Re Great Southern Ltd (in Liq)
[2016] WASC 234
•9 AUGUST 2016
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: RE GREAT SOUTHERN LTD (IN LIQ); EX PARTE MARTIN BRUCE JONES and JAMES HENRY STEWART in their capacities as the Joint and Several Liquidators of GREAT SOUTHERN LTD (IN LIQ), GREAT SOURTHERN MANAGERS AUSTRALIA LTD (IN LIQN), GREAT SOUTHERN FINANCE PTY LTD (IN LIQ), GREAT SOUTHERN OLIVE HOLDINGS PTY LTD (IN LIQ) [2016] WASC 234
CORAM: PRITCHARD J
HEARD: 27 JULY 2016
DELIVERED : 9 AUGUST 2016
FILE NO/S: COR 80 of 2016
MATTER :IN THE MATTER OF GREAT SOUTHERN LTD (IN LIQ) (ACN 052 046 536), GREAT SOURTHERN MANAGERS AUSTRALIA LTD (IN LIQ) (ACN 083 825 405), GREAT SOUTHERN FINANCE PTY LTD (IN LIQ) (ACN 009 235 143), GREAT SOUTHERN OLIVE HOLDINGS PTY LTD (IN LIQ) (ACN 111 092 374), GREAT SOUTHERN HVT HOLDINGS PTY LTD (IN LIQ) (ACN 123 433 778)
EX PARTE
MARTIN BRUCE JONES and JAMES HENRY STEWART in their capacities as the Joint and Several Liquidators of GREAT SOUTHERN LTD (IN LIQ), GREAT SOURTHERN MANAGERS AUSTRALIA LTD (IN LIQN), GREAT SOUTHERN FINANCE PTY LTD (IN LIQ), GREAT SOUTHERN OLIVE HOLDINGS PTY LTD (IN LIQ)
First PlaintiffsMARTIN BRUCE JONES in his capacity as the Liquidator of GREAT SOUTHERN HVT HOLDINGS PTY LTD (IN LIQ)
Second Plaintiff
Catchwords:
Corporations - Where committees of inspection appointed under s 548 Corporations Act 2001 (Cth) - Where meetings of creditors held - Where no meetings of contributories - Whether orders should be made pursuant s 1322(4) declaring existence and acts of committees of inspection to be valid - Whether directions should be made pursuant to s 511
Legislation:
Corporations Act 2001 (Cth), s 511, s 548, s 1322
Result:
Application granted
Category: B
Representation:
Counsel:
First Plaintiffs : Mr I M O Matthews
Second Plaintiff : Mr I M O Matthews
Solicitors:
First Plaintiffs : Chew & Matthews
Second Plaintiff : Chew & Matthews
Cases referred to in judgment:
Chalet Nominees (1999) Pty Ltd v Murray [2012] WASC 147
CordiantCommunications (Aust) Pty Ltd v Communications Group Holdings Pty Ltd [2005] NSWSC 1005; (2005) 194 FLR 322
Dean‑Willcocks v Soluble Solution Hydrophonics Pty Ltd (1997) 42 NSWLR 209
Elderslie Finance Corp Ltd v Australian Securities Commission (1993) 11 ACSR 157
Handberg (in his capacity as liquidator of S & D International Pty Ltd) (in liq) v MIG Property Services Pty Ltd [2010] VSC 336; (2010) 79 ACSR 373
In the matter of One.Tel Ltd [2014] NSWSC 457; (2014) 99 ACSR 247
Northwest Capital Management v Westate Capital Ltd [2012] WASC 121; (2012) 264 FLR 424
Re Ansett Australia Ltd and Korda (No 3) [2002] FCA 90; (2002) 115 FCR 409
Re Aprais Pty Ltd (in liq); Twin v Deputy Commissioner of Taxation [2003] QSC 329; [2004] 1 Qd R 450
Re Great Southern Managers Australia Ltd (in liq); Ex parte Jones [2014] WASC 312
Re The Bell Group Ltd (in liq); Ex parte Woodings (as liquidator of The Bell Group Ltd (in liq)) [2015] WASC 88
PRITCHARD J: This is an application brought by the liquidators of Great Southern Limited (In Liquidation) (GSL), Great Southern Managers Australia Limited (In Liquidation) (GSMAL), Great Southern Finance Pty Ltd (In Liquidation) (GSF), Great Southern Olive Holdings Pty Ltd (In Liquidation) (GSOH) and Great Southern HVT Holdings Pty Ltd (In Liquidation) (GSHVT) (collectively, the Companies) for orders pursuant to s 511 and s 1322(4)(a) of the Corporations Act 2001 (Cth) (the Act).
