Camphin Boston, in the matter of Aether X Pty Ltd v Aether X Pty Ltd

MARKOVIC J: 1 By originating process filed on 29 August 2023, the plaintiff (Camphin Boston), a creditor of the defendant, Aether X Pty Ltd, seeks an order that Aether X be wound up pursuant to s 459A of the Corporations Act 2001 (Cth) or, in the alternative, pursuant to s 461(1)(k) of that Act. Camphin Boston's application came before me on an urgent basis in my capacity as Commercial and Corporations Duty Judge. In summary, the reason for the urgency is that the sole director and secretary of Aether X is deceased. 2 Camphin Boston relied on an affidavit affirmed by Justin Woods, a chartered accountant and a partner of Camphin Boston, in support of its originating process. Camphin Boston have to date been the accountants for Aether X. In his affidavit, Mr Woods sets out the background to Camphin Boston's application. 3 It is sufficient for me to set out a summary of the relevant facts which I do below.

Background 4 Aether X was incorporated on 8 July 2021. Andrew David Findlay has been the sole director and secretary of Aether X since its incorporation. Mr Findlay passed away on or before 26 July 2023. 5 Aether X specialises in information technology (IT) security audits, IT advisory and consulting and providing training services for IT security. At the time of Mr Findlay's death, Aether X engaged three contractors: Aaron Eisler; Nicholas Ghattas; and Will Berryman. 6 As noted above, Camphin Boston has provided accounting and taxation services to Aether X since its incorporation. It has recently issued three invoices to Aether X for a total of $9,509.50. Mr Woods explains that those invoices are due and payable, they have not been disputed by Aether X and they have not been paid. 7 As to its financial status Mr Woods deposes that Aether X has a loan account with Judo Bank Pty Limited. As at 30 June 2023, it was indebted to Judo Bank in the sum of $740,770. Further, a draft profit and loss statement and balance sheet prepared for Aether X as at 30 June 2023 indicates that it made a loss in that financial year of approximately $600,000 and that it had negative equity of $674,152.31. It is not clear to me in what circumstances those draft financial statements were prepared and whether Mr Findlay ever saw them. However, they remain in draft and are the only evidence before me in relation to the financial status of the company. 8 The executor named in the last will and testament of Mr Findlay is David William Findlay, who I understand to be Mr Findlay's cousin. According to Mr Woods, David Findlay contacted both Mr Woods and Alan Walker of WLP Restructuring Pty Ltd, who has signed a consent to act as liquidator of Aether X, to obtain advice to conclude the corporate affairs of Aether X. Mr Woods understands that David Findlay intends to obtain a grant of probate to formalise his appointment as the executor of Mr Findlay's estate in the near future. However, as at the date Camphin Boston made its application for the winding up of Aether X that had not occurred. David Findlay has, however, confirmed that he does not intend to appoint a director to Aether X and that he is not aware of any suitable person to be appointed as its director. I infer that he does not intend to take up an appointment as director of Aether X. 9 On the evidence before me it is clear that since Mr Findlay's passing Aether X has had, and has, no authorised representative. There is no one with authority to operate and trade Aether X. Despite that, as at the time this application was made before me, Aether X's website remained operational and it continued to have financial obligations which it seems were not being met, particularly because it has not continued to trade in any meaningful way. 10 The originating process and supporting affidavit of Mr Woods were served on all known creditors, the sole shareholder of Aether X and other identified potentially interested parties. None of those parties appeared at the hearing and for the most part they communicated with the solicitors for Camphin Boston indicating that they did not intend to appear to oppose the orders it sought.

Consideration 11 In those circumstances, as set out above, Camphin Boston seeks that Aether X to be wound up either in insolvency, pursuant to s 459A of the Corporations Act or on the just and equitable ground pursuant to s 461(1)(k) of that Act. 12 Based on the evidence before me and, in particular, that there is no one in control of Aether X, yet it continues to incur liabilities and has a number of outstanding liabilities which cannot be met, the better course is that the company be wound up pursuant to s 461(1)(k) of the Corporations Act. While there is some suggestion based on the evidence before me that Aether X may be insolvent, there is not sufficient evidence before me to form a concluded view. 13 In any event, in the exercise of my discretion, this seems to me to be a situation in which it is appropriate to make an order for the winding up of the company on the just and equitable ground. There is a clear case that Aether X should be placed in the hands of an independent person who can manage its business and affairs and determine what steps should be taken to bring its business to an end, including considering whether its assets, if any, can be sold for value and for the benefit of the sole shareholder. Accordingly, I will take that course and make an order to that effect. 14 I also note that Camphin Boston sought an order pursuant to s 436B(2) of the Corporations Act that, in the event that that the liquidator considers that Aether X is insolvent or is likely to become insolvent at some future time or it is otherwise in the interests of the creditors for the company to be in administration, Mr Walker in his capacity as the liquidator to be appointed, is granted leave to appoint himself as the administrator of Aether X. That order was sought at this stage because there is a suggestion that there may be parties interested in acquiring the business of Aether X at some date in the future by proposing a deed of company administration. However, other than the question of convenience, it was not possible at this early stage to be satisfied of the other matters to be considered before making an order pursuant to s 436B(2) of the Corporations Act. Accordingly, the better course is for me to stand over the balance of the originating process thus permitting either the plaintiff or the liquidator, once appointed, to make an application for such an order if that is the preferred course. 15 For those reasons, I will make an order appointing Mr Walker of WLP Restructuring who, as noted above, has provided a consent to act as the liquidator of Aether X as liquidator pursuant to s 461(1)(k) of the Corporations Act and other necessary orders to give effect to that order. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Markovic.