There is currently some confusion as to whether a liquidator appointed by a State Supreme Court is required to publish notice of their appointment in a newspaper, given inconsistencies between Federal and State legislative requirements. In this article, we will focus on the position in Queensland.
Under section 465A(2) of the Corporations Act 2001 (Cth) (“CA”), if the Court orders the winding up of a company as a result of an application under section 459P, 462 or 464, the liquidator (or provisional liquidator) must cause notice setting out prescribed information about the order to be published in the prescribed manner. The Federal and State legislation have different prescribed manners for such publication.
In our view, the Federal requirements will prevail, meaning that Court liquidators only need to publish notice of their appointment on the ASIC Insolvency Notices website, and do not need to go to the more expensive cost of newspaper publication. This may be welcome news given the increased costs for liquidators in accepting Court liquidation appointments.
Since the introduction of the ASIC Insolvency Notices website, the Corporations Regulations 2001 were updated to allow publication of certain notices via that website. However, the Queensland rules for winding up proceedings have not been updated, which has led to some uncertainty.
Position under the Queensland legislation
Pursuant to Rules 2.11 and 5.11 of the Corporations Proceedings Rules at Schedule 1A to the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”), as soon as practicable after being informed of the appointment, the liquidator must publish a notice of the winding-up order and the liquidator’s appointment, which must be published once in a daily newspaper circulating generally in the State or Territory where the body has its principal, or last known, place of business. Newspaper publication can be costly (compared to ASIC Insolvency Notices).
However, Rule 995 of the UCPR provides that the rules in Schedule 1A are intended to apply in harmony with similar rules in the Federal Court and other Australian courts.
Position under the Federal legislation
Pursuant to the Federal legislation and in winding up proceedings in the Federal Court, publication under s465A(2) of the CA can be made via the ASIC Insolvency Notices website.
Under Rule 5.11 of the Federal Court (Corporations) Rules 2000 (Cth), once a usual winding up order is made by the Court, the liquidator must cause the prescribed notice to be published in the manner provided by section 1367A of the CA and regulation 5.6.75 of the Corporations Regulations 2001 (Cth).
Section 1367A of the CA allows for such publication to be done in the manner covered by the regulations. This links with regulation 5.6.75, which allows for electronic lodgement of such notices for publication via the ASIC Insolvency Notices website.
In light of Rule 995 of the UCPR in Queensland, the position under the Federal legislation will prevail, allowing for a liquidator to publish notice of their appointment via the ASIC Insolvency Notice website even where their appointment was ordered by the Supreme Court of Queensland. Newspaper publication will not be required.
In any event, as a matter of legislative interpretation, where there is inconsistency between Federal and State laws, the Federal law will prevail for such inconsistency.
Should you wish to discuss this article, please contact Levi Smouha, Partner, Rostron Carlyle Rojas Lawyers
Disclaimer: This has been prepared based on the law as it stands at 4 June 2018.