Re Australian Institute of Professional Photography Ltd (in liq)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2023 05797

IN THE MATTER of AUSTRALIAN INSTITUTE OF PROFESSIONAL PHOTOGRAPHY LIMITED (ACN 050 167 498) (In Liquidation)

BETWEEN:

MATTHEW TERENCE GOLLANT in his capacity as Liquidator of AUSTRALIAN INSTITUTE OF PROFESSIONAL PHOTOGRAPHY LIMITED
(ACN 050 167 498) (In Liquidation)

Plaintiff

---

JUDGE:	Hetyey AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	13 May 2024, further material filed 27 May 2024, 7 June 2024 and 17 June 2024.
DATE OF JUDGMENT:	4 March 2025
CASE MAY BE CITED AS:	Re Australian Institute of Professional Photography Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2025] VSC 71

---

CORPORATIONS — Application by purported member of not-for-profit public company limited by guarantee for order staying or terminating winding up — Corporations Act 2001 (Cth) — s 482 — s 90-15 (Sch 2, Insolvency Practice Schedule (Corporations)) — Ancillary orders sought in relation to company’s governance arrangements — Whether applicant for termination has standing as a contributory or member of company — Where company now solvent — Reasonable prospect company will remain solvent — Relative significance of delay in filing of application — Liquidation close to completion — Liquidator, members and creditors will not be prejudiced by a stay or termination of the winding up — Relief not inconsistent with commercial morality or public interest — Stay of winding up pending payment of liquidator’s reasonable remuneration and expenses — Ancillary orders appointing new directors and for convening of general meeting of members to vote on proposed resolutions for reconstitution of board.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Sinisgalli	Sinisgalli Foster Legal
Malcolm Charles Mathieson as applicant for interlocutory process	None	Self-represented
Sheree Anne Roberts as an interested party	None	Self-represented
John Stuart Ansell as an interested party	None	Self-represented
For Image Makers Association Australia Inc as an interested party	Mr J O’Regan of counsel	Banki Haddock Fiora
For Professional Photographers’ Association of Queensland Inc as an interested party	None	Self-represented
For Pro Photography WA Inc as an interested party	None	Self-represented

TABLE OF CONTENTS

Introduction

Background

Procedural history

Statutory provisions and legal principles

Termination application

Standing of applicants
Key evidence relied on in support of termination application
Evidence of Ms Roberts
Evidence of Mr Ansell
Initial evidence of Mr Mathieson
Evidence of Mr Sinnott
Supplementary evidence of Mr Mathieson

Consideration
Solvency of company
Commercial morality, the public interest and delay in making application
Other considerations
Ancillary relief

Conclusion

HIS HONOUR:

Introduction

By originating process dated 7 December 2023, Mr Mathew Terence Gollant, in his capacity as liquidator (‘liquidator’) of Australian Institute of Professional Photography Ltd (in liq) (‘AIPP’ or ‘company’), makes application under s 488(2) of the Corporations Act 2001 (Cth) (‘Act’) for, among other things, special leave to distribute surplus assets of the company and for leave to resign as liquidator (‘liquidator’s application’). A number of interested parties have responded to the application and requested that the surplus assets be apportioned between them. However, the liquidator’s application has precipitated a separate interlocutory application by two persons purporting to be past or current members of the company who seek to stay or terminate the winding up, along with ancillary orders dealing with the company’s immediate governance arrangements.
For the reasons that follow, I will make orders terminating the winding up of the company upon the payment of the liquidator’s outstanding remuneration and expenses. I will stay the winding up until this occurs. Consequently, the surplus will remain with the company rather than be distributed to those interested parties who have staked a claim to it.

Background

AIPP is an unlisted not-for-profit public company limited by guarantee. According to cl 4 of its constitution, the objects of AIPP include, among other things, improving the technical knowledge and professional status of the photography profession and persons engaged in photography, video production, image making and ancillary occupations. AIPP also seeks to support diversity in its membership and operations, promote high standards of professional conduct and to educate and inform the general public about the use of professional photographic services.
In his initial affidavit sworn 7 December 2023, Mr Gollant said he was appointed as voluntary administrator of AIPP on 17 November 2021 by way of a resolution of members. He also deposed that on 22 December 2021 he was appointed liquidator of the company by a special resolution of members. These statements were materially wrong. After the final hearing of the matter, Mr Gollant filed a supplementary affidavit sworn 7 June 2024 confirming he was in fact appointed as voluntary administrator of AIPP on 17 November 2021 by way of a resolution of the company’s directors. He states that upon his appointment as administrator, the board of directors of AIPP advised him that the costs of continuing the operations of the company, including the costs of managing award programs, would exceed its available funds. In light of this and perceived declining membership, the board apparently formed the view that the company was insolvent or on the brink of insolvency. Mr Gollant further states in his supplementary affidavit that he was actually appointed as liquidator of the company on 21 December 2021 by unanimous resolution at the second meeting of creditors.
At the same time, Mr Gollant instructed his solicitor, Ms Michelle Ang, that the company ‘went into voluntary administration and was subsequently liquidated for the purposes of transitioning into a new organisation or combination of organisations given the change in landscape of the photography business’.
One of the company’s directors, Mr Malcolm Leslie Morrison, provided Mr Gollant with a Report on Company Activities and Property (‘ROCAP’). The ROCAP disclosed the company’s assets exceeded its liabilities. As at the date of the appointment of the liquidator, the company had four creditors: the Australian Taxation Office and three employees.
On 21 April 2022, the debts owed by the company to its creditors were paid in full. Contributions made by the company’s members and member fees were also apparently refunded prior to Mr Gollant’s appointment. As at the time of Mr Gollant swearing his initial affidavit, the company had surplus assets in the amount of $105,660.44, including cash at the bank (‘surplus funds’). Additionally, the company holds various intellectual property assets and other items of limited commercial value like easels and laptop bags that are held in a storage facility for which storage fees are payable.
Clause 20 of AIPP’s constitution deals with the distribution of surplus assets and is in the following terms:
20 Winding up
20.1 Surplus assets not to be distributed to members
If the [company] is wound up, any surplus assets must not be distributed to a member or a former member of the [company].
20.2 Distribution of surplus assets
1)Subject to the Corporations Act and any other applicable Act, and any court order, any surplus assets that remain after the [company] is wound up must be distributed to one or more organisations in Australia:
a)with purpose(s) similar to, or inclusive of, the purpose(s) in clause 4.1, and
b)which also prohibit the distribution of any surplus assets to its members at leave to the same extent as the [company].
2)the decision as to the organisation or organisations to be given the surplus assets must be made by special resolution of members at or before the time of winding up. If the members do not make this decision, the [company] may apply to the Supreme Court to make this decision.
According to the liquidator, no resolution was ever made by members of the company concerning the distribution of its surplus funds.
The liquidator explains that during the course of the liquidation, he was informed by Mr Morrison that a group of former members of the company intended to incorporate a new entity under the name ‘Australian Photographic Arts Foundation Trust’ (‘APAF’). Although Mr Morrison proposed APAF as a suitable recipient of the surplus funds, there were disagreements regarding its membership and constitution, and that course of action was ultimately not pursued.
At the time of the final hearing, the liquidator estimated his legal fees to be approximately $20,000, with disbursements of between $5,000 to $8,000. As at 2 June 2024, the liquidator had work in progress in the external administration of the company of around $8,580 plus GST. In his supplementary affidavit, the liquidator deposes to there being approximately $78,827 remaining of the surplus funds.

