In the matter of Austluck Property Pty Ltd [2011] NSWSC 851

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Austluck Property Pty Ltd [2011] NSWSC 851 Decision date: 18 July 2011 Before: White J Decision: 1. Make orders in accordance with the short minutes of order provided by counsel for the applicants which I have signed and dated today. In accordance with order 6, those orders may be entered forthwith. 2. The exhibits may be returned forthwith Catchwords: CORPORATIONS - winding up - application to terminate winding up - consideration of assets and liabilities of company - surplus of assets over liabilities - winding up terminated - no question of principle Category: Principal judgment Parties: Goulburn International Pty Ltd (Applicant) Austluck Property Pty Ltd (Respondent) Representation: S Golledge (Applicant) S Agosta (Respondent) O'Neill Marengo Lawyers (Applicant) Leonard Legal (Respondent) File Number(s): 2011/41612

Judgment 1HIS HONOUR : This is an application to terminate the winding-up of the first respondent. The company was wound up on the application of the City of Sydney Council following non-compliance with its demand for outstanding rates. The reason that the debt for rates was unpaid and the statutory demand and winding-up application were not dealt with are explained in the affidavit of Rebecca Huynh. The relevant documents did not come to the attention of the officers of the company. 2The company's creditors have all now been paid, save in respect of a secured debt owed to Challenger Managed Investments Pty Limited and in respect of shareholder loans. The company is the owner of a level of the building known as Golden Harbour Building in Dixon Street, Sydney. 3I am satisfied that the company's assets comfortably exceed its liabilities. That question is not straightforward because the company was a joint borrower along with three other companies in a group under a loan of $9.65 million from Challenger Investments Limited. In its financial statements the company brought that liability to account only in an amount of $935,959. It can be inferred that this was the proportion of the moneys borrowed that were used to acquire the property owned by the company. 4Whilst the company is liable jointly with other members of the group for the debt of $9.65 million, it would be entitled to contribution against the other borrowers if it were called upon to meet the liability to Challenger. Valuations obtained of the assets of other companies in the group show that the total assets of the group comfortably exceed the group's liabilities. 5I am satisfied that no third parties would be prejudiced by an order terminating the winding-up. The secured creditor does not oppose the order. Its position is protected by its mortgage. 6If fresh debts were to be incurred, I am satisfied that further creditors would not be prejudiced because of the surplus of assets over liabilities that the company enjoys. 7I take into account matters properly raised by the liquidator, in particular, that the group accounts were stated only as at 30 June 2010 and were in draft. However, the substantial surplus of assets over liabilities for the group are established by recent valuations. The liquidator through his solicitor also observes there is no evidence as to the stage of development of the building. However, the valuations obtained are on an "as is" basis. They are not estimates of value on completion of the development. There is evidence from an external accountant that supports this view as to the company's solvency. 8In my view it is appropriate to order that the winding-up of the company be terminated. 9I make orders in accordance with the short minutes of order provided by counsel for the applicants which I have signed and dated today. In accordance with order 6, those orders may be entered forthwith. The exhibits may be returned forthwith. 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. Decision last updated: 09 August 2011