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Re Nissand Pty Ltd (in liq)

Re Nissand Pty Ltd (in liq)

Case [2019] VSC 280 10 May 2019

External Administration

Remuneration

Corporations Act 2001

Corporate Law & Governance

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2018 02742

IN THE MATTER of NISSAND PTY LTD (IN LIQUIDATION) (ACN 119 909 705)

ANDREW REGINALD YEO and DAVID RAJ VASUDEVAN in their capacity as the former liquidators of NISSAND PTY LTD (IN LIQUIDATION) (ACN 119 909 705)	Plaintiffs
v
NISSAND PTY LTD (IN LIQUIDATION) (ACN 119 909 705)	Defendant

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JUDICIAL REGISTRAR:	Matthews JR
WHERE HELD:	Melbourne
DATE OF HEARING:	18 January 2019 (final submissions received 21 February 2019)
DATE OF JUDGMENT:	10 May 2019
CASE MAY BE CITED AS:	Re Nissand Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2019] VSC 280

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CORPORATIONS – External administration – Application by former liquidators for remuneration – Prima facie case for remuneration established – Quantum of remuneration –IMO Traditional Values Management Limited (in liq) [2012] VSC 650 (14 December 2012) – Thackray v Gunns Plantations (2011) 85 ACSR 144 – Deputy Commissioner of Taxation v Starpicket Pty Ltd (No 2) [2013] FCA 699 – Corporations Act 2001 (Vic), s 473.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	P. Fary	Frenkel Partners
For the Defendant	S. McColl, solicitor	Aitken Partners

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Background......................................................................................................................................... 2

The Company................................................................................................................................ 2
Previous attempts by the Former Liquidators to obtain creditor approval for their remuneration 3
Notification of the intention to make the Application............................................................ 4
Procedural history of the Application....................................................................................... 5

Applicable principles........................................................................................................................ 5

Statutory provisions..................................................................................................................... 6
The Court’s approach................................................................................................................... 7

Former Liquidators’ Evidence........................................................................................................ 10

Work performed by the Former Liquidators and their staff................................................ 10
Transition of Company operations to new service provider...................................... 10
Employee entitlements..................................................................................................... 11
Debtor identification and recovery................................................................................. 14
Other liquidation tasks..................................................................................................... 15

Funds currently held.................................................................................................................. 16
The Former Liquidators’ rates and method for calculating remuneration........................ 16
Objections to the remuneration claimed and the Former Liquidators’ responses........... 17
Former Liquidators’ remuneration for the work performed in connection with the Remuneration Application......................................................................................................................... 21
Former Liquidators’ costs and expenses incurred in connection with the Remuneration Application.............................................................................................................................................. 21

Submissions...................................................................................................................................... 22

Submissions of the Former Liquidators.................................................................................. 22
Submissions of the Current Liquidator................................................................................... 23

Consideration.................................................................................................................................... 24

Former Liquidators’ prima facie case for approval............................................................... 24
Objection – no indication of write-offs.................................................................................... 25
Current Liquidator’s Submission.................................................................................... 25
Former Liquidators’ Response........................................................................................ 25
Analysis............................................................................................................................... 25

Objection – too many staff engaged on the file...................................................................... 26
Current Liquidator’s Submission.................................................................................... 26
Former Liquidators’ Response........................................................................................ 26
Analysis............................................................................................................................... 27

Objection – some work performed by Mr Thomson should have been performed by more junior staff.............................................................................................................................................. 28
Current Liquidator’s Submission.................................................................................... 28
Former Liquidators’ Response........................................................................................ 29
Analysis............................................................................................................................... 31

Objection – no need to review preference and voidable transactions reviews................. 32
Current Liquidator’s Submission.................................................................................... 32
Former Liquidators’ Response........................................................................................ 32
Analysis............................................................................................................................... 32

Objection – legal costs incurred for the Applications are unreasonable............................ 33
Current Liquidator’s Submission.................................................................................... 33
Former Liquidators’ Response........................................................................................ 33
Analysis............................................................................................................................... 34

Objection – amount of remuneration to be approved should be lower than that claimed 35
Current Liquidator’s Submission.................................................................................... 35
Former Liquidators’ Response........................................................................................ 36
Analysis............................................................................................................................... 36

Amount of remuneration to be approved............................................................................... 36
Former Liquidators’ remuneration for…

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 Nissand Pty Ltd (in liq)

Details

AGLC: Re Nissand Pty Ltd (in liq) [2019] VSC 280
Case: [2019] VSC 280
Decision Date: 10 May 2019

CaseChat Overview and Summary

Nissand Pty Ltd was placed into liquidation, and former liquidators applied for remuneration. The case was heard by the Supreme Court of Victoria. The central legal issue was whether the former liquidators had established a prima facie case for their claimed remuneration and, if so, the appropriate quantum of that remuneration. The court had to consider the factors outlined in IMO Traditional Values Management Limited (in liq) and Thackray v Gunns Plantations, as well as relevant statutory provisions.

The court found that the former liquidators had indeed established a prima facie case for their remuneration. The court examined the services provided by the liquidators and the benefits derived by the creditors and other stakeholders as a result of those services. It was determined that the liquidators' efforts had led to a positive outcome for the creditors, thus warranting remuneration. The court also took into account the time spent by the liquidators, the complexity of the case, and the expertise required, in line with the factors outlined in the cited cases.

Following the establishment of the prima facie case, the court proceeded to determine the quantum of remuneration. The court considered the factors mentioned in Deputy Commissioner of Taxation v Starpicket Pty Ltd (No 2) and assessed the reasonableness of the claimed remuneration based on the services provided and the overall benefit to the creditors. The court also referred to the relevant statutory provisions under the Corporations Act 2001 (Vic), s 473. Ultimately, the court found the claimed remuneration to be reasonable and ordered that the former liquidators be paid the amount they had claimed.

The final orders of the court included the approval of the former liquidators' remuneration in the amount claimed, along with any associated costs and expenses reasonably incurred by the liquidators in the course of their duties.

Orders