Procedural history

The liquidator’s application was first listed before me for initial directions on 9 February 2024. At that time, several interested parties appeared as proposed recipients of the surplus funds, namely: Image Makers Association Australia Inc (‘IMAA’); Professional Photographers’ Association of Queensland Inc (‘PPAQ’); and Pro Photography WA Inc (‘PPWA’) (together, ‘interested parties’). Ms Sheree Anne Roberts (former director and member of AIPP) and Mr Malcolm Charles Mathieson (honorary member) also sought to be heard. They foreshadowed making an application under s 482 of the Act to stay or terminate the winding up of AIPP. Orders were made including for the provision of the company’s list of members to Mr Mathieson and Ms Roberts on their request, and for the filing and service of material by Mr Mathieson and Ms Roberts, the interested parties, and the liquidator. The matter was listed for final hearing on 13 May 2024, at which time both the liquidator’s application and any interlocutory application made by Mr Mathieson and Ms Roberts would be heard together.
On 13 February 2024, Mr Mathieson and Ms Roberts requested a copy of AIPP’s list of members from the liquidator, which was provided to them. Although the liquidators’ solicitors attempted to publish a notice of the liquidator’s application in compliance with r 7.9 of the Supreme Court (Corporations) Rules 2023 (Vic) (‘Corporations Rules’), they were unable to do so because the Australian Securities and Investments Commission (‘ASIC’) website apparently could not accommodate the particular notice. As a result, the liquidator’s solicitors placed the notice in the Australian newspaper on 19 February 2024. Additionally, the liquidator caused his application to be served on all the interested parties, along with Mr Mathieson and Ms Roberts. I accept the liquidator has provided sufficient notice of his application to those persons who may be affected by it. However, the liquidator’s material does not strictly comply with the requirements of r 7.9(1) of the Corporations Rules because it does not ‘state how the liquidator intends to distribute the surplus including the name and address of each person to whom the liquidator intends to distribute any part of the surplus’. Instead, the liquidator deposes that he is unable to determine which organisation is suitable to receive the distribution of surplus funds in accordance with cl 20 of AIPP’s constitution without explaining why that is the case. Initially, he sought leave to deposit the funds into Court so that any persons claiming an entitlement, including former members, may apply to the Court to receive a distribution.
At the final hearing, the interested parties reached an agreement between themselves and sought orders that the surplus funds be allocated between them on the following proportions: 60% as to IMAA; 35% as to PPWA; and 5% as to PPAQ. The interested parties submitted they were appropriate recipients of the funds on the basis that their respective objects and purposes are similar to, or align with, the objects and purposes of AIPP. The liquidator adopted a neutral position and simply asked the Court to determine the appropriate distribution of the surplus funds.
By way of his short written submissions dated 3 May 2024, Mr Gollant sought to expand the scope of the liquidator’s application to include an order under ss 480(c) or 480(d) of the Act that he be released from further obligations, or an order that he be released from further obligations and be permitted to apply to ASIC to deregister the company. Section 481(3) of the Act provides that an order of the Court releasing a liquidator discharges the liquidator from all liability in respect of any act done or default made by the liquidator in the administration of the affairs of the company, or otherwise in relation to the liquidator’s conduct as liquidator, but that any such order may be revoked on proof that it was obtained by fraud, by suppression or by concealment of any material fact. However, ASIC was not notified of this proposed change to the liquidator’s application in accordance with r 2.8 of the Corporations Rules. Nor did the liquidator comply with r 7.5 of the Corporations Rules by filing an affidavit addressing various specific matters, including: whether the committee of inspection (if any) had passed a resolution approving the liquidator's release; whether the liquidator had received any objection to his release from an auditor appointed by ASIC or the Court, or any creditor, contributory or other interested person; and whether the liquidator was aware of any act or default made by him that would likely give rise to any liability or claim by any person that there had been any such act or default. After the Court raised these deficiencies with the liquidator’s solicitor at the final hearing, the liquidator ultimately determined not to press for a release under s 480 of the Act.
At all events, the liquidator’s application has been largely overtaken by another application. On 7 April 2024, Mr Mathieson and Ms Roberts filed their interlocutory process pursuant to s 482 of the Act seeking the termination of the winding up of the company (‘termination application’). Additionally, they seek directions pursuant to s 482(3) to require the company to convene a general meeting of members to vote on proposed resolutions that those directors in office immediately prior to the appointment of the liquidator — being Mr David Bernard Simmonds, Ms Felisha Mendoza Mina, Mr Geoffrey Alan Comfort, Mr Benjamin Kopilow, Mr Malcolm Leslie Morrison, Mr Joshua Cameron Holko, and Ms Louise Ungermann Blaedel Bagger (‘existing directors’) — be removed and that Mr Mathieson, Ms Roberts, Mr Dale Richard Sinnott, Ms Carol Ann Gibbons and Mr John Stuart Ansell (‘new directors’) be appointed as directors in their stead.
At the final hearing, it was agreed that I would hear and consider the termination application prior to the liquidator’s application. This was because if the termination application was successful, there would be no need to consider the allocation of the surplus funds to the interested parties. The termination application was opposed by both the liquidator and the interested parties, although the liquidator did not file any material in opposition. Whilst ASIC was notified of the termination application, it did not provide any substantive response to the application prior to the hearing. It does not appear that the termination application was served on the creditors of the company; however, given the creditors have been paid in full, I do not consider their interests are affected by the application. Although AIPP’s members were not formally served, there is evidence (which I deal with further below) that they were provided notice of the application and a reasonable number appeared to express support for it by updating their contact details. While the existing board of directors were not provided with notice of the application, I consider this oversight can be addressed in any orders made by the Court.
At the conclusion of the hearing, I made orders requiring Mr Mathieson to file and serve a short supplementary affidavit setting out and exhibiting the position of ASIC in relation to the termination application, together with any revised budgetary information for the future conduct of the company. The liquidator was required to file a supplementary affidavit addressing any concerns as to the future solvency and governance of the company and exhibiting relevant documents to better clarify the circumstances of his appointment (as administrator and then liquidator), together with any statutory reports prepared for creditors. IMAA was also permitted to file and serve supplementary submissions opposing the termination application.
In connection with this matter:
(a)the liquidator relies on the affidavits of: Mr Gollant sworn 7 December 2023 and 7 June 2024; and Ms Ang affirmed 22 February 2024, together with short written submissions dated 3 May 2024;
(b)IMAA relies on the affidavits of: Mr Alasdair James Doctor affirmed 5 February 2024; Mr Ian van der Wolde affirmed 7 February 2024; and Ms Dianna Snape affirmed 8 March 2024, together with written submissions dated 16 June 2024;
(c)PPAQ relies on the affidavit of Ms Amanda Leigh Waschevski affirmed 8 March 2024, together with written submissions dated 2 May 2024;
(d)PPWA relies on written submissions in the form of a letter to the Court from its President, Mr Mark Brierley, dated 16 January 2024;
(e)together, the interested parties rely on joint written submissions dated 3 May 2024 prepared by counsel for IMAA; and
(f)Mr Mathieson and Ms Roberts rely on the affidavits of: Ms Roberts sworn 5 April 2024 and 30 April 2024 (the latter being filed as submissions); Mr Mathieson affirmed 5 April 2024, 2 May 2024 (filed as submissions) and 27 May 2024; and Mr Ansell (a member and volunteer of AIPP) affirmed 26 April 2024 (filed as submissions), together with their joint written submissions dated 5 May 2024 and the submissions of Mr Kevin O’Daly (a former President and Treasurer of AIPP when it was an unincorporated body) dated 2 May 2024.

