FEDERAL COURT OF AUSTRALIA Programmed Maintenance Services Ltd v Ranelagh House Pty Ltd (In Liquidation) [2008] FCA 1974 CORPORATIONS – application by plaintiff creditor to defer dissolution of defendant company – final distribution of funds already made by liquidator – plaintiff claiming unpaid debt – continued existence of company necessary to effect proper purpose – application granted Corporations Act 2001 (Cth) s 509(6) Billingham; Re WM Ritchie (Aust) Pty Ltd [2007] NSWSC 325 referred to Kerol Pty Ltdv Vergeld Engineering Pty Ltd (in liquidation) (unreported, Supreme Court of South Australia, Burley J, 30 April 1998) applied IN THE MATTER OF RANELAGH HOUSE PTY LTD (ACN 001 160 078) (IN LIQUIDATION); PROGRAMMED MAINTENANCE SERVICES LIMITED (ACN 054 742 264) v RANELAGH HOUSE PTY LTD (ACN 001 160 078) (IN LIQUIDATION), ROBERT JOHN REDENBACH (IN HIS CAPACITY AS LIQUIDATOR OF RANELAGH HOUSE PTY LTD) (ACN 001 160 078) (IN LIQUIDATION)) and AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION NSD 1908 of 2008 JACOBSON J 19 DECEMBER 2008 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1908 of 2008 IN THE MATTER OF RANELAGH HOUSE PTY LTD (ACN 001 160 078) (IN LIQUIDATION) BETWEEN: PROGRAMMED MAINTENANCE SERVICES LIMITED (ACN 054 742 264) Plaintiff AND: RANELAGH HOUSE PTY LTD (ACN 001 160 078) (IN LIQUIDATION) First Defendant ROBERT JOHN REDENBACH (IN HIS CAPACITY AS LIQUIDATOR OF RANELAGH HOUSE PTY LTD) (ACN 001 160 078) (IN LIQUIDATION)) Second Defendant AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Third Defendant JUDGE: JACOBSON J DATE OF ORDER: 19 DECEMBER 2008 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pursuant to s 509(6) of the Corporations Act 2001 (Cth), that the Australian Securities and Investments Commission deregister Ranelagh House Pty Ltd (ACN 001 160 078) (in liquidation) on 15 December 2010. 2. The Amended Application be adjourned to 10 February 2009. 3. Costs of the Interlocutory Process filed on 15 December 2008 to be costs in the cause. 4. The Plaintiff's notice to produce to the second defendant dated 16 December 2008 be adjourned to 10 February 2009. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1908 of 2008 IN THE MATTER OF RANELAGH HOUSE PTY LTD (ACN 001 160 078) (IN LIQUIDATION) BETWEEN: PROGRAMMED MAINTENANCE SERVICES LIMITED (ACN 054 742 264) Plaintiff AND: RANELAGH HOUSE PTY LTD (ACN 001 160 078) (IN LIQUIDATION) First Defendant ROBERT JOHN REDENBACH (IN HIS CAPACITY AS LIQUIDATOR OF RANELAGH HOUSE PTY LTD) (ACN 001 160 078) (IN LIQUIDATION)) Second Defendant AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Third Defendant JUDGE: JACOBSON J DATE: 19 DECEMBER 2008 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The plaintiff makes application under s 509(6) of the Corporations Act 2001 (Cth) for an order that ASIC deregister the company known as Ranelagh House Pty Ltd on 15 December 2010. 2 The plaintiff claims to be a creditor of Ranelagh House, which went into liquidation. The plaintiff notified the liquidator of its claim to be a creditor in August 2008. 3 The plaintiff contends that on 22 September 2008, without any communication from the liquidator in relation to the claim made by the plaintiff, the liquidator made a final distribution from the funds available to the liquidator which consisted of a significant surplus that was distributed to the members of the company. The plaintiff also contends that the liquidator did not have regard to its claim in the liquidation of the company. 4 Final accounts were filed by the liquidator with ASIC, the effect of which would have been that under s 509(5) of the Act, ASIC would have been required to deregister the company at the end of the period of three months after the return was lodged. The effect of this would have been that the company would be deregistered on 29 December 2008. Within the three-month period, the plaintiff filed an application which included the claim for an order under s 509(6) that ASIC deregister the company on 15 December 2010. 5 I have been taken to affidavit evidence which sets out the nature of the claim made by the plaintiff for breach of contract. The plaintiff asserts that the company owes it a debt in the sum of nearly $182,000. The application having been made within the period referred to in s 509(6), I am satisfied that I have power to make the order. 6 The application is not made by the liquidator, but it is made by the plaintiff as an interested party. There is authority in a decision in Kerol Pty Ltdv Vergeld Engineering Pty Ltd (in liquidation) (unreported, Supreme Court of South Australia, Burley J, 30 April 1998) that a creditor is an interested party within the terms of s 509(6). The application in that case was quite similar to that which is made in the present proceedings. 7 In Kerol,Judge Burley said that the subsection confers a discretion on the Court to defer the dissolution of the company in two circumstances, one of which is that the continued existence of the company is necessary in order to effect some proper purpose. In that case, the proper purpose was the maintenance of proceedings in the District Court against the company by the plaintiffs. Here it is the continuation of the proceedings in this Court in which the plaintiff seeks to recover its debt in the amount, as I have said, of approximately $182,000. 8 I do not see that the present circumstances are materially different from those which existed in Kerol. Moreover, as Judge Burley said, the other circumstances in which the discretion to defer dissolution may be exercised arise where the interested party needs to make an application in relation to the administration of the liquidation. Here it may be necessary for the liquidator to seek to recover a part of the surplus from the members. That is a further reason for me to exercise my discretion to make the order. 9 In Billingham; Re WM Ritchie (Aust) Pty Ltd [2007] NSWSC 325, Barrett J made an order under s 509(6) upon an application by the liquidators of a company. His Honour observed that at [3] that the application was made in circumstances where the liquidators had completed their administration and distributed the surplus to the members. The liquidators were unaware at all material times that the creditors had instituted proceedings in the District Court of South Australia. They sought an extension of the registration of the company for a period of approximately six months and his Honour made an order in those terms. 10 Barrett J observed at [11] that a court's jurisdiction under s 509(6) cannot be exercised after the expiration of the period of three months of the lodgment of the liquidator's final return. The effect of what his Honour said at [11] is that an order under the subsection can only be made once. Accordingly, a party requesting an order will need to arrive at a period sufficient to enable the purpose for which the order is made to be achieved. 11 Here, the plaintiff seeks an extension for two years. At first sight, that seems to be a period which might be thought to be excessive, however, bearing in mind what Barrett J said about the limitation upon the power to make such an order, I have come to the view that I ought to extend the registration of the company for the full two-year period as sought by Ms Soars of counsel for the plaintiff. 12 In coming to this view, I have heard from counsel for the first and second defendants; he does not oppose the extension for that period of time. Also, I have before me a letter from ASIC which states that ASIC does not consider it necessary to make submissions in regard to the application. ASIC never consents to, nor opposes the making of orders sought pursuant to s 509(6) of the Act. Accordingly, I propose to make orders in terms of the short minutes of order provided by the plaintiff, which I will sign and date and place with the Court papers. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate: Dated: 27 January 2009 Counsel for the Plaintiff: J A Soars Solicitor for the Plaintiff: Robert James Lawyers Counsel for the First & Second Defendants: P Doyle Gray Solicitor for the First & Second Defendants: B Bilinsky & Co, Solicitors Date of Hearing: 19 December 2008 Date of Judgment: 19 December 2008