Re J.M.B. Group Australia Pty Ltd (ACN 113 976 060) (In Liquidation)
[2015] VSC 289
•19 June 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S CI 2015 01590
IN THE MATTER of J.M.B. GROUP AUSTRALIA PTY LTD (ACN 113 976 060)
(IN LIQUIDATION)
| GREGORY STEWART ANDREWS (as liquidator of J.M.B. Group Australia Pty Ltd (ACN 113 976 060) (In Liquidation) | Plaintiff |
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JUDGE: | GARDINER AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 19 June 2015 |
CASE MAY BE CITED AS: | Re J.M.B. Group Australia Pty Ltd (ACN 113 976 060) (In Liquidation) |
MEDIUM NEUTRAL CITATION: | [2015] VSC 289 |
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The originating process seeking determination of the remuneration of the liquidators was endorsed pursuant to rule 9.5(5)(d) of the Supreme Court (Corporations) Rules 2013 (Vic) with a request that the application be dealt with in the absence of the public and without any attendance by or on behalf of the liquidators and the Court has determined that it is appropriate that the application may be so dealt with.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | McMahon Fearnley Lawyers Pty Ltd |
HIS HONOUR:
The plaintiff, Gregory Stewart Andrews, makes application for the determination of his remuneration as liquidator of J.M.B. Group Australia Pty Ltd (‘the Company’) pursuant to s 473(3) of the Corporations Act 2001 (Cth) (‘the Act’).
Mr Andrews relies principally on his affidavit sworn 7 April 2015 as well as an affidavit of Tanya Cane sworn 14 April 2015.[1] In his affidavit, Mr Andrews deposes that no notice of objection to the application has been received. He requests in accordance with rule 9.5(5)(b) of the Supreme Court (Corporations) Rules 2013 (Vic) (‘the Rules’) that the application be dealt with in the absence of the public without any attendance by or on behalf of the liquidator. I am prepared to accede to that request. I do because I am satisfied that all the relevant persons who are entitled to be notified of the application and who might be minded to oppose or contradict it have been given the requisite notice under the Rules and that there has been no response by them.
[1]In her affidavit, Ms Cane deposes that on 4 March 2015 she sent to each of the five largest creditors of the company who are identified a Form 16–Notice of Intention to Apply for Remuneration in compliance with rule 9.4 of the Supreme Court (Corporations) Rules 2013 (Vic).
Mr Andrews makes the application under s 473(3) of the Act. His reason for approaching the Court to determine and approve his remuneration is that it has not been possible to achieve a quorum at any of the three creditors meetings which he called on 13 May 2013, 28 September 2013 and 6 May 2014.
In his application, Mr Andrews seeks an order that his remuneration be determined in the sum of $20,000.00 plus GST. This amount is comprised of $15,102.30 being the remuneration owing at the date of the last report to creditors on 6 May 2014 together with the further sum of $4,897.70 which he estimates as being the remuneration required to complete the liquidation. Because of the modest sum sought in respect of prospective remuneration, I am prepared on the basis of the evidence which has been filed to make such an order in these circumstances.
On 8 February 2012, the Company was ordered to be wound up in insolvency by this Court under the Act and Mr Andrews was appointed liquidator.
Mr Andrews deposes that since his appointment, he and his staff have undertaken various tasks in the liquidation which he classifies into several categories. These are:
(a) Assets;
(b) Creditors;
(c) Employees; and
(d) Investigations.
In a document exhibited to Mr Andrews’ affidavit,[2] there are two tables which catalogue the work undertaken for the periods 8 February 2012 to 26 November 2014 and 27 November 2014 to the completion of the liquidation.
[2]Exhibit GSA-3.
The Company was incorporated in Victoria on 26 April 2005 and traded as a building company specialising in the construction of residential housing. It operated from premises in Traralgon, Victoria. Its sole director was Jeremy Balcombe who was made bankrupt on 19 December 2011, after which the Company had no director. Mr Balcombe was the Company’s only shareholder. The failure of the Company apparently arose by reason of its inability to rectify defective works in respect of building projects that it undertook.
The reports to creditors prepared by Mr Andrews and his staff disclosed several creditors including the Australian Taxation Office, the Victorian State Revenue Office, Mr Balcombe’s bankrupt estate, a Ms Dez Wart, apparently a claimant in respect of a construction carried out by the Company and Vero Insurance, the Company’s insurer in relation to its building works.
The evidence indicates that the liquidation would not appear to have been a complicated undertaking. Mr Andrews received receipts of $36,263.54 and made payments of $14,460.45. He also incurred very modest disbursements.
