Deputy Commissioner of Taxation v Giumar Pty Ltd (ACN 080 506 298) (in liq) [2006] FCA 101 (3 March 2006)

DEPUTY COMMISSIONER OF TAXATION v GIUMAR PTY LTD (ACN 080 506 298) (IN LIQUIDATION)
NSD 2582 OF 2005

RARES J
3 MARCH 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2582 OF 2005

BETWEEN:	DEPUTY COMMISSIONER OF TAXATION PLAINTIFF
AND:	GIUMAR PTY LTD (ACN 080 506 298) (IN LIQUIDATION) DEFENDANT
JUDGE:	RARES J
DATE OF ORDER:	3 MARCH 2006
WHERE MADE:	SYDNEY

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2582 OF 2005

BETWEEN:	DEPUTY COMMISSIONER OF TAXATION PLAINTIFF
AND:	GIUMAR PTY LTD (ACN 080 506 298) (IN LIQUDIATION) DEFENDANT

JUDGE:	RARES J
DATE:	3 MARCH 2006
PLACE:	SYDNEY

1 This is an application made pursuant to section 482 of the Corporations Act 2001 (Cth) to terminate the winding up of Giumar Pty Limited (‘the Company’) which was placed in liquidation by an order made by Registrar Tesoriero on 24 February 2006. Mr Max Donnelly was appointed the liquidator of the company. The application was filed in court yesterday and I have heard it today. Mr Oram appears for the plaintiff, the Deputy Commissioner of Taxation, who does not oppose the making of the order.

2 There is evidence from one of the directors and shareholders of the company, Ms Incandela as to the company's financial circumstances and the circumstances in which the events leading up to the liquidation occurred. Ms Incandela explained that among other things the other director and shareholder of the company, her partner, was diagnosed with multiple sclerosis some time ago but that his condition had recently deteriorated considerably which has caused both his ability to participate in the management of the company's affairs and Ms Incandela's ability to deal with matters affecting it to be diminished.

3 There have also been a number of difficulties relating to the post office box at the premises of the business conducted by the company in Lyn Parade, Preston, which has apparently been broken into or robbed on a number of occasions and there was also a robbery from the office itself in early December last year. I am satisfied by the explanation given by Ms Incandela as to the circumstances in which the service of the statutory demand and originating processes may not have come to her notice, or the company's notice, or may have indeed gone astray and that a proper explanation has been given as to why there was no appearance to oppose the making of the orders before Registrar Tesoriero or an application earlier to set aside the statutory demand.

4 The material in exhibit A satisfies me that the company is solvent and in light of the material in Ms Incandela's affidavit in exhibit A and her oral evidence today I am satisfied that the interests of creditors generally will not be prejudiced if I were to make an order as sought terminating the winding up. I particularly raised concern with counsel for the applicant as to the schedule of aged payables forming part of exhibit A which showed that amounts totalling $6,333.96 and $15,176.29 had been due and owing by the company for, periods of respectively 61 to 90 days and 90 days plus.

5 Ms Incandela has given evidence that the overdraft facilities available to the company will permit, together with recent bankings, those debts to be discharged and that she would attend to that discharge on Monday by sending cheques drawn on the company's account to the creditors concerned.

6 In considering the making of orders of this kind the court has regard to, inter alia, the considerations referred to by Master Lee QC in Re Warbler Pty Limited (1982) 6 ACLR 526. In recent cases in the Supreme Court of New South Wales Santow J in Dubolo Pty Limited v Codrington Investment Corporation Pty Limited (1998) 26 ACSR 723 and Barrett J in Anderson v Palmer [2002] NSWSC 192 at [5] noted that the list provided by Master Lee QC in the earlier case was not a series of rigid principles, rather it provides guidance as to matters which the court should consider in making such an order.

7 Relevantly the list indicates that the grant of a stay, or, now, a termination, under the amended provisions since the Master gave his judgment, of section 482 is a discretionary matter and that there is a clear onus on the applicant to make out a positive case for such an order. Secondly, it was suggested in the list that there had to be service of a notice of the application on all creditors and contributories together with proof of that. Thirdly, the nature and extent of the creditors must be shown and whether or not all the debts have been or will be discharged. Fourthly, the attitude of creditors, contributories and liquidator was a relevant consideration.

8 Fifthly, the current trading position and general solvency of the company should be demonstrated and solvency was of significance when a stay of proceedings in the winding up was sought. A similar principle is obviously applicable where it is a termination rather than a stay that is in question. Sixthly, if there had been non-compliance by the directors with their statutory duties as to the giving of information and furnishing of a statement of affairs, a full explanation with the reasons and circumstances should be given. Seventhly, the general background and circumstances which led to the winding up order should be explained, and, last, the nature of the business carried on by the company should be demonstrated and whether or not the conduct of the company was in any way contrary either to commercial morality or the public interest.

9 The evidence in the present case does not demonstrate that all the creditors had been informed of the present application, indeed I think I can infer quite readily that they have not. However, I do not regard that as being a matter of sufficient weight to inhibit the making of the order in light of the other evidence before me. I am mindful that Mr Oram who appears for the Commissioner of Taxation, who is the plaintiff for the order, informed me this morning that he was not aware of any persons who had come forward as intending to be supporting creditors or substitute creditors were the Commissioner of Taxation not to proceed. The liquidator, Mr Donnelly, has added in exhibit B that he is prepared to allow for the termination of the winding up provided his costs are paid. That is being attended to today and the solicitor for the applicants has given an undertaking to the court that she will personally deliver a bank cheque in the amount of Mr Donnelly's outstanding fees of $8,562.40 inclusive of GST.

10 I am satisfied on the evidence that the company's general trading position is such, and its solvency is such, that it would be in the interests creditors generally for me to exercise my discretion in making the order sought. I have had regard to all of the evidence and I am satisfied that it would be an appropriate exercise of my discretion to make an order terminating the winding up. I note that the amount due and owing to the plaintiff has been tendered by way of bank cheque this morning. In all the circumstances, I consider that I should make an order terminating the winding up.

1. Pursuant to section 482 of the Corporations Act 2001 the winding up of Giumar Pty Limited (In Liquidation) ACN 080 506 298 be terminated on 3 March 2006.

2. I note the undertaking of the applicants by the counsel that the solicitor for the applicants will attend at the offices of the liquidator with the bank cheque for the total amount of his fees in the sum of $8,562.40 today.

I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

Solicitor for the Plaintiff:	Australian Taxation Office

Counsel for the Defendant:	P Newton

Solicitor for the Defendant:	Kemp Strang

Date of Hearing:	3 March 2006

Date of Judgment:	3 March 2006

Federal Court of Australia

Deputy Commissioner of Taxation v Giumar Pty Ltd (ACN 080 506 298) (in liq) [2006] FCA 101 (3 March 2006)