MERVYN JONATHAN KITAY AS LIQUIDATOR OF SHIELDS MEDIA PTY LTD (IN LIQUIDATION) (ACN 009 252 153) v SHIELDS MEDIA PTY LTD

REASONS FOR JUDGMENT 1 This is an application which has been made by Mr Mervyn Jonathan Kitay as liquidator of Shields Media Pty Ltd (in liquidation) (the company) for orders to be made and directions to be given under s 480 and s 542 of the Corporations Act 2001 (Cth) respectively. 2 Mr Kitay has applied for an order under s 480(d) of the Corporations Act that he be released as liquidator and that the company be deregistered by the Australian Securities and Investments Commission (ASIC). 3 Mr Kitay also seeks a direction under s 542(3) of the Corporations Act that the books of the company and the applicant that are relevant to the affairs of the company, be destroyed six months after the deregistration of the company. 4 Section 480 of the Corporations Act provides: When the liquidator: (a) has realised all the property of the company or so much of that property as can in his or her opinion be realised without needlessly protracting the winding up, and has distributed a final dividend (if any) to the creditors and adjusted the rights of the contributories among themselves and made a final return (if any) to the contributories; or (b) has resigned or has been removed from office; he or she may apply to the Court: (c) for an order that he or she be released; or (d) for an order that he or she be released and that ASIC deregister the company. 5 Subsections 542(2) and 542(3) of the Corporations Act provide as follows: (2) If a company has been wound up, the liquidator must retain the books referred to in subsection (1) for a period of 5 years from the date of deregistration of the company and, subject to section 262A of the Income Tax Assessment Act 1936, may, at the end of that period, destroy them. (3) Despite subsection (2) but subject to subsections (4), when a company has been wound up, the books referred to in subsection (1) may be destroyed within a period of 5 years after the deregistration of the company: (a) in the case of a winding up by the Court - in accordance with the directions of the Court given pursuant to an application of which at least 14 days notice has been given to ASIC; and (b) in the case of a members' voluntary winding up - as the company by resolution directs; and (c) in the case of a creditors' voluntary winding up - as the committee of inspection directs, or, if there is no such committee, as the creditors of the company by resolution direct. 6 I deal, first, with the application made under s 480, and then I will deal later with the application made under s 542. 7 The consequence of the making of an order under s 480 of the Corporations Act is significant for the liquidator because it has the effect of "wiping the slate clean". (See, In the matter of RR Impex Pty Ltd (in liquidation) [2013] NSWSC 1667 at [3].) There are strict requirements which the liquidator must fulfil in relation to the making of this application. They are set out in r 7.5 of the Federal Court (Corporations) Rules 2000 (Cth) (the Corporations Rules). One such requirement is to make and file a supporting affidavit which deals with the matters prescribed at r 7.5(3) and otherwise complies with r 7.5(4) and r 7.5(5). I do not need to set out those provisions here. Suffice to say that Mr Kitay has sworn and filed two affidavits in support of his application, which have satisfactorily addressed each of those specific requirements. Mr Pearson, on behalf of Mr Kitay, relies on these affidavits. I observe that the evidence shows that the priority creditors obtained 100 cents in the dollar and the unsecured creditors obtained about 22 cents in the dollar. 8 In compliance with r 7.5(2) of the Corporations Rules, Mr Kitay has also deposed that he has caused a copy of the interlocutory process to be served upon each of the contributories and creditors, which he has identified as the Australian Taxation Office, C & D Shields Family Trust, Mr and Mrs Shields, a firm of accountants, as well as another organisation referred to as "Northerly". 9 The interlocutory process served on each of those persons and entities included the statement referred to at r 7.5(2)(b) of the Corporations Rules, and a notice informing them of their right to appear at the hearing today to oppose the making of any of the orders and directions sought. Mr Kitay deposed that by the date of his second affidavit, which was 9 July 2014, he had not received any objection to his being released as liquidator from any creditor or contributory. Further, I note that none of the creditors or contributories, nor indeed anyone else, has appeared today to oppose the making of the orders sought under s 480 or the direction sought under s 542 of the Corporations Act. 10 Mr Kitay also deposed that ASIC was, pursuant to r 2.8(3) of the Corporations Rules, served with the interlocutory process, and was notified of today's hearing. The notice stated that should ASIC have any objection to the release of the liquidator or any of the other orders sought by Mr Kitay, it should file such an objection with the Court. Mr Pearson has today handed up to the Court a letter from ASIC addressed to the law firm representing Mr Kitay, stating that ASIC had been served with the application and that it did not oppose the making of the orders that Mr Kitay sought under s 480(d) of the Corporations Act, nor the giving of the proposed direction under s 542(3)(a) of the Corporations Act for the destruction of the books of the company and the applicant that are relevant to the affairs of the company, six months after the date of the deregistration of the company. 11 The letter went on to say that ASIC did not intend to appear at the hearing today. ASIC has not appeared at this hearing. 12 I am satisfied that Mr Kitay has complied with the statutory requirements, and, in the absence of any objection from any interested party and ASIC, I am satisfied that the orders sought under s 480(d) of the Corporations Act should be made. 13 As to the application made under s 542(3) of the Corporations Act, Mr Kitay has applied for a direction that the books of the company and the applicant that are relevant to the affairs of the company, may be destroyed by the applicant six months after deregistration of the company. 14 The Corporations Act gives the Court power to make such a direction notwithstanding s 542(2) which provides that the liquidated company's books must be retained for a period of five years after the deregistration of the company before being destroyed by the liquidator. 15 As to the requirement under s 542(3)(a) of the Corporations Act that ASIC be given 14 days notice of this application, I have already mentioned that ASIC received such notification and that it has said that it has no objection to the making of the direction sought by Mr Kitay. I was not made aware of any circumstance which would preclude the Court making the direction sought by the applicant. Accordingly, I will make the direction. 16 Mr Kitay has also sought an order that the costs of this application be costs in the liquidation. I am content to make that order as well. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.