Cherry v Boultbee

Applicable principles

1. Pursuant to s 60-5 of the IPS, the Liquidator is entitled to receive remuneration for necessary work properly performed in the external administration of the Company in accordance with remuneration determinations made under s 60-10 by resolution of the creditors or a committee of inspection (if any) or made by the Court.
2. Section 60-12 of the IPS requires the Court to have regard to whether the remuneration is reasonable, taking into account the following matters: "(a) the extent to which the work by the external administrator was necessary and properly performed; (b) the extent to which the work likely to be performed by the external administrator is likely to be necessary and properly performed; (c) the period during which the work was, or is likely to be, performed by the external administrator; (d) the quality of the work performed, or likely to be performed, by the external administrator; (e) the complexity (or otherwise) of the work performed, or likely to be performed, by the external administrator; (f) the extent (if any) to which the external administrator was, or is likely to be, required to deal with extraordinary issues; (g) the extent (if any) to which the external 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 external administrator; (i) the number, attributes and conduct, or the likely number, attributes and conduct, of the creditors; (j) if the remuneration is worked out wholly or partly on a time‑cost basis - the time properly taken, or likely to be properly taken, by the external administrator in performing the work; (k) whether the external administrator was, or is likely to be, required to deal with one or more controllers, or one or more managing controllers; (l) if: (i) a review has been carried out under Subdivision C of Division 90 (review by another registered liquidator) into a matter that relates to the external administration; and (ii) the matter is, or includes, remuneration of the external administrator; the contents of the report on the review that relate to that matter; (m) any other relevant matters."
3. The proportionality of the work done compared to the size of the Company's assets is an important consideration in determining reasonableness. The work done must be proportionate to the difficulty and importance of the task in the context in which it needed to be performed. The percentage that the total remuneration constitutes of the value of assets realised by the Liquidator therefore provides a measure of objective testing of the reasonableness of the remuneration claimed. However, the Court does not focus on proportionality in this sense alone in determining the reasonableness or otherwise of the remuneration. It is still necessary to consider the work actually done and whether the amount charged for it was proportionate to the difficulty and complexity of the tasks performed: Sanderson as Liquidator of Sakr Nominees Pty Ltd (in liq) v Sakr (2017) 93 NSWLR 459; [2017] NSWCA 38 at [54]-[60] (Bathurst CJ, with the concurrence of the other members of the Court of Appeal); In the matter of Fearndale Holdings Pty Ltd (admin apptd) (recs & mgrs apptd) [2020] NSWSC 901 at [32]-[38]. As Black J, pointed out in the latter case (at [38], citations omitted): "It is not the Court's role, as constituted by a judge in an application of this kind, to undertake a line by line review of the relevant narratives in an insolvency practitioner's billing record, but the Court will generally review the relevant narratives in a broad way in order to satisfy itself that they support the other evidence led in respect of the claimed remuneration."
4. As noted in [9] above, the Liquidator's application under s 60-10 of the IPS is for determination specifying the amount of remuneration that he is entitled to receive for the period since his appointment on 5 June 2019 until 31 August 2020. It is relevant to consider evidence of the work done by the Liquidator's predecessor, Mr Iannuzzi, prior to 5 June 2019 in addition to the evidence of the work performed by the Liquidator and his staff in the period after the Liquidator's appointment. The work already done by Mr Iannuzzi provides part of the context in which the reasonableness of the amount of remuneration claimed by the Liquidator in respect of the period after 5 June 2019 falls to be assessed.

