In the Matter of Janelle Sharman Pty Ltd [2012] NSWSC 1366

Supreme Court New South Wales

Medium Neutral Citation: In the Matter of Janelle Sharman Pty Ltd [2012] NSWSC 1366 Hearing dates: 15 October 2012 Decision date: 15 October 2012 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Deed of company arrangement terminated Catchwords: COPROPATIONS - external administration - termination of deed of company arrangement - whether liquidator should be appointed Legislation Cited: (Cth) Corporations Act 2001, s 445D(1)(g) Category: Interlocutory applications Parties: Pollack Insurance Services Pty Ltd - Plaintiff Jonathon Paul McCleod - First Defendant Janelle Sharman Pty Limited - Second Defendant Representation: Counsel: AJ Bully - Plaintiff M Hayter (Solicitor) - Defendant Solicitors: Collin Biggers & Paisley - Plaintiff Gillis Delaney Lawyers - First and Second Defendant File Number(s): 12/ 300992

Judgment (ex tempore) 1HIS HONOUR: I am satisfied that, having regard to the circumstances in which the resolution that the company enter into the Deed of Company Arrangement was passed, and having regard to the quantum of the company's indebtedness relative to the size of the fund provided under the deed, and the time frame within which that fund is to be provided, and the desirability that there be a proper investigation of the matters referred to in paragraph 42 of the affidavit of Peter John Harkin sworn 27 September 2012, the deed should be terminated pursuant to (Cth) Corporations Act 2001, s 445D(1)(g). 2I make an order pursuant to section 445D(1)(g) terminating the Deed of Company Arrangement entered into by the first defendant on 28 September 2012. I order that the first defendant pay the plaintiff's costs of the application. 3I should record that I am not prepared to make an order appointing a liquidator as sought in the originating process. While there may be evidence from which insolvency could be inferred, there is not evidence that requires a presumption of insolvency to be drawn. In any event, before a liquidator could be appointed, it would be necessary for an application to be made for an order that the company be wound up, and for that application to be notified and prosecuted in the ordinary way. 4However, the evidence discloses a number of transactions that give cause for thought that the assets of the company such as they are may be in jeopardy and that it may be insolvent. 5I make the following orders: (1)Upon the plaintiff by its counsel giving to the court the usual undertaking as to damages, order that Neil Cusson of Deloittes be appointed liquidator of the first defendant provisionally. (2)Grant leave to the plaintiff to amend the originating process to include a claim for a winding up order. (3)Adjourn the hearing of the proceedings to 5 November 2012 at 9.45 in the Corporations Judge motions list. (4)Excuse the second defendant from further attendance. (5)Direct that the plaintiff serve and advertise the amended interlocutory process as if it were the original interlocutory process in the proceedings.