Condon v Watson

FARRELL J 1 This is an application made under s 473A of the Corporations Act 2001 (Cth) and s 90-15(3)(c) of the Insolvency Practice Schedule to that Act by way of an originating process filed on 9 October 2018. 2 On 1 August 2018, the accounting firms PricewaterhouseCoopers (PWC) and PPB Advisory merged. The first plaintiff, Mr Theobald, and the second plaintiff, Mr Robinson, were partners in PPB Advisory and are registered liquidators and official liquidators. They have been employees of PWC since the merger and now wish to pursue other opportunities and to resign from their roles as liquidator in the companies identified in the first and second schedules to draft short minutes of order which have been provided by counsel for the plaintiffs. Mr Robinson wishes to resign as deed administrator in relation to the companies identified in the third schedule. Mr Robinson also wishes to resign as liquidator of Reed Constructions Australia Pty Ltd and Momentum Mortgages Ltd. It is proposed that they be replaced by the third to ninth plaintiffs who are partners or employees of PWC and registered and official liquidators in their own right. 3 Two affidavits of Mr Robinson sworn on 25 September 2018 and an affidavit of Mr Theobald sworn on 27 September 2018 were read. The evidence derived from those affidavits is usefully summarised in submissions provided by counsel for the plaintiffs (marked as MFI-1) which is reproduced in annexure A to these reasons. Counsel also tendered a letter dated 15 October 2018 from the Australian Securities & Investments Commission which has been marked as Exhibit 1. The letter indicates that ASIC has received a copy of the originating process and supporting affidavits and considers that these matters are properly left to the determination of the Court and that it does not seek leave to appear at the hearing. 4 Having regard to the principles set out at paragraphs [32]-[35] and [38]-[39] of annexure A, I am satisfied both that the Court has power to make the orders sought and that it is appropriate to make orders appointing the third to ninth plaintiffs as liquidators or deed administrators of the relevant companies. 5 In particular I note that: (1) In Re Kukulovski, Arnautovic & Crisp [2015] NSWSC 2040, Black J referred at [3] to the efficiencies in appointing persons from the same firm as replacements for retiring liquidators in minimising the costs of the administration. While Messrs Theobald and Robinson have not been employees of PWC of long duration, I note that some of the replacement liquidators have previously been employed by PPB Advisory and PWC's systems are now employed in administering those companies which are in liquidation or of which Mr Robinson is a deed administrator. Accordingly, the third to ninth plaintiffs are familiar with PWC's systems so that it is cost-effective and in the interest of the efficiency of those administrations for the third to the ninth plaintiffs to be appointed. (2) Both of Messrs Theobald and Robinson have given evidence that they have briefed those plaintiffs who it is proposed should be appointed in their place about the things remaining to be done in the relevant liquidations and administrations. (3) The affidavits set out the background of the appointment of Messrs Robinson and Theobald as liquidator or deed administrator. They also set out how the third to ninth plaintiffs have been identified to replace them. (4) The third to ninth plaintiffs have consented in writing to be appointed to those roles and ASIC has been notified of that. (5) The receivers and managers which have been appointed to Bowesco Pty Ltd and Lanepoint Enterprises Pty Ltd have each been given notice of the proposed changes of liquidator and they have no objection. (6) There will be no increase in fees as a result of the replacement and any increase would need the approval of relevant creditors. (7) The plaintiffs do not seek an order as to costs. 6 The plaintiffs have sought an order dispensing with notice of the proceedings being given to creditors prior to the hearing and I am satisfied that I should make the order. 7 The plaintiffs originally proposed to give notice to creditors of the orders within 21 days and that leave should be given to the creditors to approach the Court within 60 days. However, given that the merger has been in effect since 1 August 2018, the plaintiffs should be in a position to identify creditors and how to contact them in a relatively short period and I was not satisfied that the proposed 21 days was appropriate. Further, in my view, in the absence of prior notice of the hearing, a copy of the orders should be available as soon as possible on PWC's website. The proposed short minutes have been amended accordingly. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell.

SCHEDULE OF PARTIES NSD 1887 of 2018 Plaintiffs Fourth Plaintiff: ROBERT SCOTT DITRICH Fifth Plaintiff: ANDREW JOHN SCOTT Sixth Plaintiff: WILLIAM ANTHONY HONNER Seventh Plaintiff: DANIEL AUSTIN WALLEY Eighth Plaintiff: CHRISTOPHER CLARKE HILL Ninth Plaintiff: MICHAEL ANDREW OWEN