In the matter of Octaviar Limited (in liq) and Octaviar Administration Pty Ltd (in liq) [2017] NSWSC 1005

In the matter of Octaviar Limited (in liq) and Octaviar Administration Pty Ltd (in liq) [2017] NSWSC 1005

The Court was satisfied that the proposed allocation was proper and reasonable and that directions should be given. The funder's entitlement, legal costs and liquidators' remuneration incurred in obtaining the KPMG settlement were properly to be deducted or reimbursed before distribution of the balance, notwithstanding that OA had borne most of the costs, because the expenditure benefited OA and OL and brought in the settlement fund. The balance was to be allocated on a principled basis by reference to Counsels' assessment of the prospects and value of OA's and OL's respective claims. Further approval by OL's committee of inspection of remuneration already approved by OA's committee was...

Jurisdiction
Australia
Judgment Date
28 July 2017
Procedural Posture
Application for Directions in Winding Up Under Ss 479 and 511 of the Corporations Act 2001 (cth) / Interlocutory Processes in Liquidation Proceedings
Outcome
Directions given that the liquidators would be justified in allocating the settlement proceeds in the proposed manner.
Legal Topics
['winding Up' "liquidators' Directions" 'allocation of Settlement Proceeds' "liquidators' Remuneration and Costs" 'equitable Lien for Costs of Realisation']
['corporations' 'insolvency'] ['winding Up' "liquidators' Directions" 'allocation of Settlement Proceeds' "liquidators' Remuneration and Costs" 'equitable Lien for Costs of Realisation']

Case Brief

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Procedural Posture

Application for Directions in Winding Up Under Ss 479 and 511 of the Corporations Act 2001 (cth) / Interlocutory Processes in Liquidation Proceedings

Legal Issues

  1. 1 ['Whether the general purpose liquidators and special purpose liquidator would be justified in agreeing to and implementing the proposed allocation of settlement proceeds from the KPMG proceedings between OA and OL.' "Whether litigation funding costs, legal costs and liquidators' remuneration should be deducted or reimbursed before distribution of the balance of the settlement proceeds." "Whether remuneration payable to the liquidators of OA, to be reimbursed to OA under the allocation, first required approval by OL's committee of inspection."]

Ratio Decidendi

The Court was satisfied that the proposed allocation was proper and reasonable and that directions should be given. The funder's entitlement, legal costs and liquidators' remuneration incurred in obtaining the KPMG settlement were properly to be deducted or reimbursed before distribution of the balance, notwithstanding that OA had borne most of the costs, because the expenditure benefited OA and OL and brought in the settlement fund. The balance was to be allocated on a principled basis by reference to Counsels' assessment of the prospects and value of OA's and OL's respective claims. Further approval by OL's committee of inspection of remuneration already approved by OA's committee was...

Court Disposition

Directions given that the liquidators would be justified in allocating the settlement proceeds in the proposed manner.

Orders

  • ['Pursuant to s 479(3) of the Corporations Act 2001 (Cth) in the case of Octaviar Limited, and pursuant to s 511 of the Act in the case of Octaviar Administration Pty Ltd, the First Plaintiffs are justified in agreeing to the proposed allocation of the Settlement Proceeds as set out in paragraph 9 of the affidavit...