In the matter of Gondon Five Pty Limited and Cui Family Asset Management Pty Limited

1. [1]

   The applicant Dominic Calabretta (“the Receiver”) – who was on 2 December 2016 appointed, on the motion of the plaintiff Tracy Cui, to be interim receiver and manager of the respondent companies Cui Family Asset Management Pty Ltd (“CFAM”) as trustee for the Cui Family Trust, and its wholly owned subsidiary Gondon Five Pty Limited (“Gondon”), and remained in office as such receiver no longer than 21 days – applies, by interlocutory process filed on 3 May 2017, for orders fixing his remuneration as receiver at $107,278.51 (being $99,005.42 plus GST), and approving payment of his expenses (being the legal costs of his solicitors Piper Alderman) in the sum of $73,904.75. The Receiver also seeks orders authorising him to draw such remuneration and expenses from funds of the companies which remain in his trust account; requiring the respondents’ solicitors Marsdens to transfer the balance approved from $100,000 retained by them pending determination of his remuneration; and costs of the application, also to be paid from the funds retained by Marsdens. The plaintiff has agreed to the Receiver’s remuneration claim, but the respondent companies (“the Companies”) have not.

Background

1. [2]

   The Cui Family Trust was a discretionary family trust of which each of Tracy and her brother, Jinsong Cui, were beneficiaries; Jinsong was also the appointor, and the sole shareholder in CFAM, which was the trustee. In its trustee capacity, CFAM was the sole shareholder in Gondon, which was undertaking a property development in North Ryde. CFAM was also the sole shareholder in Australian Blue Mountains Group Pty Limited (“ABMG”), which operated a spring water business under its trade name Blue Mountains Natural Spring Water; Tracy was the sole director of ABMG. Arise Constructions Pty Limited was a building company, owned and controlled by Jinsong, which was retained by Gondon to construct the North Ryde development.1

2. [3]

   By late 2016, the North Ryde development was nearing completion, and sales of the units in it were underway; many had been sold, and many of the sales had been completed. Tracy as plaintiff commenced the substantive proceedings against CFAM, Gondon and Jinsong as defendants, and on 13 September 2016, obtained freezing orders against CFAM and Gondon, in the following terms: [1]

3. [4]

   Those orders were made for reasons which were summarised as follows: [2]

4. [5]

   In respect of the risk of dissipation, the following observations were made: [3]

5. [6]

   The Receiver was appointed on the plaintiff’s ex parte application on Friday 2 December 2016, essentially because it appeared that the freezing orders had been ineffective to prevent adverse dealings with the Companies’ assets. He was appointed, without security, initially only until Monday 5 December 2016 (which was the next business day), and expressly with the powers referred to in (CTH) Corporations Act 2001, s 420, but subject to the proviso that no distribution was to be made of any assets without the leave of the Court. The order of the Court was in the following terms:

6. [7]

   The application returned before the Court on 5 December 2016, when the appointment was continued until 21 December 2016 and directions made with a view to an interlocutory hearing on that day to determine whether the appointment would continue thereafter:

7. [8]

   The Companies became concerned at the extent of the work which the Receiver, his staff and solicitors appeared to be undertaking, and challenged his approach – and in particular his stated intention to prepare a “report” for the Court – pointing out that the appointment was an interim one, that the Court had not directed preparation of any such report, and that preparation of a report would incur significant costs. At the Receiver’s request, the proceedings were re-listed on 15 December 2016, when the Receiver sought clarification of the purpose and scope of his appointment, and the Court confirmed that the purpose of the appointment was to take custody of and secure the assets of the companies and prevent further dealings with them:

8. [9]

   In response to a query from Senior Counsel for the Receiver concerning the need for a formal report, I said:

9. [10]

   The Court also directed that the Receiver would be justified in completing any property sales entered into by either company in respect of which contracts had been exchanged prior to the appointment date. In addition, variations were made to the timetable in connection with the interlocutory hearing appointed for 21 December. The formal orders of the Court were:

10. [11]

    On 21 December, after the hearing of the interlocutory application commenced, it was stood down while the parties negotiated. Late in the day, the Court was informed that the substantive proceedings had been settled, and with them the interlocutory application had also been resolved. The proceedings were adjourned to 23 December 2016, for short minutes.

11. [12]

    On 23 December 2016, orders were made, by consent, that the Receiver be discharged. He was authorised to retain until further order the sum of $150,000, and also to maintain caveats on two units in the North Ryde development on account of and as security for his remuneration, costs and liability for tax. Subsequently, by agreement, those caveats were withdrawn on 7 February 2017, and instead the Companies’ solicitors Marsdens undertook to hold $100,000 in trust pending the determination of the Receiver’s remuneration.

12. [13]

    On 16 February 2017, the solicitors for the Receiver sought approval from the solicitors for the plaintiff and the Companies for their remuneration and expenses in the total amount of $181,183.26 (GST inclusive). The plaintiff agreed to the Receiver’s remuneration claim, but the Companies did not.

13. [14]

    The Receiver’s remuneration application was first listed for hearing before me on 6 June 2017, pursuant to directions made on 10 March 2017 for filing and service of an interlocutory process, affidavit evidence and outlines of submissions, by the Receiver by 7 April 2017, and by any objecting party by 12 May 2017.

14. [15]

    In support of his application, the Receiver belatedly served an affidavit of Domenic Calabretta sworn 2 May 2017 (“first affidavit”), and lodged written submissions dated 11 May 2017. The Receiver’s first affidavit summarised the work performed by the Receiver and his staff under ten headings, or “issues”, across which he approximately allocated his total remuneration claim of $99,005.42, of which $77,603.42 relates to the Gondon receivership, and $21,377 to the CFAM receivership. This description and allocation by the Receiver provides a useful overview of the work in respect of which remuneration is claimed, and is summarised in the following paragraphs. The amounts referred to are exclusive of GST.

15. [16]

    1 - Books and records. The Receiver took steps to obtain possession of the books and records of both companies. For this he claimed remuneration of $9,000 to $11,000, which was later refined to $8,813 for Gondon and $1,841 for CFAM.

16. [17]

    2 - Status of sales. The Receiver sought and obtained information concerning the status of sales of the units in Gondon’s North Ryde development, and endeavoured to reconcile what he considered to be discrepancies in the information obtained. For this he claimed remuneration of $11,000 to $13,000, which was later refined to $11,632 for Gondon and $385 for CFAM.

17. [18]

    3 - Caveats. The Receiver conducted searches of real property owned by Gondon and instructed his solicitors to lodge caveats over the 61 units in Gondon’s name. His solicitors lodged a single caveat covering the 44 titles which remained in Gondon’s name (the sale of the others having been completed) – in which the interest claimed was a charge for the Receiver’s remuneration and expenses – and subsequently engaged in correspondence with the Companies’ solicitors Marsdens about the validity of the caveat. For this he claimed remuneration of $2,000 to $3,000, later refined to $2,640 for Gondon.

