Background
Mohammad Mirzan Bin Mansoor, the liquidator of Harley Cranes Payroll Pty Ltd, Harley Cranes & Rigging Pty Ltd and Harley Cranes Group Pty Ltd, sought a pooling order under s 579E of the Corporations Act 2001 (Cth). Alternatively, he sought a direction under s 90-15 of the Insolvency Practice Schedule (Corporations) authorizing him to administer the three liquidations as though the companies formed a pooled group.
The companies had operated collectively within a family-owned crane and rigging business. Their activities, assets and finances were substantially intermingled, their intercompany dealings could not reliably be reconstructed from the available records, and separating the estates would require costly valuation, accounting and adjudication work. All known creditors received notice of the application, and none objected or sought to appear.
The Court’s Holding
Justice Jackman refused the statutory pooling order because the gateway requirement in s 579E(1)(b)(iv) was not satisfied. Although the companies had contributed property and services to a jointly conducted business, the relevant physical assets had been sold before judgment. The provision required qualifying property still to be owned by one or more group companies at the time of judgment. The evidence also did not establish, on the balance of probabilities, that HCR or HCP presently held an intercompany debt or other chose in action against HCG that could satisfy that requirement.
The Court nevertheless directed under s 90-15 that the liquidator was justified in combining the companies’ property into one fund, distributing it as though the companies and their creditors belonged to a single liquidation, and disregarding liabilities claimed between the companies. The broad power in s 90-15 permitted that direction even though it was not a statutory pooling order. The companies’ intermingled affairs, the cost and difficulty of reconstructing their accounts, the likely savings to creditors and the absence of material creditor disadvantage made the direction appropriate. The remainder of the amended originating process was dismissed, with costs treated as costs of the liquidations.
Key Takeaways
- A pooling order under s 579E(1)(b)(iv) requires qualifying property to remain owned by a group company when judgment is given; proceeds from assets already realized do not satisfy that requirement merely because the former assets were used in the joint business.
- An alleged intercompany receivable cannot supply the necessary property without evidence establishing both the underlying liability and an unpaid net balance.
- Section 90-15 may support a direction protecting a liquidator who administers related estates on a pooled basis where the statutory pooling gateway is unavailable, particularly when the estates are inseparable, creditors are better off and none is materially disadvantaged.
Why It Matters
The decision distinguishes a formal pooling order under s 579E from a direction that a liquidator is justified in producing similar administrative consequences under s 90-15. It offers a practical route for heavily intermingled corporate groups when statutory pooling fails solely because relevant business assets were realized before the application was decided.
The ruling also underscores the importance of timing and proof. Liquidators seeking statutory pooling should identify property still owned at judgment and substantiate any asserted intercompany debts, while creditors should recognize that silence after notice may support a finding that pooled administration causes no material disadvantage.