HIS HONOUR: On 7 July 2011, Mr Schon Condon (the Liquidator) was appointed liquidator of Global Alliance Pty Ltd (the Company). The application to wind up the Company was filed by the Owners of Strata Plan 42936, the Whelan Property Group Pty Ltd.
The Company was incorporated on 8 March 2002 and operated as an investment holding company. Following his appointment, the Liquidator took steps to secure the Company's assets. Since it did not have any trading business, there was no requirement for the Liquidator to deal with matters pertaining to ceasing to trade.
By notice dated 9 December 2011, which was accompanied by a report to the creditors, the Liquidator convened a meeting of creditors on 22 December 2011 to consider the progress of the liquidation. On 16 March 2016 the Liquidator provided a further report to creditors. In the intervening period he had realised one of the Company's properties and applied the proceeds in satisfaction of a secured debt owing to the Commonwealth Bank of Australia. The three remaining properties of the Company were the subject of an auction sale process initiated by the Liquidator, which was scheduled to be completed by 31 March 2016. In his report of 16 March 2016, the Liquidator said that he expected to be able to pay all of the creditor's claims in full, and that any surplus funds would be distributed to the Company's sole shareholder.
The Liquidator sent a third report to creditors on 28 March 2018, in which he indicated that he had realised net sale proceeds of some $394,062 from the sale of the Company's remaining three properties. The report indicated that all known creditors had been paid in full, and that there would be a surplus available for distribution to the Company's sole shareholder. The report to creditors indicated that the Liquidator sought approval for his remuneration for the work performed and to be performed to finalise the liquidation.
By interlocutory process filed on 12 December 2019, the Liquidator now seeks orders under s 480(d) of the Corporations Act 2001 (Cth) (the Corporations Act) that he be released as official liquidator of the Company, and that the Company be deregistered by the Australian Securities and Investments Commission (ASIC). The Liquidator also seeks special leave, pursuant to s 488(2) of the Corporations Act, to distribute the surplus assets of the Company, amounting to some $53,598.31, to the sole shareholder of the Company, Global Custodian Corporation Pty Ltd (the Holding Company).
Section 480 of the Corporations Act relevantly provides that, where the liquidator of a company has realised all the property of the company, has distributed a final dividend to the creditors, adjusted the rights of the contributories amongst themselves, and made a final return to contributories, the liquidator may apply to the Court for an order that he be released and that ASIC deregister the company.
Section 488(2) of the Corporations Act relevantly provides that, despite anything in the rules or regulations made for the purposes of s 488(1), the Liquidator may distribute a surplus only with the Court's special leave. Section s 488(1) authorises the making of rules or regulations that make provision for enabling certain powers and duties of the Court to be exercised or performed by the liquidator as an officer of the Court and subject to the control of the Court.
Rule 7.5 of the Supreme Court (Corporations) Rules 1999 applies to an application by the liquidator of a company for an order that the liquidator be released, or for an order that the liquidator be released and that ASIC deregister the company. Rule 7.5(2) provides that the interlocutory process seeking the order must include certain notices and statements. Thus, r 7.5(3) provides that the supporting affidavit must include details of the matters set out in paragraphs (a) to (m) of r 7.5(3). Rule 7.5(4) also provides that the liquidator must include in his supporting affidavit certain statements set out in that rule. I am satisfied that the Liquidator has complied with the prerequisites of r 7.5.
I am also satisfied that all necessary notifications have been given to all interested persons, being the admitted creditors and the Holding Company as well as ASIC. I have evidence before me that no creditor has objected to the release of the Liquidator or raised concerns regarding the performance of the Liquidator's duties. The Holding Company also has raised no concern. In the circumstances I am satisfied that it is appropriate to make an order under s 480 of the Corporations Act.
The interlocutory process originally sought an order that the surplus be paid to ASIC since, at the time of the filing of the interlocutory process, the Holding Company had been deregistered. The interlocutory process sought, in the alternative, special leave under s 488(2) of the Corporations Act for the surplus to be paid to the Holding Company if the Holding Company had been reinstated by the date of the hearing. By letter dated 6 January 2020, addressed to Ms Jenny Chenn, one of the directors of the Holding Company, ASIC stated that the Holding Company had been reinstated by ASIC on 6 January 2020 under s 601AH of the Corporations Act. Section 601AH(1) relevantly provides that the ASIC may reinstate the registration of the Company if it is satisfied that the Company should not have been deregistered. The circumstances of the deregistration of the Holding Company are not before me, but it is clear that ASIC has exercised the power conferred by s 601AH and the Holding Company is now a legal entity.
The requirement that special leave be obtained under s 488 of the Corporations Act is to ensure that there is in reality a surplus and that all creditor's claims have been recognised and met in full. The evidence before me satisfies me that the only creditors of the Company have been paid in full, and that the creditors have raised no objection to the relief sought in the interlocutory process. The Liquidator paid a first and final dividend on 16 October 2017 of 100 cents in the dollar to all unsecured creditors, the total of whose debts was $22,051.48. The secured creditor of the company, Whelan Property Group Pty Ltd, was also paid out in full. All issued shares are fully paid so there is no question of any call on contributories.
The evidence indicates that the Liquidator proposes to distribute the surplus, after deduction of the costs of the application, to the Holding Company in accordance with direction given by Ms Joanne Chenn who has been duly authorised by the directors of the Holding Company. In the circumstances it is appropriate to make an order under s 488 of the Corporations Act.
The Liquidator also seeks dispensation of the requirements of reg 5.6.71 of the Corporations Regulations 2001 (Cth), which require an order authorising a liquidator to distribute a surplus to annex a schedule in accordance with Form 551. Where the identity of the contributories is clear, no useful purpose would be served by annexing such a schedule. As I have said, there is only one shareholder of the Company, namely, the Holding Company. The regulation is clearly directed to cases where there are numerous contributories and there may be matters for adjustment between them. That is not the case here.
Finally, the Liquidator seeks dispensation from complying with Supreme Court (Corporations) Rules 1999 (NSW), rr 7.9(2) and 7.9(3) which require that an applicant must, 14 days before the date fixed for hearing, advertise in accordance with a specified form. There is no need for advertisement where it is plain that all debts of all creditors have been discharged and that the contributories have been given notice of the application. I have clear evidence before me that all creditors and the Holding Company were served with the interlocutory process. Again, as I have said, no objection has been received from any unsecured creditor. In the circumstances, it is appropriate that rr 7.9(2) and 7.9(3) be dispensed with.
The Liquidator seeks an order that his costs and expenses be paid out of the assets of the Company. That is appropriate in the circumstances as I have indicated above.
Accordingly, I propose to make orders to give effect to those conclusions.
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Decision last updated: 21 February 2020