Case: Deane-Willcocks v Soluble Solution Hydroponics Pty Ltd (1997) 42 NSWLR 209
Outcome: cited
The distinction between the status of court appointed liquidators and liquidators appointed under voluntary administrators, as a basis for the distinction between the language of s 479(3) and s 511 has long been recognised: see eg, Australian Securities Commission v Melbourne Asset Management Pty Ltd (Receiver and Manager Appointed) (1994) 49 FCR 334 at 348-349 (Northrop J); Deane-Willcocks v Soluble Solution Hydroponics Pty Ltd (1997) 42 NSWLR 209. In the latter case Young J said that: ... the authorities tend to suggest that the court has the same jurisdiction under both sections... The reasons advanced in those and other cases for the conferral of express powers in s 511 are supported by the comment on one of its many predecessors, s 274 of the Uniform Companies Act 1961, in Wallace and Young, Australian Company Law and Practice (Law Book Co, 1965) at 759: the effect of this section (which the court has interpreted so as to give it wide powers) ... is to lessen the distinction between a voluntary and compulsory winding up. 50 Given the more substantive character of the applications contemplated by s 511(1)(a) the preceding observations are even more apposite in applications made under that provision. Whether the Court should proceed to entertain applications for the determination of substantive rights and award final relief as between competing creditors and others in an application under s 511, is a matter of discretion. As Young J said about s 511 in Deane-Willcocks 42 NSWLR 209 (at 212): There are many questions where the only order that the court should make is that the liquidator or the claimant proceed in the ordinary courts in the ordinary way for the determination of a dispute. However, there are many other situations where the court can summarily solve the difficulty that has arisen in the liquidation by an order under the section in a cheap and efficient manner. Where this can be done it is "just and beneficial" to exercise the power. 51 In my opinion it is open to the Court, in a suitable case, to entertain an application for the determination of questions under s 511 by joining affected parties with competing interests as defendants and permitting them to file cross-claims for declaratory relief as between themselves and any other interested parties and the liquidator so that there can be a res judicata between all of them. Such a course may be appropriate where the evidence necessary to determine the questions and the competing claims is largely documentary and amenable to expeditious hearing and determination. Otherwise the parties can simply commence their own substantive proceedings. 52 On the basis of the information provided at the directions hearing and the nature of the factual matters underpinning the questions raised by the liquidator, it appears likely that the resolution of the competing claims reflected in the liquidator's questions could proceed expeditiously on a largely documentary basis. I accept that there may be some oral evidence going to questions of estoppel in relation to IMF. Although the proposed statement of claim outlines a somewhat complex and convoluted sequence of transactions, the heavy documentary emphasis suggests that a largely documentary case can be run.