+ Committees of Creditors

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Under the Corporations Act, the function of fixing remuneration in a winding up can lie within the Committee of Inspection. Ultimately if there is no agreement to fix remuneration, the court can do so. Similar laws apply in bankruptcy.

In Onefone Australia Pty Ltd -v- One.Tel Ltd [2009] NSWSC 822 the responsibilities of the liquidator in responding to valid queries from a committee of creditors and the duties of the committee itself were considered.

The Court said it was not clear enough on the facts that there was no real agreement between the committee and the liquidator in relation to the liquidator's remuneration.

The Court said "There must be interaction and debate. If the committee of inspection requests further information or explanation, the ...liquidator ordinarily ought to provide that. If the committee of inspection needs time to consider that explanation, that time should be granted." The Court then went on and said that it is not enough that "something is put up and not passed at a single meeting. That is insufficient. This is particularly so, when the fact that 3 out of the 4 members of the committee abstained from voting, may well be taken to indicate that they did not consider themselves to be in a position to make a proper informed decision. It is also important to know that the committee has a statutory function to perform and therefore a duty to act. If it finds itself unable to do so despite its best efforts, it must say why."

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