ERA Legal recently acted in a case for Sule Arnautovic, the Administrator of the group of art companies trading as Smith & Hall.

In that case the Administrator upon his appointment found himself in possession of significant assets (namely artworks) which it seemed did not belong to any of the companies to which he was appointed.

In the Supreme Court, Justice Ward decided that the Administrator was entitled to require payment from owners of the artwork for time and expenses incurred by the Administrator in validating ownership of the artwork even though it had been clear from the outset that the artwork was not property of the company and at no time had the Administrator contemplated that it would be property of the company.

The Court accepted that the method proposed by Mr. Arnautovic to meet payment of his costs and expenses was fair and equitable.

The decision is a very useful guide to steps Administrators can take to preserve interests of others in property and at the same time ensure they are paid for their efforts.  Similar principles could apply to steps taken by Liquidators and, while each case will turn upon its own individual facts, the statements of principle are of universal application.

Readers wanting to know more review the decision in the matter of International Art Holdings Pty Limited (Administrator Appointed) and Ors. v Adams and Ors.