Special Purpose Liquidators: Appointment Scope

Identify the Unresolved Task and the Proposed Mandate

Define the investigation, asset or possible claim before choosing the proposed appointee. Identify the company concerned and the records needed. Explain what the existing liquidator has already investigated, what remains unresolved and why separate attention is justified.

An additional appointment can separate a confined investigation from the continuing winding up. The general liquidator retains the functions left with that officeholder under the order. This guide concerns that additional role. Replacement of the general liquidator raises a separate question.

A provisional liquidator has a different purpose and timing, including interim protection before the winding-up question is resolved. A special purpose appointment within a liquidation needs a mandate suited to the outstanding task.

Write the proposed division of work in practical terms. For example, an additional practitioner might investigate specified related-party transfers while the general liquidator continues asset realisation and creditor administration. Identify the existing liquidator’s investigations that the additional practitioner can use, so the proposal explains the new work without duplicating it.

Establish the Legal Route and the Evidence

Identify the applicant’s standing and the court power relied on before drafting the appointment application. Sections 90-15 and 90-20 of Schedule 2 to the Corporations Act provide the central statutory route considered here.

Section 90-15 gives the court power to make orders about a company’s external administration. Its examples include appointing another registered liquidator. Section 90-20 identifies eligible applicants, including a person with a financial interest in the administration, a company officer and the Australian Securities and Investments Commission (ASIC). A creditor authorised by the committee of inspection can also apply on its behalf.

Explain the applicant’s particular basis for standing through evidence. A claimed debt needs the supporting transaction and account record. The appointment power remains discretionary even when the applicant has standing.

Section 90-15(4) identifies matters the court can consider, including performance of duties and compliance with legislation or court orders. It also addresses loss or damage and the consequences of the liquidator’s conduct. These statutory considerations do not turn every proposed additional appointment into a finding of wrongdoing.

Assemble the existing appointment orders, practitioner reports, correspondence about the unresolved work and relevant transaction records. Separate a documented conflict or unexplained delay from allegations that still need investigation. Show the expected utility of the confined work, its cost and its effect on the existing administration.

A useful example of drafting appears in ASIC’s filed application concerning the Aboriginal Community Benefit Fund entities. ASIC sought additional appointments with defined investigations, litigation powers and cooperation arrangements. The document records relief sought. A filed application does not establish that the court granted those powers.

Set the Limits, Funding and Working Arrangements

Draft the proposed mandate so each practitioner can identify who controls a particular issue. Specify the companies, transactions and investigation period. Describe the books required and any proposed recovery work.

The proposed orders need to address the following matters where they affect the task.

• The investigation and any express exclusions.
• The powers sought to obtain records, conduct examinations or bring proceedings.
• Access to the general liquidator’s existing work and cooperation between the practitioners.
• Reporting recipients, timetable and treatment of confidential material.
• Responsibility for costs and the process for seeking further directions.
• The event that ends the limited task and the records to be returned.

Match each proposed power with its statutory basis and the intended order. Section 477 addresses liquidator powers, including proceedings on the company’s behalf and inspection of company books. Section 530A addresses officers’ assistance and delivery of books. The limited appointment must be read with the applicable provisions and restrictions, including any separate court process needed for an examination.

Obtain the proposed registered liquidator’s written consent to act. Disclose relationships that affect independence, including work for related companies and connections with the applicant or funder. Explain how any overlap will be managed under the proposed appointment.

Prepare a budget and identify the source of payment. Distinguish an indemnity, litigation funding and payment from company assets. A funder’s commercial interest does not determine the officeholder’s investigation or findings.

Section 477(2B) generally requires approval for an agreement on the company’s behalf whose term or performance can extend beyond three months. Approval can come from the court, committee of inspection or a creditors’ resolution, subject to the statutory exception. Assess the proposed funding agreement against that provision before entry. Keep agreement approval separate from remuneration approval.

Seek the Appointment and Check the Actual Order

Choose the process required by the selected court and the existing proceeding. In the Federal Court, Corporations Rules 2.2 to 2.8 govern the application framework used here.

1. Identify whether an existing proceeding can receive the application. Rule 2.2 generally uses Form 2 originating process for a new proceeding and Form 3 interlocutory process within an existing one.
2. State the statutory provisions and exact relief sought. Support the process with an affidavit under rule 2.4, unless the court directs otherwise. An originating-process affidavit ordinarily needs a recent ASIC search under that rule.
3. Obtain the hearing details and serve the process and supporting affidavits. Rule 2.7 generally requires service at least five days before an originating-process hearing or three days before an interlocutory-process hearing.
4. Address ASIC notice under rule 2.8. Its table includes applications under section 90-20. Give affected practitioners notice and address any further service or participation directions.
5. Present the evidence supporting the mandate and respond to objections at the hearing. Take the proposed consent, independence disclosures and funding arrangements with the appointment material.

After the hearing, compare the actual orders with every requested power and cost arrangement. Record any restriction or omitted provision. If the order permits investigation only, a proposal that also sought litigation authority does not enlarge it.

Send the operative order to the practitioners and identify the handover obligations that now apply. Resolve an unclear boundary through the available directions process before two officeholders give conflicting instructions.

Run the Investigation Within the Mandate

Hand over records through a source-linked index and assign responsibility for each open issue. Identify who retains originals, who receives enquiries and which practitioner communicates with each records custodian. Preserve privilege and any confidentiality restrictions governing the material.

Use a shared issue schedule to record completed work, outstanding explanations and the next permitted step. Match the schedule to the order so another suspected transaction does not silently expand the appointment.

FinTrace can analyse the supplied bank statements and follow transfers across related accounts. Its ledger and findings report cite the source PDF filename and page, giving the practitioner direct access to the evidence behind the cash movements. Those factual outputs can support the investigation schedule alongside contractual records and legal analysis.

Fictional Related-Party Transfer Inquiry

Assume an order permits investigation of payments from Company A to a related company. It reserves any proposed proceedings for further consideration. Company A’s statements show four payments of $25,000, totalling $100,000. The related company’s supplied statements show matching receipts.

The cash movement is established on those assumed records. A ledger description says “management fees”, but the investigator has only two invoices for $25,000 each. The remaining $50,000 needs an explanation and supporting records.

Investigation Point	Established Information	Outstanding Work	Decision
Cash movement	Four matching payments and receipts total $100,000	Confirm account identities against source records	Record the matched transfers
Stated purpose	Ledger describes management fees	Obtain the agreement and evidence of services	Assess each payment’s explanation
Invoice support	Two invoices total $50,000	Seek records for the other $50,000	Keep the unsupported amount separate
Possible recovery	Investigation identifies an unresolved basis for payment	Assess legal elements, defences and recoverability	Recommend the next authorised step

Missing invoices do not establish a recoverable claim by themselves. The responsible practitioner and solicitors assess the legal basis against all relevant evidence. Under the assumed order, the next step is a report or directions application before proceedings begin.

Report, Account and End the Limited Appointment

Report against the ordered task and identify the work still requiring a decision. Separate completed investigation, proposed claims and actual recoveries. A recommendation to litigate records an assessment. Authority to commence proceedings must come from the applicable powers and appointment terms.

Account for expenditure against the funding arrangement and seek remuneration or costs approval through the applicable procedure. Record any approval still outstanding. If the task expands, funding changes or another conflict emerges, address the necessary directions before acting beyond the mandate.

At completion, reconcile money received with the bank records and the practitioner’s account. Return records and working schedules as required, identifying any continuing confidentiality or retention duties. Seek the discharge or further order required to end the appointment. The final handover must show who remains responsible for unresolved claims and the continuing liquidation.