Shannon (in his capacity as receiver and manager of North East Wiradjuri Co Limited) v North East Wiradjuri Co Limited

The requirement of service of the Notice of Intention to apply for Remuneration and a copy of the affidavit on which the First and Second Applicants intend to rely ("the Documents") pursuant to Regulation 9.1(2)(e) of the Federal Court (Corporations) Rules 2000 (Cth) be dispensed with, on condition that the Documents be served on: 1.1 Mr Phillip Teitzel Teitzel & Partners 43 Woodlands Road LINDFIELD NSW 2070; and 1.2 Mr Michael Hayter Gillis Delaney Lawyers Level 11, 179 Elizabeth Street SYDNEY NSW 2000
Remuneration of the Applicants for the period 5 November 2010 to 28 February 2011 be fixed in the amount of $45,651.65 including GST.
The Applicants be empowered to draw upon such remuneration forthwith from the Respondents' assets. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.

REASONS FOR JUDGMENT 1 This is an application made by the applicants, Mr David Shannon and Mr Bruce Gleeson, for the Court to fix the amount of their remuneration pursuant to s 425 of the Corporations Act 2001 (Cth) ("Corporations Act") and reg 9.1 of the Federal Court (Corporations) Rules 2000 (Cth). 2 The period covered by the application for remuneration is from 5 November 2010 to 28 February 2011. The amount sought is $45,651.65. The application is supported by two affidavits of Mr David Graham Shannon. The first was sworn on 14 April 2011 and the second on 12 May 2011. 3 The application arises from an order which I made on 5 November 2010 when I made various orders including the appointment of Mr Shannon and Mr Gleeson as receivers and managers of North East Wiradjuri Company Limited ("NEWCO") and North Eastern Wiradjuri Community Fund Limited ("NEWCF"). 4 Order 11 of my orders of 5 November 2010 provided for the costs and disbursements properly incurred by Mr Shannon and Mr Gleeson in the course of acting as receivers and managers of NEWCO and NEWCF, including their remuneration in such amount as may be fixed by the court to be payable from the pooled assets of NEWCO and NEWCF. The reasons for the pooling order, which I made last year, are explained in my reasons for judgment in the matter of Allen, in the matter of North East Wiradjuri Co Limited (Administrators Appointed) [2010] FCA 1248. 5 In exercising the power to fix the remuneration of the receivers under s 425 of the Corporations Act, s 425(8) sets out the matters to which the court must have regard in determining whether the remuneration is reasonable. I have been taken to the evidence set out in the two affidavits of Mr Shannon which satisfy me as to the relevant matters falling with in the items enumerated in paragraph (a) to paragraph (k) of that subsection. It is unnecessary to repeat them. It is sufficient to say that I am satisfied in particular as to the work that was performed during the period mentioned above and that the work appears to be have been reasonably necessary. 6 I was assisted, in particular, by a remuneration report which forms part of exhibit DS-1 to the affidavit of Mr Shannon dated 14 April 2011. The report appears on pages 34 and following and it gives a useful description of the work which was performed by the receivers. It also provides a breakdown of the amounts referrable to the particular items of work as described in the general description and as more fully explained in the third column of the detailed description of the work contained in the remuneration report. 7 There is also before me a schedule in the remuneration report which shows the hourly rates of the receivers and their staff. It is evident, from this, that most of the work was carried out by employees whose hourly rates are far less than those of Mr Gleeson and Mr Shannon. That is not to say that Mr Gleeson and Mr Shannon have not been involved in the process but much of the work relates to administration which seems to have been more properly assigned to the employees as disclosed in Part 3 of the remuneration report. 8 Rule 9.1 specifies a number of procedural matters which must be satisfied. These include the service of a notice of intention to apply for an order. In the present case, it would be necessary, under reg 9.1(2)(c) to serve each member of NEWCO and NEWCF. However, the essential issue in this case is as to the identity of the persons who are entitled to be and who are directors and members of the companies. Accordingly, the procedural requirement of reg 9.1(e)(ii) has been satisfied by serving the solicitor for the parties who claim to be entitled to be members and directors of the companies. 9 It is of significance in the present application that the solicitors for those parties consent to the making of the orders sought in the application and I have taken that into account in exercising my power to fix the remuneration of the receivers in the amount stated in the application. I am satisfied that all of the other matters specified in reg 9.1 have been dealt with in the evidence. In particular the affidavits of Mr Shannon contain evidence which deals with the items specified in regulation 9.1(6). 10 I am therefore satisfied that I should make orders in accordance with paragraphs 1, 2 and 3 of the interlocutory application filed on 13 May 2011. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.

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