NAB v Idoport [2008] NSWSC 999

New South Wales Supreme Court

CITATION : NAB v Idoport [2008] NSWSC 999

HEARING DATE(S) : 03/09/08

JUDGMENT DATE : 3 September 2008

JURISDICTION : Equity

JUDGMENT OF : White J

EX TEMPORE JUDGMENT DATE : 3 September 2008

DECISION : 1. Make an order in accordance with paras 1 and 2 of the originating process; 2. order that the defendant pay the costs of the proceedings; 3. the exhibits may be returned after 28 days.

CATCHWORDS : CORPORATIONS - winding-up in insolvency - company clearly insolvent - no question of principle

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

CASES CITED : National Australia Bank Limited v Idoport Pty Limited [2007] NSWSC 1349

National Australia Bank Limited & 11 Ors PARTIES : v Idoport Pty Ltd

FILE NUMBER(S) : SC 1878/07

COUNSEL : Plaintiff: T Bathurst QC & R Dick Defendant: M J Dawson

SOLICITORS : Plaintiff: Freehills Defendant: Mimmo & Associates

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WHITE J

Wednesday, 3 September 2008

1878/07 National Australia Bank Limited & 11 Ors v Idoport Pty Ltd JUDGMENT 1 HIS HONOUR: Pursuant to an originating process filed on 16 March 2007 the plaintiffs seek an order that the defendant be wound up in insolvency. Various extensions of time for the determination of the winding-up application have been given under s 459R of the Corporations Act 2001 (Cth). The last such order was made on 12 May 2008. The period for determination of the plaintiffs' winding-up application was extended to 31 October 2008. 2 By its amended notice of appearance filed on 29 May 2008, the defendant indicated its intention to oppose the winding-up application on the following grounds. First, that the defendant is solvent. Second, that the plaintiffs are not creditors of the defendant. Third, that: " The plaintiffs do not have standing as creditors of the defendant for the purposes of Section 459P of the Corporations Act 2001 (Cth) as the first plaintiff has been paid. More particularly: (a) the defendant is the beneficiary of a guarantee issued by the first plaintiff on 6 November 1996 (the 'Guarantee' ); (b) the Guarantee creates an unconditional obligation to pay the guaranteed money on demand; (c) the unconditional nature of the Guarantee to pay on demand is not qualified by reference to the terms of the Consulting Agreement between the second plaintiff, the defendant and others dated 6 November 1996 (the ' Consulting Agreement '). The Guarantee is autonomous and the defendant is entitled to exercise its rights under the Guarantee independently of the defendant exercising its rights under the Consulting Agreement; and (d) the judgment debt in Supreme Court Equity Division Proceedings case numbers 50113 of 1998 and 50026 of 1999 ( 'Judgment Debt' ) has been paid by operation of contractual set-off pursuant to the Guarantee. " 3 Fourthly, the defendant contended that the proceedings were an abuse of process because the defendant was a beneficiary of an unconditional guarantee issued by the first plaintiff as issuing bank and is owed a sum in excess of the judgment debt. Finally, the defendant indicated its intention to oppose the winding-up application on discretionary grounds. 4 The defendant's principal contention was that it was owed a sum which exceeds the judgment debt in favour of the plaintiffs and was entitled to set off moneys owed to it against moneys payable by it under the judgment debt. In particular, it relied upon a guarantee of 6 November 2006.