In the matter of Fluid Form Movement Pty Limited and other companies [2013] NSWSC 2007
[2013] NSWSC 2007
At a glance
Source factsCourt
Supreme Court of NSW
Decision date
2013-12-17
Before
Brereton J
Source
Original judgment source is linked above.
Judgment (2 paragraphs)
Judgment - EX TEMPORE 1HIS HONOUR: By originating process leave to file which is sought today, the first plaintiff Guy Anthony Baxendale seeks orders under various provisions of the (Cth) Corporations Act 2001 effecting his removal and replacement by the second and third plaintiffs or the fourth and fifth plaintiffs respectively, as official liquidator, voluntary liquidator and deed administrator of a number of companies referred to in the originating process. 2Mr Baxendale is an official liquidator and a registered liquidator. He is the sole director of Baxendale & Associates Pty Ltd. He is currently the appointed administrator, under one of the guises of official liquidator, voluntary liquidator or deed administrator, of eleven corporations referred to in the application. 3Due to a requirement to undergo serious and major surgery, he is unlikely to be able to do any work in connection with these administrations for a number of months. His firm does not have others who could act in his place. In those circumstances, he is of the view that another liquidator or deed administrator, as the case may be, ought to be appointed to finalise each of the administrations. This application is made for that purpose. 4In respect of the company Fluid Form Movement Pty Ltd listed in schedule 1 to the originating process, Mr Baxendale is the court appointed liquidator. Section 473 of the Corporations Act provides, by subsection (1), that a liquidator appointed by the court may resign or, on cause being shown, be removed by the court; and, by subsection (7) that a vacancy in the office of liquidator appointed by the court must be filled by the court. 5The wish of a liquidator to resign for reasonable cause in order to enable a replacement liquidator to be appointed is, even though the liquidator has not formally resigned, sufficient cause for a removal under s 473(1). 6The court orders that: (1)Pursuant to Corporations Act s 473(1) Guy Anthony Baxendale be removed as liquidator of Fluid Form Movement Pty Ltd. (2)Pursuant to Corporations Act s 473(7) Stephen Wesley Hathway and Thomas John Joachim Atkinson, of Level 7, 151 Castlereagh Street, Sydney, be appointed jointly as official liquidators of Fluid Form Movement Pty Ltd. 7Mr Baxendale is the liquidator pursuant to a members' voluntary winding up of Australia Total Logistics Pty Ltd, and pursuant to creditors' voluntary windings up of Golden Personnel Solutions, GRC Corp Pty Ltd, KTDH Pty Ltd, Direct Rumtson Estate Pty Ltd, Stone & Design Company Pty Ltd and UCN Pty Ltd. Corporations Act, s 503, provides that the court may on cause shown remove a liquidator and appoint another liquidator. 8The court orders that: (3)Pursuant to Corporations Act, s 503, Guy Anthony Baxendale be removed as liquidator of Australia Total Logistics Pty Ltd, Golden Personnel Solutions Pty Ltd, GRC Corp Pty Ltd, KTDH Pty Ltd, Direct Rumtson Estate Pty Ltd, Stone & Design Company Pty Ltd and UCN Pty Ltd, and Stephen Wesley Hathway and Thomas John Joachim Atkinson of Level 7, Castlereagh Street, Sydney, be appointed jointly as liquidators of the said companies. 9Mr Baxendale is also the liquidator pursuant to a creditors' winding up of Strathfield Tax Pty Ltd and Wharf Restaurant @ Pier 2 Pty Ltd. (4)Pursuant to Corporations Act, s 503, Guy Anthony Baxendale be removed as liquidator of Strathfield Tax Pty Ltd and Wharf Restaurant @ Pier 2 Pty Ltd, and Alan Hayes and Christian Sprowles of 166 King Street, Sydney, be appointed jointly as liquidators of each of the said companies. 10Mr Baxendale is the administrator of a deed of company arrangement in respect of Plaza West Pty Ltd. Corporations Act, s 447E(1), provides that where the court is satisfied that the administrator of a deed of company arrangement has managed or is managing the company's business, property or affairs in a way that is prejudicial to the interests of the creditors or members or has done an act or made an omission (or proposes to do) that would be prejudicial to such interests, the court may make such order as it thinks fit. It is not suggested that the ground in that section is established, and it is not invoked. Subsection (2) provides that where the court is satisfied that a deed of company arrangement has not yet terminated but there is a vacancy in the office of the administrator or no administrator is acting, the court may make such order as it thinks just. Subsection (3) provides that such an order may be made only on the application of ASIC or a creditor or a member. In my view, there is presently no vacancy in the office of administrator, as Mr Baxendale has not yet resigned, although he has expressed a wish to be replaced; and it cannot be said that no administrator of the deed is acting, because he is in office as administrator. In any event, the application is not made by ASIC or a creditor or a member. That section is not engaged. 