The Court Is Likely To Be Slow To Remove A Liquidator Absent Being Shown Good Cause
Overview Of Liquidator Not Removed By Court Of Appeal
In the matter of Dominar Group Ltd (In Voluntary Liquidation) (Unapproved)  IECA 284 the Liquidator was not removed by the Court of Appeal in Ireland.
An application was made to Remove A Liquidator and more than a year after the first decision the matter came before the Irish Court of Appeal and was dismissed.
The appellate was a 50% shareholder in Dominar Group Limited that went into solvent Liquidation. However, the appellant was concerned about delay, asset realisations, cost, Liquidator remuneration and transparency where the Liquidator was concerned.
Principles Of Removing A Liquidator
The Court referred to an English Court of Appeal decision as to the principles concerning the removal of a Liquidator although the decision of Finnerty & Anor v Clark & Anor  EWCA Civ 858 applied to the removal of Administrators.
The basic principles were referred to from another Irish Court of Appeal decision as follows:
(i) The burden of proof is on the applicant to show good cause for the removal of the liquidator.
(ii) Whether good cause has been shown is to be measured by reference to the real and substantial interests of the liquidation and the purpose for which a liquidator is appointed.
(iii) The Court has a wide discretion as to the circumstances in which it may remove a liquidator and it is not dependent on proof by the applicant of misconduct, personal unfitness or any particular of their statutory obligations. What will amount to good cause will depend upon the particular circumstances of each individual case.
(iv) Failure on the part of a liquidator to conduct the liquidation in a vigorous, efficient and cost-effective manner may provide good cause, as may a conflict of interest or loss of confidence in the liquidator on the part of one or more creditors. However, in the latter case the creditor/creditors concerns must be real and reasonable.
(v) The fact that a liquidator’s conduct has been shown in one or possibly more than one respect to have fallen short of ideal will not afford good grounds to support an application to remove a liquidator.
(vi) The Court among other considerations, ought to pay due regard to the potential impact of the proposed removal on the liquidator’s professional standing and reputation. If he has been generally effective and honest, the Court should think carefully before deciding to remove him.
(vii) The Court must bear in mind that in almost any case where an order to remove a liquidator is made the same will likely have undesirable consequences in terms of costs and delay.
(viii) In seeking to strike a careful balance in each case the Court should take into account whether, on the evidence before it, it could be confident that if left in situ the liquidator would not repeat matters complained of and could be relied upon to complete the liquidation in accordance with his obligations.
Reasons For Decision Not To Remove The Liquidator By The Court Of Appeal
The Court of Appeal could not find sufficient reasons to remove the Liquidator. The burden is fairly and squarely on the applicant who seeks the removal, to show sufficient good cause for the same. The failings of the Liquidator need to be real, material and reasonable.
In this matter, the respondent Liquidator appears to have been transparent and forthcoming with the provision of information to the appellant. It was noted that the first instance Court had found the Liquidator honest and effective.
The appellant seems to have suggested in time gone by that a removal application was on the cards but nevertheless did not proceed to issue the application for a number of years.
Although not determining matters de novo or as a full hearing, the appellate Court considers if the Court of first instance has applied the correct principles in the exercise of its discretion:
In addressing this appeal this court is not in the position of the High Court hearing a case in full, nor does it conduct a de novo hearing; it has a more limited role. This was emphasised by this court in Ballyrider where Irvine J. at para. 26 stated:
“…the role of the appellate court is not to substitute its own judgment for that of the trial judge but to assess whether the correct legal principles were applied and whether on the evidence the decision of the judge can be justified”.
- The legal principles governing an application to remove a liquidator under s. 638 are those set out by this court in Ballyrider. This was not in dispute. In relation to the principle (i) which affirms that the applicant bears the burden of proof to show good cause, Irvine J. stated at para. 23 –
“It is clear from the language in s. 277(2) of the 1963 Act and, in particular, the words ‘on cause shown’ that a party who seeks to remove a liquidator bears the burden of advancing substantial grounds to satisfy a court as to why such relief should be granted. Those words are very much stronger than words such as ‘if the Court shall think fit ‘or ‘if the Court is of opinion’ which regularly appear in other statutory provisions.”
