FEDERAL COURT OF AUSTRALIA Deputy Commissioner of Taxation, in the matter of Elhaj Financial Services Pty Ltd v Elhaj Financial Services Pty Ltd [2011] FCA 180 Citation: Deputy Commissioner of Taxation, in the matter of Elhaj Financial Services Pty Ltd v Elhaj Financial Services Pty Ltd [2011] FCA 180 Parties: DEPUTY COMMISSIONER OF TAXATION v ELHAJ FINANCIAL SERVICES PTY LTD ACN 105 921 560 File number: WAD 190 of 2010 Judge: SIOPIS J Date of judgment: 16 February 2011 Catchwords: CORPORATIONS – winding up orders made when company was already in liquidation – second winding up orders set aside. Legislation: Federal Court Rules O 35 r 7(2)(a) Cases: Dewina Trading Sdn Bhd v Ion International Pty Ltd (1996) 71 FCR 75 Date of hearing: 16 February 2011 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 11 Counsel for the Plaintiff: Ms J Ding Solicitor for the Plaintiff: Australian Taxation Office Legal Services Branch Counsel for the Defendant: The Defendant did not appear. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 190 of 2010 IN THE MATTER OF ELHAJ FINANCIAL SERVICES PTY LTD ACN 105 921 560 DEPUTY COMMISSIONER OF TAXATION Plaintiff ELHAJ FINANCIAL SERVICES PTY LTD ACN 105 921 560 Defendant JUDGE: SIOPIS J DATE OF ORDER: 16 february 2011 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. Orders 1, 2 and 3 made by District Registrar Jan on 17 August 2010 are set aside. 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 WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 190 of 2010 IN THE MATTER OF ELHAJ FINANCIAL SERVICES PTY LTD ACN 105 921 560 DEPUTY COMMISSIONER OF TAXATION Plaintiff ELHAJ FINANCIAL SERVICES PTY LTD ACN 105 921 560 Defendant JUDGE: SIOPIS J DATE: 16 february 2011 PLACE: PERTH REASONS FOR JUDGMENT 1 This is an application which is brought by the plaintiff for the setting aside of orders which were made by District Registrar Jan on 17 August 2010 for the winding up of the company, Elhaj Financial Services Pty Ltd. 2 On that day, District Registrar Jan made the following orders: (1) Elhaj Financial Services Pty Ltd be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth). (2) Mr Kitay, of WHK Horwath, be appointed as liquidator of the said company. (3) The plaintiff's costs of the application be fixed in the sum of $1,145 and be reimbursed in accordance with subsection 466(2) of the Corporations Act 2001 (Cth). 3 The plaintiff now seeks, pursuant to O 35 r 7(2)(a) of the Federal Court Rules, orders setting aside the orders made by District Registrar Jan. That rule provides: 7(2) The Court, may vary or set aside a judgment or order after the order has been entered where: (a) the order has been made in the absence of a party, whether or not the absent party is in default of appearance or otherwise in default and whether or not the absent party had notice of the motion for the order. 4 The facts in this case are somewhat unusual. 5 At the time that the plaintiff made the application for the winding up of the company, a representative of the plaintiff undertook a company search of the company. The company search did not reveal any other application was pending for the winding up of the company. Those acting on behalf of the plaintiff continued to believe that to be the case when the winding up application came on for hearing before District Registrar Jan on 17 August 2010. However, later on 17 August 2010, and after District Registrar Jan had made the orders winding up the company, a representative of WHK Horwath contacted a representative of the plaintiff, and advised that the company was already the subject of a winding up order and that Mr Kitay would, therefore, not proceed with the appointment as liquidator. 6 A representative of the plaintiff then conducted a further company search of the company. That company search revealed that another petitioner, realestate.com.au Pty Limited, had made an application for the winding up of the company on 5 July 2010, and that orders for the winding up of the company and the appointment of liquidators had been made on 4 August 2010, by the Supreme Court of Victoria. 7 As I mentioned, the plaintiff relies upon O 35 r 7(2)(a). There is evidence before the Court that the company did not appear before District Registrar Jan at the hearing of the winding up application on 17 August 2010. In those circumstances, the discretion which is provided for in O 35 r 7(2)(a) is enlivened. The circumstances in this case are such that the Court would readily exercise its discretion to set aside the orders made by District Registrar Jan. 8 First, and this would be a sufficient reason in itself, the Court has no power to make an order for the winding up of a company, where such an order has already been made (Dewina Trading Sdn Bhd v Ion International Pty Ltd (1996) 71 FCR 75). 9 Secondly, it is clear that the orders were made in ignorance of the existence of a preexisting order for the winding up of the company. I accept the evidence that the representative of the plaintiff was of the genuine belief, at the time that District Registrar Jan made the orders, that there was no other proceeding on foot to wind up the company. I accept, therefore, that everyone concerned was acting in good faith. 10 Thirdly, both the liquidators appointed to the company by the Supreme Court of Victoria, and the liquidator purportedly appointed by the orders of this Court, do not object to the making of the order sought by the plaintiff. 11 For those reasons, I will order that the orders made by District Registrar Jan on 17 August 2010, are set aside. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. Associate: Dated: 3 March 2011