Statutory provisions and legal principles

Section 482 of the Act relevantly provides:
(1)At any time during the winding up of a company, the Court may, on application, make an order staying the winding up either indefinitely or for a limited time or terminating the winding up on a day specified in the order.
(1A)An application may be made by:
(a)in any case--the liquidator, or a creditor or contributory, of the company
…
(2)On such an application, the Court may, before making an order, direct the liquidator to give a report with respect to a relevant fact or matter.
(3)Where the Court has made an order terminating the winding up, the Court may give such directions as it thinks fit for the resumption of the management and control of the company by its officers, including directions for the convening of a general meeting of members of the company to elect directors of the company to take office upon the termination of the winding up.
(4)The costs of proceedings before the Court under this section and the costs incurred in convening a meeting of members of the company in accordance with an order of the Court under this section, if the Court so directs, forms part of the costs, charges and expenses of the winding up.
(5)Where an order is made under this section, the company must lodge an office copy of the order within 14 days after the making of the order.

The term ‘contributory’ finds definition in s 9 of the Act and includes, in relation to a company (other than a no liability company), ‘a person liable as a member or past member to contribute to the property of the company if it is wound up.’ Additionally, s 231 of the Act relevantly provides that a person is a member of a company if they are a member of the company on its registration or agree to become a member of the company after its registration and their name is entered on the register of members.
Section 90-15 of the Insolvency Practice Schedule (Corporations) (‘IPS’) (which is Sch 2 of the Act) relevantly states:
(1)The Court may make such orders as it thinks fit in relation to the external administration of a company.
(2)The Court may exercise the power under subsection (1):
(a) on its own initiative, during proceedings before the Court; or
(b) on application under section 90-20.[1]
(3)Without limiting subsection (1), those orders may include any one or more of the following:
(a)an order determining any question arising in the external administration of the company;
(b)an order that a person cease to be the external administrator of the company;
…
(d)an order in relation to the costs of an action (including court action) taken by the external administrator of the company or another person in relation to the external administration of the company
[1]Section 90-20 of the IPS provides that an application under s 90-15 may be made by, among other persons, a person with a financial interest in the external administration of the company, an officer of the company or ASIC.
Section 90-15 of the IPS is broad in its scope and contemplates not only the exercise of judicial discretion but also the determination of substantive rights.[2] In GDK Projects Pty Ltd, in the matter of Umberto Pty Ltd (in liq) v Umberto Pty Ltd (in liq),[3] Farrell J observed that the power in s 90-15(1) is, ‘in its terms, unconstrained.’[4]
[2]See Re Polat Enterprises Pty Ltd (in liq) [2020] VSC 485, [31] (Hetyey AsJ) and also Michael Murray and Jason Harris, Keay’s Insolvency: Personal and Corporate Law and Practice (Lawbook, 11^th ed, 2022) [10.335].
[3][2018] FCA 541.
[4]Ibid, [33].
In Von Risefer v Mainfreight International Pty Ltd,[5] Ashley JA (with whom Beach AJA agreed) referred to a number of principles relevant to an application to stay or terminate the winding up of a company as follows:[6]
[5](2009) 25 VR 366.
[6]Ibid, 376-8 (Ashley JA) (citations omitted).
A long line of authorities establishes the framework within which an application to terminate or stay a winding-up will be considered. In Re Warbler Pty Ltd [(1982) 6 ACLR 526, 533], Master Lee QC of the Queensland Supreme Court said this:
1.The granting of a stay is a discretionary matter, and there is a clear onus on the applicant to make out a positive case for a stay.
2.There must be service of notice of the application for a stay on all creditors and contributories, and proof of this.
3.The nature and extent of the creditors must be shown, and whether or not all debts have been [or will be] discharged.
4.The attitude of creditors, contributories and the liquidator is a relevant consideration.
5.The current trading position and general solvency of the company should be demonstrated. Solvency is of significance when a stay of proceedings in the winding up is sought.
6.If there has been non-compliance by directors with their statutory duties as to the giving of information or furnishing a statement of affairs, a full explanation of the reasons and circumstances should be given.
7.The general background and circumstances which led to the winding up order should be explained.
8.The nature of the business carried on by the company should be demonstrated, and whether or not the conduct of the company was in any way contrary to ‘commercial morality’ or the ‘public interest’.
This list has been often cited. But, as Master Lee himself stated, it was not intended to be exhaustive, and should not be regarded as a series of rigid principles. Nor does it follow that all items on the list carry equal weight. Solvency or otherwise of the company will loom large where the company was wound up because of inability to pay its debts as they fell due. Thus, in Anderson v Palmer [[2002] NSWSC 192, [6]], Barrett J [(as his Honour then was)] said:
In a case such as this where the company was wound up because of inability to pay its debts as they fell due, the whole focus has moved to a system of administration presided over by the liquidator in the interests of creditors, with the interests of members relegated to a subordinate position. It cannot be expected that restoration of control of the company’s destiny to its shareholders and directors (or, in this case, its sole shareholder and director) will be allowed by the court in the exercise of its discretion unless it can be seen that the debts of the existing creditors have been or will be paid and that there is a sufficient degree of additional financial strength and stability to promote confidence in the company’s ability to continue without any appreciable risk of reverting to liquidation. It would not be an appropriate or prudent exercise of the court’s discretion to re-launch a company which, while for the moment technically solvent, was in such a border line position that it might well succumb again to compulsory winding up in the short term. As Street J said in Re Data Homes Pty Ltd [(1972) 2 NSWLR 22, 26 (Mason AJA)], the court will not exercise its discretions in a way which has “the consequence of permitting an insolvent company to go forth again into the community”. The same applies to a company which is technically solvent but likely to become insolvent.
Put simply, given the risk to potential future creditors, there is a clear public interest against permitting an insolvent company to resume operations and to trade, regardless of the circumstances which originally led to it being placed into liquidation.[7]
[7]Re The Thoroughbred Consultants Pty Ltd [2021] VSC 627, [86] (M Osborne J) (‘Thoroughbred Consultants’).
In Re Glass Recycling Pty Ltd,[8] Brereton J (as his Honour then was) observed:[9]
Essentially, on such an application, the court must be satisfied, first, that the state of affairs that required that the company be wound up no longer exists. Where the winding up was on grounds of insolvency, it will be necessary for the applicant to demonstrate that the company is not, or is no longer, insolvent. This is usually the most significant consideration.[10] Thus it has been said that an order terminating the winding up would usually be made if all the creditors are paid out, the liquidators’ costs and expenses are covered, and the members agree.[11]
However, the factors to which the cases refer demonstrate that more is necessary than merely establishing that the state of affairs that required the company to be wound up no longer exists. This appears from, inter alia, the references to ‘commercial morality’ as a relevant consideration, and also from references to the interests of future as well as extant creditors. These factors illustrate that the second broad consideration that informs the exercise of the court’s discretion — once satisfied that the state of affairs that originally required winding up no longer exists — is that it would be reasonable to entrust the affairs of the company, once again, to the directors under whose management it previously failed.
[8][2014] NSWSC 439.
[9]Ibid, [18]-[19].
[10]Citing Re SNL Group Pty Ltd (in liq) [2010] NSWSC 797, [24] (Bergin CJ in Eq).
[11]Citing Apostolou v VA Corporation of Australia Pty Ltd (2010) 77 ACSR 84, 96 (Finkelstein J) (‘Apostolou’); Re Kitchen Dimensions Pty Ltd (in liq) [2012] VSC 280, [25] (Judd J). In Apostolou, Finkelstein J went on to explain (at 96) that there will be exceptional cases where it would not be appropriate to stay the winding up of a company simply because it is solvent, including where a stay is detrimental to the interests of commercial morality and the interests of the public at large.
Additionally, it must be shown that there exists a continuing undertaking of the company, the operation of which may be returned to its directors.[12] The Court also has ‘a clear interest in ensuring that one or more directors willing and able to act will be in office immediately after the winding up is terminated’ so that ‘the company is able to function in an ordinary way’.[13] However, particular considerations may arise where the directors who were in office at the time of the winding up may not wish to return to their role in the event of its termination, especially where considerable time has elapsed since the winding up occurred. In such a case, the Court may require positive evidence that the directors in office at the commencement of the winding up (if still suitable to be directors) are willing to perform that role again, failing which ‘some other suitable governance arrangement’ would have to be approved by the Court.[14] The Court may make necessary directions in this regard pursuant to s 482(3) of the Act.
[12]Re St Gregory’s Armenian School Inc: Ghougassian v Arnautovic in his capacity as Liquidator of St Gregory’s Armenian School Inc [2018] NSWSC 1022, [30] (Emmett AJA) (‘St Gregory’s Armenian School’).
[13]Re Pine Forests of Australia (Canberra) Pty Ltd (2010) 80 ACSR 377, 381 (Barrett J, as his Honour then was) (‘Re Pine Forests’).
[14]Ibid, 381.
Section 482 appears in Pt 5.4B of the Act which deals with winding up in insolvency by the Court. As M Osborne J explained in Re The Thoroughbred Consultants Pty Ltd (‘Thoroughbred Consultants’):[15]
There is a long line of cases to the effect that s 482 of the Corporations Act does not apply directly to a company that has been wound up voluntarily,[16] but must instead be deployed in conjunction with the now-repealed s 511 of the Corporations Act.[17]
It now appears to be the case that s 90-15 of the IPS is to be used in the manner of s 511 of the Corporations Act.
[15][2021] VSC 627, [92]-[93].
[16]Citing Re Wine National Pty Ltd [2014] NSWSC 507, [11] (Black J); Re Annabel Victoria Pty Ltd [2012] NSWSC 375, [3] (Black J); Re St George Bank [2007] NSWSC 134, [4] (Barrett J, as his Honour then was); McKern v Pacific Edge Corporation Pty Ltd (in liq) (2004) 51 ACSR 602, 602 (Barrett J, as his Honour then was); Dean-Willcocks v Payce (Buildings) Pty Ltd (Supreme Court of New South Wales, Young J, 1 September 1994).
[17]Noting that before its repeal, s 511 of the Act allowed a court to exercise, in a voluntary winding up, any power that it could exercise if the company were being wound up by the court.
The conclusion reached by M Osborne J about the application of s 90-15 of the IPS in a voluntary winding up context finds support in a number of other decisions.[18] Factors which may be relevant in assessing an application to terminate a compulsory winding up under s 482 will apply equally when considering the termination of a voluntary winding up through the rubric of s 90-15 of the IPS.[19]
[18]See In the matter of Manband Pty Ltd (in liq) (Subject to Deed of Company Arrangement) [2018] NSWSC 1282, [19] (Black J); Tucker, in the matter of Black Oak Minerals Ltd (Subject to a Deed of Company Arrangement) (in liq) [2019] FCA 293, [72] (Banks-Smith J) (‘Tucker’); Hughes, in the matter of Vah Newco No 2 Pty Ltd (in liq) (No 2) [2020] FCA 1436, [18] (Middleton J) (‘Hughes’).
[19]For example, see the approach taken in Hughes at [18]-[19] and Tucker at [73]-[74].

