Liquidators refusal to convene confirmed by court

Just because directing creditors wield more than 25 per cent doesn’t mean liquidators can’t decline to convene a meeting if they’re deemed to be acting in good faith, there’s no deficit of prudence to be discerned and the court is satisfied that a genuine threat to the administration would follow if the meeting proceeds.

“There is here no evidence and no suggestion that the Liquidators could be characterised as “poorly performing practitioners” within the scope of that identified purposes of these provisions.” Justice Ashley Black.

So sayeth NSW Supreme Court judge Ashley Black last Friday In the matter of Balamara Resources Limited (in liquidation) [2025] NSWSC 618, after the so-called directing creditors of Balamara Resources in December 2024 directed the company’s liquidators Rodgers Reidy trio Geoff Reidy, Andrew Barnden and Paula Smith to convene a meeting so that creditors could vote on a resolution calling for them to be replaced.

“The questions to be decided are whether the Liquidators (acting through Mr Barnden) in fact reached the view that (1) the Directing Creditors’ request was unreasonable by reason of circumstances specified in IPR r 75.250(a) or (2) the Directing Creditors’ request was unreasonable by reason of circumstances specified in IPR rule r 75.250(d); and (as a result of the possibly more exacting standard accepted by Mr (Stephen Golledge) the Liquidators formed either of those opinions at the conclusion of, or as a result of, a genuine attempt to inform themselves of the relevant considerations and undertook a genuine assessment of those matters in coming to that conclusion,” the judge said.

“The Directing Creditors’ request is deemed to be unreasonable for the purposes of IPSC s 75-15 and the liquidators are not required to convene the relevant meeting if the Liquidators establish either of those matters.”

“I am also satisfied that the Liquidators also held the opinion, by reference to the winding up judgment, that several of the Directing Creditors had contributed to the failures of corporate governance which had led to the Company’s winding up.

“I am also satisfied  that the Liquidators in fact held the view that the Direction was vexatious, where their express reliance on r 75-250(2)(d) indicated that view and their reasons provided possible support for it I am satisfied that view was held in subjective good faith and that the Liquidators made a genuine attempt to inform themselves of, and assess relevant matters in, that regard,” the judge said.