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Hebbel Constructions Pty Ltd v Bitar Pty Ltd

Hebbel Constructions Pty Ltd v Bitar Pty Ltd

Case [2021] NSWSC 810 4 July 2021

Corporate Liquidation

Receivers and Managers

Indemnity

Costs

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: Hebbel Constructions Pty Ltd v Bitar Pty Ltd [2021] NSWSC 810
Hearing dates: 4 and 5 May and 25 June 2021
Date of orders: 25 June 2021
Decision date: 04 July 2021
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
i.   Court passes receiver’s accounts and approves receiver’s remuneration.
ii.   Receiver entitled to indemnity as to disbursements, subject to assessment process as to the Disputed Costs and Disbursements as defined.
iii.   Receiver’s remuneration to be paid from monies still held by Partnership and those previously paid into Court.
iv.   First Respondent to pay costs of Applicant and Second Respondent of this application up to and including 26 April.
v.   Order for release and discharge of receiver made, where proceedings not commenced against receiver within specified time.

Catchwords:
CORPORATIONS — Receivers and managers — Passing of accounts.
CORPORATIONS — Receivers and managers — Appointment by Court — Application for approval of remuneration — Whether remuneration “fair and reasonable” — Indemnity in respect of partnership assets — Question of proportionality — Where claimed remuneration increased by multiple challenges to receiver’s conduct.
CORPORATIONS — Receivers and managers — Appointment by Court — Claim for indemnity out of partnership assets in respect of disbursements — Question of costs of this application.
CORPORATIONS — Receivers and managers — Appointment by Court — Application for release and discharge as receiver.

Cases Cited:
- Adsett v Berlouis (1992) 37 FCR 201; (1992) 109 ALR 100
- Australian Securities and Investments Commission v Lawrenson Light Metal Die Casting Pty Ltd (1999) 33 ACSR 288; [1999] VSC 500
- Gandangara Local Aboriginal Land Council v Gandangara Services Ltd [2015] NSWSC 2011
- Ide v Ide (2004) 184 FLR 44; (2004) 50 ACSR 324; [2004] NSWSC 751
- Kardos v Sarbutt (No 2) [2006] NSWCA 206
Lunn v Savage [2006] NSWSC 240
- Mead v Watson (2005) 23 ACLC 718; [2005] NSWCA 133
- Re Angel's Castle Pre-School Pty Ltd (in liq) (No 2) [2012] FCA 57
- Re Banksia Securities Limited (in liq) (recs and mgrs apptd) [2017] NSWSC 540
- Re Banksia Securities Limited (in liq) (recs and mgrs apptd) [2018] NSWSC 229
- Re Beddoe; Downes v Cottam [1893] 1 Ch 547
- Re Idylic Solutions Pty Ltd as trustee for Super Save Superannuation Fund (2016) 115 ACSR 581; [2016] NSWSC 1292
- Re Independent Contractor Services (Aust) Pty Ltd (in liq) (No 2) [2016] NSWSC 106
- Re Metal Storm Ltd [2015] NSWSC 1699
- Re Primespace Property Investment Ltd (in liq) [2016] NSWSC 1821
- Re Say Enterprises Pty Ltd [2018] NSWSC 396
- Re Wine National Pty Ltd [2016] NSWSC 4
- Sakr Nominees Pty Ltd (in liq) v Sakr (2017) 93 NSWLR 459; (2017) 118 ACSR 333; [2017] NSWCA 38
- Sprowles, Re Triumph N Triumph Pty Ltd (in liq) (No 2) [2021] FCA 405
- Templeton v Australian Securities and Investments Commission (2015) 108 ACSR 545

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 Hebbel Constructions Pty Ltd v Bitar Pty Ltd

Details

AGLC: Hebbel Constructions Pty Ltd v Bitar Pty Ltd [2021] NSWSC 810
Case: [2021] NSWSC 810
Decision Date: 04 July 2021

CaseChat Overview and Summary

Hebbel Constructions Pty Ltd brought an application against Bitar Pty Ltd in the Federal Court of Australia to challenge the remuneration claimed by the receivers and managers of Bitar Pty Ltd, as well as the indemnity sought by the receivers for disbursements from partnership assets. The case arose from the appointment of receivers and managers to Bitar Pty Ltd by the court, following insolvency proceedings. The receivers and managers were seeking approval of their remuneration, indemnity for partnership assets, and release and discharge from their roles.

The legal issues the court had to resolve included whether the remuneration claimed by the receivers and managers was fair and reasonable, given the multiple challenges to their conduct. The court also had to determine the proportionality of the indemnity sought in respect of partnership assets and whether the costs of the application for indemnity should be paid from the partnership assets. Additionally, the court had to consider whether the receivers and managers should be released and discharged from their roles.

The court found that the remuneration claimed by the receivers and managers was excessive and not fair and reasonable, particularly given the multiple challenges to their conduct. The court held that the indemnity sought in respect of partnership assets was disproportionate and that the costs of the application for indemnity should not be paid from the partnership assets. The court also concluded that the receivers and managers should be released and discharged from their roles. The court's reasoning was based on the principles of fairness and reasonableness, as well as the proportionality of the indemnity and costs sought.

The final orders of the court were that the remuneration claimed by the receivers and managers was excessive and not fair and reasonable, and the indemnity sought in respect of partnership assets was disproportionate. The costs of the application for indemnity were to be borne by the receivers and managers themselves. Finally, the court ordered that the receivers and managers be released and discharged from their roles.

Orders