Under principle (ii) the question whether there is good cause is to be measured “by reference to the real and substantial interests of the liquidation and the purpose for which a liquidator is appointed”.
- The trial judge correctly approached his task on the basis of these principles, and sought to “strike a careful balance” (principle (viii)). The trial judge undertook the “difficult balancing exercise” described by Neuberger J. in AMP Music Box Enterprises Limited v Hoffman  1 BCLC 319 in paras  –  which are quoted by Sanfey J., and are passages which were quoted with approval by Irvine J. in Ballyrider.
Principle (iv) requires that there needs to be a failure on the part of a liquidator to conduct the liquidation “in a vigorous, efficient and cost-effective manner” in order to show good cause and this may include a conflict of interest or loss of confidence in the liquidator, but “in the latter case the creditor/creditors concerns must be real and reasonable”. As the trial judge correctly identified in this case the balancing exercise relates not to creditors but to a member’s concerns, and these must be “real and reasonable”, and it was to this that he addressed his mind.
84. It is apparent from his judgment that the trial judge carefully took into account all of the relevant evidence that was before him in the High Court, and carried out this balancing exercise in his “analysis” at paras. 163 – 205 of his judgment. In the course of his judgment he made a number of findings of fact that are important to his conclusions, and these were helpfully identified by counsel for the respondent in his written submissions as follows –
- There was no evidence that the appellant was unaware of, or objected to, the respondent’s reliance on the existing management of the Polish subsidiary companies.
- Where difficulties arose with the payment of rent and dumping of material on the Osmanska 7 property, Grosbeak took legal advice and appropriate action where necessary.
- The respondent was monitoring the situation concerning the Osmanska 7 property on an ongoing basis. He was responding to queries from the appellants solicitors as they arose, and reporting on any significant developments regarding the site.
- The interests of the Company and Grosbeak did not diverge as to procuring the efficient administration of the Osmanska 7 property and the most advantageous sale possible.
- The costs incurred in clearing the Osmanska 7 property did not arise from any neglect or oversight on the part of the respondent.
- The delay in realising the Company’s interest in the Osmanska 7 property arose mainly from the necessity to await the resolution of the restitution claims. The strategy of awaiting the resolution of the restitution claims was never seriously challenged by the appellant, and the appellant did not respond when invited to clarify whether it wished for the property to be sold at a reduced price on account of the restitution claim.
- There was no material lack of transparency on the part of the liquidator in conducting the liquidation of the Company.
- The respondent liquidator had been generally effective and honest in the conduct of the liquidation.
These findings were not based solely on the trial judge’s consideration of the affidavit evidence and documentary material before him but rely also on his assessment of the oral evidence given by the respondent over 2 hearing days.
- The circumstances in which an appellate court may disturb findings of fact are circumscribed by the principles established in Hay v O’Grady  1 IR 210, recently affirmed by the Supreme Court in Tracey v Anderson  IESC 76 where Charleton J. stated: –
“3. For the purposes of clarity, these principles can be more concisely stated as follows:
- Findings of fact supported by credible evidence are not to be disturbed.
- Inferences of fact derived from oral evidence can be reconsidered, but an appellate court should be slow to do so.
- Inferences drawn from circumstantial evidence can be more readily put aside by an appellate court since that court is in as good a position to draw its own inferences as the court of trial.”
- In my view there was credible evidence for these findings of fact and conclusions of the trial judge. It is perhaps not surprising therefore that the appellant did not address this issue at all in his submissions, and instead in oral submissions concentrated on the compromise of s. 205 oppression proceedings – which themselves were grounded on loss of trust and confidence – and lack of transparency in the respondent’s dealings with the liquidation and with the appellant/its solicitors, and conflicts of interest. I am satisfied however that there is no sound basis for revisiting or setting aside these findings of facts.
