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Re Twenty-Seventh Android Pty Ltd

Re Twenty-Seventh Android Pty Ltd

Case [2019] VSC 563 23 August 2019

Winding Up & Liquidation

Remuneration of Liquidators

Approval of Remuneration

Insolvency Law

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2018 02334

IN THE MATTER of Twenty-Seventh Android Pty Ltd (ACN 006 146 667) (In Liquidation)

CHRISTOPHER JOHN MORGAN	Plaintiff
v
ANDREW WILLIAM POULTER (IN HIS CAPACITY AS FORMER LIQUIDATOR OF TWENTY-SEVENTH ANDROID PTY LTD (ACN 006 146 667)	Defendant

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JUDICIAL REGISTRAR	Matthews JR
WHERE HELD:	Melbourne
DATE OF HEARING:	29 April 2019
DATE OF RULING:	23 August 2019
CASE MAY BE CITED AS:	Re Twenty-Seventh Android Pty Ltd
MEDIUM NEUTRAL CITATION:	[2019] VSC 563

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CORPORATIONS – External administration – Winding up of company terminated – Application by director of company for review of remuneration of former liquidator approved by creditors prior to the termination of the winding up – Application by liquidator for approval of balance of remuneration – Insolvency Practice Schedule (Schedule 2 to the Corporations Act (2001) (Cth)), ss 60-10 and 60-11 apply – Remuneration approved in a reduced amount – Westpoint Corporation Pty Ltd (in liq) v Yeo [2018] VSC 705 – IMO Traditional Values Management Limited (in liq) [2012] VSC 650 – In the matter of Sakr Nominees Pty Limited [2017] NSWSC 668 – Sanderson, as liquidator of Sakr Nominees Pty Ltd (in liquidation) v Sakr [2017] NSWCA 38.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms B Slocum	SLF Lawyers
For the Defendant	Mr I Hristovski	Meerkin & Apel Lawyers

TABLE OF CONTENTS

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

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

The Company................................................................................................................................ 2
The circumstances in which the Former Liquidator was appointed as liquidator of the Company 2
The termination of the liquidation of the Company................................................................ 3
Previous approval of the Former Liquidator’s remuneration............................................... 4

Applicable Law................................................................................................................................... 5

Statutory Provisions..................................................................................................................... 5
The Court’s approach when considering applications regarding an external administrator’s remuneration........................................................................................................................ 8
Principles in respect of the Court making a remuneration determination................. 8
Principles in respect of the Court reviewing a remuneration determination.......... 11

Former Liquidator’s evidence........................................................................................................ 13

The Remuneration Statement.................................................................................................... 13
Remuneration and disbursements........................................................................................... 14
Remuneration rates........................................................................................................... 14
Method of calculating remuneration.............................................................................. 14
Amount claimed................................................................................................................ 15
Disbursements................................................................................................................... 15

Work performed by the Former Liquidator........................................................................... 16
Description of work performed in the First Period...................................................... 16
Description of work to be performed for the balance of the liquidation, as set out in the Creditors Circular.................................................................................................. 17
Description of work performed in the Second Period................................................. 18
Description of work performed in the Third Period.................................................... 19
Description of work performed or to be performed in the Fourth Period............... 20

The Plaintiff’s evidence.................................................................................................................. 20

The Company’s role and financial position............................................................................ 20
The Company’s creditors........................................................................................................... 21
The passing of the Remuneration Resolution........................................................................ 23
Previous requests for further information regarding the claimed remuneration............. 24
The Plaintiff’s intention to have the liquidation of the Company terminated.................. 25

Submissions...................................................................................................................................... 25

The Plaintiff’s submissions........................................................................................................ 25
The Former Liquidator’s submissions..................................................................................... 29

Consideration.................................................................................................................................... 35

Should a review of the remuneration already approved by creditors be conducted?.... 35
Amount to be approved............................................................................................................. 36
Rates. 36
General matters.................................................................................................................. 36
Impact of the foreshadowed Termination Application on the work performed by…

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 Twenty-Seventh Android Pty Ltd

Details

AGLC: Re Twenty-Seventh Android Pty Ltd [2019] VSC 563
Case: [2019] VSC 563
Decision Date: 23 August 2019

CaseChat Overview and Summary

The case of Re Twenty-Seventh Android Pty Ltd involves the winding up of a company, which was terminated before the finalisation of the liquidator's remuneration. The former liquidator applied for the court to review the remuneration that had been approved by the creditors prior to the winding up's termination. The liquidator then applied for approval of the balance of their remuneration. The primary concern was the application of the Insolvency Practice Schedule, specifically sections 60-10 and 60-11 of the Corporations Act (2001) (Cth).

The legal issues in the case revolved around the scope of the court's authority to review the approved remuneration and whether the liquidator was entitled to further remuneration after the winding up was terminated. The court had to determine whether the Insolvency Practice Schedule applied and if the liquidator's claim for additional remuneration was justified. The case also examined relevant precedents, including Westpoint Corporation Pty Ltd (in liq) v Yeo, IMO Traditional Values Management Limited (in liq), In the matter of Sakr Nominees Pty Limited, and Sanderson, as liquidator of Sakr Nominees Pty Ltd (in liquidation) v Sakr.

The court found that the Insolvency Practice Schedule applied to the case and that the liquidator's claim for additional remuneration was not entirely without merit. However, the court was of the opinion that the remuneration should be reduced. The creditors' prior approval of the remuneration was respected but adjusted to a lower amount. The court balanced the liquidator's efforts and the company's financial state in making its decision. The final orders included the approval of the liquidator's remuneration in a reduced amount, reflecting the court's findings and the precedents considered.

Orders