When An Administrator Or Liquidator’s Casting Vote Does Not Count

On 8 August 2006, a New South Wales court found that an administrator could not use his casting vote to pass resolutions for the approval of his own fees, being resolutions from which he stood to financially benefit.

The court ordered that the remuneration could be paid in accordance with the resolutions, but found that by using his casting vote, the administrator was in breach of his fiduciary duties to act in the interests of others over his personal interests.

The plaintiff, Mr Krejic, was the administrator and subsequently the liquidator of the company, Eaton Electrical Services Pty Ltd.

In his capacity as administrator, the plaintiff chaired the second meeting of creditors held under the provisions of the Australian Corporations Act (ACA). At that meeting, the creditors resolved that the company be wound up. In the meeting, the plaintiff also put forward two resolutions for consideration by the creditors, summarised as follows: