Re Samgris Resources Pty Ltd (in liquidation)

The applicants, appointed liquidators of Samgris Resources Pty Ltd, sought advice and orders for the distribution of surplus funds and other matters following the company’s liquidation in 2018. Samgris Resources Pty Ltd was incorporated in 2010 and entered into agreements with two Shaanxi companies in 2011 for the acquisition of shares. After disputes arose over the second instalment of the agreed payment, the Shaanxi companies referred the matter to arbitration in China in 2019. The liquidators consented to orders preventing asset distribution until the final arbitral award. In August 2019, a joint venture vehicle submitted a proof of debt, which was rejected in April 2020. The joint venture vehicle was subsequently placed into liquidation in August 2020, and the arbitral award was delivered in October 2021 dismissing the claims. The liquidators distributed a final dividend to admitted creditors in December 2021, leaving a surplus. The liquidators intend to distribute this surplus equally between the remaining contributories, ARH and MBR.

The primary legal issues before the court were whether the liquidators made appropriate inquiries to identify creditors, if a surplus existed for distribution, if the surplus should be distributed immediately, and if the liquidators should be granted special leave to distribute the surplus equally between ARH and MBR. The court also needed to consider the application in the Beijing Fourth Intermediate Peoples’ Court to set aside the arbitral award and the liquidators' release from their duties.

The court found that the liquidators had made appropriate inquiries and identified the creditors. It was established that a surplus existed for distribution. The court considered the rule in Cherry v Boultbee and found that the liquidators had not acted in bad faith. The court concluded that the surplus should be distributed immediately and granted special leave for the liquidators to distribute the surplus funds equally between ARH and MBR. The court also ruled that the liquidators should not be required to take any steps in the Beijing Fourth Intermediate Peoples’ Court proceeding, and ordered their release and the deregistration of the company.

The court ordered that the surplus funds be distributed equally between McKay Brooke Resources Limited and Allways Resources Holdings Pty Ltd, dispensed with certain procedural requirements, justified the liquidators' calculation of the distribution, and released the liquidators from their duties. The court also ordered the sealing of a confidential affidavit and directed that the liquidators' costs and expenses be paid out of the company's assets.