23 If Mr Barry were speaking for himself, he would not need to describe himself as a director of the company. The document is consistent with his giving instructions to Kemp Strang on behalf of the company. The fact that they were his own solicitors is not persuasive either way.
24 The two Kemp Strang letters of October 2005 do not throw any real light on the question of ownership of the moneys. The only slight glimmer is a reference, in one of the letters, to "the first defendant in the proceedings", that is Apex Sports, when one might perhaps have considered more natural the words "our client", if, in reality, it was on behalf of Apex Sports that the solicitors were writing. This is the Kemp Strang letter to Ausino's former solicitors.
25 It is true that the deed administrators seem to say, in their November 2006 report, that the money in the trust account is not an asset of Apex Sports, but that can only reflect something they have been told and, since Mr Barry seems to be the guiding mind and will of Apex Sports, as well as associated companies, I assume, including Apex Footwear, it is perhaps likely that the deed administrators obtained that information, or version of reality, from Mr Barry.
26 Mr Barry, of course, has had his counsel air, on this application, the proposition, based mainly on the Kemp Strang letters and the notice of appearance showing them to be his solicitors, that the money belongs to him. Yet his own statements of assets and liabilities made in June 2005 and November 2006, in such a way as to attract sanctions for perjury if wilfully wrong, show neither ownership of $360,000 or $370,000 in the trust account of Kemp Strang nor, as far as the earlier date goes, any source from which such a sum could have been deposited into the trust account.
27 I am satisfied, on this evidence, that there is a serious question to be tried on the claim made by Ausino that the moneys in the Kemp Strang trust account belong to, and are an asset of, Apex Sports, the company in respect of which Ausino's winding-up application is pending.
28 That leads to the balance of convenience, or the balance of hardship. In considering that matter, I observe at once that Kemp Strang themselves do not make any claim that prejudice will flow from a requirement that they continue to hold the moneys.
29 Moving beyond that, I note that the moneys have been in the trust account since October 2005 and that the line taken by what I might call, in a broad sense, the Barry interests, has been, at all times since then, that the moneys would not be contributed to the deed fund unless the proceedings challenging the deed of company arrangement were withdrawn or dismissed.
30 The additional message was that, if Apex Sports did not obtain the benefit of release by creditors, the funds would not be available. The deed of company arrangement proceedings have now been heard. Judgment is reserved. It should not be too long before the outcome is known. Nothing in the evidence shows any statement by any putative owner of the funds that they will remain where they are until judgment in the deed of company arrangement proceedings is given.
31 I accept that, because of the point those proceedings have reached, there are grounds for an apprehension that the funds may be removed, so that, if they are truly the property of Apex Sports, they may be put beyond the reach of any liquidator who might be appointed.
32 The owner of the funds has been content to see them lying in the trust account, or probably earning interest in a controlled moneys account, for sixteen months. No prejudice is said to be likely if they remain there for a few more weeks.
33 The final point is that figures appearing in the evidence suggest that, if the funds are an asset of Apex Sports, they will probably be swallowed up wholly, or very substantially, by the secured creditor, Mrs Barry. So, it is said that it makes no difference to the general body of creditors. That, if correct, is really beside the point. The liquidator could well pursue recovery actions and there could be returns to unsecured creditors, which would otherwise be diminished.
34 On the whole, the balance of convenience favours Ausino, as plaintiff, and, according to ordinary equitable principles, an interlocutory injunction would be granted to preserve the status quo if this were a case in which the ownership claims of Apex Sports were in issue.
35 But the application is made in winding-up proceedings. That leads me to the procedural issues. Ausino does not invoke the ordinary equitable jurisdiction of the court, whether of the Mareva variety or otherwise. It relies squarely and deliberately on s.467(1)(c) of the Corporations Act;
" Court's powers on hearing application
(1) Subject to subsection (2) and section 467A, on hearing a winding up application the Court may:
(a) dismiss the application with or without costs, even if a ground has been proved on which the Court may order the company to be wound up on the application; or
(b) adjourn the hearing conditionally or unconditionally; or
(c) make any interim or other order that it thinks fit."
36 The qualifications concerning sub-s.(2) and s.467A appearing at the beginning of s.467(1) are irrelevant in this case. The first point to note is, therefore, that I have not yet embarked on the hearing of Ausino's winding-up application. Indeed, if Ausino is unsuccessful in its challenge to the deed of company arrangement, its winding-up proceedings will probably become a dead letter and may well never proceed to a hearing, at least beyond a point of formal dismissal. But that, it is submitted on behalf of Ausino, does not really matter, because s.467(1), referring, as it does, to "on hearing a winding-up application", warrants an interpretation somewhat wider than the literal meaning of those words would suggest.
37 Reliance is placed in that respect on two decisions of the present Chief Judge in Equity, being Alati v Wei Sheung (2000) 34 ASCR 489 and Rapid Metal Developments (Australia) Pty Limited v Build Max Corporation Pty Limited [2000] NSWSC 1190.
