Falcon Australia Ltd, Re [1991] QSC 80

10 _)0 IN THE SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION BEFORE MR. JUSTICE MOYNIHAN BRISBANE, 13 MARCH 1991 No. 258 of 1990 (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Chief Court Reporter,Court Reporting Bureau.) IN THE MATTER OF the Companies (Queensland) Code -and- IN THE MATTER OF Falcon Australia Limited ~~ L! ; JUDGMENT ~' HIS HONOUR: For the reasons which I now publish, I would 30 dismiss the appeal in this matter with costs. /\ , '-..__/ 40 C so 60 , G 214---0ovt. Printer, Qld. 1 10 20 30 40 50 60 -- 1 of 5 -- 0 0 0 0 IN THE SUPREME COURT OF QUEENSLAND 5e, 91 \o~o Application No. 258 of 1990 Before Mr. Justice Moynihan IN THE MATTER of the Companies (Queensland) Code - and - IN THE MATTER of Falcon Australia Limited JUDGMENT - MOYNIHAN J. Delivered the 13th day of March, 1991 Counsel: Solicitors: Hearing Date: Mr. Bain for the Appellant Mr. Dutney for the Respondent Mr. O'Grady for the Respondent Henderson Trout for the Appellant Morris Fletcher & Cross for the Respondent 20th June, 1990 -- 2 of 5 -- 0 0 0 0 IN THE SUPREME COURT OF QUEENSLAND Application No. 258 of 1990 IN THE MATTER of the Companies (Queensland) Code - and - IN THE MATTER of Falcon Australia Limited JUDGMENT - MOYNIHAN J. Delivered the 13th day of March, 1991 On 21 May, 1990 a Master, on the application of the Rural and Industries Bank of Western Australia, ordered that Falcon Australia Limited ("the company") be wound up under the provisions of the Companies Code. This is an appeal by the director of the company seeking that the order be set aside and in lieu thereof that the application to wind up be dismissed or alternatively set aside pursuant to O. 39 r. 33 of the Rules of the Supreme Court. That rule permits a verdict or judgment obtained when one party does not appear at the trial to be set aside. The affidavit material relied on by the appellant/applicant swears to the issues in a number of respects and is argumentative rather than factual in others. There was no application to cross examine on the affidavits. The grounds of the appeal were that the Master erred in finding that the statutory notice founding deemed insolvency was in accordance with s. 364(2)(a) of the Companies (Queensland) Code and in concluding that the statutory affidavit was -- 3 of 5 -- -··---------~---------~ ---------~-------------~-----· 2 sufficient to f;Upport the application. The company's appeal was supported by a substantial (of the order of 25 per cent) creditor which is involved in the financing of attempts to put the company in funds to which I will shortly refer. I should mention that the company's indebtedness or its inability to pay it are not in dispute. The debt is of the order of six million dollars. It is said however that provided that the order made for the winding up of the company is set aside, the company should be able to pay its debts if the proposed restructure negotiations of the Falcon/Minefields with NatWest proceeds Group and if presently under the company is successful in ·its Supreme court of Victoria Proceeding No. 2018 of 1990, in which the company and other plaintiffs are seeking damages against Tricontinental Corporation Limited and Ian Malcolm Johns. The appellant deposes that para. 5 of the affidavit in support of the winding up, to the effect that the company is indebted to the applicant for $5,906,160.75 under an overdraft facility is false and misleading. This is put on the basis that the facility was a commercial bill accepting facility and not an overdraft. There is said to have been ~o demand in respect of the commercial bill acceptance facility. So far as the material discloses the company was offered a commercial bill acceptance facility. Because the security documentation could not be completed by _the time the company wished to draw down the funds made available by the petitioning creditor it was agreed that the funds be drawn down as an overdraft facility and the transaction proceeded on that basis. 0 0 0 0 -- 4 of 5 -- 0 0 0 0 3 The position thus is that the company is unable to pay its debts as they fall due. The only prospect of the credi tars being paid are in the far from certain contingencies to which I have referred. The complexity of the restructuring referred appears in some degree from the material. I will not attempt to analyse it. Suffice it to say that it seems to itself to involve contingencies. The supporting creditor is directly involved in the restructuring. The necessary favourable ultimate outcome of the interrelated contingencies seems to me far from certain. The time scale deposed to seems on the material, optimistic. The considerations being those to which I have adverted I dismiss the appeal with costs. -- 5 of 5 --