Wily v Terra Cresta Business Solutions Pty Ltd [2010] NSWSC 63 (8 February 2010)

Last Updated: 17 February 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
Wily v Terra Cresta Business Solutions Pty Ltd [2010] NSWSC 63


JURISDICTION:
Equity

FILE NUMBER(S):
2009/279355

HEARING DATE(S):
08/02/2010

JUDGMENT DATE:
8 February 2010

EX TEMPORE DATE:
8 February 2010

PARTIES:
Plaintiff: Andrew Hugh Jenner Wily as Liquidator of Business Australia Capital Mortgage Pty Ltd & Business Australia Capital Finance Pty Ltd
Defendant: Terra Cresta Business Solutions Pty Ltd

JUDGMENT OF:
White J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Applicant: J K Chippindall
Respondent: O J Salmon for the Salmon Family Trust

SOLICITORS:
Applicant: McLachlan Chilton Solicitors & Attorneys
Respondent: n/a


CATCHWORDS:
CORPORATIONS – application under Corporations Act, s 473(3) for court to determine liquidator’s remuneration – creditor’s objection to liquidator’s remuneration claim on basis of allegations of misconduct by liquidator – s 473 not an appropriate vehicle for determining creditor’s allegations of liquidator’s misconduct – liquidator’s claim for remuneration reasonable

LEGISLATION CITED:
Corporations Act 2001 (Cth)

CATEGORY:
Procedural and other rulings

CASES CITED:


TEXTS CITED:


DECISION:
Make orders 1, 2 and 3 in the interlocutory process filed on 25 November 2009.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST


WHITE J

Monday, 8 February 2010

2009/279355 Andrew Hugh Jenner Wily as Liquidator of Business Australia Capital Mortgage Pty Ltd & Business Australia Capital Finance Pty Ltd v Terra Cresta Business Solutions Pty Ltd

JUDGMENT

1 HIS HONOUR: This is an application under s 473(3) of the Corporations Act 2001 (Cth) that the Court determine the remuneration of Mr Levi as liquidator of Terra Cresta Business Solutions Pty Ltd in the sum of $67,511.40 for the period from 5 August to 24 October 2008, and $30,701 for the period from 25 October 2008 to 15 May 2009.

2 The application is opposed by Mr Salmon. He claims to be a creditor in his capacity as trustee of the Salmon Family Trust. He also claims to be a creditor in his own right. He is presently bankrupt. His trustee in bankruptcy neither supports nor opposes the liquidator's application.

3 Mr Salmon contended he had not been served with the material on which the liquidator relies, but there is evidence of those materials having been duly served by post.

4 The liquidator's evidence is that there are insufficient funds to satisfy his claim for remuneration. It would not be just to postpone the determination of this application which would result in the liquidator incurring further expense, which would further deplete the moneys available to meet his claim for remuneration.

5 At a meeting of creditors held on 24 December 2008 two creditors, including the Australian Taxation Office, indicated that they would vote in favour of a proposed resolution to approve the liquidator's remuneration. Two creditors, namely Mr Salmon and a Mr Lawson, indicated they would vote against such a resolution. As the liquidator could not give a casting vote the resolution was not put.

6 Hence the application is made pursuant to s 473(3)(b)(ii) that the Court determine the liquidator's remuneration for the periods in question.

7 In support of that claim the liquidator has provided a detailed description of the work done during the periods in question and the hours spent by himself and different persons in his office.

8 On 21 July 2009 Mr Lawson lodged a written objection to the liquidator's then claims for remuneration. He contended, in part, that the hours spent by the liquidator were grossly inflated. But the primary complaint was that the liquidator had spent time and money in challenging a charge pursuant to which Mr Lawson claimed to be a secured creditor.

9 I see nothing in that complaint to warrant the rejection or reduction of the liquidator's claim.

10 Mr Salmon made wide-ranging, but unparticularised, allegations that the liquidator had a conflict of interest, which he had hidden from the Court, and had acted fraudulently and corruptly. If there is substance to those allegations they would presumably warrant an enquiry pursuant to s 536 of the Corporations Act, or perhaps s 423. If on such inquiry the allegations were made good the Court, pursuant to s 536(1), could take such action as it thought fit.

11 No proceedings have been commenced either by Mr Salmon or by ASIC pursuant to s 536 for such an inquiry into the liquidator's alleged misfeasance.

12 On 1 December 2009 Austin J refused an application by Mr Salmon for an order referring him for pro bono legal assistance in relation to the proposed investigation of the actions of the liquidator, among others, pursuant to s 536 or s 423 of the Corporations Act.

13 On an application under s 473 for the determination or review of a liquidator's remuneration, the Court is required by s 473(10) to have regard to whether the remuneration is reasonable, taking into account the matters listed in that subsection. Whilst the listed matters includes "any other relevant matter", none of the specific matters to which the Court is required to have regard encompasses allegations of the kind Mr Salmon adumbrates as being reasons for rejecting the liquidator's claim for remuneration.

14 It seems to me that s 473 is an inappropriate vehicle for determining the kind of allegations that Mr Salmon seeks to raise.

15 If on an inquiry under s 536 the complaints that Mr Salmon makes were substantiated, and the Court was satisfied that by reason of misconduct the liquidator should not have received remuneration, the power under s 536(1) for the Court to take such action as it thinks fit would be amply wide enough to require repayment of any remuneration which it might be found on such an inquiry the liquidator should not have received.

16 It is not possible on the present materials to say that there is any ground for denying the liquidator his remuneration. Indeed, in his reasons for judgment of 16 November 2009 in related proceedings no. 4200 of 2006, Austin J was moved to describe an affidavit of Mr Salmon in those proceedings as being a document which made scattered allegations against various people to do with blackmail, fraud, perjury, threats of intimidation, attempted bribery and so on, without any documentary support for the statements made.

17 Having regard to the liquidator’s description of the work done and the amount of time spent in carrying out that work, I am satisfied that the claim for remuneration is reasonable.

18 For these reasons, I make orders 1, 2 and 3 in the interlocutory process filed on 25 November 2009.

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LAST UPDATED:
16 February 2010