Re Genoa Resources and Investment Limited (in liq) [2005] NSWSC 1145

New South Wales Supreme Court

CITATION : Re Genoa Resources and Investment Limited (in liq) [2005] NSWSC 1145

HEARING DATE(S) : 31 October 2005

JUDGMENT DATE : 31 October 2005

JURISDICTION : Equity

JUDGMENT OF : Campbell J

DECISION : Leave granted

CATCHWORDS : CORPORATIONS - winding up - committee of inspection - application by liquidator for leave to enable two members of committee of inspection to accept a gift for their services rendered

LEGISLATION CITED : Companies Code

CASES CITED : Re Security Directors Pty Limited (1997) 15 ACLC 1083

PARTIES : Ronald John Dean-Willcocks in his capacity as official liquidator of Genoa Resources & Investment Limited (in liq) - Plaintiff

FILE NUMBER(S) : SC 2789/89

COUNSEL : J T Johnson - Plaintiff

SOLICITORS : Kemp Strang - Plaintiff

LOWER COURT JURISDICTION :

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST

CAMPBELL J

MONDAY 31 OCTOBER 2005

2789/89 RONALD JOHN DEAN-WILLCOCKS IN HIS CAPACITY AS OFFICIAL LIQUIDATOR OF GENOA RESOURCES AND INVESTMENT LTD (IN LIQ) JUDGMENT – Ex Tempore 1 HIS HONOUR: This is an application by the liquidator of a company to grant leave to two members of the Committee of Inspection to accept a gift. 2 The company was placed into liquidation on 31 October 1989. Thus, its liquidation has been proceeding now for sixteen years. 3 A Committee of Inspection was appointed on 10 April 1990, comprising three representatives of shareholders, and three representatives of creditors. One of the shareholders' representatives has died. The other two have been members of the Committee of Inspection continually since they were first appointed. It is to those two members of the Committee of Inspection that the liquidator seeks leave to pay a gift. 4 The liquidation has been an unusually complicated one. There has been considerable litigation, and the financial affairs of the company itself have been most complicated, quite apart from that litigation. 5 In his affidavit the liquidator has given the two members of the Committee of Inspection very high praise. He says that they have attended virtually every meeting of the Committee of Inspection, and that they have both remained and been unswervingly diligent in the performance of their duties. 6 The liquidation, commencing as it did in 1989, is conducted under the provisions of the Companies Code. Section 435 of the Code says: "(1) A member of the committee of inspection shall not, while acting as such a member, except as provided by this Code or with the leave of the Court -- (a) make an arrangement for receiving, or accept, from the company or any other person, in connection with the winding up, a gift, remuneration or pecuniary or other consideration or benefit; (b) directly or indirectly derive any profit or advantage from a transaction, sale or purchase for or on account of the company or any gift, profit or advantage from a creditor …" 7 The policy and history of that section had been examined by Senior Master Mahony in the Supreme Court of Victoria in Re Security Directors Pty Limited (1997) 15 ACLC 1083. I accept the conclusion there arrived at, that there is power for the Court to grant leave under s 435 even after the work in question had been done. 8 I also accept the principles articulated in the judgment, to the effect that: