Stephen Richard O'Ryan v Gregory Ray Golding (No.4)

[2020] NSWSC 424

Supreme Court

New South Wales

Medium Neutral Citation:	Stephen Richard O’Ryan v Gregory Ray Golding (No.4) [2020] NSWSC 424
Hearing dates:	Written submissions
Decision date:	21 April 2020
Jurisdiction:	Equity - Technology and Construction List
Before:	Hammerschlag J
Decision:	Pursuant to s 60-10(1)(c) of Schedule 2 of the Corporations Act 2001 (Cth), the Court determines that: (1)   the liquidators of the Company are entitled to receive remuneration for work done as liquidators of the Company, for the period 17 September 2019 to 21 February 2020 in the amount of $36,933; and (2)   the administrators of the Company are entitled to receive remuneration for work done as administrators of the Company, for the period 10 October 2019 to 6 March 2020 in the amount of $72,302.
Catchwords:	CORPORATIONS – Corporations Act 2001 (Cth), Sch 2, ss 60-10, 60-12 – determination of remuneration of liquidators and administrators.
Legislation Cited:	Corporations Act 2001 (Cth)
Cases Cited:	Stephen Richard O’Ryan v Greg Ray Golding [2019] NSWSC 1229 Stephen Richard O’Ryan v Gregory Ray Golding No.2 [2019] NSWSC 1349 Stephen Richard O’Ryan v Gregory Ray Golding No.3 [2019] NSWSC 1372 Golding v O’Ryan [2019] NSWCA 259
Category:	Procedural and other rulings
Parties:	John McInerney and Phillip Campbell-Wilson – Applicants Stephen Richard O’Ryan - First Plaintiff Jane Anne O’Ryan - Second Plaintiff Gregory Ray Golding - First Defendant Deborah Anne Golding - Second Defendant Wentworth Place Pty Ltd (in liquidation) (in administration) – Third Defendant Melanie Freyberg - Fourth Defendant
Representation:	Counsel: J. Hynes - Applicants Self-represented - First and Second Defendants   Solicitors: First and Second Plaintiffs – Chambers Russell Lawyers First Defendant - Self-Represented Second Defendant - Self-Represented Applicants - Corrs Chambers Westgarth Fourth Defendant - No Appearance
File Number(s):	2015/98239

Judgment

1. HIS HONOUR:   This unfortunate saga, the history of which is set out in earlier judgments, including one of the Court of Appeal, continues: see Stephen Richard O’Ryan v Greg Ray Golding [2019] NSWSC 1229; Stephen Richard O’Ryan v Gregory Ray Golding No.2 [2019] NSWSC 1349; Stephen Richard O’Ryan v Gregory Ray Golding No.3 [2019] NSWSC 1372; Golding v O’Ryan [2019] NSWCA 259.

2. On 17 September 2019, the Court appointed Messrs John McInerney and Phillip Campbell-Wilson to be the liquidators the Company, Wentworth Place Pty Ltd, the shareholders of which were in deadlock.

3. On 10 October 2019, the liquidators were given leave to appoint themselves as joint and several administrators, which they did. I shall refer to them as ‘the administrators’.

4. Before me is a motion filed on 17 March 2020 by the administrators seeking a determination of their remuneration for the period 17 December 2019 to 21 February 2020 when they were acting as liquidators, in the amount of $36,933, and of their remuneration for work done by them as administrators for the period 10 October 2019 to 6 March 2020, in the amount of $72,302.

5. The O’Ryans support the application, Freyberg does not oppose it. The Goldings oppose it. Their position is that the administrators have not established the reasonableness of their claimed remuneration. They argue that it would be just and equitable for the remuneration claimed by the administrators to be reduced by 30%.

6. I received written submissions from the administrators and from the Goldings. I am dealing with the motion on the papers, no objection to that course having been made.

7. Section 60-10(1)(c) of Schedule 2 to the Corporations Act 2001 (Cth) empowers the Court to make the determination which the administrators seek. Section 60-12 sets out the factors to which regard is to be had.

8. The motion is supported by an affidavit sworn on 17 March by Mr McInerney and an affidavit by the administrators’ solicitor, Mr Matthew Whitbread, sworn 25 March 2020.

9. The administrators find themselves in a position of some complexity.

10. The relationship between the O’Ryans and Freyberg on the one hand, and the Goldings on the other, clearly remains fraught.

11. The process of converting the Company to a strata scheme, from company title, and of carrying out the necessary remedial building works is made more complex than it should be because of the disharmony. This is reflected, amongst others, by the fact that to carry out the conversion works the administrators have raised a special levy on the shareholders which the O’Ryans and Freyberg have paid, but which the Goldings have not. The administrators have instituted separate proceedings against the Goldings to recover the levy.

12. Irrespective of the merits of that claim, time has been spent and will continue to be spent, expenses have been incurred and will continue to be incurred. Mr McInerney provides comprehensive information about the work that has been done by the administrators and how the amount to be charged for it has been calculated and made up. It is not suggested that the work has not been done, that the work that has been done was unnecessary or was inappropriately staffed.

13. The Goldings correctly argue that the work done and the charges levied for it must be proportionate to the difficulty and importance of the task, in the context in which it needs to be performed. They identify a number of factors which they say are relevant to proportionality. These factors include that the sole asset of the Company is the building, and that it otherwise does not trade.

14. They point out that they have to bear 54.39% of the costs because they hold 54.39% of the shares. They observe that the members do not have limitless financial resources to meet the costs of an external administration process for an indefinite period. These particular factors are not ones which go strictly to the proportionality of the work and the charges, but they do show up the disadvantages which will be suffered without cooperation.

15. A factor which I consider to be material in this case (and not identified by the Goldings) is their own lack of cooperation. The administrators have been distracted by litigation, including that which they have commenced to recover the special levy which the Goldings have not paid. Without the necessary funding, the conversion works cannot happen.

16. The Goldings complain about what they describe as the reasonably notorious typical profit margin which would be charged by the administrators, said to be 30-40%. There is no evidence to suggest any excessive profit margin. The administrators are entitled to make a reasonable profit. If the Court were to accede to the Goldings’ submission that there should be a 30% reduction, and it was the case that the administrators’ profit margin was 30%, there would be no profit margin. This is an untenable and unreasonable position to adopt.

17. It is not incumbent on the Court to do a line-by-line analysis of the amount claimed by the administrators. The material placed before the Court satisfies me that the work was necessary, and that the remuneration claimed by the administrators is not excessive and is reasonable. Their claim passes the test of proportionality.

18. Pursuant to s 60-10(1)(c) of Schedule 2 of the Corporations Act 2001 (Cth), the Court determines that:

1. the liquidators of the Company are entitled to receive remuneration for work done as liquidators of the Company, for the period 17 September 2019 to 21 February 2020 in the amount of $36,933; and

2. the administrators of the Company are entitled to receive remuneration for work done as administrators of the Company, for the period 10 October 2019 to 6 March 2020 in the amount of $72,302.

19. The costs of the Notice of Motion filed 17 March 2020 will be costs in the external administration of the Company.

20. I note that no submission has been made that there should be some other order as to costs as between the shareholders.    

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Decision last updated: 21 April 2020