Termination application

As AIPP is the subject of a creditor’s voluntary winding up, s 482 of the Act does not strictly apply to the termination application. To regularise matters, it is appropriate for the Court to invoke s 90-15(1) of the IPS on its own motion (in accordance with s 90-15(2)(a) of the IPS) in considering the application in conjunction with s 482 of the Act. While s 90-15(1) of the IPS likely provides an independent source of power to terminate a voluntary winding up, it may also enable the Court to exercise a power in a voluntary winding up which it could exercise had the company been wound up by the Court, namely the power to stay or terminate the winding up under s 482(1) of the Act. In other words, s 90-15(1) of the IPS can be used to activate the power in s 482(1).
Before turning to the merits of the termination application, it is necessary to consider the threshold question of Mr Mathieson’s and Ms Roberts’ standing as applicants.

Standing of applicants

None of the material filed by Mr Mathieson and Ms Roberts specifically addresses the basis of their standing to make an application to stay or terminate the winding up of the company.
At the final hearing, Mr Mathieson gave unchallenged oral evidence that following his tenure as past national president of AIPP, chair of its board of directors and chair of the jurors for AIPP’s photography awards, he was granted the status of ‘honorary fellow’ at an awards night held in the Victorian Arts Centre nearly 20 years ago. He said being granted the status of honorary fellow meant he was a life member of AIPP without having to pay ongoing membership fees. Clause 5.2(2) of AIPP’s constitution provides that a person is a member of AIPP who is honoured by the organisation with ‘[h]onorary membership or [l]ife membership’. Clause 1.3 of the constitution essentially states that each member of AIPP must contribute an amount not more than AUD$25 (by way of a guarantee) to the property of AIPP if it is wound up while the member is a member, or within 12 months after they stop being a member. The clause further stipulates that this guaranteed contribution is required to pay for the debts and liabilities of AIPP incurred before the member stopped being a member, or for the costs of the winding up.
IMAA submits that AIPP’s constitution does not make any express reference to the concept of ‘honorary fellow’, with the result that it is unclear whether Mr Mathieson is in fact a member for the purposes of the constitution and s 482(1A) of the Act. However, I am satisfied that Mr Mathieson’s status as ‘honorary fellow’ is an analogue for the terms ‘[h]onorary membership or [l]ife membership’ as found in cl 5.2 of AIPP’s constitution. When I questioned him on this aspect, he confirmed under oath that he was in fact afforded ongoing life membership pursuant to cl 5.2 of the constitution. It follows that Mr Mathieson is a member or contributory for the purpose of s 482(1A) of the Act as he would be someone who, as a member, is liable to contribute to the property of the company on its winding up and to pay for its debts and the costs of the winding up in accordance with cl 1.3 of the company’s constitution. I therefore consider that Mr Mathieson has standing to bring the termination application.
Ms Roberts explained to the Court that she ceased to be a member of AIPP in 2009. However, there is no evidence that Ms Roberts is liable as a past member to contribute to the property of AIPP on its winding up. Accordingly, I am unable to find that her status as a past member of AIPP gives her the necessary standing as a contributory or member to bring the termination application. That said, I do not accept IMAA’s submission that it is appropriate to entirely disregard her affidavit evidence and oral submissions made at the hearing. Ms Roberts has nominated herself to become a director of AIPP in the event its winding up is stayed or terminated and she is a past member and office holder of the company. In the circumstances, I will grant Ms Roberts leave to be heard on the termination application as an ‘interested person’ for the purpose of r 2.13 of the Corporations Rules. In any event, Mr Mathieson relies on Ms Roberts’ affidavit material and submissions in advancing the termination application. There is nothing to prevent him from relying on the affidavits of other persons in support of the termination application, even if those persons themselves lack standing.

