In the matter of Lake View Estates Pty Ltd (in liquidation) (ACN 108 590 129) [2015] NSWSC 2056

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Lake View Estates Pty Ltd (in liquidation) (ACN 108 590 129) [2015] NSWSC 2056 Hearing dates: 30 April 2015 Date of orders: 30 April 2015 Decision date: 30 April 2015 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Plaintiff appointed liquidator of the defendant; administration of the defendant terminated. Catchwords: CORPORATIONS – winding up – liquidators – application for appointment as liquidator – where proposed liquidator is administrator of company – where validity of appointment as administrator doubtful – where company is in liquidation and liquidator has resigned – where secured creditor supports administrator's appointment – held, administrator appointed as liquidator. Legislation Cited: (Cth) Corporations Act 2001, s 436A, s 436B, s 436C, s 439A, s 447A, s 499(5), s 502, s 509, s 511(1) (NSW) Supreme Court (Corporations) Rules 1999, r 7.2 Cases Cited: In the matter of Tumut River Orchard Management Limited (in liq) ABN 003 501 611 [2011] NSWSC 915 Category: Procedural and other rulings Parties: Angus Carnegie Gordon (plaintiff) Lake Views Estates Pty Ltd ACN 108 590 129 (defendant) Representation: Counsel: J D Chard (solicitor) (plaintiff)

Solicitors: Paul Bard Lawyers (plaintiff) File Number(s): 2015/128138

Judgment (ex tempore) 1. HIS HONOUR: The applicant Angus Carnegie Gordon, who has purportedly been appointed voluntary administrator of the defendant Lake Views Estates Pty Limited, seeks leave to file an originating process claiming orders that he be appointed liquidator of the defendant and that the administration end. 2. On 22 December 2004, the defendant company, which had been incorporated on 1 April 2004, gave a charge over its assets and undertaking to the Public Trustee of Queensland as custodian of the City Pacific Mortgage Trust. On 30 September 2008, the Public Trustee assigned the benefit of that charge to City Pacific Limited. On 12 August 2009, Matthew Campbell Muldoon and Kenneth Stuart Sellers were appointed voluntary administrators of the defendant – presumably, although it is not clear, pursuant to (Cth) Corporations Act 2001, s 436A. Shortly thereafter City Pacific Limited, which was in receivership, was replaced as custodian of the trust by a trustee company, Fiduciary Services Limited. Consequent on its appointment as custodian, Fiduciary on 31 August 2009 appointed Matthew Caddie and Joseph Hayes as receivers of the defendant company. On 23 December 2009, at the s 439A meeting, the creditors of the defendant resolved that the defendant be wound-up. As a result, the then administrators became liquidators of the company in a deemed creditors voluntary winding-up. 3. On 5 December 2012, the custodian appointed Blair Alexander Peach and Richard L Barron as receivers of the defendant, presumably in anticipation of the resignation of Caddie and Hayes on 17 December 2012. On 13 February 2013, Muldoon and Sellers, who were the liquidators, having filed final accounts with ASIC, resigned as liquidators, without convening a final meeting of creditors. 4. On 1 April 2015, the custodian, as a secured creditor, purported to appoint Mr Gordon voluntary administrator of the defendant under Corporations Act, s 436C. I say 'purported' because s 436C(2) provides that subsection (1) – which provides that a person entitled to enforce a security interest in the whole or substantially the whole of a company's property may appoint an administrator – does not apply to a company if a person holds an appointment as liquidator of the company. On one view, that section was not attracted because, although the company was in liquidation, no-one held an appointment as liquidator, the liquidator having resigned. But on another view, the intent of s 436C(2) (and see section 436A(2)) is that where a company is in liquidation, only a liquidator can appoint an administrator under s 436B. It is not necessary for present purposes to resolve that question, beyond noting that there is doubt as to the validity of the appointment of the administrator. 5. The administrator now desires to be appointed liquidator, and the secured creditor who appointed the liquidator supports the administrator's application in that respect. The secured creditor desires a liquidation for accounting and audit purposes. ASIC can deregister the company only after the liquidator has called the final meeting of creditors, after first determining that the affairs of the company have been fully wound-up [see Corporations Act, s 509]. 6. It is even more doubtful that the creditors at a s 439A meeting could resolve that the company be wound up, as it is already in liquidation, although the creditors could, pursuant to s 499(5), fill the vacancy in the office of liquidator. But pursuant to s 502, there being no liquidator acting, the Court may appoint a liquidator. 7. Given the state of the liquidation, being that the winding up appears to have been completed save for the very final steps, the apparent overwhelming interest in financial terms of the secured creditor/custodian that purports to have appointed the plaintiff, and its interest in having the liquidation brought to an end, it is convenient to appoint the plaintiff for that purpose. Although not in one of the classes referred to in (NSW) Supreme Court (Corporations) Rules 1999, r 7.2, those classes are not exclusive [see In the matter of Tumut River Orchard Management Limited (in liq) ABN 003 501 611 [2011] NSWSC 915, [11]]. Moreover, the application is supported by the custodian, who would have standing under that rule as a creditor. If for any reason other creditors take a different view as to the appropriateness of the liquidator, they can apply, if so advised, to set aside the order which I propose to make, but that seems an unlikely prospect. 8. Upon the undertaking of Jeffrey Chard, solicitor, to pay the appropriate filing fees, I grant leave to Angus Carnegie Gordon to file an originating process in the form initialled by me, dated this day and placed with the papers. I dispense with service of the originating process. I direct that the originating process be returnable instanter. 9. The Court orders that: 1. Pursuant to Corporations Act, s 502, the plaintiff, Angus Carnegie Gordon, be appointed liquidator of the defendant. 2. Pursuant to Corporations Act, s 447A, the plaintiff's administration of the defendant is to end forthwith. 3. Pursuant to Corporation Act, s 511(1), the plaintiff would be justified in treating his remuneration and expenses for acting as administrator as remuneration and expenses of the liquidator. 4. The costs of this application be paid out of the assets of the company.