Deputy Commissioner of Taxation v Statewide Contracting Qld Pty Ltd

REASONS FOR JUDGMENT 1 On 28 April 2015, Dowsett J made orders that the defendant ("Statewide") be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth) (the "Act"). His Honour also ordered that Blair Alexander Pleash and Anne Marie Barley, official liquidators, be appointed as liquidators of the company and that the plaintiff's costs be fixed in a particular sum and reimbursed in accordance with s 466(2) of the Act: Deputy Commissioner of Taxation v Statewide Contracting Qld Pty Ltd [2015] FCA 636. 2 In support of the application for the winding-up order and the appointment of liquidators, the representative of the Deputy Commissioner of Taxation relied upon the material recited in the submissions put on before the primary Judge. That material included the consent of an official liquidator, Mr Terrence John Rose, dated 24 November 2014 and filed on 27 November 2014. 3 In the course of the hearing before the primary Judge on 28 April 2015 argument took place about whether a winding-up order ought to be made or whether the application should be adjourned pending a meeting of creditors. In the result, the primary Judge was satisfied that a winding-up order ought to be made. 4 In the course of the argument a question arose about whether a consent to act as liquidator had been obtained and filed. In the course of that discussion the representative of the Deputy Commissioner advised the Court that the plaintiff had no difficulty with the administrators being appointed liquidators (rather than Mr Rose). Mr Pleash and Ms Barley had been appointed as voluntary administrators of Statewide on 16 March 2015. The solicitor acting for the company advised the Court that the relevant consents to act as liquidator were attached to Mr Pleash's affidavit and had been filed. The difficulty that has now emerged is that no consent had been obtained from Ms Anne Marie Barley to act as liquidator of the company. In order to address the implications of that circumstance, the proceeding was relisted before me for further consideration. 5 The application for the winding-up order was made under s 459P of the Act. Section 459A of the Act confers power on the Court to order that an insolvent company be wound-up in insolvency. On the hearing of the application, the Court may make any order that it thinks fit: s 467(1). 6 On a winding-up order being made, the Court may appoint an official liquidator to be a liquidator of the company: s 472(1). 7 An application under Pt 5.4 of the Act, relevantly, must not be dismissed merely because of a defect or irregularity in connection with the application: s 467A(a). Section 473(9) of the Act provides that, subject to the Act, the acts of a liquidator are valid notwithstanding any defects that may afterwards be discovered in his or her appointment or qualification. 8 Section 532(9) provides that a person must not be appointed as liquidator of a company unless the person has, before his or her appointment, consented in writing to act as liquidator of the company. For the purposes of the Federal Court (Corporations) Rules 2000 (the "Corporations Rules"), the consent of an official liquidator to act as liquidator of a company must be in accordance with Form 8: r 5.5(2). Rule 5.5(3) provides that in an application for an order that a company be wound-up, the plaintiff must, before the hearing of the application, file the consent required by r 5.5(2) and serve a copy of the consent on the company at least one day before the hearing: r 5.5(3). 9 The representative for the Deputy Commissioner of Taxation concedes this morning that she failed to identify that a consent had not been obtained from Ms Barley. The solicitor for the company who assumed the conduct of the matter the day before the hearing before the primary Judge also accepts that he failed to identify that no consent had been obtained from Ms Barley. In fact, the position is that there was no proposal that Ms Barley act as liquidator and thus she was not consenting to act as liquidator. Ms Barley was in the process of obtaining accreditation as an official liquidator, as at 28 April 2015. The representative for the Deputy Commissioner of Taxation and the solicitor for the company both concede that they simply made a mistaken assumption that both administrators were official liquidators who had consented to act as liquidators of the company. 10 The Commissioner seeks an order discharging the order appointing Mr Pleash and Ms Barley as liquidators and in substitution an order appointing Mr Pleash as liquidator. That order is sought in reliance upon r 39.05 of the Federal Court Rules 2011 which provides, relevantly, that the Court may vary or set aside a judgment or order after it has been entered if it does not reflect the intention of the court; or the party in whose favour it was made consents; or there is a clerical mistake in a judgment or order; or there is an error arising in a judgment or order from an accidental slip or omission: see r 39.05(e), (f), (g) and (h). 11 In this case, there is no suggestion that the order made by the primary Judge does not reflect the order sought by the parties. The Court made the Order it was urged to make. Nor is there any clerical mistake on the part of the primary Judge in making the Order, as the Court made the Order it was urged to make. Nor, prima facie, is there an error arising in the Order from an accidental slip or omission as the terms of the Order reflect precisely the Order the Court was asked to make. 12 The circumstance that the Court was urged to make (and did so make) an order appointing a person as liquidator in circumstances where that person was prohibited from acting as liquidator of the company, by reason of s 532(9) of the Act, is a serious matter. A range of consequences flow from appointing a person as a liquidator of a company and some of those consequences are to be found in ss 474, 475, 476 and 477 of the Act. The Court is advised this morning that Ms Barley has not undertaken any step in the purported discharge of functions as liquidator of the company. 13 All steps in the insolvent administration have been undertaken by Mr Pleash, as liquidator. 14 I am satisfied that the Order made by the primary Judge reflects error in the Order arising out of an accidental slip or omission on the part of the representatives of the parties. In Symes v Commonwealth (1987) 89 FLR 356, Gallop J in considering the scope and operation of the "slip rule" said this at 357: It now seems to be settled law that the application of the slip rule is not confined to giving effect to the judge's intention at the time when his judgment or order was made. It extends also to the intention which the court would have had but for the failure by reason of which there was an accidental slip or omission. The slip or omission may have been made by the party applying under the rule or, of course, by his counsel or solicitor: Arnett v Holloway [1960] VR 22. 15 In Construction, Forestry, Mining and Energy Union v Mammoet Australia Pty Ltd (No 2) (2012) 209 FCR 123, Gilmour J at [10] considered that the Court may invoke r 39.05(e) (that is, the judgment or order does not reflect the intention of the Court) in circumstances where the order does not reflect the intention that the Court would have had "but for the failure by reason of which there was an accidental slip or omission" on the part of the representatives. 16 The true intention of the Court is plain enough. The primary Judge was intending to make an order, appointing as liquidator of the company, the person or persons (licensed official liquidators) who had consented to act as the liquidator or liquidators of the company and on whose behalf consents to act had been filed in accordance with the Corporations Rules. Due to the failure on the part of the representatives for the parties to properly recognise the true state of the consent or consents to act, there was an accidental slip or omission by the parties which led to an order being made which would not have been made had the accidental omission not occurred. 17 Thus, r 39.05(e) is properly engaged. 18 I am also satisfied that the failure to obtain and file a consent from Ms Barley does not give raise to a failure in the conferral of jurisdiction upon the Court in the proceedings: Re Macks; Ex parte Saint (2000) 204 CLR 158 at [191] per Gummow J; Grant v John Grant & Sons Pty Ltd (1950) 82 CLR 1 at 52-53, per Kitto J. 19 I propose to vary the Orders of the primary Judge such that from 28 April 2015, Order 2 of the Orders of the primary Judge shall read: "Blair Alexander Pleash, official liquidator, be appointed as liquidator of the company". . I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.