As iNO reported recently, Commonwealth FEG recovery Czar Henry Carr doesn’t like losing which is why it’s no surprise to learn that the taxpayer-backed Active Creditor Unit has filed a notice of intention to appeal in respect of the decision In the matter of BCA National Training Group Pty Ltd (in liq) [2023] NSWSC 366.
The notice was filed last week, just before the deadline was due to expire so Carr and his team have a little less than two months to formulate an argument that will convince the appeals court that NSW Supreme Court Corporations judge Ashley Black got it wrong.
His honour handed down his judgment on April 13 after PKF partner and BCA National Training Group (BCA) liquidator Brad Tonks came to court with a problem.
BCA, which was a registered training organisation providing education and training services Australia-wide had both circulating and non-circulating assets for the liquidator to deal with.
Tonks had paid out secured creditor Westpac in full from realisations generated from BCA’s non-circulating assets.
He then advised creditors that he was gong to deal with the remainder in accordance with the priorities set out in s 556 of the Corporations Act.
In other words, his remuneration and expenses would be paid in full, but priority creditors’ claims would not. It was a proposition that held little appeal for Carr and his team.
Subrogated to the rights of most of BCA’s employees with claims under s 556(1)(e), (g) or (h) and whose claims had been paid out, FEG asserted that s 561 operated to give it (and BCA’s other employee claimants) priority over Tonks’ fees and expenses, apart from than that which Tonks could claim under the lien he was entitled to as per the Universal Distributors’ case.
So Tonks applied to the court for directions and Justice Black preferred his arguments. The onus is now on Carr and his team to show why the judge was wrong to do so.
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