Judge chooses cheapest, unfunded option

2024 has opened with a rash of contests between parties who want their preferred liquidator installed in preference to their opponent’s nominee and this week the trend persisted, with a twist.

On Monday 8 Wentworth’s Ahmed Rizk urged Judge Tony McGrath to reject his opponent’s nominee on the basis that those on the other side refused to fund any liquidator other than their preferred choice.

A judge acceding to such a condition could Rizk argued create the appearance of a lack of independence.

Further, he said a judge, in deciding whose nominee gets appointed, cannot give consideration to the fact that other liquidators have provided consents without indemnification.

The argument about exclusive funding being a condition that should disqualify the nominee was ventilated in an application to wind up an incorporated association, The Bosnian Islamic Council of Australia (BICA).

Rizk was representing the applicant, BIAC. Opposing him was 8 Selbourne’s John Anderson on behalf of The Australian Bosnian Islamic Centre Deer Park (Deer Park), which was granted leave to be heard by virtue of its claim to be both a member and a creditor of BICA.

Rizk disputed Deer Park’s claim to have standing but Anderson explained how his client was one of six members of BICA and a creditor, based on more than $41,000 in donations it made to BICA.

He also explained how prior to filing its originating process to initiate winding up proceedings, BICA had sought to dissuade his clients from doing the same, alluding to correspondence from BICA’s lawyers arguing that that there was no need for urgency.

Until apparently BICA decided there was and filed an originating process without notice.

Not that either side opposes the winding up of BICA on the just and equitable ground. They’re just poles apart in respect of the choice of liquidator.

BICA came to court packing four consents. Worrells’ Graeme Beattie and Aaron Lucan had thrown their hat in this ring and for reasons yet to be revealed, those advising BICA sourced additional consents from KPT Restructuring’s Ozem Kassem and Jason Tang.

Deer Park’s sole nominee was Adam Farnsworth of Farnsworth Carson, who would be funded up to $50,000, but not a cent would Deer Park make available for an alternative liquidator.

Evidence was put before the court as to the different charge out rates of the competing practitioners.

The Worrells duo would be more expensive than Farnsworth, the court heard.

But Kassem and Tang would be cheapest and that appeared to sway the judge, who in delivering his reasons after lunch declined to appoint either side’s first preference, seemingly delighted he’d been given a third option. iNO will publish the judgment as soon as Judge McGrath makes it available.