Orders sought and summary of relevant evidence

1. In his amended interlocutory process, the Liquidator seeks: "4 Order approving the remuneration of Mr Pirina for the period 5 June 2019 to 31 August 2020 in the fixed amount of $31,446 plus GST. 5 Order approving the internal disbursements of Mr Pirina for the period from 5 June 2019 to 31 August 2020 in the amount of $382 plus GST. 6 Order approving the internal disbursements of Mr Pirina up until the date of deregistration in the amount of $118 plus GST. 7 The costs of and incidental to this interlocutory process be paid from the assets of the company fixed at $25,000 plus GST and a $3,175 application fee (GST exempt). Alternatively, on an indemnity basis or as determined by the Court."
2. Although the orders sought relate to remuneration during the period from 5 June 2019 (being the date of Mr Pirina's appointment as Liquidator) to 31 August 2020, it is my understanding that the Liquidator does not intend to seek remuneration in respect of the period after 31 August 2020 and it is for that reason that the Liquidator has made his remuneration application and his application for special leave to distribute the surplus in one interlocutory process. I proceed to determine the remuneration application on that basis.
3. Following his appointment as liquidator on 24 April 2019, Mr Iannuzzi issued a first report to creditors on 10 May 2019. By that time, Mr Iannuzzi had: 1. received payment of $51,315 held by the Company in an account with Australia and New Zealand Banking Group Limited (ANZ), requested transfer of the balance of the Company's term deposits with ANZ totalling $300,000 and requested bank statements for the Company's accounts with ANZ; 2. undertaken searches to identify any other bank accounts of the Company, and any real property or motor vehicles owned by the Company; 3. ascertained that there were no registered security interests against the Company; 4. made demands on the directors for production of the Company's books and records, a report on the Company's affairs, activities and property and a completed director's questionnaire; 5. obtained background information about the nature of the Company's business and investigated its trading history; 6. ascertained that the Company had commenced operating an iron ore mining and/or exploration business in about mid-2012 and ceased trading in December 2017, at which time the Company had surrendered its exploration licences; 7. ascertained that the sole creditor of the company was its accountant, Baker & Company, which was owed $1,100; and 8. ascertained that Tianda Hong Kong had applied to the Court for orders winding up the Company because it had been unable to reach agreement with Gansu on the distribution of the Company's surplus funds.
4. Charging on a time-cost basis, Mr Iannuzzi's firm had incurred fees of $4,934 (plus GST) in the period up to 5 May 2019. The total amount of those fees was apportioned between the following categories of work (all figures excluding GST): 1. administration - $2,876; 2. assets - $420.00; and 3. investigations - $1,638.00.
5. Mr Iannuzzi estimated that he and his firm would incur further fees of approximately $25,066 (excluding GST) in the period from 6 May 2019 to completion of the liquidation. That estimate was apportioned between categories of work as follows (all figures excluding GST): 1. administration - $4,000; 2. assets - $6,066; 3. creditors - $5,000; 4. investigations - $6,000; and 5. dividend - $4,000.
6. On 29 May 2019, Mr Iannuzzi issued a notice of intention to declare first and final dividend. The notice required creditors to formally prove debts or claims by 18 June 2019. This notice did not result in any further creditors of the Company submitting proofs of debts or claims.
7. A meeting of creditors was held on 5 June 2019. The only persons in attendance were two members of Mr Iannuzzi's staff. One of those persons was authorised by Mr Iannuzzi to act as chairperson of the meeting and to vote in his place as proxy for the Company's sole creditor, which had given Mr Iannuzzi a proxy directing him to vote in favour of proposed resolutions removing Mr Iannuzzi and appointing Mr Pirina as liquidator of the Company. Mr Pirina's consent to act as liquidator and declaration of independence, relevant relationships and indemnities was tabled. Both resolutions were carried.
8. On 22 July 2019, the Liquidator made a report to creditors pursuant to r 70-40 of the Insolvency Practice Rules (Corporations) 2016 (Cth).
9. The report disclosed that, since Mr Iannuzzi's report on 10 May 2019, Mr Iannuzzi and the Liquidator had: 1. obtained and lodged with the Court a report from the Company's directors as to the affairs of the Company, in accordance with s 475 of the Corporations Act; 2. liaised with the Company's accountant, Baker & Co, to obtain information about the Company's history, trading position and assets; 3. obtained the Company's books and records from Baker & Co, and ascertained that the Company had complied with its obligations under s 286 of the Corporations Act; 4. engaged Baker & Co to prepare the Company's outstanding business activity statements and taxation returns as at the date of the winding up. The report noted that outstanding income tax returns and business activity statements related to the period after the Company had ceased trading, the Australian Taxation Office (ATO) had advised that there was presently no claim in the liquidation, and there was unlikely to be a claim; 5. corresponded with the ATO concerning the Company's taxation affairs and requested a taxation clearance in order to proceed with a first and final distribution to unsecured creditors; 6. received $300,222 from the Company's ANZ term deposits (in addition to the sum of $51,686 that had already been received from the Company's other account with ANZ at the time of Mr Iannuzzi's report dated 10 May 2019); 7. obtained and reviewed the Company's bank statements for potential voidable transactions, and concluded that there did not appear to be any voidable transactions; 8. conducted an investigation into potential insolvent trading, and concluded that the Company did not appear to have traded whilst insolvent; and 9. prepared and lodged a report with ASIC pursuant to s 533 of the Corporations Act (without being obliged to do so).
10. The report stated that the Liquidator was aware of only one unsecured creditor, namely Baker & Company in the amount of $1,100.
11. Despite this, and despite noting that Gansu (not the Company) had been ordered to pay Tianda Hong Kong's costs of the winding up proceedings, the report stated an intention to distribute funds to Tianda Hong Kong in respect of their costs of those proceedings before finalising the winding up.
12. On 29 July 2019, the Liquidator issued a notice of declaration of dividend for unsecured creditors of the Company. The notice was addressed to the sole unsecured creditor, Baker & Company, and advised that its debt of $1,100 would be paid in full with interest. On the same date, that dividend was paid to Baker & Company in the sum of $1,123.
