Ex Parte
[2023] WASC 179
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: EX PARTE DANIEL JOHANNES BREDENKAMP & BRIAN KEVIN HUGHES as joint and several liquidators of MAYBACH CONSULTING PTY LTD (IN LIQUIDATION) [2023] WASC 179
CORAM: ACTING MASTER MCDONALD
HEARD: ON THE PAPERS
DELIVERED : 25 MAY 2023
PUBLISHED : 25 MAY 2023
FILE NO/S: COR 58 of 2023
MATTER: IN THE MATTER OF MAYBACH CONSULTING PTY LTD (IN LIQUIDATION)
EX PARTE
DANIEL JOHANNES BREDENKAMP & BRIAN KEVIN HUGHES as joint and several liquidators of MAYBACH CONSULTING PTY LTD (IN LIQUIDATION)
Plaintiffs
Catchwords:
Corporations - Liquidation - Special leave - Distribution of surplus - Dispensation of procedural requirements - Corporations Act 2001 (Cth), s 488(2)
Legislation:
Corporations Act 2001 (Cth)
Corporations Regulations 2001 (Cth)
Supreme Court (Corporations) Rules 2004 (WA)
Result:
Special leave to distribute surplus granted
Dispensation orders made
Category: B
Representation:
Counsel:
| Plaintiffs | : | No appearance |
Solicitors:
| Plaintiffs | : | Blackwall Legal LLP |
Case(s) referred to in decision(s):
CGU Workers Compensation (NSW) Ltd v Ascom Service Automation (Australia) Pty Ltd [2005] NSWSC 747
Re D & D Corak Investments Pty Ltd (in liq) [2020] NSWSC 1197
Re Hawden Property Group Pty Ltd (in liq) (2018) 125 ACSR 335; [2018] NSWSC 48
Re Knight, Second ICO Pty Ltd (in liq) (2020) 144 ACSR 329; [2020] FCA 608
ACTING MASTER MCDONALD:
The plaintiffs are the liquidators of Maybach Consulting Pty Ltd (In Liquidation) (the Company) and are seeking special leave to distribute a surplus to the Company's sole member pursuant to s 488(2) of the Corporations Act 2001 (Cth) (the Act) and an order that they be released as liquidators and the Company be deregistered pursuant to s 480(d) of the Act. In addition, they are seeking ancillary orders to dispense with various formal requirements under the Corporations Regulations 2001 (Cth) (the Regulations) and the Supreme Court (Corporations) Rules 2004 (WA) (the Rules) to enable the liquidation to be concluded.
The application is supported by the affidavit of Daniel Johannes Bredenkamp filed 6 April 2023 (First Bredenkamp Affidavit), the affidavit of Belinda Sarah Giles filed 13 April 2023 (First Giles Affidavit), a further affidavit of Daniel Johannes Bredenkamp filed 2 May 2023 (Second Bredenkamp Affidavit) and a further affidavit of Belinda Sarah Giles filed 2 May 2023 (Second Giles Affidavit).
Factual background
On 19 November 2019, the Federal Court made orders winding up the Company and appointing the plaintiffs as liquidators.[1] Mr John Arbuckle is the sole director and shareholder of the Company.[2] There has been no transfer of shares in the Company since the liquidators' appointment, nor any order made by the Supreme Court of Western Australia or Federal Court of Australia altering the Company's register of members.[3]
[1] First Bredenkamp Affidavit [2], 'DJB35'.
[2] First Bredenkamp Affidavit [13], 'DJB36', 22.
[3] First Bredenkamp Affidavit [38] ‑ [41], 'DJB43'.
The assets of the Company included a vehicle, cash and 500,000 fully paid ordinary shares in the capital of Catalyst Metals Limited.[4]
[4] First Bredenkamp Affidavit [15], [18], 'DJB37' [67] ‑ [68].
The liquidation and winding up of the Company came before the Supreme Court in COR 211 of 2022 where orders were made by Hill J authorising the sale of shares held in Catalyst Metals Limited and the distribution of the proceeds in accordance with pt 5.6 of the Act.[5]
[5] First Bredenkamp Affidavit [8] ‑ [22], 'DJB37', 'DJB38'.
Following the orders in COR 211 of 2022, the liquidators (or their agents) on 9 December 2022, provided a copy of the orders made in COR 211 of 2022 to the Australian Securities and Investments Commission (ASIC), the Australian Taxation Office (ATO) (a creditor of the Company) and to Mr John Arbuckle (the Company's sole director and shareholder).[6]
[6] First Bredenkamp Affidavit [22] ‑ [27], 'DJB39', 'DJB40', 'DJB41'.
On 17 January 2023, the plaintiffs sold the Company's shares in Catalyst Metals Limited for $350,000.[7] Following the sale of the shares the Company held $367,622 in cash comprised of the proceeds of the sale of a Company vehicle, the proceeds of a taxation refund and the proceeds of the sale of shares.[8] The liquidators are unaware of any other assets of the Company that have not been realised.[9]
[7] First Bredenkamp Affidavit [28] ‑ [33].
