Kelly (liquidator), in the matter of Australian Institute of Professional Education Pty Limited (in liq)

The case before the court involved the liquidators of Australian Institute of Professional Education Pty Limited, who were seeking approval to defend proceedings brought by the Australian Competition and Consumer Commission (ACCC). The liquidators had identified substantial payments made by the company that might be recoverable and were seeking guidance on the appropriate defence strategy in the ACCC proceeding. The central issue was whether the liquidators' decision to follow legal advice in filing an amended response and defending the ACCC proceeding was reasonable and justified. This required the court to assess the propriety of the liquidators' actions in light of the legal advice they had obtained and the circumstances of the case.

The court examined the legal advice provided to the liquidators and considered whether it was reasonable for them to rely on this advice in their decision-making process. It noted that the liquidators had obtained detailed legal advice from senior counsel, which assessed the material available to them and recommended a course of action. The court found that the advice was thorough and applied the relevant legal principles correctly, with no obvious defects or issues that would call into question its propriety. The liquidators had chosen to act on this advice, and the court concluded that their decision to do so was reasonable and justified. Therefore, the liquidators were approved to file the amended response, defend the ACCC proceeding on the basis of this response, and use the company’s resources to pay the costs of the defence.

The court's decision affirmed the liquidators' right to follow professional legal advice in managing the company's affairs and defending proceedings brought against it. It reinforced the principle that the court respects the commercial judgment of liquidators, provided that it is made in good faith and based on sound legal advice. The court's approval enabled the liquidators to proceed with their defence strategy as recommended by their legal counsel.