Australian Securities & Investment Commission v Radisson Maine Property Group

The issue of leave 4 Section 459P(1) of the Corporations Act entitles ASIC to apply to the Court for a company to be wound up in insolvency. Pursuant to s 459P(2), ASIC may only make such an application with the leave of the Court. The Court may give leave if satisfied that there is a prima facie case that the company is insolvent, but not otherwise: s 459P(3). 5 In its interlocutory process ASIC sought, amongst other things, a grant of leave under s 459P(2). It also sought the appointment of Mr Lombe as provisional liquidator of each of the defendants. On 11 June 2004, Campbell J made an order for the appointment of Mr Lombe as provisional liquidator, but no leave was then granted under s 459P(2). 6 At the commencement of the hearing of the proceedings before me, Mr Stack, appearing for ASIC, renewed ASIC's application for leave. The Court did not grant leave at that point, preferring to hear the evidence and submissions in the winding up application, and then to proceed, if satisfied, to grant leave retroactively (or, as usually expressed, nunc pro tunc) (Emanuele and Anor v Australian Securities Commission and Ors (1996) 188 CLR 114). The parties raised no objection to that course. 7 Accordingly, before embarking upon consideration of the application for winding up, I turn to consider whether the Court may be satisfied that there is a prima facie case that each of the defendants is insolvent. 8 Section 459C provides that, for the purpose of s 459P (and other presently irrelevant provisions), the Court must presume that the company is insolvent if, during or after the 3 months ending on the day when the application was made, the company failed to comply with a statutory demand (sub-cl (2)(a)), or a receiver and manager of property of the company was appointed under a power contained in an instrument relating to a floating charge on such property (sub-cl (2)(c)). 9 As to sub-clause (2)(a), affidavit evidence was given by Mr J G Fuller, a senior solicitor employed by ASIC, that a statutory demand dated 12 May 2004 had been given to the first defendant by Robert William Blowes and Augustina Van Raay in respect of an amount of $200,000 being the amount of a default judgment against the first defendant obtained in the Supreme Court of the Australian Capital Territory. On 7 June 2004, an application was made under s 459G to set aside the statutory demand, supported by an affidavit of one of the directors of the first defendant, Mr Bassili. That application was dismissed by consent (consent on behalf of the first defendant having been given by Mr Lombe as provisional liquidator), but since then some discussions have taken place between Mr Lombe and solicitors acting for another director of the first defendant, Mr Popov, with respect to the possibility of revocation of the consent order and restoration to the list. Those discussions do not appear to have been resolved, and at this point it appears that the statutory demand was given and the first defendant has failed to comply with it. I take that circumstance into account in relation to the insolvency of the first defendant. 10 As to sub-clause (2)(c), the evidence of Mr A J Keys, an investigator currently under secondment to ASIC, was that, on 27 May 2004, a receiver and manager of the whole of the first defendant's undertaking, property and assets was appointed pursuant to a fixed and floating charge. No evidence was adduced as to the present position concerning this appointment, but, in his judgment, Campbell J noted that the receiver was discharged on 4 June 2004 (that is, after the winding up application had commenced) by being fully paid out. I take into account the appointment of the receiver and manager in relation to the insolvency of the first defendant. 11 Finally, and generally in relation to both defendants, I take into account the evidence adduced in support of the winding up application that I deal with in detail below. That evidence supports a prima facie finding of insolvency of both defendants. It shows, on its face, that both had incurred substantial losses up to 11 June 2004, that the total liabilities of each of the defendants exceeded their assets at that date, and that neither of the defendants had the assets or capacity to pay their respective debts as they became due and payable. 12 Accordingly, I grant leave to ASIC to apply for each of the defendants to be wound up in insolvency, and, so far as is necessary, I grant that leave nunc pro tunc. 13 I turn, then, to consider the winding up application.

