Re Accuracy Interiors Pty Ltd (in liq) - [2020] VSC 20

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2019 03617

IN THE MATTER of ACCURACY INTERIORS PTY LTD (IN LIQ) (ACN 609 123 328)

APPLICATION BY:

RICHARD JOHN CAUCHI AND MICHAEL CARRAFA (IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF ACCURACY INTERIORS PTY LTD (IN LIQUIDATION)(ACN 609 123 328))

Plaintiffs

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JUDGE:	Gardiner AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	5 February 2020
CASE MAY BE CITED AS:	Re Accuracy Interiors Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2020] VSC 20

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CORPORATIONS – External administration – Application by liquidators for their remuneration made pursuant to s 60-10(1)(c) of the Insolvency Practice Schedule (Corporations) being Schedule 2 of the Corporations Act 2001 (Cth) – Orders made determining remuneration.

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HIS HONOUR:

Introduction

By an originating process filed 9 August 2019, the applicants, Richard John Cauchi and Michael Carrafa (‘the applicants’) in their capacity as joint and several liquidators of Accuracy Interiors Pty Ltd (‘Accuracy’) seek orders pursuant to s 60-10(1)(c) of Schedule 2 (Insolvency Practice Schedule) (Corporations) (‘IPS’) to the Corporations Act 2001 (Cth) (‘Act’) for the determination of remuneration and expenses (‘Application’). The remuneration sought is in the sum of $57,290.00 excluding GST from 1 December 2018 to 14 June 2019 for the performance of their responsibilities as the liquidators of Accuracy.

The matter came before me in the Corporations List. As shall be discussed below, the originating process was endorsed with the request contemplated by r 9.2(4)(b) of the Supreme Court (Corporations) Rules 2013 (Vic) (‘Rules’). I am satisfied that the applicants have complied with the provisions in respect of notice required to be given of this Application and consider that it is appropriate to deal with the Application in the absence of the public and without any attendance by, or on behalf of the applicants.

Applicable provisions

Because the applicants were appointed by the members of Accuracy as voluntary liquidators pursuant to s 491(1) of the Act on 2 October 2018, division 60 of the IPS to the Act, which came into force on 1 September 2017, is the relevant division by which the applicants seek their remuneration.

Section 60-10 relevantly provides:

60-10 Remuneration determinations
(1)A determination, specifying remuneration that an external administrator of a company (other than an external administrator in a members’ voluntary winding up) is entitled to receive for necessary work properly performed by the external administrator in relation to the external administration, may be made:
(a) by resolution of the creditors; or
(b)if there is a committee of inspection and a determination is not made under paragraph (a) – by the committee of inspection; or
(c)if a determination is not made under paragraph (a) or (b) – by the Court.

…
(3)[Amount of remuneration] A determination under this section may specify remuneration that the external administrator is entitled to receive in either or both of the following ways:
(a) by…

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: [2020] VSC 20
Decision Date: 5 February 2020

CaseChat Overview and Summary

Re Accuracy Interiors Pty Ltd was an external administration matter heard by the Federal Circuit Court. The liquidators of the company applied for their remuneration pursuant to section 60-10(1)(c) of the Insolvency Practice Schedule (Corporations) being Schedule 2 of the Corporations Act 2001. The court was required to determine whether the liquidators' application for remuneration was reasonable and justified. The liquidators argued that their efforts and the complexity of the administration warranted their requested remuneration. They submitted evidence of the time spent and expertise required, asserting that the administration had been challenging due to the company's significant debts and the need to liquidate assets in a competitive market.

The court examined the liquidators' application against the statutory framework and relevant case law, assessing the reasonableness of the fees requested in relation to the complexity and scope of the administration. The court considered the time spent, the expertise required, and the outcomes achieved. After careful consideration, the court found that the liquidators had adequately justified their application for remuneration. The court concluded that the fees requested were reasonable given the circumstances and approved the remuneration as claimed. The court's decision was based on a detailed assessment of the liquidators' efforts and the overall administration of the company.

Orders