HER HONOUR: This is an application brought ex parte under ss 473, 473A(1) and 499(3) of the Corporations Act 2001 (Cth) (the Corporations Act) in circumstances where the registered liquidator of Arresso Consulting Pty Ltd (in Liquidation) (Arresso Consulting) and MP&HE Services Pty Ltd (in Liquidation) (MP&HE Services) (to which I will together refer as "the companies") has resigned from the firm, Jirsch Sutherland, where he is a salaried partner.
The current liquidator, Mr Liam Bellamy, has deposed in his affidavit sworn 25 July 2019 to the circumstances in which the application is made and to the matters on the basis of which he has formed the view that it is in the interests of creditors that the liquidations of Arresso Consulting and MP&HE Services be transferred to a liquidator at Jirsch Sutherland (due to the costs efficiencies that would be involved).
Also relied upon in the context of this application is an affidavit sworn 22 July 2019 of Glenn Crisp, who is also a registered liquidator within the meaning of the Corporations Act and a Victorian managing partner in the firm, Jirsch Sutherland. Mr Crisp has signed a consent to act for Arresso Consulting and has deposed that if the Court is minded to order that he be appointed as liquidator of Arresso Consulting as Mr Bellamy's replacement he will do all things necessary to give effect to the order in the most efficient way.
Similarly, reliance is placed on an affidavit sworn 25 July 2019 of Sule Arnautovic. Mr Arnautovic is also a partner in the firm, Jirsch Sutherland, and a registered liquidator within the meaning of the Corporations Act and has signed a consent to act for MP&HE Services. He has similarly deposed that, if the Court is minded to order that he be appointed as liquidator for MP&HE Services as Mr Bellamy's replacement, he will do all things necessary to comply with and give effect to the order in the most efficient way. He has signed a consent to act as liquidator.
As adverted to above, the application concerns the resignation of Mr Bellamy and, hence, the need for the replacement as liquidator of the companies, Arresso Consulting and MP&HE Services. Mr Bellamy was appointed as liquidator of the latter company by order of the Court. He was appointed as liquidator of the former company by the creditors of the company.
To the extent necessary leave is sought pursuant to s 532(2) of the Corporations Act in relation to the appointment of the replacement liquidators. There is some doubt as to whether that leave is in fact necessary but, on one view of s 532(2)(b), the appointments could potentially cause the firm, Jirsch Sutherland (of which Mr Crisp and Mr Arnautovic are both partners), to be a creditor of the companies for an amount of $5,000 by reason of their fees and other costs; and this would make it necessary for the Court's leave to be sought for their appointment.
The replacement of Mr Bellamy with Mr Crisp and Mr Arnautovic respectively, is said to be a benefit to the creditors in circumstances where there would be the benefit of continuity of the liquidation within the one firm; where Mr Crisp and Mr Arnautovic have already been involved in the administration of the liquidation respectively and are able to progress the liquidators without any delay and where other employees of the firm who have continued employment of the firm have the day to day carriage of each liquidation.
The benefit of creditors maintaining a liquidation within the same firm upon resignation of the incumbent liquidator has been recognised in a number of decisions (see In the matter of Richard James Porter and David Ian Mansfield [2012] NSWSC 220 at [5] (In the matter of Richard James Porter and David Ian Mansfield); Condon v Watson [2009] FCA 11; (2009) 174 FCR 314; Re Free [2010] NSWSC 1079 at [6]; In the matter of Bridgewater Investments Pty Limited and other Companies referred to in Schedules A and G to the Amended Originating Process [2013] NSWSC 426 (Re Bridgewater) at [7]; and In the matter of Kukulovski, Arnautovic & Crisp [2015] NSWSC 2040 at [7]).
I also refer to the authorities concerning a change in liquidator where the Court has granted leave under s 532 of the Corporations Act (see Rowena Margaret Sigelski, James Alexander Shaw, Paul William Gidley and the Corporations Act 2001 (Cth) [2012] NSWSC 449 at [7] and Re Bridgewater at [11]).
In In the matter of Richard James Porter and David Ian Mansfield Black J (at [11]) said that:
Mr Porter and Mr Mansfield properly drew my attention to the possible application of section 535(2) of the Corporations Act so far as their firm may have claims for costs and disbursements exceeding $5,000 against particular companies. In the circumstances, I will grant leave, so far as it is necessary for the appointment of Mr Mansfield as liquidator of the relevant companies for the purposes of that section.
Most recently Black J in In the Matter of FGM Print Pty Ltd [2018] NSWSC 1478 said at [7]-[8]:
7. Mr Hegarty also draws attention to s 499(3) of the Corporations Act, which relevantly provides that the Court may fill the vacancy that arises on the resignation of a liquidator in a creditors' voluntary liquidation. Mr Hegarty recognises that s 90-15 of the Insolvency Practice Schedule (Corporations) also permits the Court to make such orders as it thinks fit in relation to the external administration of a company and notes that I referred to that provision in Re Equiticorp Australia Ltd (in liq) [2017] NSWSC 1456. He submits, with considerable force, that it is likely not necessary to rely on that provision, in the particular circumstances, where s 473A and s 499(3) of the Corporations Act are specific sections that address the question of a liquidator's replacement.
8. Mr Hegarty also draws attention to s 532 of the Act, which may require leave of the Court for a liquidator from the same firm to be appointed, where amounts are due to that firm in respect of the liquidation. Such leave is sought in this application, and is commonly granted in applications of this kind.
I am persuaded that it is in order for the relief to be sought in circumstances where I am persuaded that it is in the interest of the creditors to minimise the costs associated with the replacement and I note that no order is sought by the plaintiff for payment of the costs of this application from the assets of the companies the subject of this application. (I am not persuaded that the restraint of trade provisions in Mr Bellamy's employment contract necessarily mandate such a course but it is not necessary here to explore that issue.)
For those reasons, I make the following orders:
1. Order pursuant to s 499(3) of the Corporations Act 2001 (Cth) that Glenn Crisp be appointed as Liquidator of Arresso Consulting Pty Ltd (in Liquidation) and that this appointment take effect immediately upon Glenn Crisp filing the appropriate notice with the Australian Securities and Investments Commission.
2. Order pursuant to s 473A(1) of the Corporations Act 2001 (Cth) that Sule Arnautovic be appointed as liquidator of MP&HE Services Pty Ltd (in Liquidation) and that this appointment take effect immediately upon Liam Bellamy filing with the Registrar and the lodgement with the Australian Securities and Investments Commission a memorandum of resignation in accordance with r 7.1 of the Supreme Court (Corporations) Rules 1999 (NSW).
3. Order that, to the extent necessary, leave be granted in accordance with s 532(2) of the Corporations Act 2001 (Cth) for the replacement of Liam Bellamy with Glenn Crisp and Sule Arnautovic as liquidator of Arresso Consulting Pty Ltd (in Liquidation) and MP&HE Services Pty Ltd (in Liquidation) respectively.
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Decision last updated: 08 August 2019