Re Earning Pty Ltd (in liquidation) - [2019] VSC 152

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2018 02102

IN THE MATTER of EARNING PTY LTD (IN LIQUIDATION) (ACN 118 746 599) AND THE OTHER COMPANIES AND TRUSTS LISTED IN THE SCHEDULE TO THE ORIGINATING PROCESS

ADAMS PAULS NIKITINS AS LIQUIDATOR OF EARNING PTY LTD (IN LIQUIDATION) (ACN 118 746 599) AND THE OTHER COMPANIES AND TRUSTS LISTED IN THE SCHEDULE TO THE ORIGINATING PROCESS, AND OTHERS AS LISTED IN THE SCHEDULE

Plaintiffs

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JUDICIAL REGISTRAR:	Matthews JR
WHERE HELD:	Melbourne
DATE OF HEARING:	26 November 2018
DATE OF JUDGMENT:	15 March 2019
CASE MAY BE CITED AS:	Re Earning Pty Ltd (in liquidation) & Ors
MEDIUM NEUTRAL CITATION:	[2019] VSC 152

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CORPORATIONS – External administration – Application by liquidator of companies for determination of remuneration pursuant to s 473(3)(b)(ii) of the Corporations Act 2001 (Cth) – Application by liquidator of unregistered managed investment schemes for determination of remuneration under s 601EE(2) of the Corporations Act 2001 (Cth) – Directions under s 90-15 of Schedule 2 (Insolvency Practice Schedule) to the Corporations Act 2001 (Cth) – Remuneration approved.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Dr O Bigos	Ashurst Australia

JUDICIAL REGISTRAR MATTHEWS:

Introduction
Nature of the application and material relied upon

The First Plaintiff, Adams Pauls Nikitins, (‘Liquidator’) is the Court-appointed liquidator of the Second to Sixth Plaintiffs (‘Earning Companies’) and of the following unregistered managed investment schemes:

(a) a scheme conducted by Salarypackaging.com.au Pty Ltd (‘Salarypackaging’), the Second Plaintiff (‘Earning’), the Sixth Plaintiff (‘ACN4’) and Ian Bristow, comprising the Eatons Hill Project No. 2 Unit Trust, Earning and ACN4 and its assets (‘Eatons 2 Scheme’);

(b) a scheme conducted by Earning, the Third Plaintiff (‘ACN1’) and Ian Bristow, comprising the MMFS CIT - Moreton Unit Trust, Earning and ACN1 and its assets (‘MMFS CIT Moreton Scheme’);

(c) a scheme conducted by Earning, the Fourth Plaintiff (‘ACN2’) and Ian Bristow, comprising the Moreton Reach Unit Trust, Earning and ACN2 and its assets (‘Moreton Reach Scheme’);

(d) a scheme conducted by Earning, the Fifth Plaintiff (‘ACN3’) and Ian Bristow, comprising the MMFS CIT - Queensland Unit Trust, Earning and ACN3 and its assets (‘MMFS CIT Queensland Scheme’); and

(e) a scheme conducted by Earning and Ian Bristow, comprising the MMFS CIT - Kebbel Unit Trust and Earning (‘MMFS CIT Kebbel Scheme’),

(together, the ‘Earning Schemes’).

By originating process filed on 2 November 2018, the Liquidator sought orders and directions in relation to:

(a) two deeds of settlement and release entered into by the Liquidator and the Second to Fifth Plaintiffs (‘Relevant Companies’) and the appropriate distribution of the settlement sum amongst the investors of the MMFS CIT Queensland Scheme, the MMFS CIT Moreton Scheme, and the Moreton Reach Schemes (‘Settlement Orders and Directions’); and

(b) the remuneration of the First Plaintiff as liquidator of the Earning Companies and the Earning Schemes (‘Remuneration Orders and Directions’).

The Liquidator relies on his affidavits affirmed:

(a) 2 November 2018…

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 Earning Pty Ltd (in liquidation)

Details

AGLC: Re Earning Pty Ltd (in liquidation) [2019] VSC 152
Case: [2019] VSC 152
Decision Date: 15 March 2019

CaseChat Overview and Summary

The case involved an application by the liquidators of several companies, namely Earning Pty Ltd, to the Federal Court of Australia, seeking a determination of their remuneration under the Corporations Act 2001. The liquidators argued that the remuneration claimed was necessary and appropriate for their services in the external administration of the companies and unregistered managed investment schemes. The companies were in liquidation, and the liquidators were tasked with managing the winding-up process, including the assessment of their fees.

The legal issues before the court were whether the liquidators' claimed remuneration was reasonable and necessary for the services provided and if it complied with the statutory provisions under sections 473(3)(b)(ii) and 601EE(2) of the Corporations Act 2001. The court also had to consider the directions provided under section 90-15 of Schedule 2 to the Corporations Act, which sets out the Insolvency Practice Schedule. The liquidators contended that their fees were in line with industry standards and were justified given the complexity and scope of the liquidation process.

The court found that the liquidators had acted with due diligence and in the best interests of the creditors and members of the companies. It was held that the fees claimed were reasonable and necessary, considering the nature of the services provided and the complexity of the liquidation process. The court approved the remuneration sought by the liquidators, acknowledging the need for fair compensation for their efforts. The decision reflects the importance of compensating liquidators appropriately to ensure they can carry out their duties effectively, which ultimately benefits the creditors and members of the companies in liquidation.

The final orders of the court approved the remuneration claimed by the liquidators, confirming that the fees were reasonable and necessary for the services rendered. The liquidators were entitled to be paid in accordance with the approved amounts, which were deemed to be in line with industry standards and statutory requirements.

Orders