Judges also pinpoint where power to review liquidator’s expenses really comes from
The Court of Appeal has clarified how courts should fix liquidators’ remuneration, ruling that an arbitrary broad-brush approach is never acceptable.
In IBC Japan Ltd v Jones [2026] NZCA 193, the court dismissed both an appeal and a cross-appeal challenging a High Court order that fixed three liquidators’ remuneration at $1,064,429 and approved expenses of $618,706.15.
Autoterminal New Zealand Ltd went into liquidation in September 2021 after IBC Japan Ltd, its largest creditor, secured a $38.6 million judgment against it. Kieran Jones, Steven Khov and Thomas Rodewald took on the liquidation, and Kevyn Botes later replaced the remaining two. The liquidators applied to fix their remuneration at $1,232,801.41. IBC opposed the application, arguing the fees were excessive and that reasonable remuneration should sit no higher than $600,000. Brewer J fixed remuneration about $168,000 below the amount sought.
IBC and Botes appealed, seeking substantially lower figures. The liquidators cross-appealed, arguing the High Court should have approved the full amount.
The court tackled four main issues: whether parts of Jones’ evidence amounted to inadmissible hearsay, whether the judge erred by taking a broad-brush approach, whether he erred in fixing the remuneration amount, and whether the court had jurisdiction to review expenses.
On the hearsay point, the court held that time records from Rodewald’s firm, although hearsay, qualified as admissible under sections 18 and 19 of the Evidence Act 2006. The records were reliable, and requiring the firm’s staff to give evidence would have caused undue delay and expense.
On the broad-brush question, the court delivered its most significant clarification. It endorsed Re Roslea Path Ltd (in liq) and held that courts must always assess remuneration by applying the relevant principles, even when liquidators supply inadequate information. The court corrected a statement in Madsen-Ries v Salus Safety Equipment Ltd (in liq) suggesting a broad-brush approach was acceptable, finding it did not reflect what Roslea Path actually decided. An arbitrary choice of amount, the court confirmed, is never appropriate.
The court rejected the argument that Brewer J had applied a broad-brush approach. He had set out the relevant principles, analysed the evidence and seven issues bearing on reasonableness, and gave reasons for his percentage reductions. That made his approach judicial rather than arbitrary, even if he described it as global.
The court also upheld the judge’s finding that the liquidators overserviced two workstreams – the foreign exchange reconciliation, where they duplicated work already underway, and the remuneration application itself, which generated an affidavit running to more than 120 pages and thousands of pages of exhibits the court considered unnecessary.
On expenses, the court agreed that s 284(1)(e) confers no power to review expenses, since remuneration means payment for services, not out-of-pocket costs. However, the court located the review power elsewhere: liquidators act as fiduciaries, and their right to an indemnity covers only expenses properly incurred. Courts can therefore review whether expenses fall within that indemnity under the general law. The court found the liquidators’ evidence amply justified the legal fees, which involved seven law firms including offshore firms in Japan, the Philippines, and Singapore, and upheld the full expenses claim.
The court fixed costs on a band A basis for both the appeal and cross-appeal.
