Sunarto v Zurich
[2001] NSWSC 422
•16 May 2001
CITATION: Sunarto v Zurich [2001] NSWSC 422 CURRENT JURISDICTION: Equity Division FILE NUMBER(S): SC 2026/01 HEARING DATE(S): 16/05/01 JUDGMENT DATE:
16 May 2001PARTIES :
Budi Sunarto - Applicant
Zurich Australian Workers Compensation Ltd - First Respondent
John Frederick Lord - Second RespondentJUDGMENT OF: Barrett J
COUNSEL : Mr J.K. Chippindall - Applicant SOLICITORS: Stewart Smith & Associates - Applicant
ALR Lawyers - First Respondent
John Frederick Lord - Second RespondentCATCHWORDS: CORPORATIONS - Winding up - Winding up order obtained ex parte - Application to terminate winding up - Whether sole director and shareholder may apply under Pt 40 r 9 of Supreme Court Rules - Matters to be considered upon application undere s.482 of Corporations Law LEGISLATION CITED: Corporations Law CASES CITED: Nicholson v Nicholson [1974] 2 NSWLR 59
George Ward Steel Pty Ltd v Kizkot Pty Ltd (1989) 15 ACLR 464
Re Skay Fashions Pty Ltd (1986) 10 ACLR 743DECISION: Order that the winding up be terminated
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THE SUPREME COURT REVISED
OF NEW SOUTH WALES
EQUITY DIVISION
BARRETT J
WEDNESDAY 16 MAY 2001
2026/01 - ZURICH AUSTRALIAN WORKERS' COMPENSATION LTD v HYVAN PTY LTD
JUDGMENT
HIS HONOUR:
1 Mr Sunarto, the sole director and sole shareholder of Hyvan Pty Ltd, seeks to terminate the winding up of that company which commenced when an order was made ex parte by the Registrar on 4 May 2001 on the application of Zurich Australian Workers' Compensation Limited in consequence of an unsatisfied statutory demand.
2 The company’s business involves the leasing of taxis and taxi plates and has as its main creditors Esanda, Taxis Combined Services and HIH Premium Funding Pty Ltd. Other creditors, some six in number, are detailed in paragraph 16 of Mr Sunarto's affidavit sworn today.
3 Mr Sunarto did not appear or arrange for the company to appear upon the hearing of the application for winding up. Mr Chippindall of Counsel, who makes the present application on Mr Sunarto's behalf, says that Mr Sunarto, partly through language difficulties and inexperience, did not fully understand the implications of the threatened winding up and that it was for that reason that he did not attend.
4 Since the winding up order was made, Mr Sunarto has arranged for company funds in his possession to be applied in paying the Zurich debt and costs as well as the costs of the liquidator to date. In addition, Mr Sunarto has obtained a statement of the balance owing to each of the six creditors referred to in paragraph 16 of his affidavit and Mr Chippindall has produced to me those statements together with bank cheques made out in favour of the respective creditors for the amounts in the statements. Mr Chippindall has, on Mr Sunarto's behalf, given to the Court an undertaking that the bank cheques will be delivered to the respective creditors within the next 24 hours.
5 As to the major creditors, Esanda, Taxis Combined Services and HIH Premium Funding, I have before me letters from the respective companies stating that Hyvan Pty Ltd is operating within current arrangements and that, in effect, each of the creditors is content with the current position as to payment and promptness of payment.
6 It is in those circumstances that Mr Sunarto seeks to terminate the winding up so that he may resume his position as sole director and thereby displace the liquidator.
7 Mr Chippindall suggested that the appropriate course might be for the Court to act under Pt 40 r 9(3) of the Supreme Court Rules on the footing that the winding up order had been obtained in the absence of the company, Hyvan Pty Ltd. He pointed out, however, that in view of s.471A of the Corporations Law, Hyvan Pty Ltd itself could not be set in motion by Mr Sunarto for these purposes. His powers as an officer ceased when the winding up order was made. It may be that Mr Sunarto can, in his own right, be an applicant under Pt 40 r 9(3): cf Nicholson v Nicholson [1974] 2 NSWLR 59. But whether that is so or not, it seems preferable to resort to another avenue which is undoubtedly available, namely, the power of the Court under s.482 of the Corporations Law to terminate the winding up. A contributory is, by reason of the express provision in s.482(1A)(a), a competent applicant for such an order so that there is no doubt about Mr Sunarto's standing if he proceeds under that section.
8 As to the matters with which the Court should be concerned in an application of this kind, Mr Chippindall referred me to the decision of Hodgson J in George Ward Steel Pty Ltd v Kizkot Pty Ltd (1989) 15 ACLR 464 which, although a case under Pt 40 r 9 of the Supreme Court Rules, to my mind outlines the considerations which should also be relevant in an application under s.482. Further guidance is to be had in relation to s.482 from the judgment of Tadgell J in Re Skay Fashions Pty Ltd (1986) 10 ACLR 743. Taking both those cases together, the matter resolves itself in the following way:
1. It must be clear that the application to terminate the liquidation is brought promptly. There is no doubt about that in this case, given that the winding up order was made less than two weeks ago.
2. The application to terminate should be notified to the liquidator, to the original petitioning creditor and to any creditor who appeared at the hearing. In this case the only persons affected in these ways are the liquidator and Zurich, both of whom have been notified. There is in evidence a letter from the liquidator to Mr Sunarto's solicitor saying that the liquidator neither consents to nor opposes the present application and that, to my mind, is sufficient in respect of that party. As to Zurich, the same letter from the liquidator confirms that the Zurich debt has been paid and again, I think that is sufficient in respect of that party.
3. The evidence should show an explanation for the non-appearance. I have already dealt with that matter by reference to the explanation Mr Chippindall gave me.
4. There must be consent or at least no opposition to the termination of the winding up. That is the case here. I have already referred to the letter from the liquidator on the position of Zurich and the statements that have been received from the major creditors who are happy with the current trading terms.
5. There must be nothing in the liquidator's investigations to date showing a reason for the company to be stopped from trading. Again, I refer to the letter from the liquidator in which he neither consents to nor opposes the termination of the winding up. Had any such adverse matters come to the liquidator’s notice, it would have been reasonable to expect that he would not have written the letter that he has in fact written.
6. The Court must consider whether the termination of the winding up will be conducive or detrimental to commercial morality and the interests of the public at large, it being axiomatic that insolvent companies should be wound up and should stay in liquidation. The evidence before me here shows that arrangements have been made which are satisfactory to current creditors and that while the company's position could not be described as particularly strong, it could not at the same time, be said that it was insolvent or approaching insolvency. I also have the impression that Mr Sunarto now sufficiently understands that the payment of legitimate creditors in a timely way is an important responsibility of company directors. That being so, I think the matter of commercial morality arising from Skay Fashions does not become a concern here.
9 I am satisfied that it is appropriate to make an order under s.482 for the termination of the winding up of Hyvan Pty Ltd. I asked Mr Chippindall whether any order was sought as to the future management of the company or the reinstatement of individuals but, as he pointed out, this is in every sense of the word a one man company in which Mr Sunarto is not only the sole shareholder but also the sole director, with the result that it is entirely within his power to deal with such matters as may require attention in that respect.
10 I order that the winding up of Hyvan Pty Ltd be terminated this day, 16 May 2001. This order may be taken out forthwith.
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