In the matter of Tumut River Orchard Management Limited (in liq) ABN 003 501 611 [2011] NSWSC 915

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Tumut River Orchard Management Limited (in liq) ABN 003 501 611 [2011] NSWSC 915 Hearing dates: 15 August 2011 Decision date: 15 August 2011 Jurisdiction: Equity Division - Corporations List Before: Hammerschlag J Decision: An order for the appointment of a liquidator consequent upon the resignation of a previous one Catchwords: CORPORATIONS - application for appointment of liquidator - s 502 of the Corporations Act 2001 (Cth) - where company in liquidation without liquidator -- r 7.2 of the Supreme Court (Corporations) Rules 1999 (NSW) - whether plaintiff can bring the application where it is neither a creditor nor a contributory of the company - held r 7.2(2)(a) does not create a closed class - held s 502 of the Corporations Act 2001 (Cth) does not restrict who may properly make the application - s 14 of the Civil Procedure Act 2005 (NSW) - if it were otherwise the present case is an appropriate one in which to dispense with rule - r 1.8 of the Supreme Court (Corporations) Rules 1999 (NSW) - liquidator appointed Legislation Cited: Corporations Act 2001 Cth Supreme Court (Corporations) Rules NSW Civil Procedure Act 2005 (NSW) Category: Principal judgment Parties: HP Mercantile Pty Ltd - Plaintiff Representation: S.M. Golledge - Plaintiff Versace McKenzie Lawyers - Plaintiff File Number(s): 2011/229150

EX TEMPORE Judgment 1HIS HONOUR: The plaintiff moves by Originating Process dated 15 July 2011 for an order that Mr Steven Gladman be appointed as liquidator of Tumut River Orchard Management Ltd (in liq) ABN 003 501 611 ("the company"), consequent upon the resignation of Mr Nicholas James Crouch who previously held that office. 2On 20 July 1998, a voluntary administrator was appointed to the company and on 20 April 1999, by resolution of creditors, Messrs Prentice and Barilla were appointed joint liquidators. The company was deregistered on 7 January 2006 and was reinstated by order of the Court on 7 July 2008 when Mr Crouch was appointed liquidator. He resigned on 24 June 2011. 3The circumstances giving rise to the present application are set out in the affidavit of Ross Chapman, a consultant for the plaintiff. 4The company lent money to a large number of persons who invested in horticultural schemes promoted by it. The loans were assigned to the plaintiff in equity. 5The plaintiff, as beneficial owner of the rights under the loans, has brought proceedings to recover the moneys lent. The legal owner of those rights is, however, the company and it is a necessary party to the proceedings. But it is in liquidation without a liquidator. Hence the necessity for the present application. 6Section 502 of the Corporations Act 2001 (Cth) ("the Act") provides that if from any cause there is no liquidator acting the Court may appoint a liquidator. 7Rule 7.2 of the Supreme Court (Corporations) Rules 1999 (NSW) ("the Corporations Rules") provides, however, as follows: Filling vacancy in office of liquidator (Corporations Act s 473 (7), s 502) (1) If, for any reason, there is no liquidator acting in a winding up, the Court may: (a) in the case of a winding up by the Court- appoint another official liquidator whose written consent in accordance with Form 8 has been filed, and (b) in the case of a voluntary winding up- appoint another registered liquidator whose written consent in accordance with Form 8 has been filed. (2) The Court may make the appointment: (a) in any case-on application by ASIC, a creditor or a contributory, or (b) in the case of a winding up by the Court-on its own initiative. 8The plaintiff is neither a creditor nor a contributory of the company so that the present case is not within any of the examples enumerated in r 7.2(2) of the Corporations Rules. The winding up of the company is not by the Court. 9The question therefore arises whether the order sought can be made on the application of the plaintiff. 10In my view, it can. 11Firstly, r 7.2(2)(a) of the Corporations Rules expressly confers standing on those identified in it to make the application. There is no warrant for construing it so as to create a closed class. Plainly others, such as the plaintiff in this case, may have a legitimate and recognisable interest in obtaining an order to fill a vacancy. 12This construction finds support in r 7.2(2)(b) in that, in the case of winding up by the Court, it could hardly be the case that only the Court on its own initiative could make the appointment. 13Secondly, s 502 of the Act itself does not place any restriction on who may properly make the application and I do not consider that it would be sensible to construe r 7.2 of the Corporations Rules (a procedural rule) as purporting (even if this were permissible - which I doubt it is) to create one. 14Thirdly, s 14 of the Civil Procedure Act 2005 (NSW) provides as follows: In relation to particular civil proceedings, the court may, by order, dispense with any requirement of rules of court if satisfied that it is appropriate to do so in the circumstances of the case. 15The present is a case in which it would be entirely appropriate to dispense with the requirements of the rule if by it the plaintiff could not bring the application. 16Finally, r 1.8 of the Corporations Rules itself provides: The court may give directions in relation to the practice and procedure to be followed in a proceeding if it is satisfied, in the circumstances of the proceeding, that: (a) the provisions of the Corporations Act, the ASIC Act, or the rules of the Court do not adequately provide for the practice and procedure to be followed in the proceeding; or (b) a difficulty arises, or doubt exists, in relation to the practice and procedure to be followed in the proceeding. 17Rule 7.2 of the Corporations Rules does not adequately provide for the present circumstances and it would be appropriate to direct that the order sought may be made on the application of the plaintiff. 18To the extent that is required to enable this application to be brought by the present plaintiff and the order which it seeks to be made I a. dispense with any requirement of r 7.2 of the Corporations Rules that the application in the present case be by ASIC, a creditor or a contributory; and b. direct that this application may be brought by the plaintiff. 19I make an order in terms of paragraph 1 of the Originating Process. 20I note the consent of the liquidator, Mr Gladman, has been filed.