38 In the Alati case, his Honour was hearing together two sets of proceedings, one aimed at setting aside certain mortgages under s.37A of the Conveyancing Act and the other a winding-up application based on the insolvency ground or, in the alternative, the just and equitable ground. In the latter connection, Young CJ in Eq considered a preliminary point about the plaintiff's standing to bring the winding-up proceedings. He then acceded to an application to make what was, in effect, an asset preservation order.
39 Having noted a submission by Mr Newlinds of counsel that s.467(1)(c) created the necessary jurisdiction, his Honour went on to consider the scope of the provision.
40 His Honour referred to some older cases which were not squarely in point, including a Canadian case in which an appeal court thought that the equivalent section could not have been relied on by thue trial judge but could not identify any other bases. Young J also seemed to be of the view that the statutory power was available "when the case is in the list for consideration and not just at the time when the court is considering whether to make the actual order".
41 The formulation here refers to the winding-up application being in the list for consideration and indicates that the availability of s.467(1)(c) is not confined to the point at which the court is, as it were, poised to decide the winding-up application.
42 Young J extended this position somewhat in the Rapid Metal case, where an order was made based explicitly on s.467(1)(c), in circumstances where, at least so far as the judgment indicates, the winding-up application may not have been even "in the list for consideration". The judgment simply begins:
"This is an application under s.467(1) of the Corporations Law for an injunction to prevent the defendant company (the "Company") from dealing with funds that it is about to receive until the Court can deal with an application to substitute the present applicant as the petitioner to wind up the Company, or, alternatively, until the Company is wound up, or the application to wind up is dismissed."
43 In the course of that judgment, Young J referred to Alati v Wei Sheung, but not to the timing constraints he had there identified.
44 I am bound to say that, if the Rapid Metal case implies that s.467(1)(c) creates some general interlocutory jurisdiction in winding-up proceedings, it proceeds on a view of the legislation which does not seem to me to be open on the words "on hearing a winding up application".
45 In the present case, the winding-up application has not come on for hearing. It has been deferred because of the significance of the pending outcome in the deed of company arrangement proceedings. But the actual sequence of events is not the only factor. There are, in the present context, particular statutory directives that must be observed. A deed of company arrangement is in force. Section 444E therefore operates. By force of s.444E(1), the subsequent subsections of s.444E apply to a person bound by the deed and to continue to apply to the person until the deed terminates.
46 That point has not arrived in this case. Ausino, being an unsecured creditor of Apex Sports, is a person bound by the deed. This is the effect of s.444E(1). By force of s.444E(2)(b), Ausino "cannot" - that is the word Parliament has chosen - "cannot" proceed with its winding-up application. That embargo is absolute. The court cannot grant leave to cause it to be dispensed with. By force of s.444E(3), Ausino "cannot", without the court's leave, begin or proceed with a proceeding against the company, or in relation to any of its property.
47 In seeking a restraining order with respect to the moneys in the Kemp Strang trust account, Ausino bases its claim wholly and solely on s.467(1)(c). There was debate before me as to whether, by making an application under that section, Ausino was proceeding with its winding-up application (that being the activity made unavailable absolutely by s.444E(2)(b)) or whether it was beginning some new and different proceeding against the company, or in relation to its property, which, by virtue of s.444E(3)(a), cannot be done without leave.
48 In the end, I do not think it is necessary to decide between these alternative possibilities. The reality is that, because of s.444E(2)(b), it is not possible, according to the statute, for the winding-up proceeding to be proceeded with at this time. The prohibition upon the applicant's proceeding with the winding-up application must carry with it a prohibition upon the court's hearing such an application. The court could not entertain and hear something which the relevant litigant was forbidden by statute to proceed with.
49 It must follow that, even allowing for the type of latitude which commended itself to Young J in the cases which I have mentioned, I cannot regard myself as actively or constructively engaged in a situation described by the opening words of s.467(1), that is, "on hearing a winding-up application". The conclusion, therefore, must be that the jurisdiction Ausino seeks to invoke in applying for the restraining order is not available.
50 It was submitted that s.447A might be employed to overcome this. More precisely, it was submitted that, if s.444E(2) was found to be an obstacle, a s.447A order might be made. I am not satisfied, however, that any such order would be of utility. The s.447A jurisdiction is wide, as the High Court pointed out in Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270. It would, in my view, support an order modifying the operation of s.444E(2) to enable a winding-up application to be proceeded with, even though a deed of company arrangement was in place. But an order of that kind, in this case, would achieve nothing. The fact is that the winding-up application has not come on for hearing. It has been deliberately postponed. No-one yet knows when the hearing to which s.467(1)(c) refers will eventuate, or even if it will eventuate at all, except, perhaps, by way of formal dismissal. It is for that reason that I say that a s.447A order is of no utility.
51 In the result, therefore, and notwithstanding my findings on a serious question to be tried and balance of convenience, the application for interlocutory relief advanced by Ausino, and based squarely and deliberately on the statutory jurisdiction created by s.467(1)(c), must be dismissed.