Re Glowbind Pty Limited (In Liquidation); Takchi v Parbery [2003] NSWSC 1190 | Case summary

Regulation 5.6.26 then provides: "(1) The chairperson of a meeting has power to admit or reject a proof of debt or claim for the purposes of voting. (2) If the chairperson is in doubt whether a proof of debt or claim should be admitted or rejected, he or she must mark that proof as objected to and allow the creditor to vote, subject to the vote being declared invalid if the objection is sustained. (3) A decision by the chairperson to admit or reject a proof of debt or claim for the purposes of voting may be appealed against to the Court within 14 days after the decision." 4 An understanding of the arguments presented to the court, particularly of those relating to s 536, requires some examination of the history of the matter. Mr Parbery, the liquidator, was appointed on 18 April 2000 following a winding up order made in a contested proceeding in which, by reason of procedural error, the company was precluded from disputing the petitioning creditor's debt. However, when a proof of debt was submitted to the liquidator by the petitioning creditor on 22 June 2000 in the sum of 1.3 million dollars, claimed to be due by contract, the former directors and shareholders of the company insisted that it should be rejected. According to their contention, the petitioning creditor Switz Pty Limited ("Switz") had not performed its contract so as to be entitled to anything. In this situation, it is not surprising that the liquidator obtained advice from the very experienced solicitors whom he had retained, Henry Davis York. They furnished their advice in writing by a letter dated 25 October 2000, which discussed the problems raised by the proof of debt at very considerable length, commencing by referring to the legal proposition, to be found in the joint judgment of Brennan and Dawson JJ in Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332 at 340, that "no liability which is unenforceable against the company by the general law can found a debt admissible to proof in a winding up". To that statement may be added a reference to Westpac Banking Corp v Totterdell (1998) 29 ACSR 448 at 455, per Ipp J. They proceeded to refer to a "reasonable argument" that Switz had not earned its fee of $800,000, a matter as to which they warned "there will be a risk of error involved in determining Switz's proof without seeking to test the opposing versions of events by way of further inquiry or examination". As to the balance of Switz's claim, $500,000, they considered the question whether this was a penalty under the contract, and expressed the view: "[W]e consider that it will be necessary to obtain more detailed evidence of the circumstances surrounding the negotiation and execution of the Consulting Agreement." They then went on to refer to what they thought "a persuasive argument" that significant parts of the agreement were "so poorly drafted as to be void for uncertainty". At the end of fifteen pages of discussion, the advice concluded as follows: "The Consulting Agreement is a poorly drafted document that presents a number of difficulties in determining the obligations and liabilities of the parties to it. Consequently, your task as liquidator in determining whether Glowbind is truly indebted to Switz as alleged in its proof of debt is also fraught with difficulties. … In all the circumstances, we recommend that the advice of counsel experienced in insolvency matters be sought as to whether a view of this complex matter can properly be formed on the available evidence and submissions or whether it is appropriate for you to proceed with an examination before you conclude your determination of Switz's proof of debt." 5 Following discussions with the solicitors and with Mr B Skinner of Counsel, a barrister in good standing and experienced in insolvency matters, the liquidator decided to undertake certain examinations, and these followed on 2, 3 and 4 April 2001. Mr Parbery then obtained Mr Skinner's advice as to whether the proof of debt should be admitted. Counsel's views were sent to him by letter from Henry Davis York dated 18 July 2001, as follows: "As a result of the examinations conducted under the Corporations Law … I have concluded that the deficiencies and ambiguities contained in the Consulting Agreement are such that the Agreement is incapable of performance. … Given my earlier conclusion as to the uncertainty and ambiguity of the Consulting Agreement, it follows that regard should not be had to the Agreement for the purposes of computing the quantum of the proof of debt lodged by Switz. … In my opinion, it would be properly open to the liquidator to consider a proof of debt founded upon the difference between the option price of $1.3 M and the market price of the land at the time of the transaction, namely $2.0 M. Credit would clearly have to be given for the sum of $200,000 paid by Glowbind. … The official liquidator should, in my opinion, advise Switz that he does not accept the proof of debt in its present form and that it is open to Switz to lodge an amended proof." The "thrust" of Mr Skinner's advice, as subsequently summarised by Mr R Weber SC, was "that the consultancy agreement was so uncertain and ambiguous as to be unenforceable". At the same time, as Mr Weber added, the "Liquidator was advised…that Switz may have a claim pursuant to restitutionary principles, either by way of quantum meruit, or otherwise". Mr Weber made it plain, in advising the liquidator further in the matter, that he did not see any reason why the liquidator should not have accepted Mr Skinner's advice. 