FEDERAL COURT OF AUSTRALIA
Williamson, in the matter of Morago Nominees Pty Ltd (in liquidation) [2013] FCA 1240
Citation: Williamson, in the matter of Morago Nominees Pty Ltd (in liquidation) [2013] FCA 1240 Parties: CHRISTOPHER MICHAEL WILLIAMSON AND DAVID ASHLEY NORMAN HURT AS FORMER JOINT AND SEVERAL ADMINISTRATORS OF MORAGO NOMINEES PTY LTD (IN LIQUIDATION) ACN 008 810 964 File number: WAD 414 of 2013 Judge: MCKERRACHER J Date of judgment: 21 November 2013 Catchwords: CORPORATIONS – application to fix remuneration of former administrators on the papers – whether remuneration reasonable – where no notice of objection given by served creditors – application referred to Registrar of the Court for assessment Legislation: Corporations Act 2001 (Cth) ss 449E(1)(c), 449E(1C), 449E(4)
Federal Court of Australia Act 1976 (Cth) s 20ACases cited: Re Clynton Court Pty Ltd (2005) 53 ACSR 432
Re Timeshare Resort Club Ltd (in liq) (2010) 187 FCR 13Date of hearing: Determined on the papers Date of last submissions: No submissions filed Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 25 Counsel for the Plaintiff: Mr A Mason Solicitor for the Plaintiff: Roe Legal Services
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 414 of 2013
IN THE MATTER OF MORAGO NOMINEES PTY LTD (IN LIQUIDATION)
ACN 008 810 964
BETWEEN: CHRISTOPHER MICHAEL WILLIAMSON AND DAVID ASHLEY NORMAN HURT AS FORMER JOINT AND SEVERAL ADMINISTRATORS OF MORAGO NOMINEES PTY LTD (IN LIQUIDATION) ACN 008 810 964
Plaintiff
JUDGE:
MCKERRACHER J
DATE OF ORDER:
21 NOVEMBER 2013
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.Pursuant to s 449E(1)(c) of the Corporations Act 2001 (Cth), the plaintiff be entitled to remuneration for the period 24 June 2013 to 10 July 2013 in respect of the work performed as joint and several administrators during the administration of Morago Nominees Pty Ltd (in liquidation) ACN 008 810 964 in such amount as to be assessed by the Court.
2.The plaintiff's application for remuneration be referred to a Registrar of this Court for assessment in accordance with these reasons for decision and s 449E(4) of the Corporations Act 2001 (Cth).
3.The costs of and incidental to the assessment before the Registrar be costs in the administration of Morago Nominees Pty Ltd (in liquidation) ACN 008 810 964 to be determined by the Registrar.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 414 of 2013
IN THE MATTER OF MORAGO NOMINEES PTY LTD (IN LIQUIDATION)
ACN 008 810 964
BETWEEN: CHRISTOPHER MICHAEL WILLIAMSON AND DAVID ASHLEY NORMAN HURT AS FORMER JOINT AND SEVERAL ADMINISTRATORS OF MORAGO NOMINEES PTY LTD (IN LIQUIDATION) ACN 008 810 964
Plaintiff
JUDGE:
MCKERRACHER J
DATE:
21 NOVEMBER 2013
PLACE:
PERTH
REASONS FOR JUDGMENT
INTRODUCTION
By originating process filed on 5 November 2013, the plaintiff applies pursuant to s 449E(1)(c) of the Corporations Act 2001 (Cth) (CA) for the…
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- AGLC
- Williamson, in the matter of Morago Nominees Pty Ltd (in liquidation) [2013] FCA 1240
- Case
- [2013] FCA 1240
- Decision Date
CaseChat Overview and Summary
The primary legal issue in this case was whether the court should fix the remuneration of the administrators on the papers, considering that no notice of objection was given by the served creditors. The court had to determine if the remuneration claimed by the administrators was reasonable under the Corporations Act 2001 (Cth). The court also had to consider the factors outlined in s 449E(4) of the Corporations Act 2001 (Cth) when assessing the reasonableness of the claimed remuneration.