Key evidence relied on in support of termination application

Evidence of Ms Roberts

In her affidavits, Ms Roberts deposes as to what she describes as the irregular circumstances surrounding AIPP’s winding up. She refers to a board pack, which suggests the company derived $30,000 to $60,000 in monthly membership income in 2019, which is roughly comparable to that received in 2017 and 2018. Ms Roberts observes that as a consequence of various lockdowns which occurred in Melbourne during the COVID-19 pandemic, many members would have understandably sought to have paused or cancelled their membership.
Ms Roberts also deposes to AIPP being owed an amount of $120,828.29 by sponsors in or around October 2019. She says that sponsorships provided significant income to AIPP. She also states that much work has been achieved by members volunteering their time. For example, volunteers have implemented AIPP’s national awards system since 1986 and have helped facilitate a biannual two-day seminar event over the years.
Ms Roberts exhibits a letter circulated by AIPP’s then National Chair, Mr Morrison, by which members were informed of the foreshadowed appointment of an administrator and told that AIPP would close at 5:00pm on 17 November 2021 (‘circular’). The circular also stated, among other things:
Ultimately, AIPP is closing due to a devastating reduction in membership revenue which has left our ongoing operational capabilities unviable. However it is essential to convey that AIPP has been in a slow decline for more than a decade. Although the current AIPP Board has significant plans and initiatives to reverse this decline, the COVID-19 pandemic has made it impossible to implement these changes. Other contributing factors include industry and brand positioning and poor financial management in the past.
We understand this difficult news may come as a shock to our members, trade partners and supporters, and we are incredibly sad the time has come to say farewell.
Ms Roberts states she received a number of calls from distressed AIPP members following receipt of the circular. She says she is aware of members seeking counselling as they felt their livelihoods had been suddenly disrupted and they had lost various accreditations.
Ms Roberts makes reference to the liquidator’s erroneous evidence in his initial affidavit to the effect that he was appointed as voluntary administrator of AIPP on 17 November 2021 by a resolution of members and later appointed liquidator of the company by a special resolution of members on 22 December 2021. Ms Roberts says she did not receive any notice of any meetings and that members were never given the opportunity to vote on any resolutions in relation to Mr Gollant’s appointments. While she accepts the company was severely impacted by the COVID-19 pandemic, Ms Roberts understands that no attempt was made to restructure its operations prior to its winding up.
By reference to a statement of account produced by the liquidator, Ms Roberts observes that by 7 December 2023, the company had surplus assets totalling $105,470.44 and that all creditors had been paid in full. Ms Roberts says that, with appropriate strategies in place, she is confident it will remain solvent.
Ms Roberts deposes that 605 former members have positively responded to a request for updated contact details in the event they were in favour of the termination application. If the liquidation of the company is terminated, Ms Roberts estimates that, on the basis 500 members would rejoin the company and pay an annual membership fee of $600, the company would have a projected net surplus of $12,400 (after expenses), in addition to the surplus funds held by the liquidator. She exhibits a budget spreadsheet setting out the relevant financial projections (‘initial budget’). Ms Roberts believes that preserving the company’s resources, reputation, intellectual property (including a trademark), branding and websites will save significant costs and be more beneficial than providing the surplus funds to another organisation. Ms Roberts deposes there are currently more than 180 trained volunteers who would be prepared to help rebuild AIPP. She personally commits to volunteering her time and working with others to rebuilding AIPP and returning it to a sound business model. She acknowledges the need for a relaunched version of AIPP to be more ‘slimmed down’, while focusing on the growth of younger photographers and emerging artists of all genres. She also undertakes to help mentor younger photographers.

Evidence of Mr Ansell

In his affidavit sworn 29 April 2024, Mr Ansell emphasises that AIPP supported photographers from all genres across Australia. He describes the level of support he received from AIPP’s leadership after his business premises was destroyed by a fire. Mr Ansell speaks fondly of volunteering to help run AIPP’s awards over many years and laments what he perceives as a lack of consultation surrounding the placement of the company into external administration. He says that as a consequence of AIPP’s liquidation, he and other members have experienced a sense of isolation, disconnectedness and anger.

Initial evidence of Mr Mathieson

In his affidavit sworn 5 April 2024, Mr Mathieson deposes to receiving the circular advising of the imminent closure of AIPP. Responding to the incorrect evidence of the liquidator about the circumstances of AIPP’s external administration, Mr Mathieson says that following receipt of the circular, neither he nor any of the company’s members received any notice of meetings, voted on any resolutions or were given any opportunity to consider any alternatives to a winding up. He has since requested documentation regarding the relevant meeting from one of the company’s directors but has not received a response.
While Mr Mathieson, together with other past presidents of AIPP, signed a letter dated 1 December 2023 and addressed to the liquidator endorsing IMAA as an appropriate recipient of the surplus funds (‘1 December 2023 letter’),[20] he says he was then unaware of the possibility of making the termination application.
[20]The 1 December 2023 letter is an exhibit to the affidavit of Mr Ian Van der Wolde dated 8 March 2024 and filed by IMAA.
Following receipt of member details in accordance with the Court’s previous orders, Mr Mathieson sent an email on 27 February 2024 to AIPP’s members requesting they update their contact details should they be in favour of the company’s re-establishment. Mr Mathieson indicates he received 605 responses from members expressing an interest in the termination application. Over 180 individual members expressed a willingness to offer specific assistance in revitalising AIPP in the event its liquidation is terminated. He believes that around 947 members will lose their professional status if the winding up of AIPP is not brought to an end.
In his affidavit of 2 May 2024, Mr Mathieson provides some additional historical background to AIPP. He explains that AIPP has a legacy spanning over 70 years and was, at one time, the sole national organisation representing all facets of professional photography. AIPP’s membership base can be divided into two main categories: photographers engaged in business-to-business work and those serving the general public. The majority of AIPP members fall into the latter category and operate as sole proprietors, often from home-based or small studio settings. AIPP has assisted individual members to communicate with the public and navigate business-to-business transactions, including through regular gatherings and a monthly publication. AIPP’s award and peer review process has been in place for more than 40 years and has allowed members to gain recognition for their work and accreditation. Additionally, the organisation has cultivated close relationships with similarly aligned organisations, including representative bodies located overseas.
Mr Mathieson says he has helped assemble a small interim board of directors to implement a ‘strong corporate governance framework’ to ensure the financial stability of the company going forward. The interim board is said to include past national board members with expertise in overseeing State and Territory divisions, and regulatory and financial matters. I understand the interim board would comprise the new directors identified in the interlocutory process, namely: Mr Mathieson, Ms Roberts, Mr Dale Richard Sinnott, Mr Ansell and Ms Gibbons. Mr Mathieson clarified in oral submissions that, in addition to seeking a direction under s 482(3) of the Act that he and Ms Roberts convene a general meeting of members to allow voting on the reconstitution of the board as soon as practicable, the Court should also appoint the new directors pending the convening of the general meeting. He believed a general meeting of members to elect a new board on an ongoing basis could be held within six to twelve months.
It is also intended that the approximately 180 members who have volunteered their services would assist with sub-committees in the following areas: information technology; social media; membership and accreditation; finance, constitution and regulatory compliance; and awards, recognition and member education. The services of an accountant have also been engaged on a pro bono basis to help establish the necessary financial infrastructure for ongoing operations. I understand this to be a reference to Mr Sinnott.