6 Not surprisingly, the liquidator was perturbed by the difficulty and complexity of the essentially legal problem the proof of debt presented, and his first inclination was to seek judicial directions, but both his solicitors and Mr Skinner, at an early date, and Mr Weber SC later, all advised him that this course was not available. Nevertheless, a key issue raised in the proceeding before me was whether, as the applicants contended, the liquidator was failing in his duty in not referring the question of the value of the debt claimed to the court pursuant to s 554A(2) of the Corporations Act. 7 So advised, the liquidator came to the conclusion in October 2001 that the proof of debt for $1.3 million, as submitted, should be rejected, but that, as counsel had suggested, Switz would be entitled to payment of a lesser sum upon the basis of a quantum meruit if it submitted an appropriate proof of debt. Communication of his view in that respect led to the submission, on 12 December 2001, of a second proof of debt which maintained the original claim, but added alternative claims. The alternative claims were for $1,366,364.00, alleged to be due pursuant to principles of unjust enrichment, or $655,550, alleged to be due upon a quantum meruit. The sum of $655,550 was the total of various items of "estimated costs incurred by the Creditor", which included a sum of $251,550 in respect of certain legal costs, the accuracy of that last figure being initially accepted by the liquidator, although he subsequently came to the conclusion that this sum had no place in the claim; and that question has become the subject of separate proceedings involving Switz. 8 After completing further enquiries, the liquidator issued a written determination in respect of the second proof of debt on 13 March 2002. He rejected the claims other than that based on a quantum meruit, which he accepted after reducing it by the deduction of the sum of $193,000 that had already been paid to Switz. The result was the allowance of a balance of $462,550. 9 It was in about July 2002 that the liquidator became aware of problems in respect of the sum of $251,000, part of the proof he had allowed. Accordingly, he sought further information from Switz. This seems to have prompted the submission of yet a third proof of debt on 16 October 2002, together with a statement of withdrawal of "the earlier Proof of Debt to the extent that it is contrary to or inconsistent with the Further Amended Proof of Debt lodged herewith." The third proof of debt appeared to be aimed at substituting for the quantum meruit claim a somewhat amorphous claim to go behind what purported to be the written agreement of the parties. The liquidator's response, on 5 December 2002, was to give his consent under regulation 5.6.56 of the Corporations Regulations to the withdrawal of the previous proof of debt of 12 December 2001, and to disallow the third proof of debt wholly. 10 Proceedings brought by Switz to challenge the rejection of its proofs of debt pursuant to s 1321 of the Corporations Act have been abandoned and were dismissed. 11 The foregoing account, if somewhat tedious, is an attempt to reduce the very considerable volume of evidence upon the principal issue in this matter to proportions that enable the wood of the applicants' case to be discerned among the trees. I am indebted to both counsel for their assistance in this respect. 12 Although particular or relatively minor complaints were also raised, the theme of the opening of the case on behalf of the applicants was that the liquidator had prolonged the liquidation unnecessarily and rendered the process of consideration of Switz's proof of debt unnecessarily expensive by his failure, at an early stage, to refer the question of its admissibility to the court. It was also said that the liquidator had been inappropriately concerned about the "merits" of Switz's claim to be paid for its work, when he should simply have dealt with the proof of debt as initially presented, and rejected it. There was, of course, a degree of inconsistency between the two complaints, as the latter presupposed a straightforward answer to the proof of debt, while the former asserted the case was so complex that it obviously required to be submitted to the court for solution. It seems to me the liquidator rightly appreciated that a flat rejection of the first proof of debt, on the basis that it had formulated the claim inappropriately, would be likely not merely to fail to accord to Switz its legal rights, but also to embroil the company in even more complex and expensive litigation than seemed already almost inevitable. He was advised that the appropriate course was to conduct examinations; and, subsequently, that the initial proof of debt could be rejected on the basis on which it was formulated, but that nevertheless a substantial sum was probably owing. Having regard to that advice, it seems to me to be difficult to find any ground for regarding the decisions to which he actually came as other than properly open to him. The advice to conduct examinations was in keeping with views expressed by Austin J about this very case in Switz v Glowbind [1999] NSWSC 1296 at [18], where he said that "if there were anything like a full hearing of the defendant's claim with respect to the debt, … there would be further admissible evidence as to the contractual circumstances and that evidence may well shed light on whether the $500,000 should be properly characterised as a penalty or as a genuine pre-estimate of loss". As to the other question raised by the proof of debt, that relating to the claim for $800,000, Austin J said, at [23], "there is obviously an important and large factual issue as to whether substantial performance has occurred". 