GIOVANNI MAURIZIO CARRELLO as liquidator of WEST AUSTRALIAN SHOTCRETE PTY LTD (IN LIQUIDATION) -v- AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION [2025] WASC 285 (24 July 2025)

1. The Company has four shareholders: SDWOODS Pty Ltd (who holds 90 of the 180 shares on issue), Nosred Pty Ltd (Nosred) (who holds 30 shares), Fairmax Holdings Pty Ltd (who holds 30 shares), and BECM (who holds the final 30 issued shares).
2. At the time of the plaintiff's appointment, there were three directors of the Company representing three of the shareholders.[2]
3. After his appointment, the plaintiff received a Report on Company Activities and Property (ROCAP) from each of the directors. Various allegations were made in each of the ROCAPs regarding the amount of money that each of the shareholders owed or were owed by the Company.[3]
4. Given the various claims that were made, the plaintiff believed that a settlement would incur the least amount of costs and take the least amount of time to finalise the winding up of the Company.[4]
5. The deed of settlement, which, as I have said already, has been negotiated over the last 12 months, has now been executed by all relevant parties (Deed).[5] Under the terms of the Deed, third‑party creditors will be paid in full, with the remaining funds to be distributed to the shareholders in the proportion equivalent to their shareholding.

1. An order is sought under s 601AH(2) of the Corporations Act 2001 (Cth) (Act). If this order is made, the plaintiff also seeks an order pursuant to s 601AH(3)(c) of the Act to validate BECM's execution of the Deed.
2. In considering an application under s 601AH(2) of the Act, the court is required to consider first, whether the plaintiff is a 'person aggrieved' by the deregistration of the company, and second, whether it is 'just' that the registration of the company be reinstated.
3. The term 'person aggrieved' is not expressly defined in the Act and should not be construed narrowly. In determining whether a plaintiff is a person aggrieved, the court must consider whether the plaintiff has shown that deregistration has deprived them of something, injured or damaged them in a legal sense, or that they became entitled in a legal sense to regard the deregistration as the cause of dissatisfaction.
4. Importantly in this case, it is important to stress that there is no temporal limitation in the term 'person aggrieved' - that is, it is only necessary that there is a causal link between the grievance and the deregistration of the company, and a person can become aggrieved as a result of events which occur after the time of the deregistration.[6]
5. In considering whether it is 'just' to order the reinstatement of the company, the court's discretion is wide. The court is obliged to take into account all relevant circumstances.[7]
6. On the evidence before me, I am satisfied that the application has been served on ASIC. ASIC does not oppose the application and gave notice that it did not intend to appear at the hearing today.[8] I am also satisfied that the sole director of BECM who will resume office if the company is reinstated has been given notice of the hearing today but has not sought to be heard on the application.
7. The plaintiff says that he is a person aggrieved by the deregistration of BECM primarily because of what will occur if orders are not made for its reinstatement. In that case, he will not receive the remuneration that has been agreed and will incur further costs and delays in having to obtain ASIC's consent to the terms of the Deed (the costs of which he is unlikely to be able to recover). It is also possible that the settlement could fall over, which would mean the plaintiff would continue as liquidator of the Company on terms, which means it is unlikely he would recover any additional costs.
8. Given these matters, I accept that the plaintiff is a person who was aggrieved by the deregistration of BECM. If the company is reinstated, I accept that good use can be made of it through the finalisation of the deed which contemplates a payment being made to BECM, and also the completion of the winding up of the Company. In these circumstances, I accept that it would be just to order that ASIC reinstate BECM's registration.

Should the court validate BECM's execution of the Deed?

1. It is accepted that the court has a broad power under s 601AH(3)(c) to validate anything that has been done between the deregistration and the date of its reinstatement. In exercising its discretion under this subsection, the court considers what orders should be made to do justice to all persons who are affected by the making of the court's orders.[9]
2. In this case, I consider that it is in the interests of all creditors and members of the Company, as well as the plaintiff, to make orders to validate BECM's execution of the Deed. Unless these orders are made, there will be a question as to whether all parties who have signed the Deed remain bound by it. In my view, this will impact not only the plaintiff and BECM, but also all of the Company's members.

Should the court approve the compromises of debt contained in the Deed?

1. A liquidator is granted broad powers under s 477 of the Act, and s 477(2A) and s 477(2B) are a fetter on this broad power. Once these provisions are enlivened, as they are in this case, a liquidator cannot enter into a compromise without the approval of the court, the committee of inspection, or a resolution of creditors.[10]
2. Although s 477(2A) and s 477(2B) deal with different aspects of a liquidator's power, similar considerations apply under each provision. The purpose of these statutory provisions is to ensure that there is oversight of the liquidator's actions.[11]
3. In considering whether to grant the approval sought, the usual approach taken by the court is to:[12]

[pay] regard to the commercial judgment of the liquidator. That is not to say that it rubber stamps whatever is put forward by the liquidator but the court is necessarily confined in attempting to second guess the liquidator in the exercise of his powers, and generally will not interfere unless there can be seen to be some lack of good faith, some error in law or principle, or real and substantial grounds for doubting the prudence of the liquidator's conduct. (citations omitted)