The application relates to the appointment of committees of inspection in respect of the Companies, on 19 November 2009 (the Committees of Inspection). The plaintiffs have now become concerned that the Committees of Inspection may not have been validly appointed by virtue of a failure to comply with the requirements of s 548 of the Act. They seek orders that the appointment of each Committee of Inspection, and the acts, decisions and resolutions of each of those committees, are not invalid by virtue of any contravention of s 548 of the Act. In addition, and perhaps out of an abundance of caution, the liquidators seek a direction that the liquidators are and will be justified and acting properly in proceeding on the basis that the appointment of each Committee of Inspection is not invalid and that the acts, decisions and resolutions of each Committee of Inspection are not invalid, by reason of any contravention of s 548 of the Act.
At the conclusion of the hearing, and having read the affidavits relied upon by the plaintiffs and considered counsel's submissions, I was satisfied that the orders sought by the plaintiffs (which are set out in the schedule to these reasons) should be made, and indicated that I would publish my reasons for that decision in due course. These are those reasons.
In these reasons for decision, I deal with the following matters:
1.Factual background;
2.The requirements of s 548 of the Act;
3.Why I was satisfied that declarations pursuant to s 1322(4)(a) of the Act should be made; and
4.Why I was satisfied that directions pursuant to s 511 of the Act should be made in the terms sought by the plaintiffs.
Factual background
In support of the application, the plaintiffs relied on affidavits sworn by Mr Martin Bruce Jones on 21 April 2016 and 19 July 2016. Except where I indicate otherwise, the facts set out below are drawn from the affidavit of Mr Jones sworn on 21 April 2016.
The liquidation of the Companies
Mr Jones and Mr Stewart are the joint and several liquidators of GSL, GSMAL, GSF and GSOH. Mr Jones is the liquidator of GSHVT.
GSL is the parent company of each of GSMAL, GSF, GSOH and GSHVT. Each of those companies is a member of the Great Southern Group of Companies (Great Southern Group). On 16 May 2009, the directors of the Companies placed each of the Companies into voluntary administration. On 18 May 2009, receivers and managers were appointed over all of the assets and undertakings of GSL, GSMAL and certain other wholly owned subsidiaries of GSL. The receivers retired on 18 December 2013.
On 19 November 2009, the creditors of the Companies resolved to wind up, and appoint liquidators to each of, the Companies. On the same date, the creditors of the Companies resolved to appoint the Committees of Inspection to represent the creditors in the winding up of each of the Companies.
The Great Southern Group comprised GSL and a total of 34 subsidiaries, employed over 480 staff and 2,500 contractors across Australia, had raised over $2.2 billion in managed investment scheme sales, had developed and operated managed investment scheme assets for over 52,000 investors, owned and leased significant areas of land, managed forestry plantations, horticultural estates and cattle properties, and had estimated total consolidated liabilities, both secured and unsecured, of in excess of $1 billion. Mr Jones deposed that because of the size and complexity of the Great Southern Group, the administration and winding up has been a particularly long and complex process.
In addition to the ordinary tasks in a winding up such as identifying liabilities and creditors, selling assets and so on, the liquidators of the companies in the Great Southern Group have had to deal with litigation in the Victorian Supreme Court and this Court, brought against, and by, some of the companies in the Group. That litigation has all been resolved and deeds of settlement have been approved in the actions.
The Committees of Inspection
Since the appointment of the Committees of Inspection, the liquidators of the Companies have convened numerous meetings of those Committees for the purpose of reporting on the liquidators' investigations into the affairs of the Companies, consulting with the Committees with respect to certain aspects of the liquidations of the Companies, and seeking various approvals required by the liquidators pursuant to the Act.
Mr Jones deposed that there had been approximately 18 resolutions made by the Committees of Inspection in respect of, or pursuant to, s 477(2B) of the Act and that approximately 38 resolutions have been passed by the Committees with respect to the remuneration of the liquidators.
Concern in relation to the possible contravention of s 548 of the Act
Mr Jones deposed that in about June 2015, he became aware of my decision in Re The Bell Group Ltd (in liq); Ex parte Woodings (as liquidator of The Bell Group Ltd (in liq))[1]. Mr Jones' evidence was that prior to reading that decision, it was not his understanding that it was necessary to convene a meeting of contributories in order validly to appoint a committee of inspection, in circumstances where no request for a separate meeting of contributories had been made to the liquidator. After reading that decision, Mr Jones became concerned that the manner in which the Committees of Inspection were appointed may have involved an inadvertent contravention of s 548 of the Act, by virtue of the fact that no meeting of the contributories of any of the Companies had been held for the purpose of determining the matters set out in s 548(1)(a) and (b) of the Act.
Steps taken to ratify the appointments of the committees of inspection
[1] Re The Bell Group Ltd (in liq); Ex parte Woodings (as liquidator of The Bell Group Ltd (in liq)) [2015] WASC 88.
