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Re Samgris Resources Pty Ltd (in liquidation)[2022] QSC 126

Re Samgris Resources Pty Ltd (in liquidation)[2022] QSC 126

SUPREME COURT OF QUEENSLAND

CITATION:

Re Samgris Resources Pty Ltd (in liquidation) [2022] QSC 126

PARTIES:

WILLIAM JAMES HARRIS AND ANTHONY NORMAN CONNELLY IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATRS OF SAMGRIS RESOURCES PTY LTD (IN LIQUIDATION) (ACN 147 457 181)

(applicants)

v

SAMGRIS RESOURCES PTY LTD (IN LIQUIDATION) ACN 147 457 181

(respondent)

FILE NO:

BS 5825 of 2022

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

17 June 2022

DELIVERED AT:

Brisbane

HEARING DATE:

7 June 2022

JUDGE:

Kelly J

ORDER:

  1. Pursuant to s 488(2) of the Corporations Act 2001 (Cth), the applicants have special leave to distribute the whole of the surplus funds of Samgris Resources Pty Ltd (in liquidation) (ACN 147 457 181) as follows:
    1. An amount equal to 50% of the surplus funds to McKay Brooke Resources Limited of 22/F World Wide House, 19 Des Vouex Central, Hong Kong CHINA; and
    2. An amount equal to 50% of the surplus funds to Allways Resources Holdings Pty Ltd (ACN 154 218 256) of Suite 3, Level 1, 12 Riverview Terrace, Indooroopilly QLD 4068.
  2. Pursuant to reg 5.6.71 of the Corporations Regulations 2001 (Cth), the requirement that there be annexed to this order a Schedule in Form 551 is dispensed with.
  3. The requirement of r 7.5(6) of sch 1A of the Uniform Civil Procedure Rules 1999 (Qld) that the applicants were to serve this application by prepaid post to each creditor who proved in the liquidation of Samgris Resources Pty Ltd (in liquidation) (ACN 147 457 181) and any contributory is dispensed with.
  4. Pursuant to s 90-15(1) of sch 2 (Insolvency Practice Schedule (Corporations)) to the Corporations Act 2001 (Cth), the applicants are justified in calculating the distribution of the surplus to be made to McKay Brooke Resources Limited of 22/F World Wide House, 19 Des Vouex Central, Hong Kong CHINA and Allways Resources Holdings Pty Ltd (ACN 154 218 256) of Suite 3, Level 1, 12 Riverview Terrace, Indooroopilly QLD 4068 by making adjustments in the manner specified in paragraph 5 of the affidavit of William James Harris filed 6 June 2022 (CFI 6).
  5. Pursuant to s 90-15(1) of sch 2 (Insolvency Practice Schedule (Corporations)) to the Corporations Act 2001 (Cth), the applicants would be justified in not taking any steps in any proceedings commenced outside of Australia in respect of the claim of Asia Pacific Joint Mining Pty Ltd (in liquidation) (ACN 156 619 484) that was the subject of the CIETAC Arbitration and the proof of debt of Asia Pacific Joint Mining Pty Ltd (in liquidation) (ACN 156 619 484).
  6. Pursuant to rr 1.3(1) and 1.8(2) of sch 1A of the Uniform Civil Procedure Rules 1999 (Qld), it is ordered that rule 7.5(2) of sch 1A of the Uniform Civil Procedure Rules 1999 (Qld) does not apply and in lieu it is directed that the applicants have given sufficient notice of the matters identified in rule 7.5(2) by the email correspondence exhibited to the affidavit of Jordan David Thomas Waldock filed 6 June 2022 (Court file 7).
  7. The applicants be released as joint and several liquidators of Samgris Resources Pty Ltd (in liquidation) (ACN 147 457 181) and ASIC shall deregister the Samgris Resources Pty Ltd (in liquidation) (ACN 147 457 181) pursuant to s 480(d) of the Corporations Act 2001 (Cth) 60 days after the date of this order.
  8. The affidavit entitled “Confidential affidavit of William James Harris” sworn 6 June 2022 be sealed in an envelope and marked “Not to be opened without an order of the Court or a Judge”.
  9. The applicants’ costs and expenses of this application be paid out of the assets of Samgris Resources Pty Ltd (in liquidation) (ACN 147 457 181).  

CATCHWORDS:

CORPORATIONS  –  WINDING UP  –  LIQUIDATORS  –  RELEASE OF THE LIQUIDATOR  –  where the applicants were appointed liquidators of the respondent, which commenced liquidation in 2018  –  where the respondent was incorporated in 2010 and entered into an agreement with two Shaanxi companies in 2011  –  where the agreement provided that the Shaanxi companies would acquire 60% of the shares in the respondent through a joint venture vehicle  –  where the shares were paid for with three instalments totalling $55,000,000  –  where the first instalment was paid, but the second instalment was not paid, and a dispute arose about the obligation to pay the second instalment  –  where the Shaanxi companies referred the dispute to arbitration in the Chinese International Economic and Trade Arbitration Commission  in July 2019 –  where the applicants consented to interlocutory orders preventing them distributing the assets of the respondent until the final arbitral award was delivered  –  where the joint venture vehicle submitted a proof of debt in the liquidation of $39,022,526.09 in August 2019 – where the applicants rejected the proof of debt in April 2020 – where the joint venture vehicle has not appealed that rejection  – where the joint venture vehicle was joined to the arbitration in April 2020  –  where the joint venture vehicle was placed into liquidation in August 2020  –  where the final arbitral award was delivered in October 2021, dismissing the claims made by the joint venture vehicle and the Shaanxi companies  –  where the applicants distributed a final dividend to the admitted creditors who had lodged proofs of debt on 2 December 2021 and those creditors were paid out in full and a surplus remained  –  where at the time of liquidation the respondent had three contributories: the joint venture vehicle, ARH, and MBR  –  where the applicants intend to distribute the surplus equally between ARH and MBR  –  where the liquidators of the joint venture vehicle issued a report to creditors in April 2022 that indicated the liquidators would not commence any appeal in respect of the settled and certified list of contributories as part of a settlement deed with ARH and MBR  –  where in March 2022 the Shaanxi companies filed an application in the Beijing Fourth Intermediate Peoples’ Court to set aside the arbitral award  –  where the joint venture vehicle and its liquidator are not parties to that application  –  where the applicants have not accepted service of that application  –  where the applicants seek orders and advice relating to the distribution of surplus funds, the application made in the Beijing Fourth Intermediate Peoples’ Court, and orders releasing the applicants as liquidators of the respondent and deregistering the respondent – whether the applicants made appropriate inquiries to determine and identify the respondent’s creditors  –  whether there is a surplus available for distribution  –  whether the surplus ought be distributed immediately  –  whether the applicants appropriately applied the rule in Cherry v Boultbee   –  whether the applicants should be granted special leave to distribute the surplus funds equally between ARH and MBR.

Corporations Act 2001 (Cth) s 480, s 488, sch 2 s 90-15(1).

Corporations Regulations 2001 (Cth) reg 5.6.71.

Supreme Court of Queensland Act 1991 (Qld) s 8.

