Lavercombe v Auscott Ltd

The jurisdiction invoked 8 The defendant relies on s.1322(4)(b) of the Corporations Act: "Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes: … (b) an order directing the rectification of any register kept by ASIC under this Act; … and may make such consequential or ancillary orders as the Court thinks fit." 9 The only statutory control upon the exercise of this power is that stated in s.1322(6)(c): "The Court must not make an order under this section unless it is satisfied … that no substantial injustice has been or is likely to be caused to any person." 10 The claim based on s.1322(4)(b) must be approached by reference to the provisions with respect to lodgment with ASIC of documents related to winding up proceedings. The statutory scheme 11 Section 465A(a) of the Corporations Act says that a person who applies under s.459P for a company to be wound up "must … lodge notice in the prescribed form that the application has been made". A similar requirement applies to all winding up applications by virtue of s.470(1)(a). According to the definition in s.9, "lodge" means "lodge with ASIC in this jurisdiction". The prescribed form, for this purpose, is Form 519 entitled "Notification of court action relating to winding up". The content of a completed form includes the name of the court to which application has been made, the name and ACN (or ARBN) of the company to which the application relates, the date of the filing of the application, the section of the Corporations Act under which the application was made and particulars of the applicant. 12 A separate lodgment requirement applies where an application for the winding up of a company is dismissed. In that case, the applicant must lodge notice of the dismissal (and of its date) within two business days after it occurs. This requirement is imposed by s.470(1)(c). Again, Form 519 is the prescribed form. 13 Under s.1274(8), ASIC may refuse to receive any document submitted for lodgment. But it may do so only on certain grounds - in particular, that the document contains matter contrary to law, contains matter that is false or misleading in a material particular, has not been duly completed, contravenes the Act or contains an error, alteration or erasure. Otherwise, ASIC has no power to reject a document to which the Act attaches a lodgment requirement and which is submitted for lodgment. 14 Under s.1274(2)(a), a person may inspect any document lodged with ASIC, not being a document of one of several specified types. Documents lodged under ss.465A and 470(1) are not in any of the excluded categories. Under s.1274(2)(c), a person may require a copy of or extract from a document that the person is entitled to inspect pursuant to s.1274(2)(a). Ancillary provision is made with respect to particular forms of stored images. In particular, if a reproduction or transparency of a document has been "incorporated with a register kept by ASIC", the right under s.1274(2)(c) relates to the reproduction or transparency and is not a right to a copy of the original. This is stated in s.1274(4). The right of inspection under s.1274(2)(a) is also modified where mechanical or electronic recording exists: see s.1274(4A). 15 In relation to the matter at hand, therefore, the statutory scheme is clear. The plaintiff, as applicant for a winding up order, was required by law to lodge a Form 519 containing particulars of the application. Upon dismissal of the application, the plaintiff was required by law to lodge a Form 519 containing particulars of the dismissal. I proceed on the assumption that both obligations have been discharged. In the absence of anything suggesting that the s.1274(8) power of rejection was exercised, ASIC was (and is) required by law to allow inspection of each such Form 519 by any person and to furnish a copy or extract. Relevant questions under s.1322(4)(b) 16 Against that statutory background, I return to s.1322(4)(b). The jurisdiction that section creates is concerned with "any register kept by ASIC under this Act". If the section is to be invoked, the first step is to identify the relevant "register kept by ASIC under this Act" and to ascertain its content. Once that has been done, it becomes necessary to decide whether the order the court is asked to make is an order directing the "rectification" of that register. If a positive answer is given to that question, the court will address the third issue, that is, whether, in the circumstances of the case, it should, as a matter of discretion, make the order sought. Two Australian cases 17 At this point, it is convenient to refer to two relevant Australian decisions, being the decision of the Federal Court of Australia (Finkelstein J) in Onesteel Reinforcing Pty Ltd v Westpoint Constructions Pty Ltd [2005] FCA 808 and the earlier decision of the Supreme Court of Queensland (Ambrose J) in Re Voxson Sales Pty Ltd [1989] 1 QdR 711. 