Hancock as liquidator of 246 Arabella Investments Pty Limited (In Liquidation) ACN 001 085 481 v 246 Arabella Investments Pty Limited (In Liquidation) ACN 001 085 481
[2010] FCA 457
•29 April 2010
FEDERAL COURT OF AUSTRALIA
Hancock as liquidator of 246 Arabella Investments Pty Limited (In Liquidation) ACN 001 085 481 v 246 Arabella Investments Pty Limited (In Liquidation)
ACN 001 085 481 [2010] FCA 457
Citation: Hancock as liquidator of 246 Arabella Investments Pty Limited (In Liquidation) ACN 001 085 481 v 246 Arabella Investments Pty Limited (In Liquidation) ACN 001 085 481 [2010] FCA 457 Parties: GEOFFREY TRENT HANCOCK AS LIQUIDATOR OF 246 ARABELLA INVESTMENTS PTY LIMITED (IN LIQUIDATION) ACN 001 085 481, 246 ARABELLA INVESTMENTS PTY LIMITED (IN LIQUIDATION) ACN 001 085 481, CHRISTOPHER LYNDON HIGGINS and TIMOTHY HALL HIGGINS File number: NSD 419 of 2010 Judge: EMMETT J Date of judgment: 29 April 2010 Legislation: Corporations Act 2001 (Cth) ss 494, 495, 542, 1322 Date of hearing: 29 April 2010 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 13 Counsel for the Plaintiff: M Aldridge SC, J Darams Solicitor for the Plaintiff: Eakin McCaffery Cox Solicitors Counsel for the First Defendant No representation Counsel for the Second Defendant R D Marshall Solicitor for the Second Defendant Argyle Lawyers Counsel for the Third Defendant J Baird Solicitor for the Third Defendant Peter Kennedy Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 419 of 2010
GEOFFREY TRENT HANCOCK AS LIQUIDATOR OF 246 ARABELLA INVESTMENTS PTY LIMITED (IN LIQUIDATION) ACN 001 085 481
Plaintiff246 ARABELLA INVESTMENTS PTY LIMITED (IN LIQUIDATION) ACN 001 085 481
First DefendantCHRISTOPHER LYNDON HIGGINS
Second DefendantTIMOTHY HALL HIGGINS
Third Defendant
JUDGE:
EMMETT J
DATE OF ORDER:
29 APRIL 2010
WHERE MADE:
SYDNEY
THE COURT DECLARES THAT:
1.The plaintiff was validly appointed as liquidator of 246 Arabella Investments Pty Limited (in liquidation) (ACN 001 085 481) (the Company) on 15 December 2008.
THE COURT ORDERS THAT:
2.Pursuant to s 1322(4) of the Corporations Act 2001 (Cth), any defect in the appointment of the plaintiff as liquidator of the Company on 15 December 2008 will not invalidate any act of the plaintiff purporting to act as liquidator of the Company since 15 December 2008.
3.The costs of the plaintiff and third defendant be paid out of the assets of the first defendant.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 419 of 2010
GEOFFREY TRENT HANCOCK AS LIQUIDATOR OF 246 ARABELLA INVESTMENTS PTY LIMITED (IN LIQUIDATION) ACN 001 085 481
Plaintiff246 ARABELLA INVESTMENTS PTY LIMITED (IN LIQUIDATION) ACN 001 085 481
First DefendantCHRISTOPHER LYNDON HIGGINS
Second DefendantTIMOTHY HALL HIGGINS
Third DefendantJUDGE:
EMMETT J
DATE:
29 APRIL 2010
PLACE:
SYDNEY
REASONS FOR JUDGMENT
The plaintiff, Mr Geoffrey Hancock, seeks a determination as to the validity of his appointment as liquidator of the first defendant (the Company). Initially, part of the relief sought by Mr Hancock was opposed by the second defendant, Mr Christopher Higgins. None of the relief sought by Mr Hancock was opposed by the third defendant, Mr Timothy Higgins. As at 26 October 2007, the only directors of the Company were Christopher Higgins and Timothy Higgins. At that time, they were the only shareholders.
On 23 October 2007, a declaration of solvency under s 494 of the Corporations Act 2001 (Cth) (the Act) was lodged with Australian Securities and Investments Commission (the Commission). The declaration of solvency was signed by Mr Christopher Higgins and Mr Timothy Higgins, and named Mr Roderick Sutherland as liquidator. It recorded the estimated realisable value of assets at $6,417,429 and liabilities, being estimated expenses of winding up, at $5,500.
On 26 October 2007, Mr Christopher Higgins signed a form annexing minutes of a general meeting of the members of the Company. That form was lodged with the Commission on that day. The minutes attached to the form are signed by both Mr Christopher Higgins and Mr Timothy Higgins. They are recorded as having been present at a meeting of the members of the Company held on 26 October 2007 at 12.30 pm.