13 There are some basic problems of construction of the Corporations Act which lie behind the applicants' contentions to the contrary. In the first place, it was strongly argued for the applicants that s 554A was available to enable the liquidator to short circuit his difficulties by going straight to the court. That section commences by providing, in subsection (1), that the section "applies where, in the winding up of a company, the liquidator admits a debt or claim that, as at the relevant date, did not bear a certain value". Subsection (2) then provides: "The liquidator must: (a) make an estimate of the value of the debt or claim as at the relevant date; or (b) refer the question of the value of the debt or claim to the Court." If the liquidator adopts the alternative in subsection (2)(a), subsection (3) gives a right of appeal to the court against his estimate. Subsection (4) provides: "If: (a) the liquidator refers the question of the value of the debt or claim to the Court; or (b) a person appeals to the Court against the liquidator's estimate of the value of the debt or claim; the Court must: (c) make an estimate of the value of the debt or claim as at the relevant date; or (d) determine a method to be applied by the liquidator in working out the value of the debt or claim as at the relevant date." 14 Several things should be said about s 554A. Its provisions only bite after the liquidator has admitted a debt or claim that did not bear a certain value. In this case, the debt or claim, as formulated in the first proof of debt, was never admitted by the liquidator, although he did not ultimately doubt that the creditor was entitled to maintain a different claim for a different amount. And if the claim originally formulated had been admitted by the liquidator, what he would have admitted would have been composed of two claims, each for a liquidated sum, neither of which could have been described as not bearing a certain value. 15 It was suggested the liquidator should have admitted the claim on the basis of an estoppel, or something akin to an estoppel, because it was the petitioning creditor's claim which had been accepted by the court when the winding up order was made. However, it should be pointed out that, in that proceeding, the company was precluded from contesting the debt: Switz Pty Ltd v Glowbind Pty Ltd (2000) 48 NSWLR 661. The proposition that the liquidator was estopped from rejecting the proof of debt was supported by reference to Direct Acceptance Investments Pty Ltd v Blackwell (1995) 17 ACSR 89. It is not entirely clear to me from the report that the question was finally dealt with, but in that case Young J did say (at 92), of an argument that a liquidator was bound by estoppel to accept the petitioning creditor's proof of debt: "I have not found any authority on the point, nor has any been referred to me by counsel. It may well be valid to make a distinction between an estoppel which is binding against the company as a trading entity and an estoppel which is binding as against the fund being administered by a liquidator for the benefit of all the creditors. However, when the point to be decided in the winding up proceedings is that a particular debt exists, and the court so finds and on the basis of that finding the liquidator is appointed, then that is an estoppel which is binding in the liquidation. The liquidator is not at liberty to reject entirely the creditor's proof of debt except in the circumstances that I will now consider. It may be that the liquidator can reject part of the petitioning creditor's proof of debt. Whether this be so or not, the liquidator cannot, however, reject it in its entirety as he has purported to do here, as to do so would be to say that the claimant was not a creditor. There is an operative estoppel binding the liquidator which prevents him denying that the claimant is a creditor." However, in Direct Acceptance v Blackwell, the one question put in issue in the winding up proceeding (the decision in which is reported as Re ME AND ANGUS PTY LTD (1992) 7 ACSR 748) was whether the creditor was in fact a creditor of the company in the sum of $6, 499, 935. That question having been determined adversely to the company, McLelland J ordered it to be wound up. Here, by contrast, as I have already said, the company was precluded from contesting the debt alleged in the notice of demand. It would be extraordinary if the statutory provision having that effect, which was plainly designed to exercise a harsh discipline over corporations dealing with claims against them in a dilatory or evasive manner (see David Grant & Co Pty Limited v Westpac Banking Corporation (1995) 184 CLR 265 at 269-270, 279), were to be given an extended effect capable of depriving all other creditors of the right to a fair distribution of the company's assets towards payment of its debts by the imposition by estoppel of a possibly massive unproved and untestable entitlement in the petitioning creditor. This surprising result could not in fact be justified upon the principle of issue estoppel, which would require the court to find "that precise matter [the