Mr Jones deposed that GSMAL and GSF are each wholly owned subsidiaries of GSL and, consequently, their only contributory is GSL. GSOH and GSHVT are wholly owned subsidiaries of GSMAL and, consequently, their only contributory is GSMAL.
On 18 December 2015, the liquidators of GSL caused GSL, in its capacity as the sole member of each of GSMAL and GSF, to execute a member's resolution, pursuant to s 249B of the Act, by which GSL determined that a committee of inspection should be appointed to each of GSMAL and GSF pursuant to s 548(1)(a) of the Act, with effect from 19 November 2009, and that, pursuant to s 548(1)(b) of the Act, each Committee of Inspection should comprise creditor representatives only, as appointed by the creditors. The resolution also confirmed and ratified the acts, decisions and resolutions of the Committees of Inspection for GSMAL and GSF in the period between 19 November 2009 and 18 December 2015.
On 18 December 2015, the liquidators caused GSMAL, in its capacity as the sole member of each of GSOH and GSHVT, to execute a member's resolution, pursuant to s 249B of the Act, by which it determined that a committee of inspection should be appointed to each of GSOH and GSHVT, pursuant s 548(1)(a) of the Act, with effect from 19 November 2009, and that, pursuant to s 548(1)(b) of the Act, each Committee of Inspection should consist of creditor representatives only, as appointed by the creditors. In addition, the resolution confirmed and ratified the acts, decisions and resolutions of the Committees of Inspection of GSOH and GSHVT in the period between 19 November 2009 and 18 December 2015.
GSL is in a different position from GSMAL, GSF, GSOH and GSHVT with respect to contributories. That is because GSL was listed on the Australian Stock Exchange and its shares were held by in excess of 19,000 different shareholders located throughout Australia and overseas. Mr Jones deposed that, in order to convene a meeting of GSL's contributories, the liquidators would need to ascertain and verify the accuracy and currency of the contact information for the contributories in GSL's share register (which has not been updated since 2009), to prepare and issue a circular and notice of meeting to each of the contributories, to deal with any inquiries, and then to conduct a meeting of the contributories. Mr Jones estimated that the likely cost of doing so would be in the order of $100,000. In those circumstances, the plaintiffs have not endeavoured to hold a meeting of the contributories of GSL.
Mr Jones deposed that on the information presently available, he is of the view that the liabilities of GSL significantly exceed its assets. Mr Jones' belief is that the liquidation of GSL will not result in the payment of any dividend to GSL's contributories. Mr Jones deposed that, in those circumstances, if a meeting of GSL's contributories were to be held, and if such a meeting passed a resolution to the effect that the Committee of Inspection for GSL should include representatives of the contributories, that decision would have little practical utility. The reason for that view was that such a decision would be likely to prompt an application by the plaintiffs to the Court, pursuant to s 548(2) of the Act, to resolve the difference between the determinations of the creditors and the contributories. Given the contributories do not stand to receive any dividend in the winding up, there would be a strong argument that there is no reasonable basis for the contributories to be represented on the Committee of Inspection for GSL.
Mr Jones deposed that it is highly desirable that the appointment of the Committees of Inspection of the Companies be validated, having regard to the complexity of the winding up, the significant costs which have been incurred to date, and which will continue to be incurred, and the number and value of claims by creditors against each of the Companies.
Mr Jones anticipates that considerable costs would be incurred in the event that the validation orders were not made by the Court. In the absence of validation orders being made by the Court, Mr Jones deposed that the liquidators may be required to convene a general meeting of creditors, or make an application to the Court, in relation to the subject matter of each resolution already passed by the Committees of Inspection granting approval to the liquidators, pursuant to s 477(2B) of the Act, to enter into long‑term agreements on behalf of the Companies, and in respect of the liquidators' remuneration. Furthermore, in the absence of a validly appointed committee of inspection for each of the Companies, Mr Jones deposed that the liquidators would be required to convene a general meeting of the creditors of the Companies, or make an application to the Court, on each and every future occasion when it becomes necessary or desirable for the liquidators to ascertain the creditors' views or wishes in relation to the conduct of the winding up of those companies, where approval is required for a decision or action by the liquidators pursuant to s 477(2A) or s 477(2B) of the Act, or where approval of the liquidators' remuneration is required. Mr Jones deposed that the costs of doing so would be likely to significantly exceed the costs of convening a meeting of a committee of inspection. Mr Jones deposed that the absence of a validly appointed committee of inspection would thus be likely to result in a significantly greater cost to each of the Companies during the remaining course of the winding up, and would cause delay (when compared to the shorter time frame within which a meeting of a committee of inspection may be convened and held).
Advertisement of the application
This application was made on an ex parte basis. On 10 May 2016, Master Sanderson made programming orders, including orders designed to ensure that the contributories of the Companies had notice of the application. Those orders required that the plaintiffs place notices to the contributories in local and national newspapers.
