Palmer re Harrison

[2010] NSWSC 1400

CITATION:	Palmer re Harrison [2010] NSWSC 1400
HEARING DATE(S):	01/12/10
JUDGMENT DATE :	1 December 2010
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
EX TEMPORE JUDGMENT DATE:	1 December 2010
DECISION:	Order that there be referred to Senior Deputy Registrar Musgrave each of the following matters: (a) the hearing and determination of proceedings 2010/225405 and the fixing of the proper remuneration of the applicant liquidators therein by determining the question of the quantum thereof; and (b) the hearing and determination of proceedings 2010/225436 and the fixing of the proper remuneration of the applicant liquidators therein by determining the question of the quantum thereof.
CATCHWORDS:	CORPORATIONS - creditors voluntary winding up - fixing of liquidator's remuneration - where meeting of creditors asked to fix remuneration but does not do so - court's power to determine proper quantification - PROCEDURE - powers of registrars - delegation to registrars - quantification of remuneration of office-holders - established practice and procedure indicate registrar should deal with such matters - need, in the particular circumstances, for special conferral of power on registrar - source of power to confer - order made
LEGISLATION CITED:	Civil Procedure Act 2005, s 13 Corporations Act 2001 (Cth), ss 473(3), 499(3), 504, 511(1)(a), 511(1)(b), 511(2)
CATEGORY:	Procedural and other rulings
CASES CITED:	Re Walker as Liquidators of One.Tel Ltd [2005] NSWSC 557; (2005) 189 FLR 467
PARTIES:	Christopher Palmer and Patrick Collis - Applicants Norman Leslie Harrison - Objector
FILE NUMBER(S):	SC 2010/225405; 2010/225436
COUNSEL:	Mr R D Glasson - Applicants Mr J T Johnson - Objector
SOLICITORS:	Truman Hoyle - Applicants Proctor Phair Lawyers - Objector

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

WEDNESDAY 1 DECEMBER 2010

2010/225405 ) CHRISTOPHER JOHN PALMER AND PATRICK
2010/225436 ) COLLIS - Applicants
NORMAN LESLIE HARRISON - Objector

JUDGMENT

1 In each of these matters, liquidators appointed in a creditors voluntary winding up that commenced in February 2009 have moved the court for relief by way of determination of their remuneration.

2 In each case, a meeting of creditors convened in December 2009 was asked to fix the liquidators’ remuneration but did not do so. No creditor moved a motion for a relevant resolution and the question was accordingly never put before the meeting for decision.

3 On 6 July 2010, therefore, the liquidators commenced two proceedings in each of which they sought an order fixing their remuneration.

4 Correspondence in evidence suggests that the liquidators rely on a combination of s 473(3) and s 511(1)(b) of the Corporations Act 2001 (Cth) as the source of the court's power to make such a determination. I do not think that that is the correct approach. It is true that s 511(1)(b) enables the court to make in a voluntary winding up any order that could be made in a winding up by the court. It is also true that, in a winding up by the court, s 473(3) empowers the court to fix the remuneration of a liquidator. But there is a specific provision with respect to the fixing of remuneration of a liquidator in a creditors voluntary winding up such as this, being s 499(3):

“The remuneration to be paid to the liquidator may be fixed:
(a) if there is a committee of inspection--by that committee; or
(b) by resolution of the creditors.”

5 In my opinion, the existence of s 499(3) and the specific machinery it creates probably precludes resort to a combination of s 511(2) and s 473(3) in a case such as this. But that does not mean that if, as here, creditors have declined to perform the function of fixing the liquidators’ remuneration, the liquidators receive no remuneration. Rather and as explained in Re Walker as Liquidators of One.Tel Ltd [2005] NSWSC 557; (2005) 189 FLR 467, the situation is one in which a question has arisen in the winding up, namely, the proper quantum of the remuneration in the absence of determination as envisaged by s 499(3), which question s 511(2) empowers the court to answer on application made under s 511(1)(a).

6 It follows that the proceedings the liquidators have commenced are properly brought before the court, even though the statutory basis may differ somewhat from that put forward in the correspondence.

7 The immediate problem, however, comes from the fact that a hearing by Senior Deputy Registrar Musgrave directed towards the determination of the liquidators’ proper remuneration in each winding up is scheduled for tomorrow. A creditor of each company has lodged a schedule of objections and, in written submissions served yesterday, counsel for the creditor has made the point that there is no delegation empowering a registrar to deal with such a case.

8 Counsel's submissions proceeded on the basis that it is s 504 that is the source of the court's power to fix a liquidators remuneration in a creditors voluntary winding up. This cannot be so. The power under s 504 is a power to review, not to fix or determine. It applies to remuneration already fixed or determined. But whatever may be the source of the court's power (and, as I have said, I am of the opinion that it is s 511(2)), the point that the registrar does not have delegated power is well taken.

9 The objecting creditor does not, however, have any problem with the conferral of additional delegated power on the registrar. That, if I may say so, is a sensible attitude, given the well-established course of practice and procedure under which matters involving remuneration quantification for office-holders are dealt with by registrars.

10 There is then a question of how the delegation can and should be made.

11 The last item in the list of delegated matters under the Corporations Act sub-heading in item 1 of the delegation by the Chief Justice of 9 April 2009 is:

“Any matter which arises in a winding up by the Court and is referred to a Registrar by a Judge or the Court of Appeal".

12 Counsel for the objecting creditor noted that this provision is not applicable because the winding up in each of these cases is not a winding up by the court. Counsel suggested that the only course is for a special delegation to be made by this court's "senior judicial officer" under s 13 of the Civil Procedure Act 2005.

13 It is not necessary to go to those lengths. Relevantly useful provision is made by item 7 of the existing s 13 delegation of 9 April 2009:

“Any matter which a Judge or Associate Judge may conduct or deal with and is referred to a Registrar by order of a Judge or Associate Judge".

14 I therefore make the following order:

Order that there be referred to Senior Deputy Registrar Musgrave each of the following matters:
(a) the hearing and determination of proceedings 2010/225405 and the fixing of the proper remuneration of the applicant liquidators therein by determining the question of the quantum thereof; and
(b) the hearing and determination of proceedings 2010/225436 and the fixing of the proper remuneration of the applicant liquidators therein by determining the question of the quantum thereof.

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