ABCD Corporation Pty Ltd v Sampson

Principles

Section 480 of the Corporations Act provides: Release of liquidator and deregistration of company When the liquidator: (a) has realised all the property of the company or so much of that property as can in his or her opinion be realised without needlessly protracting the winding up, and has distributed a final dividend (if any) to the creditors and adjusted the rights of the contributories among themselves and made a final return (if any) to the contributories; or (b) has resigned or has been removed from office; he or she may apply to the Court: (c) for an order that he or she be released; or (d) for an order that he or she be released and that ASIC deregister the company.
In the event that an order is made that a liquidator be released, then section 481(3) and (4) of the Corporations Act provides: Orders for release or deregistration … (3) An order of the Court releasing the liquidator discharges him or her from all liability in respect of any act done or default made by him or her in the administration of the affairs of the company or otherwise in relation to his or her conduct as liquidator, but any such order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact. (4) Where the liquidator has not previously resigned or been removed, his or her release operates as a removal from office.
When such an application might be appropriate was explained by Black J in Re RH Trevan Pty Ltd (in liq); Trevan Auto Service Pty Ltd (in liq); Trevan Car Sales Pty Ltd (in liq) [2013] NSWSC 1445 at [16]: …where a liquidator has realised all of the company's property or so much of that property as can, in his or her opinion, be realised without needlessly protracting the winding up, and has distributed any final dividend to the creditors and adjusted the rights of the contributories among themselves and made any final return to the contributories, he or she may apply to the Court for an order that he or she be released and that ASIC deregister the company.
His Honour also described the nature of an order under section 480 in In the matter of RR Impex Pty Ltd (in liquidation) [2013] NSWSC 1667 at [3]: The effect of such an order has been described as to "wipe the slate clean", subject to the limited exceptions set out in s 481(3): Singer v Trustee of the Property of Munro [1981] 3 All ER 215 at 219 (dealing with the corresponding English provisions in respect of a trustee in bankruptcy); Re Wayland as Liquidator of ABC Containerline NV (in liq) [2005] NSWSC 1; (2005) 52 ACSR 750 at [27]. The notification provisions in respect of such an application allow such an application to be the forum at which any claim that the liquidator has been deficient in performing his or her role should be advanced: Deputy Commissioner of Taxation v Tideturn Pty Ltd [2001] NSWSC 217; (2001) 37 ACSR 152; Re Wayland as liquidator of ABC Container Line NV (in liq) [2005] NSWSC 1; (2005) 52 ACSR 750 at [28]. It appears to be implicit in the structure of the sections and those notification requirements that, if the Court is satisfied that the relevant notifications have been given, no creditors have objected to the release of the liquidator or raised any concern as to the performance of his or her duties and the other evidence contemplated by the appropriate rules is placed before the Court, then the Court would ordinarily make an order releasing the liquidator, unless any reason emerges why it should not do so: Re Adellos Pty Limited (in liq) [2013] NSWSC 747 at [2]-[3]. See also Re Adellos Pty Ltd (in liq) [2013] NSWSC 747 at [3]; and Re One.Tel Ltd (in liq) [2014] NSWSC 1892 at [3].
A liquidator is required to prove, strictly, compliance with all of the prerequisites to a release: Re Autistic Therapy Society of Queensland Limited (in liq) (1981) 5 ACLR 658; (1981) 5 ACLR 658; Re Budget Floor Coverings Pty Ltd (in liq) (1982) 6 ACLR 657; (1982) 1 ACLC 312; Re Cardiff Coal Company (2014) 104 ACSR 135; [2014] NSWSC 1590 at [40] per Brereton J. Those requirements are set out in rule 7.5(3) of the Supreme Court (Corporations) Rules: The supporting affidavit must include details of the following matters: (a) whether the whole of the company's property has been realised or whether so much of the company's property has been realised as, in the liquidator's opinion, can be realised without needlessly protracting the winding up, (b) any calls made on contributories in the course of the winding up, (c) any dividends paid in the course of the winding up, (d) whether the committee of inspection (if any) has passed a resolution approving the liquidator's release, (e) whether ASIC has caused books in relation to the company to be audited under section 70-15 of the Insolvency Practice Schedule (Corporations), (f) whether the Court has ordered a report on the accounts of the liquidator to be prepared, (g) whether any objection to the release of the liquidator has been received by the liquidator from: (i) an auditor appointed by ASIC or by the Court, or (ii) any creditor, contributory or other interested person, (h) whether any report has been submitted by the liquidator to ASIC under section 533 of the Corporations Act, (i) whether the liquidator considers it necessary to report on the affairs of the company or any of its officers, (j) any property disclaimed in the course of the winding up, (k) any remuneration paid or payable to the liquidator and how such remuneration was determined, (l) any costs, charges or expenses payable by the liquidator if the Court grants the liquidator's release, (m) if the application is made under paragraph 480 (c) of the Corporations Act - the facts and circumstances by reason of which it is submitted that the company should not be deregistered.
