ASIC v Tutormaster Pty Ltd & 1 Or [2006] NSWSC 1430

New South Wales Supreme Court

CITATION : ASIC v Tutormaster Pty Ltd & 1 Or [2006] NSWSC 1430

HEARING DATE(S) : 15/12/06

JUDGMENT DATE : 15 December 2006

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : White J

EX TEMPORE JUDGMENT DATE : 12/15/2006

DECISION : See para 7 of judgment.

CATCHWORDS : CORPORATIONS – Winding-up – Other grounds for winding-up – Application by Australian Securities and Investments Commission (ASIC) for orders that the first and second defendants be wound up on just and equitable ground – Where defendants have no presence at registered offices – Where director of each defendant of unknown whereabouts – Where in public interest that defendants be wound up – No question of principle – Application granted.

LEGISLATION CITED : Corporations Act 2001 (Cth) Uniform Civil Procedure Rules 2005 (NSW)

Australian Securities Commission v AS Nominees Ltd (1995) 62 FCR 504 CASES CITED : Australian Securities and Investments Commission v Austimber Pty Ltd (1999) 17 ACLC 893 Australian Securities & Investments Commission v ABC Fund Managers & ors (2001) 39 ACSR 443

Australian Securities & Investments Commission PARTIES : v Tutormaster Pty Ltd & Anor

FILE NUMBER(S) : SC 6252/06

COUNSEL : Plaintiff: D R Stack Defendant: N/A

SOLICITORS : Plaintiff: Conrad Gray Solicitor

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

WHITE J

Friday, 15 December 2006

6252/06 Australian Securities & Investments Commission v Tutormaster Pty Ltd & Anor JUDGMENT 1 HIS HONOUR: This is an application by the Australian Securities and Invesments Commission ("ASIC") for an order that the first defendant, Tutormaster Pty Ltd ("Tutormaster"), and ABC Tutors Pty Ltd ("ABC Tutors"), be wound up pursuant to s 461(1)(k). ASIC has investigated or is investigating the affairs of each company and has standing to make this application pursuant to s 464 of the Corporations Act 2001 (Cth). 2 The application for the winding-up of the companies is made on the just and equitable ground. A company may be wound up on the just and equitable ground where there is a lack of confidence in the management of the affairs of the company and a risk to the public interest that warrants protection, particularly where there has been mismanagement or misconduct in the affairs of the corporation, or regular or repeated threatened breaches of the Corporations Act (Australian Securities Commission v AS Nominees Ltd (1995) 62 FCR 504; Australian Securities & Investments Commission v Austimber Pty Ltd (1999) 17 ACLC 893 at 894-895; Australian Securities & Investments Commission v ABC Fund Managers & Ors (2001) 39 ACSR 443). 3 According to returns filed with ASIC, a Mr Salvatore Paje is the sole director of each company. Each company has a registered office at Level 2, 50 York Street, Sydney. Endeavours to contact Mr Paje have been unavailing. The office at Level 2, 50 York Street, Sydney is occupied by a business called Art Workspace, which leases out office space to other companies. Neither ABC Tutors nor Tutormaster has any presence at that address. The occupant of that address has advised ASIC that mail received for Tutormaster or ABC Tutors was being returned to sender. It appears that the companies stopped paying that business for use of those premises. 4 The companies' stationery indicates that their principal place of business is at Level 1, 299 Elizabeth Street, Sydney. Those premises are occupied by a company called Genesis Offices Pty Ltd, which is in the business of providing serviced offices. It appears that Tutormaster did use those premises as a business address but ceased doing so in October or December 2005. 5 Both companies were in the business of providing tutorial services to students. They secured tutors with a promise to pay for the tutors' services and received moneys in advance from students seeking services of tutors. From late 2005, persons dealing with the companies either as tutors or as students were consistently unable to communicate with any person concerned in the business of the companies, save to receive recorded telephone messages when they telephoned telephone numbers which they had been given. 6 The address of the director, Mr Paje, notified to ASIC was not his residential address, but the address at Level 2, 50 York Street, Sydney. He is not present at that address. This is an apparent breach of s 205B(1) of the Corporations Act. The companies have not notified ASIC of any change to their registered office, in apparent breach of s 142(1) and (2) of the Corporations Act. Moreover, it appears that the companies have simply ceased to carry on business, leaving tutors to whom money is owed without any recourse to recover that money. Likewise, students who have prepaid for courses are unable to obtain the services contracted for and appear to have no recourse for recovery of moneys prepaid. It is very much in the public interest that the companies be wound up. 7 To the extent necessary, I give leave pursuant to rule 6.19 of the Uniform Civil Procedure Rules 2005 (NSW) for the plaintiff to join Tutormaster and ABC Tutors as defendants in the proceedings. Otherwise, I make orders in accordance with the short minutes of order which I initial, date today and place with the papers. That includes an order that the orders may be entered forthwith. The exhibits may be returned.