Re FAI Car Owners Mutual Insurance Company Pty Ltd

In the matter of FAI Car Owners Mutual Insurance Company Pty Ltd, the court addressed a complex series of issues related to the winding up of the company, the distribution of surplus funds, and the interpretation of the company's constitution. The primary dispute involved the allocation of the company's assets following the full payment of debts and claims, including a particular right to participate as a creditor in the insolvent winding up of another company. The court had to determine whether a special resolution was necessary to settle the list of contributories and ascertain their entitlements, particularly as the company's constitution allowed for distribution in kind with such a resolution.

The court examined the role of the company's constitution and the necessity of a special resolution to distribute surplus funds. It found that no effective special resolution had been passed, raising questions about the court's power to sanction a distribution in kind despite this absence. Additionally, the court considered whether unanimous assent could cure the lack of a special resolution and if the assignment of a right under another company's winding up constituted an "agreement" within the relevant statute. The court also addressed whether the modified rule in Cherry v Boultbee required deferral of the surplus distribution until the proceeds of proof were received, determining that this requirement did not apply to a sole contributory.

The court ruled that the distribution of the company's right in kind to the sole contributory did not constitute a "compromise" of a "debt." It also addressed the liquidator's remuneration, fixing the amount given the absence of a committee of inspection and creditors. The application for the release of the liquidators was deemed premature as the surplus had not yet been distributed. Lastly, the court considered the destruction of books and found that, based on the evidence presented, an order for destruction should not be made.