In the matter of Karim Pty Ltd (in liq) [2020] NSWSC 1603

In the matter of Karim Pty Ltd (in liq) [2020] NSWSC 1603

The Liquidators' claim, although quantified by reference to work done by employees of Veritas Advisory Pty Ltd and Aston Chace Group Pty Ltd as well as work done personally by the Liquidators, was a claim for remuneration and not a claim for disbursements. Under s 60-20(4A) of the Insolvency Practice Schedule (Corporations), s 60-20(1) does not apply to the extent that a related entity derives a profit or advantage from remuneration paid to the external administrator in accordance with s 60-5. Accordingly, the Liquidators did not need leave under s 60-20(3)(b) or to establish the exception in s 60-20(4) to recover remuneration referable to work done by employees of their incorporated...

Jurisdiction
Australia
Judgment Date
13 November 2020
Procedural Posture
Application by Liquidators Under S 60 10 of the Insolvency Practice Schedule (corporations) for Remuneration to Be Set / Principal Judgment Determining a Legal Issue About Remuneration Referable to Employees of Incorporated Entities and Costs; Quantum of Remuneration to Be Determined Later
Outcome
Liquidators' remuneration may include amounts referable to work of employees of incorporated entities; the Second Defendant was ordered to pay costs; remaining questions as to quantum of remuneration were left to be determined.
Legal Topics
["liquidators' Remuneration" 'external Administrators' 'internal Disbursements' 'profit or Advantage From External Administration' 'insolvency Practice Schedule (corporations) S 60 20(4 A)']
['corporations' 'insolvency' 'winding Up'] ["liquidators' Remuneration" 'external Administrators' 'internal Disbursements' 'profit or Advantage From External Administration' 'insolvency Practice Schedule (corporations) S 60 20(4 A)']

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Procedural Posture

Application by Liquidators Under S 60 10 of the Insolvency Practice Schedule (corporations) for Remuneration to Be Set / Principal Judgment Determining a Legal Issue About Remuneration Referable to Employees of Incorporated Entities and Costs; Quantum of Remuneration to Be Determined Later

Legal Issues

  1. 1 ['Whether liquidators can claim remuneration for work done by employees of incorporated accounting firms with which they have been associated.' "Whether such amounts are properly characterised as liquidators' disbursements or as remuneration." 'Whether the liquidators required leave under s 60-20(3)(b) of the Insolvency Practice Schedule (Corporations) or had to establish an exception under s 60-20(4).' 'Whether s 60-20(4A) of the Insolvency Practice Schedule (Corporations) applies where related entities derive a profit or advantage from remuneration paid to the liquidators.' 'Whether the Second Defendant should pay the costs of the legal issue determined at the hearing on 9 November 2020.']

Ratio Decidendi

The Liquidators' claim, although quantified by reference to work done by employees of Veritas Advisory Pty Ltd and Aston Chace Group Pty Ltd as well as work done personally by the Liquidators, was a claim for remuneration and not a claim for disbursements. Under s 60-20(4A) of the Insolvency Practice Schedule (Corporations), s 60-20(1) does not apply to the extent that a related entity derives a profit or advantage from remuneration paid to the external administrator in accordance with s 60-5. Accordingly, the Liquidators did not need leave under s 60-20(3)(b) or to establish the exception in s 60-20(4) to recover remuneration referable to work done by employees of their incorporated...

Court Disposition

Liquidators' remuneration may include amounts referable to work of employees of incorporated entities; the Second Defendant was ordered to pay costs; remaining questions as to quantum of remuneration were left to be determined.

Orders

  • ['Mr Nol pay the costs of and incidental to the matters addressed at the hearing on 9 November 2020, as agreed or as assessed.']