Independent Cement and Lime Pty Limited v Brick and Block Company Ltd (In Liquidation) (Receivers and Managers Appointed) [2010] FCA 352

Independent Cement and Lime Pty Limited v Brick and Block Company Ltd (In Liquidation) (Receivers and Managers Appointed) [2010] FCA 352

Removal was for the better conduct of the liquidation because the administrators' investigations into significant potential claims were inadequate, the recommended DOCA involved troubling features including effectively buying directors' cooperation, and the circumstances justified a loss of confidence in the liquidators' independence and ability to pursue claims against directors and related parties, notwithstanding their familiarity with the company and creditor support.

Jurisdiction
Australia
Judgment Date
13 April 2010
Procedural Posture
Application Under S 503 of the Corporations Act 2001 (cth) for Removal of Company Liquidators / Reasons for Judgment on Amended Application After Termination of Deed of Company Arrangement and Appointment of Liquidators
Outcome
The Court concluded that it was in the best interests of those interested in the liquidation that the liquidators be removed and that new liquidators be appointed for the conduct of the liquidation as a whole.
Legal Topics
['removal of Liquidators' 'voluntary Administration' 'deed of Company Arrangement' "administrators' Investigations" 'voidable Transactions' 'insolvent Trading']
['corporations Law' 'insolvency'] ['removal of Liquidators' 'voluntary Administration' 'deed of Company Arrangement' "administrators' Investigations" 'voidable Transactions' 'insolvent Trading']

Case Brief

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Procedural Posture

Application Under S 503 of the Corporations Act 2001 (cth) for Removal of Company Liquidators / Reasons for Judgment on Amended Application After Termination of Deed of Company Arrangement and Appointment of Liquidators

Legal Issues

  1. 1 ['Whether Messrs Barnden and Kassem should be removed as liquidators under s 503 of the Corporations Act 2001 (Cth).' 'Whether their conduct as administrators and deed administrators, including investigations into potential recovery claims, justified a loss of confidence in their ability to conduct the liquidation.' "Whether the administrators inadequately investigated potential preference claims, capital improvements at Port Kembla, directors' assets for insolvent trading claims, and a possible holding company claim under s 588V." "Whether the administrators' recommendation of the proposed DOCA was flawed, including because it involved sharing recoveries from the Sasso Debt and Insurance Claim with directors and left non-participating creditors' debts uncompromised."]

Ratio Decidendi

Removal was for the better conduct of the liquidation because the administrators' investigations into significant potential claims were inadequate, the recommended DOCA involved troubling features including effectively buying directors' cooperation, and the circumstances justified a loss of confidence in the liquidators' independence and ability to pursue claims against directors and related parties, notwithstanding their familiarity with the company and creditor support.

Court Disposition

The Court concluded that it was in the best interests of those interested in the liquidation that the liquidators be removed and that new liquidators be appointed for the conduct of the liquidation as a whole.

Orders

  • ['The plaintiff should bring in, by 4.00 pm on 14 April 2010, short minutes of order to give effect to these reasons.']