The minutes record that each member consented to short notice of the meeting. The minutes then refer to the declaration of solvency, to which I have referred, and note that Mr Christopher Higgins had consented to act as liquidator of the Company. The minutes then record a special resolution that the Company be wound up voluntarily and that the surplus assets of the Company be distributed to the relevant members of the Company, either by way of distribution in specie or in cash. They also record an ordinary resolution that the books and records of the Company and of the liquidator be disposed of by the liquidator six months after the dissolution of the Company, subject to the obtaining of the relevant approval for destruction from the Commission pursuant to s 542 of the Act.
The minutes record that the meeting closed at 12:45 pm. Mr Christopher Higgins signed the minutes as chairman and each of Mr Christopher Higgins and Timothy Higgins signed the minutes as members. Mr Christopher Higgins also signed a notification of the special resolution dated 26 October 2007. That notification was lodged with the Commission on that day. Mr Christopher Higgins also signed notification of his appointment as an external administrator, being a liquidator in a voluntary members’ winding up of 26 October 2007, being the date of Mr Christopher Higgins’ appointment as liquidator.
On 5 November 2008, a Deputy Commissioner of Taxation wrote to Mr Christopher Higgins, asserting that the Company was indebted to the Deputy Commissioner of Taxation for income tax in the sum of $10,395,717.34. If that assertion is correct, the financial position of the Company is somewhat different from that disclosed in the declaration of solvency. That circumstance may have led to the next relevant event in relation to the affairs of the Company, which occurred on 15 December 2008.
Minutes of a meeting of the members of the Company held on 15 December 2008 at 3:50 pm record that Messrs Christopher Higgins and Timothy Higgins were present and that they resolved that the resignation of Christopher Higgins, as liquidator be accepted and that, in his place, Mr Geoffrey Trent Hancock and Mr Alan Godfrey Topp be appointed as joint and several liquidators of the Company, effective immediately. Messrs Hancock and Topp had consented to that appointment on 16 February 2008. Notification of the appointment of Messrs Hancock and Topp as external liquidators was lodged with the Commission. Mr Topp subsequently resigned as a joint liquidator.
On 16 April 2010, Argyle Lawyers Pty Limited wrote to the solicitors for Mr Hancock asserting that Mr Hancock’s appointment as liquidator of the Company was invalid. The letter of 16 April 2010 asserted that the minutes of 26 October 2007 meeting do not record any resolution to appoint a liquidator. The letter says that the members’ meeting on 15 December 2007 resolved only to fill the vacancy left by Mr Higgins’ purported resignation, presumably in accordance with s 495(3) of the Act, but that unfortunately there was no office actually vested. The letter said that, should Mr Hancock seek to have the Court validate his appointment, both shareholders may wish to be heard. That letter prompted this application.
Mr Christopher Higgins and Mr Timothy Higgins were separately represented. Although the Company was joined as a party and served, it did not appear. No evidence was given by either Christopher Higgins or Timothy Higgins. The only material before the Court is the documentary evidence to which I have referred.
It appears to me to be without doubt that the intention of the only shareholders and directors of the Company as at 26 October 2007 was that Mr Christopher Higgins be appointed as liquidator. That is the only inference that can be drawn from the minutes attached to the notice lodged with the Commission on 26 October 2007. That was confirmed by the minutes of the further meeting of members held on 15 December 2008. In my view there can be no doubt that the intention of the only minds who were responsible for the affairs of the Company at the relevant time was that Christopher Higgins be appointed as liquidator.
While the reference to Mr Sutherland in the declaration of solvency and the absence of a specific resolution appointing Christopher Higgins as liquidator may be regarded as an irregularity in relation to the appointment, that irregularity does not detract from the effectiveness of the appointment of Christopher Higgins as liquidator. I therefore propose to make a declaration that Mr Hancock was validly appointed as liquidator of the Company on 15 December 2008, in order to remove any possible argument as to the effect of his appointment.
It is also desirable to make an order under s 1322(4) of the Act. By that provision, the Court may, on application by any interested person, make various orders, including an order declaring that any act, matter or thing purporting to have been done under the Act or in relation to a Company is not invalid by reason of any contravention of the provisions of the Act. Under s 1322(6), the Court must not make an order under s 1322(4) unless it is satisfied that the act, matter, thing or proceeding is essentially procedural in nature and that the person or persons concerned in or party to any contravention or failure acted honestly, or that it is just and equitable that the order be made.
Insofar as there has been any failure to comply with the requirements of the Act, and for the reason I have indicated, I am not persuaded that there necessarily has been, it is clear that the appointment of Mr Hancock as liquidator should not be treated in any way as ineffective. Accordingly, it is appropriate to make an order under s 1322 of the Act.
I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate:
Dated: 11 May 2010
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