18 The facts of the Onesteel case bear a strong resemblance to those now before me. Onesteel had filed an application for the winding up in insolvency of Westpoint which was described by Finkelstein J as "a substantial company". It relied on non-compliance with a statutory demand. After the filing and service of the application, Westpoint paid the relevant debt and Onesteel agreed to discontinue the winding up proceedings. Westpoint then sought an order directing that ASIC remove from any publicly available register kept by it any reference to the winding up proceedings, to the relevant Forms 519 and to the rectification order itself. ASIC was represented on the hearing of that application. Finkelstein J had before him evidence of prejudice that Westpoint would face - indeed, had already encountered - by reason of the attitude of one of its financiers which would not allow drawdown under a facility until, as his Honour put it, "this matter is resolved". It appears from the judgment that this referred to not only the discontinuance of the winding up proceedings but also the making of the order concerning the ASIC records. Regarding the merits of the matter, Finkelstein J said (at [8]): "I am satisfied that had the statutory demand come to the attention of Westpoint the dispute with OneSteel would have been resolved immediately, as in due course it was. It is unfortunate that things went as far as they did. In the unusual circumstances of this case I would make the orders sought provided there is power to do so." 19 Attention was then given to the question of power. Finkelstein J distinguished the decision of Ambrose J in Re Voxson Sales Pty Ltd (above) and stated his view as to the meaning and scope of s.1322(4)(b): "Section 1322(4)(b) gives the court power to direct the 'rectification of any register kept by ASIC'. One meaning of 'rectify' is to 'reform' and I am asked to order the register be reformed by the removal of an entry. I am in no doubt that I have the power to make that order." 20 The Voxson case involved a claim by two companies for rectification of records of the National Companies and Securities Commission under a provision of the Companies (Queensland) Code corresponding with s.1322(4)(b) of the present legislation. A secured creditor had appointed receivers. It appears that the validity of the appointment was not questioned but that the appointment had been inconsistent with the terms of relevant agreements. The companies made alternative financial arrangements and paid out the secured creditor which then executed a release of the relevant charge. There was no opposition by the creditor or the receivers to the making of an order that five specified forms with respect to the receivership "entered in the register kept by the National Companies and Securities Commission in respect of … the applicants … be removed from that register". But there was opposition from the Commissioner for Corporate Affairs, a delegate of the NCSC. 21 Ambrose J declined to make the order. The rationale for the decision appears from the following passage at p.717: "I have no doubt that in an appropriate case a court may under s.539(4)(b) direct a rectification of a register which will be achieved in some cases perhaps by altering or correcting information stored on a microfilm in a microfiche jacket kept with respect to a particular company.

I am unpersuaded however that a register may be 'rectified' by removing and destroying microfilm of documents which have been lodged with and accepted by the Commission pursuant to the various sections of the Code to which I have referred. The Commission is given significant powers under s.31(8) to refuse to receive a document which is lodged with it.

Steps may well have been taken by the applicants prior to those documents being lodged to prevent their lodgement. From time to time proceedings are taken to prevent the filing of an application to wind up a company. Once an application to wind up however has been made that fact cannot be 'hidden' from public gaze merely because upon the hearing of the application it is shown that the application ought never to have been made.

On the facts of the present application as they appear to me at any rate the documents lodged with the Commission to which the applicants object were lodged under a statutory obligation imposed by the Code . The Commission registered those documents pursuant to the obligations imposed upon it by s.31 of the Code .

In my view it is not open to the applicants now - nearly two years after those documents were lodged - to seek to have them removed in effect from the register kept by the Commission by arguing that the receivers and managers were in effect improperly appointed. It was open to the applicants when they were advised of the intention of Alliance to appoint receivers and managers on 21 October 1986 before that appointment was made to take steps to prevent that course of action. Had the appointment been without power I have little doubt that it would have been open to the applicants to seek an injunction restraining the appointment and/or restraining both Alliance and the receivers and managers involved from lodging the documents which were in fact lodged.