creditor's entitlement to the very debt claimed in the proof of debt] has already been necessarily and directly decided by a competent tribunal in resolving rights or obligations between the same parties in the same respective interests or capacities", to use the language of Barwick CJ in Ramsay v Pigram (1968) 118 CLR 271 at 276, discussed in some detail in Effem Foods Pty Limited v Trawl Industries of Australia Pty Limited (1993) 43 FCR 510 at 534 - 536. In the course of this discussion, reference is made to the decision of the House of Lords in New Brunswick Railway Co. v British & French Trust Corporation, Ltd [1939] AC 1 at 38-39, where Lord Wright rejected the application of an issue estoppel to a precise matter which was "not a traversable issue in the previous action". Lord Wright's expression is, of course, directly applicable to the present situation. For in David Grant v Westpac (at 270) it was expressly held that the relevant provisions in respect of winding up proceedings "constitute a legislative scheme for quick resolution of the issue of solvency and the determination of whether the company should be wound up without the interposition of disputes about debts, unless they are raised promptly" [emphasis added]. If issue estoppel cannot bar the liquidator here, neither can res judicata, to which "the identity of what was formerly adjudged with what now falls for determination" is essential: Blair v Curran (1939) 62 CLR 464 at 510, per Starke J. 16 In any case, as I have pointed out, if the liquidator was indeed bound to admit the debt, it would have been a debt "of a certain value", and would thus not have fallen within s 554A. The applicants, of course, at all times contended that the liquidator should not admit any part of the debt. 17 But all this is really irrelevant if the liquidator was reasonably entitled to proceed himself to "make an estimate of the value of the debt or claim as at the relevant date" pursuant to s 554A(2)(a). That is what he was advised by experienced solicitors and counsel to do, and it is what he did. I am not convinced that there is any basis for impugning his actions in this respect. 18 For the applicants, it was also suggested that the liquidator should have availed himself, failing s 554A, of the provisions of s 479(3), pursuant to which a liquidator "may apply to the Court for directions in relation to any particular matter arising under the winding up". However, this section has been the subject of a full examination in Re GB Nathan and Co Pty Ltd (in liq) (1991) 24 NSWLR 674, where McLelland J held (at 679): "The historical antecedents of s479(3), the terms of that subsection and the provisions of s 479 as a whole combine to lead to the conclusion that the only proper subject of a liquidator's application for directions is the manner in which the liquidator should act in carrying out his functions as such, and that the only binding effect of, or arising from, a direction given in pursuance of such an application (other than rendering the liquidator liable to appropriate sanctions if a direction in mandatory or prohibitory form is disobeyed) is that the liquidator, if he has made full and fair disclosure to the court of the material facts, will be protected from liability for any alleged breach of duty as liquidator to a creditor or contributory or to the company in respect of anything done by him in accordance with the direction." That makes it clear that the section ought not to be used for the purpose of deciding the kind of substantive question in respect of a proof of debt which arose in the liquidation of Glowbind Pty Limited. Confirmation of this conclusion is to be found in Re JW Murphy & PC Allen; Re BPTC Ltd (in liq) (1996) 19 ACSR 569 at 570, where McLelland CJ in Eq referred to the "limited effect" of a direction under such a provision as s 479(3), saying: "It is to be emphasised that an application for directions under [such a provision] is an administrative non-adversary proceeding, and a direction given pursuant to [such a section] has no effect on the substantive rights of persons external to the winding up." See also Re Magic Aust Pty Ltd (in liq) (1992) 7 ACSR 742 at 745 - 746, the reasoning in which was adopted by Barrett J in Selim v McGrath [2003] NSWSC 927 at [140] - [141]. 19 Leaving aside the matter of the liquidator's ruling on two proofs of debt submitted for the purposes of voting at a meeting which, if I took, prima facie, an adverse view of the liquidator's conduct, might ground an inquiry under s 536, but was primarily raised as a separate question, a number of other matters were relied on by the applicants. In the context of the proceeding, and in the light of the arguments advanced, these matters appeared to me to be subsidiary to the main theme I have been discussing, the claim that the liquidator's failure to refer the admissibility of Switz's proof of debt to the court at an early stage had unnecessarily prolonged the liquidation and increased its cost. None of them seems to me to call for elaborate discussion. They included a claim that the liquidator's attempts to resolve the dispute were not, merely, ultimately futile, but involved him in functions of mediation which were foreign to his true role as liquidator. I do not accept this complaint, which seems to me to ignore the liquidator's express power under s 477(1)(c) to "make any compromise or arrangement with creditors or persons claiming to be creditors or having or alleging that they have any claim…against the company". Negotiation may be an inevitable concomitant of the exercise of this power. Other decisions criticised related to particular steps taken in the conduct of the liquidation which, even if mistakes were made, did not suggest the occurrence of anything that would call for an inquiry under s 536. 