Employers' Mutual Indemnity (Workers Compensation) Ltd v Surf City Holdings Pty Ltd [2004] NSWSC 1024

New South Wales Supreme Court

CITATION : Employers' Mutual Indemnity (Workers Compensation) Ltd v Surf City Holdings Pty Ltd [2004] NSWSC 1024 HEARING DATE(S) : 21 October 2004 JUDGMENT DATE : 21 October 2004 JURISDICTION: Equity JUDGMENT OF : Hamilton J DECISION : Adjournment granted of proceedings to wind up company under administration.

CATCHWORDS : CORPORATIONS [230] - Application under Corporations Act 2001 (Cth) s 440A(2) to adjourn hearing - Relevant considerations - Whether it is in the interests of creditors for company to continue under administration rather than be wound up - Evidence slight - Application granted. LEGISLATION CITED : Corporations Act 2001 (Cth), s 440A CASES CITED : Deputy Commissioner of Taxation: In the matter of First Netcom Pty Limited [2000] NSWSC 989 Re First Netcom Pty Ltd; Deputy Commissioner of Taxation v First Netcom Pty Ltd 35 ACSR 615 PARTIES : Employers' Mutual Indemnity (Workers Compensation) Ltd (P) Surf City Holdings Pty Limited (D) FILE NUMBER(S) : SC 4953/04 J F Merewether, Solicitor (P) COUNSEL : S Mullette, Solicitor (D) A Johnson, Solicitor (Supporting creditors) Forbes Dowling (P) SOLICITORS : The Argyle Partnership (D) A Johnson, Solicitor (Supporting creditors)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

HAMILTON J

THURSDAY, 21 OCTOBER 2004

4953/04 EMPLOYERS' MUTUAL INDEMNITY (WORKERS COMPENSATION) LTD v SURF CITY HOLDINGS PTY LTD JUDGMENT 1 HIS HONOUR: What is before me is an application to wind up the defendant, which was for hearing before the Registrar today. The adjournment application has been referred to me as Duty Judge by the Registrar. The application for adjournment is supported by the affidavit of Sule Arnautovic, a registered liquidator, who deposes that he was yesterday, 20 October 2004, appointed administrator of the defendant. 2 The situation as Mr Arnautovic sees it is there are no assets of the company and no likelihood of the creditors receiving a dividend if the company is put into liquidation today. The administrator is informed by Donna Batiste, a director of the company, that she intends to make a proposal to the administrator for the provision of funds which would permit a deed of company arrangement ("DOCA") to be entered into under which the creditors would receive something. The company as well as being without funds is not trading. 3 Section 440A(2) of the Corporations Act 2001 (Cth) provides for the Court to adjourn the hearing of an application for an order to wind up a company if the company is under administration and the Court is satisfied that it is in the interests of the company's creditors for the company to continue under administration rather than be wound up. 4 The principles that govern these applications were set out by Santow J in Re First Netcom Pty Ltd; Deputy Commissioner of Taxation v First Netcom Pty Ltd (2000) 35 ACSR 615. 5 Whilst the evidence is slight and not in very precise form, I have formed the view that it is in the interests of the company's creditors for the company to continue under administration. There appears to me to be little downside for this company being left for three or four weeks to see whether a DOCA can be entered into which will provide something for creditors who would otherwise receive nothing. The supporting creditor, the Deputy Commission of Taxation, consents to the application for adjournment. 6 The plaintiff came to oppose the application for adjournment, but now that the evidence is available, does not, I think, oppose it outright, but suggests that this is one of those middle course cases referred to by Santow J in Deputy Commissioner of Taxation: In the matter of First Netcom Pty Limited [2000] NSWSC 989, so that there should not be an adjournment until after 18 November, when the second creditors' meeting would have been held, but a shorter adjournment and the matter should be brought back before the Court at an earlier time to see what the proposal for a DOCA is to be. 7 However, in the circumstances, I have formed the view that that would create extra expense and there is not much downside from the matter going over for three or four weeks. 8 The result is that I propose to adjourn the winding up proceedings to 22 November 2004 in the Registrar's Corporations List. **********