In his affidavit sworn 19 July 2016, Mr Jones deposed that the plaintiffs' solicitors have complied with those orders, and in the two months since those advertisements were placed, no contributory has made an inquiry in response to those notices, nor have the plaintiffs' solicitors been served with any notice of appearance by any contributory. At the hearing on 27 July 2016, counsel for the plaintiffs advised that that position remained the same.
The requirements of s 548 of the Act
Section 548 of the Act relevantly provides:
(1)The liquidator of a company must, if so requested by a creditor or contributory, convene separate meetings of the creditors and contributories for the purpose of determining:
(a)whether a committee of inspection should be appointed; and
(b)where a committee of inspection is to be appointed:
(i)the numbers of members to represent the creditors and the contributories, respectively; and
(ii)the persons who are to be members of the committee representing creditors and contributories, respectively.
(2)If there is a difference between the determination of the meeting of creditors and the determination of the meeting of contributories, the Court may resolve the difference and make such order as it thinks proper.
In Re The Bell Group Ltd, I concluded that, on its proper construction, s 548(1) of the Corporations Law required that the liquidator hold separate meetings of the creditors and of the contributories to determine whether a committee of inspection should be established, the number of members of that committee of inspection, and the identity of the members of that committee of inspection.[2]
[2] Re The Bell Group Ltd (in liq); Ex parte Woodings (as liquidator of The Bell Group Ltd (in liq)) [2015] WASC 88 [37].
Section 548(1) of the Act is in almost identical terms to s 548(1) of the Corporations Law.[3] For the reasons set out in Re The Bell Group Ltd, I am of the view that s 548(1) of the Act should be construed in the same way as s 548(1) of the Corporations Law, so that it requires separate meetings of the creditors and of the contributories in order to determine the matters in s 548(1)(a) and (b) of the Act.[4]
[3] The Corporations Law provided that '[t]he liquidator of a company shall, if so requested by a creditor or contributory, convene separate meetings of the creditors and contributories ... ', whereas s 548(1) of the Act provides that '[t]he liquidator of a company must, if so requested by a creditor or contributory, convene separate meetings ...' (emphasis added).
[4] Re The Bell Group Ltd (in liq); Ex parte Woodings (as liquidator of The Bell Group Ltd (in liq)) [2015] WASC 88 [20] ‑ [51].
That construction means that the failure by the liquidators to hold separate meetings of the creditors and of the contributories of the Companies amounted to a contravention of s 548 of the Act. That contravention has now been rectified in relation to the Committees of Inspection for GSMAL, GSF, GSOH and GSHVT, by virtue of the meetings of the contributories held on 18 December 2015.
Having regard to the matters to which Mr Jones has deposed, in relation to the difficulties and cost of convening a meeting of the contributories of GSL, I accept that it is not practicable to require, nor would there be any utility in requiring, the liquidators to convene a meeting of the contributories of GSL.
Why I was satisfied that declarations pursuant to s 1322(4)(a) of the Act should be made
Section 1322 of the Act relevantly provides:
(1)In this section, unless the contrary intention appears:
(a)a reference to a proceeding under this Act is a reference to any proceeding whether a legal proceeding or not; and
(b)a reference to a procedural irregularity includes a reference to:
(i)the absence of a quorum at a meeting of a corporation, at a meeting of directors or creditors of a corporation, at a joint meeting of creditors and members of a corporation or at a meeting of members of a registered scheme; and
(ii)a defect, irregularity or deficiency of notice or time.
(2)A proceeding under this Act is not invalidated because of any procedural irregularity unless the Court is of the opinion that the irregularity has caused or may cause substantial injustice that cannot be remedied by any order of the Court and by order declares the proceeding to be invalid.
(3)A meeting held for the purposes of this Act, or a meeting notice of which is required to be given in accordance with the provisions of this Act, or any proceeding at such a meeting, is not invalidated only because of the accidental omission to give notice of the meeting or the non-receipt by any person of notice of the meeting, unless the Court, on the application of the person concerned, a person entitled to attend the meeting or ASIC, declares proceedings at the meeting to be void.
...
(4)Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes:
(a)an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation;
(b)an order directing the rectification of any register kept by ASIC under this Act;
(c)an order relieving a person in whole or in part from any civil liability in respect of a contravention or failure of a kind referred to in paragraph (a);
(d)an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding;
and may make such consequential or ancillary orders as the Court thinks fit.
(5)An order may be made under paragraph (4)(a) or (c) notwithstanding that the contravention or failure referred to in the paragraph concerned resulted in the commission of an offence.
(6)The Court must not make an order under this section unless it is satisfied:
(a)in the case of an order referred to in paragraph (4)(a):
(i)that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature;
(ii)that the person or persons concerned in or party to the contravention or failure acted honestly; or
(iii)that it is just and equitable that the order be made; and
(b)in the case of an order referred to in paragraph (4)(c) ‑ that the person subject to the civil liability concerned acted honestly; and
(c)in every case ‑ that no substantial injustice has been or is likely to be caused to any person.
