Re Ivory Cape Pty Ltd (in liquidation) Informed Sources Finance Pty Ltd v Cole, Robert Molesworth Hobill

[1996] FCA 593

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION  No VG 3267 of 1996

IN THE MATTER OF:

IVORY CAPE PTY LTD (In liquidation)

INFORMED SOURCES FINANCE PTY LTD

Applicant

-and-

ROBERT MOLESWORTH HOBILL COLE

First Respondent

-and-

IVORY CAPE PTY LTD (In liquidation)

Second Respondent

Coram:    Olney J

Place:    Melbourne

Judgment: 10 July 1996

Reasons
 published:   17 July 1996

REASONS FOR JUDGMENT

On 10 July 1996 I dismissed an application pursuant to s 503 of the Corporations Law seeking the removal of the first respondent as liquidator of the second respondent.   At the time I indicated that I would in due course give reasons for my decision which I now publish.

BACKGROUND
In 1994 the applicant commenced proceedings against the second respondent (Ivory Cape) in the County Court of Victoria (the County Court proceeding) to recover money said to be owing for fees for marketing work in relation to the sale of 53 units at a development in Port Douglas.   It is said that the amount actually due to the applicant is approximately $106,000.   Ivory Cape admitted liability for $15,965 less advances of $5,000 previously made but otherwise denied liability.   Both parties made discovery, the applicant disclosing some 128 documents and Ivory Cape 83.   The discovered documents total some 3,300 pages and fill 5 lever arch files.   The proceeding was to go to mediation in February 1996 and in the event that it was not resolved by that process, it was listed for trial on 16 April 1996, but other events overtook it.

On 7 December 1995 the applicant commenced proceeding VG 3740 in this Court seeking leave pursuant to s 459P(2)(a) of the Corporations Law to apply to wind up Ivory Cape. At the first directions hearing on 11 December 1995 Ivory Cape appeared and sought an adjournment to enable it to file answering affidavits. The directions hearing was adjourned to 15 December 1995. On 14 December 1995, pursuant to s 436A of the Corporations Law, Ivory Cape appointed the first respondent (Cole) as administrator.   One result of the appointment was that the applicant could not, without the consent of the administrator or leave of the Court, proceed with matter VG 3740 of 1995.

On 23 January 1996 Ivory Cape, Cole and others entered into a Deed of Company Arrangement (the Deed) pursuant to Part 5.3A of the Corporations Law.   On 30 January 1966 the applicant made application to the Court in proceeding VG 3051 of 1996 seeking an order pursuant to s 445D terminating the Deed.   On
22 April 1996 Northrop J made an order terminating the Deed whereupon Cole became the liquidator of Ivory Cape by operation of regulation 5.3A.07(4) of the Corporations Regulations.   In the same proceeding the applicant sought an order that Cole be removed as liquidator and that one Taylor be appointed.   Northrop J expressed the view that as Cole became liquidator as a result of his order and had not then been required to perform any duties as liquidator it was premature to seek an order for his removal.

The present proceeding was commenced on 30 May 1996.

THE APPLICANT'S CASE
In a report to creditors made by Cole on 8 January 1996 he stated that the applicant's claim against Ivory Cape had been referred to his solicitors who had advised that it should only be admitted for an amount of $10,495.   The applicant hotly contests the validity of the advice given to Cole which is said to have been given without the solicitor having inspected the documents discovered in the County Court proceeding.

The applicant asserts 2 bases for the present application.   First, it is said by one Camilleri, a director of the applicant, that he believes that Cole will not deal with the applicant's interests impartially and second, he says he has no confidence in him.

The impartiality complaint is made on the basis of Camilleri's impression from an affidavit filed in proceeding VG 3051 of 1996 that Cole has "a negative view" as to his (Camilleri's) credit and that this will impact upon his assessment of the applicant's proof of debt in relation to the claim the subject of the County Court proceeding.   Further, Camilleri takes exception to some of the submissions made by counsel acting for Cole in the proceeding before Northrop J.

Camilleri's lack of confidence in Cole appears to be based upon the impression formed in relation to the matters referred to in relation to the issue of impartiality.

CONCLUSION
The short answer to these complaints is that Northrop J apparently found no basis to remove Cole as liquidator by reason of any past conduct and further, if the applicant is dissatisfied with a decision of the liquidator as to the amount for which a claim should be admitted the Corporations Law provides an adequate remedy (Corporations Law s 1321).

No evidence has been adduced by the applicant of anything done or said by Cole since he was appointed liquidator.   Nothing has been put before the Court to suggest that Cole is not performing and will not perform his powers and functions as liquidator in a proper and professional manner in accordance with his duty.   There is no basis whatever to support the
application.   For these reasons the application was dismissed with costs.

I certify that this and the preceding 4 pages are a true copy of the Reasons for Judgment of the Honourable Justice Olney

Associate:

Dated:

Heard:    10 July 1996

Place:    Melbourne

Judgment: 10 July 1996

Reasons
 published:  17 July 1996

Appearances:

Mr W. Hopkins (instructed by Lewis Hutchinson) appeared for the applicant.

The first respondent appeared in person.