Solomon, Emad Kamel & Ors v Australian Securities Commission [1998] FCA 881

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 201 of 1998

BETWEEN: emad kamel solomon

First Applicant

transphere (south pacific) pty limited

Second Applicant

the eddie solomon emporium pty limited

Third Applicant

hot cakes pty limited

Fourth Applicant

AND: australian securities commission

Respondent

JUDGES: EINFELD, KIEFEL AND SUNDBERG JJ

DATE: 1 july 1998

PLACE: SYDNEY

REASONS FOR JUDGMENT

THE COURT: The matter under consideration today is a judgment of Justice Emmett given on 20 February 1998 in which his Honour made orders that the second, third and fourth respondents be wound up and that Brian Raymond Silvia be appointed as liquidator of those companies. His Honour also made some other orders of a procedural kind, consequent upon the principal orders. The Court has had the opportunity of reading the first applicant's written submissions, made on behalf of himself and the three companies, and has given attention to the oral submissions which he has advanced today. Only two matters of any substance arise under the notice of appeal. One is that the companies should not have been wound up because they are not insolvent, or alternatively because they are solvent, and the second is that there was a long delay between the appointment of a provisional liquidator and the winding up proceedings. Both of those matters have been addressed by the learned primary judge based upon the evidence presented to him. His conclusion that the companies were insolvent appears to us to be entirely without error. Indeed, in the course of his submissions today, the first applicant has told the Court that it is true that the companies have no assets and have significant liabilities, as the learned primary judge found. However, his claim was that the companies had assets when the provisional liquidator was first appointed and that those assets have been used up both by the provisional liquidator's fees and by the selling at an under-value of some of the possessions of the companies. Even if those assertions are correct, the learned primary judge's finding of the companies' insolvency appears to us to be unexceptionable and squarely based upon the evidence in the case. Following upon an expression of concern by Justice Hill at an earlier stage in the history of these companies, the learned primary judge expressed some concern at the delays involved, in this case of some five months. His Honour found on the evidence before him that any delays were properly explained, amongst other things by significant litigation in which the first applicant was involved. In any event, his Honour's finding that no additional harm came either to the first applicant or to the companies appears to be an unchallengeably correct statement. In the circumstances, there is no basis for upsetting the primary judgment and therefore the appeal must be dismissed. The appeal is dismissed with costs. I certify that this and the preceding one (1) page are a true copy of the Reasons for Judgment herein of the Court