Australian Securities and Investments Commission v Rowena Nominees Pty Ltd

Australian Securities and Investments Commission v Rowena Nominees Pty Ltd - [2006] WASC 36 - WASC 2006 case summary — Zoe

[51]

As a starting point, in our view, the onus is on the provisional liquidator to establish that the remuneration claimed is fair and reasonable. It is the function of the court to determine the remuneration by considering the material proffered and bringing an independent mind to bear on the relevant issues. The initial task is to consider whether, prima facie, the provisional liquidator has made out a case for the determination of the amounts claimed. The fact that there may be no person who objects to the claim, or any part of the supporting testimony, or that objectors advance unsustainable arguments, or do not properly formulate their objections, cannot detract from the court's duty in this respect. The judicial officer conducting an inquiry under s 473(2) is required to make an independent determination of the remuneration claimed, even if there is an absence of objectors, or appropriately detailed objections, or objections advanced on arguable grounds. Of course, once the court is satisfied that the provisional liquidator has made out a prima facie case that the remuneration claimed should be allowed, the absence or inappropriateness of points taken by objectors becomes relevant.

Should the provisional liquidator fail to provide adequate evidentiary material to enable the court to determine whether the amounts claimed are fair and reasonable, no order should be made: Re Solfire Pty Ltd (In liq) (No 2). Thus, for example, the mere listing of the persons who performed the work, the hours worked by each, and the amounts claimed, may well be insufficient material for the court to come to a proper decision: Re Reiter Bros Exploratory Drilling Pty Ltd.

Ordinarily, to commence the proceedings, the provisional liquidator will provide the court with a statement of account reflecting in 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. The statement of account should also reflect in appropriately itemised form the expenses incurred by the provisional liquidator, accompanied where necessary by voucher proof. Sufficient detail should be provided to enable the court to determine whether the disbursements were reasonably incurred and that the amounts claimed are reasonable.

The statement of account should be verified by affidavit. When the remuneration claimed involves work carried out by the provisional liquidator and his staff, the verifying affidavit need state merely that the work described in the statement of account was done by the provisional liquidator or under his personal supervision, and that from personal knowledge or from the records kept by the provisional liquidator or his firm, or from some other appropriate source, he believes that the information contained in the statement of account is correct. When disbursements are claimed, the affidavit should verify that they were incurred and, if necessary, why they needed to be incurred.

In Re Solfire Pty Ltd (In liq) (No 2), Shepherdson J said (at 1,164):

[63]

(a) ensuring compliance with the relevant provisions of the Corporations Act;

(b) notifying all known unsecured creditors (including trust creditors) of my appointment and matters arising generally in connection with the liquidation of the Company;

(c) identifying, securing and preserving the assets of the Company;

(d) arranging appropriate insurance policies with respect to the Company's assets;

(e) commissioning independent valuations of the Company's land and buildings;

(f) corresponding with the directors' trustee in bankruptcy;

(g) investigating the financial history of the Company;

(h) presenting a report to this Honourable Court in accordance with the Orders of this Honourable Court for my appointment as Liquidator;

(i) causing tax returns to be completed;

(j) negotiating with the Australian Taxation Office in respect of taxation treatment of interest earned on trust funds;

(k) implementing strategies to realise the assets of the Company and assets held in trust by the Company;

(l) attending to written and telephone enquiries from the creditors of the Company;

(m) causing the Company to obtain interim injunctions to prevent dealings in connection with land in which the Company had been involved in procuring loans;

(n) defending various Court applications brought against the Company by creditors of the Company and other interested parties;

(o) making an application to this Honourable Court in CIV 2076 of 1999 for directions, in my capacity as Liquidator of Oakleigh, concerning, inter alia, whether mortgages in favour of certain mortgagee investors in respect of land held by Hardie Developments Pty Ltd constituted an indefeasible interest on the part of those particular mortgagee investors;

(p) following the decision of this Honourable Court in CIV 2076 of 2076 [sic] on 3 August 2001, distributing proceeds from the sale of various parcels of land to various registered mortgagees;

(q) applying to this Honourable Court for leave to fund my activities as Liquidator of the Company from trust monies held by the Company;

(r) convening and holding meetings of creditors of the Company on 4 November 1999 and 21 November 2003;

(s) preparing and distributing various circulars to creditors of the Company;

(t) preparing and distributing reports to creditors in July 2001, July 2002, June 2003 and November 2003; and

(u) attending to general administrative and secretarial duties."

[70]

(d) To facilitate and assist the proper registration of investors' interests in mortgaged property;

(e) To determine the quantum of the trust account's financial interest in advances to borrowers whether or not supported by a registered mortgage (eg Sandgate Corporation Pty Ltd);

(f) To introduce and maintain a certificate of title register for all real property certificates of title in the custody of Rowena;

(g) To determine the trust account's financial interest in mortgages as a consequence of Rowena's funding of interest payments (ie 'cash flow guarantee' policy) due but not paid from non-performing mortgages;

(h) To protect the trust account's interest in mortgages, including the registration of caveats;

(i) To produce circulars to borrowers and investors from time to time;

(j) To convene and conduct information meetings for borrowers and investors from time to time;

(k) To maintain Rowena's existing agency contracts with investors and the determination of the contracts where considered appropriate;

(l) To maintain the trust account during the period of the Supervisor's appointment, including the deposit of monies to the trust account bank account, to maintain accounting records and the orderly disbursement of monies from the trust account to the extent permitted by section 73(4)(a) of the Act;

(m) To update and maintain existing client files, including the filing of all documents in appropriate files, the answering of all outstanding and current correspondence, the documenting and storage of records not required on a day to day basis;

(n) To meet and obtain information from various parties (eg former employees, borrowers, investors etc) to the extent necessary to conclude or dispose of outstanding matters;

(o) To discharge statutory obligations for the production of trust account information and liaise with statutory bodies in this respect;

(p) To receive and respond to telephone calls and correspondence from investors and their solicitors; and

(q) To carry out such other duties and exercise such other powers as may be conferred by the Act or an order of the Court and agreed on between the Board and the Supervisor from time to time.

('the Services')

2. The Services shall not include any work that is solely referable to or reasonably incidental to any of the duties of the liquidator of Rowena or Oakleigh Acquisitions Pty Ltd (in liquidation) ('Oakleigh')."

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (93 paragraphs)

Australian Securities and Investments Commission v Rowena Nominees Pty Ltd (In Liq) (Receiver and Manager Appointed) (Supervisor Appointed) [2006] WASC 36 (8 March 2006)

Parties

Legislation Cited (2)

Cases Cited (6)