In the matter of AMJ Transport NSW Pty Ltd (in liquidation) ACN 164 981 837

The plaintiff, AMJ Transport NSW Pty Ltd, sought to have its directors, who had been appointed as administrators and subsequently liquidators, confirmed as such. The defendant, AMJ Transport NSW Pty Ltd, contested the validity of these appointments on the basis that the sole director who passed the resolution for their appointment was an undischarged bankrupt at the time of the resolution. The matter was heard in the Federal Court of Australia. The central issue before the court was whether the appointments of the plaintiff's directors as administrators and liquidators were valid, given that the director who passed the resolution for their appointment was an undischarged bankrupt at the relevant time.

The court considered the statutory provisions relevant to the appointment of administrators and liquidators, including sections 447C, 447A(1), 1322(4) of the Corporations Act 2001 (Cth), and section 90-15 of Schedule 2 to the Act. The court also examined case law on the effect of a director's bankruptcy on their capacity to appoint administrators or liquidators. The court found that the statutory provisions did not explicitly disqualify a bankrupt director from passing a resolution for the appointment of administrators or liquidators. However, the court noted that a director's bankruptcy could be relevant to the question of their capacity to act, depending on the circumstances. The court concluded that the bankruptcy of the director did not invalidate the resolution for the appointment of administrators and liquidators, as there was no evidence that the director's bankruptcy affected their capacity to act in this regard.

The court ordered that the plaintiffs were validly appointed as administrators and liquidators of the defendant company. The court found that the sole director's bankruptcy did not affect their capacity to pass the resolution for the appointment of administrators and liquidators, and that the appointments were therefore valid. The court further found that the plaintiffs were entitled to be indemnified by the defendant company for costs and expenses incurred in relation to the administration and liquidation of the company, as well as any other costs and expenses reasonably incurred in connection with the proceedings.