Condon v Watson

(a) the period within which the first plaintiff, as liquidator removed from the creditors' voluntary liquidations pursuant to Order 2, has to lodge the form prescribed by ss 70-5(3) and 70-6 of Sch 2 of the Act after he has ceased to act as liquidator, be extended to the date he would otherwise have had to lodge that form, had he not ceased to act as liquidator; and

(b) the period within which the liquidator appointed pursuant to Order 2 has to lodge the form prescribed by ss 70-5(3) and 70-6 of Sch 2 to the Act be abridged to the date on which the removed liquidator has to lodge that form pursuant to order 3(a).

1. Leave be granted pursuant to s 532(2) of the Act to the extent that such leave may be required for the appointment of the second plaintiff conformably with Orders 1 and 2.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Delivered ex tempore, Revised from transcript

1. By an amended originating process, Messrs Hosking and Hathway, who are registered liquidators, seek orders under s 473A of the Corporations Act 2001 (the Act) and subss 90-15(3)(b)-(c) of Sch 2 to the Act (Insolvency Practice Schedule (Corporations)) arising from Mr Hosking's decision to cease practising as a liquidator. The application was initially made with respect to thirty-four companies, although the need for orders in relation to all but eight companies has fallen away.
2. Mr Hosking's resignation from the firm known as Helm Advisory is not attended with circumstances of any animosity, and I infer from that, that any cooperation required between the parties is likely to occur. Professional indemnity insurance is in place up to 30 June 2025 and continuing thereafter. ASIC has been served with the originating process and the applicant's affidavits, and does not seek to appear or be heard in relation to the plaintiffs' application.
3. Mr Hosking has been assisted in his appointments, which are the subject of this application, by staff, including Mr Huynh, who will shortly cease to be employed by Helm Advisory. The personnel, other than Mr Huynh, will remain employed by Helm Advisory and will continue to undertake work on the relevant matters.
4. The effect of the orders sought is that the external administration of eight companies which remain the subject of the application will remain with the firm of Helm Advisory.
5. A number of cases have considered the appropriateness of changes to appointments necessitated by the retirement of a partner of an insolvency firm, including Condon v Watson [2009] FCA 11; (2009) 69 ACSR 350 (Lindgren J) (Condon v Watson), Re Free [2010] NSWSC 1079 (Barrett J) (Free), and Re Kukulovski [2015] NSWSC 2040 (Black J) (Kukulovski). Those cases indicate that the interests of creditors and the orderly and cost-effective carrying out of the administrations in question are key factors to be considered. Although some of the changes sought might have been effected through resolutions of creditors, such a course would be "wasteful and inconvenient" (Condon v Watson at [15]), and it is desirable from a cost point of view for them to be effected through a short application to the court (Free at [6]; Kukulovski at [4]). It is usually desirable, where the work in an administration has been carried out within a particular insolvency firm, that any replacement be from that firm to ensure continuity: Condon v Watson at [17]; Free at [6]; Kukulovski at [3] and [7].
6. The making of orders under s 1322(4)(d) to extend time for lodgement of accounts and a statement as to the position of the winding up is appropriate where the administration continues in the same firm and there is likely to be "ongoing attention to the matters relevant to that lodgement": Free at [22]-[27].
7. As in Kukulovski at [11], the applicants do not seek the costs of the application against the companies involved.
8. Applying those principles, it is appropriate to make the orders sought by the plaintiffs.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackman.