Pascoe v Ambernap Pty Ltd

REASONS FOR JUDGMENT 1 This is an application for an order pursuant to s 461(1)(a) of the Corporations Act 2001 (Cth) that the defendant company, Ambernap Pty Ltd, be wound up and that Mr Scott Darren Pascoe be appointed as the official liquidator of that company. 2 Critical to the application is the fact that Ambernap is a sole member, sole director company. The sole member and director is Mr Jon McArthur. Mr McArthur was made bankrupt by a sequestration order made in the Federal Magistrates Court on 26 March 2008. Mr Pascoe was appointed as Mr McArthur's trustee in bankruptcy. 3 It appears that the sole asset of Ambernap is shares in a company called Pendarves Estate Pty Limited. Pendarves has been in members' voluntary liquidation since January 2008. The liquidator of that company is Mr Manfred Holzman. Ambernap owns approximately 34 per cent of the issued share capital in Pendarves. 4 On 3 December 2004, Mr Holzman wrote to the solicitors for Mr Pascoe stating that Mr Holzman expected to pay a dividend of approximately $95,000 as soon as Mr Holzman received confirmation of Mr Pascoe's appointment as official liquidator of Ambernap. On 8 December 2008, Ambernap passed a resolution in accordance with s 249B of the Corporations Act 2001 (Cth) that Ambernap be wound up in accordance with s 461(1)(a) of the Act. The resolution was signed as a true record by Mr Pascoe in his capacity as the trustee of the property of Mr McArthur. Mr Pascoe was not registered as the holder of the shares in Ambernap Pty Limited held by Mr McArthur. 5 In those circumstances, two issues arise on the present application. The first is whether it was open to Mr Pascoe to rely upon the provisions of s 1072C of the Act. I have been taken this afternoon to a number of authorities which deal with the effect of that section. The decision of Campbell J in the Official Trustee in Bankruptcy v Buffier (2005) ACSR 839 seems to me plainly to support the applicability of s 1072C to authorise Mr Pascoe to pass the resolution. Other authorities to the same effect include the decision of Sackville J in Prentice v Cummins [2002] FCA 1165 at [7]; the decision of Hasluck J in Nilant v RL & KW Nominees Pty Ltd [2007] WASC 105; and the decision of Heerey J in Rambaldi; in the matter of Weeden, a bankrupt v Weeden [2008] FCA 1597 at [40]. 6 The second issue which arises is whether it is appropriate to appoint Mr Pascoe as the liquidator of Ambernap. In theory, it might be thought that there may be a conflict arising from Mr Pascoe's position as the trustee in bankruptcy of Mr McArthur and his position as the liquidator of Ambernap. However, it seems to me that in the present case, where Ambernap is a sole member, sole director company, there is no real difference between the interests of the bankrupt and the interests of the member of the company. 7 Of course, the interests of creditors need to be considered, and I have been taken to evidence of the somewhat scanty records of Ambernap, which include a balance sheet as at 30 June 2005. The effect of the balance sheet, after adjustment for the fact that the receivables of the company now appear to be a maximum of $97,000 is that the sole asset of the administration will be the dividend from Pendarves in that amount, whereas the liabilities of the company comprising borrowings set forth in the balance sheet are in excess of $3.7 million. 8 It seems to me that, whether or not there is any real conflict of interest, I ought to accept the submission of Mr Baird, who appears for the plaintiff, that the practical and sensible approach in the present case is to appoint Mr Pascoe as the liquidator. This is because, as I have said, the sole asset would appear to be the dividend of approximately $97,000 that will come into the administration, and there is a plain need to avoid incurring duplicated costs and expenses arising from the appointment of a different person as the liquidator of Ambernap. 9 It seems to me, therefore, that I should make an order for the winding up of Ambernap and the appointment of Mr Pascoe as the official liquidator. I propose to make orders and declarations in terms of [1], [2], [4], [5] and [6] of the short minutes of order, which I have signed and dated and placed with the Court papers. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.