The New South Wales Court of Appeal recently handed down an important judgment on the remuneration of registered liquidators.
Sakr concerned an appeal by Sanderson as liquidator of Sakr against an order determining his remuneration on anad valorem basis, without reference to his time attendances or hourly rate. Due to the importance of the issues, the Australian Securities and Investments Commission (ASIC) and Australian Restructuring Insolvency and Turnaround Association (ARITA) appeared and made submissions on the issue.
The Court considered precedents in New South Wales where a number of practitioners had their remuneration respectively cut by the Court and an arbitrary percentage fee applied relative to the assets in the administration. However, in a unanimous decision the Court of Appeal confirmed that this basis of remuneration without regard to the actual work required in the liquidation was inappropriate. The Court held that liquidators are entitled to remuneration that takes account of all relevant considerations and circumstances, not simply the size of the assets subject to the administration.
A copy of the decision can be found here.