Re Kwang Hua Yu-Soon Incorporated

HIS HONOUR : This is an application under s 51 of the Associations Incorporation Act 1984 (NSW). The plaintiff seeks an order that it be wound up. The application was made ex parte yesterday and I stood the application over to this afternoon for two reasons. First, I was not at that stage satisfied that the Committee which resolved that the plaintiff make the application for its own winding-up, necessarily had the power to take that course; and, secondly, in order that counsel could consider my prima facie view that I ought not dispense with the requirements for advertising of the winding-up application and, therefore, ought not to make a final winding-up order, but, rather, should appoint the proposed liquidator as provisional liquidator.

The Associations Incorporation Act does not make specific provision conferring powers upon a Committee. The Act provides for the Committee’s powers to be specified in the rules. The rules of the association have now been tendered. The power conferred by r 13 is at least as wide as the power conferred by s 198A of the Corporations Act 2001 (Cth) on directors of a company and I am satisfied that the Committee members have the power to cause the association to make the application (see Re Inkerman Grazing Pty Limited (1972) 1 ACLR 102 and cases which followed it; most recently Trans Pacific Insurance Corp v Douglas [2009] NSWSC 308 at [23] and University of Newcastle Union Limited [2008] NSWSC 1361 at [9]).

Today there is an appearance for a company which I am told is the largest creditor. It supports the winding-up application, but no material prejudice is pointed to if the winding-up application is advertised and, in the meantime, the proposed liquidator is appointed provisional liquidator.

On the face of it this is a compelling application for the Association to be wound up. There is clear evidence of insolvency. Nonetheless, there may be some matters which an affected person, such as a member of the Association, might wish to put forward in opposition to the orders sought. I do not grant the leave sought to dispense with the requirements for advertising the application.

I order that Scott Darren Pascoe be appointed liquidator of the plaintiff provisionally.

I stand over the originating process to 27 July 2009 before the Corporations List Judge. These orders may be entered forthwith.