Re Prime Petfood Pty Ltd - [2019] VSC 572

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S CI 2014 06242

IN THE MATTER of PRIME PETFOOD PTY LTD (In Liquidation) (ACN 130 622 105)

VICTORIAN PETFOOD PROCESSORS (VIC) PTY LTD (ACN 164 353 940)	Plaintiff
- and -
PRIME PETFOOD PTY LTD (ACN 130 622 105)	Defendant

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JUDGE:	Gardiner AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	22 August 2019
CASE MAY BE CITED AS:	Re Prime Petfood Pty Ltd
MEDIUM NEUTRAL CITATION:	[2019] VSC 572

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CORPORATIONS – External administration – Application by liquidators for their remuneration made pursuant to s 60-10(1)(c) of the Insolvency Practice Schedule (Corporations) of the Corporations Act 2001 (Cth) – Application was one properly made under repealed provision of s 473(3) by application of s 1581 of the Corporations Act 2001 (Cth) – Orders made determining remuneration and expenses.

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HIS HONOUR:

Introduction

By an interlocutory process filed 14 March 2019, the applicants, Richard John Cauchi and Michael Carrafa in their capacity as joint and several liquidators of Prime Petfood Pty Ltd (‘Prime’) seek orders pursuant to s 60-10(1)(c) of Schedule 2 (Insolvency Practice Schedule) (Corporations) (‘IPS’) to the Corporations Act 2001 (Cth) (‘Act’) for the determination of remuneration and expenses for the performance of their responsibilities as the liquidators of Prime (‘Application’) for the period 22 December 2014 to 30 November 2018.

Because the applicants were appointed as liquidators of Prime on 17 December 2014, s 1581 of the Act provides that s 473 of the Act continues to apply to an application for remuneration despite its repeal when operation of division 60 of the IPS came into force on 1 September 2017. Section 1581 (which itself was repealed and substituted by a new provision) provides:

1581Old Act continues to apply in relation to remuneration for administrators already appointed or appointed during transition period
(1)Despite the repeal of sections 449E and 473 … of the old Act by Schedule 2 to the [ILRA], the old Act continues to apply in relation to the remuneration of an external administrator of a company who is appointed:
(a) before the start time; or
(b) during the transition period.

Although this application is to be properly made pursuant to s 473(3)(b)(ii) (rather than s 60-10(1)(c)) and considered by reference to the criteria in repealed s 473(10) of the Act, in my view there is no material difference in the criteria to which the Court must have regard. I will make an amendment to the interlocutory process of the Court’s own motion so that the application is one made pursuant so s 473.[1]
[1]See Re Tuscan Property Development Pty Ltd [2018] VSC 511, [22] per Matthews JR. Note that the operation of division 60 of the IPS came into force on 1 September 2017, see regulation 10.25.02(3) of the Corporations Regulations 2001 (‘Corporations Regulations’).

In support of the Application, the applicants rely on the affidavits of:

(a)…

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.

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Details

Case: [2019] VSC 572
Decision Date: 22 August 2019

CaseChat Overview and Summary

The case of Re Prime Petfood Pty Ltd involved the liquidators of a company seeking their remuneration and expenses for their services rendered during the administration of the company. The dispute was brought before the court to decide on the validity of the application for remuneration under a repealed provision of the Corporations Act 2001. The liquidators argued that their application, made under the repealed section 473(3) of the Act, should be considered as properly made under the current law through the application of section 1581 of the same Act.

The primary legal issue before the court was whether the liquidators' application for remuneration was validly made under the repealed provision of section 473(3) and whether it could be considered as properly made under section 1581 of the Corporations Act 2001. The court needed to determine if the liquidators' reliance on the repealed provision was justified and if the application was in accordance with the current legal framework governing such matters.

The court found that the liquidators' application for remuneration was indeed properly made under the repealed section 473(3) by virtue of section 1581 of the Corporations Act 2001. The court held that the application, although made under a repealed provision, was not invalid as it fell within the transitional provisions of the Act. The court further ruled that the liquidators were entitled to their remuneration and expenses for the services rendered during the administration of the company. The court made orders determining the remuneration and expenses payable to the liquidators.

This decision confirms that liquidators can rely on repealed provisions of the Corporations Act 2001 through the transitional provisions of section 1581, provided the application is made in accordance with the current legal framework. The court's ruling ensures that liquidators can seek their remuneration and expenses for services rendered, even if the specific provision under which they applied has been repealed.

Orders