FEDERAL COURT OF AUSTRALIA

Workers Compensation Nominal Insurer v Total Transaction Management Pty Ltd [2013] FCA 1334

THE COURT ORDERS THAT:

1.    Pursuant to section 471A(1A)(d) of the Corporations Act 2001, leave be granted to the applicants’ performance or exercise of the function or power in bringing this application.

2.    Pursuant to rule 39.5(a) of the Federal Court Rules 2011, the orders of Registrar Segal made in these proceedings on 11 October 2013 be set aside.

3.    The Liquidator pay from the amount held by him, the following:

3.1    The Applicants costs of these proceedings fixed in the amount of $6,900.20;

3.2    The remuneration of the Liquidator and incidental to this application up to a maximum amount of $18,387.60 plus GST;

3.3    The disbursements incurred by the liquidator up to a maximum amount of $2,000.00 plus GST excluding legal fees;

3.4    The legal fees incurred by the Liquidator of an incidental to this application on an incurred basis;

3.5    Payment of the following creditors:

3.5.1    Outstanding superannuation contributions owed by the company in the amount of $139,540.00 (subject to the Superannuation Guarantee Charge);

3.5.2    The Australian Taxation Office in the sum of $141,163.98; and

3.5.3    GIO in the amount of $441.00.

4.    The Liquidator pay to the Respondent any surplus of the funds held by him after the payments have been made in accordance with order 3 above.

5.    The proceedings be otherwise dismissed

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    This is an application to set aside orders made on 11 October 2013 by a Registrar of the Court that the defendant company be wound up and consequential thereupon for the appointment of a liquidator. By an interlocutory application filed on 31 October 2013 the directors of the defendant company sought orders, first, for leave pursuant to s 417(1A)(d) of the Corporations Act 2001 (Cth) (the Act) to approve their performing the function of bringing the application and, relevantly, the setting aside of the winding up order and the appointment of a liquidator.

2    The application is supported by affidavits which explain why the defendant company was not present and, indeed, did not know about the application by the then creditor for the winding up and the appointment of a liquidator. In effect, there was an oversight by the directors of the company when they moved from their then residential address, which was also the registered address of the defendant company, and the directors failed to update the company’s address with ASIC. There is also evidence before me that indicates that the defendant company is solvent and, otherwise, agreement has been reached with the liquidator for the payment of all other creditors, the original petitioning creditor, in fact, being no longer a creditor of the defendant company at all, and for payment of the liquidator’s costs and expenses.

3    In these circumstances, rather than relying upon the statutory power to terminate a winding up in s 482 of the Act, the directors seek that the company be permitted to make this application on the basis of rule 39.05(a) of the Federal Court Rules 2011.

4    Rule 39.05(a) is the provision which permits the Court to vary or to set aside any judgment or order after it has been entered if, relevantly, it was made in the absence of a party. My attention has been drawn to a decision of Hodgson J in George Ward Steel Pty Ltd v Kizcot Pty Ltd (1989) 15 ACLR 464 at 465 where his Honour said:

In my view if an order winding up a company is made in the absence of the defendant company, and an application is brought promptly by the company with notice being given to the liquidator, to the plaintiff, and to any creditor who appeared at the hearing, and if the evidence shows an explanation for the non-appearance at the hearing and indicates solvency of the company; and if there is consent to setting aside or at least non-opposition; and if the liquidator indicates that nothing in his investigations to date shows a reason for the company to be stopped from trading, then the Court will normally set aside the order.

5    This reasoning has been applied in this court on a number of occasions including by Jacobson J in GFK & Sons Pty Ltd, in re GFK & Sons (Balmain) Pty Ltd [2010] FCA 953, in particular see [7] – [9]. It should be apparent that the evidence before me satisfies all of the conditions which were referred to by Hodgson J, including that there is evidence indicating solvency of the company, there is an explanation for the non-appearance, there is no opposition to the orders, and nothing in the liquidator’s investigations shows any reason why the defendant company should be stopped from trading.

6    In these circumstances I am content to make the orders sought by the defendant company.

Associate:

Dated:    15 November 2013