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Strazdins v DNPW Pty Ltd

Strazdins v DNPW Pty Ltd

Case [2013] FCA 1368 16 December 2013

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FEDERAL COURT OF AUSTRALIA
Strazdins v DNPW Pty Ltd [2013] FCA 1368

Citation: Strazdins v DNPW Pty Ltd [2013] FCA 1368

Parties: ANDRE STRAZDINS and NICK COOPER v DNPW PTY LTD

File number: SAD 98 of 2013

Judge: BESANKO J

Date of judgment: 16 December 2013

Catchwords:
CORPORATIONS – Remuneration of administrator – standing to make an application under s 449E of the Corporations Act 2001 (Cth) (“the Act”) – where former administrators and first deed administrators of the defendant company seek an order under s 447A of the Act that s 449E be deemed to operate such that they may make an application under that section – where defendant company, three objectors and the ANZ Bank oppose the plaintiffs’ application – whether delay caused by the former administrators and first deed administrators – whether prejudice caused to objecting parties.

PRACTICE AND PROCEDURE – application by defendant company and three objectors to join the three objectors as defendants to the proceeding – application to transfer proceedings to the Supreme Court of the Northern Territory.

Held: The plaintiffs’ application filed on 9 May 2013 and the application of the defendant, NT Pubco Pty Ltd, Garrihy Pty Ltd and DMTL Management Pty Ltd dated 8 July 2013 be adjourned to a date to be fixed for the parties to be heard as to the appropriate orders.

Legislation: Corporations Act 2001 (Cth) ss 435C, 436A, 439C, 443D, 443E, 443F, 447A, 449E
Corporations Amendment (Insolvency) Act 2007 (Cth)
Federal Court (Corporations) Rules 2000 (Cth) r 9.2
Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 5
Trade Practices Act 1974 (Cth)

Cases cited: Australasian Memory Pty Ltd v Brien (1998) 45 NSWLR 111; [2000] HCA 30; 200 CLR 270
Deputy Commissioner of Taxation v ACN 080 122 587 Pty Ltd [2005] NSWSC 1247
In the matter of VPlus Superstores Pty Ltd (in liq) and Others [2013] NSWSC 662
NT Pubco Pty Ltd & Anor v DNPW Pty Ltd (Subject to a Deed of Company Arrangement) & Ors [2011] NTSC 51
Purchas, in the matter of RSP Group Pty Limited (in liq) [2006] FCA 1329
Re Anderson Group Pty Ltd [2002] NSWSC 764
Re Ansett Australia Ltd and Others (all admin apptd) and Mentha and Another (as admin) [2002] FCA 1; 40 ACSR 409
Re Carlovers Carwash Ltd and Others [2005] NSWSC 879; 54 ACSR 696
Re Currabubula Holdings Pty Ltd (in liq); Ex parte Lord (2004) 48 ACSR 734; (2004) 22 ACLC 858
Strazdins and Cooper (in their capacity as joint and several deed administrators of DNPW Pty Ltd (subject to DOCA)) (ACN 107 484 711) and Another v Birch Carroll and Coyle Ltd (ACN 990 659 643) [2009] FCA 731; 72 ACSR 563
Wellnora Pty Ltd v Fiorentino [2008] NSWSC 483; 66 ACSR 229

Date of hearing: 30 July 2013 and 13 August 2013

Place: Adelaide

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 59

Counsel for the Plaintiffs: Mr R Ross-Smith

Solicitor for the Plaintiffs:

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 Strazdins v DNPW Pty Ltd

Details

AGLC: Strazdins v DNPW Pty Ltd [2013] FCA 1368
Case: [2013] FCA 1368
Decision Date: 16 December 2013

CaseChat Overview and Summary

Strazdins v DNPW Pty Ltd involved a dispute over the remuneration of administrators under the Corporations Act 2001 (Cth). The former administrators and first deed administrators of DNPW Pty Ltd sought an order under s 447A of the Act, seeking for s 449E to operate such that they could make an application under that section. The defendant company, three objectors, and the ANZ Bank opposed the plaintiffs’ application, raising issues of delay and prejudice. The Federal Court was required to determine whether the plaintiffs had standing to make the application and whether the delay and prejudice caused by the plaintiffs warranted a dismissal of their application. The court found that the plaintiffs had standing to make the application, and while there was a delay in filing the application, it did not cause prejudice to the objecting parties. Therefore, the plaintiffs' application should not be dismissed on the basis of delay. The court adjourned the matter to allow the parties to be heard on the appropriate orders. The decision underscores the importance of timely applications under the Corporations Act and the need for courts to consider the specific circumstances of each case when determining the appropriateness of an application.

