New South Wales Supreme Court CITATION : Little v Edwards Concreting Pty Ltd [2010] NSWSC 185 HEARING DATE(S) : 3 March 2010 JUDGMENT DATE : 3 March 2010 JURISDICTION : Equity JUDGMENT OF : White J EX TEMPORE JUDGMENT DATE : 3 March 2010 1. Order that James Alexander Shaw of Level 3, 2 Market Street Newcastle be appointed liquidator of the defendant, Edwards Concreting Pty Limited ACN 104 650 535 (the company). DECISION : 2. Give leave to the plaintiff in proceedings 291424 of 2009, to Mr Leigh Robert Edwards and Mr Douglas Robert Edwards to inspect and copy the affidavits of Scott Anthony Newton sworn 25 February 2010, and James Alexander Shaw, sworn 25 February 2010 and 3 March 2010, and the exhibits to those affidavits. 3. Give leave to those persons to inspect and copy a letter from the NSW Office of Fair Trading to Mr Douglas Robert Edwards dated 22 August 2008 which has been marked MFI 1, and to use those documents or information contained in them in any way in connection with the winding-up of the company, or in connection with the proceedings between the plaintiffs and the company in the Consumer, Trader and Tenancy Tribunal. I direct that those documents, including the exhibits to Messrs Newton and Shaw's affidavits remain with the file. CATCHWORDS : CORPORATIONS – materials provided by liquidators provide sufficient explanation of conduct of winding up of company – not necessary for court to hold inquiry and examine liquidators in relation to winding up under Corporations Act, s 536 –effectiveness of resignations of liquidators – appointment of liquidator by court under s 502 LEGISLATION CITED : Corporations Act 2001 (Cth) CATEGORY : Consequential orders CASES CITED : McGrane v Ryan (Commonwealth Industrial Court, Spicer CJ, Joske and Smithers JJ, 12 March 1965) 7 AILR 83) TEXTS CITED : BH McPherson, M Gronow, R Mason, McPherson's Law of Company Liquidation, Thomson Reuters Legal Online PARTIES : Plaintiffs: John & Birgit Little Defendant: Edwards Concreting Pty Ltd FILE NUMBER(S) : SC 2009/291424 COUNSEL : Plaintiffs: In person Defendant: J M Ireland QC & A L Connolly SOLICITORS : Plaintiffs: n/a Defendant: n/a IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WHITE J Wednesday, 3 March 2010 2009/291424 J & B Little v Edwards Concreting Pty Ltd JUDGMENT 1 HIS HONOUR: On 11 February 2009, I made orders including that this matter be fixed today to hear any submissions by or on behalf of the liquidators, or Mr Leigh Robert Edwards or Douglas Robert Edwards, as to whether the court should exercise its powers under s 536(3) of the Corporations Act 2001 (Cth) to conduct an examination of liquidators, and of the Messrs Edwards, and to direct an investigation of the liquidators' books. 2 The liquidators have provided affidavits which appear to give a full explanation of the conduct of the winding up of Edwards Concreting Pty Ltd ("the company"). They acknowledge that some errors were made in the course of the winding up, but it is fair to say that the principal matters about which I expressed prima facie concern in my reasons included in the addendum 11 February 2009 have been addressed. 3 I do not think that any purpose would be served by embarking formally on a course of examination of any of those individuals on oath or affirmation, or directing an investigation of the books of the company. 4 The materials provided by the liquidators should put the plaintiffs in the position that, if they are successful in their case against the company in the Consumer, Trader and Tenancy Tribunal and wish to take the matter further, they will know the underlying facts they might need to know in order to decide on any particular course of action. 5 I have decided that, having regard to the full material which the liquidators have provided, it is not necessary to proceed further. 6 There is one matter that needs to be dealt with, namely the resignation of both liquidators. The liquidators have lodged with ASIC notice of having ceased to occupy the position of liquidators. They resigned their position. 7 In their affidavits, the liquidators explain the misapprehensions they were under when they resigned. Those misapprehensions would not deprive the resignations of effect. 8 The Corporations Act does not specify how liquidators appointed in a voluntary winding-up are to resign, although the Act clearly contemplates that they can do so (Corporations Act ss 495(3), 499(5) and 537(2); BH McPherson, M Gronow, R Mason, McPherson's Law of Company Liquidation, Thomson Reuters Legal Online at [8.3130]). 9 It is observed in McPherson's Law of Company Liquidation that it is usual practice to tender a resignation at meetings of creditors and contributories. There is nothing in the Act that requires that a resignation be effected in that way. It appears to me (and after considering the matter, counsel for the liquidators accepted that this was correct) that the liquidators' resignations were effective. It follows they ceased to hold office and it is not open to them simply to withdraw their resignation. (See McGrane v Ryan (Commonwealth Industrial Court, Spicer CJ, Joske and Smithers JJ, 12 March 1965) 7 AILR 83.) 10 The Court therefore should exercise its power pursuant to s 502 of the Corporations Act to appoint a liquidator. In the circumstances disclosed in the liquidators' affidavits I am satisfied that it is appropriate to re-appoint one of them as liquidator. It is proposed that Mr Shaw be appointed and I think that is appropriate. He now has primary responsibility for the matter. Also he did not make the earlier determination that notice of the creditors' meeting should not be given to the plaintiffs. Mr Shaw is an official liquidator and he consents to his appointment. 11 The liquidators accept that it is appropriate to make orders which would permit the plaintiffs and Messrs Edwards to use the information contained in the affidavits and the exhibits, and the information provided in the course of this hearing in any way which might arise in connection with the winding-up of the company or in the Tribunal. 12 I make the following orders: 1. That James Alexander Shaw of Level 3, 2 Market Street Newcastle be appointed liquidator of the defendant, Edwards Concreting Pty Limited ACN 104 650 535 (the company). 2. I give leave to the plaintiff in proceedings 291424 of 2009, to Mr Leigh Robert Edwards and Mr Douglas Robert Edwards to inspect and copy the affidavits of Scott Anthony Newton sworn 25 February 2010, and James Alexander Shaw, sworn 25 February 2010 and 3 March 2010, and the exhibits to those affidavits. 3. I give leave to those persons to inspect and copy a letter from the NSW Office of Fair Trading to Mr Douglas Robert Edwards dated 22 August 2008 which has been marked MFI 1, and to use those documents or information contained in them in any way in connection with the winding-up of the company, or in connection with the proceedings between the plaintiffs and the company in the Consumer, Trader and Tenancy Tribunal. I direct that those documents, including the exhibits to Messrs Newton and Shaw's affidavits remain with the file. ****** 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.