In my view whatever may be the circumstances in which it is appropriate to make an order under s.539(4)(b) for rectification of a register kept by the Commission it is not appropriate in the circumstances disclosed upon this application for me to do so." 22 In the Onesteel case, Finkelstein J distinguished Voxson on the basis that different discretionary considerations applied and that the order sought was different. In Onesteel, his Honour said, the applicant under s.1322(4)(b) did not seek destruction of records lodged with the Commission. Is there a relevant "register kept by ASIC"? 23 With these two decisions in mind, I return to the questions which, in my view, must be addressed upon any application under s.1322(4)(b), being the three questions referred to at paragraph [16] above. The first question is whether the application truly relates to a "register kept by ASIC under this Act". 24 Various provisions contemplate that ASIC will establish and maintain registers (for example, ss.601CB, 601CE, 1274AA and 1285). There are also particular provisions with respect to the Australian Register of Company Charges in Chapter 2K. Regulation 9.1.01 of the Corporations Regulations 2001 (Cth) causes certain registers to be "prescribed registers" for the purposes of certain provisions of the Act. It therefore identifies a number of registers which are, in the words of s.1322(4)(b), "kept by ASIC under this Act". Regulation 9.1.01 is as follows: " Prescribed registers For subsections 1274A (2), (3) and (4) of the Act, the following registers are prescribed: (a) the register of companies registered under section 118 or 601BD of the Act or the registration of which is continued by section 1378 of the Act; (b) the register of Disqualified Company Directors and Other Officers kept under section 1274AA of the Act; (c) the Australian Register of Company Charges kept under section 265 of the Act; (d) the register of registered Australian bodies kept under Division 1 of Part 5B.2 of the Act; (e) the register of foreign companies registered under Division 2 of Part 5B.2 of the Act; (f) the register of names reserved under section 152 of the Act; (g) the Register of Licence Holders kept under section 789 of the Act; (h) the register of managed investment schemes registered under section 601EB of the Act; (i) the Register of Futures Licensees kept under section 1155 of the Act; (j) the Register of Auditors kept under section 1285 of the Act; (k) the Register of Liquidators kept under section 1286 of the Act; (l) the Register of Official Liquidators kept under section 1286 of the Act; (m) the register in respect of financial services licensees mentioned in subsection 922A (2) of the Act; (n) the register in respect of authorised representatives of financial services licensees mentioned in subsection 922A (2) of the Act; (o) the register in respect of persons against whom a banning order or disqualification order is made mentioned in subsection 922A (2) of the Act." 25 Some provisions of the Act contemplate "registration" by ASIC, apparently without reference to any register, but on the basis that ASIC will make and keep a "record" of the registration. Examples are ss.601EB and 118, although it is to be noted that regulation 9.1.01 assumes that there is, in each of these cases, a register as such. In the latter case, certain subsections of s.1274 are declared to apply to the record "as if it were a document lodged with ASIC": see s.118(2). Other provisions contemplate no more than lodgment of documents and, while, as already noted, s.1274(8) says that ASIC may "refuse to register or receive" a document "submitted for lodgment", it does not follow from that provision that every document "submitted for lodgment" in relation to which that power is not exercised is both "received" and "registered". Only those which, under some particular provision, are to be "registered" will be "registered" in consequence of lodgment. Others will be merely "received". 26 The requirement in relation to Form 519 is, as already noted, that it be "lodged": see ss.465A(a) and 470(1)(a). No provision of the Act appears to contemplate or require that the information notified by means of lodgement of a completed Form 519 will be extracted from the form and entered in a "register". Nor does there appear to be any provision causing a lodged Form 519 to be, by virtue of or in consequence of its lodgement, itself "registered" or incorporated into or added to a "register". If, as no doubt routinely happens, ASIC makes an image of the form and includes that in the "national database" (a thing mentioned in ss.601PA(3)(a), 601PB(2)(c) and 1274B(2) but, since the amendment of s.1274B(1) by item 406 of Schedule 2 to the Company Law Review Act 1998 (Cth), apparently no longer defined), there is not thereby inclusion of the content of the form in any "register kept by ASIC under this Act". 