REASONS FOR JUDGMENT (REVISED FROM TRANSCRIPT)
1 The first and second plaintiffs are the court-appointed liquidators of the seventh, eighth and ninth plaintiffs (Bulumba, SEA Holdings and SEA respectively). They apply for special leave, pursuant to s 482(2) of the Corporations Act 2001 (Cth) (the Act), to distribute the surplus arising from the liquidation of SEA. The first and second plaintiffs also apply for orders determining their remuneration as liquidators of Bulumba, SEA Holdings and SEA.
2 The background to these applications can be found in my earlier reasons: Hayes, in the matter of Henry Walker Eltin Group Limited [2013] FCA 973 and Hayes, in the matter of Henry Walker Eltin Group Limited (in liquidation) (No 3) [2014] FCA 722. I will only refer to aspects of that background to the extent necessary to make these reasons comprehensible. Needless to say, these reasons should be considered in the light of my earlier reasons.
3 An earlier application for special leave to distribute the surplus in relation to SEA was made on 20 September 2013. I declined special leave on that occasion because proceedings had been brought against SEA in the District Court of Western Australia for indemnity in respect of a claim brought by a former employee against Newcrest Mining Limited. The proceeding has now been settled and dismissed.
4 In the meantime, a claim was brought against SEA in the Dust Diseases Tribunal of New South Wales by a gentleman who may have been an employee of SEA for a short period in the 1960s. However, those proceedings have now been discontinued against SEA.
5 The first plaintiff, Mr Hayes, has deposed that, after inquiry, he is not aware of any further claim that has been brought or threatened against SEA. In light of these developments, I am now satisfied that it is appropriate to grant the leave that is sought. In that connection, I note that when the matter was first before the Court for special leave, notice as required under r 7.9 of the Federal Court (Corporations) Rules 2000 (the Rules) had been given, and no person came forward to oppose special leave being granted. Further notice has been given. Once again, no person has come forward to oppose special leave being granted.
6 I record that, apart from the requirements of r 7.9, notice of the present application has been given to the 10 largest shareholders of the fourth plaintiff (HWE), SEA's ultimate holding company, and its two remaining directors. Further, the Australian Securities and Investments Commission has been given notice of the application for special leave and, by letter dated 25 May 2015, has stated that it considers the matter to be one left for the Court's determination. It stated that it did not propose to intervene in, or to appear at, the hearing for special leave.
7 Relatedly, the first and second plaintiffs seek an order dispensing with compliance with reg 5.6.71(1) of the Corporations Regulations 2001 (Cth). That regulation requires that a schedule in accordance with Form 551 be annexed to an order in a winding up by the Court authorising the liquidator to distribute any surplus to a person entitled to it, unless the Court otherwise directs.
8 I am satisfied that it is appropriate to grant the dispensation that is sought. I accept the first and second plaintiffs' submission that such a schedule is not necessary, in light of the fact that SEA is a wholly-owned subsidiary of SEA Holdings, which, in turn, is a wholly-owned subsidiary of HWE. The first and second plaintiffs are also the court-appointed liquidators of HWE.
9 Mr Hayes has given evidence on the question of the first and second plaintiffs' remuneration in relation to work undertaken in the period 27 September 2013 to 20 February 2015 and in the period 21 February 2015 until the conclusion of the liquidation of Bulumba, SEA Holdings and SEA. The latter period thus contains an element of prospective remuneration.
10 The first and second plaintiffs seek the following determinations. First, as to Bulumba, the sum of $14,745 plus disbursements and applicable GST, in respect of remuneration for the period 27 September 2013 to 20 February 2015, and the sum of $3,110 plus disbursements and applicable GST, in respect of prospective remuneration for the period 21 February 2015 until the conclusion of the liquidation.
11 Secondly, as to SEA Holdings, the sum of $4,799.50 plus disbursements and applicable GST, in respect of remuneration for the period 27 September 2013 to 20 February 2015, and the sum of $3,110 plus disbursements and applicable GST, in respect of prospective remuneration for the period 21 February 2015 until the conclusion of the liquidation.
12 Thirdly, as to SEA, the sum of $5,960 plus disbursements and applicable GST, in respect of remuneration for the period 27 September 2013 to 20 February 2015, and the sum of $3,110 plus disbursements and applicable GST, in respect of prospective remuneration for the period 21 February 2015 until the conclusion of the liquidation.