13. On 10 September 2019, the Liquidator settled the list of contributories as comprising Tianda Hong Kong (with 140,000 shares and a paid up amount of $140,000) and Gansu (with 60,000 shares and a paid up amount of $60,000).
14. On 30 December 2019, the costs payable by Gansu to Tianda Hong Kong in respect of the winding up application pursuant to the orders made by Black J on 24 April 2019 were assessed in the sum of $36,879.96, plus a further sum of $2,011.62 payable by Gansu in respect of the costs incurred by the costs assessor and Manager, Costs Assessment.
15. It is clear from the tax invoice annexed to Mr Lu's affidavit affirmed on 1 November 2020 and the Liquidator's supplementary remuneration affidavit that the Liquidator's staff did some work, and his solicitors did considerable work, in the period after 30 December 2019 directed to facilitating or ensuring payment of Tianda Hong Kong's costs as assessed. This work was done notwithstanding that it was Gansu (and not the Company) that was liable to pay those costs under the orders made by Black J.
16. In his affidavit affirmed on 16 October 2020, the Liquidator deposed that Tianda Hong Kong proposed a "tripartite deed" to address the question of the payment of Tianda Hong Kong's costs of the winding up application, but that Gansu had declined to execute the proposed deed. In his affidavit affirmed on 1 November 2020, Mr Lu refers to this deed as a "Deed of Settlement and Release". Mr Lu says that it was proposed on or about 8 April 2020 and that negotiations continued throughout May 2020. By late May 2020, it appeared that Gansu would sign the deed, but this did not occur and Gansu confirmed in late August 2020 that it would not sign the deed. The terms of the proposed deed were not in evidence.
17. During the negotiations referred to above, the Liquidator made a payment of $36,879.96 to Tianda Hong Kong on 15 May 2020 for its assessed costs of the winding up application. This payment was made out of the Company's funds.
18. By reason of s 466(1) of the Corporations Act, Tianda Hong Kong was required to bear its own costs of the winding up application until a liquidator was appointed. Section 466(2) provides (my emphasis): "The liquidator must, unless the Court orders otherwise, reimburse the applicant out of the property of the company the taxed costs incurred by the applicant in any such proceedings".
19. In his affidavit affirmed on 16 October 2020, the Liquidator referred to the payment made on 15 May 2020 and deposed: "… I caused this payment to be made based upon my understanding of the operation of s.466(2) and 556(1)(b) of the [Corporations Act 2001 (Cth)]. This payment was made out of the common pool that is available for distribution to contributories. … I now understand that, due to Black J's cost order of 24 April 2019, this payment of $36,879.96 should not have been made out of the common pool and that said $36,879.96 should have remained in the common pool for distribution on a 70/30 basis to contributories."
20. The Liquidator prepared an eight page "remuneration report" dated 16 October 2020 setting out "my opinion on the costs and expenses incurred and to be incurred, work performed and to be performed by my office .. the basis of the calculation and the hourly rates charged". The report was annexed to the Liquidator's affidavit affirmed on 16 October 2020. As the Company's sole creditor had been paid in full on 29 July 2019, it is clear that the sole purpose of the remuneration report was to support the Liquidator's application to the Court.
21. Schedule 3 to the remuneration report sets out a list of hourly rates charged by the personnel of different levels of seniority with the Liquidator's firm.
22. The remuneration report states that Schedules 1 and 2 contain a detailed summary of the tasks undertaken by the Liquidator's firm, based on its computerised time management records, for the period from 5 June 2019 to 31 August 2020.
23. Schedule 1 to the remuneration report is a list of 19 personnel within the Liquidator's firm (including the Liquidator himself) who have recorded time worked in relation to the Company in the period from 5 June 2019 to 31 August 2020 and the fees attributable to each person's time. The fees for the time charged come to the total of $31,446 (excluding GST). Schedule 1 does not include a description of the work performed, save that the time entries and fees are divided into five categories as follows (all figures excluding GST): 1. administration - 57.7 hours, with total fees of $19,134; 2. creditors - 13.4 hours, with total fees of $5,052; 3. dividend - 7.1 hours, with total fees of $2,851; 4. investigations - 12.9 hours with total fees of $4,156; and 5. assets - 0.9 hours with total fees of $253.00.
24. As counsel for the liquidator acknowledged at the hearing on 2 November 2020, Schedule 2 to the remuneration report appears to be a generic list of types of work that may be undertaken within each of the above categories, rather than a list of work said to have been actually performed in the winding up of the Company. That is of no assistance to the Court.
25. In his supplementary remuneration affidavit affirmed on 10 November 2020, the Liquidator divided the total fees and work into six different categories, each of which included work from two or more of the five categories adopted in the earlier remuneration report. The six categories and the total fees referable to each category are (all figures excluding GST): 1. statutory investigations & reporting - $4,827; 2. dealing with creditors - $2,894; 3. dealing with shareholders - $9,674; 4. general administration tasks - $10,169; 5. dealing with the petitioning creditor - $1,580; and 6. dealing with the Macquarie term deposit - $2,302.
26. The total amount of remuneration claimed has not changed.
27. The Liquidator has provided some explanation of the work done in relation to each of the six categories in his supplementary remuneration affidavit and has annexed to that affidavit spreadsheets recording all time entries made within each of the six categories. The Liquidator's explanations and the annexed time records identify the time and fees that relate to payment of Tianda Hong Kong's costs of the winding up application (being the whole of the new category 5) and the proposed tripartite deed (being some entries within the new category 3).
28. Although the preparation of a judgment by reference to the five categories in the remuneration report was well advanced before the Liquidator foreshadowed his application to re-open the remuneration application, it is now appropriate to consider that application by reference to the six categories and the evidence in the Liquidator's supplementary remuneration affidavit. However, that is not to be seen as encouraging liquidators and their legal representatives to approach the presentation of remuneration applications in this inefficient manner in the future.
29. The remuneration of $31,446 (plus GST) in respect which the Liquidator now seeks the Court's determination under s 60-10 of the IPS is in addition to remuneration of $13,429 already received by the Liquidator, as disclosed in the summary of receipts and payments in Schedule 4 to the remuneration report. [1]

