Jamieson Andrew Louttit in his capacity as Official Receiver and Manager of Supernatural Agency Pty Limited (Official Receiver and Manager appointed) (in liquidation) ACN 150 343 838 and T.T.F.U Pty Limited (Official Receiver and Manager appointed) (in liquidation) ACN 150 342 742 v Supernatural Agency Pty Limited

Judgment

1. HIS HONOUR: On about 29 June 2017, the Court, as presently constituted, appointed Jamieson Andre Louttit (hereinafter "the Receiver") as the Official Receiver of the defendants, Supernatural Agency Pty Limited ACN 150 343 838 and T.T.F.U. Pty Limited ACN 150 342 742 (collectively referred to in this Judgment as "the Companies").
2. This appointment arose as a result of evidence before the Court arising out of contempt proceedings in which it became clear that there were a number of difficulties associated with the operation of Supernatural Agency Pty Limited ACN 150 343 838 (hereinafter "Supernatural").
3. In issuing the orders to appoint the Receiver as Official Receiver, the Court, pursuant to r 26.7 of the Uniform Civil Procedure Rules 2005 (hereinafter "UCPR"), made orders setting out the powers of the Court, including an order (order 2(e)) that the Receiver be empowered to make any application for the winding up of the corporation, being a reference to Supernatural and T.T.F.U. Pty Limited, the Companies.
4. On 9 November 2017, the Receiver sought orders that Supernatural be wound up together with the other corporation to which the orders related, T.T.F.U. Pty Limited ACN 150 342 742. The application for winding up was made pursuant to the terms of ss 459A and 459P of the Corporations Act 2001 (Cth), and, alternatively, pursuant to s 461 of the Corporations Act.
5. For the purpose of the winding up application, the plaintiff relied upon the affidavit of Jamieson Andre Louttit sworn 15 November 2017 (hereinafter "the Louttit Affidavit") together with Exhibit JAL1 to the Louttit Affidavit.
6. It is unnecessary to recite the terms, or relevant terms, of s 459A, s 459P or s 461 of the Corporations Act. It is sufficient for present purposes to note that the orders of the Court made on 29 June 2017, as already stated, expressly empowered the official Receiver to make application for the winding up of each of the corporations who are defendants in these proceedings. In so doing, the Official Receiver is acting as an agent for the Companies and, as a consequence, is capable of acting within ss 459P and s 462 of the Corporations Act.
7. The orders of 15 November 2017 relied upon the Louttit Affidavit, to which earlier reference has been made, and the consent to act as liquidator that was filed with the Court on 10 November 2017. Further, the application was advertised, pursuant to the usual practice, by the Australian Securities and Investments Commission (ASIC) following the lodgement of a form 519S with ASIC (see [27] of the Louttit Affidavit).
8. The Court, as presently constituted, was involved in these applications because they flowed from an award of damages by the Court in defamation proceedings and the issuing of injunctive relief in relation to certain internet and social media publications. Further, applications were made for contempt of the aforesaid injunctions.
9. The principal defendant in the defamation proceedings, who is the principal of the companies who are defendants in this application, was evading personal service, but was, on the evidence, receiving emails and, for that and other reasons, service of the matters involved in this application was ordered to be other than personal service.
10. The order of 15 November 2017, winding up the Companies, was issued on the ground that the Companies were insolvent. The evidence of insolvency was contained in the Official Receiver's report exhibited to the Louttit Affidavit, under Exhibit JAL1, to which earlier reference has been made.
11. It was clear from the material before the Court, that neither company was able to pay all of its debts as and when they became due and payable. This conclusion was based upon the cash flow test, as it has been called, rather than the balance sheet or net assets test: see The Bell Group Ltd (in liq) v Westpac Banking Corporation & Ors [No 9] [2008] WASC 239. Nevertheless, the Official Receiver's report also disclosed that even on the balance sheet or net assets test, the Companies were insolvent: see Louttit Affidavit, Exhibit JAL1, pp 37-39.
12. On the basis of the material available to the Court on 15 November 2017, the Court made orders for the winding up of the Companies and for the appointment of the plaintiff as the liquidator of each.
13. On the basis of the material before the Court as at 15 November 2017, the Court also adopted the well-known principle that the liquidator (and when he was acting as Receiver) was to be appointed, and was appointed, on the basis of the receipt of reasonable remuneration and reimbursement of reasonable expenses out of the receivership assets: see Westpac Banking Corp v ITS Taxation Services (2004) 183 FLR 273; [2004] NSWSC 50.
14. The remuneration must be fair and reasonable and the Receiver must provide sufficient information to enable the Court to assess whether there remuneration is reasonable and the task performed prudent: see ASIC v Letten (No 23) [2014] FCA 985 at [14] per Gordon J.
15. The reasonableness of the remuneration will depend upon the circumstances in the particular case before the Court. A number of relevant factors have been adumbrated in the judgment of Black J in Wine National Pty Ltd [2016] NSWSC 4 at [15].
16. Further, there is a question of proportionality that is important in determining whether the overall reasonableness of the work undertaken for the remuneration to be received: see Templeton v ASIC (2015) 108 ACSR 545 at [31]-[34]; [2015] FCAFC 137.
17. The work undertaken by the plaintiff as Official Receiver and Manager of the Companies is deposed to in the affidavit of Jamieson Andre Louttit sworn 25 June 2018 (hereinafter "the Second Louttit Affidavit") at [5]-[8] and set out at Tabs 2, 3 and 4 of Exhibit JL1 to the Second Louttit Affidavit. The application made by the Receiver also provides the requisite detail in terms of the persons who performed the work; the charge-out rates; the time spent performing each task; and the task descriptions: see [9] of the Second Louttit Affidavit and invoices and activities slips set out at Tab 5 of Exhibit JL1.
18. I am satisfied that the work undertaken by the plaintiff and the staff employed by him, whilst acting as Official Receiver and Manager of the Companies, is properly detailed and enables the Court to form the view that the remuneration claimed is fair and reasonable.
19. As a consequence, the remuneration that is claimed is one that will be granted by the Court and approved by the Court: see ASIC v Lawrenson Light Metal Die Casting Pty Ltd (1999) 158 FLR 307; 33 ACSR 288 at [17]-[20]; [1999] VSC 500.
20. The function of the Official Receiver and Manager has concluded. The plaintiff seeks that his appointment to that position be terminated. As already stated, the plaintiff, with the assistance of the staff, undertook considerable work in connection with the receivership of the Companies: see [8] of the Second Louttit Affidavit.
21. The Official Receiver and Manager now seeks to retire as Official Receiver and Manager of the Companies on the basis that, as the Companies are now in liquidation and the plaintiff was appointed as Liquidator of the Companies, there is no ongoing utility in him remaining appointed as Official Receiver and Manager of the Companies. The control of the Companies remains beyond the control of the Directors (whose powers, pursuant to the Corporations Act, are suspended).
22. For the foregoing reasons, on 29 June 2018, the Court made the following orders: 1. An order that Jamieson Andre Louttit as Official Receiver and Manager of Supernatural Agency Pty Limited ACN 150 343 838 (Receiver and Manager Appointed) (in liquidation) and T.T.F.U. Pty Limited ACN 150 342 742 (Receiver and Manager Appointed) (in liquidation) (collectively referred to in these orders as "the Companies") retire with immediate effect as Official Receiver and Manager of the Companies; 2. An order that Mr Louttit's remuneration for acting as Official Receiver and Manager of the Companies be approved in the sum of $67,737.02, inclusive of GST; 3. An order that the costs and expenses of this notice of motion be costs and expenses of the Official Receivership and Management of the Companies.

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