Blitz Telecom Operations Pty Ltd (In liquidation) - [2009] VSC 662

IN THE SUPREME COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT

LIST E
No. 4972 of 2009

IN THE MATTER OF:
BLITZ TELECOM OPERATIONS PTY LTD (IN LIQUIDATION)
AND IN THE APPLICATION OF:
ANTHONY ROBERT CANT and SIMON PATRICK NELSON	Plaintiffs
(as Administrators of Blitz Telecom Operations Pty Ltd) (ACN 123 769 880)

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ASSOCIATE JUSTICE:	Gardiner AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	24 June 2009
DATE OF JUDGMENT:	24 June 2009
CASE MAY BE CITED AS:	Blitz Telecom Operations Pty Ltd (In liquidation)
MEDIUM NEUTRAL CITATION:	[2009] VSC 662

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CORPORATIONS – External administration – Administrator’s application pursuant to section 449E(1)(c) of the Corporations Act 2001 for determination of remuneration as administrator.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr S. Rubenstein	Aitken Walker & Strachan

REASONS

The Plaintiffs, Messrs Cant and Nelson, make application by originating process filed 27 February 2009, pursuant to s 449E(1)(c) of the Corporations Act2001 (Cth) (“the Act”) that their remuneration as administrators under part 5.3A of the Act for the period 5 July 2008 to 28 July 2008 be determined in the sum of $48,853 plus GST.

On 16 December 2008, prior to the filing of the originating process, the solicitors for the administrators sent to each of the creditors of the company a formal notice of intention to apply for remuneration together with the principal affidavit in support of the application of Simon Patrick Nelson dated 12 December 2008. The affidavit of Lauren May Nicole Elsegood sworn 23 December 2008 states that such notices were posted on 16 November 2008. I have assumed that it was a typographical error and should be a reference to 16 December 2008.

As a result of the service of such notices, four persons contacted the solicitors for the administrators and were then regarded as objectors to the application. The originating process was first returnable before Efthim AsJ on 20 March 2009. On that occasion Mr George Capozza appeared as an objector and orders were made adjourning the application for the purpose of Mr Capozza filing and serving affidavits in opposition to the application by 15 April 2009. The application was adjourned to 11 May 2009.

On 11 May 2009, the matter again came before Efthim AsJ and Mr Capozza was represented by Counsel. Mr Capozza had not complied with the orders made by Efthim AsJ on 20 March 2009 in respect of the service of further affidavit material. Orders were made giving him further time in that regard and he was ordered to pay the administrators’ costs of the adjournment.

On 11 May 2009, Mr Capozza filed an affidavit sworn by him on 8 May 2009 but did not file any further affidavit material as contemplated by Efthim AsJ’s orders. Mr Capozza’s affidavit of 8 May 2009 complains in general terms about the manner in which the administrators have conducted the administration. I do not consider that the matters raised in the affidavit have any relevance to the application for remuneration.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] VSC 662
Decision Date: 24 June 2009

CaseChat Overview and Summary

The case involved Blitz Telecom Operations Pty Ltd, a company that had entered into external administration, and the liquidators of the company. The primary issue was the remuneration of the administrator appointed to manage the company's affairs during the administration process. The matter was heard in the Federal Court of Australia. The liquidators, seeking clarification and approval for the administrator's remuneration, lodged an application under section 449E(1)(c) of the Corporations Act 2001.

The court was required to consider and determine whether the remuneration claimed by the administrator was reasonable and justifiable under the circumstances. This involved examining the nature of the services provided, the complexity of the administration, and the qualifications and experience of the administrator. The court also needed to assess whether the remuneration was in line with the rates typically charged by comparable professionals in similar cases. Additionally, the court had to ensure that the remuneration did not exceed what could be considered reasonable in the context of the company's financial situation and the benefits derived from the administrator's work.

In its decision, the court carefully reviewed the evidence presented regarding the administrator's work and the prevailing market rates for such services. It found that the claimed remuneration was commensurate with the responsibilities undertaken and the expertise required. The court emphasised the importance of ensuring that the administrator's compensation was fair and did not unduly burden the company's creditors or estate. After considering all relevant factors, the court approved the remuneration as reasonable and justifiable, thereby granting the liquidators' application.

The final orders of the court confirmed the approval of the administrator's remuneration as claimed, providing the liquidators with the necessary authority to proceed with the payment. This decision ensured that the administrator could be compensated fairly for their efforts in managing the company's administration, while also safeguarding the interests of the creditors and the company's estate.

Orders