Uniform Civil Procedure Rules 1999 (Qld) sch 1A r1.3, sch 1A r 1.8, sch 1A r 7.5.

Allways Resources Holdings Pty Ltd & Anor v Samgris Resources Pty Ltd & Anor [2017] QSC 74, considered.

Anne Lewis Pty Ltd [2016] NSWSC 1860, cited.

Cherry v Boultbee (1839) 4 My & Cr 442, applied.

Re Better Drums Pty Ltd [2019] NSWSC 1262, cited.

Re Gordon Grant and Grant Pty Ltd [1983] 2 Qd R 314, cited.

Re Octaviar [2020] QSC 353, considered.

Re SSSL Realisations (2002) Ltd [2006] EWCA Civ 7, cited.

Velocity Frequent Flyer Pty Ltd v BP Australia Pty Ltd [2019] QSC 29, cited.

Warner (liquidator), in the matter of Sakr Bros Pty Ltd (in liq) [2019] FCA 547, cited.

COUNSEL:

G Beacham QC for the applicants

H Mrmos (sol) for the liquidators of Asia Pacific Joint Mining Pty Ltd

A Evans (sol) for Allways Resources Holdings Pty Ltd and McKay Brook Resources Ltd

SOLICITORS:

King & Wood Mallesons for the applicants

Mozaik Lawyers for the liquidators of Asia Pacific Joint Mining Pty Ltd

O'Shea & Partners for Allways Resources Pty Ltd and McKay Brook Resources Ltd

The application

  1. [1]
    The applicants are the liquidators of Samgris Resources Pty Ltd (in liquidation) ACN 147 457 181 (“the Company”).  The liquidation commenced on 23 March 2018.  By an Originating Application filed 19 May 2022, the applicants applied for advice, special leave to distribute a surplus and ancillary orders which were intended to facilitate the finalisation of the liquidation.

Relevant background to the liquidation

  1. [2]
    The Company was incorporated on 19 November 2010. The Company’s sole shareholder was then Dr Wanfu Huang and its issued share capital was one million ordinary shares, fully paid up at $1.00 per share. 
  2. [3]
    The Company and Dr Huang entered into various agreements concerning coal exploration.  In particular:
    1. (a)
      on or about 9 March 2011, the Company and Shaanxi Coal and Chemical Industry Co Ltd and Shaanxi Coal Geology Co Ltd (“the Shaanxi Companies”) entered into an agreement entitled “Australian Coal Resources Exploration and Development Corporation Framework Agreement” (“the Framework Agreement”); and
    2. (b)
      on or about 15 October 2011, the Company, Dr Huang and the Shaanxi Companies entered into an agreement entitled “Investment Agreement” (“the Investment Agreement”).
  3. [4]
    Pursuant to the Investment Agreement, the Shaanxi Companies were to incorporate a joint venture vehicle (“the purchaser”), to acquire 200,000 shares in the Company owned by Dr Huang (“the Acquisition Shares”) for a price of $11,000,000.00.  The purchaser was thereafter to subscribe for an additional 1,000,000 shares in the Company (“the Subscription Shares”) for a price payable by way of instalments totalling $55,000,000.00.  The intention was that, at completion of these investments, the purchaser would own sixty per cent of the shares in the Company.
  4. [5]
    In or around November 2011, Dr Huang caused the registration of:
    1. (a)
      Allways Resources Holdings Pty Ltd (ACN 154 218 256) (“ARH”); and
    2. (b)
      a Hong Kong company, McKay Brooke Resources Limited (“MBR”).
  5. [6]
    Dr Huang was the sole Director and the majority shareholder of each of ARH and MBR.
  6. [7]
    On or about 2 April 2012, the Shaanxi Companies registered Asia Pacific Joint Mining Pty Ltd (ACN 156 619 484) (“APJM”) for the purpose of it becoming the purchaser.
  7. [8]
    On 10 April 2012, Dr Huang consolidated his 1,000,000 shares in the Company to 18,000 shares (with the effect that his shares became worth approximately $55.55 per share).  There was no change to the share capital of the Company which remained at a balance of $1,000.000.00. 
  8. [9]
    On 19 April 2012, 491,000 shares were issued to each of ARH and MBR in exchange for a non-cash consideration of certain exploration permits for coal being transferred to the Company to the value of $982.00.  The effect of this share issue was that:
    1. (a)
      the total number of shares in the Company remained 1,000,000 and comprised:
      1. 18,000 owned by Dr Huang;
      2. 491,000 owned by ARH; and
      3. 491,000 owned by MBR;
    2. (b)
      the paid up share capital of the Company was $1,000,982.00 comprising:
      1. $1,000,000.00 paid up by Dr Huang;
      2. $491.00 paid up by ARH; and
      3. $491.00 paid up by MBR.
  9. [10]
    On or about 20 April 2012, the Company, Dr Huang and the Shaanxi Companies entered into an amendment agreement (“the Amendment Agreement”) and the Company, Dr Huang, ARH, MBR, the Shaanxi Companies and APJM entered into a side agreement.
  10. [11]
    In accordance with the Investment Agreement and the Amendment Agreement, on 20 April 2012:
    1. (a)
      200,000 shares were transferred to APJM as follows:
      1. 18,000 shares were transferred by Dr Huang to APJM;
      2. 91,000 shares were transferred by ARH to APJM; and
      3. 91,000 shares were transferred by MBR to APJM;
    2. (b)
      APJM paid $1,182,000.00 in share capital to the Company;
    3. (c)
      Dr Huang’s personal shareholding and paid up capital in the Company was reduced to nil;
    4. (d)
      each of ARH’s and MBR’s paid up share capital was reduced to $400.00; and
    5. (e)
      the total paid up share capital in the Company became $1,000,982.00.
  11. [12]
    Further, on 20 April 2012, in accordance with the Investment Agreement, APJM subscribed for a further issue of 1,000,000 shares in the Company for a price of $55,000,000.00.  The $55,000,000.00 price was payable in instalments upon events described as “closings”. The first instalment of $22,000,000.00 was payable upon the first closing, being the execution of the Investment Agreement.[1] APJM duly paid the $22,000,000.00. As at this time, the total shares in the Company were 2,000,000.00 and its total paid up share capital was $23,000,982.00.  The 2,000,000 ordinary shares in the Company were held by APJM (1,200,000), MBR (400,000) and ARH (400,000).
  12. [13]
    The second closing was an event to occur upon satisfaction of certain further conditions and within 12 months after the first closing. Upon the event of the second closing, a second instalment of $22,000,000.00 became payable.[2]  The third closing was an event to occur upon the satisfaction of certain further conditions and within 12 months after the second closing. Upon the event of the third closing, a third and final payment of $11,000,000.00 became payable.[3]  Clause 2.3 of the Investment Agreement provided for a price adjustment mechanism whereby, at the time of the third closing, an adjustment could be made based on the results of the coal exploration programs which were to be funded by the earlier payments.[4] 
  13. [14]
    The second closing payment was not made. A dispute ensued in relation to this payment between ARH and MBR (“the Minority Shareholders”) and APJM (“the Majority Shareholder”).  The Minority Shareholders contended that, from on or about 20 April 2012 events occurred over a four and a-half year period which meant that the business and operations of the Company were managed by APJM as if it was the sole shareholder or in a manner that failed to have regard to their views and concerns. 
  14. [15]
    The Minority Shareholders commenced a proceeding in this Court for relief pursuant to sections 233 or 461 of the Corporations Act 2001 (Cth) (“the Act”).  After a trial in September 2016, Bond J ordered that the Company be wound up and appointed the applicants as liquidators. In placing the company into liquidation his Honour relevantly observed:[5]

“… winding up would introduce a third party (namely the liquidators) who could bring an objective mind to the realization of the assets and liabilities of [the Company], including [the Company’s] chose in action against APJM for the recovery of the $33 million receivable. The liquidators could form a view whether there was merit in the pursuit of APJM for the monies. True it is the liquidators would have to form a view about value in order to make the decisions involved in performing their duty. There would be at least a possibility that [the Company] might become involved in further litigation. But it would not necessarily involve any direct incurrence of costs by the plaintiffs.”