Evidence of Mr Sinnott

At the final hearing, Mr Sinnott gave oral evidence about the budget projections that had been undertaken in connection with the termination application. Mr Sinnott is an accountant of nearly 40 years’ standing with public accounting and industry experience. At one point he was a chief financial officer (‘CFO’) of an ASX-listed company. He currently works part-time as a ‘virtual CFO’ for a number of businesses, including a not-for-profit seaweed farming business in the Philippines. He explained that Mr Mathieson and Ms Roberts approached him to assist in providing advice about the financial viability of AIPP and in preparing a budget cashflow spreadsheet. Mr Sinnott said he prepared the initial budget on a conservative basis and that he had overestimated the costs and underestimated the revenue accordingly. He explained an assumption underpinning the initial budget was to re-orientate the company to being a ‘voluntary base[d] small organisation that was flexible, and to be able to minimise expenditure as much as possible.’ The initial budget contemplated a flat membership fee of $600 per year, with its associated professional recognition.
Mr Sinnott has budgeted for award events to be profit-neutral, with operating costs offset by sponsorship and entry fees. That said, he accepted that the cost of running events was high (being around $330,000 per annum). While he said that a number of other expenses, such as information technology and website costs, were quite high, Mr Sinnott believed the timing of certain expenses could be deferred. Although the initial budget had been prepared without inclusion of the surplus funds, he considered that AIPP could draw on the surplus funds as working capital in the event of any cost-overruns. He confirmed he was prepared to be part of the interim board and any later constituted board to assist the company in achieving good governance. Given his involvement on a volunteer basis, Mr Sinnott did not consider the company would necessarily need to engage external accountants but did think there would be benefit in retaining an auditor.
Mr Sinnott was cross-examined by both Mr Sinisgalli, the solicitor for the liquidator, and Mr O’Regan of counsel for IMAA. When asked by Mr Sinisgalli how the company could operate without the four full-time employees who were engaged immediately prior to the liquidation, Mr Sinnott confirmed the company would operate on a smaller and more flexible model with volunteer assistance. He also undertook to perform corporate secretarial and similar work himself on a pro bono basis. Mr Sinnott clarified the initial budget did not account for office rental expenses because work would be undertaken from his own office. He also said the proposed membership fee of $600 did not include GST which would need to be paid by the member and then remitted by the company. Mr Sinnott accepted under cross-examination by IMAA’s counsel that he was unaware of the precise membership fees charged by AIPP immediately prior to its liquidation, but that the proposed fee had been set following discussions between Ms Roberts and Mr Mathieson with prospective members about what was reasonable. He further accepted a key assumption of the initial budget was that 500 members would be willing and able to pay $600 (plus GST) upfront (that is, not in instalments on a monthly basis). Mr Sinnott believed the fee was reasonable given the benefits associated with membership, including professional accreditation. He had also benchmarked the proposed membership fee against other professional association and union fees which he said were much higher. Moreover, Mr Sinnott clarified that the 500 members could be recruited over the course of a year with around 150 members signed up within a month. Mr Sinnott also stated that in preparing the initial budget, he had been provided with two sets of AIPP’s audited financial accounts for the 2017/18 and 2019/20 financial years, together with a budget prepared for the company’s board.

Supplementary evidence of Mr Mathieson

In accordance with the Court’s orders, Mr Mathieson’s affidavit affirmed 27 May 2024 was filed following the final hearing. He exhibits a revised budget for AIPP, which updates the initial budget referred to at the hearing (‘revised budget’). I infer the revised budget has been prepared with the assistance of Mr Sinnott as it appears to address a number of aspects of Mr Sinnott’s cross-examination and exchange with the bench. The revised budget refers to two ‘budget scenarios’. The first scenario is a ‘minimum case’ which assumes that 556 members will take up membership[21] in the first year of AIPP’s renewed operations (out of a total of 1,820 registered members at the time of liquidation). The second ‘best case’ scenario envisions over 1,000 members renewing their membership (out of a total of 1,820 registered members at the time of liquidation).
[21]Although IMAA objected to a statement in Mr Mathieson’s supplementary affidavit that the ‘minimum case’ is ‘anchored in the position that 556 dedicated members will join the reinstated AIPP’ on the basis it constitutes inadmissible opinion evidence, I need not rely on the statement because the revised budget for AIPP exhibited to Mr Mathieson’s affidavit affirmed 27 May 2024 speaks for itself.
Both budget scenarios assume an operational model underpinned by volunteers and professionals offering their services on a pro bono basis, rather than the organisation employing paid staff. Total expenses in the revised budget have been reduced from $268,600 in the initial budget to $98,100. For example, when compared with the initial budget, information technology and website expenses have been reduced from $50,000 to $12,000 and board travel and associated costs have been reduced from $30,000 to $7,500. No provision appears to be made for holding events in the first year of operation. Mr Mathieson explains that if there is strong demand and support for events in the first year, they will only be held if they are cost-neutral. There has also been a corresponding reduction in membership revenue from $300,000 in the initial budget to $126,905 on the minimum case scenario and $255,510 on the best case scenario. Allowing for costs of sales (largely in the form of membership renewal costs and a 15% distribution of fees to regional areas to establish sub-committees), along with general expenses, including website costs, legal fees (including in connection with a review of AIPP’s constitution) and advertising and promotion costs. As a consequence, the ‘minimum case’ scenario is expected to result in a net surplus of $24,305 in the first year of renewed operations. On the best case scenario, there is a projected net surplus of $48,145.50. Neither scenario assumes the immediate use of the surplus funds and both scenarios assume all expenses and costs of sales are expected to be met by the organisation’s revenue.
Mr Mathieson states that because the company has been in external administration since late 2021, the membership projections in the revised budget are conservative, with different categories reflecting previous membership categories, such as students, accredited members and life members. The membership fees are significantly reduced from the flat $600 (exclusive of GST) fee in the initial budget to a tiered structure of either $95, $100 or $350, depending on the membership category. Membership will confer various benefits, including: professional accreditation; access to professional development and mentoring at reduced costs; training and support in business management, marketing, and social media; regular newsletters and updates; and exclusive industry discounts through sponsors and partner organisations. Mr Mathieson also states the income projections have been adjusted to account for the shorter initial trading period over only part of the financial year.
Mr Mathieson emphasises the company would operate in its first year as a volunteer-driven, not-for-profit entity, with the interim board adopting a conservative approach to expense management. The interim board would also strategically pursue sponsorships, partnerships and grants which are not expected to be secured in the first year of operations. While no allowance has been made for the use of the surplus funds, Mr Mathieson requests that the funds remain with the company to ‘fuel [the] swift expansion of membership services, educational events and seed funding for [regional] divisions’.

Consideration

Although the termination application was partly directed to concerns relating to perceived irregularities surrounding AIPP’s entry into voluntary administration and then liquidation, these concerns have fallen away in light of Mr Gollant’s supplementary affidavit which was filed and served following the final hearing of the matter in accordance with the Court’s orders. Plainly, the errors in Mr Gollant’s initial affidavit concerning the bases of his appointments not only caused confusion but resulted in wasted time and costs.
The real issues for determination are: firstly, whether the state of affairs that originally required the winding up of AIPP no longer exist; and, secondly, whether it would be reasonable and not inconsistent with commercial morality or the public interest for control of the company to be returned to directors in circumstances where it has previously failed.

