Campbell & Diboll

Case [2021] FedCFamC1F 114

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Campbell & Diboll [2021] FedCFamC1F 114

File number(s): WOC 455 of 2013
Judgment of: GILL J
Date of judgment: 8 October 2021
Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – SUMMARY DISMISSAL – Correct test to be applied – Application to enforce obligation to pay liquidator’s fees arising under court orders – Whether no reasonable prospect of success – Whether approval of creditors constitutes evidence of propriety – Whether remuneration claimed by liquidators is supported by evidence of sufficient particularity – Application for summary dismissal refused
Legislation:

Corporations Act 2001 (Cth)

Family Law Act 1975 (Cth) s 45A

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 46

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.09
Cases cited:

Bretton & Bondai [2013] FamCAFC 168

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125

Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541

Re Halifax Investment Services Pty Ltd (in liq)(No 9) [2020] FCA 925

Spencer v The Commonwealth (2010) 241 CLR 118

Division: Division 1 First Instance
Number of paragraphs: 48
Date of hearing: 7 & 8 October 2021
Place: Canberra
Counsel for the Applicants: Mr Lipp
Solicitor for the Applicants: Chamberlains Law Firm
Counsel for the Respondent: Mr Moller
Solicitor for the Respondent: Farrar Gesini Dunn

ORDERS

WOC455 of 2013
BETWEEN:

MR X

First Applicant

MR Z

Second Applicant
AND:

MS DIBOLL

Respondent

ORDER MADE BY:

GILL J

DATE OF ORDER:

8 OCTOBER 2021

THE COURT ORDERS THAT:

1.The oral application made by the respondent on 7 October 2021 for summary dismissal of the applicant’s Amended Application in a Case filed 25 June 2021 is dismissed.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Campbell & Diboll has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

GILL J

INTRODUCTION

  1. These proceedings involve the enforcement of orders made by Faulks DCJ dealing with the remuneration of liquidators appointed in respect of a company associated with the parties to the marriage.  It is now disputed between the liquidators and the respondent wife the degree to which she is liable for costs which they now claim.  Accordingly, what is sought by way of enforcement is the court’s determination of a specific dollar figure for the liability of…

Continue reading Campbell & Diboll

Sign in free to access the full text

Details
AGLC
Campbell & Diboll [2021] FedCFamC1F 114
Case
[2021] FedCFamC1F 114
Decision Date

CaseChat Overview and Summary

In the matter of Campbell & Diboll, the liquidator of a company sought to dismiss the claim for remuneration brought by the respondent wife. The wife contested the liquidator’s claim, asserting that the evidence provided was insufficient to establish the fundamental factual matter of the propriety of the charges. The case required the court to determine whether the liquidator’s evidence was adequate to support the claim for remuneration.

The central legal issue was whether the liquidator’s evidence was sufficient to establish that there were reasonable prospects for success in relation to the claim for remuneration. The court needed to assess the sufficiency of the evidence provided by the liquidator, particularly the reports from the creditors’ meetings that detailed the remuneration claims and the approvals given by the creditors, including the wife. The court also had to consider the effect of the wife’s approval or disapproval of the remuneration claims at different stages of the proceedings.

The court found that, while the liquidator’s case appeared fragile and the claim for remuneration was inadequately supported in some respects, it was not clear that the evidence was entirely lacking in specificity to the point of making the claim impossible to succeed. The court noted that the wife had approved some of the remuneration claims in earlier creditors’ meetings, which acted as admissions against her interest. However, the subsequent meetings, where her proxy vote opposed the approval, did not definitively undermine the liquidator’s claim. The court concluded that there were reasonable prospects of success in relation to the claim for remuneration, at least in part, and therefore refused the application for summary dismissal.

The court’s decision was that the application for summary dismissal was refused, allowing the claim for remuneration to proceed to further argument on its merits.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The respondent wife asserts that the proof offered by the liquidator is incapable of establishing this fundamental factual matter.THE EVIDENCE TO ESTABLISH THE KEY FACTUAL CONTENTION But for any evidence that the liquidator might seek to lead in reply to evidence hoped to be led for the respondent from Mr E, the liquidator currently relies wholly on evidence proffered by Mr Z in his affidavit filed 25 June 2021. The evidence relevant to whether the charges are proper (and hence the evidence essential to determining the summary disposal) is contained in the various annexures to that affidavit that produce reports from the four creditors’ meetings that have been conducted by the liquidator. There are two aspects of those reports relied upon, being firstly their recording of creditor approval of the remuneration claims made by the liquidator and secondly, the schedules annexed thereto as provided to the creditors outlining of the basis for those remuneration claims. Different considerations apply to what may be gleaned from each of those creditors’ meetings. The first creditors’ meeting The first of those creditors’ meetings, occurring in June 2015, contained an executive summary setting out both the work undertaken until then, being 2 October 2014 to 8 May 2015 of $41,074.50, along with prospective remuneration from 9 May 2015 to the conclusion of the liquidation of $15,390 totalling $56,464.50.[14] These amounts were approved by the creditors, including by the respondent wife (herself a creditor).[15] For the purposes of determining the summary dismissal application the approval by the wife on that occasion acts as an admission against interest as to her recognition of the propriety of those expenditures as approved.[14] Affidavit of Mr Z filed 26 June 2021, p. 100. [15] Ibid p. 125–6. This approval predated the orders made by the Deputy Chief Justice. It may be understood that the prospects for the success of the claim seeking further payment rely upon the subsequent creditors’ meetings.The second creditors’ meeting The report in relation to the second creditors’ meeting (occurring on 24 September 2015, again in advance of the orders made by the Deputy Chief Justice), contains a remuneration report from the liquidator.[16] The creditors approved an amount of $34,832 covering the periods 20 May 2015 to 31 August 2015 and 1 September 2015 to the conclusion of the liquidation ”set on an interim basis”.[17] That approval of remuneration was on the basis of what was contained in the report.[16] Ibid p. 155.[17] Ibid p. 180–2. While approved by the creditors, there is no indication that approval for such came from the respondent wife as one of the creditors.The third creditors’ meeting The third of the creditors’ meetings occurred on 22 December 2016 following the orders made by the Deputy Chief Justice. The report contains a remuneration report[18] setting out that the total remuneration previously approved is $91,296.50, and records that the liquidators sought approval for a further $16,527.30 for the period 1 September 2015 to 30 November 2016 and a further $5,000 to cover estimated future fees ”on a full and final basis”[19] to the conclusion of the liquidation. The report records a proxy vote against the approval of the remuneration made behalf of the respondent wife.[20][18] Ibid p. 192–3.[19] Ibid p. 192[20] Ibid p. 219.The fourth creditors’ meeting

Decision

Reasons for decision

However, under circumstances where it rests upon the respondent to establish that there are no reasonable prospects or likelihood of success, it is not apparent that all of the matters listed are so lacking in specificity as to be unable to sustain the liquidator’s claim that the expenses were proper.CONCLUSION The liquidator’s case appears at present in a fragile state. Subject to further argument on the substantive case, much of the claim for remuneration appears inadequately supported. However, it cannot be concluded that there are no reasonable prospects for success in relation to the claim (at least in part). Accordingly, the application for summary dismissal is refused.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.