Re Custometal Engineering Pty Ltd (in liquidation) - [2018] VSC 726

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2018 01355

IN THE MATTER of CUSTOMETAL ENGINEERING PTY LTD (in liquidation) (ACN 144 985 259)

BETWEEN:

SAM KASO and DANIEL PETER JURATOWITCH (in their capacity as joint and several liquidators of Custometal Engineering Pty Ltd (in liquidation) (ACN 144 985 259))	First and Second Plaintiffs
v
CUSTOMETAL ENGINEERING PTY LTD (in liquidation) (ACN 144 985 259)	Defendant

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JUDICIAL REGISTRAR:	Matthews JR
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	23 November 2018
CASE MAY BE CITED AS:	Re Custometal Engineering Pty Ltd (in liquidation)
MEDIUM NEUTRAL CITATION:	[2018] VSC 726

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CORPORATIONS – External administration – Application by former administrators for determination of remuneration pursuant to s 60-10(1)(c) of the Insolvency Practice Schedule (Corporations) (Schedule 2 to the Corporations Act 2001 (Cth)) – Remuneration approved.

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The plaintiffs have served all parties required to be served with notice of the intention to make this application and no such party opposed it. In such circumstances and in light of the provisions of r 9.2 of the Supreme Court (Corporations) Rules 2013, it was considered appropriate to deal with the application in the absence of the public and without the necessity for the plaintiffs to attend at Court.

JUDICIAL REGISTRAR MATTHEWS:

Introduction
Nature of the application and material relied upon

The defendant, Custometal Engineering Pty Ltd (in liquidation) (‘Company’), went into voluntary administration on 21 September 2017 when Sam Kaso and Daniel Peter Juratowitch (‘Plaintiffs’) were appointed as administrators.[1]
[1]Affidavit of Sam Kaso sworn 23 July 2018 (‘First Kaso Affidavit’), [4].

Prior to that time, on 11 September 2017 U-Neek Bending Co Pty Ltd had issued winding up proceedings in this Court against the Company.[2]
[2]Exhibit SK-2.

The administration of the Company came to an end on 11 October 2017, when orders were made by this Court that the administration of the Company be terminated, that the Company be wound up and that Mr Kaso and Mr Juratowitch be appointed as joint and several liquidators of the Company.[3] The Company was wound up prior to the second meeting of creditors being held and thus the second meeting did not occur.[4]
[3]First Kaso Affidavit, [6]; Exhibit SK-2. The orders were made by Gardiner AsJ in proceeding number S CI 2017 03646.
[4]First Kaso Affidavit, [7].

By originating process filed 14 September 2018, the Plaintiffs apply, under s 60-10(1)(c) of the Insolvency Practice Schedule (Corporations) (Schedule 2 of the Corporations Act 2001 (Cth)) (‘Practice Schedule’), for the approval of their remuneration in relation to the administration of the Company in the amount of $40,860 (excluding GST) and an order that the Plaintiffs’ costs of the application be costs in the liquidation of the Company (‘Application’). Rule 9.2 of the Supreme Court (Corporations) Rules 2013 (‘Rules’) also governs such applications.

The Application is supported by the following:

(a) the First…

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: [2018] VSC 726
Decision Date: 23 November 2018

CaseChat Overview and Summary

The plaintiffs, Mr Sam Kaso and Mr Daniel Peter Juratowitch, applied for an order approving their remuneration as administrators of Custometal Engineering Pty Ltd (in liquidation). The administrators claimed $40,860 in remuneration, excluding GST, and sought an order that their costs of the application be costs in the liquidation of the company. The Court found that the plaintiffs had made out a prima facie case that the remuneration claimed was reasonable and that there was sufficient information to enable potential objectors to review the amounts claimed and to ascertain whether there were matters to which objection should be taken. The Court was satisfied that the work performed by the plaintiffs was necessary and properly performed, that the period during which the work was performed was 21 September to 11 October 2017, and that the work was performed to an appropriate standard. The Court also found that the remuneration was calculated on a time basis, and the time taken by the administrator and each employee was set out in sufficient detail. The Court approved the plaintiffs' remuneration in the amount of $40,860, comprising $33,872.50 for the period 21 September to 11 October 2017 and $6,987.50 for the work performed in connection with the Application. The Court also made orders that the plaintiffs' costs of the Application be costs in the liquidation of the Company.

The Court found that the plaintiffs had made out a prima facie case for payment of their remuneration, within the meaning referred to in paragraph 20 above. Although no objection had been taken to the remuneration claimed by the plaintiffs, the Court was still required to review the claimed remuneration, taking the matters identified in s 60-12 of the Practice Schedule into account. The Court was satisfied that the work performed by the plaintiffs was necessary and properly performed, that the period during which the work was performed was 21 September to 11 October 2017, and that the work was performed to an appropriate standard. The Court also found that the remuneration was calculated on a time basis, and the time taken by the administrator and each employee was set out in sufficient detail. The Court approved the plaintiffs' remuneration in the amount of $40,860, comprising $33,872.50 for the period 21 September to 11 October 2017 and $6,987.50 for the work performed in connection with the Application. The Court also made orders that the plaintiffs' costs of the Application be costs in the liquidation of the Company.

Orders