Orders

Orders of the court

1. The plaintiffs’ application filed on 9 May 2013 and the application of the defendant, NT Pubco Pty Ltd, Garrihy Pty Ltd and DMTL Management Pty Ltd dated 8 July 2013 be adjourned to a date to be fixed for the parties to be heard as to the appropriate orders.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Section 449E of the Act deals with the remuneration of administrators, both administrators of a company under administration, and administrators of a company operating under a deed of company arrangement. It provides for the determination of the remuneration to which the administrators are entitled. Relevantly, it is in the following terms:449E Remuneration of administrator(1)The administrator of a company under administration is entitled to receive such remuneration as is determined:(a)by agreement between the administrator and the committee of creditors (if any); or(b)by resolution of the company’s creditors; or(c)if there is no such agreement or resolution—by the Court.(1A)The administrator of a company under a deed of company arrangement is entitled to receive such remuneration as is determined:(a)by agreement between the administrator and the committee of inspection (if any); or(b) by resolution of the company’s creditors; or(c) if there is no such agreement or resolution—by the Court.(1B)To be effective, a resolution under paragraph (1)(b) or (1A)(b) must deal exclusively with remuneration of the administrator.Note:This means that the resolution must not be bundled with any other resolution.(1C) The Court may determine remuneration under paragraph (1)(c) even if:(a)there has been no meeting of the committee of creditors; or(b) there has been no meeting of the company’s creditors.(1D) The Court may determine remuneration under paragraph (1A)(c) even if:(a)there has been no meeting of the committee of inspection; or(b) there has been no meeting of the company’s creditors.(2)Where remuneration is determined under paragraph (1)(a) or (b) or paragraph (1A)(a) or (b), the Court may, on the application of ASIC, of the administrator or of an officer, member or creditor of the company:(a)review the remuneration; and(b)confirm, increase or reduce it.(3) Subsection (2) has effect despite section 437C.(4)In exercising its powers under subsection (1), (1A) or (2), the Court must have regard to whether the remuneration is reasonable, taking into account any or all of the following matters:(a)the extent to which the work performed by the administrator was reasonably necessary;(c)the extent to which the work likely to be performed by the administrator is likely to be reasonably necessary;(c)the period during which the work was, or is likely to be, performed by the administrator;(d)the quality of the work performed, or likely to be performed, by the administrator;(e)the complexity (or otherwise) of the work performed, or likely to be performed, by the administrator;(f)the extent (if any) to which the administrator was, or is likely to be, required to deal with extraordinary issues;(g)the extent (if any) to which the administrator was, or is likely to be, required to accept a higher level of risk or responsibility than is usually the case;(h)the value and nature of any property dealt with, or likely to be dealt with, by the administrator;(i)whether the administrator was, or is likely to be, required to deal with:(i) one or more receivers; or(ii) one or more receivers and managers;(j)the number, attributes and behaviour, or the likely number, attributes and behaviour, of the company’s creditors;(k)if the remuneration is ascertained, in whole or in part, on a time basis:(i)the time properly taken, or likely to be properly taken, by the administrator in performing the work; and(ii)whether the total remuneration payable to the administrator is capped;(l) any other relevant matters.…

Actions

Citations

Strazdins v DNPW Pty Ltd [2013] FCA 1368

Most Recent Citation

Re AsiaPAC Communications Group Pty Ltd (In Liquidation) (Receivers and Managers Appointed) [2015] VSC 413

Cases Citing This Decision

Strazdins v ANZ Banking Group Ltd [2017] SASC 3
Citation 1 (Para 6)

…mination and approval of Mr Strazdins’ and Mr Cooper’s remuneration had to be obtained from the Federal Court; see Strazdins v DNPW Pty Ltd [2013] FCA 1368 and Strazdins v DNPW Pty Ltd (No 2) [2014] FCA 199 . In the Supreme Court of the Northern Territory proceedings seeking the winding up of DNPW Pty Ltd were com…
Re AsiaPAC Communications Group Pty Ltd (In Liquidation) (Receivers and Managers Appointed) [2015] VSC 413
Citation 2 (Para 1)

…nder s 449E(1)(c) of the Act notwithstanding that the administration has come to an end when the application is made.[1] [1] Strazdins v DNPW Pty Ltd [2013] FCA 1368 per Besanko J at [38] – [41]. Arnautovic v El Zorro Transport Pty Ltd [2014] NSWSC 135 per Brereton J at [6] – [10].…
Re Lime Gourmet Pizza Bar (Charlestown) Pty Ltd (formerly under administration) [2015] NSWSC 244
Citation 3 (Para 61)

…his or her remuneration. Second, that reading of the section is inconsistent with the views expressed by Besanko J in Strazdins v DNPW Pty Ltd [2013] FCA 1368, where his Honour noted (at [34]ff) that several cases, prior to the amendment of s 449E by the Corporations Amendment (Insolvency) Act 2007 (Cth), had acc…
In the matter of Bestcare Foods Ltd (subject to a Deed of Company Arrangement) [2014] NSWSC 1630
Citation 4 (Para 1)