- It is also clear, contrary to certain submissions of counsel for the appellant, that the trial judge in his judgment and analysis was aware of and kept in mind “the depth of enmity and distrust between the principals of” the appellant and Mr. Curneen – see for example para. 171 of the judgment. He was also cognisant of the purpose of the liquidation, as declared in the Settlement Agreement, which was the realisation of the assets of the subsidiary companies as soon as possible.
- As to issue (1) – the sale of the P&D Polska business (the sole trading entity) to Mr. Curneen at a figure less than Mr. Conway was prepared to offer – I am quite satisfied that the trial judge was correct to find that no cause was shown for removal of the liquidator. The respondent took appropriate steps, including approaching 50 potential buyers, before concluding that finding a third party purchaser was not feasible. It must also be recalled that the economic climate in 2009 was not propitious. The respondent then conducted a fair auction between the appellant/its principals and Mr. Curneen. He accepted a bid from the appellant and entered into heads of terms in November, 2009 which included a period of exclusivity. However the evidence was that the appellant failed to complete or substantially advance the purchase, and it was agreed with the appellant that the period of exclusivity should be terminated and revised offers sought. The respondent indicated that these would be assessed by reference to (a) their conditionality, (b) ability to complete by 31 May 2010, and (c) price. It became apparent during the ensuing negotiations that the existing management team of P&D Polska was not prepared to work with Mr. Conway or his son. While the appellant offered €1.3 million, this was subject to a condition that the sale would not close until 1 September 2010 at the earliest, to enable the appellant to find new management. Ultimately while Mr. Curneen’s offer of €975,000 was lower by some margin it was not subject to similar conditions and was accompanied by protections including a personal guarantee.
- In the circumstances it is hard to see how any criticism could be levelled at the respondent for accepting Mr. Curneen’s offer. In my view the manner in which the respondent conducted this sale was eminently fair and sensible. The trial judge correctly commented at para. 196 of his judgment that there was no material lack of transparency on the part of the respondent in relation to the sale of P&D Polska; not only was the appellant directly involved in that sale process, but the respondent also made his files relating to that sale available to the appellant’s solicitors.
- The weakness of this element of the appellant’s case is apparent when one considers the Plenary Summons issued by the appellant on 7 February 2011 seeking damages arising out of the sale of the P&D Polska shareholding. These proceedings had not been progressed in the ten year period up to the hearing of this appeal, and were at the time of that hearing the subject of an application to dismiss for want of prosecution.
91. It is only in respect of issue (2) – the PPKZ proceedings – that the trial judge was not so impressed with the respondent’s evidence. His criticisms centre on the failure to produce any documentation to illustrate to whom he had spoken, or the contemporaneous advice that he or Grosbeak received, before deciding not to appeal the adverse decision in the Polish court. At para. 176 the trial judge finds that the respondent personally did not receive any advice from Ms. Wasik, but relied on advice relayed to him by Grosbeak/Mr. Curneen, and the extent to which the respondent was involved in the decision not to appeal remained unclear from his evidence. However, having considered the respondent’s evidence on affidavit and heard him under cross-examination, the trial judge concluded that –
“… I have no reason to believe that the respondent was not informed of the court’s adverse decision or consulted by the directors of Grosbeak in the aftermath of that decision”.
He was critical of the respondent for not having obtained independent legal advice and/or legal advice in Poland on the appeal issue. As the trial judge points out at para. 195, the atmosphere between the parties was “not improved by the discovery in December 2015 by the applicant that the PPKZ proceedings had been lost in February 2015, and that a decision not to appeal had been taken by the respondent without either informing the applicant or seeking its opinion on the matter.”
