In the matter of Kimberley Diamond Company Pty Ltd (in liq) (ACN 061 899 634) [2017] NSWSC 538

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Kimberley Diamond Company Pty Ltd (in liq) (ACN 061 899 634) [2017] NSWSC 538 Hearing dates: 10 March 2017 Decision date: 05 May 2017 Before: Gleeson JA Decision: (1) That pursuant to s 459A of the Corporations Act 2001 (Cth), Kimberley Diamond Company Pty Ltd (in liq) (ACN 061 899 634) (the Company), be wound up in insolvency. (2) That Sule Arnautovic and Christopher Michael Williamson be appointed joint and several liquidators of the Company. (3) Pursuant to s 472(6) of the Corporations Act, declare that anything required or authorised by the Corporations Act to be done by the liquidator may be done by any one of the liquidators of the Company. (4) That pursuant to s 467(3)(b) of the Corporations Act and r 5.6(1) of the Supreme Court (Corporations) Rules 1999 (NSW), the requirement to advertise, or publish notice of, the application under s 465A of the Corporations Act and r 5.6 of the Corporations Rules be dispensed with. (5) That pursuant to s 467(3)(b) of the Corporations Act, the requirement that the application be served on the Company under s 465A of the Corporations Act be dispensed with. (6) That pursuant to s 467(3)(b) of the Corporations Act, the requirements to: (a) serve an office copy of the order on the Company under s 470(2)(b) of the Corporations Act; and (b) deliver to the liquidators an office copy of the order together with a statement that the order has been served under s 470(2)(c) of the Corporations Act be dispensed with. Catchwords: CORPORATIONS – external administration – application to convert deemed creditors' voluntary winding up to a court ordered winding up in insolvency – whether appropriate to exercise discretion to order winding up in insolvency under Corporations Act, s 459A – where claim under Corporations Act, s 588FJ only available to liquidators appointed pursuant to a court ordered winding up – whether a rational possibility that a s 588FJ claim might result in potential benefits for the general body of creditors – whether appropriate for the Court to apply a higher standard of satisfaction as to the potential benefits to creditors as if on a summary dismissal application – whether court should decide legal arguments – where contestable issues of fact and construction of legislation and security deed. Legislation Cited: Corporations Act 2001 (Cth), ss 51, 51A, 51B, 51C, 95A, 233, 439C, 446A(2), 459A, 459B, 459P, 461, 465A, 467, 472, 467B, 468, 470, 495A, 513B, 513C, 588FF, 588FJ, 588FP; Pt 5.3A, Pt 5.7B Costs in Criminal Cases Act 1967 (NSW) Personal Property Securities Act 2009 (Cth), ss 12, 24, 340, 341, 341(1B), 342(1B) Personal Property Securities (Corporations and Other Amendments) Act 2010 (Cth), items 95-101, Pt IV, Sch 1 Personal Property Securities Regulations 2010, Sch 1, cl 2.3 Supreme Court (Corporations) Rules 1999 (NSW), r 5.6(1) Cases Cited: AB v Director of Public Prosecutions (NSW) [2014] NSWCA 122 Ann Street Mezzanine Pty Ltd (in Liq) v Beck (2009) 175 FCR 532; [2009] FCA 333 Carter v New Tel Ltd (in Liq) (2003) 44 ACSR 661; [2003] NSWSC 128 CBA Corporate Services (NSW) Pty Ltd v Walker (2013) 212 FCR 444; [2013] FCAFC 74 Citrix Systems Inc v Tele Systems Learning Pty Ltd (in Liq) (1998) 28 ACSR 529 Deputy Commissioner of Taxation v Tull Reinforcing Pty Ltd (2006) 153 FCR 394; [2006] FCA 810 Gericevich Contracting Pty Ltd v Sabemo (WA) Pty Ltd (1984) 9 ACLR 452 Hadfield v ACN 092 328 400 Pty Ltd [2011] NSWSC 114 Re Evcorp Grains Pty Ltd (No 2) [2014] NSWSC 155 Re Green (as liq of Australian Resources Ltd (in liq)) (2004) 52 ACSR 452; [2004] NSWSC 1095 Re Patterson Group Pty Ltd (in Liq) ACN 070 677 020 [2014] NSWSC 1927 Walker and Maloney v CBA Corporate Services (NSW) Pty Ltd [2012] FCA 328 Category: Principal judgment Parties: Sule Arnautovic in his capacity as Liquidator of Kimberley Diamond Company Pty Limited (ACN 061 899 634) (First Plaintiff) Christopher Michael Williamson in his capacity as Liquidator of Kimberley Diamond Company Pty Limited (ACN 061 899 634) (Second Plaintiff) Kimberley Diamond Company Pty Limited (in Liquidation) (ACN 061 899 634) (Third Plaintiff) Kimberley Diamonds Limited (ACN 150 737 563) (First Defendant) Representation: Counsel: D R Stack (First and Second Plaintiffs)