Australian Securities and Investments Commission v Macks (No 5)

The case involved the Australian Securities and Investments Commission (ASIC) as the plaintiff, seeking the winding up of Macks, an Australian company, and the appointment of a liquidator. The dispute centred on the manner in which the liquidator, Mr. David Smith, was appointed and supervised by the court, as well as the costs associated with the proceedings. The case was heard in the Federal Court of Australia.

The central legal issues revolved around the proper procedure for the removal and supervision of liquidators in corporate winding-up proceedings. The court had to determine whether ASIC's actions in appointing and supervising the liquidator were appropriate and in compliance with the Corporations Act 2001. Additionally, the court needed to address the issue of costs, particularly whether ASIC was entitled to recover costs from the company and the liquidator under the general rule that costs follow the event, despite only achieving partial success in its claims.

In its decision, the Federal Court found that ASIC's actions in appointing Mr. Smith as liquidator were procedurally flawed, as they did not adhere to the mandatory requirements of the Corporations Act. The court held that the liquidator's supervision by ASIC was also inadequate, leading to significant breaches of duty. Regarding costs, the court ruled that ASIC was entitled to recover costs from the company and the liquidator, despite its partial success. The court reasoned that the costs incurred were directly related to the claims pursued and the relief sought, justifying the recovery under the general rule of costs following the event.

As a result of the decision, the court ordered the removal of Mr. Smith as liquidator and appointed a new liquidator to take over the winding-up process. The court also directed that ASIC's costs, which included legal fees and expenses, be paid by the company and the liquidator in accordance with the ruling on costs. The new liquidator was tasked with ensuring that the winding-up process proceeded in a manner that complied with the statutory requirements and the court's directions.