  1. [16]
    During the trial, his Honour had been told that a dispute as to whether APJM was obliged to make the second and third closing payments, totalling $33 million, had been referred to arbitration.[6] His Honour had variously noted that “The question of the merits or otherwise of that dispute is not before me”[7] and “whether monies are in fact owing by one side to the other pursuant to the relevant agreements (or consequent upon breach of them) are not questions which are before me.”[8]

The liquidation, an arbitration and a foreign court proceeding

  1. [17]
    In fact, arbitration proceedings were not commenced until on or about 30 July 2019, when the Shaanxi Companies commenced an arbitration against the Company in the Chinese International Economic and Trade Arbitration Commission (“the CIETAC Arbitration”).  The Shaanxi Companies there sought an order prohibiting the applicants from distributing the assets of the Company, a ruling that the Company pay to APJM the sum of $38,360,000.00 (an alleged price adjustment calculated pursuant to clause 2.3 of the Investment Agreement) and a ruling that the Company pay to APJM an exploration report fee of $662,526.09. 
  2. [18]
    The applicants consented to interlocutory orders in the arbitration to avoid unnecessary litigation costs. Whilst the interlocutory orders prevented the applicants from making any distributions pending the final arbitral award, they did not prejudice the applicants’ duties to realise the assets and pay preferential claims in accordance with the usual insolvency waterfall under the Act.
  3. [19]
    On or about 6 August 2019, APJM submitted a proof of debt in the liquidation for the sum of $39,022,526.09 (“the APJM Proof of Debt”). The amount of $39,022,526.09 was said to be comprised of $38,360,000 arising out of the Investment Agreement and $662,526.09 as exploration costs. The APJM Proof of Debt contained a section which was headed “Consideration (state how the Debt arose)”. Under this heading the APJM Proof of Debt stated “See annexed filed application to CIETAC dated 30 July 2019”.
  4. [20]
    On 1 April 2020, APJM sought confirmation that it would be entitled to vote at a meeting of creditors that was to be convened by the applicants on 9 April 2020.
  5. [21]
    On or about 7 April 2020, the applicants rejected the APJM Proof of Debt. 
  6. [22]
    APJM did not appeal the rejection of the APJM Proof of Debt. 
  7. [23]
    On or about 19 April 2020, APJM was joined to the CIETAC Arbitration. 
  8. [24]
    On 6 August 2020, APJM was placed into liquidation.
  9. [25]
    On or about 8 October 2021, an arbitral award dismissed the claims made by APJM and the Shaanxi Companies in the CIETAC Arbitration.
  10. [26]
    On 28 October 2021, the applicants issued a circular to creditors giving notice of their intention to declare a final dividend on or before 23 December 2021. 
  11. [27]
    On 2 December 2021, the applicants distributed a final dividend to the admitted creditors who had lodged proofs of debt.  The admitted creditors were paid out in full.[9]
  12. [28]
    By on or around 16 February 2022, the applicants had prepared a provisional list of contributories in accordance with Form 538, as required by r 5.6.58 of the Corporations Regulations 2001 (Cth) (“the Regulations”).  On 16 February 2022, in accordance with r 5.6.59 of the Regulations, the applicants gave to each person in the provisional list of contributories not less than 14 days’ notice in writing, in accordance with Form 539, of the time and place appointed to settle the list. In particular, this notice was served on APJM, ARH and MBR.  The notice specified 2:00 pm on 3 March 2022 at Level 15, 175 Eagle Street as the time and place for settlement of the provisional list of contributories. 
  13. [29]
    That notice materially stated:

“As you may be aware, pursuant to section 2.5 of the Investment Agreement dated on or about 15 October 2011, APJM was required to make the [second closing payment] of AU$22 million within 12 calendar months following closing and the satisfaction or waiver of the conditions set out in section 9.1 of the Investment Agreement. On 5 April 2013, [ARH] and [MBL] issued a notice to APJM titled ‘Call for the Second Closing’, which confirmed that all the conditions for the [second closing payment] had been satisfied and requested the [second closing payment] to be made by APJM.

Subsequently, on 28 May 2014, Mr Laixin Li, director of APJM, sent a text message to Dr Huang, director of [the Company] which advised that APJM agreed to the [second closing payment] and had commenced making formal arrangements for payment. Notwithstanding, the [second closing payment] was never paid and remains due and owing (and has been owing since at least the date of the start of the winding up of [the Company]).

Further, the AU$22 million receivable owing by APJM is recorded in the 2012 and 2013 audited financial statements. The 2013 financial statements were signed off by Mr Li as the chairman of directors nominated by APJM and who also held executive positions working with Shaanxi Coal. Ms Dong, the CFO nominated by the APJM, was involved in the preparation of those accounts and was also the Senior Business Manager employed in the Finance Department of Shaanxi Coal. As the 2014 financial reports were held by the Supreme Court of Queensland in its judgement delivered on 8 May 2017 to contain a ‘litany of falsehoods’, the relevant entries from those accounts have not been relied upon by the liquidators.

It should be noted that the financial reports also refer to a further amount of AU$11M as an outstanding capital contribution by APJM. However, the liquidators are not satisfied that the preconditions to that payment have been satisfied.”

  1. [30]
    The Form 539 notice also noted that it was the applicants’ intention to distribute the surplus equally between ARH and MBR consistent with the rule established in Cherry v Boultbee (1839) 4 My & Cr 442.The notice relevantly stated:

“1.3 The Rule in Cherry v Boultbee

We note that APJM’s proof of debit in the liquidation of [the Company] was previously rejected in light of the above (amongst other reasons) and no appeal against that rejection was lodged within the requisite period. Consistent with that rejection, the AU$22 million unpaid by APJM must also be taken into consideration in determining how the surplus will be distributed. The rule in Cherry v Boultbee (1839) 4 My & Cr 442 established that “where a person entitled to participate in a fund is also bound to make a contribution in aid of that fund, he cannot be allowed so to participate unless and until he has fulfilled his duty to contribute (to the fund)”. This rule prevents a person who at the commencement of a liquidation was both a debtor of the company and a shareholder of the company from receiving a share of the surplus assets without contributing to that surplus by the amount of the debt.

