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Applying for High Court Directions in a Liquidation

Section 284 (1) of the Companies Act 1993 states:

On the application of the liquidator, a liquidation committee, or, with the leave of the court, a creditor, shareholder, other entitled person, or director of a company in liquidation, the court may:

(a) give directions in relation to any matter arising in connection with the liquidation:

(b) confirm, reverse, or modify an act or decision of the liquidator:

(c) order an audit of the accounts of the liquidation:

(d) order the liquidator to produce the accounts and records of the liquidation for audit and to provide the auditor with such information concerning the conduct of the liquidation as the auditor requests:

(e) in respect of any period, review or fix the remuneration of the liquidator at a level which is reasonable in the circumstances:

(f) to the extent that an amount retained by the liquidator as remuneration is found by the court to be unreasonable in the circumstances, order the liquidator to refund the amount:

(g) declare whether or not the liquidator was validly appointed or validly assumed custody or control of property:

(h) make an order concerning the retention or the disposition of the accounts and records of the liquidation or of the company.

A liquidator may apply to the High Court for directions (for example) on how to deal with a creditor’s claim, rather than waiting for the lodgement of the claim in the liquidation and then leaving it to the creditor to challenge the liquidator’s decision.  There is no time limit on when a liquidator can seek directions under section 284.

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