Pugh v Pro Stainless Pty Ltd

Judgment (7 paragraphs)

[1]

REASONS FOR JUDGMENT 1 By way of interlocutory application filed on 24 September 2015, the applicants apply for relief as a consequence of Orders made by District Registrar Wall on 9 September 2015 that, among other things, Pro Stainless Pty Ltd (ACN 130 088 550) (Pro Stainless) be wound up in insolvency under the Corporations Act 2001 (Cth) (the Act) and that a liquidator be appointed to Pro Stainless. 2 The primary relief sought by the applicants is an order pursuant to r 39.05(a) of the Federal Court Rules 2011 (the Rules) setting aside the Orders made on 9 September 2015. The alternative relief that the applicants seek is an order terminating the winding up under s 482 of the Act. 3 The application was listed for hearing on 7 October 2015. After hearing submissions on behalf of the applicants and on behalf of the liquidator, I made the order sought setting aside the Orders made by the District Registrar on 9 September 2015 and related orders. This judgment records my reasons for making those orders. 4 In support of the application, the applicants relied on: (1) affidavit sworn by Mark Robert Pugh on 22 September 2015 (Mr Pugh's First Affidavit); (2) affidavit sworn by Mark Robert Pugh on 6 October 2015 (Mr Pugh's Second Affidavit); (3) affidavit affirmed by Sonia Hurford on 22 September 2015; and (4) affidavit affirmed by Patrick Kaluski on 6 October 2015. 5 In addition, Mr Scarcella, who appeared on behalf of the liquidator, tendered a schedule of payments recording the payments to be made by the applicants or out of the liquidation account should the Court make the orders sought in the application.

[2]

Non-appearance and Explanation for Non-appearance 11 The order made to wind up Pro Stainless was made in its absence in the circumstances described in Mr Pugh's First Affidavit and in Ms Hurford's affidavit. Mr Pugh is the sole director of Pro Stainless and Ms Hurford is an administrative assistant employed by Pro Stainless. 12 The evidence discloses that until 9 September 2015, Pro Stainless retained Hilliers Advisers Chartered Accountants (Hilliers) as its external accountants. Until about 24 April 2015 the business address of Hilliers was Level 1, 572 Pacific Highway, Belmont, NSW 2280. From 25 April 2015, Hilliers' business premises moved to 609 Pacific Highway, Belmont, NSW 2280. The registered office of Pro Stainless was at all relevant times, Level 1, 572 Pacific Highway, Belmont, NSW 2280. It does not appear to have been changed following Hilliers' move to new business premises. 13 Ms Hurford is responsible for the initial receipt, collation and distribution of all incoming mail received into the Pro Stainless office which is located at 258 Macquarie Road, Warners Bay, NSW. Her evidence is that she has no record of receiving the correspondence from the plaintiff's solicitors, de Mestre and Company, dated 14 August 2015 which enclosed the originating process and supporting documents (the de Mestre Letter). Similarly, she has no record of receiving the statement of claim filed by the plaintiff in proceedings No. 2015/00068080 in the Local Court (the Local Court Statement of Claim). This is so notwithstanding Hilliers' assertion that those documents were sent to Pro Stainless. 14 The originating process commencing these proceedings, which is included in the exhibit to Mr Pugh's First Affidavit, records that a creditor's statutory demand dated 16 July 2015 was served on Pro Stainless at its registered office at Level 1, 572 Pacific Highway, Belmont, NSW 2280 on 22 July 2015 (the Statutory Demand). It relied on a judgment obtained in Local Court proceedings No. 2015/00068080. Neither Hilliers nor Ms Hurford has any record of receiving that document. 15 Mr Pugh deposes that he was not aware of the Local Court Statement of Claim, the Statutory Demand or the de Mestre Letter. He first became aware of the de Mestre Letter and the Statutory Demand when the liquidator provided copies of those documents to him upon attending the business premises of Pro Stainless on 11 September 2015. Mr Pugh says that if he had been aware of the plaintiff's claim and the significance of the application to wind up Pro Stainless, he would have caused Pro Stainless to pay the amount owed to the plaintiff. 16 The Orders made on 9 September 2015 were made in the absence of Pro Stainless and the applicants. I am satisfied with the explanation provided by Mr Pugh and Ms Hurford as to the reason for the non-appearance of the company at the hearing of the originating process and that Pro Stainless did not become aware of the debt owing to the plaintiff and the application to wind up the company until after orders were made.

Notice of the Application to Other Parties and their Attitude 18 The interlocutory application, Mr Pugh's First Affidavit and Ms Hurford's affidavit were served on the Australian Securities and Investments Commission which confirmed that it did not propose to intervene in or seek leave to appear at the hearing of the application. 19 The interlocutory application was served on: (1) those creditors of Pro Stainless with a debt owing in excess of $2,000, including the Australian Taxation Office. Mr Pugh deposes that as at 6 October 2015, none of those creditors had contacted him or his solicitors about the application. Further, when the application was called for hearing, there was no appearance on behalf of any of the creditors; (2) the plaintiff which indicated its consent to the application provided certain outstanding amounts were paid to it, including the costs of the winding up and the costs of this application, and certain information was provided. The applicants have agreed to those arrangements; (3) the liquidator, who did not oppose the application provided certain amounts were paid, including the liquidator's legal and other fees incurred in the liquidation, and an undertaking is provided to pay what are described as "trade-on-costs" incurred by the liquidator in the running of the company. 20 I was informed by Mr Darams of counsel, on behalf of the applicants, that no creditors appeared at the hearing of the application to wind up Pro Stainless. No evidence has been provided in that regard. However, I note those creditors who were notified of the interlocutory application did not appear or notify any objection to it to the applicants or their solicitors.

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Judgment (7 paragraphs)

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