- This criticism by the trial judge of the respondent was relied on by the appellant, and was a key element in this appeal. However, while the trial judge was troubled by the respondent’s conduct in relation to the PPKZ proceedings, he did not consider that this warranted his removal as a liquidator. His reasons for this appear to be given in para. 199 of his judgment. He correctly points out that the decision whether to appeal was that of the respondent alone, as the controller of the shares in Grosbeak, even though Grosbeak was prosecuting the proceedings. He correctly points out that any decision to pursue legal action against Grosbeak management or its legal advisors for not appealing or negligent advice was ultimately one for the respondent. While accepting that there may have been valid reasons not to embark upon a possible legal action, the trial judge opines that it “would have been far better if the respondent could show objectively that he had sought advice in that regard, or at least recorded his detailed reasons for not taking at least preliminary steps to establish whether proceedings were feasible or advisable.”
- In my view the trial judge was entitled to take this critical view of this issue, but ultimately to decide that the appellant had not shown good cause. This is particularly so in light of the respondent’s evidence on affidavit and under cross-examination in relation to the legal advice of Ms. Wasik that he received through Grosbeak, and in particular his evidence that his decision was based on whether PPKZ was “ultimately a mark so that we could get value”. The respondent’s evidence was that he assessed the financial information in relation to PPKZ which was publicly available and formed his own view on it. The respondent accepted that he should have informed the appellant much earlier of the decision not to appeal, but that is an issue of transparency, and not one that bears on the substance of the decision that the respondent had to take in relation to whether to appeal or not. While it might have been desirable, the respondent had no obligation to consult with the appellant over this decision, which related to whether or not a subsidiary company should appeal proceedings that it had taken.
- It is not absolutely clear from reading paragraph 199 of the judgment whether the trial judge considered the respondent’s conduct in relation to the PPKZ proceedings did, or could, amount to “cause shown”, or whether in the exercise of the discretion that the court has under s.638 (and principle (iii) in Ballyrider which states that “The court has a wide discretion as to the circumstances in which it may remove a liquidator…”). He did not consider that this conduct alone would warrant the respondent’s removal as a liquidator. However when para.199 is read in conjunction with the trial judge’s Conclusions, and in particular para. 206, it becomes clear the trial judge did not consider in all the circumstances of the case that the appellant had satisfied the onus of proving “good cause” for removal.
- In my view this was a conclusion that was open to the trial judge on the evidence that was before him, and in particular based on his finding of fact that the decision not to appeal the PPKZ proceedings was one that was open to the respondent on the information and advice available to him at the time; this was quintessentially a judgment call for the trial judge in the exercise of his discretion, and it is not one with which this court should interfere.
- In relation to this issue it is also important to recall that by December 2015 the appellant was aware that the PPKZ proceedings had not been appealed, and raised complaints, and indeed threatened proceedings to remove the respondent as liquidator. However, the application under s. 638 did not issue until 16 July 2018, over two and a half years after the appellant became aware of the position. By the time this appeal came on for hearing, six years and some months had elapsed since the last date upon which an appeal could have been lodged in the Polish courts. This court raised the question whether any claim in professional negligence against the respondent for not pursuing an appeal could ever be maintained by a replacement liquidator (or any other party) given this lapse in time. While these issues of delay, and possible legal consequences, were not fully ventilated in argument, they are factors that I believe this court is entitled to take into account in considering this appeal.
- The appellant also criticised the respondent for not considering, taking formal legal advice on, or pursuing, a possible cause of action in negligence against PW Legal, or indeed against the management of Grosbeak.This would require consideration of Polish law.. However, the appellants, on whom the onus fell, did not adduce any opinion of a Polish lawyer to support an argument that any such cause of action lay, or whether it could now be maintained given the lapse of time.
- Accordingly the trial judge was entitled to find no cause shown arising out of respondent’s involvement in the PPKZ proceedings.
