New South Wales Supreme Court CITATION : Spurbest v North Sydney College [2005] NSWSC 449 HEARING DATE(S) : 2 May 2005 JUDGMENT DATE : 2 May 2005 JURISDICTION : Equity JUDGMENT OF : Campbell J DECISION : Company wound up. Advertising dispensed with. CATCHWORDS : CORPORATIONS - winding up - sole director and shareholder abandons company - winding up on just and equitable ground appropriate - dispensing with advertising appropriate LEGISLATION CITED : Corporations Act 2001 (Cth) Spurbest Pty Limited - Plaintiff PARTIES : North Sydney College Pty Limited - Defendant FILE NUMBER(S) : SC 2590/05 S Mullette, Solicitor - Plaintiff COUNSEL : No Appearance - Defendant The Argyle Partnership - Plaintiff SOLICITORS : No Appearance - Defendant LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST CAMPBELL J MONDAY 2 MAY 2005 2590/05 SPURBEST PTY LIMITED v NORTH SYDNEY COLLEGE PTY LTD JUDGMENT – Ex Tempore 1 HIS HONOUR: This is an application to wind up a company. The company conducts business as a provider of English courses to foreign students. It operates from leased premises in Chatswood. The petitioning creditor is the landlord of those premises, and is owed a little over $90,000 in rent. On 14 April 2005 it sent a statutory demand to the company. That has not produced any response. 2 The 21-day time period for complying with that statutory demand has not yet expired. Notwithstanding that, the application is made today to wind up the company, on the just and equitable ground. 3 The company has only one director, namely Mr Charles Cho, who is also the sole shareholder. Mr Cho had formerly resided in Australia but at the start of March 2004 he left Australia and travelled to Korea. He told Ms Kim, an administration manager employed by the company, that he was going back to Korea for his business, and for treatment of an illness. He managed the company by remote control from Korea for a period of time, but on 19 April 2005 sent an email to "admin@northsydneycollege.com" entitled "Letter of Resignation" saying: "Since I have very serious health problem I cannot continue my duty as director at North Sydney English College. Also, I can not continue financial support to the college. Therefore I am going to resign my post as director from today." He has not been heard from since then. 4 Last week, on 22 April 2005, Palmer J appointed Mr Sutherland as provisional liquidator of the company. Mr Sutherland has endeavoured to contact Mr Cho, without success. Without information from the sole director, Mr Sutherland has not been able to provide a complete report as to affairs. However, the information he has been able to glean from the company's records (which were not up to date) suggest that total assets were a little over $28,000, and liabilities of the order of $567,000. Of these, general unsecured creditors are estimated to be $317,000. 5 Incorporation is a privilege which is granted on terms set out in the Corporations Act 2001 (Cth). One of those terms is, in summary, that the company be subjected to proper administration, in the various ways required by the Act. This company is rudderless, as well as apparently insolvent. It is not appropriate it should be allowed to continue in existence. I order that Roderick Mackay Sutherland be appointed as liquidator of the company. This order may be entered forthwith. I order that the costs of the petitioning creditor be costs paid from the assets of the company. 6 I will make a supplementary order, whereby the plaintiff is excused from compliance with the rules relating to advertising. The usual procedures for advertising, important as they are where there is the opportunity for real dispute about whether a company should be wound up or not, have considerably less importance when the management of the company has abandoned it. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.