FEDERAL COURT OF AUSTRALIA Gimima Pty Ltd v Sustainable Freshwater Technologies Ltd [2011] FCA 676 Citation: Gimima Pty Ltd v Sustainable Freshwater Technologies Ltd [2011] FCA 676 Parties: GIMIMA PTY LTD ACN 063 740 152 and THE GOOD OIL GROUP PTY LTD ACN 077 128 860 v SUSTAINABLE FRESHWATER TECHNOLOGIES LTD ACN 136 930 615 and BRIEN EDWARD GONINAN File number(s): NSD 306 of 2011 Judge: JAGOT J Date of judgment: 8 June 2011 Catchwords: BANKRUPTCY AND INSOLVENCY – consideration of proposed consent orders including winding-up of defendant company in insolvency and appointment of liquidator Legislation: Corporations Act 2001 (Cth) ss 232, 233, 459A, 461(1)(k) Date of hearing: 8 June 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 8 Counsel for the Plaintiffs: Mr A Clauzel (appeared with leave) Counsel for the First Defendant: Mr D Jacobs (appeared with leave) Solicitor for the Second Defendant: Mr A Atkinson of Cameron Gillingham Boyd Solicitors IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 306 of 2011 BETWEEN: GIMIMA PTY LTD ACN 063 740 152 First Plaintiff THE GOOD OIL GROUP PTY LTD ACN 077 128 860 Second Plaintiff AND: SUSTAINABLE FRESHWATER TECHNOLOGIES LTD ACN 136 930 615 First Defendant BRIEN EDWARD GONINAN Second Defendant JUDGE: JAGOT J DATE OF ORDER: 8 JUNE 2011 WHERE MADE: SYDNEY BY CONSENT, THE COURT ORDERS THAT: 1. The first defendant, Sustainable Freshwater Technologies Ltd, be wound up in insolvency pursuant to the provisions of the Corporations Act 2001 (Cth). 2. Giles Geoffrey Woodgate of Woodgate & Co be appointed as the liquidator of the first defendant. 3. The interlocutory injunctions issued by the Court on 17 March 2011 and continued on 21 March 2011 be dissolved, and the application filed on 17 March 2011 be otherwise dismissed. 4. The taxed costs of the plaintiffs be reimbursed from the assets of the first defendant in accordance with the provisions of the Corporations Act 2001 (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 NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 306 of 2011 BETWEEN: GIMIMA PTY LTD ACN 063 740 152 First Plaintiff THE GOOD OIL GROUP PTY LTD ACN 077 128 860 Second Plaintiff AND: SUSTAINABLE FRESHWATER TECHNOLOGIES LTD ACN 136 930 615 First Defendant BRIEN EDWARD GONINAN Second Defendant JUDGE: JAGOT J DATE: 8 JUNE 2011 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This proceeding concerns an application made under ss 232, 233, 459A and 461(1)(k) of the Corporations Act 2001 (Cth). The plaintiffs sought (amongst other things) orders that the first defendant, Sustainable Freshwater Technologies Ltd (Sustainable Freshwater Technologies), be wound up on the ground of insolvency or on just and equitable grounds, and an order that a liquidator be appointed. On 21 March 2011 the parties to the proceeding were directed to attend mediation. As a consequence of that mediation, all parties agreed and executed proposed consent orders providing for the winding-up in insolvency of the first defendant, the appointment of a liquidator, the dissolution of certain interlocutory injunctions, and an arrangement as to costs. 2 Mr Anthony Clauzel is a director of Gimima Pty Ltd (Gimima), the first plaintiff, and of The Good Oil Group Pty Ltd (The Good Oil Group), the second plaintiff. I have given Mr Clauzel leave to appear on behalf of the first and second plaintiffs in his capacity as a director of those corporations for the purpose of the consideration of the proposed consent orders. 3 Mr David Jacobs is a director and secretary of the first defendant, Sustainable Freshwater Technologies. Again for the purpose of the consideration of the proposed consent orders, I have given Mr Jacobs leave to appear on behalf of the first defendant. 4 Mr Atkinson, solicitor, has appeared on behalf of the second defendant, Mr Brien Goninan. Mr Goninan is a director and shareholder of the first defendant. 5 In evidence before me I have the affidavit of Anthony Clauzel sworn 15 March 2011. Relevantly, Mr Clauzel deposes to the fact that each of Gimima and two other companies in which he holds an interest – one of which is The Good Oil Group – are shareholders of Sustainable Freshwater Technologies. Further, Mr Clauzel deposes to the fact that Gimima and Sustainable Freshwater Technologies entered into a loan agreement on 10 May 2009. The Good Oil Group and Sustainable Freshwater Technologies entered into a loan agreement on the same date. According to Mr Clauzel's affidavit, the repayment dates under both loan agreements have now passed, leading to events of default by Sustainable Freshwater Technologies under each agreement. According to Mr Clauzel, Sustainable Freshwater Technologies remains indebted to Gimima in the amount of approximately $270,000 and to The Good Oil Group in the amount of approximately $334,000. 6 Although Mr Goninan does not admit the quantum of the amounts owing, it is common ground between the parties that Sustainable Freshwater Technologies is indebted to Gimima and The Good Oil Group pursuant to the loan agreements. 7 I also have in evidence an affidavit of David Jacobs, who (as noted above) is a director and secretary of Sustainable Freshwater Technologies. According to his affidavit, Mr Jacobs is aware that The Good Oil Group and Gimima have issued letters of demand for repayment of the amounts advanced by them to Sustainable Freshwater Technologies. Mr Jacobs says that Sustainable Freshwater Technologies cannot now pay its debts as and when they fall due, and is therefore insolvent. 8 In these circumstances I am satisfied that the first defendant, Sustainable Freshwater Technologies, is insolvent and that it is appropriate that orders be made by consent as proposed by the parties. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. Associate: Dated: 8 June 2011