Supreme Court Orders Review of Administrators' Remuneration
📌 In brief
The Supreme Court of NSW decided to review the administrators' pay but not the liquidator's pay. They found the liquidator's pay was fair and appropriate, but the administrators' pay seemed disproportionately high given the results achieved.
⚖️ Legal holding
A review of remuneration is warranted if there is a demonstrated need to inquire into the originally determined quantum.
📖 What the law says
A empresa pode nomear um administrador se o conselho resolver que, na opinião dos diretores que votaram pela resolução, a empresa é insolvente ou provavelmente se tornará insolvente no futuro.
Plain-English explanation — does not replace advice from a legal practitioner.
📚 Full judgment
The summary, holding and questions above are VadeLab’s own material. The official decision itself is published by the court, and we do not reproduce it on this page.
📄 Read the full judgment⚖️ View on the official court website ↗
⚖️ What tends to weigh in cases like this
✅ Tends to be accepted
- The administrators' remuneration showed a striking disproportionality to the company's value.
- The administrators' initial remuneration estimate was significantly lower than the final amount.
- The creditors were not fully informed of the prospective outcome when they first voted on the administrators' remuneration.
- The administrators' remuneration represented a very substantial transfer of value from the company, leaving little for creditors.
- The court found a well-based suspicion indicating a need for further investigation into the administrators' fees.
❌ Tends to be rejected
- The application to review the liquidators' remuneration was dismissed because the amount was negotiated and not clearly disproportionate.
Patterns observed in similar cases in this collection — every case is unique.
❓ Frequently asked questions
What was the dispute about?
The dispute was about whether the remuneration paid to the administrators and the liquidator was reasonable given the results achieved.
How did the court decide, and why?
The court decided to review the administrators' remuneration due to the apparent disproportionality, but dismissed the review of the liquidator's remuneration as it was reasonable and not attended by clear disproportionality.
Which laws or rules were applied?
The Corporations Act 2001 (Cth) sections 436A, 449E(2), and 504(1) were applied.
What was the argument that mattered most?
The argument that mattered most was the proportionality of the remuneration to the results achieved by the administrators and the liquidator.
Was the decision for or against the person who brought the case?
The decision was partly for and partly against the person who brought the case, as the review of the administrators' remuneration was ordered but the review of the liquidator's remuneration was dismissed.
What evidence or documents mattered?
The evidence and documents that mattered included detailed ledgers of the work performed by the administrators and the liquidator, and the results achieved by their actions.