Consideration and determination: remuneration

1. The Company had ceased trading before the Liquidator was appointed.
2. The only property dealt with in the winding up has been the Company's funds in bank accounts with one financial institution, in the total sum of $351,908. The Liquidator was able to get these assets in by simply requesting that the funds be transferred to the account maintained by the Liquidator for the purpose of the winding up. All of the funds had been received into that account by the time the Liquidator made his report to creditors on 22 July 2019. Searches of the kind typically performed by liquidators were undertaken in order to confirm that there were no other assets.
3. The Company had no secured creditors, and only one unsecured creditor. The unsecured creditor was the Company's accountant who was owed $1,100. There is no evidence that this debt was the subject of any dispute. The debt was paid in full on 29 July 2019, about eight weeks after the Liquidator was appointed. However, the Liquidator submitted and I accept that work was required to be done to complete outstanding tax returns and business activity statements for the Company and to ascertain any amounts owed to the ATO. Counsel for the Liquidator informed the Court that the time and fees relating to this work are included in the "Creditors" category in the remuneration report.
4. Given the nature of the Company's affairs, assets and creditors, the work involved in the liquidation was not complex and did not involve the Liquidator dealing with extraordinary issues or accepting a higher level of responsibility than is usually the case.
5. The Liquidator's remuneration has been charged on a time basis at hourly rates ranging from $140 - $510. In his supplementary remuneration affidavit, the Liquidator expressed the opinion that the rates charged were in accordance with industry practice. I accept that this is so.
6. As identified in the Liquidator's supplementary remuneration affidavit, the work included in the new category 1 - "Statutory investigations and reporting" - is itemised in 49 time entries in Annexure "B" to that affidavit. Some of those time entries relate to investigation work. Whilst the investigations undertaken by the Liquidator did not reveal any voidable transactions or insolvent trading, it was necessary to undertake some investigation work to reach that conclusion. The majority of the time entries relate to the preparation of statutory reports to creditors and associated administrative tasks.
7. It is clear from reading Annexure "B" together with Schedule 1 to the remuneration report annexed to the Liquidator's 16 October 2020 affidavit that most of the work within the new category 1 was performed by one of the Liquidator's staff who had between 2 and 4 years' experience at the times that the work was performed. His work was reviewed by a more senior member of the Liquidator's staff of between 5 and 7 years' experience and the Liquidator himself reviewed the statutory report to creditors before it was finalised. Administrative tasks were attended to by more junior and less qualified members of the Liquidator's staff. I am satisfied that that the work in the new category 1 was necessary and was properly performed and that the total amount of remuneration to be specified by the Court pursuant to s 60-10 of the IPS should include the sum of $4,827 (plus GST) in respect of this category.
8. The work included in the new category 2 - "Dealing with creditors" - is itemised in 37 time entries in Annexure "C" to the Liquidator's supplementary remuneration affidavit. As with category 1, most of the work in the new category 2 was performed by one of the Liquidator's staff who had between 2 and 4 years' experience at the times that the work was performed, with occasional review by a more senior member of the Liquidator's staff and administrative tasks prepared by administrative staff. As explained in the Liquidator's supplementary remuneration affidavit, the work included submitting outstanding lodgements to the ATO and liaising with the ATO for tax clearance before the dividend to creditor was declared and paid. I am satisfied that that the work in the new category 2 was necessary and was properly performed and that the total amount of remuneration to be specified by the Court pursuant to s 60-10 of the IPS should include the sum of $2,894 (plus GST) in respect of this category.
9. It is convenient to deal next with the new category 4 - "General administration tasks". The work included in this category is itemised in 206 time entries in Annexure "E" to the Liquidator's supplementary remuneration affidavit. Most of the time entries are for small charges and for work done by administrative or junior staff of the Liquidator. Many of the charges relate to routine, periodic tasks, such as correspondence, filing, preparation, review and lodgement of business activity statements and bank reconciliations. Although the total charges in category 4 of $10,169 (plus GST) exceed Mr Iannuzzi's estimated administration fees as at 10 May 2019 of $4,000 for the period from 6 May 2019 until the completion of the winding up, that amount was only an estimate. I am satisfied that that the work in the new category 4 was necessary and was properly performed and that the total amount of remuneration to be specified by the Court pursuant to s 60-10 of the IPS should include the sum of $10,169 (plus GST) in respect of this category.
10. It is convenient to deal next with the new category 6 - "Dealing with the Macquarie term deposit". The work included in this category is itemised in 47 time entries in Annexure "G" to the Liquidator's supplementary remuneration affidavit. After perusing Annexure "G", I am satisfied that the work performed is accurately described in paragraph 42 of the Liquidator's supplementary remuneration affidavit, including monitoring term deposit and interest rates, administrative tasks in relation to bank statements, reconciliations with respect to interest received, correspondence with Macquarie bank concerning partial withdrawals and transfer to the liquidation account in preparation for distribution to contributories and ancillary tasks. I am also satisfied that the work was performed by persons of appropriate seniority within the Liquidator's staff. I am therefore satisfied that that the work in the new category 6 was necessary and was properly performed and that the total amount of remuneration to be specified by the Court pursuant to s 60-10 of the IPS should include the sum of $2,302 (plus GST) in respect of this category.
11. It is necessary to return to: 1. the new category 3 - "Dealing with Shareholders" - which includes charges totalling $9,674 (plus GST), of which $1,494 (plus GST) relate to the tripartite deed as identified in paragraph 26 of the Liquidator's supplementary remuneration affidavit; and 2. the new category 5 - "Dealing with the petitioning creditor" - with charges of $1,580 (plus GST), all of which relate to the payment of Tianda Hong Kong's costs of the winding up application, as acknowledged in paragraphs 33 to 38 of the Liquidator's supplementary remuneration affidavit.
