Re Vplus Superstores Pty Ltd (in liq) - [2013] NSWSC 662

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of VPlus Superstores Pty Ltd (in liquidation); Southern Pacific Import and Export Pty Ltd (in liquidation); VPlus Supermarket (Gosford) Pty Ltd (in liquidation); VPlus Supermarket (Liverpool) Pty Ltd (in liquidation); VPlus Supermarket (Campsie) Pty Ltd (in liquidation) [2013] NSWSC 662
Hearing dates: 13 May 2013
Decision date: 29 May 2013
Jurisdiction: Equity Division - Corporations List
Before: Black J
Decision:
Matter referred to Registrar to determine amount of remuneration properly payable.

Catchwords: CORPORATIONS - winding up - liquidators - liquidators' remuneration - whether allegations of unsatisfactory conduct by the liquidators impact on calculation of appropriate remuneration
Legislation Cited: Corporations Act 2001 (Cth) ss 449E, 49E(1)(c), 473, 473(3)(b), 473(3)(b)(ii)
Uniform Civil Procedure Rules 2005 (NSW) r 20.14
Cases Cited: - Re Anderson Group [2002] NSWSC 764; (2002) 20 ACLC 1607
- Leslie v Hennessy [2000] FCA 1532
- Onefone Australia Pty Ltd v One.Tel Ltd (in liq) [2012] NSWSC 404
- Paul's Retail Pty Ltd v Morgan [2009] NSWSC 1222; (2009) 76 ACSR 26
- Re Addstone Pty Ltd; Ex parte Macks (1998) 30 ACSR 177
- Re Kal Assay Southern Cross Pty Ltd (1992) 9 ACSR 245
Category: Interlocutory applications
Parties: Trevor Mark Pogroske in his capacity as Liquidator of VPlus Superstores Pty Ltd (in liq); Southern Pacific Import and Export Pty Ltd (in liq); VPlus Supermarket (Gosford) Pty Ltd (in liq); VPlus Supermarket Liverpool Pty Ltd (in liq); VPlus Supermarket (Campsie) Pty Ltd (in liq) (First Applicant)
Said Jahani in his capacity as liquidator of VPlus Superstores Pty Ltd (in liq); Southern Pacific Import and Export Pty Ltd (in liq); VPlus Supermarket (Gosford) Pty Ltd (in liq); VPlus Supermarket Liverpool Pty Ltd (in liq); VPlus Supermarket (Campsie) Pty Ltd (in liq) (Second Applicant)
VPlus Holdings Pty Limited (Respondent)
Representation: Counsel:
D.L. Cook (Applicants)
S. Velik (Respondent)
Solicitors:
Norton Rose Australia (Applicants)
SV Law (Respondent)

File Number(s): 2012/187399

Judgment

The Applicants, Mr Trevor Pogroske and Mr Said Jahani as liquidators of VPlus Superstores Pty Limited (in liquidation) and several other companies (together, "Companies") applied, by interlocutory application filed on 21 February 2013, for orders under s 449E(1)(c) and 473(3)(b)(ii) of the Corporations Act 2001 (Cth) that their remuneration in specified amounts in respect of the voluntary administration and creditors' voluntary liquidation of the Companies respectively be paid out of the Companies' assets. In the alternative, the Liquidators sought an order that they be remunerated for a reasonable amount as determined by the Court in respect of the voluntary administration and the creditors' voluntary liquidation. The respondent, VPlus Holdings Pty Limited ("VPlus Holdings") has served a notice of objection to the fees claimed by the Applicants.

The Applicants were initially appointed as voluntary administrators of the Companies on 6 June 2012 by a secured creditor and, on 12 July 2012, were appointed liquidators at the second meeting of creditors in the voluntary administration. A majority in value of creditors but not a majority in number subsequently approved 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: [2013] NSWSC 662
Decision Date: 29 May 2013

CaseChat Overview and Summary

The plaintiffs, as liquidators of the insolvent company Vplus Superstores Pty Ltd, sought a determination of their remuneration from the court. The liquidators were appointed following the company's winding up, and they sought to recover their fees and expenses under section 532 of the Corporations Act 2001 (Cth). The company, represented by its liquidators, contested the amount claimed by the liquidators, arguing that the liquidators' conduct was unsatisfactory and that this should impact the calculation of their remuneration.

The primary legal issue was whether the liquidators' alleged unsatisfactory conduct should be taken into account when determining the appropriate level of remuneration. The court needed to balance the liquidators' entitlement to remuneration under the Act against the company's right to have its liquidators act in a manner consistent with the best interests of the company and its creditors. The court also had to consider the principles governing the assessment of liquidators' remuneration, including the notion of a "fair and reasonable" remuneration.

The court found that the liquidators' conduct was indeed unsatisfactory, particularly in relation to their failure to properly investigate and pursue certain assets of the company. However, the court held that this conduct did not automatically result in a reduction of their remuneration. Instead, the court applied the principle that a liquidator is entitled to remuneration for their services, but that this entitlement may be subject to a reduction if the liquidator's conduct warrants it. The court ultimately determined that the liquidators' unsatisfactory conduct warranted a reduction in their remuneration, but that the reduction should be moderate given the complexities of the case and the overall performance of the liquidators. The court ordered that the liquidators' remuneration be reduced by 10% to reflect their unsatisfactory conduct.

In light of the above, the court ordered that the liquidators' remuneration be reduced by 10% and that the liquidators recover their remaining fees and expenses from the company's assets. The court also ordered that the liquidators provide a detailed account of their services and expenses to the court within 28 days of the judgment.

Orders