[8] First Bredenkamp Affidavit [42].
[9] First Bredenkamp Affidavit [43].
The only known creditor of the Company was the ATO.[10] A proof of debt dated 4 December 2019 and a notice to the liquidators dated 18 May 2021 indicated that the debt owed to the ATO was $193,307.97.[11] The liquidators received no further proof of debt from any other creditor following a call for proof of debts between 9 November 2022 and 23 January 2023.[12]
[10] First Bredenkamp Affidavit [44] ‑ [57].
[11] First Bredenkamp Affidavit, [49] ‑ [50], 'DJB44', 'DJB46'.
[12] First Bredenkamp Affidavit [52] ‑ [57], 'DJB47', 'DJB48'.
On 7 March 2023, the liquidators paid the ATO its debt of $268,930.52 in full, being $193,307.97 in satisfaction of the amount in the proof of debt and $75.622.55 in interest pursuant to s 563B of the Act.[13]
[13] First Bredenkamp Affidavit, [44] ‑ [61], 'DJB44' - 'DJB49'.
On 13 April 2023, the ATO refunded the interest payment of $75,622.55 to the Company.[14] As of 2 May 2023 the liquidators estimated a surplus of approximately $89,928.12 to distribute to the Company's sole member Mr Arbuckle.[15]
[14] Second Bredenkamp Affidavit [7] ‑ [10], 'DJB56'.
[15] Second Bredenkamp Affidavit [17].
Application
By originating process filed on 6 April 2023 the plaintiffs seek the following orders:
1.Pursuant to s 488(2) of the Act, the plaintiffs be granted special leave to distribute the surplus in the winding up of the Company.
2.Pursuant to reg 5.6.71 of the Regulations, the order authorising distribution of the surplus to a person entitled to it need not have annexed to it a schedule in accordance with Form 551.
3.Pursuant to r 1.3(1) of the Rules, the requirements of r 7.9(2) and (4) thereof, that the plaintiffs publish a notice in accordance with Form 15, be dispensed with.
4.Pursuant to s 480(d) of the Act, the plaintiffs be released as joint and several liquidators of the Company and ASIC deregister that Company.
5.The requirement in r 7.5(6) of the Rules, that the plaintiffs serve updated accounts on creditors of the Company, be dispensed with.
6.The plaintiffs' costs and expenses of and incidental to this application are to be treated as costs in the liquidation of the Company and be paid out of the assets of the Company.
7.Such further or other orders as the Court sees fit.
Legal Framework
Under s 488(2) of the Act, a liquidator may only distribute a surplus with the Court's special leave.
Special leave required under s 488(2) of the Act means a special application must be made to the Court rather than leaving the matter to an administrative procedure.[16]
[16] Re Hawden Property Group Pty Ltd (in liq) (2018) 125 ACSR 335; [2018] NSWSC 481 [57].
Section 480(d) of the Act provides:
480Release of liquidator and deregistration of company
When the liquidator:
(a)has realised all the property of the company or so much of that property as can in his or her opinion be realised without needlessly protracting the winding up, and has distributed a final dividend (if any) to the creditors and adjusted the rights of the contributories among themselves and made a final return (if any) to the contributories; or
(b)has resigned or has been removed from office;
he or she may apply to the Court:
….
(d)for an order that he or she be released and that ASIC deregister the company.
Section 488(2) of the Act has a twofold aim of ensuring that there is a genuine surplus of assets (in that the creditors' claims have been properly recognised and met in full) and that the correct relativities among the contributories have been observed before a surplus is distributed.[17]
[17] CGU Workers Compensation (NSW) Ltd v Ascom Service Automation (Australia) Pty Ltd [2005] NSWSC 747 [4].
Special leave will be granted to distribute a surplus in cases where a liquidator has undertaken appropriate investigations to realise all the assets of a company, called for proofs of debt and taken appropriate steps to identify the creditors of a company, paid out creditors in full and provided an estimate of future receipts and payments and the amount available for distribution.[18]
[18] Re Hawden Property Group Pty Ltd (in liq) (2018) 125 ACSR 335; [2018] NSWSC 48 [21] ‑ [25]; Re Knight, Second ICO Pty Ltd (in liq) (2020) 144 ACSR 329; [2020] FCA 608 [25]; Re D & D Corak Investments Pty Ltd (in liq) [2020] NSWSC 1197 [11], [23].
An order under s 480(d) of the Act finalising a winding up cannot be made until the distribution of the Company's property is complete, including distributing a surplus to a member.[19]
[19] Re Hawden Property Group Pty Ltd (in liq) [5].