12. Save for the charges in the new category 3 that relate to the tripartite deed, I am satisfied that the charges in that category are for work that was necessary and was properly performed. The work includes communications with contributories as well as the preparation of materials required for the applications to which these reasons for judgment relate. Whilst I was initially hesitant about allowing remuneration for the preparation of the remuneration report that was annexed to the Liquidator's 16 October 2020 affidavit which has been largely superseded by the Liquidator's supplementary remuneration affidavit, the original remuneration report does contain some relevant information concerning hourly rates and the identity and seniority of staff who have performed the work. Moreover, allowing all of the remuneration claimed for the preparation of the 16 October 2020 report is offset by the fact that the Liquidator has not claimed additional remuneration for the preparation of his supplementary remuneration affidavit. The total amount of remuneration to be specified by the Court pursuant to s 60-10 of the IPS should include the sum of $8,180 (plus GST) in respect of new category 3.
13. It remains to consider whether the remuneration to be specified by the Court pursuant to s 60-10 of the IPS should include the sum of $1,494 (plus GST) (plus GST) in respect of new category 3 and the sum of $1,580 (plus GST) in respect of new category 5.
14. In written submissions dated 9 November 2020, the Liquidator's payment of Tianda Hong Kong's costs of the winding up application out of Company funds was described as an honest mistake that was made in a genuine attempt to comply with s 466(2) of the Corporations Act.
15. On the basis of the Liquidator's affidavit affirmed on 16 October 2020 to which I have referred in paragraph [47] above, I accept that the mistake was honest.
16. However, inconsistently with his concession that the payment of those costs out of Company assets was a mistake, the Liquidator then submitted in written submissions dated 9 November 2020 that the payment was consistent with the high priority afforded by s 556(1)(b) of the Corporations Act to the costs of an application for winding up.
17. That submission was withdrawn at the hearing on 27 November 2020. In my opinion, it was appropriately withdrawn.
18. Section 556 sets out the order of priority in which unsecured debts of, and claims against, a company must be paid in the winding up of the company.
19. The costs of a winding up application to which s 556(1)(b) applies are costs that are debts of the company by reason of the operation of s 466 or some other order of the Court that requires the company to pay the costs of the winding up application. Section 556(1)(b) has no application to costs of a winding up application payable by some other person or entity. It does not apply to Tianda Hong Kong's costs of the winding up application that Black J ordered to be paid by Gansu in this case.
20. This conclusion does not undermine the policy behind s 556(1)(b). As Palmer J explained in Expile Pty Limited v Jabb's Excavations Pty Ltd [2004] NSWSC 284 at [56]-[57]: "56 That the costs of the successful applicant for the winding up of a company are given second priority under s.556(1)(b) in the insolvent administration reflects a well established policy of the law that it is in the public interest that insolvent companies be wound up rather than be permitted to trade: see e.g. Re Data Homes Pty Ltd (in liq) [1972] 2 NSWLR 22, at 26. Consistently with that policy, creditors are to be encouraged, rather than discouraged, to undertake the financial burden of proceedings to wind up a company which is insolvent by the consideration that in the winding up the costs of their application will receive high priority for payment. That is not regarded as unfair to other creditors because the applicant creditor is seen as seeking the winding up order, not for his or her exclusive benefit, but for the benefit of the class of creditors of which he or she is a member: In re Crigglestone Coal Company [1906] 2 Ch 327, at 331-2. It is right, therefore, that those who benefit from the financial risk undertaken by one of their number cede priority to the risk-taker for its costs of the risk-taking. 57 The inducement to risk-taking for the general good of creditors held out by s.556(1)(b) is not lightly to be taken away or weakened. As a general rule, therefore, creditors should not be heard to say that a deed of company arrangement should stand simply because its effect will be to deprive a successful applicant for winding up of its costs priority, thereby giving them more than they would receive in a liquidation."
21. The protagonists in the winding up application in this proceeding were not creditors of the Company, but rather its two shareholders. There is nothing inherently or necessarily inconsistent with the policy behind s 556(1)(b) in ordering the shareholder who unsuccessfully opposed the winding up application to pay the successful shareholders' costs, with the result that the company's assets available for distribution to creditors and contributories is not diminished by the amount of those costs. Black J determined that an order requiring the unsuccessful shareholder to pay the costs of the winding up application was the appropriate order in the circumstances of this case.
22. I do not accept that the work done by the Liquidator relating to the costs of the winding up application that were payable by Gansu, and the proposed tripartite deed, was necessary work properly performed in the winding up of the Company. The Company itself had not incurred any costs in the winding up application. The orders made by this Court on 24 April 2019 required Gansu to pay the costs of Tianda Hong Kong. It was a matter for Tianda Hong Kong to pursue with Gansu. It was not necessary for the Liquidator to involve himself in the issue at all. He chose to involve himself in the issue even after being advised by Gansu's lawyer that Gansu would pay the assessed costs to Tianda Hong Kong.
23. The unnecessary work that the Liquidator did resulted in him paying away funds that should have remained as part of the Company's surplus assets for distribution to contributories. The consequences of that payment now need to be addressed in the Liquidator's application for special leave to distribute the surplus.
24. As I have said above, I accept that the Liquidator did this work as a result of an honest mistake. However, the test is not one of honesty or dishonesty, but whether the work was necessary and properly performed: see ss 60-5, 60-10 and 60-12(a) of the IPS.
25. For all of those reasons, there will be an order under s 60-10 of the IPS specifying the amount of the remuneration that the Liquidator is entitled to receive pursuant to s 60-5 of the IPS for work performed in the winding up of the Company during the period from 5 June 2019 to 31 August 2020 as $28,372 (plus GST).
26. I note that the total of $28,372 together with the $13,429 remuneration previously approved by creditors as referred to in [57] above amounts to approximately 11.88% of the Company's assets as at the date of appointment of Mr Iannuzzi as liquidator (being $351,908 held in bank accounts). In my opinion, this confirms that the total remuneration that the liquidator and his predecessor will receive as a result of the order that I will make is reasonable.