18. [19]

    4 - ABMG. The Receiver was notified by the plaintiff’s solicitors that Jinsong and one Rong Chen had attempted to effect a “lockout” of ABMG’s business premises, interfering with the operation of ABMG’s business, and instructed Piper Alderman to correspond with Marsdens in relation to this. For this he claimed remuneration of $2,000 to $2,500, later refined to $2,398 for CFAM.

19. [20]

    5 - Subpoena. In connection with the interlocutory hearing, the Receiver was served with a subpoena, issued at the request of the Companies, to produce documents, and incurred time in considering and responding to it, including in obtaining advice from his solicitors. For this he claimed remuneration of $3,000 to $4,000, later refined to $2,713 for Gondon and $880 for CFAM.

20. [21]

    6 - Investigation of transactions. The Receiver investigated transactions made from the bank accounts of Gondon in the period 1 August 2016 until 2 December 2016. This involved reviewing the bank statements, and liaising with the plaintiff’s solicitors and the Bank. He also investigated a payment made to Marsdens on 28 October 2016. For this he claimed remuneration of $6,500 to $7,500; this was later refined to $6,675 for Gondon and $148 for CFAM.

21. [22]

    7 - Litigation. The Receiver prepared for, attended at and reviewed, and instructed solicitors in relation to, all proceedings “related to but not limited to the scope of my appointment”. This included attending (with multiple members of his staff, and solicitors) the hearings on 5 December, 21 December 2016 and 23 December 2016, and making his own application for directions (with senior counsel) on 15 December 2016. For this he claimed remuneration of $23,000 to $25,000, later refined to $16,935 for Gondon and $7,118 for CFAM.

22. [23]

    8 - Execution of contracts for sale of units A206 and B206. Having obtained advice from his solicitors that he was entitled to do so, the Receiver authorised the exchange of contracts for the sale of units A206 and B206, for a total price of $1,519,000, and instructed and liaised with his solicitors in connection with the execution of the contracts. For this he claimed remuneration of $4,000 to $5,000, which was later refined to $4,816 for Gondon.

23. [24]

    9 - Other work necessary for effective performance as receiver. The Receiver performed other work said to be necessary to fulfil his function. For this he claimed remuneration of $20,000 to $22,000, later refined to $16,460 for Gondon and $4,954 for CFAM.

24. [25]

    10 - Mandatory work. The Receiver performed what was said to be mandatory work required of a receiver, of an administrative nature, which did not relate directly to securing or preserving assets. For this he claimed remuneration of $7,500 to $8,500 for Gondon and $3,000 to $4,000 for CFAM; this was later refined to $7,849 and $3,655 respectively.

25. [26]

    In his first affidavit, the Receiver also described the tasks undertaken by him (and his staff) in the receiverships. These comprised 16 tasks undertaken in relation to CFAM; 32 tasks undertaken in relation to Gondon; and 5 tasks undertaken after his discharge. These tasks are explained later in this judgment.

26. [27]

    The respondents’ submissions of 2 June 2017 raised three main issues: the first was that the Receiver had failed to adduce sufficient evidence to establish that his remuneration and expenses were fair and reasonable; [4] the second was that much of the work performed was outside of the scope of the appointment and ought not to be allowed; and the third was that the Receiver had conducted himself in a manner inconsistent with his duty of impartiality. The respondents proposed that, consistent with the course that had been taken by Black J in Sakr Nominees, the Court should permit the Receiver, if so advised, to adduce further evidence particularising the work undertaken, and in particular to produce a schedule which effectively subcategorised each of the ten “issues” across the 53 “tasks”.

27. [28]

    In the light of those submissions, the Receiver sought and was granted an adjournment, and the application was adjourned to 3 July 2017, with directions for the service of further evidence.

28. [29]

    The Receiver served a further affidavit of Domenic Calabretta, sworn 23 June 2017 (“second affidavit”), and further submissions dated 27 June 2017. The second affidavit included revised remuneration reports, providing considerably greater detail of the work in respect of which remuneration was claimed. The submissions included a proposal for referral of the matter to an insolvency practitioner as an expert.

29. [30]

    At the directions hearing on 3 July 2017, directions were made for service of evidence in reply by the respondents. I did not accede to the Receiver’s proposal for what was in effect a reference to an insolvency practitioner, and indicated that if the receiver wished to adduce expert evidence, a formal application would be required. No such application was made. The proceedings were adjourned to 7 August 2017.

30. [31]

    At the directions hearing on 7 August 2017, the Receiver foreshadowed that he had instructed his solicitors to have his legal costs – which he claimed as expenses – submitted for costs assessment. The proceedings were fixed for hearing on 8 December 2017, with an agreed one day estimate; the Court offered a date in September, but the later date was fixed to accommodate the convenience of counsel. The respondents lodged supplementary submissions on 21 August 2017.

31. [32]

    On 17 October 2017, the Receiver filed, with the Manager Costs Assessment, the foreshadowed application for assessment, as between client and practitioner, of the costs which had been rendered by Piper Alderman, and which constituted the out-of-pocket expenses which he sought to recover from the Companies. On 30 November 2017, on the application of the Companies, that application was stayed pending the hearing of the remuneration application, essentially because – for reasons which will appear – it could not resolve all the issues in respect of the Receiver’s expenses, and also the respondents could not reasonably be expected to deal with it in the short time that remained before the final hearing.

32. [33]

    The hearing of the present application commenced on 8 December 2017, but the Receiver was still in cross-examination at the end of the day and the proceedings were adjourned, part heard, to 28 March 2018. On that day, the cross-examination of the Receiver was completed, and further written and oral submissions received. Following the hearing, written submissions in reply were lodged by the Receiver on 6 April 2018, to which the respondents responded on 13 April 2018.

Issues

1. [34]

   The remuneration of court-appointed receivers is provided for by (NSW) Uniform Civil Procedure Rules 2005, r 26.4, which states that a receiver is to be allowed such remuneration (if any) as may be fixed by the Court. The Court has a very wide discretion in fixing the basis and level of remuneration. [5] Founding on what Young CJ in Eq said in Ide v Ide, [6] but drawing on the qualifications expressed in later cases, [7] the relevant principles may be restated, so far as they are relevant to the present case, as follows: [8]

   1. (1)

      A receiver is entitled to the costs, charges and expenses properly incurred in the discharge of the receiver’s ordinary duties, or in the performance of extraordinary services that have been sanctioned by the Court.

   2. (2)

      In fixing remuneration, the objective is to award a sum or devise a formula which will reasonably and fairly compensate the receiver for the time and trouble expended in the execution of his or her duties and the responsibility he or she has assumed.