I discussed the operation of s 1322(4) of the Act in my reasons for decision in Re The Bell Group Ltd.[5] It is unnecessary to repeat that discussion here.
[5] Re The Bell Group Ltd (in liq); Ex parte Woodings (as liquidator of The Bell Group Ltd (in liq)) [2015] WASC 88 [55] ‑ [62].
For the reasons set out in Re The Bell Group Ltd, in my view, the failure to hold a separate meeting of the contributories as well as of the creditors of each of the Companies to consider the appointment of a committee of inspection for each of the Companies, cannot be characterised as a mere 'procedural irregularity' having regard to the terms of s 1322(1) of the Act.[6] Accordingly, in my view, the present application was properly brought pursuant to s 1322(4)(a) of the Act.
[6] Re The Bell Group Ltd (in liq); Ex parte Woodings (as liquidator of The Bell Group Ltd (in liq)) [2015] WASC 88 [56]; cf Cordiant Communications (Aust) Pty Ltd v Communications Group Holdings Pty Ltd [2005] NSWSC 1005; (2005) 194 FLR 322 [103] (Palmer J); cf Northwest Capital Management v Westate Capital Ltd [2012] WASC 121; (2012) 264 FLR 424 [76] (Edelman J).
I am satisfied that orders should be made pursuant to s 1322(4)(a) of the Act, in the terms sought by the plaintiffs for the following reasons.
A person whose financial interests are affected or likely to be affected by an act or decision falls within the concept of an 'interested person' for the purpose of s 1322(4).[7] One of the items of business carried out by each of the Committees of Inspection thus far has been to approve the remuneration of the liquidators, including Mr Jones. Mr Jones is therefore clearly an 'interested person' for the purposes of the present application under s 1322(4)(a).
[7] Re Aprais Pty Ltd (in liq); Twin v Deputy Commissioner of Taxation [2003] QSC 329; [2004] 1 Qd R 450 [16] (Holmes J, as her Honour then was).
The appointment of each Committee of Inspection was also clearly an act done 'in relation to a corporation'.
Further, for the reasons set out at [23] ‑ [26] above, the process by which each Committee of Inspection was appointed constituted a contravention of the Act in that each Committee was appointed without there having been a meeting of the contributories of each company, as required by s 548(1) of the Act. That constituted a contravention of the Act for the purposes of s 1322(4)(a).
Finally, in my view, it is just and equitable to make the orders sought by the plaintiffs pursuant to s 1322(4) in respect of each of the Committees of Inspection. I have reached that view for the following reasons.
First, it is clearly desirable that a committee of inspection be appointed in the winding up of each of the Companies. Having regard to the complexity of the winding up of the Great Southern Group, it is desirable that a committee of inspection be appointed to each of the Companies to avoid the need for the liquidators to seek a direction from a general meeting of creditors, or from the Court, on each occasion when they require a direction in the winding up.
Secondly, the significant deficiency of assets over liabilities for each of the Companies and, consequently, the fact that there is no prospect that the liquidators will be able to make a distribution to the contributories of the Companies, means that it is only the creditors who have any direct or financial interest in the conduct of the winding up of the Companies.
Thirdly, I am satisfied that the liquidators of the Companies acted honestly in relation to the appointment of the Committees of Inspection. At the time of the appointment of the Committees of Inspection, Mr Jones was not aware that a meeting of the contributories was required in order to comply with the requirements of s 548(1) of the Act.
Fourthly, in so far as the Committee of Inspection for GSL is concerned, the evidence of Mr Jones compels the conclusion that a meeting of the contributories of GSL would involve considerable time, resources and costs.
Fifthly, since a notice to contributories was published in local and national newspapers in May 2016, the contributories of GSL have had the opportunity to indicate that they wish to be heard in respect of this application and no contributory has sought to do so, nor has any contributory contacted the solicitors for the plaintiffs to make an inquiry in respect of the application.
Sixthly, if a meeting of the contributories of GSL were now to be held and if that meeting resulted in a resolution that the Committee of Inspection should include representatives of the contributories then, as Mr Jones deposed, an application would need to be made to the Court to resolve the question of the composition of the Committee of Inspection. As I have already observed, there would be a strong argument that there was no reasonable basis for the contributories to be represented on the Committee of Inspection for GSL. The distinct possibility that such an argument would be accepted supports the conclusion that it is just and equitable to make the orders sought in respect of GSL.
Seventhly, the fact that significant costs would need to be incurred to seek retrospective validation of the decisions made by the Committees of Inspection, were the orders sought not made by the Court, also strongly supports the conclusion that it is just and equitable to make those orders.
