Sykes is the managing director, secretary and shareholder of the Daycare. Daycare was ordered to be wound up on 9 November 2010. Sykes sought an order that the winding up be terminated under s 482(1) of the Corporations Act 2001.
The winding up order was founded on Daycare’s deemed insolvency due to its failure to comply with a statutory demand. The statutory demand was based on a judgment debt. The judgment debt remained unsatisfied.
Daycare sought termination of the winding up on the basis that despite the failure to comply with the statutory demand, it was solvent and had made provision for, or paid, all its creditors: .
Daycare held the licence for a childcare centre. This business had been sold with completion due on 8 November 2010. Completion later took place with substantial cash proceeds: .
The winding up was stayed pending the resolution of this application and control of Daycare was returned to Sykes. The debts due to employees and unsecured creditors were paid in full and money set aside for taxation debts.
Daycare had another similar business with value of approximately $1.4M.
It was clear that notwithstanding the winding up order, and failure to comply with the statutory demand, Daycare was solvent and able to pay its debts when and as they fell due. Therefore subject to making adequate provision for the costs and expenses of the winding up it was appropriate to make an order terminating the winding up: .
Provision was made for payment of the judgment debt and the taxation debts and undertakings were given to not register a charge over Daycare until the taxation debt was paid, to pay the liquidators costs into a controlled money account and to remit cheques drawn in favour of unsecured creditors and employees.
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