Liquidator owed $200,000 trapped in stoush over fund

It can be ticklish being both receiver and liquidator of a corporate trustee and Christian Sprowles is one practitioner who knows all about it.

The Hogan Sprowles‘ principal was appointed liquidator of CWCN Pty Ltd, the trustee of the CWCN Unit Trust on March 4, 2020.

After discovering that although the company was assetless the underlying trust was anything but he had the courts appoint him as receiver to enforce CWCN’s rights in respect of liabilities and expenses incurred while it was trustee.

Despite the appointment of a new corporate trustee and the emergence of four trust deeds Sprowles managed to navigate the complexities such that he amassed a fund of $950,000.

Seemingly all that was left to do was to get his fees as receiver approved and then he could distribute the surplus and retire, but as NSW Supreme Court chief judge in equity David Hammerschlag heard this week, it’s not quite as simple as that.

On Monday the court heard that new claimants had come forward seeking to be joined to proceedings so as to press their asserted entitlements.

Justice Hammerschlag however was more concerned with understanding Sprowles’ enthusiasm for the fight if he could simply get his receiver’s fees approved and retire, leaving the various claimants to fight over what remained.

Sprowles’ counsel then revealed that in his capacity as CWCN’s liquidator his client was out of pocket more than $200,000 in regard to the conduct of public examinations.

Sprowles has to stay in the proceedings so as to assert his lien in respect of those costs.

His honour understood but seemed concerned about the prospect’s for the $950,000.

“Once the lawyers get stuck into it, it’ll be worth half that,” the former Freehill Hollingdale and Page partner declared.