Re Atwell & Co Pty Ltd (in liq) - [2017] VSC 683

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S CI 2016 02275

IN THE MATTER OF ATWELL & CO PTY LTD (ACN 106 264 055) (IN LIQUIDATION)
BETWEEN:
MORAG ATWELL (A BANKRUPT)	Appellant
-AND-
DENNIS ANTHONY TURNER & LUKE CHRISTOPHER TARGETT (IN THEIR CAPACITIES AS JOINT AND SEVERAL LIQUIDATORS OF ATWELL & CO PTY LTD (ACN 106 264 055) (IN LIQUIDATION)	First Respondent
ATWELL & CO PTY LTD (ACN 106 264 055) (IN LIQUIDATION)	Second Respondent

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JUDGE:	Kennedy J
WHERE HELD:	Melbourne
DATE OF HEARING:	10 November 2017
DATE OF JUDGMENT:	12 December 2017
CASE MAY BE CITED AS:	Re Atwell & Co Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2017] VSC 683
JUDGMENT APPEALED FROM:	Dennis Anthony Turner and Luke Christopher Targett (in their capacities as joint and several liquidators of Atwell & Co Pty Ltd (in liq)) v Atwell & Co Pty Ltd (in liq) (Unreported, Supreme Court of Victoria, Efthim AsJ, 14 December 2016)

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APPEAL – Appeal from associate judge under Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 77.06 – Determination of liquidators’ remuneration pursuant to Corporations Act 2001 (Cth) s 504 – Leave sought to file appeal out of time – Extension of time granted – Whether error in finding of facts – No error – Whether error in applying principle of proportionality – No error – Appeal dismissed

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr J Gray	Just Law
For the First and Second Respondents	Mr D Snyder	Aitken Partners

HER HONOUR:

This is an appeal from a decision of Associate Justice Efthim made on 14 December 2016 (the Reasons) that the plaintiff liquidators, Mr Dennis Anthony Turner and Mr Luke Christopher Targett (Liquidators), are entitled to receive remuneration fixed in the sum of $252,000 for the period of liquidation of the defendant from 24 September 2015 to the completion of the liquidation.[1] In so saying, his Honour stated that he was satisfied that the Liquidators’ claim was ‘reasonable’ for the purposes of s 504(2) of the Corporations Act 2001 (Cth) (the Act).[2] He did so on the basis of six affidavits filed by Mr Turner, which included detailed accounts of the time value of the work undertaken.
[1]Dennis Anthony Turner and Luke Christopher Targett (in their capacities as joint and several liquidators of Atwell & Co Pty Ltd (in liq)) v Atwell & Co Pty Ltd (in liq) (Unreported, Supreme Court of Victoria, Efthim AsJ, 14 December 2016).
[2]Note that s 504 of the Corporations Act was repealed by Sch 2 Pt 2 s 165 of the Insolvency Law Reform Act 2016 (Cth) and replaced by the Insolvency Practice Schedule (Corporations) (Sch 2 of the Corporations Act), commencing 1 March 2017. However, both Counsel accepted that s 504 remained applicable in this case. This is correct given that, pursuant to Sch 2 Pt 3 s 1581 of the Insolvency Law Reform Act 2016 (Cth), 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.

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Details

Case: [2017] VSC 683
Decision Date: 12 December 2017

CaseChat Overview and Summary

In the matter of Atwell & Co Pty Ltd (in liquidation), the liquidators sought to have their remuneration determined in accordance with the Corporations Act 2001 (Cth). The initial determination by an associate judge was subject to an appeal by the liquidators, who sought leave to file their appeal out of time and an extension of the time limit for filing the appeal. The appeal was heard in the Supreme Court of Victoria, where the liquidators argued there had been errors in both the findings of fact and the application of the principle of proportionality in determining their remuneration.

The central legal issues before the court were whether there were any errors in the findings of fact made by the associate judge and whether there was any error in the application of the principle of proportionality when determining the liquidators' remuneration. The liquidators argued that the associate judge had incorrectly assessed the complexity and duration of the liquidation process, and therefore misapplied the proportionality principle. The court needed to determine whether these arguments were valid and if any of the findings or applications were erroneous.

The Supreme Court found no error in the associate judge’s findings of fact or in the application of the principle of proportionality. The court was satisfied that the associate judge had properly considered the relevant factors and that the determination of the liquidators’ remuneration was fair and proportionate to the work performed. The court concluded that the liquidators had not demonstrated any grounds for the appeal to succeed, and accordingly, dismissed the appeal. The court also noted that the liquidators had not shown any exceptional circumstances warranting an extension of time for filing the appeal.

The final orders of the court were that the appeal be dismissed and that the liquidators pay the costs of the appeal. The court denied the liquidators’ application for leave to file the appeal out of time and for an extension of the time limit for filing the appeal. The decision underscored the importance of adhering to procedural rules and the high threshold for overturning findings of fact and proportionality assessments in such matters.

Orders