FEDERAL COURT OF AUSTRALIA Cassidy; in the matter of Pattrupp Holdings Pty Ltd v Pattrupp Holdings Pty Ltd (No 2) [2011] FCA 1099 Citation: Cassidy; in the matter of Pattrupp Holdings Pty Ltd v Pattrupp Holdings Pty Ltd (No 2) [2011] FCA 1099 Parties: BARBARA MOLLY CASSIDY v PATTRUPP HOLDINGS PTY LTD ACN 094 797 010 and RUMMINN HOLDINGS PTY LTD ACN 101 545 206 File number(s): ACD 38 of 2011 Judge: JACOBSON J Date of judgment: 31 August 2011 Legislation: Corporations Act 2001 (Cth), ss 459, 461 Cases cited: Cassidy, in the matter of Pattrupp Holdings Pty Ltd v Pattrupp Holdings Pty Ltd [2011] FCA 929 Date of hearing: 31 August 2011 Place: Sydney Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 12 Counsel for the Plaintiff: Mr J Larkings Solicitor for the Plaintiff: William Love & Nicol IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION ACD 38 of 2011 IN THE MATTER OF PATTRUPP HOLDINGS PTY LTD ACN 094 797 010 AND RUMMINN HOLDINGS PTY LTD ACN 101 545 206 BETWEEN: BARBARA MOLLY CASSIDY Plaintiff AND: PATTRUPP HOLDINGS PTY LTD ACN 094 797 010 First Defendant RUMMINN HOLDINGS PTY LTD ACN 101 545 206 Second Defendant JUDGE: JACOBSON J DATE OF ORDER: 31 AUGUST 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pattrupp Holdings Pty Ltd ACN 094 797 010 be wound up. 2. Rumminn Holdings Pty Ltd ACN 101 545 206 be wound up. 3. Mr Henry Joseph Kazar of Level 3 Engineering House, 11 National Circuit, Barton, an official liquidator, be appointed liquidator of the Defendants. 4. The remuneration of the provisional liquidator, Mr Henry Joseph Kazar, to date be fixed in the amount of: (a) $4874.00 plus GST in respect of Pattrupp Holdings Pty Ltd ACN 094 797 010; and (b) $4752.00 plus GST in respect of Rumminn Holdings Pty Ltd ACN 101 545 206. 5. The costs of this Application be part of the costs, charges and expenses of the winding up pursuant to s 482(4) of the Corporations Act 2001 (Cth). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION ACD 38 of 2011 IN THE MATTER OF PATTRUPP HOLDINGS PTY LTD ACN 094 797 010 AND RUMMINN HOLDINGS PTY LTD ACN 101 545 206 BETWEEN: BARBARA MOLLY CASSIDY Plaintiff AND: PATTRUPP HOLDINGS PTY LTD ACN 094 797 010 First Defendant RUMMINN HOLDINGS PTY LTD ACN 101 545 206 Second Defendant JUDGE: JACOBSON J DATE: 31 AUGUST 2011 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application for an order that the companies now known as Pattrup Holdings Pty Ltd and Rumminn Holdings Pty Ltd ("the Companies") be wound up on the just-and-equitable ground stated in s 461(1)(k) of the Corporations Act 2001 (Cth). 2 This matter first came before Jagot J on 28 July 2011 when her Honour ordered that Mr Henry Joseph Kazar be appointed as the provisional liquidator of each of the companies: see Cassidy, in the matter of Pattrupp Holdings Pty Ltd v Pattrupp Holdings Pty Ltd [2011] FCA 929. Her Honour observed in her reasons for judgment that Mr Kazar consented to be appointed by the court as the provisional liquidator of the companies as well as to act as liquidator of the companies in the event that winding-up orders are made. 3 There was evidence before Jagot J, to which her Honour referred at [2] of her judgment, that the plaintiff, Ms Cassidy, was owed $165,000 pursuant to an order of the Court made by Moore J on 31 May 2011 for the payment of $165,000. That sum had not been paid at the time when her Honour appointed Mr Kazar as provisional liquidator. Although Ms Cassidy's affidavit of 27 July 2011, which establishes this fact, has not since been updated, I can infer from the other evidence before me today that the sum remains outstanding. 4 The essential basis upon which her Honour ordered the appointment of a provisional liquidator was that the Companies have no director and are thus rudderless and that the Companies cannot comply with the order of the Court for payment of the sum of $165,000 because the Companies are not subject to any corporate control. 5 Mr Kazar has sworn an affidavit dated 30 August 2011 which provides further evidence of the absence of any corporate control of the Companies. He states that his investigations have revealed that the business formerly carried on by the Companies has ceased. Mr Kazar's examinations revealed that three other "EdSonic companies" (known as EdSonic Holdings Pty Ltd, EdSonic Publications Pty Ltd, and EdSonic Education & Training Pty Ltd) appear to be carrying on a business similar to that formerly conducted by the Companies. 6 Significantly, Mr Kazar deposes to the fact that the Companies have no properly appointed directors. He has concluded that the Companies have defective management insofar as no directors are appointed to either company and each company has insufficient funds available to it to discharge its liabilities as they fall due. Accordingly, Mr Kazar has formed the opinion that the Companies are insolvent and ought to be wound up. 7 I have been taken to the evidence which establishes that all necessary procedural requirements that are to be satisfied before a winding-up order can be made have been established. In particular, I am satisfied that the application has been served on the companies and that the application has been advertised. When the matter was called this morning, there was no appearance on behalf of either of the companies. 8 For the reasons set forth in Mr Kazar's affidavit, in particular his evidence as to the absence of appointment of any directors of the companies and his conclusion that the companies have defective management, I am satisfied that I ought to order, pursuant to s 461(1)(k) that the company be wound up on the just-and-equitable ground. 9 As required by that subsection, I should express the view that I am of the opinion that it is just and equitable that each of the companies be wound up. Although the petitioning creditor does not rely on the insolvency ground stated in s 459(p), it would nonetheless have been open to me to make an order under that section that the Companies be wound up in insolvency. 10 Mr Larkings also seeks an order approving the remuneration of the provisional liquidator for the work carried out by him from the date of his appointment to date. The amounts which he seeks are $4874 plus GST in respect of Pattrup and $4752 plus GST in respect of Rumminn. I am satisfied on the basis of the material in Mr Kazar's affidavit and in particular the schedules which appear at annexure B that I ought to approve Mr Kazar's remuneration in the amounts stated above. 11 I will make orders in terms of para 5 of the originating process and I approve the remuneration of Mr Kazar as provisional liquidator in the amounts of $4874 plus GST in respect of Pattrup and $4752 plus GST in respect of Rumminn. I will also approve the payment of Mr Kazar's remuneration in those amounts to be paid from the assets of each of the companies. 12 I should add that there is evidence in Mr Kazar's affidavit that he has been successful in obtaining the sum of $52,680.83 from Copyright Agency Limited. He has apportioned the funds as between the companies on the following basis: $36,123.24 in respect of Pattrupp and $16,557.59 in respect of Rumminn. Those payments represent royalties and other funds payable to CAL, which is a third party escrow holder of copyright works and is entitled to receive royalties on behalf of the companies in respect of the sale of copyrighted works. Mr Kazar therefore holds sufficient funds to meet the payments of remuneration referred to above. 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: 31 August 2011