Burton re Palmbird Pty Ltd
[2006] NSWSC 1068
•13 October 2006
Reported Decision:
59 ACSR 695
(2006) 24 ACLC 1275
New South Wales
Supreme Court
CITATION: Burton re Palmbird Pty Ltd [2006] NSWSC 1068 HEARING DATE(S): 10/08/06
Written submissions: 14/09/06
Further affidavit: 04/10/06
JUDGMENT DATE :
13 October 2006JURISDICTION: Equity Division
Corporations ListJUDGMENT OF: Barrett J DECISION: No further order CATCHWORDS: CORPORATIONS - winding up - voluntary winding up - liquidators' final return lodged with ASIC - unknown asset later discovered - court extends date for deregistration - whether further final meeting should be convened by liquidators in due course on basis that affairs had not been fully wound up when earlier meeting convened LEGISLATION CITED: Corporations Act 2001 (Cth), Part 5.3A, ss.509, 564 CASES CITED: Deputy Commissioner of Taxation v Bettina House of Fashion Pty Ltd (unreported, VSC, Marks J, 18 November 1988)
Fuji Xerox Australia Pty Ltd v Tolcher (2004) 60 NSWLR 696
Re Rosaub Pty Ltd (2005) 192 FLR 395PARTIES: Peter George Burton & Brian Hugh Allen as liquidators of Palmbird Pty Limited - Plaintiffs FILE NUMBER(S): SC 4174/06 COUNSEL: Mr R.K. Eassie - Plaintiffs SOLICITORS: Nash O'Neill Tomko Lawyers - Plaintiffs
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST
BARRETT J
FRIDAY, 13 OCTOBER 2006
4174/06 PETER GEORGE BURTON & BRIAN HUGH ALLEN AS LIQUIDATORS OF PALMBIRD PTY LIMITED
JUDGMENT
1 Section 509 of the Corporations Act 2001 (Cth) prescribes the action to be taken by a liquidator under a voluntary winding up once “the affairs of the company are fully wound up”. The liquidator must make up an account and convene a meeting for the purpose of laying the account before the meeting. After the meeting has been held (or has lapsed for want of a quorum), the liquidator must lodge with Australian Securities and Investments Commission a particular return, with a copy of the account attached. Sections 509(5) and (6) then provide:
- “(5) ASIC must deregister the company at the end of the 3 month period after the return was lodged.
- (6) On application by the liquidator or any other interested party, the Court may make an order that ASIC deregister the company on a specified day. The Court must make the order before the end of the 3 month period after the return was lodged.”
2 On 10 August 2006, I made an order under s.509(6) specifying 30 November 2006 as the day on which Australian Securities and Investments Commission is to deregister Palmbird Pty Limited, a company subject to creditors’ voluntary winding up. In the absence of that order, the deregistration would have occurred immediately after 10 August 2006 in consequence of filing of the liquidators’ final return under s.509(4) on 10 May 2006. The date 30 November 2006 was nominated by the liquidators as the appropriate date. Their application was made on the last day of the period of three months within which s.509(6) allows the court to act.
3 The order under s.509(6) was made on the application of the liquidators following receipt by them of an unexpected insurance premium refund after 10 May 2006. The liquidators required further time in which to determine the appropriate course of action in respect of a sum of some $22,000 remaining in their hands.
4 Because the application was brought in some haste on the last day, the liquidators did not press on 10 August 2006 for any order beyond the s.509(6) order. Mr Eassie of counsel indicated that written submissions would be filed on other aspects. Submissions received on 14 September 2006 indicated that a further affidavit was to be filed. This was filed on 4 October 2006.
5 There was reference in submissions to the possibility that an application under s.564 might be made with a view to affording preferential treatment to Mr Henry who had provided (or arranged to be provided) a sum of $5,700 to the persons who ultimately became the liquidators. That sum was made available to meet, in part, the costs of the Part 5.3A administration of Palmbird in respect of which the recipients were about to accept appointment as administrators. The contribution was necessary because it appeared that available assets would be insufficient to cover remuneration. However, it is by no means clear that either Mr Henry or the entity he caused to provide the funds was a creditor of Palmbird. That, coupled with two other factors (that the payment of the $5,700 was not obviously associated with any indemnity and that financial assistance in the administration phase is not within s.564: Fuji Xerox Australia Pty Ltd v Tolcher (2004) 60 NSWLR 696) apparently caused that proposal not to be pursued.
6 The liquidators have sought guidance as to whether they should convene a further meeting under s.509(1), on the footing that, following receipt of the insurance premium refund, it is no longer correct to regard the situation as one in which the affairs of the company have been fully wound up. One such meeting has already been held on the basis that the affairs were fully wound up, that being an accurate appreciation of the situation on the basis of what was then known.
7 Having regard to the scheme of and consequences under s.509, I do not consider it appropriate that another meeting be called. This is because ss.509(5) and (6) have already operated to fix a date for deregistration. Successive occasions of resort to the meeting and related processes under s.509 would be inconsistent with the status of the section as a provision which fixes a single date for deregistration.
8 In Re Rosaub Pty Ltd (2005) 192 FLR 395, I emphasised the need for the day on which ASIC must effect deregistration to be fixed with certainty. It would be contrary to the statutory scheme for s.509 to become the source of two conflicting commands to ASIC regarding the time at which it was to deregister. The court has no power to stop the process provided for in ss.509(5) and (6) once it has begun. The most it can do is fix a date other than that which would otherwise apply. But it can do that only by order made within the specified period of three months. Once that period of three months has expired, deregistration must be effected on the day which has, by then, been made certain.
9 The liquidators’ task is to apply any balance of the $22,000 remaining after satisfaction of their remuneration in the manner provided for in the Corporations Act. If they require particular guidance on any matter, they may make application in these proceedings.
10 Should it happen that the necessary tasks are incomplete at 30 November 2006, the appropriate course will be for the liquidators to make prompt application for an order directing reinstatement of the registration and their re-appointment as liquidators. I say this because, although it is suggested at paragraph 27.690 of HAJ Ford, RP Austin and I Ramsay, “Principles of Corporation Law”, citing Deputy Commissioner of Taxation v Bettina House of Fashion Pty Ltd (unreported, VSC, Marks J, 18 November 1988), that successive extensions may be made under s.509(6), the provision itself makes it clear that the court may only make an extending order within the period of three months to which I have referred, that is, the period of three months after lodgment of the liquidator’s final return. In the present case, that period ended at the conclusion of 10 August 2006 and the court’s power is therefore no longer exercisable.
11 It is true that, in the Bettina House of Fashion case, Marks J entertained the possibility of making an extension order under a corresponding provision of the Companies (Victoria) Code even though such an order had already been made by a Master (his Honour was in fact hearing an appeal from the Master’s decision). It is clear, however, that the hearing before Marks J (at the conclusion of which he gave an ex tempore judgment) took place within the period of three months referred to in the equivalent of ss.509(5) and (6). The reference to the possibility of successive orders can therefore only have been a reference to the possibility that a second or subsequent order might be made within the three month period.
12 I make no order beyond that already made on 10 August 2006.
0
2
1