In the matter of Hawkesbury House Pty Limited (in liquidation) [2019] NSWSC 1673

In the matter of Hawkesbury House Pty Limited (in liquidation) [2019] NSWSC 1673

The replacement of Mr Farnsworth by Mr Tonks was in the best interests of creditors because matters identified in the incumbent liquidator's report warranted further investigation, the Council was prepared to fund those steps only if undertaken by Mr Tonks, the application was not opposed, and any familiarisation...

Source-derived case information.

Jurisdiction
Australia
Judgment Date
26 June 2019
Procedural Posture
Corporations Winding Up Application / Application for Removal and Replacement of Liquidator and Approval of Entry Into Funding Agreement
Outcome
Orders made for removal and replacement of the incumbent liquidator and for approval of entry into the funding agreement.
Legal Topics
['winding Up' 'removal and Replacement of Liquidator' 'funding Agreement' 'public Examinations' "creditors' Interests"]
['corporations' 'insolvency'] ['winding Up' 'removal and Replacement of Liquidator' 'funding Agreement' 'public Examinations' "creditors' Interests"]

Source-derived case record

Summary, issues, holding and outcome

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Procedural Posture

Corporations Winding Up Application / Application for Removal and Replacement of Liquidator and Approval of Entry Into Funding Agreement

Legal Issues

  1. 1 ['Whether the incumbent liquidator should be removed and replaced by consent where a substantial creditor was prepared to fund investigations only by the replacement liquidator.' 'Whether approval should be granted under s 477(2B) of the Corporations Act 2001 (Cth) for the liquidator to enter into the proposed funding agreement.']

Ratio Decidendi

The replacement of Mr Farnsworth by Mr Tonks was in the best interests of creditors because matters identified in the incumbent liquidator's report warranted further investigation, the Council was prepared to fund those steps only if undertaken by Mr Tonks, the application was not opposed, and any familiarisation burden was not expected to be substantial. Approval of the funding agreement was also in creditors' interests because it funded preliminary investigations that could identify causes of action increasing returns to creditors, preserved the liquidator's independent discretion and statutory and professional duties, and raised no issue of lack of good faith, error of law or...

Court Disposition

Orders made for removal and replacement of the incumbent liquidator and for approval of entry into the funding agreement.

Orders

  • ['Mr Farnsworth removed as liquidator of Hawkesbury House Pty Limited (in liquidation).' 'Mr Tonks appointed as liquidator of Hawkesbury House Pty Limited (in liquidation).' "The Council's and Mr Farnsworth's reasonable costs of the application are costs in the winding up." 'Approval granted pursuant to s 477(2B) of...