Background 14 The Radisson Maine group of companies ("the Group") consists of a holding company, being the second defendant, Ran Holdings International Pty Ltd ("RAN"), and five wholly owned subsidiaries, one of which is the first defendant, Radisson Maine Property Group (Australia) Pty Ltd ("RMPG"). 15 The shares in RAN are held as to 45% by Mr Robert Bassili and Mr Nicholas Popov and as to 10% by Mr Andrew Doualetas. 16 The Group has acted principally as a property developer and investment company. Its business is to solicit investors with whom it would enter into three types of transactions:

(1) purchase of land and construction of a house where ultimately the investor has title to the land and house as an investment property ("the land and house package");

(2) joint ventures whereby the Group and an investor jointly develop a property and share the profits on sale on a 50/50 basis; and

(3) investment of funds in the Group by investors seeking a return by way of interest. 17 Mr Lombe described a typical land and house package as follows:

(ii) A meeting is arranged with a "Radisson Maine strategy consultant". The investor receives an information booklet and pays a fee of $495 for the preparation of a strategy. The investor signs a "strategy proposal agreement" that provides for a professional fee of up to 1.5% of the property value should the investor proceed;

(iii) The second meeting is a strategy presentation meeting where a financial strategy document is presented, as well as a property profile on a specific property (in Victoria);

(iv) The Group then, at its own cost, flies the investor to Melbourne to inspect the land, which is not subdivided at this stage. At this time, the investor signs an " irrevocable letter of intent and authority" that requires the payment of $2000;

(v) The Group then organises finance, or the investor organises his or her own funding through his or her own resources.

(vi) The investor then pays 20% of the total land and house package amount;

(vii) At some time in the future, when the subdivision of which the land forms part has been completed, a back-to-back property settlement takes place. The Group completes the purchase of the land from the subdivider, and at the same time completes the sale of the land to the investor;

(viii) The Group then organises the building of a house on the land, pursuant to a building contract between the investor and a third party builder. 18 Mr Lombe provided an example of a land and house package (excluding small fees) as follows: $ Total house and land package selling price to investor as per irrevocable letter of intent 345,900 Cost to RMPG of land from land developer 116,000 Value attributed to house construction 150,000 Profit on sale of house and land package made by RMPG 79,900

The amounts are paid as follows: $ 1 Deposit (eg $2,000 & $68,000) 70,000 - paid initially after executing the irrevocable letter of intent or receiving invoice for a 20% deposit

2 Land settlement - purchase price of land by RMPG paid to land developer 116,000 - RMPG selling price to investor 136,000 It should be noted that at the time of settling a land purchase and sale the funds paid by the investor will be less than the selling price on the contract. In this example the amount drawn on the investor's bank facility was $110,000. Therefore the amount paid of $116,000 for the purchase price of the land to RMPG came from the following sources: - Investor 110,000 - RMPG 6,000 116,000

3 Construction of the house paid by investor to builder 150,000 This would leave a balance owing to RMPG by the investor at the end of the period

In summary, the RMPG profit of $79,000 is paid as follows: (i) Initial deposit payment $70,000 (ii) Land sale completion less net funding provided by RMPG (6,000) (iii) Completion of house - balance outstanding owing to RMPG 15,900 Total profit to RMPG 79,900

19 Mr Lombe also provided typical examples of a joint venture transaction and an investment transaction, but it is unnecessary for present purposes to set these out in detail.

The insolvency ground 20 ASIC contends that, as a matter of commercial reality and having regard to all the circumstances, each of the defendants is insolvent.

Standing of ASIC 21 Before proceeding to consider the evidence adduced by ASIC to support its application, I observe that, (as set out in the affidavit of Mr Keys), ASIC commenced, on 22 December 2003, a formal investigation pursuant to s 13(1) (which is part of division 1 of part 3) of the Australian Securities and Investments Commission Act 2001. Accordingly, ASIC has standing, pursuant to s 464(1) of the Corporations Act, to apply for the winding up of both the defendants.

