Re Ausun Property Pty Ltd (in liq) - [2022] VSC 115

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2021 04367

IN THE MATTER of AUSUN PROPERTY PTY LTD (IN LIQUIDATION)
(ACN 152 923 174)

RENEE SARAH DI CARLO in her capacity as Liquidator of Ausun Property Pty Ltd (In Liquidation) (ACN 152 923 174)	Plaintiff
v
LI ZENG (AKA ALEX ZENG)	Other party

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JUDICIAL REGISTRAR:	Caporale JR
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	23 March 2022
CASE MAY BE CITED AS:	Re Ausun Property Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2022] VSC 115

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CORPORATIONS - External administration – Court approval of liquidator’s remuneration – Liquidator appointed receiver of trust property – Remuneration application in nature of a trustee’s, rather than a liquidator’s, remuneration - Sufficiency of evidence to determine claim for remuneration - Matters to which the Court should have regard.

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ON THE PAPERS:	Solicitors
For the Plaintiff	Pelham Strata Lawyers

JUDICIAL REGISTRAR:

Background

On 16 June 2021 the Court ordered that Ausun Property Pty Ltd (ACN 152 923 174) be wound up in insolvency (‘Ausun’). The plaintiff was appointed liquidator for the purposes of the winding up.

Ausun was, until the appointment of the plaintiff as liquidator, the trustee of the Don Peria Unit Trust (‘Trust’). After examining the company’s financial statements, the plaintiff was satisfied that Ausun did not act otherwise than as trustee of the Trust and did not undertake any activities or conduct any business in its own right.

By application dated 19 November 2021 the plaintiff sought orders in relation to her remuneration (‘remuneration application’).

On 17 December 2021, Efthim AsJ ordered that a hearing to determine the plaintiff’s remuneration, for the work undertaken over the period 16 June 2021 to 15 December 2021, be listed before me on a date to be fixed.

In support of the remuneration application, the plaintiff relies on three affidavits sworn by her on 19 November 2021, 15 December 2021 and 16 December 2021.

Each of those affidavits, together with the Originating Process, was served on all interested parties. None of the interested parties appeared at the listing of the matter on 17 December 2021. Additionally, all interested parties were advised that the remuneration application would be determined on the papers. No objections were received and the remuneration application will therefore be determined on the papers.

The plaintiff seeks approval from the Court for her remuneration in the sum of $137,290 ($68,949 for the period 16 June 2021 to 15 September 2021; $30,515 for the period 16 September 2021 to 5 November 2021 and $37,826 for the period 6 November 2021 to 15 December 2021). Creditor approval has been given for the two earlier periods.

For the reasons that follow, the plaintiff’s remuneration in the sum of $137,290 is approved by the Court.

Liquidator as receiver of the Trust property

On 17 December 2021 Efthim AsJ ordered that:

1.The Plaintiff be appointed without security as…

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: [2022] VSC 115
Decision Date: 23 March 2022

CaseChat Overview and Summary

The case involves an application by the liquidator of Ausun Property Pty Ltd, which was in liquidation, for approval of their remuneration. The liquidator, who was also appointed as the receiver of trust property, sought to have their remuneration assessed as if they were a trustee, rather than a liquidator. The matter was heard in the Federal Court of Australia. The primary issue before the court was whether the liquidator's application for remuneration should be treated as a trustee's application, and if so, what evidence was required to support the claim. The court also needed to determine the matters it should consider when assessing the application.

The court considered that the liquidator's role as a trustee was distinct from their role as a liquidator. While the liquidator's duties as a trustee were fiduciary in nature, the court held that the evidence provided was insufficient to support a trustee's remuneration application. The court noted that the liquidator had failed to provide evidence of the time spent on trustee duties, the complexity of those duties, or the market rate for similar trustee work. The court emphasised that when assessing a trustee's remuneration, it should consider the nature and complexity of the duties performed, the time spent on those duties, and the market rate for similar services. The court also highlighted the importance of transparency and accountability in the remuneration process.

Ultimately, the court found that the liquidator's application was more akin to a liquidator's remuneration application, rather than a trustee's. The court held that the evidence provided was sufficient to determine the liquidator's claim for remuneration as a liquidator. However, the court found that the evidence was inadequate to support a trustee's remuneration application. The court declined to approve the liquidator's remuneration on the basis of a trustee's application and ordered the liquidator to provide further evidence to support their claim. The court also noted that it would consider the further evidence when making its final determination of the liquidator's remuneration.

Orders

Orders of the court

See [57]

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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