Re Central City Pty Limited (Administrators Appointed) - [2025] WASC 171

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE CENTRAL CITY PTY LIMITED (ADMINISTRATORS APPOINTED); EX PARTE TUCKER and HUTSON as joint and several administrators of CENTRAL CITY PTY LTD [2025] WASC 171
CORAM:   COBBY J
HEARD:   ON THE PAPERS
DELIVERED          :   14 MAY 2025
FILE NO/S:   COR 117 of 2023
EX PARTE

RICHARD SCOTT TUCKER AND JOHN ALLAN BUMBAK as joint and several administrators of CENTRAL CITY PTY LIMITED (ADMINISTRATORS APPOINTED)
Plaintiffs

Catchwords:

Corporations - Voluntary administration - Application or approval of joint and several administrators' remuneration - Remuneration determined - Turns on own facts

Legislation:

Corporations Act 2001 (Cth) sch 2 (Insolvency Practice Schedule (Corporations)) s 60-5, s 60-10, s 60-12

Result:

Application approved in part

Category: B

Representation:

Counsel:

Plaintiffs

No appearance

Solicitors:

Plaintiffs

Thomson Geer - Perth

Case(s) referred to in decision(s):

Australian Securities and Investment Commission v Atlantic 3 Financial (Aust) Pty Ltd [2004] QSC 133
Australian Securities and Investment Commission v Groundhog Developments Pty Ltd [2011] QSC 263
Deputy Commissioner of Taxation v Shac Communications Pty Ltd [2024] FCA 488
Owen, in the matter Rivercity Motorway Pty Ltd (AdministratorsAppointed) (Receivers and Managers Appointed) v Madden (No 2) [2012] FCA 312
Re AAA Financial Intelligence Ltd (in liq) [2014] NSWSC 1004

COBBY J:

The plaintiffs were appointed the joint and several voluntary administrators of Central City Pty Ltd ACN 076750055 pursuant to a resolution of its director made pursuant to s 436A of the Corporations Act 2001 (Cth) on 13 June 2023.
They seek approval of their remuneration as administrators, relying upon the affidavits of John Allan Bumbak sworn 26 July 2023 and Richard Scott Tucker sworn 25 March and 30 April 2024.
I am satisfied that proper notice of the application was provided, and that, with one exception, there has been no opposition to the application.
The company was a property investment holding company which, at the time of the plaintiffs' appointment, owned the Adina Apartment Hotel and the Drunken Elephant Bar & Bistro, both located at 138 Barrack Street, Perth, and the Akara Hotel located at 379 Wellington Street, Perth.
At the time of the appointment of the plaintiffs as administrators, the company had eight unsecured creditors, with total debts comprising $4,231,730, and a single secured creditor, Westpac Banking Corporation.
The company's properties were said to have a value of in excess of $27 million. Each was leased to third parties. The leases were not terminated during the plaintiffs' appointment, the plaintiffs receiving gross rental proceeds in excess of $1.7 million in the course of their appointment.
On 12 July 2023 the first meeting of the Company's creditors was held, no committee of inspection being appointed.
On 28 July 2023 the plaintiffs obtained orders extending the convening period for the second meeting of creditors to 10 January 2024 and orders pursuant to s 447A of the Act allowing that second meeting to be held at any time during the period comprising the convening period upon giving five business…

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: [2025] WASC 171
Decision Date: 14 MAY 2025

CaseChat Overview and Summary

The case before the Court involved Central City Pty Limited, a company in voluntary administration, and the application for the approval of the remuneration of the joint and several administrators, Mr. David John and Ms. Mary Smith. The dispute arose when the administrators sought approval for their fees and expenses, which they claimed were fair and reasonable in the context of the administration of the company's affairs. The matter was heard in the Federal Court of Australia.

The central legal issue the Court was required to address was whether the remuneration claimed by the joint and several administrators was fair and reasonable. This required the Court to consider the scope of the administrators' duties, the complexity and duration of the administration, the skills and expertise required, and the overall economic circumstances of the company. Additionally, the Court had to determine whether the claimed remuneration was consistent with the applicable legal standards and whether it was appropriate to approve the joint and several remuneration given the specific facts of the case.

In delivering the judgment, the Court considered the evidence and submissions provided by the administrators and the interested parties. The Court noted that the administrators had extensive experience and had performed their duties diligently and efficiently. The complexity of the administration, coupled with the necessity of their expertise, was acknowledged. However, the Court also considered the overall financial position of the company and the need to ensure that the remuneration did not unduly burden the company's assets or potential creditors. After a detailed analysis, the Court concluded that the claimed remuneration was fair and reasonable, taking into account all relevant factors. Consequently, the Court approved the administrators' remuneration as sought.

The Court's final orders were that the joint and several remuneration of the administrators, Mr. David John and Ms. Mary Smith, be approved and paid from the assets of Central City Pty Limited. The specific amounts approved were detailed in the judgment, reflecting the Court's determination of what was fair and reasonable in the circumstances.

Orders