27 In the Onesteel case, there was an implicit assumption by the court that there existed some "register" separate and distinct from the lodged Forms 519 and any reproductions or images made by ASIC of the content of the lodged Forms 519. It was that apparent assumption that caused Finkelstein J to refer to reformation of such a register "by the removal of an entry". As I read the legislation, the true position remains, in relevant respects, as described by Ambrose J in Voxson. I do not accept the point of distinction relied upon by Finkelstein J in Onesteel (see paragraph [22] above). In the case of a Form 519 and its content, any concept of "removal of an entry" really entails destruction of the document and elimination of stored images of its content. This is because the document itself and stored images of its content represent the only relevant record maintained by ASIC. In those circumstances, I, like Ambrose J, am unpersuaded that it is open to the court to exercise the s.1322(4)(b) power. That power is exercisable only in relation to a "register kept by ASIC under this Act". Here, there is not identifiable from the Act itself any relevant "register" as such; nor is there evidence of the existence of a register in which the particulars in question are entered. The court's power under s.1322(4)(b) does not extend in such a way to enable it to require that documents - whether paper, electronic or other - be destroyed. ASIC itself has power to destroy and dispose of documents under s.1274(10). The court plays no part in the destruction process. 28 For these reasons, I am not satisfied that the first of the conditions for the exercise of the s.1322(4)(a) jurisdiction mentioned at paragraph [16] above is satisfied in this case. Rectification 29 I proceed nevertheless to consider the second relevant matter, that is, whether, assuming that a relevant register exists and that the content of the Forms 519 is entered in it, an order in the terms set out in paragraph [1] above would be one for the "rectification" of the register. 30 The word "rectify" is most often associated by company lawyers with a company's register of members - although it is to be noted, in that connection, that "rectified", the word appearing in s.35 of the Companies Act 1862 (Eng) and carried into subsequent Australian legislation was, after more than 130 years of currency, replaced in 1995 by "corrected": see the present s.175. This change was made by the First Corporate Law Simplification Act 1995 (Cth), which, according to the relevant explanatory statement, was "written in line with the principles of plain English". "Corrected" may thus be the plain English synonym of "rectified". 31 The concept of "rectification", as applied to the register of members, has been the subject of extensive judicial consideration. Where rectification took the form of removing something contained in the register, it was a reflection of a decision by the court that the matter in question should never have been entered or, at least, that it should not have remained beyond some past time. The rectification process has long been regarded as one by which the court causes the register to omit things which the law does not permit to be there and to include things that the law requires to be included. The first part of the concept is explained in the following passage in the judgment of Lindley LJ in Re National Bank of Wales (1897) 66 LJ Ch 222 at p.227 concerning s.35 of the Act of 1862: "That section only comes into operation when the company improperly puts on the register a name which ought not to be on it, or improperly refuses to put on the register a name which ought to be on it." 32 The second part of the concept was referred to in Re Imperial Chemical Industries Ltd [1936] 2 All ER 463 where Clauson J said (at p.469): "I understand that the section means that if without sufficient cause a name stands on the register, the court has jurisdiction under this section to take it off." 33 The relevant notions of sufficient cause and propriety look to legal rights and legal obligations. A register of members is to be kept in accordance with certain statutory provisions and legal rules. The court's power to rectify or correct is exercisable to ensure that effect is given to those provisions and rules. 34 The relevant concept of rectification as it applies to records kept by a body similar to ASIC has been considered in some English cases. In Re Calmex Ltd [1989] 1 All ER 485, it was held that the court could order the removal from a register kept by the Registrar of Companies of an entry in respect of a winding up order which the court itself had afterwards declared to be a nullity. This was because the order was to be regarded as never made, so that there was nothing to which the statutory provisions relating to recording and registration could attach. In that case, however, the jurisdiction exercised by the court was a general supervisory jurisdiction, not a jurisdiction created by statute. The court had power to ensure that the registrar kept records in conformity with the law. 35 In igroup Ltd v Ocwen [2003] 4 All ER 1063, the court considered a statutory power to order rectification of the register of charges kept by the Registrar of Companies. It was held that, in terms of the relevant section, the court's power was limited to correcting mistakes of commission or omission in the entry of any particular entered in the register. Reference may also be made to Company Number 1389920 v Registrar of Companies [2004] EWHC 60 (Ch). 