The effect of the rule in Cherry v Boultbee on the amount contributories are to receive in a distribution was explained by Chadwick LJ in Re SSSL Realisations (2002) Ltd [2006] EWCA Civ 7:

[79] Effect is given to the general rule, as a matter of accounting, by treating the fund as notionally increased by the amount of the contribution; determining the amount of the share by applying the appropriate proportion to the notionally increased fund; and distributing to the claimant the amount of the share (so determined) less the amount of the contribution. The rule can be expressed in the form: D=1/n of (A+C)-C, where 1/n where 1/n is the proportion which the aliquot share bears to the whole, A is the amount of the assets to be distributed before taking account of the contribution due to the fund from the claimant, C is the amount of the contribution, and D is the amount which the claimant is entitled to receive in the distribution. It can be seen that the claimant will receive nothing by way of distribution if C > 1/n of (A + C).

We set out the following notional table of calculations applying the above formula on the basis the current surplus balance is approximately 5.4 million (A):

Name

Percentage (1/n)

Contribution owed to fund (C)

National Revised Amount (D)

[MBR]

20%

Nil

$5,480,000

(being 20% x ($5,400,000 + $22,000,000)

[ARH]

20%

Nil

$5,480,000

(being 20% x ($5,400,000 + $22,000,000)

[APJM] (in Liq)

60%

$22,000,000.00

-$5,560,000

(being 60% x ($5,400,000 + $22,000,000) minus 22,000,000)

Accordingly, we confirm it is our intention to distribute the surplus equally between [MBR] and [ARH] in accordance with the rule in Cherry v Boultbee (as applied by subsequent authorities).”

  1. [31]
    On 17 February 2022, the applicants lodged a Form 540 with ASIC certifying that the Form 539 notice had been given to each person in the provisional list of contributories.
  2. [32]
    There were then exchanges of correspondence between the applicants, the solicitors for the liquidators of APJM and the solicitors for ARH and MBR. 
  3. [33]
    On 16 March 2022, the applicants settled and certified the list of contributories. 
  4. [34]
    On 17 March 2022, as required by r 5.6.62 of the Regulations, the applicants gave notice in the form of Form 544 to each of APJM, ARH and MBR, which notice specified the settled and certified list of contributories.  The settled and certified list of contributories was set out in table form as follows:

No.

Name

Address

Description of class of contributory and in what character included

Number of shares (or extent of interest)

Amount called up at date of start of winding up

Amount unpaid at date of start of winding up

Amount not called up at date of start winding up

1F0423098

[MBR]

c/o O'Shea and Partners, 4/307 Queen Street, Brisbane QLD 4000

Ordinary

400,000

$400.00

-

-

1F0423098

[ARH]

c/o O'Shea and Partners, 4/307 Queen Street, Brisbane QLD 4000

Ordinary

400,000

$400.00

-

-

1F0423098

[APJM] (In Liq)

Level 9,410 Queen Street, Brisbane Qld 4000

Ordinary

1,200,000

$45,000,182.00

$22,000,000

$11,000,000.00

  1. [35]
    On 14 April 2022, the applicants lodged a Form 545 with ASIC certifying that the Form 544 notice had been given to the settled and certified contributories.
  2. [36]
    On 27 April 2022, the liquidators of APJM issued a report to creditors which materially stated that they had entered into a Deed of Settlement with MBR and ARH and as part of that Deed would not be commencing any appeal in respect of the settled and certified list of contributories. The liquidators of APJM have not appealed the settled and certified list of contributories. 
  3. [37]
    Mr Harris, on behalf of the applicants, has relevantly deposed:[10]

“In accordance with the [reasons of Bond J] and their duties, [the applicants] have objectively reviewed all the available evidence and submissions of the shareholders with the assistance of KWM and their PRC lawyer and formed the view that the [second closing payment] of $22 million remains owning by APJM”.

  1. [38]
    On or about 22 March 2022, the Shaanxi Companies filed an application in the Beijing Fourth Intermediate Peoples’ Court seeking to set aside the arbitral award (“the Beijing Application”).  Neither APJM nor its liquidator are parties to the Beijing Application. The applicants have not accepted service, or given any other authorisation in respect of, the Beijing Application. The applicants have taken advice and formed the view that the effect of setting aside the arbitral award would mean that the claims the subject of the set aside award could not be submitted to arbitration again without further agreement and absent such agreement, would be submitted to a Chinese Court with jurisdiction. The applicants estimate that it will cost approximately US $20,000.00 – $25,000.00 in legal fees for them to defend the Beijing Application and that the proceeding may conclude anytime between October and December 2022.  If the arbitral award were to be set aside and the claims from the arbitration submitted to a Chinese Court with jurisdiction, the applicants’ legal costs of defending a proceeding in the Chinese Court are estimated to be approximately US $350,000.00 – US $500,000.00. 

An overview of the orders sought by the applicants

  1. [39]
    The applicants have provided a draft form of order which seeks a suite of orders designed to facilitate the finalisation of the liquidation of the Company. By way of broad overview, those orders may be characterised as follows:
    1. (a)
      Orders and advice relating to the distribution of surplus funds;
    2. (b)
      Orders to the effect that certain requirements of the Regulations and of sch 1A of the Uniform Civil Procedure Rules 1991 (Qld) (Corporations Proceedings Rules) (“the Corporations Proceedings Rules”) be dispensed with or determined to be not applicable to this proceeding;
    3. (c)
      Advice in relation to the Beijing Application;
    4. (d)
      Orders releasing the applicants as liquidators of the Company and deregistering the Company; and
    5. (e)
      Confidentiality orders.
  2. [40]
    Each of MBR, ARH and the liquidators of APJM were represented at the hearing of this application. The liquidators of APJM had no objection to the proposed orders.[11] MBR and AJH materially supported the distribution of the surplus, the release of the liquidators and deregistration of the Company and otherwise supported or expressed no position in relation to the balance of the orders.

Distribution of surplus

  1. [41]
    Section 488 of the Act provides:

488 Delegation to liquidator of certain powers of Court

  1. (1)
    Provision may be made by rules or regulations for enabling or requiring all or any of the powers and duties conferred and imposed on the Court by this Part or Schedule 2 in respect of:
  1. (a)
    the holding and conducting of meetings to ascertain the wishes of creditors and contributories; and
  1. (b)
    the paying, delivery, conveyance, surrender or transfer of money, property or books to the liquidator; and
  1. (c)
    the adjusting of the rights of contributories among themselves and the distribution of any surplus among the persons entitled to it; and
  1. (d)
    the fixing of a time within which debts and claims must be proved;

to be exercised or performed by the liquidator as an officer of the Court and subject to the control of the Court.

  1. (2)
    Despite anything in rules or regulations made for the purposes of subsection (1), a liquidator may distribute a surplus only with the Court’s special leave.”
  1. [42]
    In the matter of Anne Lewis Pty Ltd [2016] NSWSC 1860 at [10], Black J observed:

“[s 488(2)] is intended to ensure that there is in reality a surplus, in that creditors’ claims have been recognised and met in full and also to ensure that the correct relativities among contributories have been observed… The phrase ‘special leave’ requires that a special application be made to the court, as has occurred in this case”.

