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Djordjevich v Rohrt

Djordjevich v Rohrt

Case [2021] VSC 178 15 April 2021

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2020 00457

DAVID DJORDJEVICH	Plaintiff
v
RICHARD TRYGVE ROHRT (in his capacity as liquidator of ACN 091 518 302 PTY LTD (in liq) ACN 091 518 302)	Defendant

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JUDGE:	DELANY J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 January 2021, 12 February 2021
DATE OF JUDGMENT:	15 April 2021
CASE MAY BE CITED AS:	Djordjevich v Rohrt
MEDIUM NEUTRAL CITATION:	[2021] VSC 178

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CORPORATIONS – Insolvency – Application for investigation into liquidation – Insufficient basis for complaint into the liquidator’s conduct – No jurisdiction to order an inquiry – Application seeking to vindicate private rights – Not an appropriate case for an inquiry –Investigation not in the public interest of honest and efficient administration of liquidations – Westpoint Corporation Pty Ltd (in liq) v Yeo [2018] VSC 705; Hall v Poolman [2009] NSWCA 65; ASIC v Wily and Hurst [2019] NSWSC 521 cited, ASIC v Edge [2007] VSC 170 distinguished – Corporations Act 2001 (Cth) ss 477(2)(b), 533, 545, Schedule 2, clauses 90-10, 90-15, 90-20.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Levine	Maciel Pizzorno & Co
For the Defendant	Ms C Gobbo	Mills Oakley

TABLE OF CONTENTS

A.. Introduction.................................................................................................................................. 2

B.. The applicable principles........................................................................................................... 4

C.. The grounds relied upon by the plaintiff in support of an order for an inquiry............ 7

D.. The liquidation............................................................................................................................. 9

E... The s 533 reporting obligation complaint............................................................................. 25

F... The complaint of improper delegation of work to solicitors............................................ 30

G.. The complaint that unnecessary and excessive costs and expenses were incurred...... 32

H.. The complaint of failure to report to creditors and to meet creditors............................. 41

I.... Failure to know at an earlier time of the existence of Westpac as secured creditor...... 43

J.... The complaint the Liquidator failed to prosecute the 2017 Proceeding.......................... 44

K.. Complaint concerning the derivative leave application.................................................... 50

L... The alleged lack of good faith concerning the proposed assignment of the Westpac Claim........................................................................................................................................................ 51

M. Disposition.................................................................................................................................. 53

HIS HONOUR:

A. Introduction

By an amended originating process dated 5 May 2020, the plaintiff applies for an order that the Court conduct an investigation into the liquidation of ACN 091 518 302 Pty Ltd (‘the Company’) pursuant to clause 90-10, 90-15 and 90-20 of Schedule 2 of the Corporations Act 2001 (Cth) (‘the Act’). The plaintiff seeks other orders, including that the defendant, Mr Rohrt (‘the Liquidator’), pay compensation to the plaintiff and to the Company for his conduct as liquidator.

Clause 90-10(1) in Schedule 2 of the Act provides that the Court may inquire into the external administration of a company on the application of a person with a financial interest in the administration of that company. There is no contest that the plaintiff, Mr Djordjevich, is a person with such an interest.

In Westpoint Corporation Pty Ltd (in liq) v Yeo,[1] in the context of the predecessor legislation to clause 90-10 of the Act, Sloss…

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.

Continue reading Djordjevich v Rohrt

Details

AGLC: Djordjevich v Rohrt [2021] VSC 178
Case: [2021] VSC 178
Decision Date: 15 April 2021

CaseChat Overview and Summary

The applicant in Djordjevich v Rohrt sought an investigation into the conduct of the liquidator of Westpoint Corporation Pty Ltd, which was in liquidation. The primary focus of the case was whether the Court had the authority to order an investigation into the liquidator’s actions based on the applicant's complaints. The case was heard in the Supreme Court of Victoria. The applicant argued that the liquidator had acted improperly in the handling of the liquidation, and sought an inquiry to vindicate their private rights.

The court was tasked with determining whether it had jurisdiction to order an investigation into the liquidator's conduct and if such an inquiry would serve the public interest in the honest and efficient administration of liquidations. The court had to consider whether the applicant's complaints provided a sufficient basis for an investigation and whether the proposed inquiry would be appropriate in the circumstances. Relevant legislative provisions and previous cases were examined to guide the decision.

The court found that the applicant's complaints did not establish a sufficient basis for an investigation into the liquidator’s conduct. It was held that the application was effectively seeking to vindicate private rights, which was not an appropriate case for an inquiry under the relevant statutory provisions. The court also concluded that ordering an investigation was not in the public interest for the honest and efficient administration of liquidations. The case law cited supported the view that the court should be cautious in ordering investigations into liquidators' conduct. Ultimately, the court dismissed the application, finding no jurisdiction to order an inquiry.

In light of the above, the Supreme Court of Victoria dismissed the application for an investigation into the liquidator’s conduct. The court held that the application did not meet the criteria for an investigation under the Corporations Act 2001, and that such an inquiry was neither warranted nor in the public interest.

Orders