FEDERAL COURT OF AUSTRALIA

GFK & Sons Pty Limited, in the matter of GFK & Sons (Balmain) Pty Limited [2010] FCA 953

 
IN THE MATTER OF GFK & SONS (BALMAIN) PTY LIMITED

THE COURT ORDERS THAT:

1.      Pursuant to O 35 r 7(2) of the Federal Court Rules, the winding up order made by Registrar Wall on 30 July 2010 be set aside.

THE COURT NOTES THAT:

1.      The parties have made appropriate arrangements between themselves as to payment of    all relevant costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

 
IN THE MATTER OF GFK & SONS (BALMAIN) PTY LIMITED

REASONS FOR JUDGMENT

1                     I have before me this morning an amended notice of motion filed on 23 August 2010 seeking an order that the winding up of the defendant which was ordered by Registrar Wall on 30 July 2010 be set aside or terminated. 

2                     Mr Robinson, who appeared this morning on the application, did not press for an order that the winding up be terminated, but he did press for an order setting aside the winding up order.  I have power to make such an order under Order 35 rule 7(2) of the Federal Court Rules. 

3                     The jurisdiction to terminate a winding up order under s 482 of the Corporations Act 2001 (Cth) (“the Act”) is discretionary.  The criteria which the court takes into account on such an application were set out in some detail by Barrett J in Metledge v Bambakit Pty Limited [2005] NSWSC 160 at [5].

4                     Mr Metlej, solicitor, who appeared this morning for the plaintiff, submitted that the criteria listed by Barrett J place a heavy onus upon an applicant seeking to terminate a winding up under s 482. 

5                     I accept that submission and it is sufficient to say that in the present case the course ultimately proposed by Mr Robinson does not seek to make good the criteria which would be required in order for me to consider the exercise of the jurisdiction to terminate the winding up under s 482. 

6                     However, in a series of other cases to which I referred in my decision in Workers Compensation Nominal Insurer, in the matter of Deli Glenbrook Pty Limited [2010] FCA 380 (“Deli Glenbrook”), the power of the court to set aside a winding up order can be seen to place a lower onus upon an applicant. 

7                     The central authority is the decision of Hodgson J in George Ward Steel Pty Limited v Kizkot Pty Limited (1989) 15 ACLR 464.  This authority was explained by McDougall J in Labraga v Pomfret [2005] NSWSC 654.  I was satisfied in the Deli Glenbrook matter that the Supreme Court rule relied upon by McDougall J corresponds to the provisions of Federal Court Rules Order 35 rule 7(2) under which the present application is made. 

8                     What is necessary to be established in an application under Order 35 rule 7(2) is that the winding up order was made in the absence of the defendant company, that there is evidence showing an explanation for the non-appearance at the hearing, and that the evidence “indicates solvency of the company.” 

9                     As R.D Nicholson J explained in Registrar of Aboriginal Corporations v Murnkurni Women’s Aboriginal Corporation (1995) 58 FCR 125 at 128, the requirement is not that solvency be established as a fact but that the evidence should indicate solvency in the sense of showing it to be arguable that the company is solvent. 

10                  In the present case, although I have some difficulties with the explanation that was given for the non-attendance of the company when the winding up order was made, I am satisfied that it was made in the absence of the defendant. 

11                  I am also satisfied that the explanation, although not totally satisfactory, is sufficient to enliven the power and to enable me to make an order setting aside the winding up.  The application has been brought reasonably promptly and the evidence is, in my view, sufficient to indicate solvency within the principles stated in the authorities to which I have referred.

12                  What also seems to me to be important is that I have evidence from the liquidator of his non-opposition to the order which is sought.  In addition, Mr Metlej appears this morning for the plaintiff and does not oppose the making of the order.  There is no suggestion that any other creditor appeared at the hearing when the winding up order was made, and there was no appearance by any creditor this morning, notwithstanding the fact that the creditors have been notified of today’s application. 

13                  Moreover, there does not seem to be any factor which is against public policy in the making of the order.  The reason for this, in my view, is that there is at least sufficient evidence to indicate solvency in the sense to which I have referred above. 

14                  Of course, I have discretion as to whether or not to make the order.  In all the circumstances I am satisfied that I should make the order.  I will, therefore, order pursuant to Order 35 rule 7(2), that the order made by District Registrar Wall on 30 July 2010 be set aside.  I note that the parties have made appropriate arrangements between themselves as to the payment of all relevant costs. 

Associate:

Dated:         1 September 2010