   3. (3)

      The ultimate question is what amount of remuneration is ‘reasonable’, and this involves considering (a) whether the work in respect of which remuneration is claimed was reasonably undertaken in the due course of the receivership, and (b) whether the amount claimed for it is a fair and reasonable reward for such work. On those questions, the receiver bears the onus of justifying the reasonableness and prudence of the tasks undertaken for which remuneration is sought, and the reasonableness of the remuneration claimed for them.

   4. (4)

      By analogy, the task involves consideration of the matters referred to in Corporations Act, s 425(8), which applies to receivers appointed under an instrument, [9] namely:

   5. (5)

      Many of those factors – in particular, pars (d)-(e) and (g)-(h) – have as their unifying theme the concept of proportionality (being the relationship of the work done and the remuneration claimed to the value of the estate), which is an important consideration in determining reasonableness. [10]

   6. (6)

      Remuneration may be allowed on the basis of a fixed salary, a commission on receipts, or a quantum meruit having regard to the time, trouble and responsibility involved. It is a matter for the Court to determine what basis is appropriate in the particular case, having regard to the principle that the remuneration must be reasonable.

   7. (7)

      If a time-based approach is adopted, the Court is guided by professional scales of charges, with emphasis on the broad average or general rate charged by persons of the relevant status and qualifications who carry out the relevant type of work. The Court will usually act on time sheets created in the receiver’s office, provided that they do significantly more than merely detail the total number of hours spent by the receiver and officers of particular grades of his or her staff.

   8. (8)

      In respect of disbursements, no Court approval or specific order is necessary in the absence of a challenge, although receivers should scrutinise them to ensure that they are reasonable and properly payable. [11] However, the Court has an inherent jurisdiction to review receivers’ disbursements as they are officers of the Court. [12] Further, a receiver may seek a direction that he or she would be justified in paying certain disbursements, in order to obtain prior protection in respect of such a disbursement. [13]

2. [35]

   The Court expects an applicant for remuneration to produce sufficiently detailed evidence of the work in respect of which remuneration is claimed as to enable the amounts claimed for the various tasks performed to be dissected and identified. [14] Although, on an application of this kind, it is not the function of the Court to undertake a taxation of the receiver’s bill on an item-by-item basis – the exercise involves a more impressionistic, evaluative and “broad-axe” approach – such a requirement would serve no purpose if the Court did not have regard, to some extent at least, to the detail. The categorising of work done according to tasks in the administration enables the Court to ascertain and allow (in whole or in part) – or disallow – the total amount of remuneration claimed in respect of a particular task, according to whether such task was (wholly or partly) – or was not – reasonably undertaken within the proper scope of the administration.

3. [36]

   Opposition to the Receiver’s remuneration claim was not founded on any dispute as to the reasonableness, according to professional standards or otherwise, of the rates charged by the Receiver for his time. Nor was it submitted that, in the context of this appointment, a commission or percentage-based approach should be adopted. The fundamental disputes are whether, having regard to the nature, object and outcomes of the appointment, substantial parts of the work done by the Receiver for which he claims remuneration were not reasonably performed, and/or the total amount claimed and work done was not reasonably proportionate.

4. [37]

   The evidence and submissions raise a number of issues of general principle, the resolution of which will inform consideration of the detail of the Receiver’s claim. Those issues may be summarised as follows:

   1. (1)

      To what extent does the evidence adduced by the Receiver sufficiently prove the work done and its value? Associated with this is a particular issue as to whether the Receiver’s staff member Mr Ngo performed the work attributed to him in respect of which remuneration is claimed.

   2. (2)

      To what extent was the work in respect of which remuneration is claimed reasonably undertaken in the due course of the receivership, having regard to the nature and object of the appointment? Associated with this are particular issues as to whether it was reasonable for the Receiver to embark on investigations concerning transactions which preceded his appointment, and whether the Receiver acted other than impartially; whether it was reasonable for the Receiver to incur the time and cost of preparing for and attending at the hearings on 5, 21 and 23 December 2016; whether it was reasonable for the Receiver to incur the time and cost of making the application for directions on 15 December 2016; and to what extent it was reasonable for the Receiver to incur the time and cost of engaging solicitors to act for him; and whether the Receiver is entitled to remuneration for certain work done after termination of his appointment.

   3. (3)

      To what extent is the total amount claimed for work properly done a fair, reasonable and proportionate reward for it, having regard in particular to the nature, object and outcomes of the appointment?

   4. (4)

      To what extent were the expenses paid or payable to his solicitors Piper Alderman reasonably incurred by the Receiver, having regard to the nature and object of the appointment?

The Receiver’s evidence

1. [38]

   The respondents submitted that the Receiver did not adduce sufficient evidence – conformably with the requirements of In the matter of Sakr Nominees Pty Limited [15] – to enable the Court to be satisfied that the remuneration and expenses claimed were fair and reasonable. In Sakr Nominees, Black J observed that it was not the Court’s role to review chronological work in progress schedules to endeavour to deduce which tasks related to which matters, where the insolvency practitioner did not adduce adequate evidence to facilitate the exercise.

2. [39]

   In his second affidavit, the Receiver provided detailed evidence of the work undertaken by him and his staff, through reports produced from the time recording system "CORE IPS”. These showed, for each item of work claimed, the date, duration and a narrative description of the work performed (drafted by the relevant fee earner at the time of making the entry), and a reference to the relevant ARITA work category. [16] The Receiver also explained how time spent was recorded in CORE IPS, including that the entries are made directly by the relevant staff member contemporaneously with doing the work, or if they do not have immediate computer access, as soon as reasonably practicable thereafter.

3. [40]

   In addition, the Receiver produced additional schedules, for each Company, which categorised and sub-categorised the time entries in various ways, including according to the ten “Issues” described above; the six “ARITA Categories” to which work was allocated as entered into the time recording system; and (as the respondents had requested) the 53 “Tasks” identified in the first affidavit. The Receiver deposed as to why each task was undertaken. The Receiver’s third affidavit, sworn 7 December 2017, provided some minor corrections to the allocations as to company, issue and task.

4. [41]

   The Receiver – who is an experienced insolvency practitioner, and a member of ARITA who says that he observes the ARITA Code of Professional Practice – deposed that he regularly reviewed work in progress, to ensure that work being performed was appropriate, that a reasonable amount was being charged, and that he did not identify any work that was unreasonable to perform, was performed by an inappropriate person, or seemed to have taken an unreasonable period of time.

5. [42]

   Whatever the deficiencies might have been in the evidence initially adduced by the Receiver, measured against the standard indicated by Sakr Nominees, the effect of the second affidavit and accompanying schedules produced by the Receiver is that the evidence now provides, in respect of each time entry for which remuneration is claimed, the date on which the work was performed; a description of the work by the fee earner who performed it; the name of the fee earner; the professional grade or seniority of the fee earner; the amount of time incurred; the amount charged for it; the ARITA category to which it was assigned; the “issue” to which it primarily relates; and the “task” to which it primarily relates. This evidence, extracted from the Receiver’s time records, proves, at least prima facie, that the work recorded was done, the time that was spent on it, and the staff member who performed it. The schedules enable the work done to be analysed chronologically, by ARITA category, by “issue” and by “task”, by fee earner, and by issue subcategorised by task and timeframe. In my view, this evidence is ample to enable assessment of a remuneration claim, based on the work done and recorded in the Receiver’s time recording system.