Exhibits GSA-3 and GSA-4 to my mind meet the standard in respect of the evidence required in these types of applications as described by the Full Court of the Supreme Court of Western Australia in Venetian Nominees v Conlan (Venetian Nominees).[3]
[3](1998) 16 ACLC1653 at 1657.
In summary, a liquidator in such applications must provide adequate evidentiary material to enable the Court to determine whether the amounts claimed are fair and reasonable. In Venetian Nominees the Full Court stated:
Ordinarily, to commence the proceedings, the provisional liquidator will provide the Court with a statement of account reflecting in appropriate itemised form, details of the work done, the identity of the persons who did the work, the time taken for doing the work, and the remuneration claimed accordingly…The statement of account should be verified by affidavits.[4]
[4]Ibid., at 1668.
In this regard, GSA-3 breaks up the claim into the various task areas to which reference has been made for both periods to which I have referred. I notice that the claims made in respect of the period to the completion of the liquidation include the costs of compilation of the necessary information required to make this application. I consider it is an appropriate item to include in such a claim. The narrative in respect of the period from 8 February 2012 to 26 November 2014 describes work which one would expect to be required to be carried out in a liquidation of this type, as does the narrative for the period that follows. GSA–4 breaks up the claim by reference to the personnel in Mr Andrews’ firm who carried out the tasks. While those other than Mr Andrews are not identified by name (except with some detective work by reference to their initials), it seems that there has been an appropriate delegation of work throughout the hierarchy of Mr Andrews’ firm. Ms Kennedy, a manager has performed some 40 hours of work for the period to 26 November 2014 and has been administratively assisted by a secretary for some 23 hours. Mr Andrews appears to have had minimal day-to-day involvement and exercised more of a supervisory role, as one would expect.
I consider that the hourly rates charged by Mr Andrews for his time and that of his staff are modest when compared with the prevailing rates for insolvency practitioners as revealed in consents to act as liquidators that I see appended to consents to act in the winding up list of this Court. Mr Andrews’ hourly rate is $359.00 and Ms Kennedy’s is $174.00. The clerical and secretarial staff who assist them are charged out at $89.00 an hour. I regard those rates as being more than reasonable.
My review of exhibits GSA-3 and GSA-4 does not reveal any obviously unnecessary tasks being performed in the liquidation.
Section 473(10) of the Act prescribes certain criteria to be applied in the exercise of the Court’s discretion in these types of applications. In his affidavit Mr Andrews provides evidence in regard to those criteria in the context of this liquidation.
As to s 473(10)(a) and (b), I have already observed that the work performed which has been detailed was reasonably necessary in the liquidation of the Company. The period in which the work was performed and the type of work performed was detailed in the evidence, in compliance with s 473(10)(c) and s 473(10)(d) respectively.
Mr Andrews concedes that in relation to the matters mentioned in s 473(10)(e) and (f) that the work required to be completed was not complex in nature and that he was not required to deal with any extraordinary issues. He states that the work required to complete the winding up will be routine and not complex. As regards s 473(10)(g), he states that that he was not required to accept a higher level of risk or responsibility and that the same situation will apply to the matters required to complete the winding up. As regards s 473(10)(h) he deposes that that he has dealt with property in the course of the winding up. The Company was the registered proprietor of a property in Traralgon which was mortgaged to Australian and New Zealand Banking Group Limited (‘ANZ’). ANZ sold that property by mortgagee sale on 7 February 2013 with settlement being effected on 22 March 2013. After taking into account legal fees and disbursements, agents commission, rates and repayment of the Company’s loan facility, net proceeds of $35,515.00 were paid to Mr Andrews. That was an unremarkable transaction and involved no litigation. He has not received any other funds in the liquidation, nor has he located any other assets in the Company’s name.
As to s 473(10)(i) he was not required to deal with any receivers in the course of the liquidation.
Mr Andrews has not been required in the course of the winding up to deal with difficult or fractious creditors, indeed as a group the creditors appear to have been non-responsive to his approaches to attend creditors meetings.
Although the administration of the liquidation has been relatively straightforward, uneventful and has no extraordinary features, I am not be minded to reduce the amount of remuneration which is sought. In this regard, I am particularly influenced by the relatively modest scale of hourly rates charged by Mr Andrews for the work carried out by him and his staff.
I order pursuant to s 473(3) of the Act that Mr Andrews’ remuneration as liquidator of the Company for the period 8 February 2012 until the completion of the liquidation be determined as being $20,000.00 plus GST.
I will also order that the costs of this application for remuneration be part of the costs in the winding up of the Company.
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