Onefone Australia Pty Ltd v One.Tel Ltd - [2009] NSWSC 1231

Reported Decision:
74 ACSR 716

New South Wales

Supreme Court

CITATION: Onefone Australia Pty Ltd v One.Tel Ltd [2009] NSWSC 1231

HEARING DATE(S): 02/11/09

JUDGMENT DATE :
16 November 2009

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: See paragraph 18

CATCHWORDS: CORPORATIONS - winding up - creditors voluntary winding up - where committee of inspection does not fix liquidator's remuneration - whether remuneration fixing machinery has broken down - whether question has arisen with respect to remuneration that it is open to court to answer under s 511

LEGISLATION CITED: Corporations Act 2001 (Cth) ss 499(3), 511(1)(a)

CATEGORY: Principal judgment

CASES CITED: Onefone Australia Pty Ltd v One.Tel Ltd [2008] NSWSC 1335; (2008) 69 ACSR 290
Onefone Australia Pty Ltd v One.Tel Ltd [2009] NSWSC 822
Re Walker & Anor (as liquidators of One.Tel Ltd [2005] NSWSC 557; (2005) 54 ACSR 11

PARTIES: Onefone Australia Pty Limited - First Plaintiff
DCA Resources Australia Pty Limited - Second Plaintiff
Pacific Finance Group Pty Limited - Third Plaintiff
Concept Systems (Australia) Pty Limited - Fourth Plaintiff
One.Tel Limited (in liquidation) - First Defendant
Steven Sherman - Second Defendant
Peter Walker - Third Defendant
Paul Gerard Weston - Applicant

FILE NUMBER(S): SC 5291/03

COUNSEL: Mr R D Glasson - Applicant

SOLICITORS: O'Neill Partners Commercial Lawyers - Applicant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

MONDAY 16 NOVEMBER 2009

5291/03 ONEFONE AUSTRALIA PTY LIMITED & 3 ORS v ONE.TEL LIMITED & 2 ORS; APPLICATION OF PAUL GERARD WESTON

JUDGMENT

1 I am dealing with a renewed application of the special purpose liquidator of One.Tel Limited concerning his remuneration.

2 In this case of a creditors voluntary winding up that commenced before the advent of the Corporations Amendment (Insolvency) Act 2007 (Cth) on 31 December 2007, the fixing of a liquidator’s remuneration is governed by

s 499(3) of the Corporations Act 2001 (Cth) as it stood before that date:

“The committee of inspection, or, if there is no such committee, the creditors, may fix the remuneration to be paid to the liquidator.”

3 In the present case, there is a committee of inspection, so that it alone has the power conferred by s 499(3).

4 The special purpose liquidator made an application in August last in respect of his remuneration. The circumstances were described as follows in the judgment of 17 August 2009 (Onefone Australia Pty Ltd v One.Tel Ltd [2009] NSWSC 822 at [1] to [4]:

“The special purpose liquidator of One.Tel Limited makes application under s 511 of the Corporations Act 2001 (Cth) in relation to a question which he considers to have arisen in the winding up of that company.

The question concerns the quantum of the special purpose liquidator's remuneration for the period 1 May to 30 June 2009.

Under s 499(3) of the Corporations Act , the function of fixing remuneration in this creditors’ voluntary winding up is vested in the committee of inspection (the version…

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.

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Details

Case: [2009] NSWSC 1231
Decision Date: 16 November 2009

CaseChat Overview and Summary

The matter before the Federal Court was a dispute between Onefone Australia Pty Ltd and One.Tel Ltd, which centred on the remuneration of a liquidator appointed to oversee the creditors' voluntary winding up of One.Tel. The Court was required to determine whether the remuneration fixing machinery had broken down and whether it was open to the court to fix the liquidator's remuneration under section 511 of the Corporations Act 2001. The Committee of Inspection had not fixed the liquidator's remuneration, and Onefone Australia, a creditor of One.Tel, argued that the remuneration fixing machinery had broken down and sought to have the court determine the liquidator's remuneration.

The legal issues that the Court had to decide were whether the remuneration fixing machinery had indeed broken down and, if so, whether the court had the power to fix the liquidator's remuneration under section 511 of the Corporations Act. The Court had to examine the statutory provisions and case law to determine whether the failure of the Committee of Inspection to fix the liquidator's remuneration constituted a breakdown in the remuneration fixing machinery. If the Court found that the remuneration fixing machinery had broken down, it then had to consider whether it was appropriate to exercise its discretion to fix the liquidator's remuneration under section 511 of the Corporations Act.

The Court found that the remuneration fixing machinery had indeed broken down because the Committee of Inspection had not fixed the liquidator's remuneration. The Court held that the failure of the Committee of Inspection to fix the liquidator's remuneration constituted a breakdown in the remuneration fixing machinery. The Court then turned to consider whether it was appropriate to exercise its discretion to fix the liquidator's remuneration under section 511 of the Corporations Act. The Court noted that it had the power to fix the liquidator's remuneration under section 511 if it considered it just and equitable to do so. The Court found that it was just and equitable to fix the liquidator's remuneration and exercised its discretion to do so. The Court made orders fixing the liquidator's remuneration and costs.

Orders