Nathan Deppeler.
Scott Andersen.
If liquidators put up half-hearted opposition to an application was there any point opposing it at all?
Nathan Deppeler and Scott Andersen either thought so or were persuaded by their lawyers to offer only modest resistance in respect of an application by an interested party wanting to be heard on their application for judicial directions.
The Worrells pair are seeking the court’s guidance in respect of how they intend to treat claims that employees of Clearwater Logging & Transport Pty Ltd have for alleged underpayment of wages for overtime worked.
What is yet to be determined is whether the claims are claims or wages within the meaning of ss 553 or 556 of the Corporations Act.
The interested party is MD & RE Fenn Pty Ltd as trustee of the Michael Fenn Family Trust (the trust).
Michael Fenn is a former director of Clearwater Logging & Transport Pty Ltd (Clearwater) and claims the trust is a creditor by virtue of $2.336 million it allegedly lent to the company.
As explained In the matter of Clearwater Logging & Transport Pty Ltd (in liquidation) [2026] FCA 576 Deppeler and Andersen want to engage Marcus Zeltzer’s payroll compliance start up Yellow Canary to quantify the claims.
Alive to the possibility that those claims might get paid in priority to unsecureds Fenn sought leave to be heard, arguing creditors like the trust might be unfairly disadvantaged by the liquidators’ anticipated course if the claims were deemed to be employee entitlements.
He particularly wanted to the right to challenge Yellow Canary’s calculations. But there was a condition. One that must’ve made Deppeler and Andersen a little uneasy.
Fenn would only engage lawyers and counsel if Justice O’Callaghan agreed to indemnify him for the expenses of the exercise.
Deppeler and Andersen had no problem with Fenn’s application for leave to be heard but indemnification from a fund that will no doubt have to be tapped to cover their remuneration and expenses? Well your honour, we’re not so sure.
A report circulated to creditors identified the possibility of systematic underpayment of up to 300 employees over a six year period. No wonder Fenn is concerned about the possibility of employee claims being classified as wages.
And no wonder Deppeler and Andersen are concerned about any imposts on the $8.7 million they’ve accumulated through asset sales and debtor recoveries.
Deppeler and Andersen duly filed submissions, expressing “reservations” about the making of the indemnification order but “reservations” were clearly insufficient to discourage the judge, particularly where he’d granted the liquidators leave challenge the costs.
In granting the order indemnifying the trust Justice O’Callghan said “the liquidators’ opposition to the limited costs order sought was far from strenuous” and that the making of the costs order was appropriate in the circumstances given the trust has limited the leave it sought to and only sought to be indemnified for the submissions that it made on those limited issues.”
In other words, object like it’s life or death, or not at all.
Isn’t the indemnity issue putting the cart before the horse. It’s are generally determined at conclusion of proceedings and generally are in the discretion of the Court. If the intervention is justified and assists the Court in its determination that would then be considered in exercise of Court’s discretion.