Onefone Australia Pty Ltd v One.Tel Ltd [2011] NSWSC 59 (22 February 2011)

Last Updated: 27 May 2011

Supreme Court New South Wales

Case Title:	Onefone Australia Pty Ltd v One.Tel Ltd
Medium Neutral Citation:	[2011] NSWSC 59
Hearing Date(s):	17 February 2011
Decision Date:	22 February 2011
Jurisdiction:	Equity Division - Corporations List
Before:	Barrett J
Decision:	Orders with respect to liquidator's remuneration
Catchwords:	CORPORATIONS - winding up - special purpose liquidator appointed by court in creditors voluntary winding up - where members of committee of inspection and ASIC made submissions against approval of remuneration initially sought - liquidator's claim revised - claim to be assessed by registrar in the first instance - order for payment of two thirds of claim in advance of this assessment
Legislation Cited:	Corporations Act 2001 (Cth), s 511
Cases Cited:	Georges re Sonray Capital Markets Pty Ltd [2010] FCA 1371 Onefone Australia Pty Ltd v One.Tel Ltd [2010] NSWSC 1120; (2010) 80 ACSR 11
Texts Cited:
Category:	Principal judgment
Parties:	Onefone Australia Pty Limited - First Plaintiff DCA Resources Australia Pty Limited - Second Plaintiff Pacific Finance Group Pty Limited - Third Plaintiff Concept Systems (Australia) Pty Limited - Fourth Plaintiff One.Tel Limited - First Defendant Steven Sherman - Second Defendant Peter Walker - Third Defendant Paul Gerard Weston - Special Purpose Liquidator - Applicant
Representation
- Counsel:	Counsel: Mr N A Cotman SC - Special Purpose Liquidator
- Solicitors:	Solicitors: O'Neill Partners - Special Purpose Liquidator
File number(s):	2003/86446
Publication Restriction:

Judgment

1. Following my decision of 1 October 2010 ( Onefone Australia Pty Ltd v One.Tel Ltd [2010] NSWSC 1120; (2010) 80 ACSR 11), the special purpose liquidator of One.Tel has revised his remuneration claim for the period 1 July 2009 to 28 February 2010. He has done so, he says, in a way that takes account of the delineations stated in the decision of 1 October 2010 and so as to eliminate items referable to time spent on matters which it was there said did not attract an entitlement to remuneration. The revision has also involved the re-statement of the material in order to clarify and amplify matters that had previously not been adequately explained or particularised.
   
2. In the reasons of 1 October 2010, after dealing with the questions of work attracting remuneration and further explanation and particulars, I referred to the need for the special purpose liquidator to re-formulate his claim. I then said (at [80]):
   

"In view of the course the present application took, it will be appropriate, in the first instance, for the re-formulated claim and the materials supporting it to be served on both ASIC and the members of the committee of inspection who participated in the hearing of this application. Then, when any remaining matters of principle that either ASIC or the committee members may wish to raise have been considered and determined by the court constituted by a judge, there will be a referral to the registrar to deal with the details of assessment and quantification on the basis that the registrar will report back to the court constituted by a judge so that such order under s 511 of the Corporations Act as the circumstances require may be made."

3. The three members of the committee of inspection who participated upon the hearing of the earlier stages of the remuneration application were given full opportunity to review the revised claim, as was Australian Securities and Investments Commission, which had appeared as amicus curiae . Both the committee members and ASIC indicated, in correspondence with the special purpose liquidator's solicitors, that they did not wish to raise any matter of principle in relation to the revised remuneration claim. Neither the committee members nor ASIC appeared when the matter came back before me on 17 February 2011.
   
4. I proceed therefore on the basis that those who had expressed opposition to aspects of the original claim do not see any objection of principle to the revised claim. That being so, I am satisfied that the revised claim is suitable to be referred to the registrar on the basis stated at paragraph [80] of the reasons of 1 October 2010.
   
5. The process of assessment by the registrar and return of the matter to the court constituted by a judge (being the process envisaged at paragraph [80]) is likely to take some time. The remuneration in question relates to a period that ended on 28 February 2010. In the circumstances that have emerged, final quantification of the remuneration will not be completed until well over a year after the end of the period in question.
   
6. The special purpose liquidator submits that he should, in the circumstances, have an interim payment on the footing that, when quantification is complete, he will receive the balance or refund anything shown to represent an overpayment. Given the passage of time, there is merit in that approach.
   
7. In response to my inquiry as to the authority of the court to authorise an interim payment, Mr Cotman SC referred to s 511 of the Corporations Act 2001 (Cth) and the decision of Finkelstein J in Georges re Sonray Capital Markets Pty Ltd [2010] FCA 1371. He also drew my attention to a statement in a report of 3 August 2006 by the general liquidators in which there was reference to a contested application by those liquidators for determination of their remuneration. The general liquidators there made reference to a judgment of Windeyer J following a hearing on 26 September 2005:
   

"In issuing his judgment, his Honour indicated that as the liquidators had not been paid for over a year that they should not have to wait further to be paid pending the issuing of his decision. To that end, his Honour suggested that at least two thirds of the fees claimed be paid forthwith. An order was made entitling $450,000 (plus GST) to be drawn immediately on account of the remuneration claimed. The order was made on the basis that if it was subsequently found that the remuneration claimed is in excess of what should be allowed, any difference would be refunded by the liquidators."

8. I do not think it appropriate to adopt some concept of a payment "on account" of future remuneration. What is regarded as an interim payment should have the character of remuneration, even though it is made clear that it may be part only of the remuneration eventually awarded for the relevant period.
   
9. It would not be appropriate to award remuneration on the basis that some must be repaid if the overall assessment yet to be made results in a total smaller than the interim amount. As in the decision of Justice Finkelstein, the matter of possible refund should be dealt with by an undertaking given by the special purpose liquidator to the court, with the order for a particular sum being made only if the undertaking is offered. As to quantum, the interim amount should be 66.66% of the revised claim, that being the percentage adopted by Windeyer J.
   
10. I now make the following order, noting that the undertaking preceding it has been given by counsel for the special purpose liquidator on his client's behalf:
    

Upon Paul Gerard Weston, special purpose liquidator of One.Tel Limited, by his counsel giving to the court an undertaking that, if the proper remuneration determined by the court constituted by a judge under paragraph (c)(ii) is less than $264,524.00, he will repay so much of the amount of $264,524.00 paid to him pursuant to paragraphs (c)(i) and (d) as exceeds the amount so determined and relinquish any entitlement to that excess as remuneration, the court orders that

(a) there be referred to a registrar for assessment and quantification the special purpose liquidator's revised claim for remuneration for the period 1 July 2009 to 28 February 2010 (being for the work for which remuneration is claimed in the claim presented after publication of the court's reasons of 1 October 2010 and served as contemplated by paragraph 80 of those reasons);

(b) the registrar report to the court constituted by a judge the total amount that would be the proper remuneration of the special purpose liquidator for the said work for the said period;

(c) there be paid out of the assets of One.Tel Limited as remuneration of the special purpose liquidator for the said work for the said period

(i) a sum of $264,524.00 (being the equivalent of two-thirds of the revised claim) ; and

(ii) the sum, if any, by which the sum that the court constituted by a judge determines, after receipt of the registrar's report, to be the proper remuneration of the special purpose liquidator for the said work for the said period exceeds $264,524.00;

(d) the sum to be paid pursuant to paragraph (c)(i) be paid (plus GST) within fourteen days after the making of this order; and

(e) any sum to be paid pursuant to paragraph (c)(ii) be paid (plus GST) as the court constituted by a judge directs when making its determination of proper remuneration.

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