6. [43]

   The Receiver was cross-examined, and the respondents advanced submissions critical of his credit. Some, though not all, of those criticisms are well-founded. In particular, I am unable to accept as creditworthy the Receiver’s claim that the communications between Piper Alderman and himself about removing Marsdens were confined to their role in acting for Gondon as vendor in the conveyance of units (the circumstances and communications simply do not permit that interpretation); [17] nor his evidence that there was no work done in respect of preparation of a report which he would not in any event have undertaken even had he not misapprehended that a report was required (notwithstanding that until as late as 15 December 2017 he was contemplating preparing a report for the Court in advance of the 21 December hearing, for which preparation must necessarily have by 15 December been well-advanced); nor that he would have investigated certain matters which he was asked by the plaintiff to investigate regardless of whether she had asked him to do so (notwithstanding that his staff first asked the plaintiff whether she wished them to investigate those matters); [18] nor that he thought he might be required to prepare a report by Corporations Act, s 422 (in cross-examination he suggested that an issue on 15 December was “my obligations under section 422” (to report contraventions to ASIC), and that this was a reason for seeking the Court’s directions; he then said that it was a “side issue” – in fact it was not referred to in the application on 15 December at all, and it had never previously been mentioned). These were explanations, advanced to explain away issues raised with the Receiver, which the circumstances did not objectively accommodate.

7. [44]

   On the other hand, I accept that, notwithstanding that it described the interest claimed as a charge for the Receiver’s remuneration and expenses, the caveat in respect of Gondon’s units was lodged primarily for the purpose of securing the assets, and that the reference to the Receiver’s remuneration was, on advice, a means for ensuring that a valid caveatable interest was claimed. The Receiver says that that was his primary purpose, and that the caveat was drafted as it was on his solicitor’s advice; the contemporaneous communications between the Receiver and his solicitor corroborate him in both respects.

8. [45]

   Ultimately, however, questions of credit are of only slight significance in the resolution of the issues. The evidence of what work was done is provided by contemporaneous business records. In the result, as will become apparent, acceptance or rejection of the Receiver’s contentions that the work would have been done in any event (regardless of whether he believed that a report was required, or whether the plaintiff requested it) has not been determinative. On the issue on which credit might have been determinative – namely, the purpose of the caveat – I have accepted the Receiver.

9. [46]

   The respondents submitted that 39.4 hours claimed for work done by the Receiver’s co-director Mr Ngo ought not be allowed. This submission was originally advanced on the basis that the only work attributed to Mr Ngo was “delegating”, and that in circumstances where the Receiver himself charged a total of 47.6 hours, it was unreasonable for his co-director Mr Ngo to have incurred 39.4 hours merely “delegating”. However, once evidence emerged that tended to show that Mr Ngo’s work was not limited to “delegating”, the basis of the submission shifted to a contention that the entries into the time recording system in respect of Mr Ngo were irregular and unreliable.

10. [47]

    Mr Calabretta, who was the sole appointee as Receiver, is one of three directors of the firm Mackay Goodwin, the others being Messrs Ngo and Ward. I do not accept the respondents’ submission that the Receiver described Mr Ngo’s role as limited to assisting in “delegating work to a staff member(s) of appropriate seniority”. That submission was founded on para [106] of the first affidavit, which on no fair reading says that; rather, in the context of explaining his practice in respect of the distribution of work between members of his staff, the Receiver deposed:

11. [48]

    The Receiver’s evidence was that in this receivership, in conformity with the structure usually adopted by the Receiver for an administration – which utilised a lead appointee, a manager and analysts – Mr Ngo performed the role of a manager. Because Mr Ngo’s time was charged at a rate $55 per hour less than the Receiver’s own time, economies were to be achieved from his engagement, at least if it did not result in duplication. That he was engaged in such a role, and not merely in “delegation”, is confirmed by the nature of the work attributed to Mr Ngo in the time records, examples of which include:

    1. (1)

       15 units on 6 December 2016 for:

    2. (2)

       5 units on 7 December 2016 for:

    3. (3)

       4 units on 8 December 2016 for:

    4. (4)

       5 units on 9 December 2016 for:

    5. (5)

       15 units on 9 December 2016 for:

    6. (6)

       3 units on 13 December 2016 for:

    7. (7)

       5 units on 13 December 2016 for:

    8. (8)

       15 units on 14 December 2016 for:

    9. (9)

       6 units on 15 December 2016 for:

12. [49]

    It was suggested that at least some work in respect of which Mr Ngo’s time is claimed was not “posted” in the system until 22 December 2016 and 25 January 2017, these being the dates on which the remuneration report records those entries as having been “added”. In particular, work said to have been done by him on 5 December in attending Court was shown as “added” on 25 January 2017, and work done on 7 December 2016 was shown as added on 22 December 2016 and on 25 January 2017, and did not appear in a WIP report produced on 20 December. Upon this, and the absence of any affidavit from Mr Ngo personally, the respondents’ submissions hint that perhaps these entries were ex post facto reconstructions rather than contemporaneous – though they do not explicitly contend that the work attributed to Mr Ngo was not done.

13. [50]

    At this point, the issue is not whether the work attributed to Mr Ngo was reasonably performed, but whether it was performed at all. On this issue, I do not accept that the absence of an affidavit from Mr Ngo is a matter of significance. In an application of this kind it is not expected that each person who has worked on the matter will swear an affidavit describing the work they have done. Such a requirement would disproportionately increase the costs of such applications, to the detriment of the estate. The Receiver has tendered the time records, which contain the more-or-less contemporaneous entries of every staff member who worked on the matter. Those documents, which are admissible pursuant to (NSW) Evidence Act 1995, s 69, evidence that the work was done as recorded in the time sheets, and provide a sufficient basis for the Court, and the defendants, to assess the reasonableness of the remuneration claim. Moreover, the challenge in respect of Mr Ngo’s time arose for the first time in cross-examination of the Receiver on 8 December 2017.