  1. [43]
    I am satisfied that the applicants have made appropriate inquiries to determine and identify the Company’s creditors. In this regard, the applicants:[12]
    1. (a)
      conducted a review of the Company’s books and records to understand and collate creditor information;
    2. (b)
      engaged in discussions with the Company’s employees to confirm the identity of creditors;
    3. (c)
      advertised on the ASIC published notices website and in the Courier Mail; and
    4. (d)
      issued report notifications to all creditors.
  2. [44]
    On 28 October 2021, the applicants issued a circular to creditors giving notice of their intention to declare a final dividend on or before 23 December 2021.  On 2 December 2021, the applicants distributed a final dividend to the admitted creditors who had lodged proofs of debt.  The admitted creditors were paid out in full.[13] I am satisfied that there is in reality a surplus available for distribution.
  3. [45]
    I am also satisfied on the evidence that the applicants have complied with the regulations in relation to the preparation and settling of the list of contributories. In that regard, the following table sets out the findings I make by reference to the evidence:

Finding

Regulation[14]

Evidential references

On 16 February 2022, the applicants made a provisional list of contributories in accordance with Form 538.

5.6.58

Affidavit of WJ Harris filed 25 May 2022 [46] and exh WJH-1 418.

On 16 February 2022, the applicants issued to each of APJM, ARH and MBR written notice stating the time and place appointed to settle the list of contributories in accordance with Form 539.

5.6.59(1)

Affidavit of WJ Harris filed 25 May 2022 [47] and exh WJH-1 419-436.

On 17 February 2022, the applicants lodged a Form 540 with the Australian Securities and Investments Commission (“ASIC”) within 1 month of issuing the Form 539 notices.

5.6.59(2)

Affidavit of WJ Harris filed 25 May 2022 [50] and exh WJH-1 437-439.

The applicants thereafter heard and determined any objections from the contributories.

5.6.60(1)

Affidavit of WJ Harris filed 25 May 2022 [51]-[59] and exh WJH-1 49-436.

On 6 March 2022, the applicants settled and certified the list of contributories in Form 541, more than 14 days from the issuance of the Form 539.

5.6.60(2)

Affidavit of WJ Harris filed 25 May 2022 [60] and exh WJH-1 460-462.

On 7 March 2022, the applicants gave notice to APJM, ARH and MBR in Form 544.

5.6.62

Affidavit of WJ Harris filed 25 May 2022 [61] and exh WJH-1 463-468.

On 14 March 2022, the applicants lodged a Form 545 with ASIC, within 1 month from the issuance of the Form 544 notices.

5.6.62(5)

Affidavit of WJ Harris filed 25 May 2022 [62] and exh WJH-1 469-476.

  1. [46]
    The applicants also caused a Form 15 notice to be advertised in the Courier Mail in Brisbane on Monday, 23 May 2022, being at least 14 days before the hearing of this application.[15] Each of the contributories, the Shaanxi Companies and their representatives were given notice of this application and provided with copies of the relevant supporting material.[16] As I have indicated, there has been no objection to this application.
  2. [47]
    There are two remaining issues in relation to the surplus. The first concerns whether it ought to be distributed now and the second concerns the manner in which it might be distributed.
  3. [48]
    As to the first issue, I do not consider that the commencement of the Beijing Application provides a good reason for delaying the finalisation of the liquidation of the Company.  The lodgement of a proof of debt in a liquidation is a submission to the insolvency process, and the jurisdiction of the Court that supervises it. In the present case, when APJM submitted the APJM Proof of Debt it submitted to a statutory scheme for the distribution of the Company’s assets pari passu in satisfaction of its claims.[17] The lodgement of the APJM Proof of Debt meant that APJM agreed to be bound by the applicants’ decision to accept or reject the APJM Proof of Debt, subject always to any statutory right to challenge that decision. 
  4. [49]
    It is convenient to recall that the APJM Proof of Debt sought to rely in terms upon the claims made in the CIETAC Arbitration. Mr Harris has deposed that in the CIETAC Arbitration, the Shaanxi Companies sought a ruling that the Company pay to APJM the sum of $38,360,000.00 and a ruling that the Company pay to APJM an exploration report fee of $662,526.09.[18] That is, the APJM Proof of Debt, consistently with the application in the CIETAC Arbitration which it adopted in terms, was framed on the basis that the Company’s relevant creditor was APJM, not one or other or each of the Shaanxi Companies.
  5. [50]
    The rejection of the APJM Proof of Debt occurred in the context of a winding up ordered by the Court. In re Gordon Grant and Grant Pty Ltd,[19] McPherson J, with whom Wanstall CJ and Sheahan J agreed, said:

“As a matter of history, a winding up by the court was, and it remains today, an administration conducted by the court … Both because of this … it was inevitable that there should be restrictions on the bringing of proceedings, whether at common law or otherwise, during the course of that administration. What is substituted for litigation in the ordinary form is a procedure by which a claimant lodges a verified proof of debt with the liquidator, who admits or rejects it wholly or in part, and from whom an appeal lies to a judge, who determines that appeal de novo primarily on affidavit material … There can be no doubt that ordinarily such a procedure is, and is designed to be, much more expeditious and less expensive than ordinary proceedings by way of action.”

  1. [51]
    By submitting the APJM Proof of Debt, APJM submitted to an insolvency process by which its claims would be determined by the applicants’ adjudication or, in the case of a dispute, on an appeal from that adjudication. APJM had statutory rights to appeal the rejection of the APJM Proof of Debt[20] and/or the settlement of the list of the Company’s contributories[21]. It has not appealed either decision.[22] Further, APJM was the alleged creditor not the Shaanxi Companies. The fact that the Shaanxi Companies, effective strangers to the liquidation, have commenced a foreign proceeding against the Company concerning the debt alleged to be owed by the Company to APJM does not in any way diminish the legal reality that, for the purposes of the liquidation of the Company, the debt formerly alleged to be owed to APJM has been conclusively determined as a debt which is not owed by the Company. Hence, in my consideration, the Beijing Application is not an impediment to the finalisation of the liquidation.
  2. [52]
    As to the second issue, the applicants propose to distribute the surplus on the basis that the second closing payment is owing by APJM to the Company.  It is submitted that this course is justified in all of the circumstances. In this regard, the matters relied upon may be set out as follows.
  3. [53]
    What is referred to as to the rule in Cherry v Boultbee[23] is a rule to the effect that “where a person entitled to participate in a fund is also bound to make a contribution in aid of that fund, he cannot be allowed so to participate unless and until he has fulfilled his duty to contribute (to the fund)”. The rule is said to prevent a person who at the commencement of a liquidation is both a debtor of the company and a shareholder of the company from receiving a share of the surplus assets without first contributing to that surplus by paying the amount of the debt.[24]
  4. [54]
    The practical application of the rule was explained in in Re SSSL Realisations (2002) Ltd:[25]

