A NSW Supreme Court decision has visited total defeat upon liquidator Simon Thorn almost two years after a Local Court magistrate delivered him victory.
In BounceLED Pty Ltd v Clear Skies Corp Pty Ltd (in liq) (No 2) [2023] NSWSC 810 judge Mark Richmond yesterday ruled that not only should Thorn pay BounceLED Pty Ltd’s (BounceLED) costs on the ordinary basis up to and including 13 July 2021 and on an indemnity basis thereafter, but that Thorn’s request for an Indemnity Certificate should be refused, meaning there’ll be no cash from the Suitors Fund to offset the court’s requirement that BounceLED’s costs and accrued interest must be paid by Thorn personally.
The ruling on costs was delivered some six months after his honour overturned an October 2021 decision of the NSW Local Court which found that payments received by BounceLED from Clear Skies Corp Pty Ltd (Clear Skies) totalling $63,857.70 were unfair preferences.
Thorn, who was referred the job from PwC’s Will Honner, was appointed voluntary administrator of Clear Skies on 23 July 2019. He was subsequently appointed deed administrator on 17 September 2019 and liquidator on 15 April 2020.
According to his DIRRI the appointment came with a $50,000 upfront payment and an indemnity from Clear Skies director Robert Price: “Against all claims, demands, actions, professional fees, costs, charges and expenses or other liabilities whatsoever (without limitation, including liabilities imposed by Section 443A and 443B of theCorporations Act) that may be made, brought, suffered, sustained or incurred by the Administrator arising in any way.” The key word there of course is “Administrator”.
iNO asked Thorn if the indemnity covered him in respect of yesterday’s ruling but received no response by our deadline.
One might however infer that his request for an indemnity certificate so as to tap a few thousand from the Suitors Fund suggests not. If we hear otherwise we’ll let you know.
Those interested in the reasons explaining how BounceLED succeeded on appeal can find them at BounceLED Pty Ltd v Clear Skies Corp Pty Ltd (in liq) [2023] NSWSC 121.
This is an example of the necessity for external administrators to assist the court – particularly so in lowered jurisdictions less experienced in the types of actions being commenced. Whilst they are generally not officers of the court (except in the cases of court winding up or court receiverships) generally the courts regard them as such. The better the assistance the better the likely outcome will be correct.