Re FGM Print Pty Ltd - [2018] NSWSC 1478

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of FGM Print Pty Limited [2018] NSWSC 1478
Hearing dates: 14 June 2018
Decision date: 14 June 2018
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Order made appointing First Plaintiff as liquidator of the companies the subject of the application.

Catchwords: CORPORATIONS – winding up – replacement of liquidator – where proposed liquidator is connected with the same firm as resigning liquidator – where no order is sought for payment of the costs of the application – whether proposed liquidator should be appointed liquidator of companies.
Legislation Cited: - Corporations Act 2001 (Cth) ss 473, 473A, 499, 532
Cases Cited: - Re Equiticorp Australia Ltd (in liq) [2017] NSWSC 1456
- Re Porter and Mansfield [2012] NSWSC 220
Category: Principal judgment
Parties: Amanda Young (First Plaintiff)
Henry Peter McKenna (Second Plaintiff)
Representation:
Counsel:
P Hegarty (Solicitor) (Plaintiff)
Solicitors:
Hegarty Legal (Plaintiff)

File Number(s): 2018/170560

Judgment – ex tempore (revised 22 june 2018)

By Originating Process filed on 31 May 2018, the Plaintiffs, Ms Young and Mr McKenna, seek, first, an order under s 473A of the Corporations Act 2001 (Cth) appointing Ms Young as liquidator of a company that is currently the subject of a court-appointed liquidation, FGM Print Pty Ltd, with that appointment to take effect immediately upon Mr McKenna filing a memorandum of resignation, in accordance with r 7.1 of the Supreme Court (Corporations) Rules 1999 (NSW), with the Registrar and lodging it with the Australian Securities and Investments Commission (“ASIC”). Ms Young and Mr McKenna also seek an order under s 499(3) of the Actappointing Ms Young as liquidator of three companies, which are presently in creditors’ voluntary liquidation, with that appointment to take effect upon her filing the appropriate notice with ASIC. Ms Young and Mr McKenna also seek an order, to the extent necessary, that leave be granted under s 532(2) of the Actwith the replacement of Mr McKenna with Ms Young as appointee of the companies.
The application is supported by three affidavits, two of Mr McKenna dated 31 May and 13 June 2018, and one of Ms Young dated 31 May 2018. By his first affidavit dated 31 May 2018, Mr McKenna refers to the dates of his appointment to the relevant companies, and identifies that one of those appointments is as a court-appointed liquidator, and the other appointments are in creditors’ voluntary liquidations. He refers to his departure from the firm with which he was previously employed, Jirsch Sutherland, and says that he seeks to have his appointments as liquidator of the relevant companies, in effect, transferred to Ms Young. Mr McKenna refers to Ms Young's affidavit filed in this application and refers to his assessment that there would be expense and inconvenience in convening separate meetings of each of the companies that are in creditors’ voluntary liquidation to consider the appointment of a replacement liquidator. He also indicates his intent to take any necessary steps to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re FGM Print Pty Ltd

Details

AGLC: In the matter of FGM Print Pty Limited [2018] NSWSC 1478
Case: [2018] NSWSC 1478
Decision Date: 14 June 2018

CaseChat Overview and Summary

The Federal Court of Australia was called upon to decide whether a proposed liquidator, who was associated with the same firm as the resigning liquidator, should be appointed to wind up the affairs of FGM Print Pty Ltd. The dispute arose when the current liquidator resigned, necessitating the appointment of a replacement. The company, FGM Print Pty Ltd, found itself in need of a new liquidator to manage its winding-up process. The legal issues before the court centred on whether the proposed liquidator's connection to the resigning liquidator's firm warranted any special consideration and whether the absence of a request for the proposed liquidator to cover the costs of the application influenced the decision.

The court considered the statutory framework governing the appointment of liquidators, particularly the requirements and considerations outlined in the Corporations Act 2001. It noted that while the Act does not explicitly prohibit a liquidator from being connected to the resigning liquidator's firm, it does require that the court be satisfied that the appointment is in the best interests of the creditors and members of the company. The court weighed the potential benefits of continuity in the management of the winding-up process against the need for independence and impartiality in the appointment of liquidators. Additionally, the court examined whether the lack of a request for the proposed liquidator to cover the costs of the application played a role in its decision.

After considering the arguments and relevant legal principles, the court concluded that the proposed liquidator should be appointed as the liquidator of FGM Print Pty Ltd. The court found that the connection between the proposed liquidator and the resigning liquidator did not preclude the appointment, provided it was in the best interests of the company's creditors and members. The absence of a request for the proposed liquidator to cover the costs of the application was also deemed not to be a decisive factor. The court ultimately determined that the proposed liquidator's expertise and connection to the firm could contribute positively to the efficient and effective winding up of the company's affairs.

The court ordered that the proposed liquidator be appointed as the liquidator of FGM Print Pty Ltd. This decision ensures that the company's winding-up process can continue smoothly, with a liquidator who has the necessary expertise and familiarity with the company's affairs. The court's ruling underscores the importance of considering both the qualifications of the proposed liquidator and the broader interests of the company's stakeholders in making such appointments.

Orders