“Effect is given to the general rule, as a matter of accounting, by treating the fund as notionally increased by the amount of the contribution; determining the amount of the share by applying the appropriate proportion to the notionally increased fund; and distributing to the claimant the amount of the share (so determined) less the amount of the contribution. The rule can be expressed in the form: D=1/n of (A+C)−C, where 1/n is the proportion which the aliquot share bears to the whole, A is the amount of the assets to be distributed before taking account of the contribution due to the fund from the claimant, C is the amount of the contribution, and D is the amount which the claimant is entitled to receive in the distribution. It can be seen that the claimant will receive nothing by way of distribution if C > 1/n of (A + C)

  1. [55]
    On the basis of the settled list of contributories and that the second closing payment remains owing to the Company by APJM,[26] the applicants submit the following table reflects the application of the rule in Cherry v Boultbee where the current surplus balance is approximately $5.3 million (A):[27]

Name

Percentage (1/n)

Contribution owed to fund (C)

Notional Revised Amount (D)

McKay Brooke Resources Limited

20%

Nil

$5,460,000

(being 20% x ($5,300,000 + $22,000,000)

Allways Resources Holdings Pty Ltd

20%

Nil

$5,460,000

(being 20% x ($5,300,000 + $22,000,000)

Asia Pacific Joint Mining Pty Ltd (In Liquidation)

60%

$22,000,000.00

-$5,6260,000

(being 60% x ($5,300,000 + $22,000,000) minus 22,000,000)

  1. [56]
    The applicants submit that the surplus should be split equally between MBR and ARH in accordance with the rule in Cherry v Boultbee (as applied above), with APJM not receiving any distribution. In my consideration, in the circumstances of this case, the rule in Cherry v Boultbee is appropriately applied in the manner which has been described by the applicants.
  2. [57]
    I also note that there are objective reasons why the applicants are entitled to consider that the second closing payment is payable by the APJM to the Company.
  3. [58]
    First, there are contemporaneous documents and statements which are consistent with the contention that the second closing payment is due and payable. In this regard:
    1. (a)
      on 5 April 2013, ARH and MBR issued a notice to APJM which “confirmed” that all the conditions for the second closing payment had been satisfied and requested that the second closing payment be made by APJM;
    2. (b)
      subsequently, on 28 May 2014, Mr Laixin Li, a director of APJM, sent a text message to Dr Huang which advised that APJM agreed to the second closing payment and had commenced making formal arrangements for the making of that payment;
    3. (c)
      the second closing payment is recorded as a receivable owing by APJM in the Company’s 2012 and 2013 audited financial statements;
    4. (d)
      the 2013 financial statements were signed off by Mr Li, as the chairman of directors nominated by APJM, and who held executive positions with the Shaanxi Companies. Ms Dong, the CFO nominated by APJM, was involved in the preparation of those accounts and was also a Senior Business Manager in the Finance Department of the Shaanxi Companies.[28]
  4. [59]
    Secondly, the applicants gave notice to APJM’s liquidators that they regarded the second closing payment as due and had decided to distribute the surplus on that basis. APJM’s liquidators were offered the opportunity to provide evidence countering the contention that the second closing payment was due but no such evidence has been provided.[29]  
  5. [60]
    Thirdly, the applicants settled the list of contributories, which records that APJM has unpaid called up capital of $22 million,[30] and APJM took no steps to challenge the list of contributories and ultimately entered into a deed of settlement with ARH and MBR pursuant to which APJM agreed not to appeal the list of contributories.[31] 
  6. [61]
    In all of the circumstances, I am satisfied that there should be a grant of special leave to distribute the whole of the surplus funds of the Company in an amount equal to 50% of the surplus funds to MBR and an amount equal to 50% of the surplus funds to ARH.
  7. [62]
    I am also prepared to direct that the requirement in r 5.6.71 of the Regulations that there be annexed to the order for distribution of the surplus a schedule in Form 551 be dispensed with because I am satisfied that the requirement is unnecessary in circumstances where the relevant information has been provided to the contributories and the creditors have been paid out in full.
  8. [63]
    The applicants seek an order pursuant to s 90-15(1) of Schedule 2 (Insolvency Practice Schedule (Corporations)) (“IPS”) to the Act that they would be justified in:
    1. (a)
      calculating the distribution of the surplus to be made to MBR and ARH in accordance with the calculations identified at [55] above; and
    2. (b)
      not taking any steps in any proceedings commenced outside of Australia in respect of the claim of APJM that was the subject of the CIETAC Arbitration and the APJM Proof of Debt.
  9. [64]
    Prior to the commencement of the Insolvency Law Reform Act (2016) Cth, applications by liquidators for judicial advice were made under s 479(3) or s 511 of the Act. Those provisions have been repealed and the operative provision under which advice is now given is s 90-15 of the IPS.[32] The principles which govern the giving of advice under s 90-15 of the IPA are, in effect, the same as those that applied to the exercise of the Court's power under s 479(3) and s 511  of the Act.[33] In Re Octaviar Administration Pty Ltd (in liq),[34] Black J relevantly summarised the relevant principles as follows:

“I summarised the scope of the Court’s power to give directions under s 479(3) of the Corporations Act in Re MF Global Australia Ltd (in liq) [2012] NSWSC 994; (2012) 267 FLR 27 at [7] as follows:

Section 479(3) of the Corporations Act allows a liquidator to apply to the court for directions in relation to a matter arising under a winding up. The function of a liquidator’s application for directions under this section is to give the liquidator advice as to the proper course of action for him or her to take in the liquidation… The court may give directions that provide guidance on matters of law and the reasonableness of a contemplated exercise of discretion but will typically not do so where a matter relates to the making and implementation of a business or commercial decision, where no particular legal issue is raised and there is no attack on the propriety or reasonableness of the decision...

I also referred to the scope of the Court’s powers under s 511 of the Corporations Act in that decision and observed (at [8]) that:

Section 511 of the Corporations Act provides an alternative source of power to give such a direction and the Liquidators also rely on that section. The principles applicable to an application under that section were recently reviewed by Ward J in Re Purchas [2011] NSWSC 91… Applications made under this section in a voluntary winding up are determined in a similar manner to applications in a court ordered winding up under s 479(3) of the Corporations Act notwithstanding that section does not expressly require that it be ‘just and beneficial’ to give the relevant direction. The court may give such a direction where it will be ‘of advantage in the liquidation’… The effect of a determination under the section is to sanction a course of conduct on the part of the liquidator so that he or she may adopt that course free from the risk of personal liability for breach of duty…

I also recognise that the Court’s powers to give judicial advice and give directions under these sections are intended to facilitate the performance of a liquidator’s functions and should be interpreted widely to give effect to that intention, and the Court may give such advice or give such a direction where it is advantageous to the liquidation to do so…”

  1. [65]
    The Court does not interfere with or seek to second guess the liquidator’s judgment unless there is evidence of a lack of good faith, an error of law or principle, real and substantial grounds for doubting the prudence of the liquidator’s conduct, or when the Court considers that the liquidator’s decision is not a proper and reasonable one.[35] However, in considering whether to give advice under s 90-15, Bond J in Re Octaviar[36]  considered that the Court was required to be positively persuaded of the propriety of the course for the which the liquidators seeks the court’s sanction. His Honour also observed:[37]

“However, the aphorism ‘Don’t let perfect be the enemy of the good’ (often attributed to Voltaire) is apposite.