14. [51]

    The Receiver explained that it was possible that Mr Ngo’s time had been “entered” contemporaneously but not “posted” until later, and that it would not become “work in progress” until it was “posted”; but he also accepted that it may not even have been “entered” – or amended – until as late as 22 December 2016 or 25 January 2017, as the case may be. Some support for this is provided by the 20 December WIP report, which includes Mr Ngo’s entries for 5 December – even though they are shown in remuneration report as “added” on 22 December. There is also corroboration of Mr Ngo’s work on 5 December, as the questioned entries in his time sheets assert, in Mr Narayan’s entry for 5 December:

15. [52]

    Even if Mr Ngo did not enter all his work time in the system immediately, and entered or amended some of it on 22 December 2016 or 25 January 2017, I see no reason to doubt that his entries faithfully recorded work that he had done. I accept that Mr Ngo did perform the work attributed to him, and I therefore do not accede to the respondents’ submission that time attributed to him should be disallowed globally. That is not to say that it will ultimately be allowed in full: in particular, to the extent that it was outside the scope of the receivership, or involved unnecessary duplication, it may be disallowed on those grounds.

16. [53]

    The Receiver has deposed that he has not identified any work that was unreasonable to perform, or was performed by an inappropriate person, or seemed to have taken an unreasonable period of time. Although the opinion of the insolvency practitioner to this effect is a relevant consideration, [19] the evidence of a claimant for remuneration in those terms is more than a little self-serving. Perhaps unsurprisingly, I am yet to encounter an insolvency practitioner who deposes that he has identified any work that was unreasonable to perform, was performed by an inappropriate person, or seemed to take an unreasonable time. In my judgment, while requiring an applicant for remuneration to depose to those matters serves the prophylactic purpose of at least requiring that attention be directed to them, its self-serving nature means that in the face of contention it cannot be afforded much weight.

The scope of the appointment

1. [54]

   By far the most significant issue in this case concerns the scope of the Receiver’s appointment: to what extent was the work in respect of which remuneration is claimed reasonably undertaken in the due course of the receivership. The respondents submit that much of the work performed by the Receiver was not reasonably undertaken for the purposes of the attainment of the objectives for which he was appointed, and that he should not be allowed remuneration in respect of that work, nor reimbursement of related disbursements. This issue turns on the nature of the Receiver’s appointment, and the scope of work that was reasonable to achieve its purpose.

2. [55]

   The Receiver was appointed as an interim receiver and manager. This is manifest from the orders appointing the Receiver, and continuing the appointment, because the appointment was always limited in time, and for that matter, a very short time. The Receiver’s initial appointment, by the 2 December 2016 order, was for one business day, “until and including 5 December 2016”. That appointment was continued, for a further 13 business days, by the 5 December 2016 order, “until and including 21 December 2016”. It is plain from the orders of 5 December that whether the appointment would continue beyond 21 December, even on an interlocutory basis, was contested and was to be resolved at an interlocutory hearing on that date. This was also apparent from the directions of 15 December. The appointment was therefore at all times an interim one, limited to a specified date. Moreover, on 15 December what had been understood by the Receiver from the outset was confirmed, namely that the purpose of the appointment was to take custody of and secure the assets of the companies and prevent further dealings with them.

3. [56]

   The Receiver was given the powers in Corporations Act, s 420, which provides as follows:

4. [57]

   Those powers "encompass virtually every type of power which a receiver could conceivably need", [20] and s 420 “... gives a receiver of property of the corporation the specific statutory powers listed in the subsection, "subject to any provision of the court order by which … the receiver was appointed, being a provision that limits the receiver's powers in any way"”. [21] Thus, subject to the two provisos mentioned in the orders – namely that no distribution could be made of any assets without leave of the Court, and that the directors of both Companies retained their powers to commence, continue and defend legal proceedings – the Receiver had all the powers referred to in Corporations Act, s 420, which include, among other things, the power to take into possession and take control of the property of the corporation and the power to carry on any business of a corporation.

5. [58]

   However, as s 420(1) makes clear, the powers referred to in the section are conferred not in a vacuum, but for the purpose of the attainment of the objectives of the appointment. That the Receiver had all the powers referred to in s 420 does not mean that it was necessarily reasonable or appropriate to invoke them, especially in the context of an interim appointment. An interim receiver – and an interim receiver and manager – is no equivalent of a provisional liquidator. The function of a receiver is to serve as a repository of the assets to which the receiver is appointed, and while a manager admittedly has more extensive functions [22] – in particular, the power to carry on the business of the company [23] – the function of a receiver and manager remains essentially to preserve the status quo. [24] While Corporations Act, s 420(2)(h), largely removes any distinction between the powers of a receiver and those of a manager, and although the function of “management” involves being more than a mere repository, it does not alter the fundamental purpose of the appointment, which – ordinarily – is preservation of the assets and undertaking in respect of which the appointment is made.

6. [59]

   This is all the more so in the case of an interim appointment. In Say Enterprises, I described the function of an interim receiver in the following terms, which are also apt for the present case: [25]

7. [60]

   Accordingly, in Say Enterprises, it was not reasonable for interim receivers to undertake some or all of the work for which they claimed remuneration in respect of extensive efforts to obtain information about the company from the parties (and their legal representatives) and the company’s accountant; conducting extensive negotiations with the parties and their legal representatives, with respect to attempts to resolve the dispute between the parties (as it was not the function of the receivers to intermeddle in, or endeavour to mediate, the parties’ dispute); retaining solicitors, preparing a report and affidavit, and preparing an application to the court for directions (the report and affidavit was in substance a report of their investigations into the affairs of the company, for which there was no requirement, and if they were in doubt as to the scope of their appointment, they ought first have asked the solicitors for the plaintiff to make the application, rather than incurring the costs of retaining their own solicitors and making their own application); conducting investigations into the status of the company’s ‘contractors’ (including their remuneration, visa status, whether they were in truth employees and not contractors), its sales practices, and its compliance with workplace and superannuation laws (this went far beyond their role of interim preservation); and considering the possible sale of the business of the company (which was entirely outside their proper function as interim receivers). [26]

8. [61]

   The present case has many similar features.

9. [62]

   In his first affidavit, the Receiver deposed that when he was first appointed, he understood his role to be to secure the assets of Gondon and CFAM, and to prepare a report for the Court in relation to his investigations. In his second affidavit, he said that he formed that view because he understood that there had been breaches by the respondents of the freezing orders made on 13 September 2016, and anticipated that the Court would seek an account of funds and assets from the date of the freezing orders to the date of his appointment. Similarly, in a letter to the respondents’ solicitors dated 14 December 2016, the Receiver’s solicitor stated:

10. [63]

    It is therefore plain, from his own evidence, that the Receiver thought that his task involved investigating what if any transactions had taken place, before his appointment, in contravention of the freezing orders, with a view to preparing a report for the Court on that matter. The work he did reflects that understanding, involving investigations into pre-appointment transactions of the Companies, as well as into what were the assets of the Companies.

