Voluntary administrators frequently obtain Court orders
permitting notices to be issued to creditors electronically. Such
orders are made under section 447A of the Corporations Act (the
Act) on grounds of efficiency, cost and necessity.
See Mothercare Australia Ltd (Administrators Appointed) 
NSWSC 263 and Creative Memories Australia Pty Ltd  NSWSC
Can liquidators appointed under a creditors voluntary
liquidation (CVL) obtain similar orders? This
issue was considered recently by Justice Black of the Supreme Court
in Accommodation Clearing House Pty Ltd (In Liquidation) 
NSWSC 784 in which:
ACH was an online travel company which accepted internet hotel
bookings from customers, who paid ACH either a deposit or full
On liquidation ACH had thousands of customer and hotel
ACH had always corresponded with creditors by email and the
liquidators had no postal, fax or DX addresses for customer
creditors. The Liquidators were unable to notify these creditors in
the course usually required by the Regulations. To obtain each
creditor's consent to communicate electronically under section
600G would have been costly and likely impossible.
The liquidators sought orders permitting them to issue notices
required under section 497 of the Act electronically. The
application was made under section 511 of the Act, which permits a
Court "to determine any question" arising in a
winding up or "to exercise all or any powers that the
Court might exercise if the company were being wound up by the
Justice Black declined to make orders under section 511, finding
(with regret), that the section should not be used to authorise an
act which did not comply with the Act. Unlike section 447A which
permits the Court to alter the operation of the Act as regards a
particular administration, section 511 is narrower and cannot be
used to authorise breaches of the Act. In reaching this finding the
Court indicated it was preferable to leave the liquidators to
exercise their commercial judgment. The liquidators thereafter
notified creditors by email and also by mail where postal addresses
were known. That conduct was validated by Justice Black under
section 1322 of the Act in a subsequent ex tempore decision.
Addisons acted for the applicant liquidators in the above
decision and will be writing to the IPA noting the inadequacy of
current legislation and suggesting reform. In the meantime the
above limitation should be noted by practitioners considering
appointment to insolvent companies under a CVL as opposed to a
voluntary administration, particularly for companies operating in
retail, media or other industries with voluminous electronically
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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