In the matter of Steven Sherman & Peter Walker in their capacities as liquidators of One.Tel Limited [2012] NSWSC 544

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Steven Sherman & Peter Walker in their capacities as liquidators of One.Tel Limited [2012] NSWSC 544 Hearing dates: 3 May 2012 Decision date: 03 May 2012 Jurisdiction: Equity Division - Corporations List Before: Hammerschlag J Decision: Direct that Steven Sherman and Peter Walker in their capacity as liquidators of One.Tel (the GPL) are justified in paying to the SPL out of the assets of One.Tel his legal costs and disbursements for the period 1 October 2011 to 9 March 2012 in the amount of $981,424.32 plus GST Catchwords: CORPORATIONS - Payment of Special Purpose Liquidator's legal costs by General Purpose Liquidator is justified - undertaking to repay legal costs if those costs were not properly incurred Category: Principal judgment Parties: Steven Sherman and Peter Walker in their capacities as the Liquidators of One.Tel Limited (In Liquidation) - Plaintiffs Paul Weston in his capacity as the Special Purpose Liquidator of One.Tel Limited (In Liquidation) - Defendant Representation: Counsel: V.E. Whittaker - General Purpose Liquidator R.D. Glasson - Special Purpose Liquidator Solicitors: Kemp Strang - Plaintiffs O'Neill Partners - Defendant File Number(s): 2003/86446

ex tempore Judgment 1HIS HONOUR: This is an application by the Special Purpose Liquidator (SPL) of One.Tel Limited (in liquidation) ACN 068 193 153 for an order that the General Purpose Liquidator (GPL) would be justified in paying to the SPL out of the assets of One.Tel, his legal costs and disbursements in the amount of $981,424.32 plus GST as set out in a schedule which is attached to the Amended Interlocutory Process filed with leave on 3 May 2012 by which the application is brought. 2The significant part of the amount claimed is in relation to the proceedings referred to as the Optus removal proceedings which have been heard and in which judgment is presently reserved. 3The application is supported by the affidavit of the SPL and by a series of documents which includes a number of other judgments on the subject of the payment of legal costs which it is not necessary to repeat. 4The principal issues to which this application gave rise arose out of correspondence between the SPL and the GPL in relation to the fact that the SPL did not wish, as a condition of his payment, to provide the GPL with the unredacted invoices. The GPL took the position in the correspondence that I have earlier referred to that they needed to satisfy themselves that the amount claimed was reasonable. 5I raised a question as to the position if it ultimately transpired that the costs were to be paid out but not properly incurred and ultimately a position was reached in which no opposition to the orders sought is put on behalf of the GPL because certain undertakings are to be given which I consider to be adequate and to deal with the concerns which the GPL properly in my view raised. 6They are that the SPL will make available unredacted copies of the invoices which will enable the GPL to form a view whether the payment is reasonable or not and to take any steps which they consider appropriate but not so as to delay payments to the SPL who has undoubtedly incurred these costs to his lawyers, including counsel. 7As I did in the previous judgment, I will note that the order which I propose to make does not determine the validity of any claim by the SPL for legal costs and disbursements paid by the GPL. 8Upon Paul Gerard Weston in his capacity as Special Purpose Liquidator of One.Tel Limited (in liquidation) ACN 068 193 153 (One.Tel) (the SPL) giving to the Court an undertaking that if any of the legal costs and disbursements which are the subject of the order below is ultimately determined not to have been properly incurred that he will repay any such amount so determined, I make the orders below. 9I order and direct that Steven Sherman and Peter Walker in their capacity as liquidators of One.Tel (the GPL) are justified in paying to the SPL out of the assets of One.Tel his legal costs and disbursements for the period 1 October 2011 to 9 March 2012 in the amount of $981,424.32 plus GST. 10I note the undertaking of the SPL upon receipt of the payment to deliver to the GPL copies of the invoices unredacted (other than for privilege) detailing the legal costs and disbursements concerned. 11I note further that the undertaking of the SPL first referred to may be given in writing and delivered to my Associate (together with a copy to the GPL) to be placed on the file.