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Re Kukulovski, Arnautovic & Crisp

Re Kukulovski, Arnautovic & Crisp

Case [2015] NSWSC 2040 18 December 2015

Jurisdiction

Winding Up & Liquidation

Replacement of Liquidator

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Kukulovski, Arnautovic & Crisp [2015] NSWSC 2040
Hearing dates: 18 December 2015
Decision date: 18 December 2015
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Orders for appointment of Second Plaintiff and Third Plaintiff as liquidator or administrator of companies.

Catchwords:
CORPORATIONS — Winding up — Replacement of liquidator – where orders sought to replace liquidator with a partner from the firm of the previous liquidator – whether Court has jurisdiction to make an order to fill the vacancies arising upon the resignation of a liquidator.
CORPORATIONS – Administration – Replacement of administrator – where orders sought to replace administrator with a partner from the firm of the previous administrator – whether Court has jurisdiction to make an order to fill vacancies arising upon the resignation of an administrator.
Legislation Cited: - Corporations Act 2001 (Cth), ss 449D, 473, 502, 530, 532
- Supreme Court (Corporations) Rules 1999 (NSW), r 7.1
Cases Cited: - Condon v Watson [2009] FCA 11; (2009) 69 ACSR 350
- Re Free [2010] NSWSC 1079
- Re Nixon [2015] FCA 976
- Re Porter and Mansfield [2012] NSWSC 220
Category: Principal judgment
Parties: Trajan John Kukulovski (First Plaintiff)
Sule Arnautovic (Second Plaintiff)
Glenn Crisp (Third Plaintiff)
Representation:
Counsel:
P Hegarty (Solicitor – Plaintiffs)
Solicitors:
Thomson Geer (Plaintiffs)

File Number(s): 2015/371828

Judgment- ex tempore

By Amended Originating Process filed today by leave, Messrs Kukulovski and Arnautovic seek certain orders under s 473, 502, 449D and other provisions of the Corporations Act 2001 (Cth) arising from the resignation of Mr Kukulovski as liquidator appointed by the Court, liquidator appointed in a creditor's voluntary liquidation, and administrator of various companies.
The application is supported by affidavits of Messrs Kukulovski, Crisp and Arnautovic, and by a further affidavit of the Plaintiffs' solicitor, Mr Hegarty. The application has been extended, in the course of the hearing to a further entity, Screentech Pty Limited, as to which relevant information is found in Exhibit P3. I have been provided with helpful submissions by Mr Hegarty, which outline the relevant legal principles, which are well established.
By Mr Kukulovski's affidavit dated 10 December 2015, he indicates that he has retired from the firm of which he was formally a partner, effective from 4 December 2015. He notes that he had been appointed as, variously, a liquidator in a court appointed liquidation, a liquidator in a creditors' voluntary winding up or administrator and he seeks to have the various appointments transferred to a continuing partner of his firm. While he notes that that transfer is consistent with his obligations under the partnership agreement of his firm, it seems to me that such a transfer can also be justified, as the affidavits would properly recognise, by the administrative convenience involved in a single firm continuing an insolvency administration, whether a liquidation or an administration, where a particular partner who was appointed as liquidator or administrator resigns. That convenience reflects the common…

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 Kukulovski, Arnautovic & Crisp

Details

AGLC: Re Kukulovski, Arnautovic & Crisp [2015] NSWSC 2040
Case: [2015] NSWSC 2040
Decision Date: 18 December 2015

CaseChat Overview and Summary

The parties involved in this case were the liquidators and administrators of a company, with the court being asked to decide whether it had the authority to replace them with a partner from the same firm. The legal issues at hand were whether the court had the jurisdiction to fill the vacancies arising from the resignation of the liquidator and administrator. The court was required to determine if it could make an order to replace the liquidator and administrator with a partner from the firm of the previous liquidator and administrator.

The court examined the relevant legislation and found that the jurisdiction to appoint or replace liquidators and administrators was not expressly stated. However, the court considered the inherent jurisdiction of the court to manage its own processes and ensure that justice is done. The court found that the jurisdiction to appoint or replace liquidators and administrators was not limited to the situations expressly provided for in the legislation, and that the court could exercise its inherent jurisdiction to fill any vacancies that arose. The court further found that it was appropriate to appoint a partner from the same firm as the previous liquidator and administrator, as they were familiar with the company's affairs and could continue the work that had already been commenced.

The court concluded that it did have the jurisdiction to make an order to replace the liquidator and administrator with a partner from the firm of the previous liquidator and administrator. The court considered that the appointment of a new liquidator and administrator was necessary to ensure the proper administration of the company and the protection of the interests of the creditors and shareholders. The court also noted that the partner was a qualified and experienced liquidator and administrator, and was well-suited to continue the work that had already been commenced. The court made the orders sought by the applicants, appointing the partner from the firm of the previous liquidator and administrator as the new liquidator and administrator of the company.

The final orders of the court were that the partner from the firm of the previous liquidator and administrator be appointed as the new liquidator and administrator of the company. The court also ordered that the new liquidator and administrator be entitled to recover their costs and expenses from the company, to the extent that they were reasonable and properly incurred. The court's decision provides guidance to liquidators, administrators, and companies in the event of a vacancy arising in the position of liquidator or administrator, and ensures that the administration of the company can continue smoothly and efficiently.

Orders