In the matter of News Emporium Pty Limited (in liq)

This is an application by Mr Richard Worsley pursuant to the Uniform Civil Procedure Rules 2005 (NSW) r 36.16 for an order setting aside an order made on 21 May 2025 that News Emporium Pty Ltd (in liq) be wound up. Rule 36.16(2)(b) provides that the Court may set aside or vary a judgment or order after it has been entered if it has been given or made in the absence of the party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order.

The orders made by the Court on 21 May 2025 were made in the absence of News Emporium. The principles that apply in a case such as this are set out by Gleeson JA in In the matter of Day and Night Online Transport Pty Ltd (in liq) [2018] NSWSC 796 at [9]-[13] as follows:

First, this application was brought promptly. It has been less than three weeks since the winding up order was made.

Second, notice has been given to the liquidator and to the creditor who appeared at the hearing for the winding up application. The liquidator consents to the orders propounded by Mr Worsley. The one creditor (Workers Compensation Nominal Insurer) neither consents to nor opposes the orders.

Third, there is evidence that shows an explanation for the non-appearance at the hearing. In short, the evidence is that Mr Worsley, who relevantly controls News Emporium, was unaware of: (1) the statutory demand; (2) the winding up application; and (3) the making of the winding up orders, until he was contacted by the liquidator's staff on 22 May 2025. That is because of a change of his residential address in circumstances connected with a marriage breakdown. That is, when News Emporium was properly served, the natural person who controls the company was unaware of the winding up application.

Fourth, there is evidence that indicates the solvency of the company. Recent accounting records and evidence from Mr Vido, who is the external accountant for the company, suggests a healthy net asset position and that the company is trading profitably.

Fifth, the liquidator, by his consent, indicates that his investigations have not revealed anything to show a reason for the company to be stopped from trading. The liquidator has not suggested any misconduct on the part of the director.

There was one matter that was drawn to my attention by counsel for Mr Worsley that is relevant as to whether I should make the order. It is apparent that the company has failed to lodge three recent BAS returns and that, once that default is rectified, the company will owe approximately $400,000 to the Australian Taxation Office. That is on top of the debt owed to the ATO of approximately $122,000 that is recorded in the company's accounting records. The $400,000 that will become payable is not recorded in the accounts of the company. However, the cash position of the company is such that there is comfortably a sufficient amount available to discharge that liability when it arises and there is evidence before the Court that the three outstanding BAS returns and associated income activity statements have been prepared and are ready to be lodged.

The orders proposed by Mr Worsley include a provision to protect the ATO, the creditor who appeared at the winding up application, as well as other creditors, so as to ensure they have been paid, or will be paid, and are not prejudiced by an order setting aside the orders winding up the company. In particular, the orders contemplate that, pursuant to s 90-15 of Schedule 2 of the Corporations Act 2001 (Cth), the liquidator would be justified in paying, and be directed to pay, to the creditor who appeared at the winding up application the amount of $36,028.92, to the ATO the amount of $521,234 and to the liquidator the amount of $18,617.82, on account of the liquidator's expenses.

There is evidence that the continuation of the winding up will threaten the viability of what is a profitable business. That is a consideration that supports the orders.

The proposed orders include an amount for the remuneration of the liquidator. In the matter of Re Hunter Valley Dental Surgery Pty Ltd [2017] NSWSC 1144, Black J observed as follows at [22]:

Similar considerations arise here. The creditors are protected. The person with the greatest economic interest in limiting the liquidator's remuneration is Mr Worsley, and he consents to the amount proposed to be paid by way of remuneration. In the circumstances, no further evidence to support the remuneration is required. That would produce an unnecessary additional cost.

I make the following orders: