Glenfyne International Holding Ltd v Glenfyne Farms International AU Pty Ltd (in liq)

The appeal concerned the appointment of liquidators for Glenfyne Farms International AU Pty Ltd (in liq) and GI Commercial Pty Ltd (in liq). The dispute arose after a second meeting of creditors of Glenfyne Farms International AU Pty Ltd resolved not to appoint liquidators, with the former administrator exercising a casting vote against the resolution. The primary judge had dismissed an application to have the resolution appointing liquidators taken as passed. The appeal was heard by Bathurst CJ, Bell P, and Macfarlan JA.

The central legal issues before the Court of Appeal were whether the resolution to appoint liquidators was a resolution to remove an external administrator under s 75-115 of the Insolvency Practice Rules, and whether the Court had the power under s 75-43(4)(a) of the Insolvency Practice Schedule to order that the proposed resolution to appoint liquidators be taken to have been passed. Additionally, the Court considered whether s 90-15 of the Insolvency Practice Schedule provided a source of power for such an order, and if so, whether it was a general power or only engaged in cases of failure or default by the administrator.

The Court of Appeal reasoned that the resolution in question was not a resolution to remove an external administrator, as it concerned the appointment of new liquidators rather than the removal of the existing administrator. The Court found that s 75-43(4)(a) of the Insolvency Practice Schedule conferred power on the Court to order that a resolution be taken to have been passed if it was satisfied that the resolution was intended to be passed and that the failure to pass was due to an error or omission. The Court determined that the administrator's casting vote had been improperly exercised in this context, and that the creditors' intention was to appoint liquidators. The Court also held that s 90-15 of the Insolvency Practice Schedule provided a general power to make orders in relation to the administration of a company.

Consequently, the Court of Appeal allowed the appeals, set aside the orders of the primary judge, and ordered that the resolution to appoint Jason Lloyd Porter and Fabian Kane Micheletto as joint and several liquidators of Glenfyne Farms International AU Pty Ltd be taken to have been passed. In relation to GI Commercial Pty Ltd, the Court ordered the appointment of the same individuals as joint and several liquidators. There were no orders as to costs.