ACN 004 323 184 Pty Ltd [2002] VSC 353 (29 August 2002)

2. This is an appeal pursuant to Order 77.05(1) of the Rules of Procedure in Civil Proceedings 1986 (Vic) ("the Supreme Court Rules") against the Order made by Senior Master Mahony on 7 June 2002 approving further remuneration of $42,000 for the liquidators of the respondent company pursuant to s.473 of the Corporations Act 2001 ("the Act").

5. The Order made on 7 June 2002 is set out in full.

Mr E. Woodward of Counsel for the Plaintiffs. Mr P. Halliday, as Trustee for the supporting creditor.

1. The liquidators, formerly administrators, were appointed by resolution of the creditors of the company in administration pursuant to section 439C of the Corporations Law ("the Act"). By operation of section 446A of the Corporations Law, the liquidation was, and under the Corporations Act 2001, is now taken to be a creditors' voluntary winding up. The liquidators were unable to secure the votes of sufficient creditors in number to approve further remuneration at a meeting convened for that purpose and held on 8 November 2001.

The liquidators now seek in reliance on section 511 of the Act, an order of the Court exercising a power under section 473(3) of the Act that the Court might exercise if the company were being wound up by the Court.

2. The Court is satisfied that the unsecured creditor represented by Mr Halliday (his wife) has no real interest in the proceeding as there has been a shortfall in recovery by the secured creditor, which has consented to the order sought: cf. GIS Electrical Pty Ltd v Melsom (2001) WASC 314 (72) and (123).

1. Compliance by the liquidators with rule 9.4(3) of the Rules in respect of service of notice of their intention to apply for an order determining their further remuneration and a copy of the affidavits on which they intended to rely on Ms. Soulla Schilt, Ladysan Washroom Services, Crains Machinery Transport and Pulse Energy, is dispensed with.

2. The further remuneration of the liquidators incurred but unpaid up to and including the completing of the winding up is fixed in the sum of $42,000.00.

3. The liquidators' costs of this proceeding are costs in the winding up of the company."

15. Before me, the appellant, Mr Peter Halliday, who is not a legal practitioner, appeared as the representative of his wife (a creditor of the respondent company) and in the capacity of trustee and creditor in his own right. The respondent, while not conceding Mr Halliday's status as a trustee and creditor, did not object to his appearance. The Senior Master made no finding on the standing of Mr Halliday.

18. The respondent is ACN 004 323 184 Pty Ltd (formerly Sheldons Linen Service Pty Ltd) (in liquidation) (ACN 004 323 184).

Administration and Liquidation of the Respondent

22. The respondent was placed in voluntary administration pursuant to Part 5.3A of the Corporations Law ("the Law") on 11 April 2000. John Ross Lindholm and John Menzies Spark were appointed joint and several administrators.

25. The second meeting of creditors of the company was held on 15 May 2000. The minutes indicate that at that meeting there was extensive questioning of the administrators by Mr Halliday, particularly in relation to the sale of the respondent's laundry business. The administrators reported that Mr Halliday had proposed an alternative offer to purchase the business which was not acceptable, as Mr Halliday would not disclose the identity of the purchasers or give details of their financial capacity to settle the contract. At that meeting, the creditors resolved that the respondent be wound up. Pursuant to s.446A(4) of the Law, the administrators became the liquidators. No committee of creditors was appointed.

28. The liquidators' report to the creditors pursuant to s.509 of the Act dated 2 October 2001 reported, inter alia, the sale of the respondent's business to Prahran Laundry on 10 June 2000 and the re-transfer of the respondent's "Nappy Wash" business to Aspen River Pty Ltd on 8 April 2000. It further reported that Mr Halliday had instituted legal proceedings against the respondent and the liquidators claiming to be a secured creditor and trustee of the company and that the proceedings had been successfully defended.

31. A Notice of Final Meeting of Members and Creditors dated 2 October 2001 gave notice of a proposed resolution to increase the liquidators' remuneration previously approved by creditors by $42,000 calculated at the hourly rates formerly issued by the Insolvency Practitioners Association of Australia ("IPAA"). A statement of Receipts and Payments for the period ended 14 November 2001 indicated that the remuneration for the administration period of $85,000 had been paid and that remuneration of the appointee-trustee (liquidators) of $30,000 had also been paid. The balance at bank in the respondent's general account was $47,642.67.

