Pay­day for liquidators!

Orders sought, orders made, liq­uida­tors ful­ly paid

In the recent mat­ter of Shield Resources Pty Ltd (in liq) and Shield Hold­ings South Aus­tralia Pty Ltd (in liq), two liq­uida­tors sought remu­ner­a­tion in the sum of $645,470.40 plus expens­es and costs (In the mat­ter of Shield Resources Pty Ltd (In Liq­ui­da­tion) and Shield Hold­ings South Aus­tralia Pty Ltd (In Liq­ui­da­tion) [2026] NSWSC 488).

Daniel Miller (Senior Asso­ciate) and Michael Hayter (Part­ner) of Swaab assist­ed the liq­uida­tors, Des Teng and John Refa­lo of Byrons, through­out the appli­ca­tion, with­out coun­sel to achieve a suc­cess­ful outcome. 

On 8 May 2026, the Hon­ourable Jus­tice Nixon (Nixon J) made all of the orders the liq­uida­tors sought includ­ing that the liq­uida­tors be remu­ner­at­ed for the total sum of $645,470.40 and that the costs of the appli­ca­tion be paid from the com­pa­nies’ assets on the indem­ni­ty basis.

The liq­uida­tors cal­cu­lat­ed the amount they sought on a time-cost basis. The out­come was the result of detailed evi­dence set­ting out the work the liq­uida­tors and their staff per­formed over approx­i­mate­ly 1,700 hours, sup­port­ed by submissions.

The details includ­ed evi­dence address­ing each of the mat­ters to which the Court must have regard to under sec­tion 60 – 12 of the Insol­ven­cy Prac­tice Sched­ule (Cor­po­ra­tions) set out in Sched­ule 2 to the Cor­po­ra­tions Act 2001 (Cth). Such mat­ters include the neces­si­ty, qual­i­ty, rea­son­able­ness and com­plex­i­ty of the work and whether it was per­formed prop­er­ly. Com­plex­i­ty in Shield arose due to com­plex inves­ti­ga­tions of poor­ly doc­u­ment­ed trans­ac­tions for sub­stan­tial sums of mon­ey, trad­ing-on a busi­ness which had sig­nif­i­cant amounts of stock on hand, and sell­ing that busi­ness, and engag­ing in pro­tract­ed nego­ti­a­tions with dis­put­ing par­ties regard­ing the con­trol and sale of the assets.

The evi­dence showed that the work and amounts claimed were pro­por­tion­ate to the nature and val­ue of the assets involved and that the liq­uida­tors had appro­pri­ate checks in place to reduce the risk of billing errors or over­charg­ing. It includ­ed the rates the liq­uida­tors and their team charged, and why those rates were reasonable. 

In deter­min­ing the mat­ter, Nixon J sum­marised the rel­e­vant prin­ci­ples, includ­ing mat­ters which the Court must have regard to. The Court applied con­sid­ered how those prin­ci­ples have been applied in cas­es includ­ing Sander­son as Liq­uida­tor of Sakr Nom­i­nees Pty Ltd (in liq) v Sakr (2017) 93 NSWLR 459 and Phoenix Insti­tute of Aus­tralia Pty Ltd (in liq) [2021] FCA 1203. The Court then applied the prin­ci­ples against the evi­dence and was sat­is­fied that the liq­uida­tors were enti­tled to the remu­ner­a­tion they sought.

The Shield deci­sion sends a strong sig­nal to liq­uida­tors and is sig­nif­i­cant for at least two rea­sons. The first is that it shows courts are pre­pared to order remu­ner­a­tion sought by liq­uida­tors, with­out dis­count. The sec­ond is that it shows courts are pre­pared to make orders such orders when the remu­ner­a­tion sought is sub­stan­tial and the accom­pa­ny­ing affi­davit if thor­ough­ly pre­pared explains those matters.

How­ev­er, care must be tak­en when prepar­ing timesheets. Any inac­cu­ra­cies in the timesheets should be explained, fixed, or be sub­ject to an appro­pri­ate discount.

There has been an increased ten­den­cy for courts to reduce the remu­ner­a­tion claimed or in some cas­es crit­i­cise the insol­ven­cy prac­ti­tion­er but not in this case. 

Mr Teng and Mr Refa­lo are pleased with the deci­sion, with Mr Teng stat­ing ​‘This is a fan­tas­tic result. It was great to get 100% approval. You should use the doc­u­men­ta­tion draft­ed in this case for future remu­ner­a­tion appli­ca­tions.’

If you are a liq­uida­tor or a receiv­er look­ing to make an appli­ca­tion for court ordered remu­ner­a­tion, Swaab is hap­py to assist.