- As to issue (3) – the Osmanska 7 site – the findings of fact referred to above, and which this court should not disturb, are particularly relevant. The respondent fully appraised himself of the restitution claims on which advice was given by Ms. Wasik, Grosbeak’s attorney. The decision taken to await the resolution of those claims was explained to the appellant/his solicitors, and no objection was taken. It is clear that the determination of such claims can take considerable time, as the authorities in relation to similar claims before the European Court of Human Rights which were opened to the High Court judge. Those restitution claims were not finally resolved until in or about June 2018, and certification was obtained which enabled Grosbeak to dispose of the Osmanska 7 site with good title. Further the appellant did not take issue with the background and facts outlined by Ms. Wasik in the advices received by the respondent.
- The appellant’s complaints appear to have been that the respondent should have taken control of the property sooner, that he failed to keep the appellant appraised of the situation concerning the site, and that the amount that could be realised from the sale of the property was reduced by the significant costs incurred in clearing the building waste left by JMR Trans. The substance of these complaints was undermined by the evidence before the High Court and the facts as found by the trial judge. There was no evidence to suggest that Grosbeak or the respondent could have anticipated that JMR Trans was unsuitable or would prove to be an unsatisfactory tenant. The trial judge found that, when the tenancy ended in June 2015, the respondent was monitoring the situation on an ongoing basis, and responding to queries from the appellant’s solicitors as they arose, and reporting on any significant developments. Under cross-examination the respondent explained the means by which Grosbeak acquired the rights to the soil/waste material, and that the cost of acquiring it at auction had been set against the liabilities to Grosbeak of JMR Trans. He explained his view that on expiry of the lease he believed “that the force of the environmental authorities and the proceedings would hopefully lead to a situation where Trans would ultimately remove the soil, but that did not … transpire”. In my view the trial judge was entitled to regard that as reasonable.
- The trial judge was also correct to comment that the interests of the Company and Grosbeak in procuring the efficient administration of the Osmanska 7 site, and the most advantageous sale possible, did not diverge. He was entitled to conclude – and this finding cannot be disturbed – that the costs incurred in clearing the site did not arise from any neglect or oversight on the part of the respondent. Further, the appellant cannot contest that it never seriously challenged the strategy of awaiting the resolution of the restitution claims. In particular, the appellant did not respond when by letter dated 28 August 2015 A&L Goodbody on behalf of the respondent invited it to clarify whether it wished for the site to be sold at a reduced price on account of the restitution claims rather than await their resolution.
- For these reasons I am satisfied that the trial judge was entitled to come to the conclusions that he did, and that these were warranted on the evidence. In particular, he was entitled to reject the claim that the respondent’s oversight of the restitution claims was ill-advised or unreasonable, or that there was any material lack of transparency on this issue.
- On the question of liquidator’s fees, the respondent’s letter of engagement of 9 April 2008 gave an initial estimate of €250,000, but in the High Court he asserted that the level of work necessitated by the liquidation was far in excess of that anticipated, yet no fees had been received since 2013. The appellant’s expert Mr. Garcia Diaz in his report criticised the level of fees, but Mr. Luby on behalf of the respondent considered there was justification for higher fees based on the complexity, difficulty and duration of the liquidation.
- More importantly, the respondent acknowledged that if his fees could not be agreed with the shareholders they would have to be sanctioned by the High Court, and the onus would be on him to justify the fees claimed. There is a statutory procedure that mandates this, as set out across ss. 646 -648 of the Companies Act, 2014, and s.646(2)(d) provides in effect that where members fail to pass a resolution in a voluntary winding up agreeing the amount of the remuneration the liquidator is not entitled to receive payment until the amount of the remuneration has been affixed by the court. The trial judge was therefore correct to regard the availability of such a procedure as a factor favouring the retention of the respondent as liquidator and militating against the appointment of a replacement for the purpose of investigation inter alia of the fees claimed by the liquidator.
