Re Gunns Plantations Limited (In Liq) (Receivers and Managers Appointed)
[2015] VSC 807
•20 October 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S CI 2013 2095
IN THE MATTER of GUNNS PLANTATIONS LIMITED (IN LIQUIDATION) (RECEIVERS & MANAGERS APPOINTED) (ACN 091 232 209) in its capacity as the responsible entity of the managed investment schemes listed in Schedules 1 and 2
BETWEEN:
| DANIEL MATHEW BRYANT, IAN MENZIES CARSON and CRAIG DAVID CROSBIE (in their capacity as joint and several Liquidators of GUNNS PLANTATIONS LIMITED) (IN LIQUIDATION) (RECEIVERS & MANAGERS APPOINTED) (ACN 091 232 209) | First Plaintiffs |
| and | |
| GUNNS PLANTATIONS LIMITED (IN LIQUIDATION) (RECEIVERS & MANAGERS APPOINTED) (ACN 091 232 209) in its capacity as the responsible entity of the managed investment schemes listed in Schedules 1 and 2 | Second Plaintiffs |
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JUDGE: | GARDINER AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF RULING: | 20 October 2015 |
CASE MAY BE CITED AS: | Re Gunns Plantations Limited (In Liq) (Receivers & Managers Appointed) |
MEDIUM NEUTRAL CITATION: | [2015] VSC 807 |
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CORPORATIONS – Application by liquidators of managed investment schemes for directions pursuant to s 511 of the Corporations Act 2001 (Cth) – Liquidators remuneration, costs and expenses – Orders previously made that the Court was satisfied to a prima facie level that liquidators’ claims for remuneration, costs and expenses were fair and reasonable – Submissions made by objector consequent on delivery of such reasons as contemplated by orders – Matter dealt with on the papers after consideration of submissions filed by the liquidators and the objector – Objection consisted of matters raised at the hearing of the application which was the subject of consideration and determined by the Court in its reasons.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Dr O Bigos | Arnold Bloch Leibler |
| Mr T Burdon, a member of the 2001 and 2002 Gunns Woodlot Schemes, in person. |
HIS HONOUR:
On 29 September 2014 the first plaintiffs (‘the liquidators’) who are the liquidators of the Gunns group of companies, made application by interlocutory process for directions and orders in relation to the remuneration, costs and expenses which they had incurred as the liquidators of Gunns Plantations Limited, the responsible entity of the managed investment schemes known as the Gunns Woodlot Schemes and the Great Southern Schemes. The application also sought directions regarding the remuneration, costs and expenses which the liquidators incurred in relation to the sale of assets used in the Schemes.
At the hearing of the application, Mr Trevor Burdon, who is a member of the 2001 and 2002 Gunns Woodlot Schemes,[1] filed a notice of appearance and participated in the application. He handed up an affidavit in unsworn form and made oral submissions. Much of the contents of Mr Burdon’s document were inadmissible and, as stated in my reasons, I treated it as being in the nature of a written submission.[2]
[1]Mr Burdon had been given notice of the application by the liquidators.
[2]Reference is made to Mr Burdon’s submissions at paragraphs 27 to 29 of my the reasons for judgment.
In brief terms, Mr Burdon complained about the conduct of the liquidators in selling assets at what he asserted was a fire sale price. He submitted that the professional fees claimed by the liquidators were unreasonable, the hourly rates were very high, the sale outcome of the liquidation was very poor and that his requests for information from the liquidators were repeatedly left unanswered.
On 20 March 2015, I made orders in relation to the liquidators’ application and delivered reasons.
As can be seen[3] in my reasons, I gave consideration to the subject of Mr Burdon’s grievances and complaints in regard to the amounts charged for professional fees by the liquidators and their staff.
[3][2015] VSC 102 at para 28.
Although I had heard Mr Burdon at the hearing of the matter, as is the practise in these types of applications, I being satisfied that the matters requiring consideration were established to a prima facie level, made orders providing that any interested person who wished to object to any of the matters the subject of the schedule of the orders was to file and serve a submission as provided for in paragraph 9 of my Order. The Order provided that a submission be filed and served dealing with any legal issues in regard to the entitlement to an indemnity or lien or on the basis of allocation of expenses or remuneration and a notice of objection setting out the Scheme or Schemes to which the objection relate. In the Order I specifically provided that any objections were not to cover any matters raised at or before the hearing of this application on 26 November 2014 or the reasons for judgment delivered on 20 March 2015.