20 That brings me to consider briefly what is the nature of an inquiry under s 536. For present purposes, the striking thing about this section is that it applies where "it appears…that a liquidator has not faithfully performed or is not faithfully performing his or her duties". It also applies where it appears that the liquidator "has not observed or is not observing" some requirement imposed by the court, or by the Act, regulations, or rules, or where "a complaint is made…with respect to the conduct of a liquidator in connection with the performance of his or her duties". In each of these cases the court is given a discretionary power - it "may inquire into the matter". In addition to these main aspects of the section, which are contained in subsection (1), subsection (2) confers a further power to act on a report to the court from ASIC in respect of "a misfeasance, neglect or omission on the part of the liquidator"; and subsection (3) gives a power to investigate a liquidator's books. 21 The section appears in Division 3 of Part 5.6 of the Act. Division 3 is headed "Liquidators", and the section is headed "Supervision of Liquidators". In this context, it seems quite clear that the section was intended to state with some precision the manner in which the court, in particular circumstances, will exercise its power of supervision over liquidators, who are its officers. The same historical approach which McLelland J found to be appropriate to the consideration of s 479(3) is equally applicable to a consideration of the scope and purpose of s 536. The section is to be distinguished from s 1321, which confers the jurisdiction that is generally appropriate to be exercised when the reversal or modification of a decision of the liquidator is in question. S 536 is rather "concerned with aspects of the conduct of liquidators that are likely to attract sanctions for disciplinary reasons": McPherson The Law of Company Liquidation (4 ed, 1999) at 389. If, as McPherson points out (ibid), a decision of a liquidator, apparently arrived at in good faith, is to be challenged, the appropriate course is not to be found in s 536, but in s 1321. The position is explained in Belvista Pty Ltd v Murphy (1993) 11 ACSR 628 at 630. Where an inquiry under s 536 is appropriate, this will be because the court considers that inquiry to be "in the public interest", and "it is satisfied that there is a prima facie case" to justify subjecting the liquidator to it: McPherson op cit at 388; Burns Philp Investments Pty Ltd v Dickens (1993) 11 ACLC 272 at 273. 22 In my opinion, the matters raised against Mr Parbery do not come near satisfying what would be required to justify an order for an inquiry. I should add that, as will appear, this conclusion would not be affected by the complaint about particular rulings relating to a meeting of creditors, to which I now turn. 23 The first thing to observe about the challenge to the liquidator's decision under regulation 5.6.26 (1), made for the purposes of voting at a meeting, is that regulation 5.6.26 (3) provides for an appeal against such a decision "within 14 days after the decision". The applicants, being out of time, although only by a few days, have sought an extension of time, and no submission was made to me questioning my power to grant an extension, as a matter of discretion. However, it was pointed out that the only decision of the meeting which could be affected if the applicants were to succeed is the decision concerning the remuneration of the liquidator which is independently subject to appeal pursuant to s 473(6) of the Corporations Act. That right of appeal has been exercised, and the appeal is pending. In the circumstances, the small utility of a separate appeal under regulation 5.6.26 must be a factor bearing on whether the court should, in its discretion, extend time. A further factor is the clear indication of a legislative resolve, for what must be seen as practical reasons to minimise litigation and litigious delays in respect of matters decided for the purpose of the conduct of meetings, which is evinced by the fixing of so short a time for appeal as 14 days. It would subvert this resolve if extensions were granted for light cause, or where they are not really required because an adequate alternative remedy is available. In this case, no satisfactory reason has been forthcoming for the failure to appeal within the statutory time. Although the modern view is that such an explanation is not absolutely necessary before a court will exercise a discretion to extend a time limit, it would be incongruous not to regard the absence of satisfactory explanation as at least strongly relevant to the exercise of the discretion in respect of an incident of a winding up when the winding up itself is based, by parliamentary edict, on what was accepted in David Grant v Westpac as a harsh restriction of any discretionary extension of an expired time limit. 