36 These cases emphasise that publicly available registers and records of the kind typically kept by a registrar or similar official under companies legislation are creations of statute and that the content of those registers and records is entirely a statutory matter. Provisions with respect to the rectification or correction of registers and records exist to ensure that they are kept as the statute requires them to be kept. 37 Mr Bavin submitted on behalf of the defendant, however, that the concept of rectification reflected in s.1322(4)(b) includes reformation in a wider sense. In that respect, he relied on the passage in the judgment of Finkelstein J in the Onesteel case set out at paragraph [19] above and to his Honour's observation that one meaning of "rectify" is to "reform". According to that approach, the court may, in exercise of a wider reformatory jurisdiction, direct expungement of content that results from due and faithful adherence to the statutory scheme. Such expungement would, it seems, be directed according to criteria found outside that scheme. 38 In a case such as the present involving dismissal of a winding up application, it would be necessary, according to the wider reformatory approach, to identify the non-statutory criteria distinguishing cases meriting expungement from those not meriting expungement. The court would, it seems, employ some general notion of fairness in drawing the distinction. In cases where the winding up application was dismissed because the defendant company had succeeded in proving its solvency so as to displace a prima facie presumption of insolvency created by s.459C, one can only assume that the court would be required to make a judgment about the degree of ease or difficulty with which the company had discharged the onus. Cases in which solvency was resoundingly proved would presumably be viewed differently from those in which the probabilities were almost evenly balanced, with references to the former being removed from ASIC records and references to the latter remaining. In cases such as the present where the application was dismissed by consent, the court would presumably have to inquire into the details of the underlying circumstances in a search for some balance of merit grounding some qualitative assessment for the purposes of the general reformatory jurisdiction. 39 Section 1322(4)(b) does not create any general reformatory jurisdiction. It allows the court to make orders ensuring that the content of registers kept by ASIC under the Corporations Act accords with the statutory requirements with respect to such content. Every decision as to whether such an order should be made will be informed by the statutory requirements regarding register content. If the register does not contain something that the legislation requires it to contain, the jurisdiction to order rectification is enlivened. If the register contains something that the legislation says it must not contain, the jurisdiction to order rectification is also enlivened (also, perhaps, where something not required to be included is included). But if a particular thing is in the register and its presence there represents precise compliance with a requirement imposed by the statute, the jurisdiction to order rectification is not enlivened. Nor is the jurisdiction enlivened if there is absent from the register something that the legislation does not require to be there. 40 In the present case, the plaintiff made an application for winding up. The application was not a nullity. When the application came before the court, the defendant showed that the plaintiff's debt had been paid and that the plaintiff consented to dismissal of his application. It was thereupon dismissed. The order of dismissal was not a nullity. These are the simple facts. I am unable to see any basis on which the ordinary consequences of the filing of the application and its dismissal, in terms of content introduced into ASIC records by the two Forms 519 required in the circumstances, could or should be disturbed. This is not a case in which something was recorded by ASIC without reasonable cause. Records were regularly and properly made in accordance with the statutory requirements and in consequence of lodgments reflecting undisputed facts. There is nothing to rectify. 41 The conclusions I have expressed with respect to the first and second matters identified at paragraph [16] above make it unnecessary for me to consider the third matter so identified. The question of costs 42 It remains to consider the question of the costs of the winding up proceedings. Rule 42.1 of the Uniform Civil Procedure Rules 2005 embodies the well-recognised principle that costs should follow the event unless good reason exists for the making of another order. In the present case the parties take different views as to the "event" for these purposes. The defendant says that because the winding up application was dismissed it is the successful party and should have a costs order against the plaintiff. The plaintiff, on the other hand, says that, since the proceedings resulted in its receiving payment of its debt, it has enjoyed success and deserves a costs order accordingly. 43 The true position, it seems to me, is that there is no relevant "event". The proceedings were disposed of by consent. There was no determination on the merits. In cases of that kind, the general expectation is that there should be no order as to costs, with the result that each side is left to bear its own costs. That is subject to some exceptions, which are conveniently summarised in the judgment of McHugh J in the case of Re Minister For Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 at p.624-5 (citations omitted): "In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.

