In the matter of Iris Diversified Property Pty Ltd (in liquidation) [2018] NSWSC 834

In the matter of Iris Diversified Property Pty Ltd (in liquidation) [2018] NSWSC 834

The failure to pass the resolution to remove the liquidator was contrary to the interests of creditors as a group and unreasonably prejudiced the substantial creditor (Owners Corporation), as continued funding for investigations was unavailable unless a replacement liquidator was appointed. The Second Defendant had no power to cast a vote against his own removal under r 75-115(5), so the court should make orders that the resolution be taken as having passed and new liquidators be appointed to give effect to creditor wishes and statutory provisions.

Jurisdiction
Australia
Judgment Date
06 June 2018
Procedural Posture
Corporations Insolvency Application / Judgment After Hearing of Application to Have Resolution Removing Liquidator Deemed Passed
Outcome
Resolution for removal of Second Defendant as liquidator is taken to have been passed; replacement liquidators appointed; Second Defendant to pay costs without recourse to company assets.
Legal Topics
['removal of Liquidator' 'casting Vote of External Administrator' "creditors' Meetings" 'prejudice to Creditors' 'appointment of Replacement Liquidators']
['corporate Insolvency' 'company Law'] ['removal of Liquidator' 'casting Vote of External Administrator' "creditors' Meetings" 'prejudice to Creditors' 'appointment of Replacement Liquidators']

Case Brief

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Procedural Posture

Corporations Insolvency Application / Judgment After Hearing of Application to Have Resolution Removing Liquidator Deemed Passed

Legal Issues

  1. 1 ['Whether the liquidator had power to exercise a casting vote against his own removal under the Insolvency Practice Rules (Corporations) 2016 (Cth) r 75-115(5)' 'Whether the court should order that a resolution to remove the liquidator and appoint replacements be taken as passed under s 75-41 or s 75-43 of Schedule 2 to the Corporations Act 2001 (Cth)' 'Whether the failure to pass the resolution was contrary to the interests of creditors as a group or unreasonably prejudicial to the creditor(s) voting for removal' 'Whether alternative orders should be made under s 90-15 of Schedule 2']

Ratio Decidendi

The failure to pass the resolution to remove the liquidator was contrary to the interests of creditors as a group and unreasonably prejudiced the substantial creditor (Owners Corporation), as continued funding for investigations was unavailable unless a replacement liquidator was appointed. The Second Defendant had no power to cast a vote against his own removal under r 75-115(5), so the court should make orders that the resolution be taken as having passed and new liquidators be appointed to give effect to creditor wishes and statutory provisions.

Court Disposition

Resolution for removal of Second Defendant as liquidator is taken to have been passed; replacement liquidators appointed; Second Defendant to pay costs without recourse to company assets.

Orders

  • ['The resolution that the Second Defendant be removed as liquidator of the First Defendant put at a meeting of creditors of the First Defendant held on 16 November 2017 is taken to have been passed at that meeting.' 'Messrs Bailey and Palmer be appointed as joint liquidators of the First Defendant.' "The Second...