QPS Developments Pty Ltd (ABN 92 102 700 845) In The Matter Of Quadwest Developments Pty Ltd (Receivers Appointed) (Administrator Appointed) (In Liquidation) [2011] NSWSC 671

Supreme Court New South Wales

Medium Neutral Citation: QPS Developments Pty Ltd (ABN 92 102 700 845) In The Matter Of Quadwest Developments Pty Ltd (Receivers Appointed) (Administrator Appointed) (In Liquidation) [2011] NSWSC 671 Hearing dates: 1 June 2011 Decision date: 01 June 2011 Jurisdiction: Equity Division - Corporations List Before: Hammerschlag J Decision: Winding up of Quadwest Developments Pty Ltd (Receivers appointed) (Administrator appointed) (in liquidation) ACN 113 060 861, is terminated with effect from 1 June 2011 Catchwords: CORPORATIONS - Corporations Act 2011 (Cth) s 482(1) - application to terminate winding up - no issue of principle Legislation Cited: Corporations Act 2001 (Cth) Category: Principal judgment Parties: QPS Developments Pty Ltd (ABN 92 102 700 845) - Plaintiff Representation: Counsel: M.K. Condon - Plaintiff Solicitors: DibbsBarker Lawyers File Number(s): 2011/142498

EX TEMPORE Judgment 1HIS HONOUR: The plaintiff, the sole shareholder in Quadwest Developments Pty Ltd (Receivers appointed) (Administrators appointed) (in liquidation) ACN 113 060 861 ("the company"), applies for an order under s 482 of the Corporations Act 2001 (Cth) ("the Act") that the winding up of the company (which occurred on 22 February 2011 when the creditors resolved that it be wound up) be terminated. 2The company was incorporated to construct and sell residential units at 239 Adelaide Terrace, Perth, Western Australia. The enterprise was funded, principally by a loan from BOS International (Australia) Limited. There was also mezzanine funding from a number of other lenders. 3Prior to commencement of construction, the company entered into an agreement to compensate some individuals, who traded as a cafe on adjoining land, for the adverse effect on them of construction. 4Construction was completed in late 2010. The company commenced the process of settlement of units, which had been sold off plan. 5A dispute arose between the company and the neighbours earlier referred to, resulting in them obtaining judgment against the company for $725,000 and then (arguably, impermissibly), lodging caveats on all of the then unsold residential units. This stultified the development, leading the primary lender to appoint receivers on 11 January 2011, which in turn led to the appointment of Mr Nicols as voluntary administrator on 25 January 2011 and the resolution by the creditors that the company be wound up on 22 February 2011. 6On 8 April 2011, Mr Nicols was appointed the company's administrator under s 436B of the Act. The first meeting of creditors took place on 19 April 2011. At a further meeting, the company resolved to enter into a Deed of Company Arrangement ("DOCA"). The DOCA contemplates the formation of a creditors' trust to facilitate the realisation of the assets of the company (the residential units) and the distribution of the proceeds. 7Under a term sheet dated 18 April 2011, Alceon Group Pty Ltd has conditional, upon approval of the DOCA by creditors and termination of the winding up, agreed to acquire the primary lender's position. Alceon will acquire that position, then retire the receivers (appointed by the primary lender) and thereafter make funding available to the company to market and sell the remaining units and pay Mr Nicols' costs. 8One of the company's directors, Mr Rose, has covenanted to pay $150,000 to assist in funding the realisation by the company of its assets. Additionally, he has covenanted to make a one-off payment equal to one cent in the dollar for the benefit of any creditor who receives no dividend under the DOCA. 9I am satisfied that Mr Rose will be in a position to meet his obligations. 10It is clear that the DOCA is in the interests of creditors. 11Ten creditors, having claims of approximately $28.59 million, voted for it. Five creditors, totalling some $18 million, voted against it. One of those creditors, BGC, brought proceedings in this Court to set the DOCA aside. It claims to be a creditor for $3.95 million (secured) and $1.953 million (unsecured). It has not persisted in those proceedings and they have today been discontinued. 12The termination of the winding-up is consented to by the liquidator who also recommended acceptance of the DOCA. 13ASIC has been notified of the application and has not appeared to oppose. 14Creditors have been notified. The matter was called outside Court today and none has appeared to oppose. 15This is undoubtedly a proper case for the exercise of the Court's discretion to terminate the winding up with immediate effect. 16I make the following order: Pursuant to s 482(1) of the Corporations Act 2001 (Cth), read with s 511, the winding up of Quadwest Developments Pty Ltd (Receivers appointed) (Administrator appointed) (in liquidation) ACN 113 060 861, is terminated with effect from 1 June 2011. 17This order is to be entered forthwith. 18The exhibits are to be returned. 19I should record that I have had the benefit of helpful written submissions prepared by Mr Condon of counsel, who appeared for the plaintiff, which submissions will be kept with the papers.