A contested fee application scheduled for hearing in June is likely to give liquidators and the lawyers who act for them deep insights into how the courts view the always contentious issues of information provision, seniority and duplication of work.
“I take issue with these allegations and moreover say that the ATO has no basis to question the rates charged by Hall Chadwick. Hall Chadwick is a large national accounting firm with offices in every major state of Australia. Its rates are commensurate with other similarly sized firms.” Richard Lawrence, Hall Chadwick.
Bringing the application are Hall Chadwick partners Richard Albarran and Richard Lawrence, in their capacities as the former liquidators of Tauro Capital Pty Ltd.
The pair, who were replaced by PKF’s Paul Allen and Jason Stone, have applied for court approval of approximately $225,000 in remuneration.
Opposing the fee bid is the ATO and Tauro Capital creditor Rhondalynn Korolak, both of which object to the amounts claimed on the basis that the WIP narratives lodged in support of the application contain insufficient information as to the tasks undertaken; that Lawrence and Albarran failed to delegate sufficient work to more junior staff and that the amount claimed includes work that’s been billed more than once.
Unsurprisingly Lawrence in his April 14, 2023 affidavit in response to the objections raised, rejects them.
Seniority? Well circumstances conspired again them, with Lawrence attributing the departure of a key staff member as the reason why one of the appointees – in this case himself – undertook so much of the work.
“Mrs. (Bonnie) O’Brien (nee Hudson) was the primary senior staff member who managed the file throughout the course of the file,” Lawrence said.
“However, during the period of creditors requesting the Former Liquidators convene the meeting, Mrs. O’Brien (nee Hudson) resigned from the firm and therefore had left prior to drafting the report to creditors.
“Due to the significant history of the file and the issues that had been dealt with I determined that it would be more cost effective to complete the report directly with Bryce Morey, and some input/commentary from Steve Barnett, than assign a new senior staff member who would have needed to research and get up to speed on all of the issues in the file.
“It remains my position that this would have likely increased the costs associated with drafting and issuing the report than myself completing the report directly with Brice Morey,” Lawrence said.
It should be noted that Steve Barnett, who was Hall Chadwick’s National Professional Standards Manager at the time, left the firm last month.
The ATO has also raised objections to the level of detail Lawrence and Albarran have provided in respect of the timesheets produced in support of their application, objections Lawrence appears to dismiss in his affidavit as without merit.
“I dispute the allegation that the timesheets contain insufficient information,” he said.
“Entries contain the requisite detail in compliance with the ARITA guidelines. Moreover, WIP entries do not need to be lengthy and only need to adequately describe the task completed, even if in shorthand”.
Lawrence also lambasts the ATO for what he sees as its failure to request any material supporting the former liquidators WIP narrations when it had a right to do so prior to submitting its objections, pointing out that liquidators are not required to individualise every line item by every staff member.
“It is common practice that multiple tasks can be grouped together as one time entry if it constitutes the same task with the same task code,” he said.
In his affidavit in response to the objectors, Lawrence also took issue with the questioning of Hall Chadwick’s rates, as raised by by ATO senior insolvency advisor Gary Busby.
“I take issue with these allegations and moreover say that the ATO has no basis to question the rates charged by Hall Chadwick. Hall Chadwick is a large national accounting firm with offices in every major state of Australia. Its rates are commensurate with other similarly sized firms.”
The case should be of great interest to lawyers who represent liquidators seeking court approval for fees though sorting through the minutiae will do nothing for the mood of whichever hapless judge is docketed to preside at the hearing.
Further reading:
Be the first to comment on "Court to test WIP narrations, seniority and duplication"