Consideration and determination: disbursements

1. The Liquidator's internal disbursements of $382 (plus GST) for the period from 5 June 2019 to 31 August 2020 and $118 (plus GST) for the period from 31 August 2020 until the date of deregistration related to mail, photocopying and printing charges which may include some profit component. In my view, these are the very kind of expenses that are incurred to some degree in any winding up and the overall level of the charges in this case is reasonable. There will therefore be an order approving the internal disbursements of the Liquidator for the period from 5 June 2019 to 31 August 2020 in the amount of $382 (plus GST) and for the period up to the date of deregistration in the amount of $118 (plus GST).

Consideration and determination: costs of the interlocutory process

1. As I have referred to earlier, paragraph 7 of the amended interlocutory process seeks an order in the following terms: "The costs of and incidental to this interlocutory process be paid from the assets of the company fixed at $25,000 plus GST and a $3,175 application fee (GST exempt). Alternatively, on an indemnity basis or as determined by the Court."
2. There is no reason why the Liquidator should not have an order for payment of his costs of and incidental to the interlocutory process from the assets of the Company in a sum specified pursuant to s 98(4)(c) of the Civil Procedure Act.
3. The principles applicable to a gross sum costs order were recently summarised by Black J in Re Beverage Freight Services Pty Ltd [2020] NSWSC 797 at [19]: "…s 98(4) of the Civil Procedure Act 2005 (NSW) relevantly provides that the Court may make an order to the effect that a party to whom costs are to be paid is entitled to a specified gross sum instead of assessed costs. … that power is commonly exercised where costs have been incurred in a lengthy or complex case, but it is not limited to such a case: Simone Starr-Diamond v Talus Diamond (No 4) [2013] NSWSC 811 at [8] . … the power to make a gross sum costs order should only be exercised where the Court considers it can do so fairly between the parties, including achieving an appropriate sum on the materials available to it, and the Court typically applies a discount in assessing costs on a gross sum basis: Ritchie's Uniform Civil Procedure NSW [s 98.65]; Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 . A gross sum costs order may also be made to avoid the expense, delay and aggregation involved in litigation arising out of an assessment: Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738. Where a gross costs order is to be made, the Court is not required to undertake a detailed examination of the kind which would be undertaken in a cost assessment, in determining a gross sum payable, and will apply 'a broad brush' approach: Hadid v Lenfest Communications Inc [2000] FCA 628 at [35]; Harrison v Schipp above at [22]."
4. Mr Lu's affidavit affirmed on 1 November 2020 reveals that the solicitors were first instructed by the Liquidator on 9 May 2019. Between that date and 30 October 2020, the solicitors have performed work to the value of $17,081 (excluding GST), charged on a time-costed basis. The work has been performed by the principal solicitor at the rate of $485 per hour, and by his employed solicitor at the rate of $350 per hour. It is clear from the tax invoice dated 30 October 2020 annexed to Mr Lu's affidavit that this work relates not only to the interlocutory process but also to the issue of the costs of the winding up application incurred by Tianda Hong Kong and payable by Gansu, pursuant to the orders made by Black J, and the proposed tripartite deed. As Mr Lu said in paragraph 14 of his affidavit, the proposed deed was the subject of "numerous rounds of discussion and extensive amendments".
5. At the hearing on 27 November 2020, I identified time entries in the solicitors' invoice annexed to Mr Lu's affidavit of 1 November 2020 that, on the face of the description of the work done, appear to relate solely to the costs of the winding up application and the proposed deed. Counsel for the Liquidator accepted that those time entries do relate to that issue. The amount charged for that work adds up to $5,345 (excluding GST). In my opinion, these charges cannot properly be considered to be costs of or incidental to this interlocutory application for the same reasons that the Liquidator is not entitled to remuneration for work relating to those issues. The amount of $5,345 must therefore be excluded from the order to be made in respect of the Liquidator's costs of this application. However, I am satisfied that it is appropriate to include the balance of the charges described in the invoice dated 30 October 2020 ($11,736, excluding GST) in a gross sum costs order.
6. The tax invoice annexed to Mr Lu's affidavits includes counsel's fees of $2,375 (excluding GST) in relation to the interlocutory process. Counsel's invoices for those fees were also annexed to Mr Lu's affidavit. On the basis of the description of work in counsel's invoices, I accept that those amounts are fees for work relating directly to this interlocutory process.
7. In his affidavit of 1 November 2020, Mr Lu deposed that additional fees of $5,000 (excluding GST) would be incurred for counsel to prepare for and appear at the hearing of the interlocutory process. In my view, that is a reasonable sum for a suitably experienced junior counsel to prepare for and appear at a hearing of an interlocutory process in the Corporations List in this Court in circumstances where the interlocutory process comprises a number of applications.
8. At the hearing on 27 November 2020, counsel for the Liquidator did not adduce evidence of any additional solicitors' fees incurred in the period since the date of the invoice annexed to Mr Lu's 1 November 2020 affidavit, or submit that the Court should include any amount for such costs in the order concerning the costs of the interlocutory application. Counsel for the Liquidator also disavowed any suggestion that an amount additional to the $5,000 that I have referred to immediately above should be allowed on account of counsel's fees to prepare for and appear at the hearing of the interlocutory process, notwithstanding the further hearing on 27 November 2020 and the need for a further hearing to dispose of the Liquidator's applications for a release and for an order for ASIC to deregister the Company. The fact that the application for a gross sum costs order does not include these additional costs offsets the need to make a discount of the kind that the courts typically apply when making a gross sum costs order.
9. For all of the reasons above, I am satisfied that the Liquidator's costs of and incidental to the interlocutory process (as amended on 11 November 2020) should be paid out of the assets of the Company in the amount of $25,485.20 (including GST), comprising: 1. $11,736 (plus GST) for solicitors' costs; 2. $2,375 (plus GST) in respect of counsel's fees for advising; 3. $5,000 (plus GST) in respect of junior counsel's fees for preparation for and appearance at the hearing of the interlocutory process; 4. $1,171 (plus GST), being for disbursements invoiced by the solicitors; 5. $3,175 (GST exempt), being for the application fee.