Each of these matters are squarely addressed by Mr Sampson's affidavit of 6 February 2020.
In addition, rule 7.5(6) of the Supreme Court (Corporations) Rules provides: Unless the Court otherwise orders, the liquidator must serve by prepaid post, on each creditor who has proved a debt in the course of the winding up, and on each contributory, a copy of the interlocutory process accompanied by: (a) a copy of the summary of the liquidator's receipts and payments in winding up the company, and (b) a copy of the statement of the financial position of the company at the date when the interlocutory process seeking release was filed.
Here, the creditors of the Company are: 1. The Australian Bar Association; 2. New South Wales Bar Association; 3. ABCD Corporation; and 4. Mr Minus. The contributories are ABCD Corporation and Mr Minus. Each were served with the material required by the rule.
The importance of adhering to the requirements for service was explained by McLellan J in Re Austral Family Homes Pty Ltd (in liq) (1992) 8 ACSR 322; (1992) 28 NSWLR 247 at 249: … However an order for release of the liquidator does terminate such liabilities: it operates to discharge the liquidator "from all liability in respect of any act done or default made by him in the administration of the affairs of the company or otherwise in relation to his conduct as liquidator" (s 382(3)). For this reason it is a matter of very considerable potential significance to creditors and contributories, and it is important that they have proper notice of any application for such a release: see generally, Re Autistic Therapy Society of Queensland Ltd (In Liq) (1981) 5 ACLR 658; ACLC 33,293; Re Budget Floor Coverings Pty Ltd (In Liq) (1982) 6 ACLR 657; 1 ACLC 313; Re Munro; Ex parte Singer v Trustee in Bankruptcy [1981] 1 WLR 1358; [1981] 3 All ER 215.
Examples of where the service requirements have been dispensed with include Re One.Tel, where Black J dispensed with the need to notify the 1,800 priority creditors and numerous unsecured creditors of One.Tel and instead permitted the special purpose liquidator to notify the committee of inspection only. His Honour considered that this was sufficient to satisfy the policy of the rule, "namely, that persons who might have reason to complain of the liquidator's conduct should have an opportunity to disclose that complaint to the Court before he or she is released": at [13]. In RR Impex, Black J dispensed with service on a creditor where the liquidator had endeavoured to serve a creditor at his last known address several times with no success: at [10]-[11].
In these proceedings alone, which have been on foot since 2015, I note that there have been 40 hearings - either procedural or substantive - which have generated 22 judgments of which eight have been published. Of Mr Minus' opposition to Mr Samson's remuneration, contested in December 2019, Black J noted at [3]: It was difficult to identify any commercial logic underpinning ABCD's approach to this application, where it seems unlikely that ABCD would ultimately achieve any substantial economic recovery as a creditor or contributory, given the amount of other creditors' claims in the liquidation. ABCD's approach has likely reduced the prospect that sufficient funds will be available in the liquidation to meet the liquidator's remuneration and creditors' claims, particularly if it is ultimately not possible for the liquidators to enforce an order or costs against ABCD where its asset position is unknown or against Mr Minus where he is bankrupt.
That is, commercial sense does not seem to be a factor in Mr Minus' litigious choices. It is perhaps telling that his Honour approved every dollar sought by Mr Sampson in remuneration, noting that the liquidation had "generated an extraordinary amount of litigation": at [4]. Another instance of this appears to have occurred after the hearing before Black J, when ABCD Corporation applied to reopen its case and further cross-examine Mr Sampson after Mr Minus had indicated the day before that his cross-examination was complete, ABCD Corporation had closed its case and Mr Marshall SC had made closing submissions for the liquidator on that basis: at [15].
It is readily apparent that Mr Sampson has been frequently challenged and sued by Mr Minus at, it would appear, every turn. There is every reason to think that this will not stop simply because Mr Sampson has completed his tasks as liquidator of the Company. This seems to me to be precisely the circumstance in which the Court may give a release, assuming that each of the requirements of section 480 of the Corporations Act and rule 7.5(3) of the Supreme Court (Corporations) Rules are fulfilled.
The affidavit of Mr Sampson does address each of the requirements of rule 7.5(3). No evidence was served by any other party. The Australian Bar Association and New South Wales Bar Association have advised in writing that they neither consent nor oppose the application. ASIC does not wish to intervene in this application.
There is no evidence that Mr Sampson has done other than performed his duties as a liquidator properly. I am satisfied by the evidence that this is a proper case for the release of the liquidator and an order that ASIC deregister the company. For these reasons I make the following order: 1. Pursuant to section 480 of the Corporations Act 2001 (Cth), order that David Henry Sampson be released and that the company, Australasian Barrister Chambers Pty Ltd, be deregistered.

At a glance

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Judgment (8 paragraphs)

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Legislation Cited (5)

Cases Cited (21)

Cited By (3)