…the view that the section extends to the remuneration of a former administrator is supported by the decision of Besanko J in Strazdins v DNPW Pty Ltd [2013] FCA 1368.…
Strazdins v DNPW Pty Ltd (No 2) [2014] FCA 199
Citation 5 (Para 1)

…reasons deal with the final orders which should be made in this proceeding and they should be read with my earlier reasons ( Strazdins v DNPW Pty Ltd [2013] FCA 1368).…

See all citing cases →

Cases Cited

Re Vplus Superstores Pty Ltd (in liq) [2013] NSWSC 662
Citation 1 (Para 5)

…the procedure adopted in cases such as Re Anderson Group Pty Ltd [2002] NSWSC 764 and In the matter of VPlus Superstores Pty Ltd (in liq) and Others [2013] NSWSC 662. The procedure will no doubt often be an appropriate one. However, in this case I do not think a decision as to the appropriate procedure should be m…
NT Pubco Pty Ltd & Anor v DNPW Pty Ltd (Subject to a Deed of Company Arrangement) & Ors [2011] NTSC 51
Citation 2 (Para 8)

…ons for judgment in relation to certain orders which he made: NT Pubco Pty Ltd & Anor v DNPW Pty Ltd (Subject to a Deed of Company Arrangement) & Ors [2011] NTSC 51. The plaintiffs to that action were NT Pubco Pty Ltd and Garrihy Pty Ltd and the defendants were the defendant company, the administrators, Ducks Nut…
Wellnora Pty Ltd v Fiorentino [2008] NSWSC 483
Citation 3 (Para 8)

…equitable lien. The relevant deed of company arrangement may exclude, limit or modify the equitable right or lien ( Wellnora Pty Ltd v Fiorentino [2008] NSWSC 483; 66 ACSR 229 at 234 – 236 [18] – [26]). For reasons I will give, it is not necessary for me to consider whether the deed of company arrangement dated 22…
Purchas, in the matter of RSP Group Pty Limited (in liq) [2006] FCA 1329
Citation 4 (Para 18)

…other cases which have considered the question of standing before the amendments in 2007. In Purchas, in the matter of RSP Group Pty Limited (in liq) [2006] FCA 1329, Gyles J said that the proposition that an administrator could apply as such, notwithstanding that the administration had ended, was a proposition of…
Deputy Commissioner of Taxation v ACN 080 122 587 Pty Ltd [2005] NSWSC 1247
Citation 5 (Para 18)

…was some support for the proposition to be derived from the decisions of Young CJ in Eq in Deputy Commissioner of Taxation v ACN 080 122 587 Pty Ltd [2005] NSWSC 1247 and Austin J in Re Currabubula Holdings Pty Ltd (in liq); Ex parte Lord (2004) 48 ACSR 734; (2004) 22 ACLC 858, “at least so far as standing is conce…
Re Carlovers Carwash Ltd [2005] NSWSC 879
Citation 6 (Para 28)

…se the administrators have not employed the machinery in the section. It referred to Barrett J’s observation in Re Carlovers Carwash Ltd and Others [2005] NSWSC 879; 54 ACSR 696 at 703 [29] that the general expectation should be that creditors are asked to determine the administrator’s remuneration in the first ins…
Re Currabubula Holdings Pty Ltd (in liq); Ex parte Lord [2004] NSWSC 255
Citation 7 (Para 18)

…n Deputy Commissioner of Taxation v ACN 080 122 587 Pty Ltd [2005] NSWSC 1247 and Austin J in Re Currabubula Holdings Pty Ltd (in liq); Ex parte Lord (2004) 48 ACSR 734; (2004) 22 ACLC 858, “at least so far as standing is concerned”.…
Re Anderson Group Pty Ltd [2002] NSWSC 764
Citation 8 (Para 5)

…far as the third order is concerned, it is said by the administrators to be based on the procedure adopted in cases such as Re Anderson Group Pty Ltd [2002] NSWSC 764 and In the matter of VPlus Superstores Pty Ltd (in liq) and Others [2013] NSWSC 662. The procedure will no doubt often be an appropriate one. However…
In the matter of Ansett Australia Limited and Mentha [2002] FCA 1
Citation 9 (Para 16)

…t company and the NT Pubco objectors relied on the decision in Re Ansett Australia Ltd and Others (all admin apptd) and Mentha and Another (as admin) [2002] FCA 1; 40 ACSR 409 ( “Re Ansett Australia” ). That case does not support the submission.…
Australasian Memory Pty Ltd v Brien [2000] HCA 30
Citation 10 (Para 9)

