's costs and expenses.
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Decision last updated: 19 September 2012
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