Application for special leave to distribute the surplus

1. I now turn to the Liquidator's application under s 488(2) of the Corporations Act for special leave to distribute the surplus to the contributories.
2. As Brereton J (as his Honour then was) explained in Re John L Norris Holdings Pty Ltd (in liq) [2013] NSWSC 2005 at [3], the purpose of requiring the Court's special leave to distribute the surplus is largely concerned with ensuring that there is, in fact, a surplus to be distributed, and that proper steps have been taken to ensure that those who might have a claim on it have been notified. The liquidator is expected to demonstrate these matters to assist the Court in determining whether it is appropriate in all the circumstances for the distribution to be made. [2]
3. In relation to the notification steps referred to above, r 7.9 of the Corporations Rules provides that: 1. the affidavit in support of the application must state how the liquidator intends to distribute the surplus; and 2. notice of application in the form of Form 15 must be published in a newspaper circulating in NSW at least 14 days before the date fixed for hearing of application.
4. The affidavit of Hsieh Wai Lim affirmed on 10 November 2020 sets out the steps that have been taken to notify ASIC and the contributories of the application for special leave to distribute the surplus. The Liquidator's affidavit affirmed on 16 October 2020 states how he intends to distribute the surplus by one of two methodologies that I explain below.
5. In this case, there is no evidence of publication of the Form 15 notice 14 days prior to the hearing on 27 November 2020. There was a notice published on 7 November 2020, but that notice specified a hearing date of 16 November 2020. That was the expected hearing date at the time that notice was published. The matter was subsequently adjourned to 27 November 2020 once it became apparent that the further hearing would include the Liquidator's application to adduce further evidence in respect of his remuneration application, and that the further hearing therefore needed to be listed before me.
6. Notices specifying the hearing date of 27 November 2020 were not published until 25 and 26 November 2020.
7. In my view, it is appropriate to exercise the power under r 1.3 of the Corporations Rules to dispense with compliance with the publication requirement in circumstances where a notice was published on 7 November 2020 and any interested person could have ascertained the revised hearing date by making inquiries with the Court, all unsecured creditors have been paid in full and notice of the application has been given to ASIC and to all contributories: see Re Hawden Property Group Pty Ltd (in liq) (supra) at [60].
8. I turn to the substance of the application.
9. In paragraphs 2 and 3 of the amended interlocutory process, the Liquidator seeks: "2. Order pursuant to s 488(2) of the Act and within 21 days of the date of these orders, grant the Applicant special leave to distribute the surplus assets of the Company, being the amount of approximately $246,226.25, to its shareholders Tianda Iron Ore Limited and Gansu Nonferrous Metal Australia Pty Ltd, in accordance with the Form 551 schedule that is annexed to these orders (being Annexure O to the affidavit of Vincent Pirina). 3. In the alternative to Order 2 above, (a) Order pursuant to s 488(2) of the Act and within 21 days of the date of these orders, grant the Applicant special leave to distribute the surplus assets of the Company, being the amount of approximately $246,226.25, to its shareholders Tianda Iron Ore Limited and Gansu Nonferrous Metal Australia Pty Ltd, in accordance with the Form 551 schedule that is annexed to these orders (being Annexure P to the affidavit of Vincent Pirina); and (b) Direct that the plaintiff is justified to pay from the distribution due to Gansu Nonferrous Metal Australia Pty Ltd to Tianda Iron Ore Limited the sum of $27,827.59 within 14 days."
10. The amount of $246,226.25 is the Liquidator's surplus figure, calculated in the following manner as set out in paragraphs 37-40 of his 16 October 2020 affidavit: 1. surplus as at 16 October 2020 of $302,814.20 (although the Liquidator noted that there was a discrepancy between this amount and the amount of $302,904.42 which would result from deducting the amount actually paid to Tianda Hong Kong in respect of its assessed costs of the winding up application from the cash at bank immediately after the distribution to the Company's only creditor); 2. plus receivables totalling $9,227.65 (comprising principally a GST refund due from the ATO); 3. less $65,815.60, comprising: 1. Liquidator's remuneration of $31,446 (plus GST); 2. Liquidator's internal disbursements of $382 (plus GST); 3. Liquidator's legal costs of $25,000 (plus GST); 4. application fee of $3,175 (GST exempt); plus 5. Liquidator's future internal disbursements of $118 (plus GST).
11. After the hearing on 27 November 2020, the Liquidator's legal representatives sent to my Associate a record of the balance of an account held with National Australia Bank in the name of the Company as at 4 December 2020. That balance, which the Liquidator described as the "current surplus balance" is $302,904.42.
12. The method of distribution of the surplus proposed in paragraph 2 of the amended interlocutory process involves a distribution to Tianda Hong Kong of a greater amount per share than the amount per share to be distributed to Gansu. The difference between the two amounts per share has been calculated on the basis that: 1. Tianda Hong Kong is entitled to receive 70% of amount of the surplus estimated by the Liquidator (commensurate with its ownership of 70% of the shares in the Company) plus $27,827.59 (being 70% of Tianda Hong Kong's costs of the winding up application assessed in the amount of $36,879.96 and paid by the Liquidator plus 70% of the costs of the costs assessment assessed in the amount of $2,011.62 but not paid by the Liquidator); and 2. Gansu is entitled to 30% of amount of the surplus estimated by the Liquidator (commensurate with its ownership of 30% of the shares in the Company) less $27,827.59 (calculated in the manner referred to immediately above).
13. The alternative method of distribution of the surplus proposed in paragraph 3 of the amended interlocutory process involves a distribution to each of Tianda Hong Kong and to Gansu of the same amount per share, but on the basis that the Liquidator pays to Tianda Hong Kong the sum of $27,827.59 (calculated as explained above) out of the amount that would otherwise be distributed to Gansu and reduces the payment made to Gansu accordingly.
14. It is not apparent from the evidence why both methodologies take into account the costs of the costs assessment assessed in the amount of $2,011.62 but not paid by the Liquidator. This appears to be an error, which I will address in my calculation of the amount to be distributed to each shareholder below.
15. By proposing these two methodologies, the Liquidator's application for special leave to distribute the surplus incorporates an application under s 90-15(3)(a) determining the question how the surplus should be distributed to the contributories in the circumstances of this case where the Liquidator has erroneously paid the costs of the winding up application to Tianda Hong Kong out of the assets of the Company, and that payment discharges a liability of Gansu.
16. The Court's power under s 90-15(3)(a) extends to the making of orders determining substantive rights, provided that potentially affected parties have a meaningful opportunity to be heard: Re Hawden Property Group Pty Ltd (in liq) (supra) at [7]-[8].
17. In this case, the application and the hearing date has been notified to Tianda Hong Kong and Gansu as I have noted above. Whilst there is no evidence of the attitude of Tianda Hong Kong to the orders sought in paragraphs 2 and 3 of the amended interlocutory process, Gansu has informed the Liquidator that it consents to the Court making orders in terms of paragraph 2 or paragraph 3. Gansu is the shareholder potentially adversely affected by those orders.
18. Apart from the minor error referred to in [107] above and the need to adjust the calculation of the surplus available for distribution to reflect my reasons above in relation to the Liquidator's applications for remuneration, disbursements and legal costs, I am satisfied that either of the Liquidator's two methods of distribution achieves an adjustment as between Tianda Hong Kong and Gansu that will put each shareholder in the position they would have been in if the Liquidator had not paid to Tianda Hong Kong the amount of $36,879.96 in respect of its costs of the winding up application and if Gansu remained liable to pay those costs to directly to Tianda Hong Kong. In circumstances where Gansu has consented to orders in terms of paragraph 2 or 3 of the amended interlocutory process, and my adjustments to the calculations below result in Gansu (and Tianda Hong Kong) receiving a slightly higher amount per share than they would receive under either of the Liquidator's alternative methods of calculating the amount to be distributed to each shareholder, it is not necessary to consider whether the adjustments as between Gansu and Tianda Hong Kong would have been required by the "rule" in Cherry v Boultbee (1839) 4 My & Cr 442: see Re Hawden Property Group Pty Ltd (in liq) (supra) at [36]-[52].
19. Although both contributories are already parties to this proceeding, they have been notified of the orders sought in the amended interlocutory process and the only contributory potentially adversely affected by the orders has communicated its consent to orders that are substantially the same but slightly less favourable to that contributory, it is appropriate that both contributories be joined as respondents to the amended interlocutory process under r 2.13(3) of the Corporations Rules to ensure that the determination of the question concerning the distribution of the surplus under s 90-15(3)(a) is binding on them: Re Hawden Property Group Pty Ltd (in liq) (supra) at [11]. An order to that effect will therefore be made.
20. For completeness, I note that ASIC has been notified of the amended interlocutory process, as required by r 2.8 of the Corporations Rules.
21. I am satisfied that there is a surplus to be distributed to contributories and that the amount of that surplus is $254,887.67, calculated as follows: 1. $302,904.42; 2. plus receivables totalling $9,227.65; 3. less $57,244.40 comprising: 1. Liquidator's remuneration of $31,209.20 (being the amount of $28,372 referred to in [82] above plus GST); 2. Liquidator's internal disbursements of $420.20 (being the amount of $382 referred to in [84] above plus GST); 3. Liquidator's legal costs of $25,485.20 (including GST) as referred to in [93] above; 4. Liquidator's future internal disbursements of $129.80 (being the amount of $118 referred to in [85] above plus GST).
22. In circumstances where the Liquidator has paid to Tianda Hong Kong an amount of $36,879.96 that Gansu was liable to pay, thereby relieving Gansu of that liability and diminishing the surplus available to distributed to contributories by a corresponding amount, I am satisfied that it is appropriate to make an order in terms to the following effect applying the Liquidator's second methodology referred to in [108] above to the surplus of $254,887.67, with the amount to be adjusted being $25,815.97 (being 70% of the $36,879.96 actually paid to Tianda Hong Kong out of Company funds as a result of the Liquidator's mistake): "Order pursuant to s 488(2) of the Corporations Act 2001 (Cth) that special leave be granted to the Liquidator to distribute the surplus assets of the Company, being the amount of approximately $254,887.67, to its shareholders Tianda Iron Ore Limited and Gansu Nonferrous Metal Australia Pty Limited in the proportions of 70% and 30% respectively, corresponding to each shareholder's proportionate ownership of the issued shares in the Company, subject to the adjustment immediately below. Order pursuant to s 90-15(3)(a) of Schedule 2 to the Corporations Act 2001 (Cth) that the Liquidator is justified to pay to Tianda Iron Ore Limited the sum of $25,815.97 out of the distribution due to Gansu Nonferrous Metal Australia Pty Limited."

