New South Wales Supreme Court CITATION : Lane Cove v Geebung [2002] NSWSC 41 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 5480/01 HEARING DATE(S) : 07/02/02 JUDGMENT DATE : 7 February 2002 Lane Cove Council - Plaintiff PARTIES : Geebung Polo Club Pty Limited - Defendant Mr J.D. Green - Liquidator JUDGMENT OF : Barrett J COUNSEL : Ms S. Nash - Solicitor - Plaintiff and Liquidator Mr G.P. George - Defendant SOLICITORS : Sally Nash & Co - Plaintiff and Liquidator L.G. Parker & Co - Defendant CATCHWORDS : CORPORATIONS - winding-up - sole director seeks order setting aside winding-up order - need for leave under s.471A - various methods of retrieving company from liquidation LEGISLATION CITED : Corporations Act 2001 (Cth) Brolrik Pty Ltd v Sambah Holdings pty Ltd [2001] NSWSC 1171 CASES CITED : Deputy Commissioner of Taxation v Comdox No 69 Pty Ltd [1999] NSWSC 493 Rock Bottom Fashion Market Pty Ltd v H R & C E Griffiths Pty Ltd [2000] 2 Qd R 573 DECISION : Application adjourned 3 IN THE SUPREME COURT REVISED OF NEW SOUTH WALES EQUITY DIVISION BARRETT J THURSDAY 7 FEBRUARY 2002 5480/01 - LANE COVE COUNCIL v GEEBUNG POLO CLUB PTY LTD JUDGMENT 1 Before the court is an application by Martin Grant La Nauze who appears to be the sole director of Geebung Polo Club Pty Ltd. He does not claim to be a shareholder. An order for the winding up of that company was by made by the Registrar on 10 December 2001 on evidence showing service of and non-compliance with a statutory demand. Mr La Nauze's application is expressed to be an application that the winding up order "be set aside". Under a heading "Particulars" there is a reference to Pt. 40 r. 9 of the Supreme Court Rules. 2 Mr George, who appeared for Mr La Nauze, conceded that an issue arises under s.471A of the Corporations Act 2001 (Cth), in that Mr La Nauze has not been granted leave under that section to act as an officer of the company in liquidation: Rock Bottom Fashion Market Pty Ltd v H R & C E Griffiths Pty Ltd [2000] 2 Qd R 573; Brolrik Pty Ltd v Sambah Holdings Pty Ltd [2001] NSWSC 1171. 3 Ms Nash, who appeared for the both respondents to the notice of motion (Lane Cove Council, which was the applicant for winding up, and Mr Green, the liquidator), submitted that if there is to be an application by Mr La Nauze under s.471A(1)(d) for the leave of the court, that application should be properly formulated and advanced. She referred to r. 2.2 of the Corporations Law Rules which states that, in a proceeding already commenced to which the Corporations Law Rules apply (which clearly includes the winding up proceedings in which the order the subject of Mr La Nauze's complaint was made), any application should be made by filing an interlocutory process: r. 2.2(b). To the extent that any application for leave under s. 471A(1)(d) may be seen as not made in any proceeding already commenced, an originating process will be required: r. 2.2(a). 4 Ms Nash also submitted that there are deficiencies in Mr La Nauze's notice of motion, as to both form and substance, and that the appropriate course is for that notice of motion to be dismissed on the footing that a properly constituted application to challenge the winding up order or to stay or terminate the winding up may be duly pursued if those concerned in the company are minded to take such a course. 5 There is substance in what Miss Nash says. In a case such as this where the company was the defendant in proceedings in which an order for winding up was sought and obtained against it, an appeal under r. 16.1 of the Corporations Law Rules from the Registrar's decision to make the winding up order or an application under Pt. 40 r. 9 of the Supreme Court Rules to have that order set aside is appropriately made by the defendant company itself and not, as here, by its sole director in his own name. But if the defendant company is to be set in motion as appellant or applicant by its director, there must be leave under s.471A(1)(d). There is no such requirement, obviously enough, if a person having standing under s.482 seeks an order staying or terminating the winding up. Each of these avenues is, in general concept, available in a case where it is sought to retrieve a company from liquidation: Deputy Commissioner of Taxation v Comdox No 69 Pty Ltd [1999] NSWSC 493. The s. 482 option, however, is also unavailable to Mr La Nauze in this particular instance as he is not within the class of persons having standing under that section. There will be, in any event, differences as to what the court must find (and therefore as to what must be shown) as between the different methods of achieving what are, in commercial terms, generally equivalent results. 6 I am tempted to dismiss Mr La Nauze's notice of motion but a preferable course is that it be adjourned for a short period on the footing that if the company, under the auspices and direction of its sole director, is to seek to appeal from the Registrar's decision or to have the winding up order set aside, that course should be pursued only in the context of an application by the sole director under s.471A(1)(d) which is properly initiated and supported by evidence. 7 In that connection, one matter which will be of interest to the court is how the costs incurred by the company in seeking to bring the company out of liquidation (including any costs which may be awarded against it if the attempt is unsuccessful) will be financed. On general principle, if the attempt is unsuccessful and the winding up remains, it will be inappropriate for the assets held by the liquidator for the benefit the creditors and contributories to bear the burden of those costs. That is a point which should be borne in mind as any s.471A application is prepared. 8 This company has been in liquidation for almost two months. The liquidator, I am told, is in control of its assets and affairs, which is as it should be. The present application has not been made with great dispatch, although I recognise that the vacation did intervene. A short further period before the matter is dealt with can be accommodated. 9 I adjourn the notice of motion currently before the court to the Corporations List on Monday 25 February 2002 at 10am. 10 I direct that any application under s.471A(1)(d) that Mr La Nauze intends making to enable him to activate the company to initiate an application challenging the winding up order and any new application involving appeal against that order or stay or termination of the winding up, each with supporting affidavits, be served by Thursday, 21 February 2002 on the footing that each such application shall be returnable before the Corporations List Judge on 25 February 2002. 11 I give leave to Mr La Nauze to serve any amended notice of motion by 21 February 2002, returnable before the Corporations List Judge on 25 February 2002. 12 Costs are reserved. ****** Last Modified: 02/13/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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