- WINDING UP VOLUNTARILY - CONTRIBUTORIES - where company went into liquidation
after members' voluntary winding up -
where applicant seeks a list of
Source
Original judgment source is linked above.
Catchwords
CORPORATIONS- WINDING UP VOLUNTARILY - CONTRIBUTORIES - where company went into liquidationafter members' voluntary winding up -where applicant seeks a list ofcontributories pursuant to s 506(1)(c) Corporations Act 2001 - where allshares in the company are fully paid up - whether it is necessary to "adjustthe rights of the contributories among themselves"within the meaning of s515(b) Corporations Act 2001 - where the applicant wants to obtain alist of shareholders so he can join all necessary parties to the originatingapplication -whether the liquidators should be ordered to provide a list ofcontributories in accordance with ss 506 and 478 Corporations Act 2001PROCEDURE - SUPREME COURT PROCEDURE - where applicant seeks ordersfor substituted service on three shareholders - where applicanthas not triedto serve the shareholders in the usual way - where applicant proposes servicebe effected by sending copies of thefiled documents to the liquidators -
whether it is impracticable for applicant to serve documents in the way
required by chapter
4 of the UCPR - whether the circumstances justify an
order for
substituted service
Corporations Act 2001 (Cth), s 478(1), s 478(1A), s 506(1)(c), s 515, s
516
Uniform Civil Procedure Rules 1999 (Qld), r 26(2), r
116
Phoenix Oil and Transport Co Ltd [1958] 1 Ch 560
Judgment (48 paragraphs)
[1]
Primrose Couper Cronin Rudkin for the first respondent
[2]
[1] WILSON J: The applicant is the trustee of the WGK Trust. The Trust holds shares in Kendells (NSW) Pty Limited ("the company").
[3]
[2] The company is in liquidation. It is a members' voluntary winding up.
[4]
[3] By an originating application filed on 10 September 2002 the applicant seeks -
[5]
"declaration that on its proper construction the Settlement Deed dated 14 October 1998 between the Company and Australian Vineyard Estates Pty Ltd did not have the effect of writing off or otherwise disposing of the loan accounts of the Company's shareholders"
[6]
[4] This is an interlocutory application by which the applicant seeks -
(c) exercise the power under section 478 of a liquidator appointed by the Court to settle a list of contributories."
[12]
Section 478 is in Part 5.4B Winding up in Insolvency or by the Court Division 2 Court-appointed liquidators. It provides -
[13]
"Section 478 Application of Property: List of Contributories
[14]
478(1) [Collection of property etc] As soon as practicable after the Court orders that a company be wound up, the liquidator must:
[15]
(a) cause the company's property to be collected and applied in discharging the company's liabilities; and
[16]
(b) consider whether subsection (1A) requires him or her to settle a list of contributories.
[17]
478 (1A) [Settlement of list of contributories] A liquidator of a company that is being wound up in insolvency or by the Court must settle a list of contributories if it appears to him or her likely that:
[18]
(i) there are persons liable as members or past members to contribute to the company's property on the winding up; or
[19]
(ii) there will be a surplus available for distribution; and
[20]
(ii) to adjust the rights of the contributories among themselves.
[21]
478(4) [List prima facie evidence] The list of contributories, when settled in accordance with the regulations, is prima facie evidence of the liabilities of the persons named in the list as contributories.
[22]
[6] The procedure for settling a list of contributories is set out in the Corporations Regulations regs 5.6.58 - 5.6.62.
[23]
[7] The liability of a member of a company to contribute to its property is dealt with (relevantly) in sections 515 and 516 -
[24]
515 Subject to this Division, a present or past member is liable to contribute to the company's property to an amount sufficient:
[25]
(a) to pay the company's debts and liabilities and the costs, charges and expenses of the winding up; and
[26]
(b) to adjust the rights of the contributories among themselves.
[27]
516 Subject to sections 518 and 519, if the company is a company limited by shares, a member need not contribute more than the amount (if any) unpaid on the shares in respect of which the member is liable as a present or past member."
[28]
(Sections 518 and 519 deal respectively with a company limited both by shares and by guarantee and exceptions for a former unlimited company. They are irrelevant for present purposes.)
[29]
[8] In the applicant's submission, there is likely to be a surplus available for distribution (and insofar as one of the liquidators has expressed an opinion to the contrary, that opinion is not reasonably based), and it will be necessary to make calls on shareholders pursuant to their loan accounts before that surplus can be distributed. He invokes s 478 (1A)(a)(ii) and (b)(ii).
[30]
[9] There are no unpaid or partly paid shares in the company. All shares are fully paid up.
[31]
[10] As Roxburgh J observed in Phoenix Oil and Transport Co Ltd[1958] 1 Ch 560 at 563-564 the distribution of surplus assets of itself does not involve an adjustment of the rights of contributories among themselves. Rather an adjustment of the rights of the contributories among themselves refers to an adjustment between holders of fully and partly paid shares.
[32]
[11] Even if the liquidator's opinion that there is unlikely to be a surplus available for distribution is not reasonably based (something I am not in a position to determine), this is not a case where it will be necessary to adjust the rights of contributories among themselves within the meaning of the legislation. Accordingly, I decline to order the liquidators to prepare a list of contributories.
[33]
[12] It seems that the applicant's real concern is to obtain an accurate list of shareholders so that he can join all necessary parties to the originating application: rule 26(2) of the UCPR. The liquidators have given him two lists - one showing the following shareholdings -
[34]
and the other, taken from ASIC records, showing the following -
[35]
However, sections 506 and 478 cannot be invoked to force the liquidators to provide such a list.
[36]
[13] I turn to the applications for substituted service. Rule 116 of the UCPR provides -
[37]
116. (1) If, for any reason, it is impracticable to serve a
[38]
document in a way required under this chapter, the court may make an order substituting another way of serving the document.
[39]
(2) The court may, in the order, specify the steps to be taken, instead of service, for bringing the document to the attention of the person to be served.
[40]
(3) The court may, in the order, specify that the document is to be taken to have been served on the happening of a specified event or at the end of a specified time.
[41]
(4) The court may make an order under this rule even though the person to be served is not in Queensland or was not in Queensland when the proceeding started."
[42]
(i) serving the respondent Jeni Kendell by sending a copy of the originating application and supporting affidavit to a facsimile number used for sending faxes to and receiving faxes from her in August and September and by sending a copy to the first respondents (the liquidators), there being reason to believe she is in contact with them;
[43]
(ii) serving the respondent Penny Nelson by sending a copy to the first respondents (the liquidators), there being reason to believe she is in contact with them;
[44]
(iii) serving the respondent Susan Done by sending a copy to the first respondents (the liquidators). One of the liquidators' staff recently told the applicant that she was in England, and the applicant says there is reason to believe she is in contact with them.
[45]
In each case the applicant asks for an order that the liquidators forward the documents to the respondent by registered post to her last known address.
[46]
[15] It may well be that the method of service proposed would be effective in bringing the proceeding to the attention of those respondents. However, that it not enough to justify the making of an order for substituted service. It must first be shown that it is impracticable to serve the documents in a way required by chapter 4 of the UCPR. This has not been shown - indeed, there does not appear to have been any attempt to serve the respondents in the usual way. In these circumstances I refuse to make orders for substituted service.
[47]
[16] The interlocutory application is dismissed. There is no reason why costs ought not follow the event.
[48]
[17] I dismiss the application filed on 24 October 2002 (amended in accordance with the amended application filed by leave on 15 November 2002). I order the applicant to pay the first respondents' costs of and incidental to the said application to be assessed on the standard basis.