FEDERAL COURT OF AUSTRALIA Deputy Commissioner of Taxation v Double Kaye Pty Ltd [2011] FCA 111 Citation: Deputy Commissioner of Taxation v Double Kaye Pty Ltd [2011] FCA 111 Parties: DEPUTY COMMISSIONER OF TAXATION v DOUBLE KAYE PTY LTD ACN 110 001 315 File number: SAD 199 of 2010 Judge: LANDER J Date of judgment: 9 February 2011 Legislation: Corporations Act 2001 (Cth) ss 440A(2), 482 Federal Court Rules O 35 r 7 Date of hearing: 9 February 2011 Place: Adelaide Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 8 Counsel for the Plaintiff: Mr R J Lindquist Solicitor for the Plaintiff: Hunt & Hunt Adelaide Counsel for the Defendant: Mr D A Starke Solicitor for the Defendant: Starke Lawyers IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 199 of 2010 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: DOUBLE KAYE PTY LTD ACN 110 001 315 Defendant JUDGE: LANDER J DATE OF ORDER: 9 FEBRUARY 2011 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The orders made by Registrar Christie on 2 February 2011 be set aside. 2. David Ashley Starke pay the plaintiff's costs thrown away by reason of the plaintiff's attendance before the Registrar on 2 February 2010 and the costs of this application. 3. David Ashley Starke pay the liquidator's expenses occasioned by the liquidator's appointment pursuant to the orders of Registrar Christie on 2 February 2011. 4. The proceeding be remitted to the Registrar for the hearing of the application for winding up under s 459P of the Corporations Act 2011 (Cth). 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 Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 199 of 2010 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: DOUBLE KAYE PTY LTD ACN 110 001 315 Defendant JUDGE: LANDER J DATE: 9 FEBRUARY 2011 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 This is an application made by notice of motion for the following orders: 1 that this matter be listed as a matter of urgency; 2 that the winding up order for the defendant be terminated; 3. in the alternative that the winding up order made against the defendant on 2 February 2011 be set aside; 4. directions as to the resumption of the management and control of the defendant by the administrator Mr Anthony Matthews; 5. Costs; … 2 On 2 February 2011 Registrar Christie made orders for the winding up of the defendant in insolvency and for the appointment of Mr Peter Lanthois as an official liquidator. She also fixed the plaintiff's costs in the sum of $3,190.80 and the costs of a supporting creditor, WorkCover Corporation in the sum of $330. The orders were made by the Registrar in response to an application under s 459P of the Corporations Act 2011 (Cth) (the Act) brought by the plaintiff on 6 December 2010. At the time that the Registrar made the orders, and having regard to the information before her, the orders were appropriate. 3 After the issue of the proceeding the defendant apparently resolved under s 436A that the company was insolvent and that an administrator should be appointed. An administrator, Mr Anthony Matthews, was appointed on 21 January 2011. He wrote to the creditors of the company including the plaintiff and the supporting creditor. On 1 February 2011 he chaired the first creditors' meeting which was attended by the supporting creditor on this application and at that meeting it was resolved that the second meeting of creditors would be held on 18 February 2011. 4 In the meantime, the defendant company had instructed a solicitor to appear on its behalf before the Registrar to advise the Registrar that an administrator had been appointed and to seek the adjournment of the proceeding because it was in the interest of the company's creditors for the company to continue under administration rather than be wound up. Unfortunately, the solicitor wrongly noted the time of the hearing and failed to attend at the hearing and the submission which he was to make was not known to the Registrar or, I think, to the plaintiff, and as a result the orders were made. 5 This application either seeks to terminate the winding up order or to set aside the order made for winding up. 6 It does not seem to me that it would be appropriate to terminate the winding up under s 482 of the Act, but there is good reason to set aside the order under O 35 r 7 of the Federal Court Rules. That rule allows for the setting aside of an order where a party does not appear at the hearing when the order was made. The failure of the company to appear at the hearing was the fault of the solicitor and in those circumstances it seems to me appropriate that the application be allowed and the orders set aside, and the matter remitted to the Registrar for consideration in the ordinary course of events. 7 It was put to me by Mr Lindquist, counsel for the plaintiff, that on considering an application to set aside orders of this kind I needed to satisfy myself under s 440A(2) that it was in the interests of the company's creditors for the company to continue under administration rather than be wound up. I do not agree with that submission. That consideration must be addressed on an application for an order to wind up a company by the judicial officer hearing that application. I am not hearing an application of that kind. I am simply hearing an application to set aside an order for the winding up of a company. In those circumstances, I do not think I need to be so satisfied but, of course, the Registrar, when the matter comes before her again, will need to be satisfied of that matter. 8 There seems to be no reason why the Court should not order the solicitor to pay the plaintiff's costs occasioned by his failure to attend and the liquidator's expenses setting aside this judgment occasioned by the making of the order and incurred before the order. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. Associate: Dated: 18 February 2011