Malhotra v Tiwari (No 2)
[2007] VSCA 114
•23 May 2007
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 7149 of 2005
| DINESH MALHOTRA [NO.2] | |
| Appellant | |
| v. | |
| SHEELA TIWARI and PRADEEP TIWARI | First Respondents |
| and PETER ROBERT VINCE and STIRLING LINDSAY HORNE (in their capacity as Administrators and Liquidators of S & D International Pty Ltd (in liq) | Second Respondents |
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JUDGES: | CHERNOV, NETTLE and REDLICH JJA | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 11 April 2007 and 23 May 2007 | |
DATE OF JUDGMENT: | 23 May 2007 | |
MEDIUM NEUTRAL CITATION: | [2007] VSCA 114 | |
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CORPORATIONS – External administration – Removal, replacement and remuneration of administrators – Power of court to vary remuneration – Appeal from refusal to deny administrators their remuneration – Voluntary winding up – Company’s creditors resolving that company be wound up – Administrators becoming liquidators – Review of liquidators’ remuneration – Appeal from refusal to deny liquidators their remuneration – Need for further investigation of conduct of administration prior to winding up – Orders the subject of appeal not precluding further review of administrators and liquidators’ remuneration – Costs.
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| APPEARANCES: | Counsel | Solicitors |
The Appellant in person | ||
| For the Second Respondents | Mr R S Randall | Madgwicks |
CHERNOV JA
NETTLE JA
REDLICH JA:
Following the handing down of our reasons for judgment in the appeal today[1], we withheld announcing orders so as to give the parties the opportunity to make submissions as to:
[1] [2007] VSCA 101.
(a) the proper form of order that would give effect to the Court’s decision that the liquidators be replaced; and
(b) costs.
When the matter returned to Court, counsel for the second respondents was good enough to provide it with draft Minutes of Order. We record our appreciation for this assistance. It was generally accepted that the new liquidator should be the next person whose name is recorded on the roll of registered liquidators maintained by the Prothonotary, subject to his or her consent.
Mr Malhotra submitted that the hearing on the question of costs be adjourned, he said, to give him the opportunity to obtain advice on this matter. Understandably, he was concerned that if costs were ordered against him the amount would be very significant and this would have a detrimental effect on him. Later, he said that he also wanted to argue that the costs ordered below should be set aside. We considered, however, that given the circumstances of the proceeding the application for the adjournment should be declined. We then heard brief submissions from the parties. Mr Malhotra claimed that the principal relief sought by him all along was for the liquidators to be replaced and that this has been vindicated, he claimed, as is apparent from our reasons. Consequently, he said, he should not be prejudiced by a costs order .
Mr Randall for the second respondents sought the usual order as to costs on the basis that the second respondents have succeeded on almost all the issues and that, in any event, their costs should be costs in the liquidation. Later, Mr Randall also pointed out that, prior to the hearing of the appeal, all issues raised in the grounds of appeal were alive and, consequently, the preparation of the appeal on behalf of the second respondents proceeded on that footing. It was said that the claim for the removal of the liquidators was then a relatively minor issue. Moreover, it was argued, the liquidators were only removed by the Court in order to avoid any potential for the perception of bias on their part.
It should be emphasised, however, that our principal reason for ordering the removal of the liquidators, as we have said in our reasons, was that we formed the view that there were matters pertaining to the role of the Administrators and the conduct by the first respondents in respect of the company that might be investigated by a liquidator and, plainly, this could not be properly done by the second respondents. Neither Mandie J nor this Court has concluded that the conduct of the second respondents as Administrators was necessarily unimpeachable. In that regard, we point particularly to paragraphs [63] to [68] and [71] of our reasons. In our view, it is not correct to characterise, as Mr Randall would have it, that the outcome of this case was one where the second respondents had an “overwhelming” victory. We consider that each party has succeeded in its claim and that the claims were necessarily interrelated such that, in broad terms, it would be just that each party bear its own costs of the appeal.
We also cannot accept, however, Mr Malhotra’s claim that a like order should be made in relation to the costs of the trial. He asserted that his complaints about the behaviour of the second respondents have been accepted by the Court and, therefore, they should not have the costs below. But as has been noted, the lengthy and detailed attack by the appellant on his Honour’s findings as to the entitlement of the second respondents’ fees has failed in almost every respect below and we found no relevant error in his Honours comprehensive reasons. In the circumstances, we consider that it would be inappropriate to disturb the costs below.
Consequently, the Court proposes to make the following orders:
1. The appeal be allowed in part.
2. The order made by the Honourable Justice Mandie on 22 December 2005 be varied by adding, after the word “dismissed” in Order 1, the words “except that the second defendants be replaced as liquidators of S & D International Pty Ltd (in liquidation) upon order of the court”.
3. The appeal be otherwise dismissed.
4. Upon the person whose name next appears on the roll of registered liquidators maintained by the Prothonotary consenting to act as liquidator of S & D International Pty Ltd (in liquidation) that person be appointed to act in that capacity for the purposes of the winding up.
5. The necessary consent be sought by the Master.
6. There be no order as to costs of the appeal or the trial below.
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