FEDERAL COURT OF AUSTRALIA Australian Securities & Investments Commission v Houghton & Associates Pty Ltd [1999] FCA 528 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v HOUGHTON AND ASSOCIATES PTY LTD & ORS NG 3132 OF 1998 EMMETT J 23 APRIL 1999 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 3132 OF 1998 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Applicant AND: HOUGHTON AND ASSOCIATES PTY LIMITED ACN 001 818 373 First Respondent JOHN ROBERT HOUGHTON Second Respondent COMMONWEALTH BANK OF AUSTRALIA Third Respondent JUDGE: EMMETT J DATE OF ORDER: 23 APRIL 1999 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The first respondent, Houghton and Associates Pty Limited ACN 001 818 373, be wound up pursuant to subsection 461(1)(k) of the Corporations Law. 2. John Frederick Lord of Lord and Brown, Chartered Accountants, be appointed Official Liquidator of the first respondent, Houghton and Associates Pty Limited ACN 001 818 373. 3. The first respondent pay the applicant's costs of this application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 3132 OF 1998 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Applicant AND: HOUGHTON AND ASSOCIATES PTY LIMITED ACN 001 818 373 First Respondent JOHN ROBERT HOUGHTON Second Respondent COMMONWEALTH BANK OF AUSTRALIA Third Respondent JUDGE: EMMETT J DATE: 23 APRIL 1999 PLACE: SYDNEY EX TEMPORE REASONS FOR JUDGMENT 1 I havebefore me an application for the winding up of Houghton & Associates Pty Limited. The applicant is the Australian Securities & Investments Commission ("the Commission"). The application is based on section 461(1)(k) of the Corporations Law. The Commission claims standing by the operation of section 462(2)(e) and section 464. Section 461(1)(k) provides that the Court may order the winding up of a company if the Court is of opinion that it is just and equitable that the company be wound up. 2 Section 462(2)(e) provides that the Commission may apply for an order to wind up a company pursuant to section 464. Section 464(1) provides that where the Commission is investigating or has investigated matters being, or connected with, affairs of a company, the Commission may apply to the Court for the winding up of the company. I am satisfied that the Commission has standing under section 462(2) and section 464 of the Corporations Law in the light of the evidence contained in affidavits of Ronald Leslie Hooper, sworn 13 July 1998, 16 July 1998, 21 July 1998, 21 September 1998 and 1 April 1999. 3 The basis upon which the Commission contends that the ground contained in section 461(1)(k) is made out is as follows. The company carried on business as a superannuation consultant. Its directors were the second respondent, John Robert Houghton and his wife or former wife, Anne Catherine Houghton. The evidence indicates that Mr Houghton has been solely responsible for the management of the affairs of the company for some time and that Mrs Houghton was not involved in the management of the company. Nor was the company secretary involved in the management of the company. 4 The further amended application in which a winding up order is sought was served on Mr Houghton and on the company. There has been no appearance on behalf of the company in opposition to the application to wind up. The basis for the winding up is that Mr Houghton was responsible for misappropriation of funds belonging to superannuation clients of the company. Mr Houghton pleaded guilty to charges of misappropriation and was convicted and sentenced to a term of imprisonment by reason of his offences. 5 The evidence before me also indicates that the company is insolvent and has a deficiency of liabilities over assets in excess of $1 million. Further, the evidence before me also indicates that no proper records have been kept on behalf of the company since 1994, or earlier, in contravention of section 286 of the Corporations Law. The Commission seeks the winding up of the company on the ground that it is just and equitable in the public interest for the affairs of the company to be brought under control of a liquidator and for its affairs to be wound up. 6 I am satisfied that the Commission has standing and that the just and equitable ground is applicable on the application of the Commission. I agree with the observations made by Finn J in Australian Securities Commission v AS Nominees Limited (1995) 133 ALR 1 at 59 and following. I am satisfied that the public interest is well-served by the making of a winding up order. Accordingly, I make orders in accordance with the draft orders which I have initialled, dated with today's date and placed with the papers. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 23 April 1999 Solicitor for the Applicant: Alistair Morgan of the Australian Securities and Investments Commission Date of Hearing: 23 April 1999 Date of Judgment: 23 April 1999