…111 at 150 – 151 per Sheppard A-JA (with whom Meagher JA agreed) and the High Court in the appeal from the New South Wales Court of Appeal [2000] HCA 30; 200 CLR 270 at 279 [17 et seq.]. For reasons I will give, it is not necessary for me to consider the width of the power in s 447A of the Act.…
Strazdins, in the Matter of Dnpw Pty Ltd (Subject To Doca) Acn 107 484 711 v Birch Carroll & Coyle Limited [2009] FCA 731
Citation 11 (Para 8)

…joint and several deed administrators of DNPW Pty Ltd (subject to DOCA)) (ACN 107 484 711) and Another v Birch Carroll & Coyle Ltd (ACN 990 659 643 ) [2009] FCA 731; 72 ACSR 563. The second action was an action in the Northern Territory Supreme Court (action no. 107 of 2010) which was resolved as to all matters e…

Legislation Cited

Corporations Act 2001 (Cth) 435C, 436A, 439C, 443D, 443E, 443F, 447A...
9 mentions (from Para 1)
Federal Court (Corporations) Rules 2000 (Cth) 9.2
2 mentions (from Para 14)
Jurisdiction of Courts (Cross-vesting) Act 1987 (TAS) 5
2 mentions (from Para 7)
Corporations Amendment (Insolvency) Act 2007 (Cth)
1 mention (from Para 14)
Federal Court Rules 2011 (Cth)
1 mention
Trade Practices Act 1974 (Cth)
1 mention (from Para 6)

Citation:		Strazdins v DNPW Pty Ltd [2013] FCA 1368
Parties:		ANDRE STRAZDINS and NICK COOPER v DNPW PTY LTD
File number:		SAD 98 of 2013
Judge:		BESANKO J
Date of judgment:		16 December 2013
Catchwords:		CORPORATIONS – Remuneration of administrator – standing to make an application under s 449E of the Corporations Act 2001 (Cth) (“the Act”) – where former administrators and first deed administrators of the defendant company seek an order under s 447A of the Act that s 449E be deemed to operate such that they may make an application under that section – where defendant company, three objectors and the ANZ Bank oppose the plaintiffs’ application – whether delay caused by the former administrators and first deed administrators – whether prejudice caused to objecting parties. PRACTICE AND PROCEDURE – application by defendant company and three objectors to join the three objectors as defendants to the proceeding – application to transfer proceedings to the Supreme Court of the Northern Territory. Held: The plaintiffs’ application filed on 9 May 2013 and the application of the defendant, NT Pubco Pty Ltd, Garrihy Pty Ltd and DMTL Management Pty Ltd dated 8 July 2013 be adjourned to a date to be fixed for the parties to be heard as to the appropriate orders.
Legislation:		Corporations Act 2001 (Cth) ss 435C, 436A, 439C, 443D, 443E, 443F, 447A, 449E Corporations Amendment (Insolvency) Act 2007 (Cth) Federal Court (Corporations) Rules 2000 (Cth) r 9.2 Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 5 Trade Practices Act 1974 (Cth)
Cases cited:		Australasian Memory Pty Ltd v Brien (1998) 45 NSWLR 111; [2000] HCA 30; 200 CLR 270 Deputy Commissioner of Taxation v ACN 080 122 587 Pty Ltd [2005] NSWSC 1247 In the matter of VPlus Superstores Pty Ltd (in liq) and Others [2013] NSWSC 662 NT Pubco Pty Ltd & Anor v DNPW Pty Ltd (Subject to a Deed of Company Arrangement) & Ors [2011] NTSC 51 Purchas, in the matter of RSP Group Pty Limited (in liq) [2006] FCA 1329 Re Anderson Group Pty Ltd [2002] NSWSC 764 Re Ansett Australia Ltd and Others (all admin apptd) and Mentha and Another (as admin) [2002] FCA 1; 40 ACSR 409 Re Carlovers Carwash Ltd and Others [2005] NSWSC 879; 54 ACSR 696 Re Currabubula Holdings Pty Ltd (in liq); Ex parte Lord (2004) 48 ACSR 734; (2004) 22 ACLC 858 Strazdins and Cooper (in their capacity as joint and several deed administrators of DNPW Pty Ltd (subject to DOCA)) (ACN 107 484 711) and Another v Birch Carroll and Coyle Ltd (ACN 990 659 643) [2009] FCA 731; 72 ACSR 563 Wellnora Pty Ltd v Fiorentino [2008] NSWSC 483; 66 ACSR 229
Date of hearing:	30 July 2013 and 13 August 2013
Place:	Adelaide
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	59
Counsel for the Plaintiffs:	Mr R Ross-Smith
Solicitor for the Plaintiffs: