Emerton Pty Ltd v Referral Marketing Services Pty Ltd

Emerton Pty Ltd brought an application against Referral Marketing Services Pty Ltd, seeking the appointment of a new liquidator for Emerton. The application was made in the Federal Court of Australia. The current liquidators of Emerton had indicated their intention to resign upon the appointment of a new liquidator, but no resignation had been tendered, and no specific date for their resignation had been indicated. Emerton alleged that the current liquidator had not adequately investigated claims of breach of statutory and fiduciary duties by a director of Referral Marketing Services.

The court had to decide whether it had the power to appoint a new liquidator under section 502 of the Corporations Act 2001 when the current liquidator had not yet ceased to act. The court found that the conditions for exercising this power were not satisfied. The court also had to decide whether it had the power under section 503 of the Corporations Act 2001 to appoint a new liquidator, and whether the removal of the current liquidator was in the interest of the liquidation. The court held that the removal of the current liquidators was in the interest of the liquidation.

The court rejected the plaintiff's nominee for appointment as the new liquidator, stating that appointing the plaintiff's nominee could be seen as acceding to pressure to appoint the plaintiff's preferred nominee, rather than an impartial and appropriate liquidator. The court ordered that a new liquidator be appointed, but not the plaintiff's nominee.