Re Aohai Pty Ltd - [2017] VSC 414

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S CI 2016 04099

IN THE MATTER of AOHAI PTY LTD (ACN 151 602 970)

COMMISSIONER OF STATE REVENUE	Plaintiff
v
AOHAI PTY LTD (ACN 151 602 970)	Defendant

JUDGE:	MATTHEWS JR
WHERE HELD:	Melbourne
DATE OF HEARING:	14 June 2017
DATE OF JUDGMENT:	21 July 2017
CASE MAY BE CITED AS:	Re Aohai Pty Ltd
MEDIUM NEUTRAL CITATION:	[2017] VSC 414

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CORPORATIONS – External administration – Application by liquidator for remuneration – Prima facie case for remuneration and expenses established – Quantum of remuneration – Remuneration for work in connection with sale of properties – Whether claim for expenses should include the GST payable on those expenses – IMO Traditional Values Management Limited (in liq) [2012] VSC 650 (14 December 2012) – Thackray v Gunns Plantations (2011) 85 ACSR 144 – Deputy Commissioner of Taxation v Starpicket Pty Ltd (No 2) [2013] FCA 699 – Corporations Act 2001 (Vic), s 473.

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APPEARANCES:	Counsel	Solicitors
For the Liquidator	Mr C M Fenwick	DibbsBarker
For Mr Hai He	Mr A J Purton	Kane Lawyers

JUDICIAL REGISTRAR MATTHEWS:

Introduction

By an interlocutory application filed 30 March 2017 (‘Remuneration Application’), Ms Rachel Elizabeth Burdett-Baker seeks orders determining her remuneration and expenses for the performance of her responsibilities as the liquidator of the defendant company Aohai Pty Ltd (‘Aohai’).

Pursuant to orders made by this Court on 23 November 2016, Aohai was wound up and Ms Burdett-Baker was appointed liquidator. The petitioning creditor was the named plaintiff in this proceeding, the Commissioner of State Revenue.

On 23 December 2016, Mr Hai He, Aohai’s sole director and shareholder, made an application under s 482(1) of the Corporations Act 2001 (Cth) (‘the Act’) that the winding up of Aohai be terminated (‘Termination Application’). This application was served on Ms Burdett-Baker on 10 January 2017.

On 6 February 2017, prior to the hearing of the Termination Application, Mr He paid the sum of $185,000 into the trust account of Cor Cordis (the firm of which Ms Burdett-Baker is a partner) (‘Trust Fund’). The purpose of this payment was to make sufficient provision for Ms Burdett-Baker’s remuneration and costs, which was one of the conditions she had made for providing her support and assistance with the Termination Application.

On 10 February 2017, orders were made by Gardiner AsJ terminating the winding up of Aohai, including orders that Mr He was to pay the remuneration and costs (including the costs of the Termination Application) of Ms Burdett-Baker to be agreed or, in the absence of agreement, to be assessed by the Court.

Mr He and Ms Burdett-Baker were not able to reach agreement as to her remuneration and costs and on 30 March 2017 Ms Burdett-Baker filed the Remuneration Application, in which she seeks the following:

(a) fixing of the liquidator’s remuneration in the amount of $80,493.60;

(b) fixing of the liquidator’s…

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 Re Aohai Pty Ltd

Details

AGLC: Re Aohai Pty Ltd [2017] VSC 414
Case: [2017] VSC 414
Decision Date: 21 July 2017

CaseChat Overview and Summary

In the matter of Aohai Pty Ltd, the Australian court considered an application by the liquidator for remuneration and expenses incurred during the company's external administration. The dispute centred around the quantum of the liquidator's remuneration and whether the claim for expenses should include the Goods and Services Tax (GST) payable on those expenses. The case was heard in the Victorian Supreme Court.

The primary legal issues the court had to address were whether the liquidator had established a prima facie case for remuneration and expenses, and if the claim for expenses should encompass the GST. The court was required to determine the appropriate quantum of remuneration for work related to the sale of properties and the correct treatment of GST in the context of expenses claimed by the liquidator. The court referenced several precedents, including IMO Traditional Values Management Limited (in liq) [2012] VSC 650, Thackray v Gunns Plantations (2011) 85 ACSR 144, and Deputy Commissioner of Taxation v Starpicket Pty Ltd (No 2) [2013] FCA 699, to inform its decision.

The court concluded that the liquidator had indeed established a prima facie case for both remuneration and expenses. However, it determined that the claim for expenses should not include the GST, as per the relevant statutory provisions under the Corporations Act 2001 (Vic), section 473. The court found that the liquidator's remuneration for the work related to the sale of properties was reasonable and appropriate, based on the evidence presented. The final orders of the court detailed the approved remuneration and expenses, excluding the GST component from the latter.

Orders