Solvency of company

The salient facts are that all creditors have been paid and membership fees refunded. The company may now be regarded as solvent. All that remains is for the liquidator to be paid his reasonable fees and expenses. On the basis of the evidence put forward by Mr Mathieson, Ms Roberts and Mr Sinnott, I consider that the state of affairs which resulted in the winding up of AIPP are unlikely to recur in the foreseeable future and that the company has reasonable prospects of conducting financially sustainable operations.
Having regard to the revised budget, the minimum case scenario is expected to yield a net surplus of $24,305 in the first year of AIPP’s renewed operations. This is premised on 556 members rejoining the organisation in the first year, resulting in membership income of $126,905. I consider this is an achievable target representing 30% of the total 1,820 members at the time of liquidation and having regard to the fact that around 605 members have expressed a level of support for the termination application. Notwithstanding IMAA’s submission that ‘general societal financial pressures (an increase in inflation and the cost of living since 2020)’ does not appear to have been taken into consideration in arriving at the 556 member estimate, I consider an estimate of 30% of the prior member base to be reasonable and reflective of such financial pressures.
Further, I note that the minimum case scenario in the revised budget has prudently limited non-essential expenditure in the first year of operation and assumes an operating model facilitated by the work of volunteers. Again, I consider this to be a realistic assumption given there is unchallenged evidence that over 180 people have offered to volunteer their time to help rebuild AIPP. Sensibly, the modelling in the revised budget does not rely on the use of the surplus funds.
However, even if:
(a)the number of projected members and resulting member income under the minimum case scenario was halved to 278 members (being just 15% of the total 1,820 members at the time of liquidation);
(b)the resulting membership income was also halved to $64,425 (with a corresponding reduction in the cost of membership sales); and
(c)the total expenses were to remain the same (around $98,100),
the resulting deficit could be comfortably covered by the residual surplus funds for the first year and could possibly be substantially covered for the second year. While Mr Mathieson expresses a wish to use the surplus funds to rapidly expand membership services, educational events and fund regional divisions, a more fiscally conservative approach would be to retain the surplus funds as a contingency to meet cost-overruns while AIPP’s membership base is gradually renewed and additional income streams in the form of sponsorship, partnerships and grants can be re-established.
Of course, nothing can be guaranteed and most companies are exposed to some risk of insolvency. That said, given the volunteer model proposed, the scaled-back expenses and the fact that Mr Sinnott has offered his professional accounting and business expertise as a member of the interim board, I consider the risk of AIPP returning to external administration to be reduced.
It follows from the above that I reject a submission made by the liquidator at the hearing that ‘despite everyone’s best intentions’ AIPP would very likely once again become insolvent. Even though he was ordered to address any concerns as to the future solvency and governance of the company in his supplementary affidavit, the liquidator has elected not to do so. He has not put forward any positive evidence in opposition to the termination application.

Commercial morality, the public interest and delay in making application

At the hearing, the liquidator also opposed the termination application on the basis that the liquidation of AIPP was close to complete. In a similar vein, IMAA submitted there was a public interest in completing the liquidation of an entity that had been the subject of a winding up for several years. In this regard, IMAA placed reliance on the case of St Gregory’s Armenian School Inc: Ghougassian v Arnautovic in his capacity as Liquidator of St Gregory’s Armenian School Inc (‘St Gregory’s Armenian School’),[22] in which Emmett AJA refused an application to terminate the winding up of an incorporated association brought more than five years after a liquidator was appointed. His Honour observed a delay of such a duration, in circumstances where the winding up was almost complete, would be a reason why a stay or termination of the winding up should not occur as a matter of discretion.[23]
[22][2018] NSWSC 1022.
[23]Ibid, [29], [48].
However, Emmett AJA’s decision in St Gregory’s Armenian School turned on the facts and the question of delay was simply one factor which influenced the outcome. Other important factors pertinent to the exercise of his Honour’s discretion included the following:
(a)the fact the association had no existing undertaking as a going concern that could be returned to the association’s directors and members.[24] In particular, the association had no premises from which to operate a school and there was no evidence there would be any substantial body of pupils who would be in a position to pay fees to support the ongoing viability of such a school. By contrast, in the present case there is positive evidence as to how the undertaking of the company can be revived and carried on;
(b)the fact there was no evidence as to who the members of the association were or whether any members, other than the applicants, supported or opposed the making of an order for a stay or termination of the winding up.[25] Here, there is evidence the members of AIPP were given notice of the termination application and 605 former members positively responded to a request for updated contact details in the event they were in favour of the termination application. Around 180 members have also offered to volunteer their time in helping to resurrect AIPP;
(c)his Honour considered it was unreasonable to entrust the affairs of the association to the directors under whose management it had previously failed in circumstances where there had been a failure to: meet taxation obligations; lodge financial accounts with the regulator; ensure employees were properly paid their entitlements; and provide proper assistance to the liquidator.[26] Further, his Honour was unimpressed by evidence given by the applicant directors concerning such matters which his Honour considered relevant to questions of public interest and commercial morality.[27] In the case of AIPP, there is no evidence of any non-compliance with statutory obligations; and
(d)no evidence was adduced about capital expenditure and cash flow projections to support the expenses associated with running a school.[28] Here, there is positive evidence in the form of the revised budget of future income and anticipated expenses of AIPP.
[24]Ibid, [49], [52], [69].
[25]Ibid, [55].
[26]Ibid, [70]-[72].
[27]Ibid, [56]-[63].
[28]Ibid, [69].

The authorities make clear the power to stay or terminate a winding up under s 482 of the Act and/or s 90-15 of the IPS is wholly discretionary. The language of s 482(1) of the Act also speaks of an application for a stay or termination of a winding up being made ‘[a]t any time during the winding up of a company.’ It follows there is no general principle by which relief would be refused because of the duration of a liquidation and the imminence of its completion. Instead, these are matters which may be taken into account in the exercise of the Court’s discretion and weighed against other relevant considerations. By way of illustration, there are cases in which a Court has terminated a winding up in circumstances where the company had been in liquidation for a longer period than the company in the present case. In Re Pine Forests of Australia (Canberra) Pty Ltd (‘Re Pine Forests’),[29] Barrett J (as his Honour then was) terminated the winding up of a company that had been in liquidation for more than ten years. Similarly, in Thoroughbred Consultants, M Osborne J rejected an argument by a liquidator that a delay of nearly three years in bringing an application to terminate a winding up would, of itself, justify dismissal of the application.[30] However, his Honour did observe a regrettable consequence for the delay was that the liquidator had continued to discharge his statutory duties and become entitled to his remuneration in the intervening period.[31]
[29](2010) 80 ACSR 377.
[30]Thoroughbred Consultants, [111].
[31]Ibid, [108].
Here, the length of time between the resolution of creditors to wind up the company (being 21 December 2021) and the filing of the termination application (being 7 April 2024) is approximately two years and three months. In all the circumstances, I do not consider this period to be inordinately long. Nor do I consider the fact the liquidation of AIPP is near completion to be a decisive factor in the exercise of my discretion. Other factors such as: the solvency of the company; its reasonable prospect of remaining solvent; the attitude of members; and an absence of any other matters relevant to the public interest or commercial morality are considerations I afford greater weight.
The liquidator’s solicitor also submitted at the hearing that there had been governance concerns relating to AIPP and that ‘it would be better to start a new organisation with no past track record or trouble’. When asked for evidence of these governance issues, the liquidator’s solicitor directed the Court to the 1 December 2023 letter signed by a group of past presidents of AIPP, including Mr Mathieson. The letter makes brief complaint about a lack of consultation over the decision to put AIPP into external administration and the identification of IMAA as a potential recipient of the surplus funds. However, it makes no mention of any historical governance issues concerning the company. Again, the liquidator was ordered to make express reference to any governance concerns in his supplementary affidavit but elected not to pursue this aspect.
Ultimately, there is no identifiable reason why the making of an order terminating the winding up of AIPP would be detrimental to commercial morality or contrary to the public interest. While there is a clear public interest in ensuring the termination of a winding up will not result in an insolvent company being allowed to trade and thereby create a significant risk to potential future creditors, such a concern does not loom large in this case.

Other considerations

In my view, the interests of the liquidator will not be prejudiced by a stay or termination of the winding up because there are adequate funds for his reasonable remuneration and expenses to be paid. Payment of his reasonable remuneration and expenses will be a precondition for the termination of the company’s winding up and I will stay the winding up pending payment. It appears from the minutes of the second meeting of the company’s creditors that creditors have already approved the liquidator’s remuneration for the period from 21 December 2021 to completion of the liquidation fixed in the amount of $30,000 (excluding GST), an amount which is subject to ‘upward revision by resolution of creditors’. Creditors also approved the liquidators’ internal disbursements for the period 17 November 2021 to completion of the liquidation capped in the amount of $3,000 (excluding GST). To the extent the liquidator has work in progress and internal disbursements in excess of these capped amounts, he will need to seek approval from the creditors or any committee of creditors in accordance with s 60-10 of the IPS, failing which the Court will be required to make the necessary remuneration determination.
Additionally, I do not consider creditors or members will be prejudiced by the termination of AIPP’s winding up. The evidence shows creditors have already been paid in full. The evidence also suggests a reasonable portion of members (being 605 out of 1,820 members at the time of liquidation) have expressed a level of support for the release of the company from liquidation following a communication by Mr Mathieson. I also note cl 20.1 of AIPP’s constitution expressly prohibits members or former members from receiving any surplus assets in the event of the company’s winding up.
There is no other reason why AIPP should be prevented from being restored to its former status and carrying on its activities as a peak photography organisation.