Finally, I am satisfied that no substantial injustice has been, or is likely to be, caused to any person if the orders are made pursuant to s 1322(4) of the Act in the terms sought by the plaintiffs. As I observed in Re The Bell Group Ltd,[8] there is no doubt that, in some circumstances, if a party is denied the opportunity to attend a meeting and make representations at that meeting, or to vote at a meeting, that may give rise to a substantial injustice.[9] In the present case, however, there does not appear to be any basis for concluding that the contributories have suffered any real, as opposed to merely theoretical, prejudice or injustice[10] as a result of the appointment of the Committee of Inspection in the absence of meetings of those contributories. The fact that only the creditors have any direct or financial interest in the conduct of the winding up (by virtue of the financial position of each of the Companies), and the fact that no contributory has indicated a wish to be heard in respect of the application, also supports the conclusion that the failure to hold separate meetings of the contributories in relation to the establishment of the Committees of Inspection has not caused substantial injustice to any person and, in particular, to the contributories.
[8] Re The Bell Group Ltd (in liq); Ex parte Woodings (as liquidator of The Bell Group Ltd (in liq)) [2015] WASC 88 [75].
[9] See also Northwest Capital Management v Westate Capital Ltd [2012] WASC 121; (2012) 264 FLR 424, 450 [130] ‑ [131] (Edelman J); Chalet Nominees (1999) Pty Ltd v Murray [2012] WASC 147 [29] ‑ [34] (Le Miere J).
[10] Elderslie Finance Corp Ltd v Australian Securities Commission (1993) 11 ACSR 157, 160 (Owen J).
Why I was satisfied that directions pursuant to s 511 of the Act should be made in the terms sought by the plaintiffs
Section 511 relevantly provides:
(1) The liquidator, or any contributory or creditor, may apply to the Court:
(a)to determine any question arising in the winding up of a company; or
(b)to exercise all or any of the powers that the Court might exercise if the company were being wound up by the Court.
...
(2)The Court, if satisfied that the determination of the question or the exercise of power will be just and beneficial, may accede wholly or partially to any such application on such terms and conditions as it thinks fit or may make such other order on the application as it thinks just.
Section 511 applies in respect of a voluntary winding up of a corporation, and thus applies in this case. Applications under s 511 are of the same nature as applications made pursuant to s 479(3) in a court ordered winding up.[11]
[11] Dean‑Willcocks v Soluble Solution Hydroponics Pty Ltd (1997) 42 NSWLR 209, 212 (Young J); In the matter of One.Tel Ltd [2014] NSWSC 457; (2014) 99 ACSR 247 [32] (Brereton J).
The principles in relation to applications under s 511 of the Act are well‑established. I discussed them in my decision in Re Great Southern Managers Australia Ltd (in liq); Ex parte Jones.[12] It is not necessary to repeat those principles here.
[12] Re Great Southern Managers Australia Ltd (in liq); Ex parte Jones [2014] WASC 312 [56] ‑ [65].
As counsel for the plaintiffs acknowledged, directions pursuant to s 511 of the Act may not, strictly speaking, be necessary in this case having regard to the declarations which were sought pursuant to s 1322(4)(a) of the Act. However, the concern of the plaintiffs is to put beyond doubt that the plaintiffs are entitled to rely upon the acts, decisions and resolutions of the Committees of Inspection in the period between the appointment of those Committees in 2009 and the resolutions made in 2015 by GSL and GSMAL in their capacity as the contributories of the other companies in the Great Southern Group. The plaintiffs also wish to put beyond doubt that they are entitled to rely upon the acts, decisions and resolutions of the Committees of Inspection since their appointment in 2009.
I am satisfied that the making of directions in the terms sought by the plaintiffs will be just and beneficial in the winding up of each of the Companies. In the context of the lengthy and complex liquidation of the Companies, it is undesirable that there be any room for doubt as to whether the liquidators would be justified in acting on the basis that the decisions reached by the Committees of Inspection were validly made. The terms of the orders sought are concerned solely with affording protection to the plaintiffs in connection with future action, and not with ratifying action already taken. There is nothing to suggest that the conduct of the liquidators, in reliance upon the Committees of Inspection to date, has been other than proper and reasonable, having regard to the circumstances. Finally, having regard to the likely costs and resources involved, it would be undesirable if the liquidators had to pursue the alternative means of confirming the propriety of their reliance on decisions reached by the Committees of Inspection in the future, namely by making an application to the Court in respect of each such decision.
The directions sought in each case are in terms that the liquidators are and will be justified and acting properly in proceeding on the basis that the appointment of each Committee of Inspection is not invalid and that the acts, decisions and resolutions of each Committee of Inspection are not invalid. Directions of a very similar kind have been made pursuant to the analogous provisions in s 479(3) of the Corporations Law and s 479(3) of the Act.[13]
[13] See, eg, Re The Bell Group Ltd (in liq); Ex parte Woodings (as liquidator of The Bell Group Ltd (in liq)) [2015] WASC 88 and Woods and White v Little Tiger Pty Ltd (in liq) [2014] WASC 372.