- Turning to the appellant’s argument, based primarily on Buildlead, that a replacement liquidator should be appointed to investigate the respondent’s conduct of the litigation, the first point to note is that this was fully argued in the High Court, and indeed the trial judge records at para. 140 of his judgment, that counsel placed particular emphasis on the judgment of Etherton J. There can be no doubt but that the trial judge fully considered whether he should appoint a replacement liquidator in order to undertake investigation, and his analysis and conclusion appear at paras. 189 – 205 under the heading “Is an Investigation Necessary?” of his judgment.
- Secondly, I agree with counsel for the respondent that Buildlead can be distinguished from the facts of the present appeal having regard to a number of features of that case. Firstly, in Buildlead the Company was insolvent with an estimated deficiency of STG£644,000, and the liquidation was a creditors voluntary winding up in which the liquidator was required to report to a liquidation committee in accordance with the applicable Insolvency Rules. Secondly, the basis for the application to remove the joint liquidators concerned their failure to conduct enquiries into preferential payments allegedly made by the Company to its parent company Quickson in an efficient and timely manner, and to institute proceedings to recover those payments. Thirdly, if the liquidators in Buildlead were entitled to the full amount that they sought by way of un-billed work–in-progress, there would have been no assets available for distribution to any of the creditors. Fourthly, Etherton J. appears to have been of the view that –
“ … The absence of a clear legal analysis of the basis for any preference claim, and the failure to communicate that analysis to Quickson [the parent company] and its advisors in support of requests for particular information so as to demonstrate that such information was relevant and necessary to the appraisal of the merits of the preference claim.”
- In his judgment in Buildlead Etherton J. reviews case law on “good cause” for removal of a liquidator, and cites with approval passages from the judgment of Neuberger J. in AMP Enterprises Limited at paras.  and , which in turn were cited with approval by Irvine J. in Ballyrider, and were again quoted by Sanfey J. in his judgment herein. These extracts, quoted earlier, refer to the “difficult balancing exercise” to be undertaken by the court, and that if “a liquidator has been generally effective and honest, the court must think carefully before deciding to remove him and replace him.” Etherton J. notes that Neuberger J.’s “… ultimate concern was not with the past but with the future, and it would be unfair on the liquidators, and unnecessary for the creditors and the company’s interests, as well as unnecessarily expensive and disruptive, if he was to remove the liquidators.”
- While Buildlead is undoubtedly an example of a case where a judge was prepared to remove joint liquidators and appoint a replacement primarily for the purposes of undertaking an investigation of the conduct of the liquidation, it was a case that fell to be decided on its own facts. In my view Etherton J. did not decide or establish any new principle, but rather applied existing principle which was broadly in line with that approved and adopted by Irvine J. in Ballyrider. Etherton J. concluded his review of the law and legal submissions by stating –
“ In my judgment, the touchstone for an appraisal of whether good cause has been shown for the removal of a liquidator is the principle stated by Bowen LJ in Re. Adam Eyton (at 306):-
‘… The due cause is to be measured by reference to the real, substantial, honest interests of the liquidation, and to the purpose for which the liquidator is appointed.’
 As Neuberger J. observed in AMP Enterprises (at para ) that appraisal may involve the court carrying out a difficult balancing exercise.”
This reflects principle (ii) as enunciated by Irvine J., which refers to “the real and substantial interests of the liquidation and the purpose for which a liquidator is appointed”, and principle (viii) which refers to “seeking to strike a careful balance in each case”. As Irvine J. stated in principle (iii), the court “has a wide discretion as to the circumstances in which it may remove a liquidator”, and –
“What will amount to good cause will depend upon the particular circumstances of each individual case.”