13 The following observations of Black J in Re Angstrom Assets Pty Ltd (in liq) [2014] NSWSC 1779 at [7]-[8] are apposite to the present case:
Where a liquidator's remuneration is determined by the Court in a court-ordered winding up under s 473(3) of the Corporations Act, that is usually done by a summary procedure analogous to taxation of solicitors' costs; see the cases cited in Austin & Black's Annotations to the Corporations Act [5.473]. Such a determination is also usually done by a Registrar in the exercise of delegated powers rather than by a judge. However, in the particular circumstances, where the amount claimed is relatively small and the Court has detailed information as to the work done before it, it does not seem to me to be necessary to refer the matter to a Registrar for further review. I note that Brereton J took the same approach in Re HIH Services Pty Ltd (in liq) above at [7]. I am satisfied, on the basis of Ms Barnett's evidence, that the Court should determine the Liquidators' remuneration for the period 12 March 2012 to 31 August 2014 (inclusive) in the amount of $17,940.45 (including GST).
Ms Barnett also identifies the additional steps that need to be taken prior to finalising the winding up, namely, to distribute any surplus in the liquidation, take steps to deregister the Company and undertake statutory reporting and filing with ASIC. Ms Barnet seeks a prospective determination of the remuneration referable to the tasks necessary to finalise the liquidation, based on an estimate of $2,000 plus GST. This Court has been prepared to determine reasonable amounts payable for a liquidator's future remuneration in applications of this kind, at the same time as approving the distribution of a surplus: see for example, Re HIH Services Pty Ltd (in liq) above at [7]; Re FAI Investments Pty Ltd (in liq); Re Valusi Pty Ltd (in liq) [2014] NSWSC 1300 at [6], [11]. The amount of the prospective remuneration claimed seems to me to be reasonable and I will take the same approach. I take that course although I note that Gardiner AsJ recently declined to determine prospective remuneration, in very different factual circumstances and for a much larger amount in Poulter in his capacity as liquidator of Haulton Construction Services Pty Ltd (in liq) v Haulton Construction Services Pty Ltd (in liq) [2013] VSC 366 at [49]. It is, however, not possible to grant approval for the filing fees claimed by the Liquidators in an application under s 473 of the Corporations Act since they do not comprise part of the Liquidators' remuneration.
14 The remuneration sought in the present case in respect of each of Bulumba, SEA Holdings and SEA is modest and supported by Mr Hayes' evidence, which gives verified particulars of attendances by the first and second plaintiffs and their staff and the time spent by them, as well as identifying the work in prospect and the estimated time to be taken for that work, in respect of Bulumba, SEA Holdings and SEA.
15 The supporting evidence includes, in respect of each company, a statement of receipts and payments for the period 27 September 2013 to 20 February 2015, a proposed invoice in respect of remuneration for the period 27 September 2013 to 20 February 2015, a fee summary of actual time cost for the period 27 September 2013 to 20 February 2015, a summary of tasks and time taken in respect of remuneration for the period 27 September 2013 to 20 February 2015, a detailed time sheet recording - by employee and by activity - work undertaken in the period 27 September 2013 to 20 February 2015, and a summary of tasks and estimated time to be taken in respect of those tasks for work to be undertaken in the period 21 February 2015 to the conclusion of the winding up.
16 I accept the first and second plaintiffs' submission that it is appropriate for the Court to determine their application for remuneration now. To do so will expedite the finalisation of the liquidations and intended deregistrations of the companies. It will enable the surplus to be distributed to HWE and expedite further distribution to HWE's contributories. To determine their remuneration in this application will also avoid the incurring of unnecessary costs, including filing fees.
17 On 7 July 2014, I made orders modifying the requirements of r 9.4 of the Rules in relation to any application by the first and second plaintiffs to determine their remuneration. I am satisfied that those orders have been complied with in relation to the application to determine their remuneration as liquidators of Bulumba, SEA Holdings and SEA.
18 Further, notice of the application and a copy of Mr Hayes' affidavit have been given to the HWE's 10 largest shareholders and to HWE's two remaining directors. No objection has been raised by those persons. Further, the matter has been called outside court this morning, and no opponent has sought to appear.
19 For these reasons, I am satisfied that it is appropriate that the first and second plaintiffs' remuneration as liquidators of Bulumba, SEA Holdings and SEA be determined for the amounts sought.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.