James Hardie International Finance BV v James Hardie Australia Finance Pty Limited

REASONS FOR JUDGMENT 1 The defendant, James Hardie Australia Finance Pty Limited (in liquidation) (JHAF) is the subject of a members' voluntary winding up pursuant to a special resolution passed on 16 September 2003. The plaintiff, James Hardie International Finance BV (JHIFBV), is the sole shareholder and creditor of JHAF. 2 JHIFBV applies in this proceeding under ss 482 and 511(1)(b) of the Corporations Act 2001 (Cth) (the Act) for an order terminating the winding up of the JHAF. I made that order on 22 December 2008. These are my reasons for doing so. 3 In an associated proceeding NSD 910 of 2008 brought by the Deputy Commissioner of Taxation (the Commissioner) as plaintiff, I delivered two judgments: Deputy Commissioner of Taxation; in the matter of James Hardie Australia Finance Pty Ltd (Deregistered) [2008] FCA 1181 and Deputy Commissioner of Taxation; in the matter of James Hardie Australia Finance Pty Ltd (Deregistered) (No 2) [2008] FCA 1928. I will call them respectively the "Reinstatement Judgment" and the "Directions Judgment". 4 In the Reinstatement Judgment, I ordered that the Australian Securities and Investments Commission (ASIC) reinstate the registration of JHAF and that Max Christopher Donnelly of Ferrier Hodgson (Mr Donnelly) be liquidator of JHAF. In the Directions Judgment, I gave certain directions to Mr Donnelly in his capacity as liquidator of JHAF, to the effect that he was not prevented by certain circumstances from entering into a then proposed deed of settlement and a then proposed loan agreement, by certain circumstances. 5 The background to the voluntary winding up of JHAF and subsequent events are recounted in the Reinstatement Judgment. I need not repeat what I said in the Reinstatement Judgment. 6 As was foreshadowed in the Directions Judgment (at [10] and [15]), it was an aspect of the settlement of the Commissioner's claim against JHAF that following payment of the JHAF Settlement Sum (I will use the same forms of abbreviation as I used in the Reinstatement Judgment and the Directions Judgment), an application would be made for an order terminating the winding up of JHAF, which would be supported by Mr Donnelly and the Commissioner. 7 The evidence before the Court on the present application shows that the settlement referred to in the Directions Judgment has been implemented and payment has been made to the Commissioner. 8 JHIFBV, in its capacity as general partner of a limited partnership, provided financial accommodation to JHAF in the amount of the JHAF Settlement Sum by paying that amount to the Commissioner. 9 JHAF is now solvent. The reason why it is solvent is that JHIFBV, in its capacity mentioned, is limited in its right to recover the amount of the JHAF Settlement Sum from JHAF by reference to the net assets of JHAF at the time of the demand. That is to say, there is no possibility of a liability of JHAF to JHIFBV in the capacity mentioned, beyond JHAF's capacity to pay. 10 In the light of this fact and the fact that it is the sole shareholder and creditor of JHAF that makes the present application, supported by the Commissioner and Mr Donnelly, I considered it appropriate to order that the winding up of JHAF be terminated. 11 I note that there was evidence on the hearing that ASIC had been notified of the application and of the hearing date, and that it neither consented to nor opposed the application, taking the view that the matter was properly left for determination by the Court. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.