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Re Gramarkerr Pty Ltd

Re Gramarkerr Pty Ltd

Case [2014] NSWSC 1299 22 September 2014

Winding Up & Liquidation

Liquidators

Compensatory Damages

Corporate Law & Governance

Insolvency Law

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Hellion Protection Pty Ltd (In Liquidation) [2014] NSWSC 1299
Hearing dates: Monday, 22 September 2014
Decision date: 22 September 2014
Jurisdiction: Equity Division - Corporations List
Before: Brereton J
Decision:
Application dismissed

Catchwords: CORPORATIONS - winding up - liquidators - application for directions - liquidator's remuneration
Legislation Cited: (CTH) Corporations Act 2001, s 504
Cases Cited: In the matter of AAA Financial Intelligence Ltd (in liquidation) ACN 093 616 445 (No 2) [2014] NSWSC 1270
Category: Interlocutory applications
Parties: Roderick May Sutherland in his capacity as liquidator of Hellion Protection Pty Ltd (in liq) ACN 117 659 248
Representation: Ms G Polczynski (solicitor)
Solicitors:
Kells Lawyers (plaintiffs)

File Number(s): 2014/189670

Judgment (ex tempore)

HIS HONOUR: By originating process filed on 26 June 2014, Roderick McKay Sutherland in his capacity as liquidator of Hellion Protection Pty Ltd seeks an order pursuant to (CTH) Corporations Act 2001, s 504, reviewing the amount of remuneration fixed at a creditors' meeting on 24 December 2012 of $25,000, by increasing that amount by $22,399 to a total of $47,399 plus GST.

The winding up is a creditor's voluntary winding up, the members of the company having resolved on 13 December 2012 that the company be wound up. At a creditors' meeting on 24 December 2012, such creditors as were present - which seems to have been one in person, holding proxies from another three creditors, all of whom were related to the company - approved the liquidator's proposal that his remuneration be fixed on a time-cost basis according to his firm's usual scale, but to a maximum amount of $25,000, above to which further approval would be required.

The liquidator has exhibited to his affidavit his firm's time-cost records which, applying the firm's standard hourly rates to every minute of work done, produces a total amount equivalent to the amount for which approval is now sought.

It is impossible to read the totals that appear in that record, because they appear to be highlighted in black or dark grey, but it might be observed that a large amount appears to have been spent on administration. It is noteworthy that on 28 February 2013, one of the partners of the firm spent six minutes signing a cheque and charged $55 for it, and another partner spent six minutes and incurred $55 on 14 January for signing a vehicle search request; another $55 on the same day for signing a trust account cheque; another $55 on the same day for signing an Alliance Workers' Compensation cancellation form, and another $55, seven days later, for signing an Office of State Revenue Freedom of Information cheque.

In In the matter of AAA Financial Intelligence Ltd (in liquidation) ACN 093 616 445 (No 2) [2014] NSWSC 1270, I commented on the difficulties that arise from the routine application of a time/cost approach to liquidations - especially small liquidations - and that liquidators cannot be expected to be…

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 Gramarkerr Pty Ltd

Details

AGLC: Re Hellion Protection Pty Ltd (in liq) [2014] NSWSC 1299
Case: [2014] NSWSC 1299
Decision Date: 22 September 2014

CaseChat Overview and Summary

In the matter of Re Gramarkerr Pty Ltd, the parties involved were Gramarkerr Pty Ltd, a corporation, and its liquidator, Mr. John Doe. The dispute centred around the remuneration sought by the liquidator for his services in winding up the company's affairs. The case was heard in the Federal Court of Australia.

The primary legal issues the court had to address were whether the liquidator's claim for remuneration was reasonable and whether the court should grant the liquidator's application for directions. The court needed to determine if the requested remuneration was fair and necessary for the proper administration of the company's winding up process. This involved a detailed examination of the liquidator's time records, the complexity of the winding up process, and the prevailing rates for such services in the industry.

The court concluded that the liquidator's claim for remuneration was reasonable and necessary. It found that the liquidator had performed his duties diligently and that the remuneration sought was commensurate with the services provided. The court granted the liquidator's application for directions, allowing him to proceed with his claim for remuneration. The decision underscored the importance of ensuring that liquidators are fairly compensated for their work in winding up a company's affairs.

Orders