Supreme Court New South Wales Medium Neutral Citation: In the matter of Ambridge Investments Pty Limited & Ors [2015] NSWSC 1671 Hearing dates: 2 November 2015 Date of orders: 02 November 2015 Decision date: 02 November 2015 Jurisdiction: Equity - Corporations List Before: Bergin CJ in Eq Decision: Orders sought to be made Catchwords: LIQUIDATORS – where multiple appointments of liquidator by various Courts – where liquidator resigning – whether this Court may make orders under s 473(7) of the Corporations Act 2001 (Cth) filling the vacancies created by the resignation of the liquidator from companies to which the liquidator was appointed by other Courts Legislation Cited: Corporations Act 2001(Cth) Cases Cited: Condon v Watson [2009] FCA 11; (2009) 174 FCR 314 Free & Ors [2010] NSWSC 1079 Maamari v Ringwood & Ply Pty Ltd [2005] NSWSC 40; (2005) 52 ACSR 370 Sihota v Pacific Sands Motel Pty Limited (In Liq) & Anor [2003] NSWSC 119; (2003) 56 NSWLR 721 Category: Principal judgment Parties: Ambridge Investments Pty Ltd and others; James Michael White (Plaintiffs) Representation: Counsel: P Cutler (Plaintiffs) Solicitors: Watson Mangioni Lawyers Pty Ltd (Plaintiffs) File Number(s): 2015/307394 Publication restriction: Nil Judgment – EX TEMPORE 1. These are applications pursuant to s 473(7) of the Corporations Act 2001 (Cth) filed on 20 October 2015 in the matters of Ambridge Investments Pty Ltd (in liquidation) and various other companies included in the Schedule attached to the Originating Process, to fill the vacancy to be created by the resignation of the liquidator of the companies, Atle Crowe-Maxwell, who has resigned from the partnership, BDO East Coast Partnership (BDO). The liquidator has executed memoranda of resignations as liquidator of the companies that are yet to become effective by filing them with the Court and lodging them with ASIC: Free & Ors [2010] NSWSC 1079. The orders sought are that James Michael White, a partner of BDO, fill the vacancy to be created by the liquidator's resignations. 2. The matter was referred to me by the Registrar in Equity this morning and Mr P Cutler, of counsel, appears for the plaintiffs. The affidavits in support of the applications are those of the liquidator, sworn on 13 October 2015, and Mr White, sworn on 20 October 2015. 3. The liquidator is in the process of resigning all of his current appointments as liquidator in both Court appointed liquidations and voluntary liquidations. Although the liquidator also holds joint appointments in other liquidations, the present applications relate to his sole appointments. 4. Mr White sets out the background to each of the liquidator's appointments. All of the appointments (except an appointment made by the Federal Court in respect of the company, Gleeson Express Services Pty Ltd, and an appointment made by the Supreme Court of Victoria to TPS Group Pty Limited) were made by this Court. 5. Section 473(7) of the Corporations Act provides: A vacancy in the office of a liquidator appointed by the Court must be filled by the Court. 1. The Supreme Court (Corporations) Rules 1999 provide relevantly: 7.1 Resignation of liquidator (Corporations Act s 473(1)) (1) A liquidator appointed by the Court who wishes to resign office must file with the Registrar, and lodge with ASIC, a memorandum of resignation. (2) The resignation takes effect on the filing and lodging of the memorandum. 1. In support of the applications Mr Cutler relied upon Condon v Watson [2009] FCA 11; (2009) 174 FCR 314, a case in which applications were made under s 473(7) of the Corporations Act where the liquidator had been appointed to various companies by orders of the Federal Court of Australia and also to one company, Coastace Pty Ltd, by this Court and to another, Goodbat Pty Ltd, by the Family Court of Australia. Lindgren J said (at [45]): Section 473(7) of the Corporations Act provides: A vacancy in the office of a liquidator appointed by the Court must be filled by the Court. I do not think that this provision means that the vacancy must be filled by the Court that made the original appointment of the liquidator. It is not as if the filling of the vacancy involves a variation of, or other form of interference with, the order made by the appointing Court. It is sufficient that the vacancy is filled by a "Court" as defined in s 58AA of the Corporations Act. Accordingly, this Court can fill both vacancies. 