R.K. Newson P/L (Provisional Liquidator Appointed) (ACN 000 542 727)

[1993] FCA 386

386 ,1973

JUDGMENT No. .a.. 0. ~ ~ ~ . O ~ ~ ~ . . O 0m.o.o. 0. 0

CATCHWORDS

CORPORATIONS - whether a particular official liquidator who had acted as provisional liquidator of a company should now be appointed liquidator - appearance of possibility of conflict of interest - another official liquidator appointed.

Re National Safety Council of Australia, Victorian Division

(1989) 7 ACLC 602, applied

R.K. NEWSON PTY LIMITED (PROVISIONAL LIQUIDATOR APPOINTED)

(ACN: 000 542 727)

NG 3018 of 1993

Burchett J.
Sydney

IN THE FEDERAL COURT OF AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY )	NG 3018 of 1993

)

GENERAL DIVISION )

R.K. NEWSON PTY LIMITED
(PROVISIOUAL LIQUIDATOR APPOINTED)

(ACN: 000 542 727)

Applicant

CORAM: Burchett J.
PLACE: Sydney

DATE : 26 March 1993

EX TEMPORE REASONS FOR JUDGMENT

BURCHETT J.:

In this matter, the question for decision is whether a particular official liquidator, who has acted as provisional liquidator for the company since 1 February 1993, should now be appointed as liquidator, or whether some other official liquidator should be appointed.

Four creditors object to the provisional liquidator being appointed. The ground of the objection is quite clearly	stated on the footing that the appearance of a conflict of
interest might arise, and that perhaps an actual conflict of interest might arise; but it is not suggested that any impropriety of any kind at all has in fact occurred, nor indeed, as I understand the submission, is it suggested that any impropriety would be at all likely to occur in the future if the appointment were made. It is said that in the appointment of a liquidator, the person appointed must not only be independent, but must be seen to be independent, and reliance is placed on the decision of the Full Court of the Supreme Court of Victoria in Re National Safetv Council of Australia, Victorian Division (1989) 7 ACLC 602.
In that case, the person appointed liquidator was a partner in a firm of accountants who had done some consulting work in relation to the company in the period of approximately three months immediately prior to the liquidation. The Full Court held that the appointment was an interlocutory decision to which the strictures in respect of appeals from interlocutory decisions applied. Nevertheless, the Full Court granted leave to appeal and allowed the appeal against the appointment of the liquidator, and it did so on the ground that the judge at first instance appeared to have given too much weight to the knowledge of the gentleman appointed, acquired as provisional liquidator, and:

"insufficient weight to the necessity for it to appear that there is no conflict of duty and

of the person concerned with the company." interest arising from the relationship of the firm

In my view this proposition applies in the present case, and although I have no reason to think that a conflict of interest would be resolved in other than a proper manner, I do not think the court should appoint someone as liquidator in circumstances where it can be seen that there is some real prospect, even if small, that a conflict of interest and duty might arise in the performance of his duties as liquidator.

Accordingly, I uphold the objection and will not appoint the provisional liquidator. In those circumstances, it is agreed that an appropriate person to appoint would be Martin John Green. I give leave to enable his consent to be filed in court. I make orders in accordance with the short minutes which have been handed up, which I have initialled, dated and placed with the papers. I order that the costs of the creditors who have appeared before me today be paid out of the assets of the company, and that they have the same priority as the applicant's costs.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of his Honour M r Justice Burchett.

Associate: k z - s l 4

Date: 9 June 1993

Solicitor for the Applicant:	Mr M.W. Watson of Messrs Tress Cocks and Maddox
Solicitor for the Supporting	Mr W.J. Madden of
Creditor:	Messrs Blessington Judd Freeman Lazarus