34. At the final meeting of creditors held on 8 and 9 November 2001, Mr Halliday attended as proxy for Ms Kym Chong, who was owed approximately $30,000. Mr Halliday's claim to be a creditor of a group of companies, including the respondent for $10 million in the capacity as trustee, was rejected by Mr Lindholm as Chairman. Mr Lindholm held proxies for four creditors. The meeting was also attended by Mr P. Van Staveren as proxy for the ANZ Bank, the first ranking charge holder.

37. The Chairman advised the meeting that there would be insufficient funds to pay a dividend to unsecured creditors, due to a shortfall in moneys due to both the first and second ranking charge holders (the ANZ Bank and Aspen River Pty Ltd respectively) and to employee entitlements. The Chairman noted that significant legal expenditure had been incurred in order to defend the proceeding brought by Mr Halliday.

40. The minutes of meeting noted that Mr Halliday queried the propriety of the sale of the respondent's business to Prahran Laundry, apparently on the grounds that the ANZ Bank may have been the source of the purchaser's funds and a belief that the sale price was much lower than the business was worth.

43. The minutes indicate that at the meeting on 8 November 2001, Mr Van Staveren, as proxy for the ANZ Bank, proposed that the liquidators' remuneration be increased from the $30,000 already approved and paid, by a further $42,000. Mr Halliday did not second that proposal and the meeting was adjourned until 9 November 2001. At the resumed meeting on 9 November 2001, two proxies in favour of the increased remuneration held by the Chairman could not be voted, due to the operation of Regulation 5.6.33 of the Corporations Regulations. The resolution, although supported by the ANZ Bank (which was then owed $4,866,952), thus received the necessary support by value, but did not receive the required support by numbers.[1]

46. The resolution to increase the liquidator's remuneration by $42,000 was therefore not passed at the final creditors' meeting.

49. Correspondence and e-mails sent by Mr Halliday to the liquidators in January 2002 indicate that Mr Halliday's objections to the payment of increased remuneration centred on an assertion or belief that other creditors could rank ahead of the secured creditors, because the secured creditors knew that other creditors remained unpaid prior to the secured creditors' advance of funds. Mr Halliday also required further information to be provided in support of additional remuneration. He expressed criticism that the administration appeared to have run "at a massive loss", that the liquidators did not obtain competitive quotations, appeared to have breached copyright in software and had not acknowledged the responsibility of the respondent to Mr Halliday.

52. Mr Halliday concluded that he would not support the liquidators' claim to additional remuneration, as he was not satisfied on the material provided thus far that they had "acted in accordance with a valid contract of administration and all proper duties of administrators in the circumstances pertaining to Sheldons".

Application pursuant to s.473 of the Act

56. Having failed to secure a resolution increasing the liquidators' remuneration at the final creditors' meeting, the respondent, by originating process filed 12 April 2002, applied to the Court pursuant to s.473(3)(b)(ii) of the Act for the remuneration to be determined in the sum of $42,000. Mr Halliday objected to the approval of the further remuneration at the hearings before the Senior Master. By order made 7 June 2002 the Senior Master fixed the additional remuneration at $42,000. Mr Halliday appealed.

59. The Notice of Appeal dated 13 June 2002 states, inter alia:

"THE APPEAL MATTERS The appellant appeals from the general determination of the Master that unsecured creditors ought not be heard in the application of the Applicants for additional remuneration. The appellant appeals from the determination of the Master that Mr Halliday, (who at all times announced his appearance as a trustee), ought not be heard in the application of the Applicants for additional remuneration. GROUNDS

1. It is contrary to the public interest that creditors not be heard by the Court in matters dealing with the liquidation of corporations in which they have an interest.

