WA Court backdates winding up in rare move

The Supreme Court of Western Australia has made rare retrospective winding up orders to regularise the liquidation of an incorporated association, holding that exceptional circumstances justified backdating the court-ordered winding up to the date of an earlier defective voluntary resolution.

The West Australian Group Training Scheme (WAGTS) had purported to enter voluntary liquidation on 10 March 2023 following a special resolution of its management committee and two members, amid concerns about solvency, with Stephen Dixon of HM Advisory (then Hamilton Murphy) appointed as liquidator. However, s 121 of the Associations Incorporation Act only permits voluntary winding up where the association has surplus property for distribution. As WAGTS had an estimated deficiency of more than $460,000 at the time, the statutory pathway relied upon was unavailable, casting doubt over the validity of Mr Dixon’s appointment.

Despite the technical defect, Mr Dixon proceeded to act as liquidator, notifying the regulator, issuing circulars and statutory reports to creditors, investigating the association’s affairs, and pursuing potential unfair preference claims. The issue only crystallised in 2025 when correspondence challenged the basis of his appointment, prompting an ex parte application to ratify or regularise the winding up.

The Court noted that counsel was unable to point to any specific power of the Court to make a declaration in the terms sought or to regularise the appointment of the liquidator. Nor was any authority identified in support of such a course, or in respect of making a winding up order and orders for the appointment of a liquidator to take effect on a date earlier than the date of the orders. While section 447A(4)(f) of the Corporations Act 2001 permits an invalidly appointed administrator to seek orders validating their appointment, no equivalent statutory mechanism exists to validate the appointment of a liquidator.

Instead, WAGTS pressed for orders that it be wound up by the Court under s 123 of the Associations Incorporation Act 2015 (WA) and s 583 of the Corporations Act, with those orders to operate retrospectively from 10 March 2023.

Master Russell was satisfied that WAGTS was insolvent at the time of the 2023 resolution and remained so. The evidence, including the Form 509 summary of affairs and subsequent creditor reports, demonstrated substantial liabilities, largely owed to the Australian Taxation Office, and an inability to pay debts as and when due. The Court also found it just and equitable that WAGTS be wound up.

The more controversial question was whether the Court could and should make winding up and appointment orders effective from an earlier date. Relying on the broad powers in s 467(1)(c) of the Corporations Act, and emphasising the exceptional facts, Master Russell concluded that retrospective orders were appropriate to regularise what had always been intended and treated as a liquidation.

The Court stressed that such backdating would be rare and not a precedent for routine departure from the usual rule that winding up orders take effect from the date made. However, in this case, the management committee and members clearly intended a winding up from 10 March 2023, the liquidator had acted in good faith for nearly three years, and creditors had been treated on the basis that a liquidation was underway.

As a result, the Court ordered that the WAGTS be wound up pursuant to s 123 of the Associations Incorporation Act 2015 (WA) and s 583 of the Corporations Act, and that registered liquidator Stephen Dixon be appointed with effect from 10 March 2023.

Read the decision here.

Professionals involved:

• Liam Quinn of Rowe Bristol Lawyers for the West Australian Group Training Scheme