Re BMM Investments Pty Ltd

[1998] QSC 104

IN THE SUPREME COURT

OF QUEENSLAND  No. 3289 of 1998

[Re BMM Investments Pty Ltd]

IN THE MATTER of the Corporations Law

- and -

IN THE MATTER of BMM INVESTMENTS PTY LTD ACN 064 998 232

CATCHWORDS:     Corporations - winding up - liquidators - undesirability of appointing liquidator who is also liquidator of a creditor.

Counsel:Mr P.J. Dunning for the applicant

Mrs D.A. Mullins for the respondent

Solicitors:Damien Bourke & Associates for the applicant

Bennett & Philp for the respondent

Hearing date:               27 May 1998

JUDGMENT  -  DERRINGTON J.

Judgment delivered 2 June 1998

This is an application by a creditor (which is itself in liquidation) for the appointment of liquidators to the above company, those proposed being the creditor’s own liquidator and another, a Mr Starkey.

There is opposition to this from another creditor, the Official Trustee in Bankruptcy as trustee for a creditor who opposes the appointment of the first creditor’s own liquidator on the ground of possible conflict of interest, and proposes two other liquidators.  It has no complaint about Mr Starkey.

It is true that the challenged nominee has made substantial investigations into matters that would if he were appointed, be useful and of economic saving in the winding up of this company but there could well be off-setting expenses associated with his involvement in both, particularly because of the need to appoint a co-liquidator to have charge of any questions of conflict of interest which are sure to arise.

Without any disrespect to the challenged nominee, the prospects of conflict and the possible perception of bias are significant factors.  In addition the appointment of co-liquidators in this situation has the potential for complexity and conflict which should well be avoided.

Since the opposing creditor has no objection to the appointment of Mr Starkey, the co-liquidator proposed by the first creditor, he should be appointed as the sole liquidator.  No doubt he will still be able to obtain considerable information already gathered in a way that will save the company expense.  There will be orders in terms of the draft attached.