In the matter of ACN 134 017 171 Pty Ltd (in liq) (formerly known as DPSA Pty Ltd)

A substantial creditor of a liquidated company sought to remove and replace the existing liquidators appointed in a members' voluntary winding up. The creditor was prepared to fund new liquidators to investigate the affairs of the company and its sole member, but was unwilling to fund the existing liquidators. A resolution at a creditors' meeting to remove the existing liquidators failed to pass, as the resolution was supported by a significant majority of creditors by value but was defeated by a majority of creditors by number. Creditors voting against the resolution were associated with the sole member of the company. The court was required to determine whether cause had been shown to appoint the proposed new liquidators. The court found that cause had been shown and appointed the proposed new liquidators. The court found that the resolution to remove the existing liquidators had been validly passed by a majority of creditors by value and that the new liquidators should be appointed. The court found that the creditors voting against the resolution were associated with the sole member of the company and that their opposition to the resolution was not based on any legitimate concern but rather on their association with the sole member. The court found that the substantial creditor had demonstrated that there was cause to remove the existing liquidators and appoint the proposed new liquidators. The court made orders appointing the proposed new liquidators and directing the existing liquidators to deliver up all books and records of the company to the new liquidators.