FEDERAL COURT OF AUSTRALIA Haxton, in the matter of CEDGEW Pty Ltd [2003] FCA 560 CORPORATIONS – winding up – application to terminate winding up – where company solvent – where creditors, contributories and liquidator consent to termination Corporations Act 2001 (Cth) ss 482, 493, 511 APPLICATION BY CHARLES DAVID HAXTON AND WENDY HAXTON, IN THE MATTER OF CEDGEW PTY LTD ACN 000 780 192 (IN LIQUIDATION) N3080 OF 2002 EMMETT J 16 MAY 2003 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N3080 OF 2002 IN THE MATTER OF CEDGEW PTY LTD (IN LIQUIDATION) CHARLES DAVID HAXTON FIRST PLAINTIFF WENDY HAXTON SECOND PLAINTIFF JUDGE: EMMETT J DATE OF ORDER: 16 MAY 2003 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. the winding up of CEDGEW Pty Ltd ACN 000 780 192 (in liquidation) be terminated on and with effect from 16 May 2003. 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 N3080 OF 2002 IN THE MATTER OF CEDGEW PTY LTD (IN LIQUIDATION) CHARLES DAVID HAXTON FIRST PLAINTIFF WENDY HAXTON SECOND PLAINTIFF JUDGE: EMMETT J DATE: 16 MAY 2003 PLACE: SYDNEY REASONS FOR JUDGMENT 1 I have before me an application made under s 511(1)(b) of the Corporations Act 2001 (Cth) ('the Act') to exercise the powers of the Court under s 482(1) of the Act in respect of the winding up of CEDGEW Pty Ltd ('the Company'). The Company is in voluntary liquidation and the plaintiffs are the directors and one is a contributory of the Company. 2 Section 482(1) provides that at any time during the winding-up of a company the Court may, on application, make an order staying the winding-up either indefinitely or for a limited time, or terminating the winding-up on a day specified in the order. Section 511(1)(b) provides that any contributory or creditor may apply to the Court to exercise all or any of the powers that the Court might exercise if the company were being wound-up by the Court. Accordingly, the Court is authorised to make an order that the winding-up of the Company be either stayed or terminated. The primary application is for termination of the winding-up of the Company with immediate effect. 3 The Company was formed, in essence, as a joint venture investment company. The directors were initially the second plaintiff, Mrs Wendy Haxton, and Mrs Betty Elaine Glover. The day-to-day affairs of the Company were conducted by their respective husbands, Mr Charles David Haxton, who is the first plaintiff, and Mr Ern Glover, who is the husband of Mrs Glover. The two families decided to cease their business relationship in 1999 and the Company was placed into voluntary liquidation on 30 June 1999. The Company was solvent at the time of its liquidation. 4 A balance sheet of the Company as at 30 June 1999 shows total shareholders' equity of $46,546, being total assets of $124,485 less total liabilities of $77,939. At the time of winding-up the share capital was held as to 50 per cent by Mrs Haxton, and as to 50 per cent by Mrs Glover. A transfer of shares from Mrs Glover to Mr Haxton has been signed and completed. However, by the operation of s 493(2), the transfer is void since it has not been made with the sanction of the liquidator. The liquidator, however, has consented to the making of orders sought by Mr and Mrs Haxton. Mr Haxton has standing since he is a creditor of the Company. 5 Since the winding-up of the Company, it has received distributions from a trust. The net result is that, at the present time, it has substantial surplus shareholders' equity. A balance sheet as at 30 June 2002 shows net assets of $1,284,376. The Company has current assets of $1,292,972 and total liabilities of $8596, representing $183 owing to Mr and Mrs Haxton and $8413 provided for income tax. 6 Technically, Mrs Glover is one of the two contributories and consents to the orders sought. A copy of the application and the affidavits filed in support of it have been served on the Australian Securities and Investments Commission ('the Commission') by letter of 15 May 2003. The Commission has indicated that it neither consents nor opposes the application and that the letter may be tendered to the Court to indicate the Commission's view. 7 I am satisfied that the applicants have disclosed to the Court the nature and extent of the creditors. All the creditors, contributories and liquidator consent to the orders sought. The Company is clearly solvent. The contributories desire that the Company be in a position to continue to receive distributions as it has received since its winding-up. In the circumstances, I consider that it is appropriate to make orders as asked. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 5 June 2003 Counsel for the Plaintiffs: C Dimitriadis Solicitor for the Plaintiffs: Martin Trisley Date of Hearing: 16 May 2003 Date of Judgment: 16 May 2003