FEDERAL COURT OF AUSTRALIA

Shannon (in his capacity as receiver and manager of North East Wiradjuri Co Limited) v North East Wiradjuri Co Limited (No 2) [2011] FCA 1007

THE COURT ORDERS THAT:

1.    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:

(a)    Mr Phillip Teitzel

Teitzel & Partners

Suite 2, Rialto Lane

MANLY NSW 2095; and

(b)    Mr Michael Hayter

Gillis Delaney Lawyers

Level 11, 179 Elizabeth Street

SYDNEY NSW 2000

2.    Remuneration of the Applicants for the period 1 March 2011 to 31 May 2011 be fixed in the amount of $30,385.20 including GST.

3.    The Applicants be empowered to draw upon such remuneration forthwith from the Respondents’ assets.

Note:    Settlement and entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1    On 26 May 2011, I made orders inter alia fixing the remuneration of the applicants who are the receivers and managers of North East Wiradjuri Company Limited (“NEWCO”) and North Eastern Wiradjuri Community Fund Limited (“NEWCF”) for the period 5 November 2010 to 28 February 2011: see Shannon (in his capacity as receiver and manager of North East Wiradjuri Co Limited) v North East Wiradjuri Co Limited [2011] FCA 599.

2    An application is now made for me to fix the remuneration of the receivers for the period 1 March 2011 to 31 May 2011. The amount which I am asked to fix for the remuneration is $30,852.20 inclusive of GST.

3    The background to the present application is explained in my reasons for judgment in a previous matter: see Allen, in the matter of North East Wiradjuri Co Limited (Administrators Appointed) [2010] FCA 1248.

4    The application is supported by an affidavit of Mr Shannon sworn 30 June 2011 and a further affidavit of Mr Shannon sworn 26 July 2011. The evidence in those affidavits satisfies me as to the relevant matters which I am required to take into account under s 425(8) of the Corporations Act 2001 (Cth).

5    I am satisfied, as I was on the previous occasion, that the work which was performed during the relevant period appears to have been reasonably necessary. The evidence includes a remuneration report which forms an exhibit to Mr Shannon’s affidavit of 30 June 2011. The report appears at pages 19 and following.

6    It contains a full description of the work carried out and a calculation of the remuneration which shows a breakdown of the persons who have performed each category of work which was carried out by the receivers or members of their staff. A schedule to the report shows the hourly rates of the receivers and the relevant members of their staff.

7    As on the previous occasion, the schedule shows that much of the work was carried out by employees whose hourly rates are less than those of Mr Gleeson and Mr Shannon. However, as appears to have been the case throughout, Mr Gleeson and Mr Shannon have been involved in much of the process and work has been appropriately delegated to more junior members of the staff where necessary.

8    I am also satisfied that the procedural requirements set out in r 9.1(2) of the Federal Court (Corporations) Rules 2000 (Cth) are satisfied subject only to one exception. The exception, as in the previous application, is that ordinarily the receiver is required to serve a notice of intention to seek an order for his or her remuneration upon each member of the corporation whose shareholding represents at least ten per cent of the issued capital of the corporation.

9    In this matter, the essential issue is to determine the identity of the persons who are entitled to be and who are directors and members of the companies. Accordingly, as in the previous application, the procedural requirements set out in r 9.1(2)(e)(ii) have been satisfied by serving the solicitor for the parties who claim to be entitled to be members and directors of the companies.

10    Otherwise I am satisfied that all of the procedural requirements in r 9.1(2) are satisfied. I should also observe that the solicitors for the parties who have been served have not made any opposition to the application today and I take that into account in exercising my power to fix the remuneration.

11    There are further procedural requirements in r 9.1(6). The evidence satisfies me as to all of the matters set out in paragraphs (a) to (f) of that rule. However, I should add that r 9.1(6)(f) provides that if the receivership is continuing, the supporting affidavit is to give details of matters delaying the completion of the receivership. Here, the delay is brought about by the continuation of the proceeding which seeks to identify the proper members and directors of NEWCO and NEWCF. Whilst I am prepared to make the orders sought today, I should express my concern that costs of the receivership not continue to mount unnecessarily.

12    No doubt, the substantive matter contains some degree of complexity, but the proceeding has been referred to a referee for inquiry and report pursuant to s 54A of the Federal Court of Australia Act 1976 (Cth) and The Honourable Murray Wilcox QC, a former judge of the court, has been appointed as referee. I would, so far as possible, encourage the parties to endeavour to complete the reference as soon as possible so that further applications of the present type can be kept to a minimum.

13    For the reasons set out above, I will make orders in terms of paragraphs 1, 2 and 3 of the interlocutory process filed on 29 July 2011.

Associate:

Dated:    9 August 2011