In the matter of Business In Focus Pty Ltd

[2015] NSWSC 2074

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of Business In Focus Pty Ltd [2015] NSWSC 2074
Hearing dates:	20 April 2015
Date of orders:	20 April 2015
Decision date:	20 April 2015
Jurisdiction:	Equity - Corporations List
Before:	Brereton J
Decision:	Winding up order made and liquidator appointed.
Catchwords:	CORPORATIONS – winding up – winding up on grounds of insolvency – failure to comply with creditor’s statutory demand – application for adjournment of winding up hearing to enable meeting of creditors to be convened – where administrators appointed – immediately prior to hearing of winding up proceedings – whether in creditors’ interests for administration to proceed
Legislation Cited:	(Cth) Corporations Act 2001, s 440A, s 459S
Category:	Procedural and other rulings
Parties:	Deputy Commissioner of Taxation (plaintiff) Business In Focus Pty Ltd ACN 003 636 520 (defendant)
Representation:	Counsel: K Metlej (solicitor) (plaintiff) C Muir (defendant)   Solicitors: Craddock Murray Neumann Lawyers Pty Ltd (plaintiff) Oliveri Lawyers (defendant)
File Number(s):	2015/26472

Judgment (ex tempore)

1. HIS HONOUR: By originating process filed on 28 January 2015, the plaintiff Deputy Commissioner of Taxation seeks an order that the defendant Business in Focus be wound up in insolvency and a liquidator appointed.

2. The application relies on a failure to comply with the creditor’s statutory demand for payment of debt claiming an amount of $179,160.34, which was verified by an affidavit of Mia Pelayo sworn on 17 October 2014. The demand and accompanying affidavit was served on the defendant by being posted to its registered office on 17 October 2014. The affidavit verifying the originating process of Robert Predan of 28 January 2015 establishes that the defendant did not comply with the demand within 21 days after it was served, nor did the defendant apply to have the demand set aside. Accordingly, the defendant is presumed to be insolvent. As a result of further business activity statements lodged by the defendant since the commencement of the proceedings, the amount of the defendant's indebtedness to the plaintiff has increased to $433,620.90, as deposed to in the affidavit of Robert Predan of 16 April 2015. Notice of the application has been duly lodged with ASIC and published on the ASIC insolvency website, as appears from the affidavit of publication of Khaled Metlej of 5 March 2015. Due service of the originating process is established by the affidavit of Tania Payne of 9 February 2015. In any event, the defendant has filed a notice of grounds of opposition and appeared at the hearing. Nicholas Malanos as official liquidator has consented to act as liquidator.

3. The notice of grounds of opposition raises a dispute as to the debt. However, without leave under (Cth) Corporations Act 2001, s 459S, which has not been sought, that ground is not open. It also raises a defence of solvency, but no evidence of solvency has been adduced.

4. The Court is informed that on 17 April 2014, that is to say the last business day before today, the defendant appointed voluntary administrators, and today the defendant applied for an adjournment of the proceedings to permit the creditor's meeting to take place and to enable further evidence to be adduced in support of an application for an adjournment under s 440A.

5. The appointment of administrators came at the eleventh hour, before the adjourned hearing of the winding up petition, in circumstances where the matter had been before the Court on four previous occasions, where no evidence as to the financial affairs or business of the company has ever been placed before the Court and where there is no reason to suppose that it is in the interests of the company for the company to continue under administration rather than be wound up.

6. As I have said on more than one occasion, applications for an adjournment made on behalf of a company, when administrators are appointed at the very last moment before a winding up proceeding is to be heard, are unlikely to be well-received by the Court. Where there is already a process on foot that a creditor is entitled to have heard, a company should not expect that it will be derailed by the last minute appointment of administrators. That is not to say that it will never be the case, as other cases demonstrate; but if an adjournment is sought in those circumstances, the Court will expect to see evidence that shows grounds for supposing that there is a real possibility that it will be in the interests of the company and its creditors to enable the administration to proceed, even for a short time. In this case there is absolutely nothing.

7. For those reasons, I declined to adjourn the hearing.

8. The Court grants leave to the plaintiff to file in court the affidavit of Khaled Metlej of 5 March 2015 and the affidavit of Tania Payne of 9 February 2015.

9. The Court orders that:

1. The defendant Business in Focus Pty Limited be wound up.

2. Nicholas Malanos of Worrells be appointed liquidator.

3. The plaintiff's costs of the proceedings be fixed in the amount of $2,473.61.

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