Being non-committal can get a liquidator a long way. After all, far from sitting on the fence, neither consenting or objecting can show that the external administrator is prudently preserving powder in circumstances where there may be no fight to have.
But neutrality only gets you so far unless you’re Swiss, and when tricky and contested questions around the proceeds of asset dispersals emerge, the courts don’t always look benevolently upon officers of the court who decline to declare their stance.
Yesterday, just such an instance of judicial dissatisfaction was observed in the Federal Court when various parties sought to be heard in respect of an application brought by Bradd Morelli and Trent Devine in their capacities as the liquidators of FW Projects Pty Ltd.
Back in September the Jirsch Sutherland partners applied to the Federal Court for guidance on how to deal with the proceeds of asset sales, which they’d reaped whilst appointed as receivers.
Seeking to influence the direction of that guidance were two interveners, the Owners Corporation for 22-26 Albert Street, Freshwater represented by barrister Chris Wood and White Hills Pty Ltd, a company associated with Sydney-based cardiologist Nick Cunio represented by Culwalla Chamber’s ranga-in-residence Chris Freeman.
As the liquidators’ barrister EW Young explained to Justice John Halley, an issue has arisen as to whether the liquidators’ application was properly constituted for the Federal Court given it relates to property sales they undertook in their capacity as receivers.
Young said his clients would need to take great care in ensuring the application was properly constituted and there was a possibility the application might be more correctly pressed in the Supreme Court.
The judge felt the Federal Court could deal with the liquidators’ application but wanted the parties to engage in a consultative process to facilitate the interveners’ joinder applications.
Wood said his clients had no issue with consultation and some additional time for the liquidators to get “their house in order” but complained that the issue about receivership was raised a month ago and his client will want to be heard on the topic of what advice the court might give to the liquidators irrespective of which court is asked to provide it.
“It’s a fairly straightforward application,” Wood said, adding: “My client is the natural contradictor as it seeks to be paid in priority.”
Keeping the parties focussed on the joinder issue Justice Halley said a liquidator should be able to assist the court in terms of the applications for joinder and that he didn’t think a “neither consents to or opposed is perhaps not the most helpful position”.
He instructed the parties to consult and return with some agreed short minutes ahead of case management and a possible hearing on December 9. Morelli and Devine’s time on the fence will soon be at an end.
Further reading:
Jirsch Duo May Shake SPL Scrutiny As Lender Blinks
Jirsch Pair Endure As SPL Bid Resurrected
How Hard Is It To Replace Liquidators? This Hard.
Jirsch Pair Fighting To Keep Freshwater Plum
Karellas Investments Pty Ltd v FW Projects Pty Limited (in liq) [2021] FCA 870
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