Re BMM Investments Pty Ltd

The Supreme Court of Queensland was asked to decide whether a liquidator should be appointed to wind up BMM Investments Pty Ltd. The applicant, a creditor itself in liquidation, sought the appointment of its own liquidator and another, Mr Starkey. This application was opposed by another creditor, the Official Trustee in Bankruptcy, on the grounds that the applicant's liquidator might have a conflict of interest due to their involvement with the applicant's own liquidation. The Official Trustee in Bankruptcy proposed two alternative liquidators and had no issue with Mr Starkey.

The court considered whether appointing the applicant's liquidator would create a conflict of interest, given their role in the applicant's own liquidation. The court noted that while the applicant's liquidator had conducted substantial investigations that could benefit the winding up of BMM Investments Pty Ltd, this benefit could be offset by the expenses and complexities associated with managing potential conflicts of interest. Additionally, the court recognised the significant potential for conflict and the perception of bias that could arise from the appointment of the applicant's liquidator. Given the opposition from the Official Trustee in Bankruptcy and the lack of objection to Mr Starkey, the court concluded that appointing Mr Starkey as the sole liquidator was the best course of action.

The court's decision was that Mr Starkey should be appointed as the sole liquidator of BMM Investments Pty Ltd. This decision aimed to avoid the complexities and conflicts that could arise from appointing the applicant's liquidator, while still allowing Mr Starkey to utilise the information gathered by the applicant's liquidator in a cost-effective manner. The court's order was to appoint Mr Starkey as the liquidator, reflecting a balance between potential efficiencies and the need to avoid conflicts of interest.