Court of appeal rejects bid to cut administrator’s pay

We hope David Stimpson felt some relief this week when the Queensland Court of Appeal delivered judgment in the matter of Allied Rural Pty Ltd v Stimpson [2023] QCA 77.

The SV Partners executive director deserves closure after being drawn into a ghastly dispute between rival members of Allied Rural which saw Stimpson appointed administrator by the then sole director on March 2, 2021.

As previously reported in iNO, in the early phase of the administration certain member creditors of Allied first denied insolvency then alternatively pushed a deed of company arrangement (DoCA) proposal which included a remuneration determination that Stimpson be paid an arbitrary amount of 20 per cent of the creditor value as admitted for dividend purposes in the DoCA.

Given the deed proponents had the biggest claims but precluded themselves from participating that meant the 20 per cent would be calculated against a much smaller sum.

Being no fool, Stimpson applied to the Supreme Court of Queensland for orders approving the remuneration he’d earned on the time cost basis.

By this time Allied was under the control of a different director, the former appointing director having been removed as an essential pre-condition of the deed.

On learning of Stimpson’s application to set aside the remuneration determination Allied unsuccessfully opposed it, with his honour David Jackson rejecting the their arguments in Stimpson v Allied Rural Pty Ltd (subject to deed of company arrangement) & Ors [2022] QSC 74.

Perhaps smarting from Justice Jackson’s finding in respect of the doctrine of approbate and reprobate, Allied and those behind it appealed and on Monday the Court of Appeal unanimously refused the appeal and ordered the appellants to pay Stimpson’s costs.

While that might on the face of it look like an end to Stimpson’s agony it should be noted that he was replaced as deed administrator by Pearce & Heers Michael Dullaway and Mark Pearce in February 2022 after the Pearce & Heers pair received a referral from Shand Taylor principal John Saunders.

At the last meeting of Allied creditors in November it was resolved to extend the period of the deed – again – this time to May 2023 on account of the appeal and the failure of the deed proponents to pay the required contributions.

Minutes of the last meeting record the member creditors who made Stimpson’s life hell insisting that he wasn’t entitled to the $224,000 awarded in the Jackson judgment so there is no guarantee that the Court of Appeal’s finding will shatter recalcitrance that’s proved impervious the finding of the primary judge.

Dullaway and Pearce will however need to convene a meeting to determine iff the DoCA term should be extended agains or the company wound up. Meanwhile, the Deputy Commissioner of Taxation lurks in the background.

Further reading:

VA defeats “Disruptive Humbug” amid ad valorem bid