FEDERAL COURT OF AUSTRALIA Deputy Commissioner of Taxation, in the matter of G & K Psakis Pty Ltd (in liq) v G & K Psakis Pty Ltd (in liq) [2006] FCA 1832 IN THE MATTER OF G & K PSAKIS PTY LTD (IN LIQUIDATION) (ACN 079 939 085) DEPUTY COMMISSIONER OF TAXATION v G & K PSAKIS PTY LTD (IN LIQUIDATION) (ACN 079 939 085) NSD 1970 OF 2006 LINDGREN J 21 DECEMBER 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1970 OF 2006 IN THE MATTER OF G & K PSAKIS PTY LTD (IN LIQUIDATION) (ACN 079 939 085) BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: G & K PSAKIS PTY LTD (IN LIQUIDATION) (ACN 079 939 085) Defendant JUDGE: LINDGREN J DATE OF ORDER: 21 DECEMBER 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. George Psakis have leave to file in Court an interlocutory process and the affidavit of George Psakis sworn 20 December 2006. 2. The application brought by interlocutory process by George Psakis, a contributory of G & K Psakis Pty Ltd (in liquidation), be made returnable instanter. 3. The winding up of G & K Psakis Pty Ltd (in liquidation) be stayed until 4pm on 5 January 2007. 4. To the extent that the order may be considered necessary or desirable, approval is granted to George Psakis and Kerry Psakis performing and exercising functions and powers as directors of G & K Psakis Pty Ltd (in liquidation) until 4pm on 5 January 2007. 5. The proceeding be stood over to 5 January 2007 at 10:15am. 6. The costs of today's hearing be reserved. 7. George Psakis notify the liquidator, John Frederick Lord, of the making of today's orders by serving a copy of them on him. 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 NSD 1970 OF 2006 IN THE MATTER OF G & K PSAKIS PTY LTD (IN LIQUIDATION) (ACN 079 939 085) BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: G & K PSAKIS PTY LTD (IN LIQUIDATION) (ACN 079 939 085) Defendant JUDGE: LINDGREN J DATE: 21 DECEMBER 2006 PLACE: SYDNEY REASONS FOR JUDGMENT 1 George Psakis, a contributory of the defendant, G & K Psakis Pty Ltd (in liquidation) ("the Company"), applies under s 482 of the Corporations Act 2001 (Cth) for an interlocutory order staying the winding up of the Company pending the final hearing of his substantive application, which seeks, by way of final relief, either an order that the winding up be terminated or an order dismissing the winding up application. 2 On 15 December 2006, the Court ordered that the Company be wound up, that John Frederick Lord of PKF Chartered Accountants be appointed liquidator, and that the costs of the plaintiff creditor ("the Commissioner") be fixed at $2,655.86. The orders were made by Registrar Hedge. There was no appearance for the Company. The debt was in respect of BAS provisions, interest and superannuation guarantee charges. 3 In fact, on the same day, 15 December 2006, the Company caused two payments of $50,000 each to be made to the Commissioner. As at 26 July 2006, the Company's debt to the Commissioner was $131,703.49 and on the date of the filing of the originating process, 10 October 2006, apparently it was $124,015.87. By the time of the hearing the amount was less than $100,000. The effect of the making of the two payments, therefore, was to discharge the debt on which the Commissioner had proceeded. 4 According to the Commissioner, however, the Company is indebted to the Commissioner in a different respect and the net effect is that there is a very small amount that the Commissioner is entitled to recover from the Company. Mr Melrose, who appears for the Commissioner, agrees that that amount is so small that it should not stand in the way of the making of an order staying the winding up. 5 Apparently there was a misunderstanding on the part of Mr Psakis, who, with his wife, is a director of the Company, as to whether he had until close of business on 15 December in which to pay the sum of $100,000. When the hearing of the application for the winding up took place before Registrar Hedge, Mr Melrose, who appeared for the Commissioner, was, of course, unaware of the making of the two payments totalling $100,000 (it appears that the two cheques were deposited at Australia Post, Sans Souci at 9.04 and 9.05am, and the winding up order was made by the Registrar at 10.54am). 6 An affidavit of Mr Psakis attributes the Company's failure to pay the Commissioner to the departure from the Company's employ, in or about March 2006, of its bookkeeper. Since that time, his wife and co-director has been attending to bookkeeping functions but the Company fell behind in invoicing its customers for work completed. According to his affidavit, customers owe the Company amounts totalling $273,903.12, and the Company owes to its creditors $38,863.83. 7 Mr Psakis is anxious that proceedings under the winding up be stayed so that he and his wife can ensure that there is recovered for the benefit of the Company and its creditors the said amounts totalling $273,903.12, and be able to satisfy the Court of the Company's solvency. 8 There is also annexed to Mr Psakis's affidavit a profit and loss statement for the period from 1 July 2006 to 20 December 2006 showing an operating profit of $263,096.38. 9 The Company's solicitors, Pateman Legal, have attempted to ascertain the amount of the liquidator's fees to date. Apparently the liquidator has not been able to furnish a figure yet because not all time spent has been recorded. It appears, however, that the amount of the liquidator's fees may be modest, one reason being that apparently he has not yet been put into possession of the books and financial records of the Company. 10 The Commissioner neither consents to nor opposes the granting of the stay and the liquidator takes the same position. The liquidator has not appeared on the hearing. 11 In my opinion there should be a stay for a short period, but only a short period. There will be a stay until the date when the matter is next before the Court which will be 5 January 2007. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 4 January 2007 Solicitor for the Plaintiff: Ms S Young, Pateman Legal Solicitor for the Defendant: Mr A Melrose, Australian Government Solicitor Date of Hearing: 21 December 2006 Date of Judgment: 21 December 2006