11Section 449B provides that on the application of ASIC or a creditor, liquidator or provisional liquidator of a company, the court may remove from office the administrator of a deed of company arrangement and appoint someone else as administrator of the deed. The present application is not made ASIC or a creditor, liquidator or provisional liquidator. Accordingly, that section is not engaged. 12Section 449D provides that where the administrator of a deed company arrangement dies, becomes prohibited from acting or resigns, the court may appoint someone else as administrator. Subsection (2) provides that where a deed has not terminated but for some reason no administrator of the deed is acting, the court may appoint a person as administrator. By subsection (3), in either case an appointment may be made on the application of ASIC or of an officer, member or creditor of the company. In this case - because the definition of officer would include a person acting as deed administrator - it is probable that there is no difficulty with standing. However, none of the grounds referred to in subsections (1) or (2) are established. 13Accordingly, the Act does not appear to provide, at least expressly or directly, for the removal and appointment of the administration a deed of company arrangement in the present circumstances. The difficulty could easily have been avoided had Mr Baxendale resigned by notice in writing, in which case s 449D would have been invoked; and that is the preferable means of proceeding in such a case. However, in a number of cases concerning the replacement of deed administrators where difficulties, similar though not identical to the present, have arisen, the court has resorted to s 447A(1), which provides that the court may make such orders as it thinks appropriate about how Part 5.3A is to operate in relation to a particular company, to confer a power to remove and/or appoint a replacement deed administrator: see Re Free [2010] NSWSC 1079, [17] and In the matter of Signature Pacific Pty Ltd [2010] NSWSC 1160, [11]-[15]. Those cases support the view that s 447A may be resorted to to empower the court to remove and replace the deed administrator in the present circumstances. 14The court further orders that: (5)Pursuant to Corporations Act s 447A, Part 5.3A of the Act is to operate in relation to the Plaza West Pty Ltd (subject to deed of company arrangement) (in this order called "the company") as if it empowers the court on the application of the first plaintiff being the current deed administrator to remove the plaintiff from office as administrator of the deed of company arrangement to which the company is subject and to appoint someone else as administrator of the deed. (6)Guy Anthony Baxendale be removed as deed administrator of Plaza West Pty Ltd, and Stephen Wesley Hathway and Thomas John Joachim Atkinson of Level 7, 151 Castlereagh Street, Sydney, be appointed jointly as deed administrators of the said company. 15The court further orders that: (7)Anything required or authorised by the Corporations Act to be done by Stephen Wesley Hathway and Thomas John Joachim Atkinson as liquidators of the companies referred to in these orders may be done by either of them. (8)Anything required or authorised by the Corporations Act to be done by Alan Hayes and Christian Sprowles as liquidators of the companies referred to in the preceding orders may be done by either of them. (9)The plaintiffs have liberty to apply on 48 hours' notice by arrangement with my associate. (10)One-eleventh of the costs of this application be costs in the winding up or administration of each of the companies referred to as the case may be. 16Consents have been tendered of each of the proposed replacement liquidators and administrators; that of Mr Hayes is presently in facsimile form, however, I am content to act on the facsimile consent. It is correct that there has been no opportunity to obtain the views of the creditors in this respect. While, if the creditors had contrary views, that would be a relevant matter to take into account, it is not apparent that in this case any creditor would wish to oppose the replacement of an administrator who is effectively incapacitated. In the Signature Pacific case, it was observed that if any creditor took issue with the appointment of the replacement appointee, it would be open to that creditor to apply under s 449B for an order removing the replacement and appointing someone else to that office. As there is at least a reasonable prospect that no creditor will take issue with the appointment of the replacement administrators, the course taken by the first plaintiff has the advantage of relieving others of the task of doing so. 17I direct that the plaintiffs lodge with my associate a formal minute of order for signature and sealing.