ASIC's case 22 I turn, then, to the evidence. ASIC furnished a number of affidavits, but the principal evidence upon which it relied were two reports of Mr Lombe as the provisional liquidator. The first report was made to reflect the financial position as at 11 June 2004. A draft version formed part of ex 'C', but the final version was annexed to Mr Lombe's affidavit sworn on 13 July 2004. (I mention this because the draft and final versions are not identical). I have taken the final version into account, and I refer to it as "the primary report". The second report is dated 6 September 2004. 23 The opinion of Mr Lombe is that each of the defendants is insolvent. At p 27 of the primary report, he set out his opinion as follows: The adjusted profit and loss and cash flow indicates that the group incurs significant losses and will have insufficient funds available to meet its ongoing commitments over the period without an alternative source of funding. The group does not have substantial net assets from which it would be possible to mortgage or raise additional funding. Therefore, in the absence of further equity contributions, I consider that the group will be unable to pay their debts as and when they fall due over the period and therefore is insolvent. 24 No evidence was adduced from the defendants to challenge Mr Lombe's opinion. In particular, neither Mr Bassili nor Mr Popov gave evidence. Furthermore, in his submissions, Mr Cotman SC, appearing for the defendants, did not contend that the defendants were solvent at the present time. His basic submission was that, given an injection of funds and proper management, each defendant would be able in the future to pay its debts as and when they fall due. 25 I shall return to consider the defendants' contentions later in this judgment, but first I point out a number of factors referred to by Mr Lombe and asserted by ASIC as being indicative of the inability of the defendants to pay their debts as and when they fall due. I set out those factors in the following pars 26 - 34. 26 Mr Bassili provided Mr Lombe with financial statements for the period 1 July 2002 to 30 June 2003 ("the full year"), and from 1 July 2003 to 11 June 2004 ("the part year"). In summary, these show RMPG to have suffered a loss of $47,503 for the full year, and a profit of $69,715 for the part year. They show RAN to have suffered a loss of $667,101 for the full year and $677,793 for the part year. 27 Balance sheets as at 11 June 2004 were provided by Mr Bassili to Mr Lombe, who then prepared two sets of adjustments - one to fairly state assets and liabilities, as a "going concern", of each of the defendants and the other to show amounts that would be realised on liquidation. The adjusted balance sheets disclose:

(a) the total liabilities of RAN exceed its total assets: i) on a "going concern" basis, by $562,270:

(b) the total liabilities of RMPG exceed its total assets: i) on a "going concern" basis, by $1,216,314:

ii) on a liquidation basis, by $1,376,690. (c) the current liabilities of RAN exceed its current assets on a "going concern" basis, by $418,735, and on a liquidation basis, by $577,771;

