Lewis v Battery Mineral Resources Ltd (in liq)

In the Federal Court, Lewis and others brought an application against Battery Mineral Resources Ltd (in liquidation) seeking the appointment of a special purpose liquidator and a reviewing liquidator. The applicants sought to investigate the sale of assets and the admission of a CAD$10 million liability during the company’s voluntary administration. The applicants argued that the incumbent liquidators, who were also the voluntary administrators, should be reviewed for their conduct. The court was required to determine whether it had the power to appoint a special purpose liquidator to review the conduct of the incumbent liquidator as a voluntary administrator, and whether it should appoint a reviewing liquidator in the exercise of its discretion.

The court found that it did not have the power to appoint a special purpose liquidator to review the conduct of the incumbent liquidator as a voluntary administrator. The court held that the statutory scheme and principles concerning the appointment of reviewing liquidators did not support such an appointment. The court also found that the application was not supported by other creditors and there was a 14-month delay in instituting proceedings. Additionally, the liquidation was almost finalised. The court dismissed the application for the appointment of a reviewing liquidator in the exercise of its discretion, finding that the applicants had not demonstrated sufficient grounds for such an appointment. The court held that the applicants had not shown that the interests of creditors would be served by the appointment of a reviewing liquidator, and that the delay in bringing the application and the near finalisation of the liquidation were significant factors against the appointment. The court dismissed the application with costs.