Paul's Retail Pty Ltd v Morgan

This case concerned an appeal from a decision of the primary judge regarding the remuneration of a deed administrator. The parties were Paul's Retail Pty Ltd (the applicant) and the administrator of the company under a deed of company arrangement (the respondent). The dispute arose when the administrator sought a review of his remuneration, which had been determined by creditors, and Paul's Retail argued that the administrator was estopped from seeking such a review due to an agreement to "cap" his fees. The appeal was heard by Campbell and Macfarlan JJA and Sackville AJA.

The legal issues before the court were whether the administrator was estopped from seeking a review of his remuneration under section 449E(2) of the *Corporations Act 2001* (Cth) despite an agreement to cap his fees, and whether the administrator had demonstrated a need to inquire into the originally determined quantum of remuneration. The court also considered the nature of an administrator's right to indemnity and the company's liability for remuneration under a deed of company arrangement.

The court's reasoning affirmed the primary judge's finding that the administrator's application was a claim for review under section 449E(2) of the *Corporations Act*. The primary judge rejected the estoppel argument, holding that the administrator had a statutory right to seek a review of remuneration fixed by creditors, and that the aim of such a review was to determine if the initial fixing process had resulted in unreasonable remuneration. The court noted that the assessment of reasonableness would consider all relevant circumstances, including those not known or foreseen at the time of the initial fixing.

Leave to appeal was granted, but the appeal was ultimately dismissed. Paul's Retail Pty Ltd was ordered to pay the respondent's costs of the application for leave to appeal and of the appeal.