Mr Burdon availed himself of the opportunity to make a submission in writing. In his submission, he states that he does not question the allocation of work, the quantum of work recorded or the summation of the charges by the liquidators which are the subject of my Order. However, he seeks to revisit the question of the ‘extremely high hourly rates charged across all but the most senior positions on the PPB Advisory Rate Card’. The PPB Advisory Rate Card[4] is a reference to the schedule of fees charged by the liquidators’ firm to which reference is made in the reasons. As regards the rates charged, Mr Burdon states that the lowest level work description, that of ‘Administration, non-qualified’, is charged at a rate of $120 an hour, a rate he contends is three times the rate of which such type of services can be obtained. He contends that PPB Advisory’s charge out rates for unskilled, unqualified staff are approximately equivalent to experienced, qualified professional staff sourced elsewhere. He makes other complaints about the insolvency administration generally, for example that growers’ assets have been disclaimed and sold at fire sale prices and that growers funds have been eroded rather than protected by the liquidators.
[4]Exhibit TLB–34.
Mr Burdon concludes that it is incumbent on the court to not only approve reasonable costs but that they be aligned with benchmarks for comparable work outside the insolvency practitioners profession. He submits that the fact that the liquidators are conferred with a special status by the court should not confer such status on all liquidators’ employees. He concludes by stating that the court may wish to contemplate a model where the liquidators be directed to practise independently from firms and to contract all staff as necessary in order to effect savings.
The liquidators have filed a submission in response to Mr Burdon’s submissions. They observe that Mr Burdon’s submissions:
(a) state that Mr Burdon does not question the allocation of work, the quantum or work recorded, or the summation of the charges to give the result of the cost claim;
(b) is not an objection to the cost categories of the total claims;
(c) does not identify any legal issues regarding the entitlement to an indemnity in lien or the basis of allocation of expense or remuneration;
(d) does not contain a ‘Notice of Objection to amount claimed’ as contemplated by the Order; and
(e) does not specify any amount as objected to.
Rather, they submit that Mr Burdon’s submission is directed to the high hourly rates charged by the liquidators. They observe that these matters were raised in Mr Burdon’s submissions made at the hearing of the application, both in written and oral form and were the subject of consideration in my reasons delivered on 20 March 2015. In addition it is submitted that the submission does not provide any basis for impugning the liquidators’ hourly rates.
I consider that the matters raised by Mr Burdon in his fourth submission have already been the subject of consideration by me after hearing his written and oral submissions at the hearing of this application.[5] In my reasons I stated as follows:
In his submissions both written and oral, Mr Burdon voiced heavy criticism of the scale of charges being exacted by the liquidator. As I have said, I accept to the lay person the hourly rates seem extraordinary but I have to have regard to the prevailing rates being charged by liquidators generally and what the prevailing ‘market’ rate is. Like Judd J, I accept that the scale is within the acceptable range.
I go on to say at paragraph 64:
In the course of conducting my ‘random survey’ which I have described previously in these reasons, I was mindful when examining the narrative in respect of the items that I chose to examine as far as possible whether the task being undertaken was being performed by a person of the appropriate station within the hierarchy of PPBA. As best as I could ascertain I could not identify any item which was obviously being performed by an over-qualified person. As both Judd J and Ferguson J observed in the previous applications, the Gunns administration was a most complex insolvency administration, certainly well above the run of the mill administration and liquidation.
[5][2015] VSC 102 at para 63.
While I accept as I have observed earlier that the rates being charged are high they do reflect the market and in these circumstances the tasks performed were carried out by persons of the appropriate station in PPBA. Judd J in the First Liquidation application considered the charge out rates to be reasonable and proper[6] and those same rates were applied in this application. As such, while I can understand why Mr Burdon takes the position that he has, I do not consider his objection to be sustainable.
[6][2014] VSC 239 at para 106.
Mr Burdon’s objection is disallowed.
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