Application for release of the Liquidator and deregistration of the Company

1. In paragraph 1 of the amended interlocutory process, the Liquidator seeks: "Order pursuant to s 480(d) of the Corporations Act 2001 (Cth) (the Act), within 60 days of the date of these orders: (a) The Applicant, Mr Vincent Pirina, be released as Liquidator of the Company; and (b) The Australian Securities and Investments Commission (ASIC) deregister the Company."
2. As Black J explained in Re RR Impex Pty Ltd (in liq) [2013] NSWSC 1667 at [2]-[3]: "2. Section 480(d) of the Corporations Act relevantly provides that, where a liquidator has realised all of the company's property or so much of that property as can, in his or her opinion, be realised without needlessly protracting the winding up, and has distributed any final dividend to the creditors and adjusted the rights of the contributories among themselves and made any final return to the contributories, he or she may apply to the court for an order that he or she be released and that ASIC deregister the company The effect of an order for release of a liquidator under s 480 is stated in s 481(3)-(4) of the Corporations Act as follows: (3) An order of the Court releasing the liquidator discharges him or her from all liability in respect of any act done or default made by him or her in the administration of the affairs of the company or otherwise in relation to his or her conduct as liquidator, but any such order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact. (4) Where the liquidator has not previously resigned or been removed, his or her release operates as a removal from office. 3. The effect of such an order has been described as to 'wipe the slate clean', subject to the limited exceptions set out in s 481(3): Singer v Trustee of the Property of Munro [1981] 3 All ER 215 at 219 (dealing with the corresponding English provisions in respect of a trustee in bankruptcy); Re Wayland as Liquidator of ABC Containerline NV (in liq) [2005] NSWSC 1 ; (2005) 52 ACSR 750 at [27]. The notification provisions in respect of such an application allow such an application to be the forum at which any claim that the liquidator has been deficient in performing his or her role should be advanced: Deputy Commissioner of Taxation v Tideturn Pty Ltd [2001] NSWSC 217 ; (2001) 37 ACSR 152; Re ABC Containerline above at [28]. It appears to be implicit in the structure of the sections and those notification requirements that, if the court is satisfied that the relevant notifications have been given, no creditors have objected to the release of the liquidator or raised any concern as to the performance of his or her duties and the other evidence contemplated by the appropriate rules is placed before the court, then the court would ordinarily make an order releasing the liquidator, unless any reason emerges why it should not do so: Re Adellos Pty Ltd (in liq) [2013] NSWSC 747 at [2]-[3]. …"
3. His Honour went on to refer (at [3] and [11]) to authority to the effect that an order for ASIC to deregister the company should normally be sought as part of an application for the release of the liquidator so as to avoid the problem of the winding up continuing after the release of the liquidator, without any liquidator in place.
4. The notification requirements to which Black J referred are found in rr 2.8 and 7.5(6) of the Corporations Rules. Those rules require a liquidator to serve: 1. on ASIC - notice of the application under s 480 a reasonable time before the hearing of the application; and 2. on each creditor who has proved a debt in the winding up and on each contributory - a copy of the interlocutory process together with the statement and summary required by r 7.5(5) to be filed with the application or annexed to the affidavit relied on in support of the affidavit.
5. Mr Lim's affidavit affirmed on 10 November 2020 evidences service on that date of the amended interlocutory process and all supporting affidavits (with the exception of Mr Lu's affidavit of 25 November 2020, which is not directly relevant to the Liquidator's application for release) on ASIC, the Company's only secured creditor and the two contributories.
6. The amended interlocutory process contains the notice and statement required by r 7.5(2) of the Corporations Rules. However, the 21 day period within which any objection to the release of the liquidator must be made will not expire until after the hearing on 27 November 2020.
7. This is one reason why it is not yet appropriate to make the orders sought by the Liquidator under s 480(d) of the Corporations Act.
8. A further reason is that, because the Liquidator has not yet distributed the surplus, he has not made a final return to contributories. The conditions for the making of an application for release have therefore not yet been satisfied in this case and it would be inappropriate to make an order releasing the Liquidator at this stage. It would be equally inappropriate to make an order requiring ASIC to deregister the Company. The Liquidator would be required by s 481(5) of the Corporations Act to lodge the order and ASIC would be required to comply with it, irrespective of whether the surplus had in fact been distributed as currently proposed: see FAI General Insurance Co Ltd v FAI Car Owners Mutual Insurance Co Pty Ltd (supra) at [88]-[92] (Barrett J, as his Honour then was), referred to with approval by Gleeson JA in Re Hawden Property Group Pty Ltd (in liq) (supra) at [5].
9. The appropriate course is to adjourn the Liquidator's application under s 480 of the Corporations Act to after the date for distribution of the surplus. On that occasion, it will be necessary for the Liquidator to satisfy the Court that all of the requirements of r 7.5 of the Corporations Rules have been complied with.

Conclusion and orders

1. For all of the reasons above, I make the following orders and notations: 1. Order pursuant to r 2.13(3) of the Supreme Court (Corporations) Rules 1999 (NSW) that Tianda Iron Ore Ltd and Gansu Nonferrous Metal Australia Pty Ltd, be joined as respondents to the Amended Interlocutory Process filed on 11 November 2020. 2. Order pursuant to s 60-5 and s 60-10 of Schedule 2 to the Corporations Act 2001 (Cth) (the Act) that the applicant in the Amended Interlocutory Process filed on 11 November 2020 (the Liquidator) is entitled to receive the sum of $31,209.20 (including GST) for necessary work properly performed in relation to the external administration of Tianda Iron Ore (Australia) Pty Ltd (in liq) (the Company) in respect of the period from 5 June 2019 to 31 August 2020. 3. Note that the Liquidator makes no application in respect of remuneration for any work performed in relation to the external administration of the Company in respect of the period after 31 August 2020 and has applied for special leave to distribute the surplus assets of the Company pursuant to s 488(2) of the Act on the basis that the surplus is to be calculated taking into account the Liquidator's remuneration in respect of the period up to 31 August 2020 only. 4. Order that the internal disbursements of the Liquidator incurred in relation to the external administration of the Company be approved in the following amounts and be paid out of the assets of the Company: 1. $420.20 (including GST) in respect of the period from 5 June 2019 to 31 August 2020; and 2. $129.80 (including GST) in respect of the period from 31 August 2020 to the future date of deregistration of the Company, 1. Order that the Liquidator's costs of and incidental to the Amended Interlocutory Process filed on 11 November 2020 in the sum of $25,485.20 (including GST) be paid out of the assets of the Company. 2. Order pursuant to r 1.3 of the Supreme Court (Corporations) Rules 1999 (NSW) dispensing with compliance with r 7.9 of those rules in respect of the Liquidator's application pursuant to s 488(2) of the Act. 3. Order pursuant to s 488(2) of the Act that special leave be granted to the Liquidator to distribute the surplus assets of the Company, being the amount of approximately $254,887.67, to its shareholders Tianda Iron Ore Limited and Gansu Nonferrous Metal Australia Pty Limited in the proportions of 70% and 30% respectively, corresponding to each shareholder's proportionate ownership of the issued shares in the Company, subject to the adjustment referred to in order 8 below. 4. Order pursuant to s 90-15(3)(a) of Schedule 2 to the Act that the Liquidator is justified to pay to Tianda Iron Ore Limited the sum of $25,815.97 out of the distribution due to Gansu Nonferrous Metal Australia Pty Limited. 5. Order that paragraph 8 of the Amended Interlocutory Process filed 11 November 2020 is dismissed. 6. Stand over the Liquidator's application in paragraph 1 of the Amended Interlocutory Process filed on 11 November 2020 to the Corporations List on 22 February 2021 for determination if then appropriate.

Endnotes

1. The figure disclosed is $15,101.90 (including GST), which is equivalent to $13,429 (excluding GST).
2. See also Re Cardiff Coal Company (2014) 104 ACSR 135; [2014] NSWSC 1590 at [37] (Brereton J); Re Hawden Property Group Pty Ltd (in liq) (2018) 125 ACSR 355; [2018] NSWSC 481 (Gleeson JA) at [56]-[57]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 December 2020