11. [64]

    Unlike a liquidator, a court-appointed receiver – especially an interim one – is (at least absent specific direction) neither required nor expected actively to identify the property to be collected and received, nor (as Waddell J, as the later Chief Judge then was, explained in Corporate Affairs Commission v Smithson) to conduct investigations (emphasis added): [27]

12. [65]

    It was submitted, for the Receiver, that Waddell J’s observations were of limited if any application in the present circumstances, for three reasons. The first was that they were merely obiter dicta in the context of refusal of an application, by a receiver appointed under the precursor of Corporations Act, s 1323, to conduct public examinations, in circumstances where the relevant statutory provision (being Companies (New South Wales) Code, s 573(1)) did not confer on the receiver the powers which Corporations Act, s 420, gave Mr Calabretta. These powers, it was said, would authorise an investigation into the property of the Companies, when the receiver’s powers in Smithson did not. However, in the passage cited, his Honour was addressing the position of a receiver appointed “in other circumstances” – that is to say, in circumstances other than an appointment by the Court under the predecessor of Corporations Act, s 1323 – having observed that a receiver appointed by a court under s 573 of the Companies Code implicitly had the powers ordinarily accorded to a receiver appointed by the Court for purposes such as the preservation of property. [28] The passages in Kerr, [29] to which his Honour referred, dealt with the powers and duties of a court-appointed receiver, including an interim receiver appointed by a court of equity to preserve the status quo pending resolution of litigation (as in the present case), not a receiver appointed under a special provision such as Corporations Act, s 1323. Nor is it to the point that the Smithson receiver did not enjoy all powers granted to the Receiver under Corporations Act, s 420; the Smithson receiver had been specifically empowered to investigate the affairs of the defendants, [30] so it was not a lack of such power that was his problem. Similarly, in the present case, the issue is not whether the Receiver had the power to investigate the affairs of CFAM and Gondon Five, or to undertake other forms of work for which he claims remuneration; but whether such work was reasonably undertaken for the purposes of the attainment of the objectives for which he was appointed. The issue is not one of power under s 420(2), but of the objectives of the appointment under s 420(1).

13. [66]

    A second reason advanced was that Waddell J’s observations were premised on the relevant order being one that the receiver receive particular property in contest in the litigation, and that that was not the nature of the order made in the proceedings the subject of this application. However, the Smithson receiver was not appointed in respect of particular property, but to all of the assets of the defendants, in order to secure and preserve all their assets pending an investigation by the Commission into whether they had been involved in (inter alia) operating an unlawful financial scheme; no litigation about entitlement to those assets was on foot. Like the Receiver in the present case, the Smithson receiver was appointed to all of the assets of the defendants, to preserve those assets (that is, to preserve the status quo). Waddell J held that an order in general terms was authorised. [31]

14. [67]

    A third reason advanced was that in using the words “actively to identify” Waddell J should be understood as referring only to the examinations which the receiver sought to conduct, and that a wider application of those words could preclude, for example, a review of company records to identify relevant bank accounts (at least if they were not specified in the appointment), which the parties agreed was within the scope of Mr Calabretta’s appointment. However, as the respondents submitted, Waddell J’s comments were not qualified in that way, and his Honour was expressing a principle at a general level – as is again reinforced by the references to Kerr, although (as the respondents acknowledge) this may not mean that a receiver is unjustified in reviewing company records to identify the relevant bank accounts.

15. [68]

    The order appointing the Receiver contained no requirement for a report, nor for investigations into transactions which had occurred before his appointment. The Receiver’s function was merely to take possession and control of the assets of the companies, so that they could not be dissipated and would be preserved pending the interlocutory hearing. The principal relevant assets were the remaining units in the Gondon’s North Ryde development, and bank accounts. Although the Receiver sought to justify the investigation of pre-appointment transactions on the basis that, quite apart from any contravention of the freezing orders, they might have resulted in loan accounts, and that his obligation to get in the assets meant that he could not leave “money sitting in loan accounts”, this is nonsensical: money does not “sit” in a loan account, rather, it is the loan account itself which is a chose in action and as such an asset to be preserved.

16. [69]

    It was therefore beyond the scope of the Receiver’s interim appointment to conduct investigations into whether there had been contraventions of the freezing orders, and/or whether there had been transactions that might be clawed back or recovered. Thus, even if, as he says, the Receiver would have conducted those investigations regardless of whether he believed that a report was required, they would still have been unjustified.

17. [70]

    I do not accept the Receiver’s submission that difficulties were occasioned because the appointment orders did not describe the property entrusted to the Receiver, nor specify any limitation upon the nature or exercise of his powers by reason of the appointment being an interim one. There was no lack of clarity about the assets to which the Receiver was appointed: while the order appointed him in general terms as the receiver and manager of the companies, rather than of specific assets, that plainly means that he was appointed receiver of all the assets and undertaking of CFAM and Gondon. Nor could there have been any reasonable basis for thinking that the appointment was at that stage other than an interim one; reference has already been made to the overwhelming and unambiguous indicia of its interim character.

18. [71]

    Nor do I accept the Receiver’s submission that in the absence of specific objection, by the respondents or by the Court, when the Receiver referred in the course of the hearing of his directions application on 15 December 2016 to the fact that he was investigating transactions, it would be unfair for the Receiver not to be remunerated for such work. Any reference to such investigations was oblique; senior counsel for the Receiver said:

19. [72]

    That led to my observations, previously set out, about the purpose of the appointment. Counsel then resumed:

20. [73]

    That led to the response, previously set out, to the effect that the orders did not require a report. It is true that the reference to investigations did not provoke immediate objection. However, while reference was made to investigations that had been carried out “to date”, there was no reference to ongoing or further investigations. The respondents had already robustly expressed concern about the extent of the Receiver’s activities, and the full extent of the investigations being undertaken was in any event not apparent. Moreover, there was no occasion then to consider the appropriateness of any such investigations, on which subject the Court’s guidance was not sought; such questions would properly arise for determination if and when directions were sought, and otherwise (as they have) on the claim for remuneration in respect of that work. Nonetheless it was implicit, in the Court’s indication that a report was not required, that investigations to inform it were also not required.

21. [74]

    Indeed, the Receiver well understood that his powers were not so extensive as those of a provisional liquidator: Mr Ngo had, prior to the appointment, advised the plaintiff – who had consulted him in anticipation of the application – to seek the appointment of a provisional liquidator as “the powers of a Liquidator are far more reaching than the powers of a Receiver”. And notwithstanding the Receiver’s stated view, referred to above, that he was required to conduct investigations and provide a report, he must have entertained some doubt about this – at least as to the requirement for a report – because an email from Piper Alderman to the plaintiff’s solicitor and to Marsdens dated 14 December 2016 observed (emphasis added):

22. [75]

    It is also notable that insofar as that email refers to investigations, it refers to “certain work to identify assets”; it does not refer to investigations into potential contraventions of the freezing order.

23. [76]

    Accordingly, the Receiver was not entitled to assume that the purpose of his appointment was anything more than was implicit in the appointment of an interim receiver and manager – namely to secure, hold and (to the extent necessary for their preservation) manage the assets and undertaking of the Companies in the very short term, pending determination at an interlocutory hearing of whether the appointment would continue on an interlocutory basis.

