New South Wales Supreme Court CITATION : Peniston-Bird v Bolting In Pty Limited [2002] NSWSC 201 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 1302/01 HEARING DATE(S) : 22 February 2002 JUDGMENT DATE : 22 February 2002 PARTIES : Dominic Peniston-Bird (Plaintiff) Bolting In Pty Limited (ACN 087 445 350) (Defendant) JUDGMENT OF : Master McLaughlin COUNSEL : G. Carolan (Plaintiff) M.W. Young (Defendant) SOLICITORS : Back Schwartz Vaughan Solicitors (Plaintiff) Dixon Holmes Du Pont Lawyers (Defendant) LEGISLATION CITED : Corporations Act DECISION : 1. Orders as in paragraphs 1 and 3 in notice of motion filed by the Applicant, Glenn Douglas Martin on 29 January 2002.; 2. Order that Ian Thomas Stephenson, of Duesburys, Level 3, 69 Phillip Street, Parramatta, 2150, be appointed liquidator of the Defendant in place of Geoff Reidy.; 3. Order that the Plaintiff pay the costs of the Applicant of the aforesaid notice of motion, such costs to be on the indemnity basis. IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION MASTER McLAUGHLIN Friday, 22 February 2002 1302/01 DOMINIC PENISTON-BIRD -V- BOLTING IN PTY LIMITED (ACN 087 445 350) JUDGMENT 1 MASTER: There is presently before the Court a notice of motion filed on 29 January 2002 by the applicant, Glenn Douglas Martin. Mr Martin was not a party to the substantive proceedings. Accordingly, the first prayer for relief sought in the notice of motion is an order that he be granted the approval of the Court under section 471A(b) of the Corporations Act to exercise his power as director of the defendant to bring the present motion on behalf of the defendant. 2 The substantive proceedings were instituted by the plaintiff, Dominic Peniston-Bird, who named as defendant Bolting In Pty Limited. Both the plaintiff and Mr Martin were directors of the defendant company. Indeed, they were the only two directors of the defendant company. 3 The dispute between the plaintiff and the defendant, essentially between the plaintiff and Mr Martin, came before Barrett J on 2 December 2001 after consent orders had been agreed upon between the parties. His Honour made orders by consent, including an order that the defendant be wound up pursuant to section 461 of the Corporations Act on grounds which included the just and equitable ground. 4 His Honour, as order 2 of the orders made by consent, ordered that Geoff Reidy of Rogers Reidy, Chartered Accountants, be appointed liquidator of the defendant. Subsequently it was ascertained that Mr Reidy was not an official liquidator. 5 Negotiations by way of correspondence and telephonic communications between solicitors again took place, with a view to identifying a substitutionary liquidator who would be acceptable to both the plaintiff and the applicant. No agreement in that regard was reached. 6 The solicitors for the plaintiff on 18 December 2001 sent to the solicitors for Mr Martin a letter which included the following: "Should we not hear from you by 11 am on Wednesday 19 December 2001 we note we will approach the Duty Registrar in relation to the hearing of a notice of motion to amend the summons and minutes of order to delete the name of Geoff Reidy and insert an alternate name as liquidator". 7 It will be appreciated that 18 December 2001 was after the conclusion of the Law Term and during the period of the fixed vacation of the Court. 8 The solicitors for the applicant upon receiving that letter would have been justified in expecting that in due course they would receive a notice of motion filed by the plaintiff seeking an amendment of the summons and minutes of order by the deletion of the name of Geoff Reidy and the insertion of another and specified name. 9 Further, that they would have an opportunity of appearing and being heard at the hearing of such a notice of motion and either consenting to or opposing the name of the proposed substitutionary liquidator. 10 Despite the intention set forth in the letter of 18 December 2001, the solicitors for the plaintiff, after what was described as a conversation with the Deputy Registrar, then obtained an order in the following terms: "Pursuant to Part 20 Rule 10, the appointment of Mr Geoff Reidy as liquidator be terminated and Mr Peter Rogers be appointed as liquidator in lieu thereof". 11 That order was made on 20 December 2001 and was entered upon the same date. 12 Part 20 Rule 10 is colloquially referred to as the slip rule. It relates to circumstances where there is a clerical mistake or an error arising out of an accidental omission in an administrative order or a certificate. 13 It is quite apparent that the invocation of the slip rule was inappropriate in the circumstances of this case. Indeed, at today's hearing the plaintiff does not attempt to argue otherwise. 14 The obtaining of the order on 20 December 2001 in circumstances where no opportunity was given to the present applicant to be heard upon the seeking of such an order and where no opportunity was given to the present applicant to be heard concerning the identity of the proposed substitutionary liquidator (whose appointment had not been agreed to, although his name had been raised in correspondence between the solicitors), in circumstances where that order was obtained quite contrary to the intention which had been expressed by the solicitors for the plaintiff in their letter of 18 December, make it inevitable that that order must be set aside. 15 As the parties are not in agreement as to who should be appointed as substitutionary liquidator of the defendant, it falls therefore to the Court to appoint such a liquidator. I will appoint the next liquidator from the list of official liquidators whose consent to be thus appointed was given at the time when they allowed their names to be included in that list. 16 It has been argued on behalf of the plaintiff, firstly, that the applicant should have no standing to be heard in the present application. That attitude seems to me to sit particularly poorly in the mouth of the plaintiff in the light of the conduct of the plaintiff in this matter. 17 It is essential that the record of the Court be cleansed by the setting aside of the order inappropriately and improperly obtained. The plaintiff should not be seen in such circumstances to be seeking to prevent the record of the Court from being cleansed at the instance of the present applicant. 18 I propose therefore to grant the approval sought in paragraph 1 of the notice of motion, which will remove any doubt as to the status of the applicant to bring the present application. 19 The plaintiff has next referred to expenses incurred by and the remuneration of Mr Rogers, the liquidator named in the order of 20 December 2001, and has relied on those expenses and that remuneration as a ground for allowing Mr Rogers to remain as liquidator and for having his appointment confirmed by the Court. 20 In the circumstances, where the appointment of Mr Rogers was brought about by the conduct of the plaintiff which I have outlined and where, as appears from the affidavit evidence, his appointment was not even communicated to the applicant for more than one month after the order so appointing him was made on 20 December, I do not consider that any question of Mr Rogers' expenses or remuneration should be a determining factor concerning the appointment of a liquidator in respect of whom neither party would raise any objection. 21 I express no view as to which of the present parties might ultimately be required to bear the responsibility for Mr Rogers' expenses and remuneration in the period in which he has acted in the capacity as liquidator. 22 I make the following orders: (1). I make orders as in paragraphs 1 and 3 in the notice of motion filed by the applicant, Glenn Douglas Martin on 29 January 2002. (2). I order that Ian Thomas Stephenson, of Duesbury, Level 3, 69 Phillip Street, Parramatta, 2150, be appointed liquidator of the defendant in the place of Geoff Reidy. (3). I order that the plaintiff pay the costs of the applicant of the aforesaid notice of motion, such costs to be on the indemnity basis. ********** Last Modified: 02/14/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.