ASIC fails in second court attempt

The state’s highest court has dismissed the corporate watchdog’s bid to reverse payments made to insolvency experts Martin Jones and Andrew Smith.

Mr Jones and Mr Smith were appointed as administrators of Western Australian piggery business GD Pork in 2018.

The Australian Securities and Investments Commission opposed the remuneration payments to the pair but in 2021, Supreme Court of Western Australia Justice Kenneth Martin found its legal bid for a review to be “punitive”.

In a judgment delivered today, the WA Supreme Court of Appeal bench upheld Justice Martin’s decision to not review the remuneration payments and dismissed ASIC’s appeal.

The judgment said in 2019, GD Pork creditors approved remuneration payments of about $836,000 to Mr Jones and Mr Smith.

ASIC sought to overturn the payments and claimed Mr Jones and Mr Smith lacked the independence to be administrators because their insolvency firm Ferrier Hodgson had provided services to GD Pork before its collapse, according to the judgment.

Ferrier Hodgson was acquired by KPMG in 2019.

Mr Jones became a partner at KPMG Australia while Mr Smith recently started as a partner of business restructuring & advisory at Auxilium Partners.

The judgment said Ferrier Hodgson had received payment for work done before GD Pork went into administration.

Mr Jones and Mr Smith claimed, in the judgment, that the payment was “bordering on trivial” compared to GD Pork’s at-risk assets, which were valued at $27.6 million.

Despite the Court of Appeal finding in favour of some of ASIC’s grounds of appeal, its application was dismissed.

“The conduct of a review would require remittal of the case and would involve further expense and delay, in a context where the proceedings have already taken a substantial period of time and consumed considerable resources,” the judgment said.

“Therefore, although some of the grounds of appeal have been established, we would not disturb the orders made by the primary judge disposing of the primary proceedings.

“While we would grant leave to appeal, the appeal should be dismissed.”

GD Pork was acquired by its rival, Westpork, in 2019.