New South Wales Supreme Court CITATION : In the matter of Nielsen & Moller Autoglass (NSW) Pty Limited (in liquidation); Maggie Yeung Lo -v- Nielsen & Moller Autoglass (NSW) Pty Limited (in liq) [2008] NSWSC 1068 HEARING DATE(S) : 15 December 2008 JUDGMENT OF : Hammerschlag J EX TEMPORE JUDGMENT DATE : 15 December 2008 DECISION : Liquidator removed, and further liquidators (previously special purpose liquidators) appointed. Liquidators to furnish copy of reasons to known creditors. CATCHWORDS : CORPORATIONS - Winding up - Corporations Act 2001 (Cth) s 503 - liquidators - application for removal of liquidator where special purpose liquidators are appointed in addition to liquidator to conduct certain investigations - where liquidator unfunded by creditors and likely to remain so - where no available property to fund expenses - where creditor is prepared to fund investigation but not where liquidator conducts it - where liquidator supports his removal and the appointment of the special purpose liquidators in his place and where special purpose liquidators consent to that appointment LEGISLATION CITED : Corporations Act 2001 (Cth) Lo v Nielsen & Moller (Autoglass) (NSW) Pty Ltd [2008] NSWSC 407 CASES CITED : In the matter of Nielsen & Moller Autoglass (NSW) Pty Ltd (in liq); Geoffrey James Rankine & Anor v John Frederick Lord & Anor [2008] NSWSC 1197 Re Greight Pty Ltd (in liq) (2006) 56 ACSR 334 Maggie Yeung Lo - Plaintiff PARTIES : Nielsen & Moller Autoglass (NSW) Pty Limited (in liquidation) - First Defendant Christopher Thomas Wykes, in his capacity as the liquidator of Nielsen & Moller Autoglass (NSW) Pty Limited (in liquidation) - Second Defendant FILE NUMBER(S) : SC 2490/2008 COUNSEL : J.T. Svehla (Plaintiff) SOLICITORS : McInnes Attorneys (Plaintiff) - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST HAMMERSCHLAG J 15 DECEMBER 2008 2490/2008 IN THE MATTER OF NEILSEN & MOLLER AUTOGLASS (NSW) PTY LTD (IN LIQ); MAGGIE YEUNG LO -V- NIELSEN & MOLLER AUTOGLASS (NSW) PTY LTD (IN LIQ) EX TEMPORE JUDGMENT 1 HIS HONOUR: This morning Barrett J referred to me from his busy Corporations List (it being the last week of the Court's present term), an application by the plaintiff brought by interlocutory process to vary orders made by his Honour on 2 May 2008 appointing Messrs John Frederick Lord and Atle Crowe-Maxwell to be additional liquidators of Nielsen & Moller Autoglass (NSW) Pty Ltd (in liquidation) ("the company"): see Lo v Nielsen & Moller (Autoglass) (NSW) Pty Ltd [2008] NSWSC 407. I will refer to Messrs Lord and Crowe-Maxwell where appropriate as the special purpose liquidators. 2 The application was filed last Friday with leave and made returnable today. 3 Under his Honour's orders the special purpose liquidators were given specific powers and functions to facilitate the investigation of certain financial dealings between the company and Mr Geoffrey James Rankine, alone or together with his wife, Mrs Karin Elke Rankine, and a Mr Moller. 4 The liquidator of the company is Mr Christopher Thomas Wykes. He was originally appointed administrator and upon the voluntary winding up of the company on 31 January 2008, was appointed liquidator. 5 After their appointment the special purpose liquidators obtained ex parte orders for production of documents by Mr and Mrs Rankine. 6 On 14 November 2008 I set those orders aside: see In the matter of Nielsen & Moller Autoglass (NSW) Pty Ltd (in liq); Geoffrey James Rankine & Anor v John Frederick Lord & Anor [2008] NSWSC 1197. 7 Against that background the present application was brought to vary the terms of the orders appointing the special purpose liquidators. 8 In his judgment appointing the special purpose liquidators Barrett J referred to the fact that the plaintiff, Ms Lo, was willing to finance an investigation by a liquidator only if that liquidator is not Mr Wykes. His Honour also referred to the fact that no other creditor appeared willing to provide funding either to Mr Wykes or to an alternative liquidator to enable the investigation to be carried out. 9 After hearing submissions from Mr Svehla of counsel, who appeared for the plaintiff, and having expressed some preliminary views about the amendments being sought to the appointment orders, I stood the matter down until this afternoon to allow Mr Svehla to give further consideration to the terms of amendments which might be appropriate. 