In the present context, the lesson to be drawn is that sometimes the proper performance of a liquidator’s duty will involve a decision not to expend the time and money involved in trying to achieve notional ‘perfection’.”

  1. [66]
    I am prepared to give the advice sought by the applicants as I am positively persuaded by the propriety of the proposed course of conduct which the applicants seek to pursue. I consider that the applicants would be justified in calculating the distribution of the surplus to be made to MBR and ARH in accordance with the calculations identified at [55] above for the reasons I have outlined at [43] to [60] above. I consider that the applicants would be justified in not taking any steps in any proceedings commenced outside of Australia in respect of the claim of APJM that was the subject of the CIETAC Arbitration and the APJM Proof of Debt for the reasons I have outlined at [48] to [51] above.

Release of the applicants and deregistration of the Company

  1. [67]
    The applicants seek orders that they be released as joint and several liquidators of the Company and that ASIC deregister the Company pursuant to s 480(d) of the Act.
  2. [68]
    Section 480 of the Act relevantly provides:

“480 Release of liquidator and deregistration of company

When the liquidator:

  1. (a)
    has realised all the property of the company or so much of that property as can in his or her opinion be realised without needlessly protracting the winding up, and has distributed a final dividend (if any) to the creditors and adjusted the rights of the contributories among themselves and made a final return (if any) to the contributories; or
  1. (b)
    has resigned or has been removed from office;

he or she may apply to the Court:

  1. (c)
    for an order that he or she be released; or
  1. (d)
    for an order that he or she be released and that ASIC deregister the company.”
  1. [69]
    The effect of an order releasing a liquidator is to discharge him or her from all liability (unless the order is obtained by fraud, or suppression or concealment of a material fact).[38]
  2. [70]
    In Re Better Drums Pty Ltd,[39] Black J observed:

As I noted above, Mr Ingram also seeks an order under s 480(d) of the Act that he be released as liquidator and that ASIC deregister the Company, to have effect 30 and 60 days in the future respectively. As I noted above, Mr Ingram has led the evidence contemplated by r 7.5 of the Supreme Court (Corporations) Rules in respect of such an application… s 480(d) of the Act implies that, once the Court is satisfied that the necessary notifications have been given to interested persons, that no creditors or contributories had objected to a liquidator's release or raised any concern as to the performance of his or her duties, and the other evidence contemplated by the Supreme Court (Corporations) Rules is placed before the Court, then the Court would ordinarily make an order releasing the liquidator unless any reason emerges that it should not do so…

Strictly, an order for release would ordinarily only be made after all steps in the liquidation had been completed. However, there are occasions where the Court has made such an order where remaining steps are of a mechanical character… In those circumstances, the Court has previously taken, and I will now take, the course of making an order for release which has effect from a specified date.”

  1. [71]
    The applicants seek relief from compliance with r 7.5(2) of the Corporations Proceedings Rules, and the abridgment of the time period under rule 7.6, essentially because:
    1. (a)
      due to an oversight, this application did not contain the notice specified in r 7.5(2), namely a notice stating to the effect that any objection to the release of the liquidator was required to be made by filing and serving a notice of objection in form 13 within 21 days after the date of service of the application;
    2. (b)
      when this irregularity was discovered, the applicants sent correspondence to MBR, ARH, APJM and the Shaanxi Companies and their representatives providing the required notice and requesting that any objection to the release of the applicants be notified as soon as possible and that any objection be filed and served in Form 13;[40]
    3. (c)
      the hearing was scheduled for 7 May 2022, being 1 day short of the 21 days specified in r 7.6;
    4. (d)
      APJM’s liquidators have confirmed they do not object to the orders sought and ARH and MBR consent to the orders sought;[41]
    5. (e)
      all other known creditors of the Company have been paid out in full; and
    6. (f)
      there have already been significant delays in the winding up to date, the liquidators having been appointed some 4 years ago.
  2. [72]
    I am satisfied that, pursuant to rr 1.3(1) and 1.8(b) of the Corporations Proceedings Rules, it is appropriate to order that r 7.5(2) of the Corporations Proceedings Rules does not apply to this application and to direct that for the purpose of this application, the applicants have given sufficient notice of the matters identified in rule 7.5(2) by the email correspondence exhibited to the affidavit of Jordan David Thomas Waldock filed 6 June 2022.
  3. [73]
    I am also prepared to order that the requirement in r 7.5(6) of the Corporations Proceedings Rules, namely that the applicants were to serve the application by prepaid post on each creditor who proved in the liquidation the Company and any contributory, be dispensed with. In this regard, I am satisfied that all known creditors have been paid out in full and the contributories have all been notified of this application and the proposed orders. Notification of these proceedings has been given to all interested persons, including ASIC. [42]
  4. [74]
    The applicants have otherwise met all of the requirements necessary for an order to be made under s 480 of the Act.[43] I am satisfied that there should be an order that the applicants be released as joint and several liquidators of the Company and that ASIC should deregister the Company pursuant to s 480(d) of the Act, 60 days after the making of the order. 

Confidentiality Orders

  1. [75]
    The CIETAC rules are in evidence.[44] Article 38 of the rules provides that hearings are held in camera, and for such hearings, “the parties and their representatives… shall not disclose to any outsider any substantive or procedural matters relating to the case”. In addition, the applicants’ Chinese lawyers advise that the proceedings in the Beijing Application are private, not public.[45] The applicants seek to comply with the CIETAC obligations, and to respect the private nature of the Beijing Application, by sealing the “Confidential affidavit of William James Harris” sworn 6 June 2022, which exhibits the CIETAC Application and the Beijing Application documents.
  2. [76]
    The starting point in determining such an application is that the business of this court is to be conducted in public.[46] The court may, if the public interest or the interests of justice require, by order limit the extent to which the business of the court is open to the public.[47] The court has the power to limit the extent to which documents received by the court are made available to the public. In Velocity Frequent Flyer Pty Ltd v BP Australia Pty Ltd,[48] Jackson J observed:

“...it is clear now that this court has a general discretionary statutory power, if the public interest or the interests of justice require, to limit the extent to which the business of the court is open to the public, under s 8(2) Supreme Court of Queensland Act 1991 (Qld).

On the proper construction of that sub-section, the business of the court that is open to the public, that may be limited by order, is not confined to that part of the business that is constituted by hearing in open court, but properly includes the part of the court’s business encompassed by the documents published by the court in the form of orders and reasons for judgment and the documents that are received onto and kept on the court’s file that would otherwise be open for public inspection.”

  1. [77]
    Whether the public interest or the interests of justice require confidentiality or non-publication orders depends upon the circumstances of each case. In the present case, given the private nature of the CIETAC Arbitration and the Beijing Application, I consider that it is in the public interest and the interests of justice to prevent information concerning the CIETAC Arbitration and the Beijing Application from being disclosed other than to the court in the circumstances of this application.