24. [77]

    By no means was all liaison between the Receiver and the plaintiff, and the plaintiff’s solicitors, necessarily inappropriate; some is not only entirely appropriate, but necessary, as it is the plaintiff who procures the appointment, and (as explained later) the plaintiff’s solicitor who is expected to exercise a degree of oversight of it. However, a receiver should not be partisan, should not become involved in arguing for or against the continuation of the appointment, [32] and should not intermeddle in any litigation between the parties. [33] While the line is not necessarily clear, it was crossed when the Receiver effectively invited instructions to investigate transactions which preceded his appointment, and when his solicitors became involved in critiquing the respondents’ evidence, assisting the plaintiff’s case, and contemplating procuring the removal of the respondents’ solicitors.

25. [78]

    As the respondents submit, the Receiver took instructions from the plaintiff (and her solicitors) as to some of the tasks he was to undertake. While it was entirely appropriate for the Receiver to liaise with the plaintiff and her solicitors for the purpose of obtaining information, it overstepped the bounds of impartiality to allow the plaintiff and her solicitors to determine what the Receiver should do. At a meeting on 6 December 2016 (for which remuneration is claimed) the plaintiff, two of her solicitors’ staff and three of the Receiver’s staff discussed matters which included placing bank traces on “unknown and suspicious transactions”; and the plaintiff requested the investigation of dealings between Gondon and Arise Constructions, and with other parties. On 6 December, the Receiver’s staff acted on the plaintiff’s solicitor’s request to have a bank trace of transactions on 2 December. An email on 7 December 2016 from the Receiver’s staff to the plaintiff’s solicitor identified three transfers to Weidong Zheng, on 10 and 28 November, and asked “Are you aware of the nature of the above payments? Would you like us to investigate them?”; the response included “please investigate”. In cross-examination, the Receiver said that this email of 7 December was “worded incorrectly” by his staff, and the answer would not have changed what would have happened: “I would have investigated regardless of her answer”. It is difficult to believe that such investigations would have been undertaken regardless of the plaintiff’s instructions, as otherwise seeking her instructions would have been a pointless (and wasteful) exercise. Regardless, the correspondence evinces partiality on the part of the Receiver. And in any event, such investigations into transactions which preceded his appointment were unjustified.

26. [79]

    The work in respect of which Piper Alderman has rendered costs includes discussions with the plaintiff’s solicitor on 12 December 2016 as to the “strategy moving forward with respect to the Court applications”, in the course of which the Receiver’s solicitor advised that the Receiver would prepare an affidavit to assist the plaintiff at the hearing on 21 December 2016; reviewing documents provided by the plaintiff and providing commentary to the plaintiff’s solicitors about their potential interpretations; and reviewing the evidence served on behalf of the respondents, and sending an “email to [the plaintiff’s solicitors] with general and specific commentary on evidence” (which was in the nature of instructions for cross-examination of Jinsong at the hearing on 21 December 2016). These entries refute the Receiver’s contention that he reviewed the evidence in order to obtain background information; they evidence inappropriate partisan intermeddling in the dispute between the parties.

27. [80]

    Notably, an email chain on 9 December 2016 between Piper Alderman and the Receiver discussed a plan to get “Marsdens out of the equation”. Piper Alderman wrote to the Receiver:

28. [81]

    When cross-examined about this correspondence, the Receiver said that it did not refer to removing Marsdens as solicitor for the respondents, but to removing them as conveyancers in relation to the sale of the units, in circumstances where the Receiver was not being assisted by Marsdens. However, that simply is not reconcilable with the rationale exposed in the correspondence, which expressed frustration not about impediments to any sale, but about obstruction of the Receiver’s investigations; the only way in which Marsdens could be taken “out of the equation” in any relevant way was if they were removed not merely as conveyancers, but as the solicitors for CFAM and Gondon generally. The Court’s intervention was not required for the Receiver to use other conveyancers (as he did), and only their removal in that wider capacity would require an application to the court, as contemplated by the Receiver in his reply to Mr Russell:

29. [82]

    I am therefore unable to accept as creditworthy the Receiver’s claim that the communications about removing Marsdens were confined to their role in acting for Gondon as vendor in the conveyance of units. They manifest an inappropriate intermeddling in the parties’ dispute.

30. [83]

    The Receiver attended court, with multiple members of his staff, and his solicitors, on each occasion when the substantive application was before the Court – that is, on 5, 21 and 23 December 2016. In addition, as has been noted, the Receiver caused the matter to be relisted on 15 December 2016 for the purpose of his seeking directions, in particular as to whether the Court expected him to produce a report for the hearing on 21 December; he attended that hearing with members of his staff, his solicitors, and senior counsel. No prior approach was made to any party to make the application.

31. [84]

    Ordinarily, a receiver will not be allowed the costs of intermeddling in litigation between the parties, [34] and applications to the court should as a general rule be made by the persons beneficially interested, and not by the receiver; if an application to the court becomes necessary, the receiver should apply in the first instance to the party having carriage of the order, or if necessary some other party, to make the application. If, that having been done, no application is made, and no proper means taken to address the receiver’s difficulty, or if the matter is so urgent that it cannot await applying to the parties, then the receiver may himself or herself make the application and would in that event be entitled to costs. [35]

32. [85]

    Consistently with this view, in Corporate Affairs Commission v Transphere Pty Ltd (No 2), [36] Kearney J held that it was inconsistent with the nature of the appointment of a receiver to apply for a defendant to be punished for contempt, such an application being properly to be brought by the plaintiff (on whose application the receiver had been appointed) and not by the receiver. His Honour referred to the following statement in Parker v Dunn: [37]

33. [86]

    Contrary to the Receiver’s submission, this rule is not confined to applications about controversial matters of substance, and applications to obtain clarification of the scope of the appointment do not constitute an exemption. [38] It is (typically) the plaintiff who obtains an order for appointment of a receiver and the initial description of the receiver’s function and powers; and if the receiver is in doubt, then the appropriate course is to approach the plaintiff and ask it to make any necessary application for clarification. Except perhaps in cases of urgency, it is only appropriate for the receiver to make the application if the plaintiff refuses or fails to do so. It is for the plaintiff to obtain the requisite orders from the Court for delivery of property to the receiver, and for the plaintiff to enforce compliance with the Court’s orders.

