In the recent case of Queensland Mining Corporation Ltd v Butmall Pty Ltd (in liq), the Court held that the liquidators' relationship with a major creditor of the company in liquidation (Butmall) did not per se amount to a conflict of interest. 

Butmall applied to have its liquidators removed as they were the auditors of its major creditor (QMC), against whom Butmall purported to have considerable counterclaims.

The Court pointed out that removal of liquidators requires a real, and not only theoretical, possibility of conflict of duty or interest.  The mere fact that the liquidators were the auditors of QMC was not sufficient to establish a "real" conflict of interest. 

The threshold of evidence required to remove a liquidator therefore remains high, as evidence of a relationship between a liquidator and a creditor, alone, is unlikely to justify removal of the liquidator.  

See Court decision here.