The statutory regime provided that the court 'may' have regard to the contributories' wishes in relation to all matters pertaining to the winding up of the company. Moreover, the court might direct that meetings of contributories be convened for the purpose of ascertaining those wishes. But the contributories could not control the company in any real sense. Although the court 'may' have regard to the contributories' wishes (and 'shall' have regard to the number of votes conferred on the contributory by the company's constitution), it was not compelled to act on the contributories' wishes."
12 The position under the present Corporations Act is the same.
13 The statutory scheme is such that, while winding up is in progress, the liquidator is the company's decision-maker. There is no scope for decisions affecting the company to be made by others, except, perhaps, decisions that contribute to the orderly progress of the winding up. Indeed, so strong is the claim of the liquidator to be the company's decision-maker during winding up that statutory provisions allowing a member (among others) to bring proceedings on a company's behalf if so authorised by the court (Part 2F.1A of the Corporations Act) do not apply to a company subject to winding up, even though the provisions are expressed to apply to all companies, without any distinction as to status: Chahwan Pty Ltd v Euphoric Pty Ltd [2008] NSWCA 52; (2008) 227 FLR 43.
14 There is accordingly substantial doubt as to whether it was open to the members of PFC, while the winding up continued, to pass any effective resolution to change the composition of the board of directors, even a resolution expressed to "take effect" only upon termination of the winding up. In addition, the power of the company in general meeting to pass such resolutions did not devolve upon the liquidator. A liquidator has only such powers as the Corporations Act confers. There is no explicit power for a company to do by or through its liquidator things that, in the absence of a liquidator, it can do by or through its members in general meeting.
15 Upon a s 482 application, the court has a clear interest in seeing that one or more directors able and willing to act will be in office immediately after the winding up is terminated. This is recognised in s 482(3). Part of the court's function is to ensure that the company is able to function in the ordinary way. In the present case, the winding up order was made on 8 June 1999 and the winding up therefore continued for more than ten years. After the lapse of such a long period, any court asked to terminate the winding up would wish to see positive evidence that the directors in office at the commencement of the winding up (if still suitable persons to be directors) were willing to function anew, failing which some other suitable governance arrangements would have to be placed before the court and found acceptable.
16 It was because they could not show that the persons who were directors on 8 June 1999 were willing to take up the reins again and because of their own desire, as the holders of all the issued shares, that those persons should, in any event, be replaced, that Syfind and PFA (two of the three applicants for termination of the winding up, the other being the liquidator) took steps towards removing the existing directors, appointing one new director and reducing the number of the directors to one (as is now permitted in the case of a proprietary company: s 201A(1)).
17 Given the substantial doubt as to whether the action of 20 October 2010 referred to at paragraph [4] above was effective, Syfind and PFA ultimately resorted to the regime outlined at paragraph [2] above. That regime depended on an undertaking given to the court. The undertaking was not, however, open to the objection noted in Owners Strata Plan 70294 v LNL Global Enterprises Pty Ltd [2006] NSWSC 1386; (2006) 60 ACSR 646. This is because of its short duration and the mechanism to review compliance created by item 4 at paragraph [2] above - added to which Syfind and PFA have a clear commercial incentive to honour the undertaking, given their obvious desire to see the person chosen by them replace the existing directors.
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