New South Wales Supreme Court CITATION : Alam v Quest Enterprises [2006] NSWSC 838 HEARING DATE(S) : 04/08/06 JUDGMENT DATE : 4 August 2006 JURISDICTION : Equity Division JUDGMENT OF : White J EX TEMPORE JUDGMENT DATE : 08/04/2006 DECISION : Application refused. CATCHWORDS : PRACTICE & PROCEDURE - Adjournment - Administrator of defendant sought adjournment of plaintiffs' application for winding-up of defendant - Adjournment sought to allow administrator opportunity to investigate possibility of deed of company arrangement - Whether adjournment would serve interests of defendant's creditors - Where plaintiffs are defendant's only creditors - s 440A(2) of Corporations Act 2001 (Cth) considered - Application for adjournment refused. LEGISLATION CITED : Corporations Act 2001 (Cth) CASES CITED : Switz Pty Limited v Glowbind Pty Limited (2000) 48 NSWLR 661 Alam v Quest ENterprises [2006] NSWSC 752 Anis Alam & Anor PARTIES : v Quest Enterprises (NSW) Pty Ltd FILE NUMBER(S) : SC 2534/06 COUNSEL : Plaintiff: M Ashhurst Defendant: Mr Khoury (for the administrator) SOLICITORS : Plaintiff: Uther Webster & Evans Defendant: Leonard Legal IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WHITE J Friday, 4 August 2006 2534/06 Anis Alam & Anor v Quest Enterprises (NSW) Pty Ltd JUDGMENT 1 HIS HONOUR: The defendant, for whom Mr Khoury appears on the instructions of the administrator, applies for an adjournment of the hearing of the originating process. The originating process for the winding-up of the defendant was filed on 28 April 2006. Orders were made for the filing of evidence on the application and the proceedings were stood over to 3 July 2006. It came before me when I was duty judge on 17 and 18 July 2006. 2 On 17 July 2006, the plaintiffs sought to proceed on the hearing of their originating process. There were then before me two other applications. One was an interlocutory process in these proceedings in which the defendant sought, inter alia, that leave be given to it pursuant to s 459S of the Corporations Act 2001 (Cth) to oppose the application on the ground that the debt described in the statutory demand upon which the plaintiffs rely was not due and owing at the date of the statutory demand, or on the ground that the defendant had a genuine offsetting claim. 3 On 17 July 2006, counsel then appearing for the defendant opposed my hearing all three applications together and I decided on that day that, having regard to the principles stated in Switz Pty Limited v Glowbind Pty Limited (2000) 48 NSWLR 661 at 676, I should deal with that interlocutory process before the hearing of the originating process. I gave judgment on the interlocutory process, together with a related application in other proceedings, on 28 July 2006 (Alam v Quest Enterprises [2006] NSWSC 752). On that day I fixed the originating process for hearing before myself today. 4 An administrator was appointed to the defendant on 27 July 2006. When the originating process was called for hearing earlier this morning, there was no appearance for the defendant. I took evidence from the solicitor for the plaintiffs that he had been informed this morning by the solicitors who had appeared in the proceedings for the defendant that they had spoken to the administrator, who advised that he was trying to arrange an appearance today. I stood the matter down until noon today so that the plaintiffs' solicitors could contact the office of the administrator. Hence Mr Khoury's appearance. 5 Mr Khoury, on instructions from the administrator, has requested that the proceedings be adjourned. I am told that his instructions are that the administrator has not received any books or records of the company, but that it has been suggested to the administrator that a deed of company of arrangement may be proposed. I understand that no such deed has been proposed. The adjournment is sought in order that the administrator will be in a position, if a deed of company arrangement is proposed, to form a view as to whether or not it is in the interests of creditors for the company to be wound up, or whether it is in their interests that the company enter into whatever deed may be proposed. 6 Subsection 440A(2) of the Corporations Act requires 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. It is significant that the evidence read from Mr Gino Cassaniti on the hearing of the interlocutory process, which was re-tendered before me on this application, was that, aside from the liability of the defendant company to the plaintiffs, Mr Cassaniti was not aware of the company having any other creditors. He has deposed to being the director of the company. 7 The plaintiffs opposed the adjournment. 8 There is nothing before me in the way of evidence to satisfy me that it is in the interests of the company's creditors for the company to remain under administration rather than be wound up. No particular proposal has been advanced. It is of some concern that a week after the appointment of the administrator the company's books have not been delivered to him (see s 438B). If, as Mr Cassaniti has deposed, the plaintiffs are the only creditors of the company, there would seem to be little purpose in the company being put into administration with a view to its entering into a deed of company arrangement, rather than any proposed arrangement being made directly between the company and the plaintiffs. 9 For these reasons, I refuse the application for the adjournment. ****** 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.