Baird v CB Constructions (NSW) Pty Ltd & anor

HIS HONOUR: The plaintiff John Baird, one of the two shareholders and directors in the first defendant company C B Constructions (NSW) Pty Limited has filed an originating process on 22 April 2009 returnable on 25 May 2009 for an order that the company be wound up. The second defendant Abhay Bir Chandra is the other director and shareholder in the company. By interlocutory process filed on 24 April 2009, Mr Baird seeks the appointment of a provisional liquidator, and specifically that one Ashton Brailey, an official liquidator, be appointed liquidator of the company provisionally. Mr Brailey has given a consent, in which he certifies he is not aware of any conflict of interest or duty that would make it improper for him to act as liquidator of the company. The defendants agree to the appointment of a provisional liquidator, but oppose the appointment of Mr Brailey, and have provided consents of David Ian Mansfield (an official liquidator) and of David John Frank Lombe and Simon John Cathro of Deloittes (also official liquidators).

There is no evidence that reflects adversely on the fitness of Mr Brailey, nor on the fitness if Mr Lombe and Mr Cathro. Mr Mansfield is a partner in Moore Stephens, and there is evidence that another partner of that firm was retained in early April of this year by the second defendant to value the business of the company. This prior association, while it may ultimately achieve some economies, is also a matter which might in some minds reflect on the independence of Mr Mansfield.

Disputes as to the identity of liquidators, except where there is good reason to doubt their independence, or another basis to prefer one to another are to be discouraged. It is for this reason that when the Court appoints a receiver, the proper rule is that all else being equal, the person nominated by the plaintiff is appointed in the absence of anything that reflects adversely on the fitness of the nominee [ Barclay v Barclay NSWSC, Kearney J, 22 December 1978, unreported; Parkinson v Morkaya [2008] NSWSC 1183]. The same should apply in the case of a liquidator. Nothing here reflects adversely on the fitness of Mr Brailey, except inadmissible belief expressed by the second defendant which I was compelled to reject.

Pursuant to Corporations Act s 472(2) I order that Ashton Brailey be appointed liquidator of the first defendant C B Constructions (NSW) Pty Limited provisionally.

I make order 4 in the interlocutory process filed 24 April 2009.

I order that costs of the interlocutory process be costs in the proceedings.

I adjourn the proceedings to 25 May 2009 at 9.15am before the Registrar.

I direct that this order be entered forthwith.