24 The proofs of debt the subject of the ruling for the purposes of the meeting of creditors at 10:30am on 31 May 2002 were received at the office of the liquidator by facsimile after 7:30pm on the previous evening, and were considered by the liquidator in the morning prior to the meeting. One was a proof of debt submitted by Moures Takchi for $314, 859.87 and the other was a proof of debt submitted by Takchi Bros Construction Pty Limited for $194, 054.52. In the short time available to him, the liquidator took account of the fact that there were very great discrepancies between the claims in these proofs of debt and two balance sheets, as at 14 April 2000 and 26 April 2000, available to him as emanating from the Takchi family which controlled the company prior to its liquidation. Further, the report as to affairs dated 18 April 2000 also differed from the balance sheets in material respects and, as well, from the proofs of debt. It seemed to Mr Parbery that the financial records of the company were unreliable. Over a long period, he had asked the members of the Takchi family repeatedly to submit formal proofs of debt, and he had been informed on a number of occasions that none of them would be doing so. He had sought substantiation of those debts that were shown as owing by the company in its balance sheets for the purpose of preparing and submitting its income tax returns, but no such substantiation had been received. In those circumstances, after considering the matter, he reached the view that he was not able to conclude either of the claimants was a creditor of the company at all, and he did not consider that either had established the value of any debt, if a creditor. It was therefore not possible to make any reasonable or just estimate as to the value of either claim. 25 Mr Parbery gave evidence to the effect that he was conscious his ruling might have a bearing on the result of the vote on the question of his own remuneration, and he was scrupulous not to allow that fact to influence his decision. I accept his evidence on this and other questions upon which he gave evidence. I found him an honest and careful witness. 26 Mr Parbery also told the court that, after considering the matter for himself, he took legal advice, informing his solicitor that he was "considering rejecting the proofs", and being advised that in the circumstances "it is your decision and I believe it is a reasonable one". 27 Regulation 5.6.23 (2) requires "a just estimate of its value" to be made in respect of a debt to be admitted for the purpose of voting at a meeting. The point was emphasised by Hodgson CJ in Eq in Vincent, White & Associates Pty Ltd v Vouris (1998) 28 ACSR 93 at 101, where his Honour said: "In fact, the doubt referred to in reg 5.6.26 (2) is not doubt as to the existence or amount of the debt, but doubt as to "whether a proof of debt or claim should be admitted or rejected". And in my opinion, in cases where the value of a debt is not established and a just estimate has been made, the doubt in question must be a doubt as to whether the creditor should be allowed to vote on the basis of the just estimate. If the chairperson has such a doubt, then the creditor should be allowed to vote on the basis of the just estimate, and the proof marked as objected to. However, if no just estimate of the debt can be made at all, then in my opinion reg 5.6.26 (2) requires that the creditor not be permitted to vote at all, and reg 5.6.26 (2) has no application." That, it seems to me, was the position here. On the views formed by the liquidator - and in the circumstances they were reasonably formed - this was a case where "no just estimate of the debt [could] be made at all". 28 Furthermore, regulation 5.6.26 (1) itself confers directly upon the chairperson a "power to admit or reject a proof of debt or claim for the purposes of voting". As Hodgson CJ in Eq pointed out in the case cited, the doubt referred to in regulation 5.6.26 (2) relates to that question; but in the present case the liquidator had no doubt about that. He was able to conclude, and did conclude, that there was simply no basis to admit the proofs of debt and, furthermore, no basis on which a just estimate of their value could be made, that value being simply "not established", to use the language of reg 5.6.23 (2)(d). See also Bovis Lend Lease Pty Ltd v Wily (2003) 45 ACSR 612 at 677-678; Young v Sherman (2001) 40 ACSR 12 at 29; Selim v McGrath [2003] NSWSC 927 at [82] et seq. 29 Counsel for the applicants put a subsidiary argument that the liquidator, on receiving the two proofs of debt so late, and in view of the questions they raised, should have adjourned the meeting. But if this course, which he was not actually asked to pursue, was open to be taken, the existence of such an alternative would not convert an otherwise correct decision to reject the proofs of debt into a wrong decision. In any case, it has been held that the powers he could exercise in that regard as chairperson were quite limited: John Vouris; Re Epromotions Australia Pty Ltd [2003] NSWSC 702. 30 The conclusion to which I have come is that an extension of time to appeal against the ruling relating to the two proofs of debt submitted for the purposes of voting at the meeting of creditors in question should be refused, both because the circumstances do not justify the exercise of the discretion and because such an appeal would be futile since the decision of the liquidator was not erroneous. 31 I direct that the liquidator bring in, on a date to be fixed, short minutes of orders appropriate to be made to reflect these reasons, including orders dismissing the applications in question.

Re Glowbind Pty Limited (In Liquidation); Takchi v Parbery

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