2. In determining the extent of the interest of unsecured creditors the Master erred in (a) relying upon material that the Master characterized as `hearsay' and (b) giving undue and inappropriate weight to the `hearsay' material relied upon by the Master and (c) not giving any weight to the affidavit material deposed by Mr Halliday and (d) not testing the material deposed by Mr Lindholm and (e) denying the creditors the opportunity to test the material deposed by Mr Lindholm ..."

65. In the present case, the ANZ Bank, as the first ranking secured creditor of the respondent, has indicated that it is owed $880,000. In submissions, Mr Halliday expressed disagreement with the quantum of $880,000, positing in contrast a possible secured indebtedness of not higher than $500,000. He also objected to the receipt of the letter of Mr Van Staveren of the ANZ Bank asserting an indebtedness of $880,000 as being hearsay. In relation to that objection I note and accept the view expressed in Venetian Nominees Pty Ltd v Conlan[2] (discussed below) that strict observance of the rules of evidence is not ordinarily required in a provisional liquidator's remuneration application. That approach appears equally valid in relation to a liquidator's remuneration application.

68. The total amount now remaining in the respondent's bank account does not exceed $47,642.67. Even on the lowest amount of secured indebtedness to the ANZ Bank conceded by Mr Halliday, there will be no distribution to the unsecured creditors of the respondent. Any competition for the total remaining proceeds would be between the liquidators and the ANZ Bank, which supports the application for the additional remuneration.

71. The fact that Mr Halliday (to the extent to which he is a creditor) and the creditor whom he appears to represent will receive no dividend no matter what the outcome of the present remuneration application, should not disentitle them from making objections or relieve the Court of an obligation to hear them. It would be ironic if the fact that a creditor was unable to make any recovery in insolvency precluded that person from ventilating objections in this context. However, it is a circumstance relevant to determining what weight to give particular objections or whether further inquiry is justified.

Relevant Legislation, Authority and Legal Principles

75. Section 511(1) of the Act provides:

"The liquidator, or any contributory or creditor, may apply to the Court ...

(b) to exercise all or any of the powers that the Court might exercise if the company were being wound up by the Court."

82. By force of s.511(1)(b) of the Act, s.473(3) of the Act applies to the liquidation of the respondent, which, pursuant to s.446A of the Act, is taken to be a voluntary winding up.

85. Section 473(3) of the Act provides:

"A liquidator is entitled to receive such remuneration by way of percentage or otherwise as is determined:

(a) if there is a committee of inspection - by agreement between the liquidator and the committee of inspection; or

(b) if there is no committee of inspection or the liquidator and the committee of inspection fail to agree:

(i) by resolution of the creditors; or

(ii) if no such resolution is passed - by the Court."

92. In the present case, there was no committee of creditors and as set out in paragraph 8 of the affidavit of John Ross Lindholm sworn 29 November 2001, the resolution to increase the liquidators' remuneration by $42,000 was not passed at the final meeting of creditors. The preconditions for a determination by the Court under s.473(3)(b)(ii) were therefore satisfied.

95. There appears to be little reported authority on s.473(3) of the Act. The equivalent provision under the Companies (New South Wales) Code, in similar terms, was considered by McLelland J in Nationwide News Pty Ltd v Samalot Enterprises[3] where his Honour observed that the relevant section

" ... confers on a liquidator a statutory entitlement to remuneration and confers on the Court a statutory power to determine that remuneration, neither of which are dependent upon the continued subsistence of the order appointing the liquidator but only upon the liquidator's status as such."[4]

99. In Re D.S. Millard & Son Pty Ltd,[5] Young J determined an application by a liquidator pursuant to s.473(3)(b)(ii) of the Corporations Law for remuneration. His Honour noted that

"Judges are not really qualified to work out remuneration. If a judge is asked to do so, it may well be that, in the normal course, he will either refer it to the registrar for advice or get independent evidence as to the reasonableness of the remuneration. However, in this case, the only person affected, the sole shareholder, has consented to the amount which the liquidator claims. Accordingly, I will make an order in that amount."[6]

