In the matter of Vietface TV Australia Pty Limited [2014] NSWSC 76

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Vietface TV Australia Pty Limited [2014] NSWSC 76 Hearing dates: Monday 17 February 2014 Decision date: 17 February 2014 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Pursuant to Corporations Act, s 482, the winding up of the defendant be terminated with effect from 17 February 2014 Catchwords: CORPORATIONS - winding up - applications for winding up by court - termination of a winding up relating to a deed of company arrangement - where the company is likely to trade solvently while meeting its obligations - held, winding up to be terminated Legislation Cited: (Cth) Corporations Act 2001, s 482 Category: Interlocutory applications Parties: Murray Roderick Godfrey and David Nicholas Iannuzzi in their capacity as Deed Administrators of Vietface TV-Australia Pty Ltd (in liq) (applicant) VietfaceTV-Australia Pty Limited (in liq) (Respondent) Globecast Australia Pty Limited (plaintiff) Representation: Counsel: Ms K McCaul (applicant) Solicitors: Milton Graham Lawyers (applicant) File Number(s): 2013/185716

Judgment (ex tempore) 1HIS HONOUR: By originating process filed on 18 June 2013 the plaintiff Globecast Australia Pty Limited sought an order that the defendant Vietface TV Australia Pty Limited be wound up and a liquidator appointed. On 30 July 2013, on that application, the court made an order winding up the defendant and appointing Murray Roderick Godfrey and David Nicholas Iannuzzi, its joint and several liquidators. At a meeting of creditors on 27 August 2013, the creditors of the company resolved, pursuant to (Cth) Corporations Act 2001, s 436B(2), to approve the liquidators appointing themselves as joint and several voluntary administrators of Vietface, and pursuant to that resolution the liquidators appointed themselves administrators of the company on 27 August 2013. In their s 439A report to creditors, the administrators, as they had become, recommended that the company execute a deed of company arrangement. At a creditors meeting on 1 October 2013, the creditors resolved by majority that Vietface execute a deed of company arrangement, which was duly executed on 22 October 2013. 2The administrators are the administrators of the deed. By interlocutory process filed on 15 November 2013 they seek an order pursuant to Corporations Act, s 482, that the winding up of the company be terminated. 3Corporations Act, s 482(2A), provides that on an application for termination of a winding up in relation to a company subject to a deed of company arrangement, the court, in determining the application, must have regard to all the following matters: (a) any report that has been given to the Court by: (i) the administrator, or a former administrator, of the company; or (ii) the liquidator, or a former liquidator, of the company; or (iii) ASIC; and that contains an allegation that an officer of the company has engaged in misconduct; (b) any report that has been lodged with ASIC by: (i) the administrator, or a former administrator, of the company; or (ii) the liquidator, or a former liquidator, of the company; and that contains an allegation that an officer of the company has engaged in misconduct; (c) the decision of the company's creditors to resolve that the company execute a deed of company arrangement; (d) the statement that was given under paragraph 439A(4)(b) when the company was under administration; (e) whether the deed of company arrangement is likely to result in the company becoming or remaining insolvent; (f) any other relevant matters. 4The administrator has provided to the court a report which establishes that the company is likely to trade solvently while meeting its obligations under the deed, and to be solvent once those obligations are met. Although in their s 439A report the administrators concluded that it appeared that the director had traded the company whilst insolvent, they also noted that the director was in a position to defend that claim, that the director was also a major creditor of the company, that there was doubt as to the director's ability to meet any insolvent trading claim and that, accordingly, they were of the opinion that pursuit of any claim for insolvent trading could be uncommercial. Otherwise, neither the liquidators nor the administrators made any report that contained an allegation that an officer of the company had engaged in misconduct, nor was any report containing such an allegation lodged with ASIC. 5The creditors have resolved, by proportion of about 75 per cent, that the company execute the deed of company arrangement. The administrators' recommendation was that it do so. It appears likely that under the deed of company arrangement the creditors will obtain a return of about twenty-three cents in the dollar, whereas in liquidation they would obtain a return of one to two cents in the dollar. This is the result of the contributions to be made to the deed fund, coupled with the deferral of related party debt. 6The deed of company arrangement is not likely to result in the company remaining insolvent. To the contrary, it is likely to result in the company being able to continue to trade, and to do so in the future on a solvent basis. 7Notice of the application has been served on all known creditors, as appears from the affidavit of Ali Fong sworn 22 November 2013. Notice has also been served on ASIC by letter dated 21 November 2013. ASIC acknowledged receipt of the application and advised that it considered that the matter was one properly left for the determination of the court and ASIC did not propose to intervene or seek leave to appear. The court is informed, although there does not appear to be any evidence of it, that two of the creditors, namely, the plaintiff Globecast, and the Special Broadcasting Service Corporation, consent to the application. There has apparently been no response from any other of the creditors. 8In those circumstances, this is a proper case for the exercise of the power in s 482 to terminate the winding up. 9THE COURT ORDERS THAT: (1)Pursuant to Corporations Act, s 48, the winding up of the defendant Vietface TV Australia Pty Limited ACN 154542211 (in liquidation) (subject to deed of company arrangement) be terminated with effect from 17 February 2014. (2)The costs of this application be costs in the administration.