1. In controlling the liquidator's exercise of the power to enter into a compromise, the court looks to the interests of creditors and asks whether the compromise is in their interests.[13] Where the major creditors have had an opportunity to consider the proposed compromise and do not oppose it or support it, this will be a highly influential factor. This is because creditors, if properly informed, are in the best position to judge what is in their own commercial interests.[14]
2. Approval for entry into any settlement of compromise should normally be obtained prior to entry into the deed or agreement. However, there is no doubt that the court has power to give approval that operates from the date of entry into the agreement.[15]
3. In this case, for the following reasons, I consider it is appropriate to approve the compromises of debt contained in the Deed.
4. First, the compromises of debt of the shareholders and their related parties, as reflected in the Deed, will provide certainty, avoid further legal costs being incurred, and allow the winding up of the Company to occur significantly sooner than would otherwise be the case if proceedings were required to be commenced and prosecuted.
5. Second, the plaintiff has explained the rationale for the proposed settlement, set out the considerations he took into account, and provided the reasons for his decision to cause the company to enter into the Deed.
6. Third, compromising the Company's debts and entering into the Deed was both reasonable and in the interests of all relevant parties. Whilst approval was not sought prior to entry into the Deed, the plaintiff has explained the reason for this, which I accept. In any event, I note that the Deed is conditional on approval from the court being obtained.[16]

Should orders to approve the proposed distribution be made?

1. On a court ordered winding up, s 485 of the Act requires the court to deal with the claims of creditors and distribution of property. Section 488(1) of the Act and r 7.10 of the Supreme Court (Corporations) (WA) Rules 2004 (WA) (Corporations Rules), provide a general delegation to liquidators of certain powers of the court in a court ordered winding up, including adjusting the rights of contributories amongst themselves and the distribution of any surplus.[17]
2. This general delegation is limited by s 488(2) of the Act, which requires a liquidator to obtain special leave of the court to distribute a surplus.
3. In this case, it is proposed that a distribution be made to BECM from the surplus of the Company. For this reason, the plaintiff seeks special leave pursuant to s 488(2) of the Act to approve the distribution to be made to BECM in accordance with the distribution statement annexed to the plaintiff's affidavit.[18]
4. There are two purposes in requiring special leave to be obtained: first, to ensure that there is a genuine surplus of assets in that the creditors' claims have been properly recognised and met in full, and second, to ensure that the relativities among the contributories have been observed.[19] The court's role on this application is to determine whether the requirements for distribution of the surplus have been satisfied and to consider all relevant matters between the contributories and those entitled to the surplus.[20]
5. In this case, on the evidence before me, I am satisfied that the plaintiff has complied with r 7.9 of the Corporations Rules by including in his affidavit a statement as to how the surplus is to be distributed, as well as by giving notice of the application by way of an advertisement.
6. For the following reasons, I am satisfied it is appropriate for the court to give special leave under s 488(2) of the Act.
7. First, I am satisfied from the evidence before me that the plaintiff has taken appropriate steps to identify the assets and creditors of the Company. The plaintiff has advertised for creditors and notified of his intention to pay a dividend. Under the terms of the Deed, which I have just approved, all third‑party creditors of the Company will be paid in full.
8. Second, after the agreed remuneration of the plaintiff and the costs of the liquidation are paid, there will be assets available which, in my view, can properly be regarded as a genuine surplus of assets available for distribution.
9. Third, the proposed distribution provides that each of the contributories of the Company will be treated equally relative to their shareholding.
10. Fourth, I am satisfied that notice of this application has been given to ASIC, as well as the Company's shareholders, and that it has been advertised. No one has sought to be heard on the application or provided any objection as to the orders sought.

1. For these reasons, I consider it appropriate to make orders broadly in terms of the plaintiff's originating process.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Nosred Pty Ltd v West Australian Shotcrete Pty Ltd [2023] WASC 442.

[2] Affidavit of Giovanni Maurizio Carrello filed 29 May 2025 [7].

[3] Affidavit of Giovanni Maurizio Carrello filed 29 May 2025 [12], [17] - [19], 'JC-11'.

[4] Affidavit of Giovanni Maurizio Carrello filed 29 May 2025 [19].

[5] Affidavit of Giovanni Maurizio Carrello filed 29 May 2025 [22], 'JC13'.

[6] Jit Sun Investments Pte Ltd v Australian Securities and Investments Commission [2021] WASC 235 [6] ‑ [7] and the authorities cited.

[7] See ACN 009 009 072 (in liquidation) v Australian Securities & Investments Commission [2022] WASC 221 [47]; Jit Sun Investments Pte Ltd v Australian Securities and Investments Commission [8] and the authorities cited.

[8] Affidavit of Nerida Jane Smith filed 3 July 2025, 'NS5'.

[9] Pecta Pty Ltd v ASC (1993) 10 ACSR 188.

[10] Elderslie Finance Corp Ltd v Newpage Pty Ltd (No 6) [2007] FCA 1030; (2007) 160 FCR 423 [26].

[11] Re HIH Insurance Ltd [2004] NSWSC 5 [15].

[12] Re Spedley Securities Ltd (in liq) (1992) 9 ACSR 83, 85 (Giles J); cited with approval in numerous authorities including in Re McDermott and Potts [2019] VSCA 23 [72].

[13] Re Spedley Securities Ltd (85); Re McDermott and Potts [69].

[15] Re Bell Group Ltd (in liq); Ex parte Woodings [2013] WASC 409 [34] and the authorities cited.

[17] Corporations Act 2001 (Cth) s 488(1)(c).

[18] Second affidavit of Giovanni Maurizio Carrello filed 18 June 2025, 'JC16'.

[19] CGU Workers Compensation (NSW) Ltd v Ascom Service Automation (Australia) Pty Ltd [2005] NSWSC 747 [4], cited in Re Maybach Consulting Pty Ltd (in liq); Ex parte Bredenkamp [2023] WASC 179 [15].

[20] Re Cameron Lane Pty Ltd (In Liquidation) [2024] VSC 202.