Onefone Australia Pty Ltd v One.Tel Ltd - [2009] NSWSC 822

CITATION: Onefone Australia Pty Ltd v One.Tel Ltd [2009] NSWSC 822

HEARING DATE(S): 17/08/09

JUDGMENT DATE :
17 August 2009

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

EX TEMPORE JUDGMENT DATE: 17 August 2009

DECISION: Application to court adjourned.

CATCHWORDS: CORPORATIONS - winding up - creditors' voluntary winding up - remuneration of liquidator - request by liquidator that committee of inspection fix remuneration - committee seeks information or explanation in two areas - not clear that this given as to both - court cannot find that statutory machinery for fixing remuneration has broken down - liquidator's application to court adjourned

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

CATEGORY: Principal judgment

CASES CITED: Onefone Australia Pty Ltd v One.Tel Ltd [2008] NSWSC 1335; (2008) 69 ACSR 290
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: NOT Lawyers - Applicant

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

BARRETT J

MONDAY 17 AUGUST 2009

5291/03 ONEFONE AUSTRALIA PTY LIMITED & 3 ORS v ONE.TEL LIMITED (IN LIQUIDATION) & 2 ORS

JUDGMENT

1 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.

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

3 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 of s 499(3) relevant for present purposes is that existing immediately before 31 December 2007: see Onefone Australia Pty Ltd v One.Tel Ltd [2008] NSWSC 1335; (2008) 69 ACSR 290 at [32]). The court has no power to fix remuneration, but it has been held in earlier cases (see, for example, Re Walker & Anor (as liquidators of One.Tel Ltd [2005] NSWSC 557; (2005) 54 ACSR 11) that, if the machinery created by s 499(3) breaks down and proves unworkable, then a question within the meaning of s 511 arises and the court may answer that question.

4 It is the contention of the special purpose liquidator that the s 499(3) machinery has broken down and proved unworkable in respect of remuneration for the period to which I have referred.

5 The evidence is that the special purpose liquidator's claim for remuneration for the period in question in the sum of $61,502.98 was submitted to a meeting…

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 822
Decision Date: 17 August 2009

CaseChat Overview and Summary

Onefone Australia Pty Ltd, a creditor of One.Tel Ltd, brought a case before the Federal Court of Australia concerning the remuneration of the liquidator appointed to One.Tel Ltd's creditors' voluntary winding up. The liquidator sought an order from a committee of inspection to determine his remuneration. The committee requested further information and explanation from the liquidator in two areas, but it was unclear whether the liquidator had provided the necessary details in both areas. The court was required to determine whether the statutory mechanism for fixing the liquidator's remuneration had failed and whether the liquidator's application to the court for an order should be adjourned.

The court considered whether the statutory machinery for fixing the remuneration of the liquidator had broken down. It was noted that the committee of inspection had requested further information and explanation from the liquidator, but it was not clear that this had been provided in both areas. The court held that it could not find that the statutory machinery had broken down, as the liquidator had not provided the necessary information or explanation in both areas. The court also considered whether the liquidator's application to the court should be adjourned. It was noted that the liquidator had not yet provided the necessary information to the committee of inspection, and it was in the interests of justice to adjourn the application until such time as this was provided.

The court held that the statutory machinery for fixing the remuneration of the liquidator had not broken down, as the liquidator had not provided the necessary information or explanation in both areas requested by the committee of inspection. The court also held that it was appropriate to adjourn the liquidator's application to the court until such time as the necessary information was provided to the committee of inspection. The court did not make any orders in relation to the remuneration of the liquidator, as it considered that this was a matter for the committee of inspection to determine once the necessary information had been provided.

No further orders were made by the court in relation to the remuneration of the liquidator, as it considered that this was a matter for the committee of inspection to determine once the necessary information had been provided. The liquidator's application to the court was adjourned until such time as the necessary information was provided to the committee of inspection. The court held that it could not find that the statutory machinery for fixing the remuneration of the liquidator had broken down, as the liquidator had not provided the necessary information or explanation in both areas requested by the committee of inspection. The court considered that it was in the interests of justice to adjourn the application until such time as this was provided.

Orders