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A Question of Remuneration: Allied Rural Pty Ltd v Stimpson

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By Mark Skermer, Principal, and Darsh Chauhan, Law Clerk

Introduction

On 24 April 2023 the Court of Appeal of Supreme Court of Queensland delivered judgment in the matter of Allied Rural Pty Ltd v Stimpson [2023] QCA 077. The Court unanimously held that the administrator’s appointment to the company was valid and that the variation by the prior Court to his remuneration was justified.

This article examines why the Court of Appeal of Queensland determined that an increase in the administrator’s remuneration ordered by a prior Court was reasonable in the circumstances.

Background

Allied Rural Pty Ltd (Allied) was a company which went into administration. A Mr. Stimpson was appointed as its administrator.

A deed of company arrangement was executed by the creditors of Allied.

The creditors also passed a resolution that Mr. Stimpson’s remuneration be fixed at 20% of the value of the debts owing to the creditors.

Mr. Stimpson successfully obtained an order from the Supreme Court of Queensland which increased his remuneration.

Allied, which was subject to a deed of company arrangement, appealed to the Court of Appeal of the Supreme Court of Queensland.

Issue and Decision

One issue which arose for the determination of the Court of Appeal of the Supreme Court of Queensland was whether the variation of Mr. Stimpson’s remuneration by the primary judge was reasonable.

The Court unanimously dismissed the appeal and held in favour of Mr. Stimpson (Morrison JA, with whom Mullins P and Kelly J concurred).

The Court held in favour of Mr. Stimpson largely because it had rejected Allied’s submission that he was never validly appointed as administrator in the first place. In those circumstances, there was no reason why Mr. Stimpson’s remuneration should only be limited to 20% of the value of the debts owing to creditors.

The Court noted that the conduct of the directors regarding the provision of information to Mr. Stimpson during the administration was a relevant factor to the increased costs of Mr. Stimpson. Accordingly, the discretion of the prior Court had not miscarried.

Takeaways

This case provides a useful example of the willingness of the Courts to grant applications by administrators which increase their remuneration in particular circumstances. The question of remuneration is one that is at the Court’s discretion.

If you have any questions regarding this decision or any matters raised by it, please feel free to get in contact with Mark Skermer of the MST Dispute Resolution and Litigation team on (03) 8540 0262, or by email at mark.skermer@mst.com.au.