Although the present application was made on an ex parte basis, there is no invariable rule that an application for directions under s 511 cannot be brought on an ex parte basis.[14] There is no reason to doubt that Mr Jones has made a full and fair disclosure of all relevant facts and circumstances in his affidavits.[15] In addition, I am satisfied that the contributories have had notice of the general nature of the application (at least in so far as the advertisements placed in local and national newspapers indicated that the liquidators have made application to the Court pursuant to s 1322 of the Act).
[14] Handberg (in his capacity as liquidator of S & D International Pty Ltd) (in liq) v MIG Property Services Pty Ltd [2010] VSC 336; (2010) 79 ACSR 373 [7].
[15] Cf Re Ansett Australia Ltd and Korda (No 3) [2002] FCA 90; (2002) 115 FCR 409 [44] (Goldberg J).
Accordingly, I was satisfied that it was proper to make the orders sought, pursuant to s 511 of the Act.
I am satisfied that the costs of the application are properly considered costs in the winding up of GSL and, for that reason, I made the order set out in paragraph 11 of the schedule to these reasons.
Schedule: Orders made on 27 July 2016
Pursuant to section 1322(4)(a) of the Corporations Act 2001 (Cth) (Act) the Court declares that:
(a)the appointment of the committee of inspection for Great Southern Limited (In Liquidation) (GSL Committee) by and at the general meeting of creditors of Great Southern Limited (In Liquidation) held on 19 November 2009 and consisting of the members listed in Annexure A to these orders is not invalid; and
(b)the acts, decisions and resolutions of the GSL Committee are not invalid;
by reason of any contravention of section 548 of the Act due to the circumstance that there has been no meeting of contributories of Great Southern Limited (In Liquidation) for the purposes of determining the matters set out in section 548(1)(a) and (b) of the Act.
Pursuant to section 1322(4)(a) of the Act the Court declares that:
(a)the appointment of the committee of inspection for Great Southern Managers Australia Limited (In Liquidation) (GSMAL Committee) by and at the general meeting of creditors of Great Southern Managers Australia Limited (In Liquidation) held on 19 November 2009 and consisting of the members listed in Annexure A to these orders is not invalid; and
(b)the acts, decisions and resolutions of the GSMAL Committee are not invalid;
by reason of any contravention of section 548 of the Act due to the circumstance that there has been no meeting of contributories of Great Southern Managers Australia Limited (In Liquidation) for the purposes of determining the matters set out in section 548(1)(a) and (b) of the Act prior to 18 December 2015.
Pursuant to section 1322(4)(a) of the Act the Court declares that:
(a)the appointment of the committee of inspection for Great Southern Finance Pty Ltd (In Liquidation) (GSF Committee) by and at the general meeting of creditors of Great Southern Finance Pty Ltd (In Liquidation) held on 19 November 2009 and consisting of the members listed in Annexure A to these orders is not invalid; and
(b)the acts, decisions and resolutions of the GSF Committee are not invalid;
by reason of any contravention of section 548 of the Act due to the circumstance that there has been no meeting of contributories of Great Southern Finance Pty Ltd (In Liquidation) for the purposes of determining the matters set out in section 548(1)(a) and (b) of the Act prior to 18 December 2015.
Pursuant to section 1322(4)(a) of the Act the Court declares that:
(a)the appointment of the committee of inspection for Great Southern Olive Holdings Pty Ltd (In Liquidation) (GSOH Committee) by and at the general meeting of creditors of Great Southern Olive Holdings Pty Ltd (In Liquidation) held on 19 November 2009 and consisting of the members listed in Annexure A to these orders is not invalid; and
(b)the acts, decisions and resolutions of the GSOH Committee are not invalid;
by reason of any contravention of section 548 of the Act due to the circumstance that there has been no meeting of contributories of Great Southern Olive Holdings Pty Ltd (In Liquidation) for the purposes of determining the matters set out in section 548(1)(a) and (b) of the Act prior to 18 December 2015.
Pursuant to section 1322(4)(a) of the Act the Court declares that:
(a)the appointment of the committee of inspection for Great Southern HVT Holdings Pty Ltd (In Liquidation) (GSHVT Committee) by and at the general meeting of creditors of Great Southern HVT Holdings Pty Ltd (In Liquidation) held on 19 November 2009 and consisting of the members listed in Annexure A to these orders is not invalid; and
(b)the acts, decisions and resolutions of the GSHVT Committee are not invalid;
by reason of any contravention of section 548 of the Act due to the circumstance that there has been no meeting of contributories of Great Southern HVT Holdings Pty Ltd (In Liquidation) for the purposes of determining the matters set out in section 548(1)(a) and (b) of the Act prior to 18 December 2015.
