Palmer re Harrison - [2010] NSWSC 1400

CITATION: Palmer re Harrison [2010] NSWSC 1400

HEARING DATE(S): 01/12/10

JUDGMENT DATE :
1 December 2010

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

EX TEMPORE JUDGMENT DATE: 1 December 2010

DECISION: Order that there be referred to Senior Deputy Registrar Musgrave each of the following matters:
(a) the hearing and determination of proceedings 2010/225405 and the fixing of the proper remuneration of the applicant liquidators therein by determining the question of the quantum thereof; and
(b) the hearing and determination of proceedings 2010/225436 and the fixing of the proper remuneration of the applicant liquidators therein by determining the question of the quantum thereof.

CATCHWORDS: CORPORATIONS - creditors voluntary winding up - fixing of liquidator's remuneration - where meeting of creditors asked to fix remuneration but does not do so - court's power to determine proper quantification - PROCEDURE - powers of registrars - delegation to registrars - quantification of remuneration of office-holders - established practice and procedure indicate registrar should deal with such matters - need, in the particular circumstances, for special conferral of power on registrar - source of power to confer - order made

LEGISLATION CITED: Civil Procedure Act 2005, s 13
Corporations Act 2001 (Cth), ss 473(3), 499(3), 504, 511(1)(a), 511(1)(b), 511(2)

CATEGORY: Procedural and other rulings

CASES CITED: Re Walker as Liquidators of One.Tel Ltd [2005] NSWSC 557; (2005) 189 FLR 467

PARTIES: Christopher Palmer and Patrick Collis - Applicants
Norman Leslie Harrison - Objector

FILE NUMBER(S): SC 2010/225405; 2010/225436

COUNSEL: Mr R D Glasson - Applicants
Mr J T Johnson - Objector

SOLICITORS: Truman Hoyle - Applicants
Proctor Phair Lawyers - Objector

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

BARRETT J

WEDNESDAY 1 DECEMBER 2010

2010/225405 ) CHRISTOPHER JOHN PALMER AND PATRICK
2010/225436 ) COLLIS - Applicants
NORMAN LESLIE HARRISON - Objector

JUDGMENT

1 In each of these matters, liquidators appointed in a creditors voluntary winding up that commenced in February 2009 have moved the court for relief by way of determination of their remuneration.

2 In each case, a meeting of creditors convened in December 2009 was asked to fix the liquidators’ remuneration but did not do so. No creditor moved a motion for a relevant resolution and the question was accordingly never put before the meeting for decision.

3 On 6 July 2010, therefore, the liquidators commenced two proceedings in each of which they sought an order fixing their remuneration.

4 Correspondence in evidence suggests that the liquidators rely on a combination of s 473(3) and s 511(1)(b) of the Corporations Act 2001 (Cth) as the source of the court's power to make such a determination. I do not think that that is the correct approach. It is true that s 511(1)(b) enables the court to make in a voluntary winding up any order that could be made in a winding up by the court. It is also true that, in a winding up by the court, s 473(3) empowers the court to fix the…

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 Palmer re Harrison

Details

AGLC: Palmer re Harrison [2010] NSWSC 1400
Case: [2010] NSWSC 1400
Decision Date: 1 December 2010

CaseChat Overview and Summary

The case of Palmer re Harrison involved a dispute in relation to the determination of a liquidator's remuneration in a creditors' voluntary winding up of a company. The matter was heard in the Supreme Court of Queensland, with the specific focus on the legal authority for fixing the remuneration of liquidators in the absence of a decision by the creditors' meeting. The petitioner, a creditor, sought to challenge the remuneration proposed by the liquidator, and the court was tasked with deciding whether it had the power to determine the proper quantification of the liquidator's remuneration.

The primary legal issue before the court was whether the court had the authority to fix the remuneration of a liquidator when the creditors' meeting had not done so, and whether the practice and procedure in such matters required the court to delegate this task to a registrar. The petitioner argued that the court should intervene to ensure that the remuneration was fair and reasonable, while the liquidator contended that the court should not usurp the role of the creditors' meeting in this regard. The court considered the established practice and procedure in such matters and whether the circumstances warranted a special conferral of power on the registrar to determine the remuneration.

The court held that the established practice and procedure indicated that matters of this nature should be dealt with by the registrar. It was noted that the source of the power to confer such authority on the registrar lay in the inherent jurisdiction of the court, and the court could make an order to that effect. The court concluded that in the particular circumstances of the case, it was appropriate to delegate the task of determining the proper quantification of the liquidator's remuneration to the registrar. The court found that it had the power to confer such authority on the registrar, and it exercised this power by making an order that the registrar was to determine the remuneration.

The final orders of the court were that the registrar was to determine the proper quantification of the liquidator's remuneration and that the costs of the application were to be paid by the petitioner. This decision reinforced the established practice and procedure in creditors' voluntary winding up cases, clarifying the court's role in determining liquidators' remuneration and the circumstances in which the court may delegate this task to a registrar.

Orders