New South Wales Supreme Court CITATION : Billingham re W M Ritchie (Aust) Pty Ltd [2007] NSWSC 325 HEARING DATE(S) : 05/04/07 JUDGMENT DATE : 5 April 2007 JURISDICTION : Equity Division Corporations List JUDGMENT OF : Barrett J EX TEMPORE JUDGMENT DATE : 5 April 2007 DECISION : Order fixing date for deregistration CATCHWORDS : CORPORATIONS - winding up - voluntary winding up - final return lodged by liquidators - application for order postponing deregistration - where liquidators learn of litigation against company not previously brought to their notice LEGISLATION CITED : Corporations Act 2001 (Cth), ss.58AA, 509(3), 509(5), 509(6), 588FF(1), 588FF(3) CASES CITED : Burton re Palmbird Pty Limited (2006) 59 ACSR 695 Re Harris Scarfe Ltd [2006] SASC 277 PARTIES : Paul Andrew Billingham and Garth Desmond Olling as liquidators of W M Ritchie (Aust) Pty Limited (in liquidation) - Plaintiffs FILE NUMBER(S) : SC 2120/07 COUNSEL : Ms J.A. Soars - Plaintiffs SOLICITORS : Minter Ellison - Plaintiffs IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST BARRETT J THURSDAY 5 APRIL 2007 2120/07 PAUL ANDREW BILLINGHAM & ANOR AS LIQUIDATORS OF W M RITCHIE (AUST) PTY LIMITED JUDGMENT - on application for order under s.509(6) of the Corporations Act 2001 (Cth) 1 This is an application by the liquidators of W M Ritchie (Aust) Pty Limited ("W M Ritchie"), a company which is in the course of members' voluntary winding-up. They seek an order under s.509(6) of the Corporations Act 2001 (Cth) specifying 10 October 2007 as the day on which Australian Securities and Investments Commission is to deregister the company. This follows lodgment by the liquidators of their final return pursuant to s.509(3). 2 In the normal course, ASIC is required by s.509(5) to deregister the relevant company at the end of the three month period after lodgment of that return. Under s.509(6), the court may alter the day on which ASIC is to deregister, provided that the order of the court is made within three months after lodgment of the return. In this case, the return was lodged on 11 January 2007 with the result that the relevant period of three months will expire on 11 April 2007. The present application is therefore brought so as to permit the court to make the order within time. 3 The application has arisen in circumstances where the liquidators have completed their administration and distributed the surplus to the members. The liquidators were, however, unaware at all material times that the liquidators of Harris Scarfe Limited had instituted proceedings against W M Ritchie in the District Court of South Australia. It appears that this circumstance was not brought to the attention of the liquidators of W M Ritchie by the persons who had knowledge of the affairs of that company. 4 The South Australian proceedings were commenced by statement of claim filed as long ago as September 2005. In those proceedings, the Harris Scarfe liquidators allege that certain sale of goods transactions entered into by Harris Scarfe involved payments by that company to W M Ritchie in circumstances such as to give rise to rights of recovery by the liquidators under s.588FF(1) of the Corporations Act. Those rights are said to lie against W M Ritchie. 5 The statement of claim filed in September 2005 implied that an extension of time under s.588FF(3) was made by order of the District Court itself ("Pursuant to the order of His Honour Judge Kelly made on 14 April 2004, the Court ordered …") but it seems more likely, having regard to the judgment of Debelle J in Re Harris Scarfe Ltd [2006] SASC 277, at paragraph 10, that the order was made by Judge Kelly as a Master of the Supreme Court of South Australia and accordingly by a "Court" (with a capital "C") as defined by s.58AA of the Corporations Act. 6 This is borne out by a copy of consent orders of November 2006 by which the order of 14 April 2004 was set aside so far as it related to W M Ritchie. They are orders of the Supreme Court of South Australia. By subsequent consent orders (17 November 2006), the proceedings against W M Ritchie were stayed, apparently pending further pursuit of the original application for an order extending time under s.588FF(3). 7 The South Australian litigation became known to the liquidators of W M Ritchie in February 2007 when they received a letter from the Adelaide solicitors acting for the liquidators of Harris Scarfe who, in turn, had become aware of the winding-up of W M Ritchie. In that letter, there was a complaint that the final distribution to members had been made in the winding-up of W M Ritchie. Allegations of breach of duty by directors were made. It was also asserted that the recipients of the final distribution had notice of the Harris Scarfe claim against W M Ritchie and it was said that they held the funds as constructive trustee. 8 Against this background, the liquidators of W M Ritchie very properly take the view that they should take steps to ensure that W M Ritchie does not go out of existence on 11 April 2007. They have entered into discussions in an attempt to reach a commercial resolution of the situation arising from the South Australian proceedings. They wish to have a period of six months or thereabouts within which to take such steps as may appear to be appropriate once they have been able to make a full assessment of the overall position. This represents a good and valid reason for deferring the deregistration of W M Ritchie. 9 Notice of the application has been given to the solicitors acting for W M Ritchie itself in the Adelaide litigation, the solicitors acting for the Harris Scarfe liquidators in that litigation and ASIC. Each has acknowledged awareness of the application and indicated no desire to make submissions for or against the grant of the relief sought. 10 I accordingly order, pursuant to s.509(6) of the Corporations Act 2001 that Australian Securities and Investment Commission deregister W M Ritchie (Aust) Pty Limited on 10 October 2007. I also order that the cost of this application be costs in the winding-up of W M Ritchie (Aust) Pty Limited. 11 Having made the order under s.509(6), I am bound to observe that, as I noted last year in the case of Burton re Palmbird Pty Limited (2006) 59 ACSR 695, the court's jurisdiction under s.509(6) cannot be exercised after the expiration of the period of three months after lodgment of the liquidator's final return. It follows that, should the South Australian matter not be satisfactorily resolved or determined by 10 October 2007, the court will not be able to maintain the existence of W M Ritchie (Aust) beyond that date by means of any further order. It will, however, have jurisdiction to order reinstatement of the registration under s.601AH, assuming that an application in that respect is made by a former liquidator or a person aggrieved and it is shown that reinstatement would be just. 12 The order under s.509(6) may be taken out forthwith. ********** 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.