Ancillary relief

As previously noted, the termination application seeks ancillary relief in the form of directions pursuant to s 482(3) of the Act requiring the company to convene a general meeting of members to vote on proposed resolutions that the existing directors in office immediately prior to the appointment of the liquidator be removed and the new directors be appointed instead. Mr Mathieson also submits the Court should appoint the new directors in the interim.
Such directions presume the existing directors will resume office until such time as a general meeting of members is convened to determine the identity of a new board. However, given the circumstances in which the company entered external administration and the effluxion of time, I have real doubts that some or all of the directors would wish to act in that role or otherwise be involved in the affairs of the company. Upon being notified of the termination of the winding up, it is possible some of the existing directors may elect to resign. As already noted, the existing directors were not served with the termination application and have not been heard in relation to it. How then to proceed?
In Re Pine Forests, Barrett J (as his Honour then was) was similarly concerned about the willingness of directors in office at the time of liquidation to continue to act after the termination of a winding up.[32] Accordingly, his Honour accepted an undertaking by contributories to take action to reconstitute the directorships within a fixed period after termination of the winding up. His Honour was satisfied the applicants were incentivised to, and capable of, honouring the undertaking.[33]
[32]Re Pine Forests, 381.
[33]Ibid.
In the present case, it is necessary and desirable there be directors who are actually willing to act in the role of caretaker directors so the company can function in the ordinary way pending any long-term change to the board, including by way of resolution at a general meeting of members. It is also important there be directors who are empowered and prepared to call a general meeting of members (in accordance with cl 7.1 of AIPP’s constitution). I am reluctant to leave the interim governance of the company to chance.
According to cl 10.1(1)(a) of AIPP’s constitution, the company must have ‘at least five and no more than eight directors elected by members.’ There are presently seven existing directors. There is authority for the proposition that s 482(3) of the Act may be utilised to appoint a director where there is a vacancy in office.[34] While there is no actual vacancy in office in this case given there are at least five directors, I consider the power contained in s 90-15(1) of the IPS, which allows the Court to make ‘such orders as it thinks fit in relation to the external administration of a company’, is sufficiently broad to enable the Court to make an order appointing an additional director or directors to a company in liquidation. However, given the language of the provision, such an order would need to logically occur during the external administration and prior to any order terminating the winding up taking effect. For the reasons I have already stated, I am satisfied such an order is warranted. I will appoint Mr Mathieson, Ms Roberts and Mr Sinnott as directors of AIPP given they have all indicated a clear willingness to act in that capacity. In the case of Mr Ansell and Ms Gibbons, the position is more equivocal and I will not appoint them. They can no doubt offer their services to the organisation as volunteers. Although the appointment of Mr Mathieson, Ms Roberts and Mr Sinnott would technically result in the number of directors exceeding the limit of eight as specified in cl 10.1(1)(a) of AIPP’s constitution, given there is a real chance not all of the existing directors will wish to remain, and because the new appointments are only interim in nature pending the convening of a meeting of members, I consider such an order will not unduly strain the operation of the constitution.
[34]Nagler v SLM Constructions; Nagler v H Volski [2001] NSWSC 1107, [5] (Barrett J, as his Honour then was). In that case, the relevant company had only one remaining director but its constitution required more than one.
I will also make a direction for the convening of a general meeting of members to reconstitute the board of directors of the company, including: by considering any resolutions for the removal of the existing directors; the ongoing appointment of Mr Mathieson, Ms Roberts and Mr Sinnott; and the appointment of any further directors to the board. However, I do not accept Mr Mathieson’s submission that this should occur within six to twelve months. That is far too long. Instead, the general meeting of members must take place within 120 days of my orders.

Conclusion

In view of the above matters, I am satisfied the winding up of the company should be initially stayed and then terminated upon payment of the liquidator’s reasonable remuneration and expenses. Accordingly, there is no need to consider the liquidator’s application any further. The consequence of granting a stay and eventual termination of the winding up will be that the surplus funds will remain with AIPP to be expended in accordance with the objects and purposes of the organisation.
Subject to any further submissions from the parties or interested persons as to the formulation of the necessary orders, I propose to order that:
1.Pursuant to s 90-15(1) of the Insolvency Practice Schedule (Corporations) (‘IPS’) (which is Sch 2 of the Act): Ms Sheree Anne Roberts; Mr Malcolm Charles Mathieson; and Mr Dale Richard Sinnott be appointed as directors of Australian Institute of Professional Photography Ltd (in liq) (ACN 050 167 498) (‘company’).
2.Conditional upon the company paying or securing:
(i)the reasonable remuneration and expenses of the liquidator of the company (‘liquidator’) not already paid from 21 December 2021 until the date of these orders in accordance with resolution 10 passed at the second meeting of creditors of the company on 21 December 2021 (‘second meeting’);
(ii)the reasonable internal disbursements of the liquidator not already paid from 17 November 2021 until the date of these orders in accordance with resolution 11 passed at the second meeting;
the winding up of the company be terminated pursuant to s 482(3) of the Corporations Act 2001 (Cth) (‘Act’) and /or s 90-15(1) of the IPS.
4.Pending satisfaction of the condition referred to in para 2 above, the winding up of the company shall be stayed until further order.
5.Pursuant to s 482(3) of the Act and /or s 90-15(1) of the IPS: Mr David Bernard Simmonds; Ms Felisha Mendoza Mina; Mr Geoffrey Alan Comfort; Mr Benjamin Kopilow; Mr Malcolm Leslie Morrison; Mr Joshua Cameron Holko and Ms Louise Ungermann Blaedel Bagger (‘existing directors’) resume office as directors of the company;
6.Pursuant to s 482(3) of the Act and /or s 90-15(1) of the IPS, the Court directs the directors of the company to convene a general meeting of members to reconstitute the board of directors of the company including by considering any resolution for:
(i)the removal of the existing directors as directors of the company;
(ii)the ongoing appointment of Ms Roberts, Mr Mathieson and Mr Sinnott as directors of the company; and
(iii)the appointment of additional directors of the company.
7.The general meeting of members referred to in para 6 above shall take place within 120 days of the date of these orders.
8.Pursuant to s 482(4) of the Act, the liquidator’s costs of the originating process filed on 7 December 2023 and the interlocutory process filed on 7 April 2024, save for the costs associated with preparing the supplementary affidavit of Mr Matthew Terence Gollant sworn 7 June 2024, be costs in the winding up of the company.
9.There otherwise be no order as to costs.
10.Ms Roberts, Mr Mathieson and Mr Sinnott serve a sealed copy of these orders and a copy of the Court’s judgment on the existing directors by post or email as soon as practicable.
11.Liberty to apply to any person who can demonstrate a sufficient interest to modify any of the above orders within 28 days of those orders being made, on not less than 48 hours’ notice to the liquidator and the new directors.
12.Liberty to apply generally.
13.Pursuant to s 482(5) of the Act, the company lodge an authenticated copy of these orders with the Australian Securities and Investment Commission within 14 days.

[2025] VSC 71

4 March 2025