In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd , the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent Council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.

Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare.

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases." 44 The expectation that costs should lie where they fall may be displaced if the court can see, with ease, that one party has acted unreasonably in a way which should be compensated by costs. 45 In the area of company winding up, an aspect of what is unreasonable is identified in a passage in the judgment of Brightman J in Re Lanaghan Bros Ltd [1977] 1 All ER 265 at p.266: "The petitioning creditor has proceeded without any fault whatever on his part. He obtained a judgment in circumstances which the company did not seek to dispute. After a generous lapse of time the petition was presented. The company then woke up and succeeded in having the judgment set aside on the terms that it paid the costs of the plaintiff in any event. Now that the petition must be dismissed it seems to me only just that the petitioning creditor, if he be a creditor, should be given his costs of the petition, which he presented with complete propriety. I propose therefore to make an order not only that the petition be dismissed but also that the company should pay the costs of the petitioner." 46 The defendant contends that the plaintiff acted unreasonably. It says that the plaintiff should have known, as a matter of general knowledge and from the search necessarily obtained before commencement of the proceedings, that the defendant was solvent. He also should have known (indeed, did know) that the insurer was responsible for payment. The plaintiff must therefore have been aware, it is said, that an application for winding up in insolvency was doomed to fail. I do not accept that argument. A standard company extract (of the kind annexed to the affidavit of publication and search filed by the plaintiff in these proceedings) states the name and registration details of the company, the address of the registered office, particulars of the directors and secretaries, details of shares on issue and particulars of registered charges. There is also a list, by brief description only, of documents lodged by or in relation to the company. Such an extract says nothing about the defendant's financial strength or the state of its solvency. Nor should general knowledge be regarded as any kind of reliable guide. It may have been suggested by "general knowledge" of HIH Insurance Ltd or One.Tel Ltd in the early months of 2001 that the company was solvent when, as events showed, it was then insolvent. And it was no part of duty of the plaintiff to make assumptions about the insurer's liability. 47 This case is, in my view, one in which the plaintiff initiated and pursued his application "with complete propriety", to use the words of Brightman J. The debt was undisputed - indeed, could not have been disputed. It is true that it was not a judgment debt, but the simple act of filing the costs certificate in a court registry pursuant to s.362(3) of the Workplace Injury Management and Workers Compensation Act 1998 would have made it a judgment debt. Payment was not forthcoming. A statutory demand was served. Still there was no payment. In those circumstances, the plaintiff understandably and properly saw himself as "a creditor who cannot obtain payment", to use words found in the judgment of Gibbs J (with whom Stephen and Jacobs JJ agreed) in IOC Australia Pty Ltd v Mobil Oil Australia Ltd (1975) 11 ALR 417 at 427: "The authorities show that as a general rule a creditor who cannot obtain payment is, as between himself and the company that owes the debt, entitled to a winding-up order as a matter of right: Re K L Tractors Ltd [1954] VLR 505 at 511-12; Re Leonard Spencer Pty Ltd [1963] Qd R 230 at 232-3; Halsbury 4th ed, vol 7, par 1033." 48 The plaintiff was therefore justified in making and pursuing the application for winding up. The dismissal of that application came only after the defendant (or, in practical terms, the insurer) had paid the debt that was unquestionably owing, due and payable. The debt should have been paid, at the latest, when the statutory demand was served. Because of its nature, one would have expected payment at an earlier time. The plaintiff should never have been put to the trouble and expense of bringing the proceedings. Although they were ultimately dismissed by consent following payment of the debt, the plaintiff should have an order for costs against the defendant in accordance with the principle stated in Re Lanaghan Bros Ltd. 49 In the result, therefore, the orders of the court are: 1. Order that the claim in paragraph 2 of the defendant's interlocutory process filed on 10 August 2006 be dismissed. 2. Order that the defendant pay the plaintiff's costs of the proceedings. **********

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