103. In Re Solfire Pty Ltd [No. 2][7], Shepherdson J considered, inter alia, an application by the shareholders of a company in liquidation to review the remuneration of a liquidator determined by a resolution of creditors under s.473(3)(b)(i) of the Corporations Law pursuant to s.473(6) of the Corporations Law. His Honour noted that there was no evidence to suggest that at the relevant creditors' meeting the creditors were presented with any detail beyond the "one line" or "lump figure ... ".[8] His Honour stated that "creditors ... must receive in advance of a creditors meeting sufficient detail of the remuneration claimed, to enable the creditors to make a properly informed decision on the reasonableness or otherwise of the remuneration. In my view, it is only when creditors are so informed that they are capable of considering and if thought fit, passing a resolution pursuant to s.473(3)(b)(i)".[9]

106. In relation to the application by the shareholders to review the liquidator's remuneration, Shepherdson J noted that the material before him gave no indication of how the liquidator's remuneration had been calculated. He considered that a liquidator seeking to have remuneration determined by the Court "should prepare a document not dissimilar in form to a Bill of Costs in taxable form provided by solicitors to clients".[10] The detail contemplated by Shepherdson J for such a document was the same as that he considered appropriate for an application by a provisional liquidator. That is, "he [the liquidator] should identify the person or persons and the grade or grades of the person or persons engaged in the particular task concerning the provisional liquidation, he should identify that task and dates on which time was spent on it, the amount of time spent on it and he should identify the relevant rate, according to the grade of the person or persons performing the work".[11]

109. Although it was not crucial to his Honour's observations on the nature of the material to be provided to the Court or to the creditors' meeting, in Re Solfire the relevant company was apparently not insolvent. The applicant shareholders seeking a review of remuneration, in contrast to the present case, thus had "a real and genuine interest in seeing that the liquidator and provisional liquidators are paid what they are lawfully entitled to ... and no more".[12]

112. Venetian Nominees Pty Ltd v Conlan,[13] a decision of the Full Court of the Supreme Court of Western Australia, involved an appeal from a Master's approval of a provisional liquidator's claim for remuneration pursuant to s.473. Although the case concerned the remuneration claim of a provisional liquidator, in my opinion, the approach adopted by the Full Court applies with equal validity to a claim by a liquidator.

115. The propositions enunciated in Venetian Nominees which I consider applicable to a liquidator's claim pursuant to s.473(3) of the Act include the following:

(a) The procedure for the determination is a summary one for fixing costs of an officer of the court as part of its supervisory function, in which strict observance of the rules of evidence is not ordinarily required.

(b) The onus is on the liquidator to establish that the remuneration claimed is fair and reasonable.

(c) The function of the court is to make an independent determination, based on the material proffered, of whether the remuneration claimed is fair and reasonable.

(d) If the liquidator establishes a prima facie case on the basis of the proffered material, which may include evidence which would not be admissible pursuant to strict observance of the rules of evidence, the court should then consider the validity of any objections.

(e) The mere listing of the persons who performed the work, the hours worked and the amounts claimed may be insufficient for the court to reach a determination. Ordinarily, the liquidator will provide "a statement of account reflecting in the appropriate itemised form, details of the work done, the identity of the persons who did the work, the time taken for doing the work, and the remuneration claimed accordingly."[14]

(f) the statement of account should be verified by affidavit.[15]

121. In my opinion, the approach of the Full Court of the Supreme Court of Western Australia in Venetian Nominees, in rejecting an absolute rule in detailed terms for the statement of account to be provided by a provisional liquidator, is equally applicable to the case of a liquidator. More or less particularised statements may be appropriate in different cases, and "every case depends on its own circumstances".[16] I agree with the Full Court's articulation of the overriding principle in this context, namely, that "sufficient information must be provided to the court to enable it to perform its function" under s.473(3)(b)(ii).[17]

124. In GIS Electrical Pty Ltd v Melsom[18] the plaintiff sought an enquiry into and review of the defendant's fees and disbursements claimed in relation to acting as administrators and liquidators. The plaintiff complained of the allegedly high level of remuneration charged by the administrators and liquidators and the manner of approval of the remuneration at creditors' meetings.

