In the matter of Bosnjak Holdings Pty Ltd; Fexuto Pty Ltd v Lombe

The case involved 13 related companies, Bosnjak Holdings Pty Ltd and Fexuto Pty Ltd among them, which were undergoing administration under deeds of company arrangement. The administrators sought an order under section 447A(1) of the Corporations Act 2001 (Cth) to ensure that upon the completion and termination of the administration, the companies would automatically enter into members' voluntary liquidation, with the administrator and his partner appointed as liquidators. The application was made in the Federal Court of Australia. The central issue before the court was whether section 447A(1) granted the authority to make such an order, and if so, whether there were sufficient grounds to do so. Additionally, the court had to consider whether all relevant parties had been properly notified of the application. A further matter was whether the most suitable form of order was to amend regulation 5.3A.07, and if so, whether the 2007 amendment of the regulation, which occurred inadvertently, should be rectified under section 447A(1) to achieve the appointment of liquidators.

The court held that section 447A(1) did indeed empower the court to make an order for the automatic transition into members' voluntary liquidation upon the termination of the deeds of company arrangement. However, the court found that there were no compelling reasons to order such a transition in this case, given the specific circumstances and the lack of urgency. The court also determined that all proper parties had been notified of the application. Regarding the regulation 5.3A.07, the court concluded that the 2007 amendment was indeed an inadvertent error and thus warranted correction. Consequently, the court ordered an amendment to regulation 5.3A.07 to address the error and ensure that the desired appointment of liquidators could be effected.