Investacorp – which held shares in publicly-listed companies, term deposits and a commercial building – is owned by the three children of RJ Thompson, Bruce Thompson, Elizabeth Bakker and Pamela Quinn.
The family members have been at loggerheads over how the company was run, and back in 2014 Pamela's husband, Clive Quinn, was found to have a conflict of interest in that he used his accounting firm to run the books. He resigned as a member of the institute of accountants as a result.
Fast forward to 2018 and the family members had resolved their dispute and agreed to a settlement. Toon's job was to split up the assets and let the siblings go their separate ways.
Toon's liquidators' reports show there was more than $3.6 million in cash collected, including $2m in cash from bank accounts, $750,000 from the sale of a building and $1.05m from company shares.
Original estimate
When Clive Quinn initially engaged Toon, she quoted the job at $5000-$7000, but noted that if there were any additional matters that needed attention, then the estimate would be subject to change.
After this, Toon met with Thompson who made complaints that Toon then investigated. But the judge said she should not have investigated it to the extent she did, because the dispute had been settled.
"A reasonable liquidator would have completed the liquidation more quickly, at lower cost and with less rancour. I fix her remuneration at $28,000 plus GST plus expenses."
The liquidator had claimed $101,729 plus GST and had also run up legal fees of $63,158.
"Ms Toon's remuneration claim is too high because she spent time on unnecessary work, investigating Mr Thompson's complaints, and that had other effects on the liquidation which added to its length and the time spent on it," the decision said.
The judge said her investigation of Thompson's complaints led to the pursuit of a fruitless claim against the Quinns, increased correspondence, a shareholders meeting, notices and applications under the Companies Act and "digging into past transactions that had nothing to do with the liquidation".
"None of this was reasonable or efficient. Nor did it give value to the shareholders. She should not be paid for it."
The hearing took three days in the High Court at Auckland and Toon engaged Queen's Counsel Greg Blanchard to defend her.
"I have reviewed the judgment carefully with my lawyers and found it to be fundamentally flawed. The decision turns on a legal analysis that contains major errors and the factual narrative it is based on is distorted, inaccurate and unsound," Toon said in an email to BusinessDesk.
The notice of appeal says the $101,729 claimed in fees was "reasonable in the circumstances, especially in the context of highly acrimonious and litigious shareholders and a contested fee approval application".
Unusual case
Restructuring lawyer Scott Barker said this sort of criticism from a judge is "really quite rare and particularly in the context of this case where it is a solvent liquidation."
"Disputes over fees are more likely to arise in insolvent liquidations," the Buddle Findlay partner said.
Barker added that in this case, there was a complaint over fees and, because the liquidator was court-appointed, the fees had to be checked. In many liquidations, fees go unchecked.
Last year the Government passed legislation to introduce greater rigour for liquidators, although the implementation of the regime has been deferred due to Covid-19, and practitioners won't be licensed until June 2021.
Toon is registered as a chartered accountant and an accredited member of RITANZ, the professional body for insolvency practitioners.
"As well as insolvency, Victoria is well known within Auckland chartered accountancy circles as being the doyenne of solvent liquidations. Solvent liquidations are her speciality and few others in Auckland have her depth of knowledge for this unique area," her website reads.
- BusinessDesk