127. Master Bredmeyer, in reviewing the remuneration, applied, with required adaptations, the principles of Venetian Nominees[19] and Re Solfire[20]. The Master noted that, in contrast to Re Solfire, in the case before him the creditors had received more detailed information than the one-page summary given to creditors in Re Solfire. Further, in contrast to Re Solfire, where the applicants for a review were shareholders, Master Bredmeyer observed that "the plaintiff is an unsecured creditor and even if this review succeeds, the plaintiff is unlikely to get anything. Any money ordered to be refunded from the administrators' remuneration will go to the secured creditor, the Commonwealth Bank of Australia. The Commonwealth Bank is owed more than $2million. The Bank does not support this application. The Bank voted at the various creditors' meetings to approve the administrators' fee ... The present exercise is academic. This plaintiff has not paid the administrators' fees. They have been paid, in effect, by the Bank. This plaintiff will not gain if the administrators' fees are reduced by the court."[21]

131. As this is an appeal pursuant to Rule 77.05(7) of the Supreme Court Rules, it operates as a hearing. By Rule 77.05(7)(b), any material not relied upon before the Master may be relied upon only if special leave is granted. In addition to the material relied upon before the Master, pursuant to special leave, the appellant relied upon the submissions dated 30 July 2002 and the material appended thereto.

135. At the initial hearing of the application before Senior Master Mahony on 3 May 2002 the respondent relied on the affidavits of John Ross Lindholm sworn 29 November 2001, 21 February 2002, 1 May 2002, 16 May 2002 and the exhibits thereto. On appeal, pursuant to special leave, the respondent also relied upon the affidavit of Marelda Clement Hibberd sworn 30 July 2002.

138. Exhibit "JRL 9" to the affidavit of John Ross Lindholm sworn 1 May 2002 is a computer print out providing a list of dates, nominated personnel and levels, job descriptions and amounts for work done in respect of the respondent from 1 July 1999 to 30 June 2000.

141. Exhibit "JRL 7" to the affidavit of John Ross Lindholm sworn 21 February 2002 is also a computer print out, providing a list of dates, nominated personnel and levels, job descriptions and amounts for work done in relation to the respondent for the period 1 July 2001 to 31 January 2002. Those exhibits do not constitute a statement in the form contemplated in Venetian Nominees for the material which a liquidator would ordinarily provide_._ At the hearing on 3 May 2002, the Senior Master adjourned the matter in order to enable, inter alia, the liquidators "to supplement their evidence appropriately". By the affidavit of John Ross Lindholm sworn 16 May 2002, the nature of the work carried out from 15 May 2000 to the date of swearing the affidavit is summarised for each staff member, with that person's charge rate, level or position, hourly rates and total hours worked, together with full descriptions of the work performed.

144. In paragraph 4 of his affidavit of 16 May 2002, Mr Lindholm further deposed that the work schedules were true and that the work undertaken was necessary for completing the winding up of the company.

147. The sum of $42,000 claimed as additional remuneration is not set out in the schedules as a final total figure to which the individual amounts payable for work done in relation to the respondent add up. That is because the schedules set out all the work performed by the liquidators and their staff for the period from 15 May 2000 to 16 May 2002 but the liquidators, in the circumstances of the present case, including the limited sum remaining, do not make any claim for remuneration for work carried out after 31 October 2001.

150. The sum of $42,000 accordingly reflects the amount of $42,541.64 "in progress" set out in Exhibit "JRL 3".

153. Mr Halliday, at the hearing on 1 August 2002, "accepted the arithmetic" of how the $42,000 is calculated and the issue is not in dispute. Further, in paragraph 5 of his affidavit sworn 29 May 2002, Mr Halliday deposed "I accept that their time records and dates and times of attendances by themselves and their immediate staff are more likely than not to be reasonably accurate for the purposes of quantification of the resources used by them."

156. I accept Mr Woodward's submission that the material adduced by the respondent in this case satisfies the requirements of Rule 9.4(7) of the Corporations Rules. It also satisfies the basic principle of Venetian Nominees, in that there is sufficient information provided for the Court to determine that the amounts claimed are fair and reasonable. The material sets out the person performing the work, the grade or level of the relevant person, the task and dates, time spent on the task and the relevant rate according to the level of the person carrying out the task. It is undisputed that the work was carried out for the purpose of the winding up.