Pursuant to section 511 of the Act the Court directs that the plaintiffs are and will be justified and acting properly in proceeding on the basis that:
(a)the appointment of the GSL Committee is not invalid; and
(b)the acts, decisions and resolutions of the GSL Committee are not invalid;
by reason of any contravention of section 548 of the Act due to the circumstance that there has been no meeting of contributories of Great Southern Limited (In Liquidation) for the purposes of determining the matters set out in section 548(1)(a) and (b) of the Act.
Pursuant to section 511 of the Act the Court directs that the plaintiffs are and will be justified and acting properly in proceeding on the basis that:
(a)the appointment of the GSMAL Committee is not invalid; and
(b)the acts, decisions and resolutions of the GSMAL Committee are not invalid;
by reason of any contravention of section 548 of the Act due to the circumstance that there had been no meeting of contributories of Great Southern Managers Australia Limited (In Liquidation) for the purposes of determining the matters set out in section 548(1)(a) and (b) of the Act prior to 18 December 2015.
Pursuant to section 511 of the Act the Court directs that the plaintiffs are and will be justified and acting properly in proceeding on the basis that:
(a)the appointment of the GSF Committee is not invalid; and
(b)the acts, decisions and resolutions of the GSF Committee are not invalid;
by reason of any contravention of section 548 of the Act due to the circumstance that there had been no meeting of contributories of Great Southern Finance Pty Ltd (In Liquidation) for the purposes of determining the matters set out in section 548(1)(a) and (b) of the Act prior to 18 December 2015.
Pursuant to section 511 of the Act the Court directs that the plaintiffs are and will be justified and acting properly in proceeding on the basis that:
(a)the appointment of the GSOH Committee is not invalid; and
(b)the acts, decisions and resolutions of the GSOH Committee are not invalid;
by reason of any contravention of section 548 of the Act due to the circumstance that there had been no meeting of contributories of Great Southern Olive Holdings Pty Ltd (In Liquidation) for the purposes of determining the matters set out in section 548(1)(a) and (b) of the Act prior to 18 December 2015.
Pursuant to section 511 of the Act the Court directs that the plaintiffs are and will be justified and acting properly in proceeding on the basis that:
(a)the appointment of the GSHVT Committee is not invalid; and
(b)the acts, decisions and resolutions of the GSHVT Committee are not invalid;
by reason of any contravention of section 548 of the Act due to the circumstance that there had been no meeting of contributories of Great Southern HVT Holdings Pty Ltd (In Liquidation) for the purposes of determining the matters set out in section 548(1)(a) and (b) of the Act prior to 18 December 2015.
The plaintiffs' costs and expenses of this application, including reserved costs, are costs and expenses in the winding up of Great Southern Limited (In Liquidation) and may be paid out of the assets of Great Southern Limited (In Liquidation).
ANNEXURE A
THE GSL COMMITTEE
Creditor
Representative
CRC Forestry Limited
Mark Sheldon-Stemm
Australian Executor Trustees Limited
Phillip Joseph
Great Southern Limited's Employees
Sandra Gibson
Bendigo and Adelaide Bank Ltd
Gary Tucker
Great Southern Managers Australia Limited
James Thackray
Australia & New Zealand Banking Group Ltd
Brendon Watkins
Mizuho Corporate Bank Ltd
Brendon Watkins
Commonwealth Bank of Australia Ltd
Brendon Watkins
Bank of Western Australia Ltd
Brendon Watkins
THE GSMAL COMMITTEE
Creditor
Representative
Abbey Lea Pty Ltd ATF the Lea Trust
Peter Burke
Australian Financial Services Ltd
Michael Butler
33 1/3 JAF Pty Ltd
Tom McCarthy
Bendigo and Adelaide Bank Ltd
Gary Tucker
Terello Pty Ltd ATF Blasi Family Super Fund
Paul Sweeney
Quenby Viticultural Services
Robert Quenby
Kailis Olive Processing Pty Ltd
Mark Kailis
Complete Investments
Peter Young
John Dehne
Himself
Phillip Capicchiano
Himself
Australia & New Zealand Banking Group Ltd
Brendon Watkins
Mizuho Corporate Bank Ltd
Brendon Watkins
Commonwealth Bank of Australia Ltd
Brendon Watkins
Bank of Western Australia Ltd
Brendon Watkins
THE GSF COMMITTEE
Creditor
Representative
Bendigo and Adelaide Bank Ltd
Gary Tucker
Great Southern Limited
James Thackray
THE GSOH COMMITTEE
Creditor
Representative
Great Southern Limited
James Thackray
Australia & New Zealand Banking Group Ltd
Brendon Watkins
THE GSHVT COMMITTEE
Creditor
Representative
Great Southern Limited
James Thackray
Australia & New Zealand Banking Group Ltd
Brendon Watkins
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