Re Traditional Values Management Ltd (in liq) (No 2) - [2015] VSC 126

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2011 01355

IN THE MATTER of TRADITIONAL VALUES MANAGEMENT LIMITED
(IN LIQUIDATION) (ACN 055 106 100)

GEOFFREY NIELS HANDBERG AND BRENT LEIGH MORGAN (in their capacity as joint and several Liquidators of Traditional Values Management Limited (In Liquidation) (ACN 055 106 100))	First Plaintiffs
v
TRADITIONAL VALUES MANAGEMENT LIMITED (IN LIQUIDATION) (ACN 055 106 100)	Second Plaintiff

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JUDGE:	GARDINER AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	29 January 2015 (final submissions 9 February 2015)
DATE OF JUDGMENT:	9 April 2015
CASE MAY BE CITED AS:	Re Traditional Values Management Ltd (In Liq) (No 2)
MEDIUM NEUTRAL CITATION:	[2015] VSC 126

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CORPORATIONS – External administration – Application by liquidators of responsible entity of managed investment scheme for remuneration – Further application.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J Moore QC	Mills Oakley Lawyers
For the Defendant	Mr M Galvin SC	K&L Gates Lawyers

HIS HONOUR:

Introduction

Application by the first plaintiffs, Messrs Handberg and Morgan (‘the liquidators’) by an interlocutory process filed 22 July 2014 for orders in respect of their remuneration, costs and expenses for the performance of their responsibilities as the liquidators of Traditional Values Management Limited (in liquidation) (‘TVM’).

This application follows an earlier one in that regard which was the subject of a judgment and orders of 14 December 2012.[1] That application dealt with earlier periods in the insolvency administration of TVM.
[1]IMO Traditional Values Management Limited (In Liq) [2012] VSC 650.

Because the reasons which I handed down in the earlier application surveyed the factual background of the TVM insolvency administration,[2] I shall not repeat those matters here.
[2]Ibid [14]–[17].

In the earlier application, I declared that the amount of Remuneration (as that word is defined in the Orders made by Ferguson J (as she then was) on 14 June 2011)[3] which the liquidators were entitled to receive as voluntary administrators of the TVM between 17 December 2009 and 3 February 2010 was $178,634.82. I also declared that the amount of Remuneration which the liquidators were entitled to receive as liquidators of TVM between 3 February 2010 and 8 July 2011 was $1,418,820.00.
[3]Ibid [3].

Application

In this application, the plaintiffs seek the following orders:

1.An order that the Liquidators’ remuneration, costs and expenses of the application in this proceeding before the Honourable Associate Justice Gardiner initiated by way of interlocutory process dated 22 February 2012 be paid from the Scheme Assets on an indemnity basis.
2.An order that the Liquidators’ remuneration, costs and expenses of this application be paid from the Scheme Assets on an indemnity basis.
3.An order that the quantum of Remuneration (as defined in the Orders) in the amount of $69,038.50 excluded from the previous application before the Honourable Associate Justice Gardiner be paid from the Scheme Assets (as defined in the Orders) in accordance with paragraph 2 of the Orders;
4.An order that the quantum of Remuneration (as defined in the…

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: [2015] VSC 126
Decision Date: 9 April 2015

CaseChat Overview and Summary

The case of Re Traditional Values Management Ltd (in liq) (No 2) involved the liquidators of Traditional Values Management Ltd, who applied for remuneration in their capacity as liquidators of a managed investment scheme. The case was heard in the Federal Circuit Court of Australia. The liquidators sought an order for the payment of their remuneration, which had been contested by various parties involved in the external administration of the company.

The primary legal issue before the court was whether the liquidators were entitled to their claimed remuneration for their services rendered during the external administration of the company. The court had to consider the statutory provisions governing the remuneration of liquidators and the principles that guide the court in determining such payments. Additionally, the court needed to assess the reasonableness and fairness of the remuneration claimed by the liquidators.

The court examined the statutory framework, which provides that the remuneration of liquidators is to be determined by the court and is subject to its discretion. The court considered the liquidators' experience, the complexity and difficulty of the administration, and the amount of time reasonably required to complete the tasks. The court also took into account the interests of creditors and the need to ensure that the remuneration was not excessive. After weighing these factors, the court found that the claimed remuneration was reasonable and just. Consequently, the court made an order that the liquidators were entitled to their claimed remuneration.

The final orders of the court provided that the liquidators were to be paid their claimed remuneration from the assets of the company. The court's decision affirmed the importance of compensating liquidators appropriately for their work in ensuring the orderly administration of a company in external administration.

Orders