Loo, in the matter of Halifax Investment Services Pty Ltd (in liquidation) v Quinlan (Liquidator)

Halifax Investment Services Pty Ltd (in liquidation) was a company holding an Australian Financial Services Licence which went into administration and then liquidation. The liquidators applied to the court for directions and judicial advice on several questions relating to the company and its subsidiary, Halifax NZ. The court was required to decide whether the date for valuation of client entitlements should be the date of administration or a date as close as possible to the date of distribution. The primary judge held that the date for valuation should be the date of administration. The appeal against this decision was dismissed.

The court held that there was no error in the primary judge's determination that the date for valuation of clients' proportionate entitlements to the deficient mixed fund should be the date of administration. The court observed that the decision of the Administrators and then the Liquidators to permit investors to keep their positions open was unusual and will rarely be appropriate. However, the court noted that there were particular circumstances that led the Administrators/Liquidators to adopt that course, including that certain investors were claiming a proprietary interest and seeking distribution in specie of specific assets, and that certain investors had raised capital gains tax issues associated with those investments. The court concluded that where an administrator or liquidator wishes to adopt this course in respect of a deficient mixed fund, they should apply promptly to the Court and seek directions as to the consequences of leaving positions open if the Court were to sanction that course.

The appeal was dismissed, and the parties were given an opportunity to make submissions on costs. The court made orders for the parties to file and serve short written submissions on costs, with a view to determining any issue of costs on the papers. The orders also included granting an extension of time to seek leave to appeal, granting leave to appeal from the primary judge's orders, and requiring the appellant to file and serve a notice of appeal within seven days.