MICHAEL JOHN MORRIS SMITH IN HIS CAPACITY AS LIQUIDATOR OF ACTIVELY ZONED PTY LTD (IN LIQ) ACN 129 752 414; DEPUTY COMMISSIONER OF TAXATION v ACTIVELY ZONED PTY LTD

REASONS FOR JUDGMENT 1 This is an application filed on 21 May 2012, under which the applicant in his capacity as liquidator of the defendant seeks, inter alia, an order under s 436B(2) of the Corporations Act 2001 (Cth) that the applicant have leave to appoint himself administrator of the company. The application is supported by an affidavit of Mr Michael John Morris Smith, who is the liquidator and who seeks the order that I have mentioned. Detailed written submissions supporting the application have been filed by the solicitor for the applicant. 2 The authorities which have considered the exercise of the power under s 436B(2) are collected in a decision of Finkelstein J in Re Origin Internet Solutions Pty Limited (in liq) [2004] FCA 382 at [5]. As his Honour said at [6]: Although the court is not unduly constrained in the way it exercises the discretion conferred by s 436B(2) … the most important consideration is to ensure that there is no conflict of duty or interest if the liquidator is appointed as administrator. 3 I am satisfied for the reasons explained in Mr Smith's affidavit that there is no relevant relationship with the company, and accordingly, in the circumstances, there are no grounds to suggest any real potential for any conflict of interest or other considerations of commercial morality which would preclude him from being appointed as administrator of the company. 4 The reason why Mr Smith seeks to be appointed as administrator is that he believes that there is the possibility of the proposal of a deed of company arrangement (DOCA). Mr Smith's investigations indicate that the company is insolvent and that there would not be likely to be any return to creditors if the company continues in liquidation. However, he is of the opinion that the creditors may receive a return if the company enters into a DOCA upon the basis set out in paragraphs 10 and 11 of his affidavit. 5 In these circumstances, it seems to me that the objectives stated in Part 5.3A of the Corporations Act are satisfied and that this is a proper basis for the exercise of the power conferred upon me. 6 The creditors include the Deputy Commissioner of Taxation, who does not oppose the application. Also, I have been informed that ASIC does not oppose the present application. I will therefore make an order in terms of paragraph 1 of the interlocutory application. 7 The matter will be adjourned to 20 July 2012 before the Registrar and I will make orders in terms of paragraphs 1 to 4 of the short minutes of order, which I will sign and date and place with the court file. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.