The company P Hindle & Co Pty Ltd (WA) was placed in liquidation in 2008. Mr Huxtable was appointed as liquidator of the company (Liquidator). The Liquidator acted as chairperson at a meeting of creditors in late 2010 where 4 out of a potential 161 creditors attended.

The Liquidator proposed a resolution fixing the amount of his remuneration. The creditors voted on that resolution, with the result being that 2 creditors present, representing 32.5% by value, voted in favour of the resolution whilst the remaining 2, or 67.5% by value, voted against.  

The Liquidator exercised his casting vote and voted in favour of the resolution. The Liquidator’s reasons for casting his vote in favour included that there was no legislative bar and that additional costs would be incurred if he applied to the Court for approval of his remuneration.

Had the Liquidator voted against the resolution or not exercised a casting vote, the resolution would not have been carried and the remuneration would have become a matter for decision by the Court.

ASIC queried the actions of the Liquidator, who then applied to the Court for orders under s 511 of the Corporations Act that casting his vote in favour of the resolution was appropriate in the circumstances.

ASIC intervened in the matter, submitting that the Court should refrain from making such orders.


The Court held that the fiduciary nature of a liquidator’s position needs to be borne steadily in mind in deciding how to exercise his or her casting vote.  The fact that there is no legislative fetter on the particular exercise of the casting vote is not sufficient.  A liquidator must treat as secondary, his or her own interests to those whose interests it is their duty to serve.  The requirements to avoid conflicts of interest or the earning of secret profits apply to liquidators just as they do to any other person in the position of the fiduciary.

The Court accepted the submissions of ASIC and refused to grant the orders sought. It held that, in the circumstances, it was inappropriate for the Liquidator to exercise his casting vote in favour of the resolution.  The proper course of action for the Liquidator would have been to apply to the Court for approval of the remuneration sought.

When is it okay to cast a vote in favour of approval of remuneration?

While the clear implication of this decision is that, as a general rule, a liquidator exercising a casting vote in favour of his or her remuneration is likely to be a breach of a liquidator’s fiduciary duty, the Court said there is “no blanket rule” against the casting vote being used to approve remuneration.

In appropriate circumstances, such as where the overwhelming majority in value of creditors vote in favour, the casting vote may be exercised in that way.  The Court referred to the decision of Williams as liquidator of C and D Global Protection Pty Ltd (in liq) v CD Protective Services Pty Ltd (No 3) [2010] QSC 224, in which creditors representing 99.9% by value voted in favour of the resolution.  In that case, it was held that there was no breach of a fiduciary obligation and it was appropriate for the liquidator to exercise the casting vote approving her remuneration.


The case re-affirms the fiduciary position occupied by a liquidator and the need for liquidators to carefully consider their fiduciary duties in exercising their powers. On a practical level, although applying to the Court for approval of the liquidator’s remuneration may add to costs, it will almost always be a safer course of action than casting a vote in favour of a liquidator’s own remuneration.