Hird (Liquidator), in the matter of Allmine Group Limited (in liq)

The case of Hird (Liquidator), in the matter of Allmine Group Limited (in liq) concerns an application for approval nunc pro tunc of a liquidator’s entry into a funding agreement on the company’s behalf under the Corporations Act 2001 (Cth) section 477(2B). The liquidator, Mr. Hird, sought to enter into a litigation funding agreement with Slater and Gordon Ltd to facilitate public examinations of the company’s directors and auditor regarding the company’s examinable affairs. The unsigned agreement was expressed to apply from 22 April 2016. The key legal issue before the court was whether to grant approval nunc pro tunc for the liquidator’s entry into the funding agreement, which he had entered into without prior court approval. The court considered whether Mr. Hird’s entry into the agreement was a proper exercise of his powers and whether it was in the best interests of the company and its creditors. The court found that the funding agreement was necessary for the liquidator to investigate potential claims against the directors and auditors and that the terms of the agreement were unremarkable. While the court acknowledged that Mr. Hird should have sought court approval before entering into the agreement, it also noted that there was no evidence of a lack of good faith or error of law or principle on Mr. Hird’s part in entering into the agreement. The court concluded that it was in the interests of creditors that the examinable affairs of the company be investigated to improve the liquidator’s prospects of recovering funds for the benefit of creditors. The court granted the application for approval nunc pro tunc of the liquidator’s entry into the funding agreement. Additionally, the court extended the period for making an application for approval under section 477(2B) of the Corporations Act 2001 (Cth) to 26 April 2018. The court also declared that the fee agreement was not invalid by reason of having been entered into by the liquidator prior to obtaining the approval of the court. Finally, the court ordered that the costs of the application be costs and expenses in the winding up of the Allmine Group.