Hays Personnel Services (Australia) Pty Ltd v ACN 094 797 618 Pty Ltd [2006] NSWSC 917

Reported Decision : 58 ACSR 599

New South Wales Supreme Court

CITATION : Hays Personnel Services (Australia) Pty Ltd v ACN 094 797 618 Pty Ltd [2006] NSWSC 917

HEARING DATE(S) : 14/08/06

JUDGMENT DATE : 8 September 2006

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : Barrett J

DECISION : Winding up order made. Liquidator appointed.

CATCHWORDS : CORPORATIONS - winding up - who should be appointed liquidator - associated company already in liquidation - whether same liquidator should be appointed

LEGISLATION CITED : Corporations Act 2001 (Cth), ss.532(2)(c),

National Australia Bank Ltd v Market Holdings Pty Ltd (2001) 37 ACSR 629 Re HIH Insurance Ltd (unreported, NSWSC, 15 March 2001), CASES CITED : Re Jones as liquidator of ACN 110 802 938 Pty Ltd (2006) 57 ACSR 234 Re Nuhan Ltd (1980) 5 ACLR 69 Re Pacific Acceptance Corporation Ltd (1977) 2 ACLR 528 Re The Black Stump Enterprises Pty Ltd [2005] NSWCA 480

Hays Personnel Services (Australia) Pty Ltd - Plaintiff PARTIES : ACN 094 797 618 Pty Ltd previously known as DC Corporation Australia Pty Ltd - Defendant Michael Gregory Jones and ACN 110 802 938 Pty Limited - Applicants

FILE NUMBER(S) : SC 3156/06

COUNSEL : Mr P.J. Cook - Plaintiff Mr J.T. Johnson - Applicants

SOLICITORS : D. Riggio & Associates - Plaintiff Uther Webster & Evans - Applicants

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

BARRETT J

FRIDAY, 8 SEPTEMBER 2006

3156/06 HAYS PERSONNEL SERVICES (AUSTRALIA) PTY LTD v ACN 094 797 618 PTY LTD PREVIOUSLY KNOWN AS D.C. CORPORATION AUSTRALIA PTY LTD JUDGMENT 1 I have before me an originating process filed on 7 June 2006 by which the plaintiff, Hays Personnel Services (Australia) Pty Ltd, seeks an order that the defendant, ACN 094 797 618 Pty Ltd, be wound up and that a liquidator be appointed. The consent of Mr Robert Elliott to act as liquidator has been filed by the plaintiff. Also before me is an interlocutory process by which ACN 110 802 938 Pty Ltd (which I shall call "ACN"), a creditor of the defendant, seeks the appointment of a different person as liquidator and leave under s.532(2)(c) for that person to seek to be appointed, and to act, as liquidator. The alternative person thus proposed for appointment is Mr Michael Jones. 2 There is no dispute about the central question of winding up. Grounds for the making of a winding up order have been shown and the order will be made. The only issue with which I must deal concerns the choice of liquidator. 3 There is no question about the suitability of Mr Elliott, the liquidator proposed by the plaintiff. But it is submitted on behalf of ACN that certain advantages would flow from the appointment of Mr Jones. The plaintiff, on the other hand, is concerned that Mr Jones may, because of another connection, be placed in an undesirable position of conflict if he becomes liquidator of the defendant. 4 ACN is itself in the course of being wound up. It became subject to creditors voluntary winding up on 10 February 2006. Mr Jones became the liquidator of ACN on that day (having previously been the administrator under a Part 5.3A administration) and continues as liquidator. It is because of his position as liquidator of ACN that Mr Jones believes that there will be advantages in his also being liquidator of the defendant. And it is Mr Jones' position as liquidator of ACN that causes the plaintiff to regard him as unsuitable for appointment as liquidator of the defendant. 5 In his affidavit, Mr Jones refers to a number of ways in which the affairs of the defendant and those of ACN overlap and intersect. The directors of ACN at the time of Mr Jones' appointment as administrator were, on his understanding, Mr Zukriegl and Mr Banovec, although it appears that Mr Zukriegl may have resigned shortly beforehand. It appears that, at the time of Mr Jones' appointment, ACN was the trustee of a trust known as the Capital Trust, having been appointed to that office on 1 September 2004. The directors of the defendant, according to ASIC search results, are Mr Banovec and three persons with addresses in other countries. It appears that the defendant was the trustee of the Capital Trust before being replaced by ACN on 1 September 2004. Documents in Mr Jones' possession as liquidator of ACN suggest that the defendant became trustee on 1 February 2003 and, in some documents, continued to describe itself as the trustee of the Capital Trust after its apparent replacement by ACN on 1 September 2004. It appears that the trustee for the time being of the Capital Trust conducted a mortgage broking or mortgage originating business. 6 Mr Jones has been provided with documents suggesting that, in September 2004, the defendant, as trustee of the Capital Trust, purported to effect an assignment. I had occasion to refer to those documents in a judgment of 12 April 2006 (Re Jones as liquidator of ACN 110 802 938 Pty Ltd (2006) 57 ACSR 234) and it is convenient to repeat here the description I gave there: "The plaintiff has raised similar concerns in relation to a … transaction of September 2004 under which the company of which … [ACN] … purported to assign something to Capital Securitisation Ltd. What it was that was intended to be assigned is not clear. It is referred to as 'the rights and the title of' another 'loan book' pertaining to loans of some $105m. Again, it seems likely that a right to receive some ongoing commission or reward was intended to be assigned. The price in this case was $150,000. Capital Securitisation Ltd was, it may be noted, one of the vendors under the subsequent sale agreement of 1 November 2005. The transaction of September 2004 is the subject of unanswered questions in the mind of the plaintiff generally similar to those raised in relation to the transaction of 1 November 2005." 7 Mr Jones has also been provided with documents relating to a subsequent transaction or series of transactions also briefly described in the earlier judgment: "[10] The first sale … is a sale by three parties (one [ACN]) pursuant to an agreement dated 1 November 2005. The three sellers are named and described in that agreement as follows: DC CORPORATION AUSTRALIA PTY LIMITEDACN 094 797 618 (DC), CAPITAL SECURITISATION LIMITED ACN 110 234 109 (CS) AND ACN 110 802 938 PTY LTD TRADING AS THE CAPITAL TRUST (CT) (collectively, SELLER).