David Lewis Clout in his capacity as Liquidator of Mainz Developments Pty Ltd (in liquidation) [2016] NSWSC 1146

David Lewis Clout in his capacity as Liquidator of Mainz Developments Pty Ltd (in liquidation) [2016] NSWSC 1146

The court held that the liquidator's equitable lien takes priority over charges claimed by caveators only for the portion of remuneration and expenses reasonably incurred in the care, preservation and realisation of the property. Fees and expenses beyond that, including those incurred in adjudicating caveators' claims and substantial work on scrutinising charges, are not secured by the lien in priority. The full amounts claimed by the liquidator exceeded what was reasonable, and the court declined to make an order for payment out of the funds at this time, instead requiring a close examination of claims to determine what is reasonable and entitled to priority.

Parties
First Plaintiff: David Lewis Clout in his capacity as Liquidator of Mainz Developments Pty Ltd (In Liquidation); Second Plaintiff: Mainz Developments Pty Ltd (In Liquidation); First Defendant: Stoddart (SE Queensland) Pty Ltd; Second Defendant: Adbri Masonry Pty Ltd; Third Defendant: Bunnings Group Limited; Fourth Defendant: National Masonry Pty Ltd
Jurisdiction
Australia
Judgment Date
19 August 2016
Procedural Posture
Procedural and Other Rulings / Interlocutory Determination on Liquidator's Lien, Remuneration and Distribution of Funds
Outcome
Notice of motion declined (no payment made from fund); orders for parties to confer and bring minutes for further conduct; costs reserved.
Legal Topics
Liquidator's Lien, Remuneration of Liquidators, Priority of Claims, Caveats on Real Property, Creditor Claims, Expenses in Liquidation
Corporations Law Equity Liquidator's Lien Remuneration of Liquidators Priority of Claims Caveats on Real Property Creditor Claims Expenses in Liquidation

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Parties

David Lewis Clout in his capacity as Liquidator of Mainz Developments Pty Ltd (In Liquidation)

First Plaintiff

Mainz Developments Pty Ltd (In Liquidation)

Second Plaintiff

Stoddart (SE Queensland) Pty Ltd

First Defendant

Adbri Masonry Pty Ltd

Second Defendant

Bunnings Group Limited

Third Defendant

National Masonry Pty Ltd

Fourth Defendant

Procedural Posture

Procedural and Other Rulings / Interlocutory Determination on Liquidator's Lien, Remuneration and Distribution of Funds

Legal Issues

  1. 1 Whether the liquidator's lien for remuneration and expenses takes priority over charges claimed by caveators
  2. 2 What portion of liquidator's remuneration and expenses is protected by a priority lien
  3. 3 Whether expenses incurred in scrutinising validity of charges are lien-prioritised

Ratio Decidendi

The court held that the liquidator's equitable lien takes priority over charges claimed by caveators only for the portion of remuneration and expenses reasonably incurred in the care, preservation and realisation of the property. Fees and expenses beyond that, including those incurred in adjudicating caveators' claims and substantial work on scrutinising charges, are not secured by the lien in priority. The full amounts claimed by the liquidator exceeded what was reasonable, and the court declined to make an order for payment out of the funds at this time, instead requiring a close examination of claims to determine what is reasonable and entitled to priority.

Court Disposition

Notice of motion declined (no payment made from fund); orders for parties to confer and bring minutes for further conduct; costs reserved.

Orders

  • The court declines to grant the relief sought by the plaintiffs in their notice of motion filed on 16 February 2016 at this stage of the proceedings.
  • The parties are to confer and bring in short minutes of order to provide for the further conduct of the notice of motion.