Barnden (Liquidator), in the matter of Masonry Works Pty Limited (in liquidation)

The case involves a liquidator, Barnden, who is seeking directions under section 90-15 of the Insolvency Practice Schedule to the Corporations Act 2001 (Cth) to determine the correct amount of a debt owed by Masonry Works Pty Limited (the company) to Masonry Profiles Pty Limited (Profiles). Both companies were engaged in the labour hire business and were placed into liquidation in 2014. The liquidator has identified a discrepancy in the amount of the loan recorded by the companies, with the company's records showing a debt of $505,942.77 and Profiles' records showing a debt of $536,721.87, resulting in a difference of $30,779.10. The liquidator has conducted investigations into the discrepancy, but has not been able to reconcile the remaining difference of $779.10.

The primary legal issue in this case is whether the liquidator is justified in admitting to proof in the liquidation of the company the claim by Profiles in an amount of $505,942.77, rather than the larger amount recorded in Profiles' books. The court must determine whether the liquidator's conclusion as to the amount of the debt is soundly based, given the material disclosed by the liquidator.

The court found that the liquidator's conclusion was soundly based on the evidence provided, and that there was no evidence to suggest that the liquidator was not faithfully performing his duties. The court also accepted that the liquidator had not failed to comply with the Act or any orders of the court. The court held that the amount for which the liquidator should admit Profiles' proof of debt is an issue that calls for the exercise of judgment of the kind that may properly be the subject of judicial advice, where the relevant evidence is incomplete and conflicting.

Accordingly, the court made an order under section 90-15(1) of the Insolvency Practice Schedule to the effect sought by the liquidator, that Andrew Barnden in his capacity as liquidator of Masonry Works Pty Limited (in liquidation) is justified in admitting to proof in the liquidation of the company the claim by Masonry Profiles Pty Limited (in liquidation) in an amount of $505,942.77. The applicant’s costs of this application were to be paid from the assets of the company.