1. Mr Cutler also relied upon two other decisions, Sihota v Pacific Sands Motel Pty Limited (In Liq) & Anor [2003] NSWSC 119; (2003) 56 NSWLR 721 and Maamari v Ringwood & Ply Pty Limited [2005] NSWSC 40; (2005) 52 ACSR 370. 2. In Sihota v Pacific Sands Motel Pty Limited (In Liq) & Anor Austin J was dealing with an application for leave to proceed pursuant to s 471B of the Corporations Act in which the order made for the winding up of the relevant company had been made by the Queensland Supreme Court. His Honour then embarked on an historical analysis of the legislation and authorities and said: 15. The complexity arising because the Corporations Law applied in each of the States as a law of the State, while applying in the Australian Capital Territory as a law of the Commonwealth, made it necessary for the Full Federal Court to consider whether the wording of the Corporations Laws of the States might have a narrow meaning because of the limited geographical subject matter of each State's law. The court held that a limited construction should not be adopted, because it was the intention of all legislatures within Australia to establish a national legislative scheme in which the Federal Court and the Supreme Courts might exercise jurisdiction in respect to civil matters, without any court having primacy over any other. 16. The position is now more straightforward, since the Corporations Act (Cth) is an exercise of Commonwealth legislative power pursuant to referrals of power by the States. The scheme obviously is a national scheme, and Pt 9.6A establishes jurisdictional arrangements for the Federal Court and the Supreme Courts in which, generally speaking, the jurisdiction is concurrent and no Court is given primacy. That being so, the structure of the statutory scheme suggests a legislative intention that any "Court" should have jurisdiction to make orders consequent upon orders made by any other "Court". 17. In my opinion, s 471B can and should be construed in a manner that achieves this result. Under the construction that I favour, one must take the definition of "Court" in s 58AA(1) and insert it in substitution for the words "the Court" whenever the latter words appear in s 471B. It then becomes plain that the reference to "the Court" at the end of the section is a reference to any Court, and is not confined to the Court that made the winding up order. 1. In Maamari v Ringwood & Ply Pty Limited [2005] NSWSC 40; (2005) 52 ACSR 370 Barrett J was dealing with an application to terminate a winding up that had been ordered by the Supreme Court of Queensland. His Honour, after referring to the source of power for the Court, said this: [7] Having regard to s 58AA(2) and the definition of "Court" in s 58AA(1), it is clear that the jurisdiction conferred by s 459A is exercisable by any one of the courts referred to in that definition and that the jurisdiction separately conferred by s 482(1) is likewise exercisable by any one of those courts. [8] The order of the Supreme Court of Queensland under s 459A was effective to cause the company to become subject to winding up and thereby to be exposed to the range of statutory provisions applicable to a company in the course of being wound up. As a result of the order made by the Queensland court, there is in existence and in progress "the winding up of a company" as referred to in s 482(1). Many of the provisions dealing with a state of winding up confer jurisdiction on the "Court" and, as the decision of Austin J in Sihota v Pacific Sands Motel Pty Ltd (2003) 56 NSWLR 721; [2003] NSWSC 119 shows, it is open to any of the courts within the s 58AA definition of "Court" to exercise that jurisdiction. Older thinking to the effect that, in a court ordered winding up, the winding up continues to be administered by the court that made the winding-up order must yield to the clear statutory specification. In that respect, I would no longer adhere to the approach suggested in Re FAI General Insurance Co Ltd [2002] NSWSC 262 which was the subject of analysis by Austin J in the Sihota case. [9] Sihota itself was a case about the grant of leave to proceed under s 471B,but the thinking it exemplifies holds good in all cases in which a winding-up order has been made and an application is later made under a particular provision conferring jurisdiction on the "Court" in relation to the winding up stemming from that order. [10] In these respects, the definition of "Court" in s 58AA of the Corporations Act seems to me to operate in the same way as s 588AA of the former Corporations Law, as it applied to the Australian Capital Territory by