Onefone Australia Pty Limited v One.Tel Limited (in liquidation)
[2012] NSWSC 589
•01 June 2012
Supreme Court
New South Wales
Medium Neutral Citation: Onefone Australia Pty Limited & Ors v One.Tel Limited (in liquidation) & Ors [2012] NSWSC 589 Hearing dates: Monday 21 May 2012 Decision date: 01 June 2012 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Orders with respect to the liquidator's remuneration
Catchwords: CORPORATIONS - Winding up -consideration of assessment and quantification by registrar of special purpose liquidator's claim for remuneration - registrar recommends payment of amount sought - whether final payment appropriate while proceedings to remove special purpose liquidator pending Cases Cited: Onefone Australia Pty Limited v One.Tel Ltd [2011] NSWSC 59;
Re One.Tel Ltd (in liq) (Ward J, 14 March 2011, unreported);
Onefone Australia Pty Limited v One.Tel Ltd (Hammerschlag J, 14 June 2011);
Onefone Australia Pty Limited v One.Tel Ltd (Barrett J, 19 December 2011);
Onefone Australia Pty Limited v One.Tel Ltd [2012] NSWSC 404;
Onefone Australia Pty Limited v One.Tel Ltd [2010] NSWSC 1120; (2010) 80 ACSR 11;
Onefone Australia Pty Limited v One.Tel Ltd [2012] NSWSC 404;Category: Procedural and other rulings Parties: Onefone Australia Pty Ltd (first plaintiff)
DCA Resources Australia P/L (second plaintiff)
Pacific Finance Group P/L (third plaintiff)
Concept Systems (Aust) P/L (fourth plaintiff)
On.Tel Limited (in liq) (first defendant)
Steven Sherman (second defendant)
Peter Walker (third defendant)
Paul Gerard Weston (Special Purpose Liquidator)Representation: Alan Friedlander (solicitor) (SPL)
O'Neill Partners (SPL)
File Number(s): 03/86446
Judgment
The applicant Paul Gerard Weston, as Special Purpose Liquidator of One.Tel Limited (SPL), seeks orders fixing his remuneration for the periods 1 January 2011 to 31 March 2011 and 1 April 2011 to 30 September 2011, and for payment of the approved amounts (net of interim payments) out of the assets of One.Tel and (as to that part that is payable by an external litigation funder) out of the Special Purpose Liquidation bank account.
As Black J has explained [Onefone Australia Pty Limited v One.Tel Ltd [2012] NSWSC 404, [6]-[8]], in the context of this liquidation, the procedure for referral to a registrar and an interim payment in the meantime has become well-established, such orders having been made in respect of the periods 1 July 2009 to 28 February 2010 ("the first remuneration period") [Onefone Australia Pty Limited v One.Tel Ltd [2011] NSWSC 59]; 1 March 2010 to 31 December 2010 ("the second remuneration period") [Re One.Tel Ltd (in liq) (Ward J, 14 March 2011, unreported)]; 1 January 2011 to 31 March 2011 ("the third remuneration period") [Onefone Australia Pty Limited v One.Tel Ltd (Hammerschlag J, 14 June 2011)]; 1 April 2011 to 30 September 2011 ("the fourth remuneration period") [Onefone Australia Pty Limited v One.Tel Ltd (Barrett J, 19 December 2011)]; and 1 October 2011 to 9 March 2012 ("the fifth remuneration period") [Onefone Australia Pty Limited v One.Tel Ltd [2012] NSWSC 404 (Black J, 23 April 2012)].
The next step is the consideration of the registrar's report. On 26 September 2011, following report by the registrar, Barrett J made orders fixing the remuneration of the SPL for the first and second remuneration periods, and orders for payment to the SPL of the approved amounts (net of the interim payments) out of the assets of One.Tel and (as to the funded component) out of the Special Purpose Liquidation bank account. The present application seeks similar orders in respect of the third and fourth remuneration periods.
As to the third period, the SPL seeks that his remuneration not previously approved by the Committee of Inspection ("COI") be determined in the amount of $84,405 plus GST - the COI having previously approved payment of part of the remuneration for that period that was payable by the litigation funder. On 14 June 2011, Hammerschlag J made orders for an interim payment of two thirds of the claim for the first period, reference to a registrar for assessment and quantification of the whole of the claim, and costs of the application. The Registrar has reported on the claim and recommended payment of the amount sought of $84,405 plus GST, comprising the $56,250 plus GST interim payment, and a further $28,135 plus GST, which the SPL now seeks together with the additional costs and expenses incurred in making the application.
As to the fourth period, the SPL seeks that his remuneration be determined in the amount of $232,876 plus GST - the COI not having previously approved payment of any part of the remuneration for that period. On 19 December 2011, Barrett J made orders for an interim payment of two thirds of the claim for the second period, and reference to a registrar for assessment and quantification of the whole of the claim. The Registrar has reported on the claim and recommended payment of the amount sought of $232,876 plus GST, comprising the $155,250.66 plus GST interim payment, and a further $77,625.34 plus GST. That amount, in turn, comprises $28,499.67 plus GST for "funded work" payable by the SPL's litigation funder, and $49,125.67 plus GST to be paid out of the assets of One.Tel. The SPL now seeks payment of the further amounts of $28,499.67 plus GST for funded work and $49,125.67 plus GST for unfunded work, together with the costs and expenses incurred in making the application.
The quantum of the SPL's remuneration has in the past been the subject of controversy, and some elements of his claimed remuneration have not been allowed [Onefone Australia Pty Limited v One.Tel Ltd [2010] NSWSC 1120; (2010) 80 ACSR 11]. There are now pending proceedings for the SPL's removal, including on grounds relating to the amount of remuneration he has claimed and received. In the removal proceedings, an order is sought that the SPL's costs of the removal proceedings not be born by One.Tel.
The view has consistently been taken that the pendency of proceedings for removal of the SPL is not an impediment to interim payment of the SPL's remuneration in the meantime [Onefone Australia Pty Limited v One.Tel Ltd [2010] NSWSC 1120; (2010) 80 ACSR 11, [23]]. Indeed, Barrett J apparently did not regard it as an obstacle to a final payment, as his Honour made such orders in respect of the first and second periods on 26 September 2011. However, it seems to me that a final order for payment of the SPL's remuneration, to the extent that it included remuneration referable to the defence of the removal proceedings, would at least arguably pre-empt the outcome of those proceedings, in which judgment now stands reserved. It was for similar reasons that, on a recent occasion, interim payment of remuneration referable to the removal proceedings has been made subject to an undertaking by the SPL that he repay such remuneration if it be found, in the removal proceedings, that he was not entitled to such remuneration [Onefone Australia Pty Limited v One.Tel Ltd [2012] NSWSC 404, [11]-[13] (Black J)].
While, prima facie, I would be inclined to adopt the Registrar's report, before making orders it seems to me that the members of the COI, and/or the general purpose liquidators, should be afforded an opportunity to be heard, and it should be ascertained whether the SPL is prepared to give an undertaking to repay any remuneration referable to the removal proceedings if it be found, in those proceedings, that he was not entitled to such remuneration.
I will make directions accordingly.
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Decision last updated: 20 June 2012
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