(d) on a "going concern" basis, the current assets of RMPG exceed its current liabilities by $385,481, but on a liquidation basis, its current liabilities exceed its current assets by $104,994. 28 An important factor in the financial affairs of the Group is the treatment of the deposits paid by investors in connection with the land and house packages. Mr Lombe noted that 13 investors had paid a total of $578,527 as deposits, and that this amount has been applied by the Group to meet general trading expenses. 29 However, Mr Lombe has received legal advice to the effect that the deposits should be treated as deposit moneys under s 25 of the Sale of Land Act 1962 (Vic), and accordingly should be paid into a special purpose account in the joint names of RMPG and the investor, or held by a legal practitioner or real estate agent. Mr Lombe has taken the view that, unless some specific authorisation can be found in the particular contractual documents relating to each land and house package, the deposits cannot be released to RMPG for its general use until the completion of the land transactions connected with the land and house packages to which the deposits relate. 30 I was not invited to express a concluded view as to the correctness or otherwise of the advice Mr Lombe received as to the proper legal treatment of the deposits. I have, however, noted the relevant provisions of the Sale of Land Act 1962 (Vic). Division 3 of pt 1 deals with deposits. Section 23 defines the expression "deposit moneys" as follows: 'deposit moneys' in relation to a transaction for the sale of land includes any moneys which are part of the purchase price received by the vendor or on behalf of the vendor before the purchaser becomes entitled to a transfer or conveyance of the land which is the subject of the transaction, or in the case of a terms contract any moneys received by the vendor or on behalf of the vendor before the purchaser becomes entitled to possession or to the receipt of rent and profits pursuant to the contract. 31 Section 25(1) relevantly provides that any deposit moneys received by a vendor in the course of a transaction for the sale of land shall be paid within seven days after their receipt by the vendor to an estate agent or legal practitioner acting for the vendor, or into a special purpose account in the joint names of the purchaser and the vendor. Section 27 provides for certain circumstances whereby deposit moneys may be released to the vendor. 32 All of the facts and circumstances (and, in particular, the contractual documents) relating to land and house packages would need to be examined to determine the proper legal treatment of money paid or payable under them. Mr R Y-T Wong, a solicitor acting for Mr Lombe, gave evidence that he had examined a number of files of the Group and observed that a number of contractual documents in them contain references to the payment of a deposit. I do not regard this evidence as conclusive, but, having noted it and having regard to the relevant provisions of the Sale of Land Act, I am satisfied that it is likely that the whole or some of the amounts paid in relation to land and house packages would properly be treated as deposit money under the Sale of Land Act and accordingly would not be available to meet the debts of the defendants until such time as the land transactions are completed. 33 In the adjusted balance sheet for RMPG, Mr Lombe made provision for this state of affairs by including an amount of $1,238,527 for current liabilities. This is represented, first, by an amount of $660,000 being future deposits from investors that Mr Lombe treated as not being recognisable as income upon the basis of the legal advice to which I have referred, and, secondly, by the amount of $578,527 being the deposits already received by RMPG and treated as income. 34 The directors also provided Mr Lombe with a monthly profit and loss and cash flow budget aggregated for the Group for the period 1 June 2004 to 30 November 2004. Mr Lombe adjusted the figures so provided to remove the receipt of deposits from the budget so that the financial position of the Group could be assessed on the basis that the deposits cannot be treated as income until land transactions have been completed. Upon that basis, the cash flow analysis to the end of November 2004 shows a net loss of the Group of $616,600 and a closing cash deficiency of $607,410. 35 The profit and loss and cash flow budget have been prepared on the assumption that there will be no completed land transactions during the period up to the end of November 2004. This is based on Mr Bassili's indication that the time between sale and transfer of a particular parcel of land generally takes 6 to 12 months while the subdivider finalises its subdivision. Accordingly, the only income to be received by the Group for this period is the professional fee payable (1.5% of the purchase price) and commission for the introduction of investors to a financier. 36 An additional uncertainty that impinges upon the defendants' cash flow is the indication given to Mr Lombe by solicitors acting for a vendor of some of the land subject to land and house packages (The Eden Rise Estate in Berwick Victoria) that the vendor is considering whether to exercise its contractual right to terminate the various contracts by reason of the fact that the plan of subdivision was not registered within the period of 18 months provided in each contract. 37 A related matter is the level of business activity of the Group. As I have previously explained (par 16), investors are first presented with a strategy proposal, and all or some of these mature into land and house packages. The adjusted cash flow was prepared on the basis that 13 strategies per month would be sold in a normal period. Of these, 70%, or 9, per month, would become land and house packages. 38 However, Mr Lombe's primary report discloses that only 24 land and house packages have been entered into since the Group commenced business in December 2002. In only 7 of those 24 have the land transactions been completed. In respect of another 13, deposits have been received but land transactions have yet to be completed. In one of them, a full deposit and price has been paid, but the title to the property has not yet been transferred, and in 3 of them, nothing has been paid. 39 Neither defendant has cash resources. Mr Lombe noted that, at the date of his appointment, RAN and RMPG held $4717 and $756 respectively in their bank accounts. 40 No tax returns, business activity statements, payroll tax returns, or superannuation returns for the Group have been lodged. There are sums outstanding for group tax and other current tax liabilities, as well as superannuation entitlements and other employee entitlements. Mr Lombe calculated that the amount outstanding for current tax liabilities is $71,764 and for unpaid group tax is $102,751; 41 The defendants have no significant net assets available as security for further funding. 42 The only real property held by the defendants are two properties, estimated by Mr Bassili to have a combined value of approximately $1,000,000, of which RAN is the registered proprietor. The properties have been provided by RAN as security for a mortgage advance by Laiki Bank (Australia) in the sum of $546,490. It appears, however, that a Mr Pavel Ovchinnikov has claimed that he has "lent" these two properties to the Group for a period of 48 months. Mr Ovchinnikov has indicated to Mr Lombe that he is prepared to convert his "loan" into equity by the issue to him of shares in RAN or RMPG. In the adjusted balance sheet of RAN, Mr Lombe recognised both properties as assets at the valuation provided by Mr Bassili, and made provision for the liability to the bank.

