New South Wales Supreme Court CITATION : Re Network Welding Pty Ltd (In liq) (No 1) [2001] NSWSC 808 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 3511/01 HEARING DATE(S) : 28/08/01 JUDGMENT DATE : 28 August 2001 PARTIES : John Mewburn and QBE Mercantile Mutual Insurance Ltd (Applicants) Roderick MacKay Sutherland (Liquidator) JUDGMENT OF : Young CJ in Eq COUNSEL : D R Pritchard (Applicants) A J Abadee (Liquidator) SOLICITORS : PricewaterhouseCoopers Legal (Applicants) Peter Kemp (Liquidator) CATCHWORDS : CORPORATIONS [319]- Examination- Persons allegedly having knowledge of corporation's property- Liquidator under creditors' voluntary liquidation- Whether an eligible applicant. WORDS & PHRASES- "Eligible applicant"- "Liquidator". LEGISLATION CITED : Corporations Act 2001 (Cth) ss 9, 446, 596B Companies Act 1961 (NSW), ss 249, 274 CASES CITED : Ex parte Merrett (1997) 25 ACSR 146 In re Campbell Coverings Ltd (No 2) [1954] Ch 225 DECISION : Preliminary objections dismissed. IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION 3511 of 2001 YOUNG CJ IN EQ Tuesday 28 August 2001 RE NETWORK WELDING PTY LIMITED (IN LIQUIDATION) (NO 1) Judgment 1 His Honour: This is an application by an insurance company and an officer of that company to set aside a summons for examination under section 596B of the Corporations Act 2001 (Cth) which was issued by a Registrar. 2 The underlying dispute appears to be that the company in liquidation had a fire and that the examinees did not pay the claim and presumably the liquidator wishes to obtain material which will enable him to assess whether he should press the claim or otherwise. 3 The liquidator is a voluntary liquidator having become liquidator following a failed administration, so s 446 of the Corporations Act applies. 4 In Ex parte Merrett (1997) 25 ACSR 146, 148 I raised doubts as to whether a voluntary liquidator was an "eligible applicant" as defined in the dictionary section, s 9 of the Corporations Act. I remain doubtful but I now have to decide the point. 5 It is relatively clear that up until the Companies Act 1961, the only people who could apply for an examination in New South Wales were Court appointed liquidators. Section 249 of the 1961 Act, which was derived from the Victorian 1958 Act, muddied the waters, but it was still the better view that the only way that a voluntary liquidator could invoke the Court's power was to have the Court make an order under s 274 of the 1961 Act to treat the liquidation as if it were a Court liquidation. In England the doubts remained; see eg In re Campbell Coverings Ltd (No 2) [1954] Ch 225. 6 The current Act completely changes the way in which the public examination system of officers and others works. It is strange that it did not deal with the instant point. However, it seems to me that despite my doubts, and despite the problem that the door might be opened to a voluntary liquidator who is the tool of the directors (and I make it clear that in the present case that is not the case) to cause oppression, the term "liquidator" includes a liquidation in a voluntary winding up. 7 To take the view that "a liquidator" should be read down to a Court Liquidator because of the history of the section would leave a lacuna because an administrator can ask for an examination and it would be rather strange that a voluntary liquidator who has been an administrator cannot. But if one type of voluntary liquidator can make the application, why can't all of them? 8 I have thus come to the view that a voluntary liquidator is an eligible applicant. However, in my view when a Registrar has to consider an application by a voluntary liquidator under s 596B, the Registrar must take appropriate steps to ensure that there is no oppression by an associate of the directors being able to exercise external compulsive powers over the creditors of the company. 9 Accordingly, I dismiss the preliminary objections. *********** Last Modified: 09/13/2001 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.