10 However when the hearing resumed this afternoon Mr Svehla informed me that in the interim Mr Wykes had indicated a preparedness to resign as liquidator and if the Court saw fit to have the special purpose liquidators replace him as liquidators of the company. 11 I gave leave for the filing of an amended interlocutory process seeking an order pursuant to s 503 of the Corporations Act 2001 (Cth) ("the Act"), removing Mr Wykes as liquidator and appointing Messrs Lord and Crowe-Maxwell as joint and several liquidators of the company. 12 Section 503 of the Act provides that: "The Court may, on cause shown, remove a liquidator and appoint another liquidator." 13 In support of the application there was read an affidavit of Mr Wykes sworn 15 December 2008 in which Mr Wykes says, amongst others, that: a at all times since his appointment as liquidator he has been unfunded; b the creditors of the company were not prepared to fund him, and that position continues; c he relies on s 545(1) of the Act, which provides that: "a liquidator is not liable to incur any expense in relation to the winding up of a company unless there is sufficient available property"; d he is prepared to resign as liquidator and if the Court sees fit to have Messrs Lord and Crowe-Maxwell replace him; e he supports an application for his removal and the appointment of Messrs Lord and Crowe-Maxwell to avoid any expense, delay and complications which may arise from there being two sets of liquidators appointed to the company and in circumstances where the creditors are funding the special purpose liquidators but not himself. 14 A consent by the special purpose liquidators to act as liquidators was filed in Court. 15 In Re Greight Pty Ltd (in liq) (2006) 56 ACSR 334 at 338 [18] Finkelstein J pointed out that: "In most applications for the removal of a liquidator it is necessary to find out the wishes of the persons really interested, in this case the creditors: Re Association of Land Financiers (1878) 10 Ch D 269." 16 In that case, however, Finkelstein J did not require a meeting of creditors to be convened but requested the plaintiffs to provide a copy of the Court's reasons to the largest creditor for the purpose of ascertaining whether it had any objection to certain parts of the orders that his Honour made. 17 In the present circumstances, given the absence of available property even to pay for the costs of convening a creditors' meeting, given the fact that the task for which the special purpose liquidators were appointed has not progressed very far, and given that the only resources which will be available to the company are those which Ms Lo is prepared to make available, it seems to me that it is appropriate to make the orders which the plaintiff seeks, without requiring the wishes of creditors to be ascertained at this point. That does not mean that a creditor (or any other person with standing) is precluded from making any application on proper grounds in due course. 18 I propose to order that the liquidators provide a copy of these reasons to known creditors. 19 In the circumstances it became unnecessary to consider the amendments to the orders appointing the special purpose liquidators sought in the interlocutory process. 20 The orders of the Court will accordingly be as follows: 1. Christopher Thomas Wykes is removed as liquidator of the company. 2. John Frederick Lord and Atle Crowe-Maxwell of PKF, Chartered Accountants, Level 10, 1 Margaret Street, Sydney are appointed as liquidators, jointly and severally, of the company. 3. Within 14 days of receipt of these reasons, the liquidators are to send a copy of them to known creditors of the company. 4. The amended interlocutory process is stood over before the Corporations List Judge on 23 February 2009. ********** 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.