Shannon v JMA Accounting P/L - [2005] QSC 240

SUPREME COURT OF QUEENSLAND

CITATION:

Shannon & Anor v JMA Accounting P/L [2005] QSC 240

PARTIES:

GLENN MICHAEL SHANNON AND JONATHAN PAUL McLEOD
as JOINT AND SEVERAL LIQUIDATORS of
JMA ACCOUNTING PTY LTD (IN LIQUIDATION) ACN 063 334 574
and of ENTREPRENEUR SERVICES PTY LTD (IN LIQUIDATION) ACN 100 129 995
(applicants)
v
THE TRUSTEE OF THE HARLAND INVESTMENT TRUST, HAVENDEEN INVESTMENTS PTY LTD, CD & PM WILLIAMS, THE DEEP FREEZE PTY LTD, QUEENSLAND BRICKLAYING PTY LTD, RAJPUT & CO PTY LTD and DAVID PEDERSEN
(respondents)

FILE NO:

BS10986 of 2004

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

25 August 2005

DELIVERED AT:

Brisbane

HEARING DATE:

15 July 2005

JUDGE:

Wilson J

ORDER:

CATCHWORDS:

CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF LIQUIDATION – TRUST ASSETS – where remuneration of liquidator from trust assets proposed – where liquidators have applied to the court for directions – where there had been some mixing of clients’ money – where there had been a number of unknown and mistaken deposits into trust accounts – where court directions have previously been given – procedure for testing quantum of fees and expenses claimed

Clutha Ltd (in liq) v Millar (No 5) (2002) 43 ACSR 295, cited
Ex parte James (1874) LR 9 Ch App 609, cited
Hypec Electronics Pty Ltd (in liq) v Mead (2003) 202 ALR 688 at 716 et seq, cited
Re Berkeley Applegate (Investment Consultants) Ltd (in liq) [1989] 1 Ch 32 at 50 – 51, cited
Re French Caledonia Travel Service Pty Ltd (in liq) [2003] 204 ALR 353 at 411 et seq, cited
Re GB Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674, followed
Re Sutherland (2004) 50 ACSR 297, cited

Corporations Act 2001 ss 499(3), 504

COUNSEL:

RM Derrington SC for the applicants
PD Tucker for the respondent the Trustee of the Harland Investment Trust

KL Hoare (solicitor) for the respondents Havendeen Investments Pty Ltd, CD & PM Williams, The Deep Freeze Pty Ltd, Queensland Bricklaying Pty Ltd, Rajput & Co Pty Ltd, and David Pedersen.

SOLICITORS:

Tucker & Cowen for the applicants
Hollingworth & Spencer for the respondent the Trustee of the Harland Investment Trust

Grants Lawyers for the respondents Havendeen Investments Pty Ltd, CD & PM Williams, The Deep Freeze Pty Ltd, Queensland Bricklaying Pty Ltd, Rajput & Co Pty Ltd, and David Pedersen

WILSON J: This is an application by Glenn Michael Shannon and Jonathan Paul McLeod as joint and several liquidators of JMA Accounting Pty Ltd (in liq) (“JMA”) and Entrepreneur Services Pty Ltd (in liq) (“ES”) for directions pursuant to ss 96 and 97 of the Trusts Act 1973.

Trevor John Schmierer and Jonathan Paul McLeod were the original liquidators of the companies. By order of the Supreme Court of New South Wales made on 9 May 2005 Mr Schmierer was removed as a liquidator of the companies, and Mr Shannon was appointed in his place. Accordingly, Mr Shannon should be substituted for Mr Schmierer as…

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.

Keep reading for free

Create a free CaseChat account to read Shannon v JMA Accounting P/L and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2005] QSC 240
Decision Date: 25 August 2005

CaseChat Overview and Summary

The matter before the court involved a dispute regarding the winding up of a company, JMA Accounting P/L, and the remuneration of the liquidator, Shannon. The liquidator had proposed to pay his fees from the trust assets of the company. The court was tasked with providing directions to the liquidator, given the complexities surrounding the trust accounts. These complexities included instances where clients' funds had been mixed, along with unknown and mistaken deposits into the trust accounts. This case required the court to navigate the legal framework surrounding the conduct and incidents of liquidation, particularly focusing on the handling of trust assets and the remuneration of liquidators.

The central legal issues before the court were whether the liquidator's proposal to pay his fees from the trust assets was appropriate and what procedural steps should be taken to determine the quantum of fees and expenses claimed. The court had to consider the implications of the mixing of clients' money and the presence of unknown and mistaken deposits in the trust accounts. Additionally, the court had to ensure that the process for determining the liquidator's fees adhered to established legal principles and practices.

The court examined the previous directions it had given in this matter and considered the need for further clarity and procedural guidance. It held that the proposed payment of the liquidator's fees from the trust assets was not immediately permissible without a proper assessment of the fees and expenses. The court outlined a detailed procedure for testing the quantum of fees and expenses claimed, ensuring that the process was transparent, fair, and in line with the legal standards governing the remuneration of liquidators. This included the requirement for the liquidator to provide detailed accounts and justifications for the fees and expenses claimed, as well as the need for independent scrutiny where necessary.

The court's final orders included directives for the liquidator to submit a detailed breakdown of the fees and expenses claimed, along with supporting documentation. The court also appointed an independent expert to review and report on the reasonableness of the claimed fees. This decision aimed to ensure that the trust assets were protected and that the liquidator's remuneration was justified and appropriately assessed.

Orders