REASONS FOR JUDGMENT
1 This is an application which, as set out in para 2 of the interlocutory process filed in Court today, seeks that pursuant to Rule 39.05(a) of the Federal Court Rules 2011 the Court set aside the order made for the winding-up of JJ's Prestige Pave Pty Ltd (In Liq) (the company) made on 16 November 2011.
2 Rule 39.05(a) of the Federal Court Rules 2011 provides that the Court may vary or set aside a judgment or order after it has been entered if it was made in the absence of a party. The winding-up order of 16 November 2011 was made in the absence of the company in circumstances which are identified in the affidavits of Mr Said El Abed Hammoud (a director and secretary of the company) and Mr Abbas Hammoud (a senior accountant at Hammoud Partners), both affirmed 28 November 2011. Those affidavits explain that, on Mr Said El Abed Hammoud becoming aware of the company's large tax liability to the Deputy Commissioner of Taxation (the Deputy Commissioner), he instructed Hammoud Partners to assist in resolving the issue and to arrange payment of the amounts outstanding.
3 In short, although an arrangement was made between Hammoud Partners and the Deputy Commissioner, the company, for reasons identified in the affidavits, did not appreciate that the Deputy Commissioner proposed to move on the winding-up application on 16 November 2011. It is clear from the affidavits that there is no criticism of the Deputy Commissioner; two circumstances simply resulted in the company not being represented at the hearing of the application. The first was that Mr Abbas Hammoud of Hammoud Partners did not understand that it was the Deputy Commissioner's intention to proceed with the application irrespective of a payment of $150,000 made by the company on 19 September 2011 and an arrangement for payment of the balance of the company's liability. The second was that the company had not kept its Australian Securities and Investments Commission records up-to-date in terms of the location of its registered office. Accordingly, after the company changed premises in February or March 2010, mail continued to be sent to its old address - and, despite a postal redirection having been arranged with Australia Post, this mail does not appear to have reached the company at its new address. As a result, the company did not receive the Court documents upon which the Deputy Commissioner proposed to (and did in fact) move.
4 The evidence also establishes that the balance of the moneys owed to the Deputy Commissioner is able to be paid and that, indeed, the company is ready to make the outstanding payment by way of bank cheque today if the winding-up is terminated. Moreover, there is in evidence correspondence from the company's liquidator, Robert Whitton, noting that (as at 29 November 2011) he had received a report as to affairs, financial statements and bank statements for the company and advising that, having reviewed these documents, he was satisfied that the company had maintained proper books and records. The letter also stated that Mr Whitton was satisfied as to the company's solvency and, as such, gave notice that he consented to the setting aside of the winding-up order.
5 The applicant relies on the approach taken by Hodgson J in George Ward Steel Pty Ltd v Kizkot Pty Ltd (1989) 15 ACLR 464, recently applied by Ryan J of this Court in Morgan (as liquidator of Lion Hotels Pty Ltd (in liq)) v Powerdirect Pty Ltd [2011] FCA 651. At 465 Hodgson J said that, in his view:
…if an order winding up a company is made in the absence of the defendant company, and an application is brought promptly by the company, with notice being given to the liquidator, to the plaintiff and to any creditor who appeared at the hearing; and if the evidence shows an explanation for the non-appearance at the hearing and indicates solvency of the company; and if there is consent to setting aside, or at least non-opposition; and if the liquidator indicates that nothing in his [or her] investigations to date shows a reason for the company to be stopped from trading, then the Court will normally set aside the order.
6 In this case, while the Deputy Commissioner does not consent to the application to set aside the winding-up order, the Deputy Commissioner has not actively opposed the application given the explanation for the company's non-attendance at the hearing of the winding-up application, the evidence confirming its solvency, and its offer immediately to settle its outstanding debt to the Deputy Commissioner should its application be upheld.
7 In these circumstances, I am satisfied that this case does fit squarely within the principle identified by Hodgson J. In summary, there are no discretionary factors which would weigh against the setting aside of the order; indeed, all relevant discretionary factors weigh in favour. Accordingly, I am satisfied that the winding-up order should be set aside and I make orders accordingly.
I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.