- There may be cases in which it would be appropriate for the court to remove a liquidator and appoint a replacement solely or partly to undertake an investigation of the conduct of the litigation. The trial judge gave due and appropriate consideration to taking just such a step in the present application, but came to the conclusion that this was not appropriate. His reasons are fully set out in his judgment. They include –
- that the liquidation was almost complete;
- that the respondent had been generally effective and honest;
- that a liquidator should not be removed merely because in one, or possibly more than one respect his conduct has fallen short of ideal;
- that there was no material lack of transparency;
- that updates and accounts of Grosbeak were furnished to the appellant and the respondent generally responded to requests for information;
- that while “somewhat troubled” by the respondent’s conduct in relation to the PPKZ proceedings, he did not consider those actions alone warranted his removal as liquidator;
- that the delay in completing the liquidation was sufficiently explained;
- that the circumstances surrounding the necessity to incur liability of €840,000 plus VAT in respect of the removal of waste material from the Osmanska 7 site had been sufficiently explained.
- It is important to emphasise the extent of a trial judge’s discretion in relation to finding cause shown. In the exercise of its discretion the trial judge was entitled, and possibly required, to take into account other reasons that led to his decision that an investigation by a replacement liquidator was not warranted. The first of these is his consideration of the practical consequences of removing the respondent as liquidator. As he points out in paras. 203 and 204, a replacement liquidator would have to become familiar with all matters relevant to the liquidation, examine the books and records of the respondent, establish contact with the directors of Grosbeak and Ms. Wasik/PW Legal, and possibly have to engage with independent legal advisors in Poland to review various issues on which PW Legal advised Grosbeak. At the time the trial judge gave judgment he was also concerned that a new liquidator would have to oversee the sale by Grosbeak of the Osmanska 7 site, which might well have led to disruption or delay. As the trial judge points out “all of the foregoing matters would cause significant expense for the liquidation. The liquidator’s costs would be borne equally by the shareholders…” He also correctly noted Mr. Curneen, one of the two shareholders, was strongly opposed to the application.
- The second factor considered by the trial judge is dealt with in para. 205 of his judgment and concerned the undisputed fact that in August 2014, and again in August 2015, the appellant’s solicitor intimated the appellant’s intention to proceed with an application for removal, yet the appellant did not carry out its threat until July 2018, some three years on, and at a time when it had been informed that the restitution claims had been resolved, leaving the way open for the sale of the Osmanska 7 site.
- These factors – the duration of the liquidation, the stage that it had reached, and the appellant’s delay in issuing the application – were circumstances which the trial judge properly took into account. While no Irish authority was cited to this court to support the entitlement of the trial judge to have regard to these factors in my view none was required as they clearly come within the contemplation of principle (iii) as enunciated in Ballyrider. Counsel for the respondent also helpfully cited the Supreme Court of New South Wales’ decision in Re Biposo Pty Ltd: Condon v Rodgers  A.C.S.R. 730. In his judgment Young J. stated, at page 734: –
“The present winding up has been in place for less than a month. A relevant factor is the costs that would be incurred if another liquidator had to come in and complete the winding up, wasting the work that the present liquidators had already done. Thus the Court is less likely to discharge a liquidator towards the end of the winding up, after he has become acquainted with the affairs of the company, than it would in the early winding up: see for instance Re. George A. Bond & Co. Ltd  32 SR (NSW) 301.”
- Counsel also referred the court to a Supreme Court of Northern Territory decision in ATSIC v JARCAC (In Liquidation)  10 A.C.S.R. 121, where Asche J. approved the following statement of principle from McPherson Law of Company Liquidation 3rd Ed. By J. O’Donovan (1987) at p. 228:-
“Consequently, those who assert that the liquidator should be removed, are under a duty to establish at least a prima facie case that this is for the general advantage of the persons interested in the winding up, and the onus of proof will not be easy to discharge if the liquidator has become well-acquainted with the business and affairs of the Company, or the process of winding up has almost reached a completion.”
If any authority is required these Australian cases support the proposition that the trial judge was fully entitled to take into account how advanced the liquidation was, and the obvious disadvantages of removing the respondent and appointing a replacement.
- At paragraph 198 of his decision the trial judge stated –
“I consider that I would have to be convinced that there was at least a strong possibility that an investigation would reveal conduct or disclose hitherto unknown documentation or information …”
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