The defendants' approach 43 The position put on behalf of the defendants by Mr Cotman was essentially twofold. First, he contended that, with an injection of sufficient funds and with proper management, the Group could trade profitably and its financial position would be positive. Secondly, he sought to demonstrate, in cross-examination of Mr Lombe, that the financial position of the defendants was not so negative as Mr Lombe's reports indicated if various adjustments were taken into account. 44 Mr Cotman relied upon two affidavits sworn by Mr J L King, who has agreed to accept an appointment as the sole director of the defendants, and who is prepared to undertake their proper management. Mr King, who lives in Victoria, described himself as "a self-employed consultant to the finance industry". He furnished a brief career resume, in which he revealed that he had worked in various management positions in the financial industry and in his own business. Although he had never served as a director of any corporation, he deposed as to his understanding of the obligations of company directors. 45 Mr King furnished a business plan for the Group, in which he sought to demonstrate a method of reorganisation of the business so as to achieve a positive cash flow immediately. This would depend upon him becoming the sole director of the second defendant and its subsidiaries, replacing Mr Bassili and Mr Popov, who would resign. In this connection, Mr Cotman informed the Court that he had instructions to give an undertaking to the Court from each of Mr Bassili and Mr Popov, as the directors and controlling shareholders, to retire as directors, to elect Mr King as sole director and not to remove or seek the removal of Mr King from office as the sole director for at least 18 months. 46 The business plan also noted that Mr Bassili and Mr Popov were prepared to inject the sum of $900,000 into the business. That amount was to be provided from their personal assets. The business plan noted that, of the amount of $900,000, an amount of $350,000 was to be paid within 14 days of the Court ordering the termination of the provisional liquidation, and the balance would be paid within 90 days thereafter. Mr King stated in the business plan that, if the amount of $350,000 was not paid, he, Mr King, would seek the winding up of the defendants. 47 As to the financial position of the defendants, Mr Cotman took Mr Lombe, in cross-examination, to a number of factors relevant to their cash flow position. Mr Lombe agreed that each of those factors was a theoretical possibility that might improve the cash flow position. Thus, Mr Lombe agreed that borrowings could be utilised with repayment obligations matched to income flow. He agreed that some liabilities of the defendants were long-term liabilities, that is, payable at a time greater than 12 months from the date of the accounts. He agreed that the deposits would be released upon completion of the land transactions to which they related, and would accordingly generate positive cash flow. Mr Lombe also acknowledged that the time at which deposits were available to the defendants would depend, first, on contractual terms (whereby they might be released sooner than completion of the land transaction) and secondly on a dissection of the deposits to reflect the precise amount referrable to the land transactions (which would need to be held in the manner required by the Sale of Land Act) and the precise amount referrable to the houses to be erected (which may not be subject to the same obligation). In addition, in his primary report, Mr Lombe had noted that the cash flow figures he provided were based upon a historic level of activity, that is, sales of 13 strategies per month, 9 land and house packages per month, and a lead time of 6 to 12 months, but he acknowledged that this level of activity might be improved.

The relevant principles 48 Section 95A of the Corporations Act defines "solvency" and "insolvency" as follows: 95A(1) Solvency and insolvency (1) A person is solvent if, and only if, the person is able to pay all the person's debts, as and when they become due and payable. (2) A person who is not solvent is insolvent.

49 In the decision of the Full Court of South Australia in Powell and Anor v Fryer and Anor (2001) 37 ACSR 589, Olsson J (with whom Duggan and Williams JJ agreed), at pp 600 - 601, set out a number of propositions established by the pertinent authorities as to what constitutes insolvency. I respectfully adopt those propositions so far as they are relevant for these present proceedings as follows:

(1) Whether or not a company is insolvent at a given point in time is a question of fact to be determined by the trial judge. Expert evidence may be of assistance, but it is not conclusive: Sandell v Porter and Anor (1966) 115 CLR 666 at 670 - 671):

(2) The conclusion of insolvency must be derived from a proper consideration of the company's financial position in its entirety, based on commercial reality. Generally speaking, it ought not to be drawn simply from evidence of a temporary lack of liquidity: Sandell Pegulan Floor Coverings Pty Ltd v Carter (1997) 24 ACSR 651. Regard should be had not only to the company's cash resources immediately available, but also to moneys which it can procure by realisation by sale, or borrowing against the security of its assets, or otherwise reasonably raise from those associated with, or supportive of, it. It is the inability, utilising such resources as are available through the use of assets or which may otherwise realistically be raised to meet debts as they fall due which indicates insolvency: Sandell v Porter at 670;

(3) It is not appropriate to base an assessment on the prospect that the company might be able to trade profitably in the future, thereby restoring its financial position. The question is whether it, at the relevant time, is able to pay its debts as they become due - not whether it might be able to do so in the future, given time to trade profitably: Sheahan v Hertz Australia Pty Ltd (1995) 16 ACSR 765 at 769; Bank of Australasia v Hall (1907) 4 CLR 1514 at 1528.