159. I also accept Mr Woodward's submission that in the circumstances of this case, it is appropriate to apply the 1997 IPAA rates.

162. In my opinion, the material establishes a prima facie case that the remuneration claimed is fair and reasonable and should be allowed.

166. In accordance with the approach of the Full Court of the Supreme Court of Western Australia in Venetian Nominees, objections, if any, should next be considered. Mr Halliday does not contend that the "arithmetic" in the schedules adduced by the respondent in support of the remuneration claim is incorrect or that the work described was not in fact performed in order to complete the winding up of the respondent. Further, he expressly resiled from any contention that the liquidators have conducted themselves dishonestly.

169. Some difficulty arises in this case because Mr Halliday, as a litigant in person, did not consistently express his criticisms and concerns in the form of clearly articulated objections. A consideration of his affidavits and oral submissions indicates that Mr Halliday's principal concerns, whether formulated as objections or not, include the following:

(a) Mr Halliday believed that the information presented creditors at the first meeting and second meeting of creditors was incomplete or inaccurate.[22]

(b) Mr Halliday believed that some activities of the liquidators were a misuse of resources and a duplication of costs.[23]

(c) Mr Halliday believed that the respondent's indebtedness to the ANZ was less than $500,000.[24]

(d) The ANZ Bank did not provide information to other creditors at creditors' meetings.[25]

(e) Payments to the respondent's managing director appeared to Mr Halliday to be excessive.[26]

(f) The liquidators sought approval of only $30,000 remuneration at the second meeting of creditors.[27]

(g) The liquidators did not attempt to obtain information from Mr Halliday or Ms Chong concerning the affairs of the company.[28]

(h) Other creditors have informed Mr Halliday of matters which cause him to conclude that the liquidators have incurred unnecessary and excessive legal costs in determining creditors claims.[29]

(i) The liquidators have failed to set aside the Aspen sale to the respondent and Mr Halliday disagrees with their handling of Aspen's claim.[30]

(j) Mr Halliday believes that he had more knowledge of the financial affairs of the respondent and companies related to it, which are not party to the present proceeding, "than any other person" and believes that the group had a trade-on value in excess of $9 million.[31]

(k) Mr Halliday was dissatisfied with the amount for which assets of the respondent were realised.

(l) Mr Halliday alleges that the liquidators' material shows "massive expenditure ... far in excess of that previously required to manage the affairs of the Sheldons group" and that they "incurred a significant trading loss" and "failed to use the most cost effective resources" while trading.[32]

(m) Mr Halliday, on the basis of his "knowledge of ... the ANZ and Aspen River transactions" and his "knowledge of the laws on equity and trusts" deposes that the secured creditors were not "entitled to stand ahead of the other creditors in the sums as set out by the Plaintiffs".[33]

(n) Mr Halliday deposes that more than one creditor has been paid out in full and that he has "received more second hand reports from other creditors that a number of creditors have received preferential treatment".[34]

(o) Mr Halliday further deposes as to his correspondence with creditors concerning dissatisfaction with the cost of liquidation.[35]

(p) In oral submissions, Mr Halliday contended that the liquidators' claim to additional remuneration should be disallowed because it exceeds their original estimate and because material in the form contemplated in Re Solfire was not put before the meeting of creditors.

189. Save for Mr Halliday in his various capacities, no creditor appeared to object to the application for additional remuneration. I am satisfied that none of the objections or issues raised by Mr Halliday, by affidavit or in submission, displaces the liquidators' prima facie entitlement to the additional remuneration sought. It is not disputed that the work was done and that the calculations and details in the supporting schedules are correct. The objections or concerns take the form of unsubstantiated allegations or beliefs, which go to the appellant's disagreement on matters of judgment by the liquidators and dissatisfaction with the amounts realised. The legislation contains a number of avenues providing for inquiry into or complaint concerning the conduct of a liquidator. However, as a general rule, in the absence of fraud or bad faith, the Court will not interfere with the liquidator's exercise of commercial judgment and decisions on the administration of the company's property. As McLelland J in Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd[36] observed:

"[T]he Court, in considering a challenge on commercial grounds to a liquidator's decision must approach the matter on the basis that the liquidator 'is recognised as having both the qualifications and the access to the multiplicity of information which may be necessary in order to make commercial decisions' and, except where bad faith is established, will treat the liquidator's decision as a proper one unless satisfied that he acted 'in a way which no reasonable liquidator should have acted' see Re Mineral Securities Australia Ltd (in liq) [(1971-1973) CLC 40-076 pp 27588-9]."[37]

193. While demonstrated conflict of interest or breach of duty by a liquidator may in certain circumstances disentitle him or her to remuneration[38] the material adduced by Mr Halliday in the present case does not provide evidence of such conflicts or breaches of duty.

196. I reject Mr Halliday's submissions that the liquidators should be bound by an initial estimate of remuneration of $30,000. The amount initially approved was expressed to be subject to upward revision by the resolution of creditors. In any event, such an inflexible approach would not allow effective response to unforeseen contingencies. In the present case, it would appear that litigation instituted by Mr Halliday challenging the liquidator's refusal to allow him to vote other than as a contingent creditor for $1.00, which was subsequently dismissed as an abuse of process, accounted for a significant proportion of the additional claims.

199. I also reject the submission that the failure of the liquidator to present material to a creditors' meeting in the detailed form contemplated by Shepherdson J in Re Solfire should preclude success on a subsequent application to the Court pursuant to s.473(3)(b)(ii) of the Act. The application to the Court is an alternative means of approval of remuneration, which is available pursuant to statute in the absence of approval by creditors or a committee of creditors. In any event, in my opinion, the more flexible approach to the degree of detail endorsed by the Full Court of the Supreme Court of Western Australia in Venetian Nominees is preferable in this context.

202. The frequent failure of unsecured creditors to recover any funds on insolvency has long been the subject of judicial comment and regret. The frustration of such creditors is understandable.

205. Although I have accordingly considered Mr Halliday's objections or concerns in detail, I agree with the learned Senior Master's observation that, given the shortfall in the amount due to the first ranking secured creditor, the appellant has no real interest in the outcome of the remuneration application. The respondent has adduced material which provides the appropriate level of detail. No criticism is made of its calculations or of the liquidators' probity. The first ranking secured creditor, which does have a real interest in the outcome of the application, supports the claim for additional remuneration.

[1] Corporations Regulations, Reg 5.6.21(2)

[2] (1998) 16 ACLC 1653

[3] (1986) 4 ACLC 386

[5] (1997) 24 ACSR 71

[7] (1998) 16 ACLC 1156

[13] (1998) 16 ACLC 1653

[18] [2001] WASC 314 (16 November 2001)

[21] [2001] WASC 314 (16 November 2001) at 23

[22] Affidavit of P. Halliday sworn 29 May 2002, para 4, subparas 4-9 and 17-22

[23] Affidavit of P. Halliday sworn 29 May 2002, para 4, subparas 13-15

[24] Affidavit of P. Halliday sworn 29 May 2002, para 4, subparas 23-25

[25] Affidavit of P. Halliday sworn 29 May 2002, para 4, subpara 27

[26] Affidavit of P. Halliday sworn 29 May 2002, para 4, subpara 30

[27] Affidavit of P. Halliday sworn 29 May 2002, para 4, subparas 31-32

[28] Affidavit of P. Halliday sworn 29 May 2002, para 4, subpara 34

[29] Affidavit of P. Halliday sworn 29 May 2002, para 4, subpara 42

[30] Affidavit of P. Halliday sworn 29 May 2002, para 4, subpara 45

[31] Affidavit of P. Halliday sworn 3 May 2002, paras 13, 16

[32] Affidavit of P. Halliday sworn 3 May 2002

[33] Affidavit of P. Halliday sworn 3 May 2002, para 19

[34] Affidavit of P. Halliday sworn 3 May 2002, para 20

[35] Affidavit of P. Halliday sworn 7 June 2002

[36] (1989) 19 NSWLR 434; 8 ACLC 39

[38] Re Kal Assay Southern Cross Pty Ltd (in liq) (1992) 9 ACSR 245; 10 ACLC 1627