Section 583 provides that, subject to Pt 5.7, a Pt 5.7 body may be wound up under Chapter 5 (that is the whole chapter) and the chapter applies (presumably as a whole in so far as it is applicable) to a Pt 5.7 body with such adaptations as are necessary including a number of adaptations which are specified."
15 It is made clear here that the effect of s.583 is to make the provisions of Chapter 5 as a whole applicable to the winding up of a part 5.7 body subject to two qualifications: first, the specific adaptations stated in s.583 itself must be made; and, second, the applicability of any given Chapter 5 provision is to be judged according to the circumstances of the particular case. The Chapter 5 provisions as a whole, insofar as they deal with winding up, are concerned with the winding up of companies registered under the Corporations Act. Sheppard AJA referred to differences in character and activities as among bodies made susceptible to winding up under Part 5.7. There are also differences in character and activities between companies registered as such under the Corporations Act and the various kinds of Part 5.7 bodies. The non-specific adaptations directed by s.583 must, in my opinion, take account of such differences as there actually are, as to relevant matters, between the circumstances of a domestic company in the course of winding up and the circumstances of the winding up of the particular Part 5.7 body.
16 In the present case, the winding up ordered on 21 January 1999 arose from a decision of the Belgian trustees in bankruptcy that the insolvent administration over which they presided according to Belgian law would be enhanced by resort to winding up processes available under Australian law. The Australian winding up was, in a very real sense, ancillary to the Belgian insolvent administration. The guiding principle, in our law, is accordingly that stated by Vaughan Williams J in In re English Scottish and Australian Chartered Bank [1893] 3 Ch 385 (at p.394):
"[O]ne must bear in mind the principles upon which liquidations are conducted, in different countries and in different Courts, of one concern. One knows that where there is a liquidation of one concern the general principle is - ascertain what is the domicil of the company in liquidation; let the Court of the country of domicil act as the principal Court to govern the liquidation; and let the other Courts act as ancillary, as far as they can, to the principal liquidation. But although that is so, it has always been held that the desire to assist in the main liquidation - the desire to act as ancillary to the Court where the main liquidation is going on - will not ever make the Court give up the forensic rules which govern the conduct of its own liquidation."
17 Although the winding up ordered by this court is, in reality of this ancillary kind, it is not, by the terms of the winding up order (or any legislative provision), made subsidiary to the Belgian administration. The liquidator appointed by this court is subject to the full range of duties and responsibilities attaching to the office of liquidator, subject to any direction that the court itself may see fit to make: see Re Hibernian Merchants Ltd [1958] Ch 76. As a general principle, therefore, the local liquidator should proceed in the manner stated by Lowe J in Re Australian Federal Life and General Assurance Co Ltd [1931] VLR 317 (at p.320):
"The purpose of the ancillary winding up is to secure the local assets, and the rights of the local creditors; and the duties of the liquidators accordingly are to collect the local asset, to settle a list of the local contributories and also, it would seem, to determine the claims of local creditors."
18 The fact that Mr Wayland's appointment was procured, in substance, by the Belgian trustees in bankruptcy (in that they caused ABC to make the application for a winding up order) does not mean that he is, or may regard himself as, merely an instrumentality of or assistant to those trustees. As a liquidator appointed by this court, he is an officer of the court and makes decisions which are, in effect, made under the authority of the court itself: Duffy v Super Centre Development Corporation Ltd [1967] 1 NSWR 382. As Marks J observed in Re Timberland Ltd (1979) 4 ACLR 259:
"The winding up is by the court which for the purposes the liquidator is."
19 In the case of the winding up of a company, s.480 empowers the liquidator to apply to the court for an order that he or she be released. Such an application may be made in one of two situations: where the liquidator has resigned or been removed from office (s.480(b)); or where the liquidator "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"(s.480(a)). In the present case, there is no suggestion that Mr Wayland has resigned or been removed, with the result that the application for release must be treated as based on s.480(a) or, at least, on so much of s.480(a) as is applicable to the case in conformity with s.583, having regard to the approach indicated by Sheppard AJA in the Peninsular Group case.
20 In my opinion, s.480 applies in a case such as the present on the footing that s.480(a) is concerned only with creditors and contributories having some logical connection with Australia which is of such a kind as to produce an expectation that their rights, claims and liabilities will be dealt with in the local winding up rather than in the principal administration in the place of incorporation or in some other ancillary administration in another place. That, it seems to me, is an adaptation indicated by the nature of the Part 5.7 body and the circumstances pertaining to it and, therefore, an adaptation directed by the general specification in s.583.
21 Mr Wayland's affidavit shows that the only asset (or potential asset) in Australia is the claim against CSS. He conducted a number of examinations with a view to testing the viability of that claim. The evidence does not, however, disclose Mr Wayland's own view on that question. It seems that he has reported to the Belgian trustees in bankruptcy and has transmitted to them legal advice obtained from Sydney counsel. As a result, it appears, the Judge-Commissioner in the Belgian administration has decided that the claim should not be pursued. It may be that Mr Wayland shares that view on the basis of an assessment he has himself made. But unless such an assessment has been made and decision reached, it seems to me that Mr Wayland has not completed the tasks that his position as liquidator appointed by this court under the Corporations Act requires him to perform.
22 The same comment applies in relation to the claims of creditors. Mr Wayland is aware that the Belgian trustees have called for proofs of debt and that the claims of seventeen Australian entities accounting for something in excess of A$2 million have been admitted in the principal administration. But, on the evidence as it stands, there is no indication that Mr Wayland has turned his mind to the question whether there may be other creditors within the purview of the winding up over which he has been appointed to preside. It may well be that the circumstances are not such as to warrant any formal call by Mr Wayland for proofs of debt and that, subject to the decision on the claim against CSS, it is reasonable to proceed on the basis that there will be no assets. But these are matters to which active consideration must be given.
23 When it comes to contributories in a case such as the present, the immediate inclination is to think that their liabilities will be a matter solely for the law of the place of incorporation. But s.586 makes it clear that the liquidator of a Part 5.7 body cannot ignore persons liable in the ways specified in s.586(1)(a) and (b). Each such person is, by s.586(1), made a contributory "liable to contribute to the property of the Part 5.7 body all sums due from the contributory in respect of any such liability". It is made clear that this provision is concerned not only with domestic Part 5.7 bodies but also those having some other "place of origin". In a case such as the present, therefore, the liquidator of a Part 5.7 body formed in another country and in the process of insolvent administration there cannot simply ignore the matter of contributories. There is, at the least, a duty to consider whether any persons of the kind identified in s.586(1) are within the purview of the local winding up. If they are, there will be a responsibility upon the liquidator to determine whether steps should be taken to enforce the s.586(1) liability.
24 In making the comments in paragraphs [21] to [23] above, I should not be taken to suggest that Mr Wayland has been derelict in his duty. I intend to do no more than to identify matters relevant to the conduct of the winding up under the Corporations Act that ought logically to receive attention when the application for release under s.480(c) is eventually considered by the court, particularly in the light of the pre-condition specified in s.480(a).
25 Against that background, I proceed to consider the steps that Mr Wayland should take as a prelude to pressing his application for release. Two matters are of particular relevance. The first is the effect of an order of release. That has a clear bearing on the precautions that should be taken to ensure that all considerations of relevance may come before the court. The second matter is the requirements imposed by existing provisions. Their applicability in the somewhat unusual circumstances of the present case arises for consideration.
26 The effect of an order for release of a liquidator under s.480(c) is stated in ss.481(3) and (4):
"(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.