Volkswagen Financial Services Australia Pty Ltd v Atlas CTL Pty Ltd (Receivers and Managers Appointed) (In Liquidation) [2022] NSWSC 573

Supreme Court New South Wales

Medium Neutral Citation: Volkswagen Financial Services Australia Pty Ltd v Atlas CTL Pty Ltd (Receivers and Managers Appointed) (In Liquidation) [2022] NSWSC 573 Hearing dates: 12, 13, 14, 19, 20, 21 April 2022 Decision date: 12 May 2022 Jurisdiction: Equity - Corporations List Before: Hammerschlag CJ in Eq Decision: 1. Administrators/liquidators' claim to be secured by an equitable lien (or charge) dismissed. 2. Judgment for BMW against the administrators/liquidators for $281,266.39 updated to the date of judgment 3. Administrators/liquidators' remuneration approved. Catchwords: CORPORATIONS LAW – EQUITY – Corporations Act 2001 (Cth) ss 436A(1), 443A(1), and 443D – equitable lien – the principle in Re Universal Distributing Co Ltd (in liq) (1933) 48 CLR 171 (the Universal principle) that a creditor who holds security which forms part of a winding up or insolvent administration and which is cared for, preserved, or realised at the expense of the liquidator or administrator cannot conscientiously take advantage of the efforts of the liquidator or administrator without meeting her or his expenses in so doing. Equity creates a charge over a fund created by the realisation of the security as a result of those efforts. – where voluntary administrators trade the company's business at a loss, and earn renumeration on the asserted footing that they are doing so to protect the company's asset in the form of goodwill to facilitate a sale of its business as a going concern – where the liquidators (previously voluntary administrators) assert an equitable lien over the proceeds of chattels belonging to secured creditors or securing their claims and in the possession of the company as security for their renumeration – where the company has a fund generated by the sale of secured assets not being the company's business – whether the Universal principle applies – necessity for the costs and expenses to be incurred exclusively with respect to the property cared for, protected, or realised – limitation of the lien or equitable charge to creating security over that asset or the fund created by its realisation – necessity for the costs and expenses to be reasonably incurred – necessity for the costs and expenses to be adequately proved – HELD – the Universal principle does not apply and the claimants have in any event have not proved the quantum of the expenses alleged by them to have been incurred and renumeration earned for the exclusive benefit of the secured creditors. CORPORATIONS LAW – voluntary administration/liquidation – application for approval or renumeration – HELD – renumeration should be approved. Legislation Cited: Corporations Act 2001 (Cth) Personal Property Securities Act 2009 (Cth) Cases Cited: Dean-Willcocks v Nothintoohard Pty Ltd (in liq) (2007) 25 ACLC 109 Federal Commissioner of Taxation v Murry (1998) 193 CLR 605 Pattison v Lockwood [1998] FCA 472. Primary Securities Limited v Willmott Forests Limited (Receivers and managers Appointed) (In Liq) (2016) 50 VR 752 Re Universal Distributing Co Ltd (in liq) (1933) 48 CLR 171 Stewart v Atco Controls Pty Ltd (in liq) (2014) 252 CLR 307 Troulis v Vamvoukakis [1998] NSWCA 237 Category: Principal judgment Parties: Volkswagen Financial Services Australia Pty Ltd - First Plaintiff / First Respondent to the Fourth Cross-Claim Ken Whittingham in his capacity as Receiver and Manager of Atlas CTL Pty Ltd (Receivers and Managers Appointed)(In Liquidation) and PJM Fleet Management Pty Ltd (Receivers and Managers Appointed (In Liquidation) - Second Plaintiff / Second Respondent to the Fourth Cross-Claim Atlas CTL Pty Ltd (Receivers and Managers Appointed)(In Liquidation) - First Defendant / Third Respondent to the Fourth Cross-Claim PJM Fleet Management Pty Ltd (Receivers and Managers Appointed)(In Liquidation) - Second Defendant / Fourth Respondent to the Fourth Cross-Claim Nissan Financial Services Australia Pty Ltd - Third Defendant / Fifth Respondent to the Fourth Cross-Claim Andrew Stewart Reed Hewitt and Matthew James Byrnes in their capacities as Receivers and Managers of Atlas CTL Pty Ltd (in Liquidation)(Receivers and Managers Appointed) - Fourth Defendants / Sixth Respondents to the Fourth Cross-Claim BMW Australia Finance Limited - Fifth Defendant / Seventh Respondent to the Fourth Cross-Claim Bruno Secatore and Sam Kaso in their capacity as Receivers and Managers of PJM Fleet Management Pty Ltd (Receivers and Managers Appointed)(In Liquidation) - Sixth Defendants / Eighth Respondents to the Fourth Cross-Claim Richard Albarran, Richard John Lawrence and John Vouris (in their capacities as Administrators and Liquidators of Atlas CTL Pty Ltd (In Liquidation) and PJM Fleet Management Pty Ltd (In Liquidation) - Seventh Defendant / Applicants of the Fourth Cross-Claim Representation: Counsel: S Keizer with D Farinha - First Plaintiff / First Respondent and Second Plaintiff / Second Respondent (Volkswagen and Volkswagen receiver) HNG Austin QC with AC Roe - Third Defendant / Fifth Respondent and Fourth Defendants / Sixth Respondent (Nissan and Nissan receivers) N Mirzai - Fifth Defendant / Seventh Respondent and Sixth Defendants / Eighth Respondents (BMW and BMW receivers) J Evans QC with S Sykes - Seventh Defendants / Applicants to the Fourth Cross-Claim (former administrators/present liquidators)