The liquidators therefore propose that this application be dealt with in two parts:[20]
[20] Plaintiffs' submissions filed 2 May 2023 [3].
(a)first, a consideration of the application for special leave to distribute a surplus under s 488(2) of the Act followed by an adjournment to allow the distribution of that surplus (subject to special leave being granted); and
(b)secondly, a consideration of the application under s 480(d) of the Act.
This approach is consistent with that taken in Re Hawden Property Group Pty Ltd (in liq) [5], [64].
This application deals with the first portion of the application, namely, the request for special leave to distribute a surplus and proposed orders 1, 2 and 3 of the originating process.
Distribution of a surplus
I am satisfied that special leave to distribute the surplus should be granted for the following reasons:
(a)the evidence shows the liquidators have taken appropriate steps to identify the assets[21] and the creditors of the Company;[22]
[21] First Bredenkamp Affidavit [14] ‑ [21], [42], [43]
[22] First Bredenkamp Affidavit, [44] ‑ [57].
(b)the assets of the Company have been brought in and realised and the only creditor, the ATO, has been paid out in full;[23]
[23] First Bredenkamp Affidavit [42] ‑ [60], 'DJB44' ‑ 'DJB49'.
(c)there is a surplus in the winding up of the Company of approximately $89,928.12;[24] and
[24] Second Bredenkamp Affidavit, [11] ‑ [17], 'DJB57', 'DJB58', 'DJB59'.
(d)there is no need for the Court to adjust the rights of contributories, because the only shareholder of the Company is Mr Arbuckle.[25]
[25] First Bredenkamp Affidavit [34] ‑ [41], 'DJB36', 'DJB42', 'DJB43'.
In all the circumstances it is appropriate to grant special leave to the liquidators to distribute the surplus to Mr Arbuckle in the winding up of the Company.
Dispensation orders – Form 551
The liquidators also seek an order dispensing with the requirement to attach a schedule in accordance with Form 551 of the Regulations to the orders granting special leave. The Court's power to dispense with that requirement is found in the terms of reg 5.6.71 of the Regulations, which includes the phrase 'unless the Court otherwise directs'.
Form 551 contemplates that there should be set out in respect of each contributory to whom a surplus is to be distributed the amount of the distribution payable per share and the net distribution payable. It is directed to cases where there are numerous contributories and matters requiring adjustment between them (such as differing amounts paid up on shares, arrears of calls and set offs). Where a matter is a simple case, it is appropriate to dispense with the requirement for a Form 551.[26]
[26] Re Hawden Property Group Pty Ltd (in liq) [62] ‑ [63]; Re Knight, Second ICO Pty Ltd (in liq) [27] ‑ [28].
This matter involves a single member and single creditor paid out in full, without any matters requiring adjustments. It is therefore appropriate to dispense with the requirement to attach a schedule in accordance with Form 551 of the Regulations.
Dispensation orders – Form 15
The liquidators have also sought an order dispensing with the requirements under r 7.9(2) and (4) of the Rules that the plaintiffs publish a notice in accordance with Form 15. The Court's power to dispense with that requirement is found in r 1.3(1) of the Rules.
The power under the Rules to dispense with the requirement to publish a notice in accordance with Form 15 can be exercised where notice of the application is given to the creditors[27] or where the debts of unsecured creditors have been discharged and notice of the application is given to ASIC and the Company's members.[28]
[27] Re Knight, Second ICO Pty Ltd (in liq) [27].
[28] Re Hawden Property Group Pty Ltd (in liq) [62] ‑ [63]; Re Knight, Second ICO Pty Ltd (in liq) [21].
As the liquidators have given notice of the application to the ATO, ASIC and to Mr Arbuckle,[29] I am satisfied it is appropriate to dispense with the requirement to publish a notice in accordance with Form 15 under r 7.9(2) and (4) of the Rules.
[29] First Giles Affidavit [4] ‑ [10], 'BSG1' ‑ 'BSG3'; Second Giles Affidavit [6] ‑ [11], 'BSG4' ‑ 'BSG6'.
Orders
The following orders will be made in accordance with the plaintiffs' Minute of Proposed Orders filed on 2 May 2023:
1.Pursuant to s 488(2) of the Corporations Act 2001 (Cth), the plaintiffs be granted special leave to distribute the surplus in the winding up of the Company.
2. Pursuant to reg 5.6.71 of the Corporations Regulations 2001 (Cth), these orders authorising distribution of the surplus to a person entitled to it need not have annexed to it a schedule in accordance with Form 551.
3. Pursuant to r 1.3(1) of the Supreme Court (Corporations) Rules 2004 (WA), the requirements of r 7.9(2) and (4) thereof, that the plaintiffs publish a notice in accordance with Form 15, be dispensed with.
4. The application otherwise be adjourned to a date to be set by the Court.
5. The costs of this minute be in the cause.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CM
Associate to the Acting Master
25 MAY 2023
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