In the matter of Asset Evaluation Pty Ltd (in liq)

[2020] NSWSC 211

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Asset Evaluation Pty Ltd (in liq) [2020] NSWSC 211

Hearing dates:

9 March 2020

Date of orders:

09 March 2020

Decision date:

09 March 2020

Jurisdiction:

Equity - Corporations List

Before:

Gleeson J

Decision:

(1) Order pursuant to s 488(2) of the Corporations Act 2001 (Cth), that David Ian Mansfield as liquidator of Asset Evaluation Pty Ltd (in liquidation) (“Company”) be granted special leave to distribute the surplus of the assets in the winding up of the Company to the contributories, Lesley Michelle Barrie and Timothy Edmund David O’Riordan, in equal proportions.

 

(2) Pursuant to r 5.6.71(1), Corporations Regulations 2001 (Cth), direct that the order authorising the distribution of the surplus assets of the Company need not have annexed to it a schedule in accordance with Form 551.

 (3)   Order that the applicant’s costs and expenses of this application be paid out of the assets of the Company.

Catchwords:

CORPORATIONS – winding up – company in liquidation – where creditors’ claims satisfied – application for special leave to distribute surplus to contributories – Corporations Act 2001 (Cth) s 488(2) – leave granted

Legislation Cited:

Corporations Act 2001 (Cth), ss 488(2), 601AH(1), (2)
Corporations Regulations 2001 (Cth), reg 5.6.71 (1)
Supreme Court (Corporations) Rules 1999 (NSW) r 7.9(1), 7.9(2)
Taxation Administration Act 1953 (Cth), s 260-45(3), Sch 1

Cases Cited:

Brealey v Shields [2009] NSWSC 1148
FAI General Insurance Co Ltd v FAI Car Owners Mutual Insurance Company Pty Ltd [2009] NSWSC 1350; (2009) 76 ACSR 164
CGU Workers Compensation (NSW) Ltd v ASCOM Service Automation (Australia) Pty Ltd [2005] NSWSC 747
Maetin v Klaus Maetin Pty Ltd (in liq) (2009) 232 FLR 239; [2009] NSWSC 618
Re DS Millard & Son Pty Ltd (1997) 24 ACSR 71
Re RH Trevan Pty Ltd (in liq) [2013] NSWSC 1445

Category:

Principal judgment

Parties:

David Ian Mansfield in his capacity as liquidator of Asset Evaluation Pty Limited (in liquidation) (Applicant)
Asset Evaluation Pty Limited (in liq) (Respondent)

Representation:

Counsel:
J Singh (solicitor)

  Solicitors:
Stacks Champion

File Number(s):

2004/183995

Judgment

1. GLEESON J: The applicant, Mr David Mansfield, is the liquidator of Asset Evaluation Pty Ltd (the "Company"), having been appointed by order made on 27 March 2012 as the successor to the previous liquidator, Mr Richard Porter, who was appointed by the Court on 25 October 2004 following orders that ASIC reinstate the registration of the company pursuant to s 601AH(1) and (2) of the Corporations Act 2001 (Cth) and that the company be wound up.

2. Mr Mansfield seeks an order under Corporations Act, s 488(2) for special leave to distribute the surplus that will remain after the costs and expenses associated with this application have been paid.

3. The application is made in circumstances where the evidence shows that the single asset of the company, being a residential property at Roslyn Street, Lane Cove has been realised, the debts owing to secured creditors Westpac Banking Corporation and the Chief Commissioner of State Revenue have been paid, and all unsecured creditors have been paid 100 cents in the dollar in respect of their debts.

4. The Deputy Commissioner of Taxation has issued a notice under s 260-45 (3) of Schedule 1 to the Taxation Administration Act 1953 (Cth) stating that the company has no outstanding tax-related liabilities.

5. A delegate of the Chief Commissioner of State Revenue has issued a Land Tax Clearance Certificate stating that the Commissioner has no claim in the liquidation for land tax and its costs as the petitioning plaintiff in the original winding-up proceedings.

6. Corporations Act s 488(2) provides that a liquidator may distribute a surplus only with the Court's "special leave". The purpose of the provision is to ensure that there is, in reality, a surplus in that creditors' claims have been recognised and met in full and that the relativities among contributories have been observed: CGU Workers Compensation (NSW) Ltd v ASCOM Service Automation (Australia) Pty Ltd [2005] NSWSC 747 at [4] (Barrett J). The phrase "special leave" only requires that an application be made to the Court rather than the matter being dealt with as part of some other administrative process: Maetin v Klaus Maetin Pty Ltd (in liq) (2009) 232 FLR 239; [2009] NSWSC 618 at [40]-[41] (Austin J), citing Re DS Millard & Son Pty Ltd (1997) 24 ACSR 71 (Young J); Re RH Trevan Pty Ltd (in liq) [2013] NSWSC 1445.

7. The evidence shows that the amount of the anticipated surplus is $784,824, taking into account the future anticipated costs and expenses associated with this application of $2,500, an anticipated GST refund of approximately $8,123 and the liquidator's remuneration for the period since 12 October 2017, which was approved by a Registrar of this Court on 27 November 2019.

8. Supreme Court (Corporations) Rules 1999 (NSW), r 7.9(1) provides that the affidavit in support of an application for special leave to distribute a surplus must state how the liquidator intends to distribute the surplus, including the name and address of each person to whom the liquidator intends to distribute any part of the surplus. Here, there are only two contributories of the company, Mr Timothy Edmond David O'Riordon and Ms Leslie Michelle Barrie. Each holds one ordinary share in the company.

9. Notice of the application has been published at least 14 days before the date fixed for hearing of the application in a daily newspaper circulating generally in New South Wales where the company had its principal place of business, in compliance with Corporations Rules, r 7.9(2). In addition, notice of the application has been given to the contributories, who are also the directors of the company. No interested person, including any person claiming to be a creditor, appeared on the hearing of the application.

10. The liquidator seeks dispensation from Corporations Regulations 2001 (Cth), reg 5.6.71 (1) which requires that an order of the Court authorising distribution of surplus have annexed to it a schedule of entitlements in Form 551. This regulation is directed to cases where there are numerous contributories and there may be matters for adjustment between them, such as differing amounts paid up on shares and arrears of calls. That is not the present case which is a simple one. It is appropriate to dispense with compliance with the regulation: Brealey v Shields [2009] NSWSC 1148; FAI General Insurance Co Ltd v FAI Car Owners Mutual Insurance Company Pty Ltd [2009] NSWSC 1350; (2009) 76 ACSR 164 at [28].

11. Mr Mansfield is entitled to the relief which he seeks on the present application. As the solicitor for the applicant is not in a position to provide the Court with a draft of the proposed form of order sought, the Court grants leave to the applicant to forward to my Associate a copy of the proposed form of order. The orders will be made in Chambers.

Orders

12. Following receipt of the proposed form of orders, the Court makes the following orders:

1. Order pursuant to 488(2) of the Corporations Act 2001 (Cth), that David Ian Mansfield as liquidator of Asset Evaluation Pty Ltd (in liquidation) (“Company”) be granted special leave to distribute the surplus of the assets in the winding up of the Company to the contributories, Lesley Michelle Barrie and Timothy Edmund David O’Riordan, in equal proportions.

2. Pursuant to r 5.6.71(1), Corporations Regulations 2001 (Cth), direct that the order authorising the distribution of the surplus assets of the Company need not have annexed to it a schedule in accordance with Form 551.

3. Order that the applicant’s costs and expenses of this application be paid out of the assets of the Company.

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Decision last updated: 09 March 2020