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Re Metal Storm Ltd

Re Metal Storm Ltd

Case [2015] NSWSC 1699 28 October 2015

Receivers & Controllers

Remuneration

Expenses

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Metal Storm Ltd (subject to Deed of Company Arrangement) [2015] NSWSC 1699
Hearing dates: 28 October 2015
Decision date: 28 October 2015
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Orders in accordance with the short minutes of order. Held that remuneration should be approved in the amount specified in the short minutes of order.

Catchwords: CORPORATIONS – receivers, controllers and managers – remuneration and expenses – where sale of assets involved particular complexity – whether to approve receivers’ remuneration
Legislation Cited: - Civil Procedure Act 2005 (NSW) s 56
Cases Cited: - Coeclerici Asia (Pte) Ltd v Gujarat NRE Coke Ltd (No 2) [2015] FCA 809
- Ide v Ide [2004] NSWSC 751; (2004) 50 ACSR 324
- Re Application of Crouch [2005] NSWSC 1122
Category: Procedural and other rulings
Parties: Adam Shepard (in his capacity as deed administrator of Metal Storm Ltd) (First Plaintiff)
Metal Storm Ltd (subject to a deed of company arrangement) (Second Plaintiff)
ANZ Trustees Limited (First Defendant)
The Australian Special Opportunity Fund LP (Second Defendant)
Christopher Darin and Aaron Lucan (in their capacity as receivers of Metal Storm Limited (in liquidation) (receivers appointed) (Applicants)
Representation:
Counsel:
A McGrath SC/D Krochmalik (First Defendant)
D Klineberg (Second Defendant)
M A Karam (Applicants)
Solicitors:
Ashurst (First Defendant)
Squire Patton Boggs (Second Defendant)
O’Neill Partners (Applicants)

File Number(s): 2013/377450

Judgment- ex tempore

Mr Christopher Darren and Mr Aaron Lucan (“Receivers”), in their capacity as receivers of Metal Storm (in liquidation)(receivers appointed) (“Company”), seek orders that they be allowed specified remuneration in respect of their work done as Court appointed receivers, in respect of the realisation of certain assets of the Company.
The Court previously delivered judgment on 21 July 2015 (“Judgment”), approving a sale of the assets following a sale process undertaken by Messrs Darren and Lucan in their capacity as Receivers. I will return to the summary in the Judgment of the work that had been undertaken by the Receivers below. The application for approval of the remuneration of Messrs Darren and Lucan is consented to by the trustee for note holders in respect of the company, Equity Trustees Wealth Services Limited (“Equity Trustees”) and by the liquidator to the Company. It is not actively opposed by another party to the proceedings, the Australian Special Opportunity Fund (“ASOF”), although ASOF’s solicitors have written to the trustee for noteholders and the liquidator indicating that it contends that they ought to be satisfied of the appropriateness of the remuneration sought. The Court would, in any event, need to be satisfied on evidence as to the appropriateness of the remuneration before allowing it.
I should say something further as to the approach which has been adopted in dealing with this application. It would, of course, be common for an application by receivers for remuneration to be referred to a Registrar. In this case that course has not been adopted for reasons including that it appears that…

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 Metal Storm Ltd

Details

AGLC: Re Metal Storm Ltd [2015] NSWSC 1699
Case: [2015] NSWSC 1699
Decision Date: 28 October 2015

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Re Metal Storm Ltd involved a dispute concerning the remuneration and expenses of receivers appointed to manage the affairs of the company. The company had entered into administration, and receivers were appointed to oversee the sale of its assets. The receivers sought approval for their remuneration, which was contested by the company's liquidators.

The court was required to determine whether the receivers' remuneration was reasonable and justified, given the particular complexities involved in the sale of the company's assets. The court considered the nature and scope of the receivers' duties, the time and effort expended, and the complexity and difficulty of the task. The court also considered the receivers' experience and expertise, and the market rates for similar services.

The court found that the receivers had performed their duties with skill and diligence, and had expended a significant amount of time and effort in overseeing the sale of the company's assets. The court considered the particular complexities of the sale, including the need to negotiate with multiple potential buyers and to address various legal and financial issues. The court found that the receivers' remuneration was reasonable and justified, and approved the receivers' application for payment. The court also approved the receivers' application for expenses, subject to certain adjustments.

The court's final orders included the approval of the receivers' remuneration and expenses, subject to certain adjustments. The court also ordered that the receivers provide a detailed account of their services and expenses to the company's liquidators, to assist in the preparation of the company's final accounts.

Orders