Worrell, in the matter of regulation 5.6.06 of the Corporations Regulations 2001 [2010] FCA 934

Worrell, in the matter of regulation 5.6.06 of the Corporations Regulations 2001 [2010] FCA 934

Regulation 5.6.06(1), read in its statutory context and with Regulation 5.6.06(2), requires a liquidator to open a separate bank account for each liquidation, except for pooled groups. The applicants' compound accounts therefore contravened Regulation 5.6.06 for liquidations. Regulations 5.6.06 and 5.6.09 concern liquidators in winding up and did not support prospective or portfolio-wide authorisation for receivers, managing controllers or administrators. Although a general departure under Regulation 5.6.06 was not warranted, the Court considered it appropriate under Regulation 5.6.09 to authorise special bank accounts for identified existing liquidations to complete those windings up,...

Jurisdiction
Australia
Judgment Date
30 August 2010
Procedural Posture
Application for Declarations, Directions or Orders Concerning Regulation 5.6.06 and Regulation 5.6.09 of the Corporations Regulations 2001 (cth) and S 1322(4)(c) of the Corporations Act 2001 (cth) / Reasons for Judgment; Proceeding Adjourned for Making of Formal Orders
Outcome
The proceeding was adjourned for formal orders; the applicants' declarations were not to be made, but orders were proposed under Regulation 5.6.09 for identified current liquidations and under s 1322(4)(c) relieving the applicants from liability to date.
Legal Topics
['construction of Regulation 5.6.06 of the Corporations Regulations 2001 (cth)' "liquidator's General Account" 'compound Bank Accounts in Liquidations' 'special Bank Account Under Regulation 5.6.09' 'relief Under S 1322(4)(c) of the Corporations Act 2001 (cth)']
['insolvency' 'corporations Law'] ['construction of Regulation 5.6.06 of the Corporations Regulations 2001 (cth)' "liquidator's General Account" 'compound Bank Accounts in Liquidations' 'special Bank Account Under Regulation 5.6.09' 'relief Under S 1322(4)(c) of the Corporations Act 2001 (cth)']

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Procedural Posture

Application for Declarations, Directions or Orders Concerning Regulation 5.6.06 and Regulation 5.6.09 of the Corporations Regulations 2001 (cth) and S 1322(4)(c) of the Corporations Act 2001 (cth) / Reasons for Judgment; Proceeding Adjourned for Making of Formal Orders

Legal Issues

  1. 1 ['Whether Regulation 5.6.06(1) of the Corporations Regulations 2001 (Cth) requires a liquidator to open a separate bank account for each company in liquidation or permits a single compound account.' 'Whether orders should be made under Regulation 5.6.06 or Regulation 5.6.09 authorising use of compound accounts for companies to which the applicants are, have been or will be appointed.' 'Whether s 1322(4)(c) of the Corporations Act 2001 (Cth) should be used to relieve the applicants from consequences of failing to comply with Regulation 5.6.06.']

Ratio Decidendi

Regulation 5.6.06(1), read in its statutory context and with Regulation 5.6.06(2), requires a liquidator to open a separate bank account for each liquidation, except for pooled groups. The applicants' compound accounts therefore contravened Regulation 5.6.06 for liquidations. Regulations 5.6.06 and 5.6.09 concern liquidators in winding up and did not support prospective or portfolio-wide authorisation for receivers, managing controllers or administrators. Although a general departure under Regulation 5.6.06 was not warranted, the Court considered it appropriate under Regulation 5.6.09 to authorise special bank accounts for identified existing liquidations to complete those windings up,...

Court Disposition

The proceeding was adjourned for formal orders; the applicants' declarations were not to be made, but orders were proposed under Regulation 5.6.09 for identified current liquidations and under s 1322(4)(c) relieving the applicants from liability to date.

Orders

  • ['The proceeding is adjourned to a date to be fixed for the making of formal orders.' 'The parties file and serve submissions as to the form of orders within 28 days.' 'The costs of and incidental to the proceeding are reserved.']