New South Wales Supreme Court CITATION : Dean-Willcocks (in his capacity as Liquidator of Austral Pacific Group Ltd (in liq)) [2004] NSWSC 1209 HEARING DATE(S) : 25 November, 2004 JUDGMENT DATE : 25 November 2004 JURISDICTION: Equity Division JUDGMENT OF : Palmer J DECISION : Winding up orders made. CATCHWORDS : CORPORATIONS - LIQUIDATORS - Circumstances in which a liquidator appointed in a voluntary winding up may be appointed by the Court to wind up in insolvency. LEGISLATION CITED : Corporations Act 2001 (Cth) - Pt 5.4 Div 4, s.459P, s.461, s.462, s.588M PARTIES : Ronald John Dean-Willcocks - Plaintiff FILE NUMBER(S) : SC 6198/04 COUNSEL : C.R.C. Newlinds, A.P. Coleman - Plaintiff SOLICITORS : DMAW, Adelaide - Plaintiff JUDGMENT – Ex tempore 1 The Plaintiff is the liquidator of Austral Pacific Group Limited ("Austral Pacific") having been appointed as such on 23 March 1999 when Austral entered into a creditors voluntarily winding up. Austral had gone into voluntarily administration on 26 November 1998. The Plaintiff is also the liquidator of Austral Pacific Group Purchasing Pty Ltd ("Purchasing"), again having been appointed as such in a creditors voluntary winding up. 2 The Plaintiff seeks an order that Austral Pacific now be wound up in insolvency by order of the Court under Pt 5.4 Div 4 of the Corporations Act 2001 (Cth). The Plaintiff, as liquidator of Austral Pacific, has standing to seek that order under s.459P(1)(e). The Plaintiff also seeks a winding up order on the just and equitable ground under s.461(1)(k). Again, as liquidator of Austral Pacific, the Plaintiff has standing to seek the order under s.462(2)(d). I will return in a moment to the application in respect of Purchasing. 3 The reason that the Plaintiff seeks to be appointed by the Court as liquidator of Austral Pacific is so that he may bring a claim for insolvent trading against the Directors of that company pursuant to s.588M of the Corporations Act in circumstances in which the Directors may have a claim to indemnity under a Directors and Officers Insurance Policy. The insurance policy provides indemnity to the directors only if a claim is brought against them by the company "at the instigation of a liquidator formally appointed by a court". The Plaintiff is apprehensive that if Austral Pacific brings a claim against the directors at his instigation as a liquidator appointed under a creditors voluntary winding up, the policy may not respond to the directors' claim for indemnity. 4 It is clear that the Corporations Act recognises that there may be a good reason for a person who has been appointed liquidator under a voluntary winding up to be appointed liquidator by the Court. That is why a voluntarily appointed liquidator is expressly given standing to seek a winding up order under s.459P(1)(e) and s.462(2)(d). 5 In the present case I am satisfied that good reason has been shown for the Plaintiff to be appointed by the Court as liquidator of Austral Pacific. The evidence satisfies me that the there are sufficient prospects of success against the Directors to justify the Plaintiff in bringing a claim against them under s.588M. Clearly, there would be a ground upon which the insurer could deny liability under the policy if the claim were not instigated by a liquidator appointed by the Court. There is no reason why the creditors of the company should be denied recourse to the proceeds of the insurance policy, if they are otherwise available, by the merely fortuitous circumstance that the liquidator happened to be appointed voluntarily rather than by order of the Court. I note that in any event the liquidator of the insurer has been notified of this application, has no objection and does not wish to appear. 6 I deal now with the application in respect of Purchasing. That company has been deregistered and it must be, of course, reinstated in order that it, too, may be the subject of a winding up order made by the Court. The winding up order will place the Plaintiff in a position where he will be instigating a claim against the directors pursuant to s.588M which may also be indemnified under the same insurance policy. The Australian Securities and Investment Commission has been notified of the application to reinstate and has no objection. 7 It is obviously proper in the circumstances to reinstate the company and, for the same reasons as I have given in relation to Austral Pacific, to wind up the company in insolvency and to appoint the Plaintiff as liquidator. 8 For these reasons, I made make orders in accordance with the Short Minutes of Order initialled by me, dated today and placed with the papers. ~ oOo ~ Last Modified: 12/17/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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