In the matter of Better Drums Pty Ltd (in liq) [2019] NSWSC 1262

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Better Drums Pty Ltd (in liq) [2019] NSWSC 1262 Hearing dates: 5 September 2019 Decision date: 05 September 2019 Jurisdiction: Equity - Corporations List Before: Black J Decision: Order that the Plaintiff be released as liquidator of the Company from 4pm on 8 October 2019 and that ASIC deregister the Company on or after 4pm on 7 November 2019. Catchwords: CORPORATIONS – winding up – liquidators – application to be released as liquidator – where remaining steps in liquidation relate to distribution of surplus – where no utility in deferring an order for release – whether court should order that liquidator be released. Legislation Cited: - Corporations Act 2001 (Cth) ss 480(d), 488(2), 533 - Supreme Court (Corporations) Rules 1999 (NSW) rr 7.5, 7.5(3), 7.5(4)(a), 7.5(4)(b), 7.5(6) Cases Cited: - Re One.Tel Ltd (in liq) [2014] NSWSC 1892 - Re RR Impex Pty Ltd (in liq) [2013] NSWSC 1667 Category: Principal judgment Parties: David Ingram as liquidator of Better Drums Pty Ltd (in liq) (Plaintiff) Better Drums Pty Ltd (in liq) (Defendant) Representation: Counsel: D S Weinberger (Plaintiff)

Solicitors: Edwards Kirby Lawyers (Plaintiff) File Number(s): 2019/173471

Judgment – ex tempore (revised 9 september 2019)

Background and affidavit evidence 1. By Amended Originating Process filed on 2 September 2019, Mr Ingram as liquidator of Better Drums Pty Ltd (in liq) ("Company") seeks an amendment, nunc pro tunc, to an order made by Ward CJ in Eq on 5 August 2019 granting special leave to him under s 488(2) of the Corporations Act 2001 (Cth) to distribute the whole of the surplus funds of the Company to a contributory, Mr Osman-Kerim, in the amount of $161,183.02. That amendment is to replace that figure with the amount $151,173.22 plus any GST refund received. The amendment reflects, on the one hand, an increase in the legal costs and other costs incurred in connection with the liquidation and, on the other, the expectation that a GST refund will be received by the Company. Mr Ingram also seeks an order that he be released as liquidator of the company after 30 days of the making of this order and that the Australian Securities and Investments Commission ("ASIC") then deregister the Company within a further 30 days. Mr Weinberger, who appears for Mr Ingram, draws attention to two matters as to which dispensation is sought, although it does not seem to me that formal orders are necessary in that respect, where those matters have been drawn to the Court's attention. 2. Mr Ingram relies, first, on his affidavit dated 3 June 2019 which had previously been read in the application for leave to distribute the surplus before Ward CJ in Eq and to which reference is made in further affidavits. By a second affidavit dated 2 September 2019, Mr Ingram refers to the change in legal fees incurred, from an estimate of $20,000 on which the application before Ward CJ in Eq proceeded to a capped figure of $30,000, apparently involving a discount agreed with his legal representatives. Mr Ingram also refers to the matters which lead to an expectation that the Company will receive a GST refund approximating $15,588 which would ultimately exceed the amount of the reduction now sought in the distribution. 3. Two issues had arisen when the matter was first listed in the Corporations Directions List on 2 September 2019. The first was the need for Mr Ingram to address the matters set out in rr 7.5(3)-(6) of the Supreme Court (Corporations) Rules 1999 (NSW) which provide important information to the Court in applications of this character. By a further affidavit dated 4 September 2019, Mr Ingram addresses the matters indicated in those rules, including confirming that the whole of the Company's property has been realised, based upon his investigations, and that the only contributory of the Company is Mr Osman-Kerim. He also indicates that he had lodged a report with ASIC in respect of s 533 of the Act and that ASIC had indicated it would not be commencing an investigation. He refers to his remuneration, and, importantly, provides the confirmation contemplated by rr 7.5(4)(a)-(b) that he is not aware of any act done or default made in the administration in the affairs of the Company and that there has been no claim made by any person that there has been such act or default. He also addresses one of the matters as to which a dispensation is sought, namely that correspondence has occurred throughout the liquidation by email, and notice of this application was given to Mr Osman-Kerim by email. There is no difficulty with that course, in circumstances that it is plain that the matter has come to Mr Osman-Kerim's attention. 4. By a further affidavit dated 4 September 2019, Mr Edwards, a solicitor acting for Mr Ingram in the application, refers to notification of these matters, including the change in the amount to be distributed and the application today, to Mr Osman-Kerim. Mr Osman-Kerim confirmed that he did not require notice beyond email and confirmed that he was content with the outcome and did not propose to attend Court today. I will, however, have the matter called for good order's sake before making the relevant orders. There was, as anticipated by Mr Osman-Kerim's correspondence, no further appearance today.