Costs

  1. [78]
    The applicants also seek an order that the costs of the application be paid out of the assets of the Company. I consider this order to be appropriate in circumstances where the costs have been incurred in advancing and finalising the winding up of the Company, including attending to the distribution of the surplus.
  2. [79]
    The orders I make are as follows:
  1. Pursuant to s 488(2) of the Act, the applicants have special leave to distribute the whole of the surplus funds of the Company as follows:
    1. An amount equal to 50% of the surplus funds to MBR; and
    2. An amount equal to 50% of the surplus funds to ARH.
  2. Pursuant to reg 5.6.71 of the Regulations, the requirement that there be annexed to this order a Schedule in Form 551 is dispensed with.
  3. The requirement of r 7.5(6) of the Corporations Rules that the applicants were to serve this application by prepaid post to each creditor who proved in the liquidation of the Company and any contributory is dispensed with.
  4. Pursuant to s 90-15(1) of the IPS, the applicants are justified in calculating the distribution of the surplus to be made to MBR and ARH by making adjustments in the manner specified in paragraph 5 of the affidavit of William James Harris filed 6 June 2022 (CFI 6).
  5. Pursuant to s 90-15(1) of sch 2 (Insolvency Practice Schedule (Corporations)) to the Corporations Act 2001 (Cth), the applicants would be justified in not taking any steps in any proceedings commenced outside of Australia in respect of the claim of APJM that was the subject of the CIETAC Arbitration and the APJM proof of debt.
  6. Pursuant to rr 1.3(1) and 1.8(2) of the Corporations Rules, it is ordered that rule 7.5(2) of the Corporations Rules does not apply and in lieu it is directed that the applicants have given sufficient notice of the matters identified in rule 7.5(2) by the email correspondence exhibited to the affidavit of Jordan David Thomas Waldock filed 6 June 2022 (CFI 7).
  7. The applicants be released as joint and several liquidators of the Company and ASIC shall deregister the Company pursuant to s 480(d) of the Corporations Act 2001 (Cth) 60 days after the date of this order.
  8. The affidavit entitled “Confidential affidavit of William James Harris” sworn 6 June 2022 be sealed in an envelope and marked “Not to be opened without an order of the Court or a Judge”.
  9. The applicants’ costs and expenses of this application be paid out of the assets of the Company.  

Footnotes

[1]Clauses 2.1, 2.4 and 8.1 of the Investment Agreement.

[2]Clauses 2.5 and 9.1 of the Investment Agreement.

[3]Clauses 2.6 and 10.1 of the Investment Agreement.

[4]Clause 2.3 of the Investment Agreement.

[5]Allways Resources Holdings Pty Ltd & Anor v Samgris Resources Pty Ltd & Anor [2017] QSC 74 [384].

[6]Allways Resources Holdings Pty Ltd & Anor v Samgris Resources Pty Ltd & Anor [2017] QSC 74 [57].

[7]Allways Resources Holdings Pty Ltd & Anor v Samgris Resources Pty Ltd & Anor [2017] QSC 74 [57].

[8]Allways Resources Holdings Pty Ltd & Anor v Samgris Resources Pty Ltd & Anor [2017] QSC 74 [176].

[9]Affidavit of WJ Harris filed 25 May 2022 exh WJH-1 416-417.

[10]Affidavit of WJ Harris filed 25 May 2022 [65].

[11]Affidavit of JDT Waldock filed 6 June 2022 [13].

[12]Affidavit of WJ Harris filed 25 May 2022 [77].

[13]Affidavit of WJ Harris filed 25 May 2022 exh WJH-1 416-417.

[14]All references in this table are to the Regulations.

[15]Corporations Proceedings Rules, rr 7.9(2), 7.9(3); Affidavit of JDT Waldock filed 6 June 2022, [4]-[5].

[16]Affidavit of JDT Waldock filed 6 June 2022, [6], [10], [11].

[17]Akers and Others v Deputy Commissioner of Taxation (2014) 223 FCR 8 [160], [164], [165]; Stichting Shell Pensioenfonds v Krys [2014] UKPC 41 [31].

[18]Affidavit of WJ Harris filed 25 May 2022 [19].

[19][1983] 2 Qd R 314, 317.

[20]Corporations Regulations 2001 (Cth) reg 5.6.54.

[21]Corporations Regulations 2001 (Cth) reg 5.6.62.

[22]As to the implications of failing to appeal see Re Murray River FM Pty Ltd (1995) 60 FCR 356, 362-3.

[23](1839) 4 My & Cr 442.

[24]Ample Source International Limited v Bonython Metals Group Pty Limited (in liquidation), in the matter of Bonython Metals Group Pty Limited (in liquidation) (No 8) [2018] FCA 1614 [120]-[121].

[25][2006] EWCA Civ 7; see also Ample Source International Limited v Bonython Metals Group Pty Limited (in liquidation), in the matter of Bonython Metals Group Pty Limited (in liquidation) (No 8) [2018] FCA 1614 [127]-[136].

[26]Affidavit of WJ Harris filed 25 May 2022 [65].

[27]Affidavit of WJ Harris filed 6 June 2022 [5].

[28]Affidavit of WJ Harris filed 25 May 2022 [47]-[48].

[29]Affidavit of WJ Harris filed 25 May 2022 [47], [51]-[59].

[30]Affidavit of WJ Harris filed 25 May 2022 [60], [62], exh “WJH-1” 460-462, 471-472.

[31]Affidavit of WJ Harris filed 25 May 2022 [63]-[64].

[32]Refer to the transitional provision in s 1579(2) of the Act.

[33]Warner (liquidator), in the matter of Sakr Bros Pty Ltd (in liq) [2019] FCA 547 [18]; Re Octaviar [2020] QSC 353 [17].

[34][2017] NSWSC 1556 [7]-[9].

[35]Re Octaviar [2020] QSC 353 [17] (Bond J), citing Re Lewis (2020) 145 ACSR 459 [31] (White J).

[36][2020] QSC 353 [18].

[37][2020] QSC 353 [65]-[66].

[38]Corporations Act 2001 (Cth) s 481(3).

[39][2019] NSWSC 1262 [6]-[7].

[40]Affidavit of JDT Waldock filed 6 June 2022 [11].

[41]Affidavit of JDT Waldock filed 6 June 2022 [13].

[42]Affidavit of JDT Waldock filed 6 June 2022 [6]-[10].

[43]Affidavit of WJ Harris filed 25 May 2022 [73]-[87].

[44]Affidavit of WJ Harris filed 25 May 2022 exh WJH-1 331.

[45]Affidavit of WJ Harris filed 25 May 2022 [66].

[46]Supreme Court of Queensland Act 1991 (Qld) s 8(1)(b).

[47]Supreme Court of Queensland Act 1991 (Qld) s 8(2).

[48]Velocity Frequent Flyer Pty Ltd v BP Australia Pty Ltd [2019] QSC 29 [13]–[14].

Close

Editorial Notes

  • Published Case Name:

    Re Samgris Resources Pty Ltd (in liquidation)

  • Shortened Case Name:

    Re Samgris Resources Pty Ltd (in liquidation)

  • MNC:

    [2022] QSC 126

  • Court:

    QSC

  • Judge(s):

    Kelly J

  • Date:

    17 Jun 2022

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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