Enviro Pipes Pty Ltd v Allroads Pty Ltd

[2024] QSC 127

SUPREME COURT OF QUEENSLAND

CITATION:

Enviro Pipes Pty Ltd v Allroads Pty Ltd [2024] QSC 127

PARTIES:

ENVIRO PIPES PTY LTD (ACN 130 666 518)

(applicant)

v
ALLROADS PTY LTD (ACN 142 378 514)

(respondent)

FILE NO/S:

845/24

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

21 March 2024

DELIVERED AT:

Brisbane

HEARING DATE:

21 March 2024

JUDGE:

Callaghan J

ORDERS:

1. Allroads Pty Ltd (ACN 142 378 514) be wound up in insolvency pursuant to s 459A of the Corporations Act 2001 (Cth).

2.   David Stimpson be appointed to the respondent for the purpose of winding up.

3.   The respondent pay the applicant’s costs of, and incidental to, the application.

CATCHWORDS:

CORPORATIONS – WINDING UP – LIQUIDATORS – APPOINTMENT – IN WINDING UP BY COURT – POWER TO APPOINT – where directors appointed a voluntary administrator – where applicant company nominated a different individual – where the applicant’s nominee should be appointed unless good reason not to – whether a reason to appoint one person is necessarily a reason not to appoint another – whether supporting creditors are entitled to costs

COUNSEL:

B Long for the applicant
J Copley for the respondent

SOLICITORS:

Celtic Legal for the applicant
McInnes Wilson for the respondent

1. Callaghan J: Application is made for the winding up of the respondent company. The procedural requirements have been met, and an order will be made pursuant to s 459A of the Corporations Act 2001 (Cth). That much is uncontroversial. Issue is joined, however, on the identity of the liquidator who should be appointed for the purposes of the winding up.

2. By way of background, on 4 March 2024, the directors appointed Mr Darryl Kirk as voluntary administrator of the company. On the evidence before me, he has already performed a large amount of work, and if someone else is to be appointed liquidator, there is likely to be a need for some of that to be duplicated. Mr Kirk has given an estimate as to the value of that work. I find this aspect of the matter to be somewhat problematic but will take his evidence at face value and proceed on the basis that the relevant sum may be, I will say, in the range of $220,000.

3. For some context, it is said that the company has unsecured creditors with claims admitted for voting purposes amounting to around $19.8 million, but a possible total of unsecured creditor amounts owing of $41 million. More detailed analysis of the financial situation is unnecessary. The figures are mentioned only to give a clue as to the scale of operations and, as I say, to contextualise the figures proposed by Mr Kirk. 

4. Mr Kirk is amply qualified to be a liquidator, and no one questions his ability to discharge the role. He is not, however, nominated by the applicant. That favour falls to Mr Stimpson. Mr Stimpson is therefore in pole position for the job. As the applicant’s nominee, it would be usual practice to appoint him unless there was good reason not to do so. Those reasons are said to include the involvement that Mr Kirk has already had and, as part of that, the fact that the work he has done will have to be duplicated. That might be a reason to appoint Mr Kirk, but this is not quite the same thing as saying there is a good reason not to appoint Mr Stimpson.  There is no “matter of substance to be said against” Mr Stimpson, and certainly nothing to be said about his fitness or qualifications. The additional cost that might be involved in his appointment does not, in context, seem to arise to the level of an issue that would compel departure from the usual practice.

5. I reached this conclusion without needing to interrogate to any further extent the relevance of the perceived conflict that may arise from Mr Kirk’s appointment as administrator of an entity that is related to the respondent. That relationship includes the fact that debts are both owed and payable to each other. This does raise the potential for Mr Kirk to have a difficulty if he was to be appointed.

6. I accept that this is all a bit speculative and that were a situation of conflict to arise, there would be methods for dealing with it. But there is some common sense involved in making a decision now that will have the effect of preventing the issue from arising in the first place. In all the circumstances, I am prepared to act in accordance with the course proposed by the applicant, and make orders as per the draft.

7. I acknowledge the efforts made by the lawyers involved in the preparation of these matters. It is easy to feel unappreciated, especially when the result goes against you, but the professionalism of all involved is noted and, indeed, appreciated.

8. Mr Long, who appeared for the successful applicant, sought costs not only on behalf of his client, but also on behalf of the supporting creditors. There is no issue about the order for costs in favour of the applicant.

9. Mr Copley, although by his own concession no longer really involved at that stage, queried the entitlement of supporting creditors. In the result I invited, from the supporting creditors, submissions as to costs.

10. Submissions were received from Mabey Hire Pty Ltd, Global P4P Pty Ltd, Sitech Constructions Systems Pty Ltd, Holcim (Australia) Pty Ltd, BSF Mobile Cranes Pty Ltd, SecureFence Pty Ltd, Unyte Eastern Pty Ltd, and Allroads Pty Ltd. The submissions on behalf of Sitech Constructions Systems Pty Ltd were helpful. For the reasons identified in them, which included reference to Coventry Auto Parts Pty Ltd v Tony Michael Mechanical Pty Ltd (under administration) [2003] QSC 141, I am prepared to make an order in terms of the draft provided.