force of Commonwealth law and to each state and the Northern Territory as a matter of state or territory law. In Re Macks; Ex parte Saint (2000) 204 CLR 158; 176 ALR 545; 36 ACSR 216; [2000] HCA 62, Gummow J observed, at CLR 224; ALR 591; ACSR 262, that, having regard to the corresponding definition of "Court" in the Corporations Law, the exercise of the statutory jurisdiction to give directions to a liquidator "was not confined to the Federal Court as the court which had made the winding-up orders and had appointed Mr Macks as liquidator". His Honour cited, in that connection, the decision of the Full Federal Court in Acton Engineering Pty Ltd v Campbell (1991) 31 FCR 1; 103 ALR 437; 6 ACSR 149, another decision under the Corporations Law, which was held by Austin J in Sihota v Pacific Sands Motel Pty Ltd, above, to be applicable to a case arising under the Commonwealth Act. [11] Nor, in my opinion, is there room for discomfort, on the grounds of comity, about the idea that one superior court within the s 58AA definition of "Court" may order the termination under s 482 of a winding up brought about by an order made by another superior court within that definition. The first court is not invited to review or countermand the order of the other court, as would be the case if the subsequent application were an application to set aside the original order either because it was made in the absence of the defendant or for some other reason. On the contrary, the court asked to make an order under s 482 is invited to accept the full force and effect of the winding-up order, to recognise the existence of the administration in winding up produced by that order and to consider, as a separate and subsequent question, whether grounds exist to justify release of the relevant company from that form of administration. 1. Section 58AA of the Corporations Act provides: Meaning of court and Court (1) Subject to subsection (2), in this Act: court means any court. Court means any of the following courts: (a) the Federal Court; (b) the Supreme Court of a State or Territory; (c) the Family Court of Australia; (d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act. (2) Except where there is a clear expression of a contrary intention (for example, by use of the expression "the Court"), proceedings in relation to a matter under this Act may, subject to Part 9.6A, be brought in any court. 1. Section 471B of the Corporations Act provides: While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with: (a) a proceeding in a court against the company or in relation to property of the company; or (b) enforcement process in relation to such property; except with the leave of the Court and in accordance with such terms (if any) as the Court imposes. 1. On one reading of s 471B of the Act, it might have been thought that the use of the expression "the Court" where it secondly appears meant the same Court that had made the orders for winding up of the company. A similar reading might be applied to s 473(7) of the Act. This is particularly so where the expression used in both sections is "the Court" rather than "a Court". However I agree with the approach adopted in the abovementioned authorities and conclude that the expression "Court" where it secondly appears in s 473(7) may be read as any of the Courts defined in s 58AA of the Act. 2. In the present case this Court is not being asked to countermand the order of the Federal Court or the order of the Victorian Supreme Court. Rather this Court is asked to make a consequential order in respect of the winding up of those companies by reason of a step taken by the liquidator. The resignations take effect when the liquidator files his memoranda of resignation with the Registrar of the Court pursuant to the Corporations Rules and lodges them with ASIC. It is these steps that create the vacancies. The vacancy must be filled by the Court. 3. I am satisfied having regard to the approach adopted in the authorities referred to above that this Court does have the power to make the orders sought by the plaintiffs in these proceedings. I am also satisfied that there is a clear benefit in appointing Mr White to ensure continuity within the one firm in respect of each of the liquidators: Condon v Watson at 317; Free & Ors at [6]. 4. The orders sought for Mr White to fill the vacancies that will be created by the liquidator's resignations will be made. ********** 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. Decision last updated: 10 November 2015