The court found that there was no reason to believe that the fees claimed by the administrators were not properly incurred. However, the court also noted that the materials provided did not go to the reasonableness factors outlined in s 449E(4) of the Corporations Act 2001 (Cth). Therefore, the court decided to refer the finalisation of the remuneration to a Registrar for assessment. The Registrar would assess the reasonableness of the claimed remuneration by considering the relevant factors mentioned in s 449E(4) of the Corporations Act 2001 (Cth).
In conclusion, the court made the following orders: 1) The plaintiff would be entitled to remuneration for the period 24 June 2013 to 10 July 2013 in respect of the work performed as joint and several administrators during the administration of Morago Nominees Pty Ltd (in liquidation) ACN 008 810 964 in such amount as to be assessed by the Court; 2) The plaintiff’s application for remuneration would be referred to a Registrar of the Court for assessment in accordance with these reasons for decision and s 449E(4) of the Corporations Act 2001 (Cth); and 3) The costs of and incidental to the assessment before the Registrar would be costs in the administration of Morago Nominees Pty Ltd (in liquidation) ACN 008 810 964 to be determined by the Registrar.
Orders
Orders of the court
1. Pursuant to s 449E(1)(c) of the Corporations Act 2001 (Cth), the plaintiff be entitled to remuneration for the period 24 June 2013 to 10 July 2013 in respect of the work performed as joint and several administrators during the administration of Morago Nominees Pty Ltd (in liquidation) ACN 008 810 964 in such amount as to be assessed by the Court.
2. The plaintiff's application for remuneration be referred to a Registrar of this Court for assessment in accordance with these reasons for decision and s 449E(4) of the Corporations Act 2001 (Cth).
3. The costs of and incidental to the assessment before the Registrar be costs in the administration of Morago Nominees Pty Ltd (in liquidation) ACN 008 810 964 to be determined by the Registrar.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
More importantly, the Form 16 served on four of the largest creditors on 24 September 2013, on the Deputy Commissioner on 25 September and on the Director of the Company on 8 October 2013 provided that notice should be given of any objection raised. That notice is in the following terms:TAKE NOTICE that, not less than 21 days after this notice is served on you, we, Christopher Michael Williamson and David Ashley Norman Hurt both of WA Insolvency Solutions Pty Ltd level 10, 111 St Georges Terrace, Perth WA, the former administrators of the above company, intend to apply to the Court to determine our remuneration. If you object to my application, you must, within 21 days after being served with this notice, serve on me a notice of objection stating the grounds of objection to the remuneration claimed. CONSIDERATION The Court’s discretion under s 449E(1) CA is far from unfettered. Indeed, s 449E(4) CA provides as follows:(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;(b)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.(emphasis added) In the present circumstances, there has been no specific agreement for the purposes of s 449E(1)(a) or (b) CA and the circumstances are, in that regard, similar to those considered by Barker J in Re Timeshare Resort Club Ltd (in liq) (2010) 187 FCR 13. I would adopt what his Honour said in that case (at [34]-[35]) in the following terms:34 This means that the Court has a very broad function to consider such of those matters as may be relevant – the expression “take into account any or all of the following matters” (emphasis added) indicates that some of those matters may be particularly relevant to the case at hand while others may not be. What s 449E(4) emphasises, however, is that the Court must have regard to the primary rule – whether the remuneration is “reasonable”. The factors listed are designed to assist the Court in applying that rule. This seems to be confirmed by [4.90] of the Explanatory Memorandum to the Corporations Amendment (Insolvency) Bill 2007 (Cth) by which this subsection was introduced into the Act.35 While I have observed above that the administration work claimed by Mr Huxtable, as set out in his affidavit made 23 December 2009, appears to be reasonable, it seems to me that a detailed assessment of the costs claimed in that regard still needs to be undertaken by a registrar of the Court. I will make an order to that effect. The registrar will necessarily regard the items of work claimed and assess their reasonableness by reference to such of these factors as is relevant.