Are the defendants insolvent? 50 I am satisfied, on the balance of probabilities, that the defendants are each insolvent. 51 My reasons for reaching that conclusion are as follows. First, although not determinative, I place weight upon Mr Lombe's opinion, expressed in his primary report and repeated several times in cross-examination, that neither of the defendants has assets, cash flow or capacity to pay its debts as and when they became payable. Secondly, although again not determinative, I place weight upon the fact that the defendants have in effect admitted insolvency. They have not produced any evidence to the contrary of the matters dealt with by Mr Lombe, but have approached ASIC's application for winding up on the basis that their negative financial position can be cured by the appointment of Mr King and a cash injection from Mr Bassili and Mr Popov. (I shall return to consider the implications of this approach). Thirdly, I have had regard, as a matter of commercial reality, to the whole of the financial position of the defendants set out in the evidence. Each of the defendants has significant liabilities. The Group has significantly negative cash flow. Neither of the defendants has available any realistic amount of cash to meet debts as they fall due. Nor do they have available any material net assets against which borrowings by way of further funding could be secured. The cross-examination of Mr Lombe did not change these facts. Whilst as a theoretical matter the position of the defendants could improve, that is not the present reality. Further, the defendants have failed to comply with statutory requirements as to the furnishing of returns, and significant amounts are owing for tax and employee liabilities. Fifthly, nothing has been put to the Court to demonstrate that the level of activity of the business of the defendants will increase so as to improve their financial position any substantial way. 52 The approach taken by the defendants is one of fervent hope for the future. But the issue is not whether they would be able in the future to trade profitably and thereby meet debts as they became due; the issue is whether they are presently able to do so with the assets available to them. However, even if the Court was to look to the future, the defendants have proffered nothing but speculation. Mr King has no experience as a company director, nor any demonstrated experience in the running of a business such as that of the Group. His business plan, while no doubt produced in good faith, seems hopeful rather than realistic. 53 Some examples will suffice. Mr King proposes to take an annual salary of $15,000, to remain in Sydney for the first three months and thereafter to commute from Victoria to New South Wales. He proposes to retain Mr Popov as "President Sales - New South Wales and Queensland" on an annual salary of $45,000. In cross-examination, he stated that the reason for that appointment was because Mr Popov "… is a very good motivator for staff he is training …" He stated in cross-examination that his budget forecast was based on 1.5 or 1 to 2 sales per month. He based that prediction on his better management, rather than on the group's previous trading performance. His budget forecast also depended on reducing the time lag of six to twelve months to three months, which he said was achievable by "…quick and more direct negotiations … with all parties". Furthermore his budget forecast was based on increased sales in Queensland and Victoria. He proffered no evidence to support the forecast except the assertion that "… we can trade well …" But he conceded that, without a large injection of funds, the Group could not operate at all. 54 A significant point of speculation is this proposal for a further injection of funds in the amount of $900,000. No evidence was provided as to the ability of Mr Bassili and Mr Popov to provide this amount out of their personal assets. No evidence was adduced to show the basis upon which the amount would be paid; that is, whether it would be provided by way of long term unsecured loan, with or without interest, or whether it would be, instead, provided by way of equity capital. No approach appears to have been made to Mr Lombe to arrange the injection of these further funds. The Court could have no confidence that the amount would, as Mr King put it in his business plan, "be forthcoming". It is true, as Mr Cotman was at pains to point out, that Mr King intends to seek the winding up of the defendants if the amount is not paid, but that assertion provides little comfort on the present circumstances. 55 For all those reasons, I have concluded that ASIC is entitled to the orders that it seeks.

The just and equitable ground 56 ASIC relied in the alternative upon s 461(1)(k) of the Corporations Act, which permits the Court to order the winding up of a company if the Court is of the opinion that it just and equitable that the company be wound up. 57 Because I have found that each of the defendants is insolvent, it is unnecessary for me to deal with ASIC's alternative ground, and I refrain from expressing a view about it.

Conclusion 58 For the reasons I have set out, I have concluded that each of the defendants is insolvent. Accordingly, I make the following formal orders:

1. I order that each defendant be wound up pursuant to section 459B of the Corporations Act 2001.

2. I order, pursuant to section 472(1) of the Corporations Act 2001, that David John Frank Lombe of Level 3, 225 George Street, Sydney, be appointed as liquidator of each of the defendants.

3. I order that the plaintiff's costs in this application be costs in the winding up of each of the defendants. **********

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