Official Liquidator expenses may be shared by secured creditors where liquidation funds are needed for proper administration.

A financial institution with a substantial secured interest in assets outside the winding up process may still be required, in appropriate cases, to contribute towards the Official Liquidator's initial expenses. The court noted that banks and similar institutions are not ordinarily burdened with such costs, but recognised a discretion to direct contribution where the petitioning creditors are small and the liquidation office must have funds to perform its functions. On that reasoning, the direction to deposit the amount was found neither illegal nor irregular nor unfair, and the applicant was denied relief.

---

---

Issues: Whether the direction requiring the financial institution to deposit an amount towards the initial expenses of the Official Liquidator in the winding up proceedings was justified.

Analysis: The financial institution stood outside the winding up proceedings but had a substantial secured interest in the assets and recoveries. The Court held that, while banks and financial institutions are not ordinarily asked to bear such initial costs, the Court may in appropriate cases exercise discretion to require contribution towards expenses such as those of the Official Liquidator, particularly where the petitioning creditors are small and the office must not be left without funds to perform its functions. The impugned direction was found neither illegal nor irregular nor unfair.

Conclusion: The direction to deposit the amount towards the Official Liquidator's initial expenses was upheld and no relief was granted to the applicant.

---