34. [87]

    There are powerful reasons for adhering to this well-established rule: first, so that the receiver remains at arm’s length from the litigation; and secondly, so that it is a party, and not the property, that at least in the first instance is charged with the costs of an application. This too is reflected in the judgment of Waddell J in Smithson: [39]

35. [88]

    The Receiver submitted that authorities supported the proposition that it may be appropriate for a receiver to apply to the Court for directions in relation to the scope of his or her appointment, and that being an officer of the Court, the Court has jurisdiction to provide advice and direction to a receiver it has appointed. [40] Reference was made to In the matter of Anglican Development Fund Diocese of Bathurst (receivers & managers appointed), [41] in which I said:

36. [89]

    That passage, and the authorities referred to in it, show that the court has jurisdiction to give directions and advice to a receiver appointed by it. They do not, however, detract from the proposition that – particularly in the context of an interim appointment made to preserve the status quo – applications for such directions and advice should be made by a party, not by the receiver, except as a last resort. Anglican Development Fund was not a case of an interim appointment to preserve assets, but of receivers appointed to, in effect, wind up an insolvent trading trust. Neither it, nor the cases referred to in it, referred to, or superseded, the well-established line of authorities that hold that an application for directions should not be made by the receiver unless the parties have refused to do so.

37. [90]

    The Receiver was not justified in making an application to the Court for directions. If the Receiver was in doubt as to the scope of his appointment, he could and should have asked the plaintiff, who had procured his appointment, to have it clarified. That would have seen the issue resolved at a fraction of the expense. It is precisely to avoid the unnecessary incurring of expense that the rule to which I have referred exists.

38. [91]

    I do not accept the Receiver’s submission that even if the Court were to find that he was not justified in making the application, he should nonetheless be entitled to remuneration and reimbursement of expenses in respect of it, because it should be inferred, from the circumstance that he was represented by senior counsel at the hearing on 15 December, that he had been advised that it was appropriate to make the application, and no objection was raised by the Court or the respondents at the time. First, there was no evidence that he received or relied on such advice; and given that the appropriateness of the application was raised at the hearing in December 2017, the Receiver had ample time to adduce such evidence, before it resumed in March 2018. In the absence of such evidence, the Court would not lightly infer that the application was made on senior counsel’s unqualified advice. Secondly, when the application for directions came before the Court on 15 December, the relevant costs had already been incurred; had objection then been taken, nothing would have been saved. Thirdly, the question simply did not then arise; it has now arisen in the appropriate context, on the remuneration application. The respondents had already indicated that they anticipated there being a serious issue about the Receiver’s costs and expenses. There is no unfairness in denying remuneration and reimbursement in respect of an application which the Receiver ought not have made, but there is (as the respondents submit) injustice to the respondents in visiting them with the costs of such an application.

39. [92]

    As to the Court events on 5, 21 and 23 December, the Receiver says that he attended “to make himself available to the Court, if required”. No appearance on his behalf was announced on any occasion. He was not required, and there was no indication that he would be. The Receiver had no legitimate interest in whether or not his appointment was continued, which was the issue before the Court on those occasions. He should have ascertained the outcome of the proceedings from the plaintiff’s solicitors. With some misgivings, in principle I will allow the Receiver’s personal attendance on 5 and 21 December, but not those of his staff, or solicitors. As 23 December was merely for the handing up of short minutes to consummate the settlement reached on 21 December, there was no justification for his attendance on that day at all.

40. [93]

    A substantial component of the remuneration claim is in respect of work done in instructing and liaising with Piper Alderman, the solicitors instructed by the Receiver. Moreover, the expenses claim is in respect of the costs rendered by Piper Alderman for so acting.

41. [94]

    Piper Alderman were given an extensive remit. The Receiver described the retainer in these terms:

42. [95]

    As the respondents submitted, they were instructed by the Receiver in respect of virtually every issue that arose in the course of the receivership, “including sending virtually all of the correspondence, and advising the Receiver at each and every turn”.

43. [96]

    The solicitor for the party with the conduct of the matter is responsible for exercising a general supervision over the receiver. According to Kerr, a receiver/manager should ordinarily not, without the court’s approval, retain separate solicitors, and if it is desired to obtain advice from a separate solicitor, the receiver should obtain the leave of the court, on his or her own application if a party will not make the application. [42]

44. [97]

    This may be too strict a view nowadays, and as the powers in s 420 include:

45. [98]

    It seems to me that where receivers are required, within the scope of their appointment, to undertake steps about which legal advice would ordinarily be obtained – such as the sale of real property – they would act reasonably in retaining solicitors for that purpose, although they should give serious consideration to having one or other of the parties’ solicitors act if that can safely be done. It may well be that receivers are also entitled to retain solicitors in connection with matters personal to the receivers, such as their remuneration, and questions of potential personal liability. However, consistent with the position that a receiver should not become embroiled in the litigation or make applications to the court, at least unless a party refuses to make an appropriate application, receivers should not engage solicitors to advise generally on matters relating to the conduct of the receivership, such as the recovery of property by enforcement procedures. [43]

46. [99]

    I would not have accepted the respondents’ submission – which was ultimately, if belatedly, withdrawn – that the retainer of Piper Alderman was some kind of attempt to compensate them for their losses in connection with Condor Blanco; [44] there was no evidence to support that contention, which was denied by the Receiver. Nor would I accept that the circumstance that the Receiver is not only an experienced insolvency practitioner, but also a qualified solicitor with a restricted practising certificate, necessarily disentitles him from engaging solicitors to provide him with legal advice and legal representation in relation to the receivership, where the engagement of solicitors would otherwise be appropriate – though it is of some relevance to whether it is reasonable to resort to external legal advice.

47. [100]

    From the Receiver’s affidavit evidence, it appears that the work done by Piper Alderman pursuant to their retainer included:

    1. (1)

       Attending at the hearing on 5 December 2016 upon the return of the ex parte order, advising in relation to “to all ongoing proceedings related to but not limited to the scope of my appointment”; and attending at the hearings on 21 and 23 December. For the reasons already discussed, the Receiver had no proper interest in whether or not the appointment continued, and was not justified in retaining lawyers to attend at the hearings on 5, 21 and 23 December.

    2. (2)

       Corresponding with the parties’ solicitors and others to procure delivery up of or access to books and records of the Companies. This included corresponding with the respondents’ solicitors on 6 December 2016 requesting access to Gondon’s registered office, further information and documents, and information about the status of sale of units in the development; extensive further correspondence between 6 and 9 December with the respondents’ solicitors regarding access to the books and records of the Companies, and the status of sale of units in the development; corresponding with the Companies’ external accountants on 13 December requesting the books and records or a meeting to gain access; and attending at the office of the external accountants on 16 December to discuss the matter with them and obtain the books and records in their possession. Corresponding with the parties to procure delivery of books, records and information is a routine step for an insolvency practitioner, and if obstacles are encountered enforcement of the obligation is a matter for the plaintiff, not the receiver. The Receiver was not justified in retaining solicitors for that purpose. The Receiver said that he involved Piper Alderman more extensively than he would have in the usual course, because the Companies and their legal representatives hindered his attempts to secure the property, including the books and records, and he considered a more formal approach was necessary. However, he engaged them in this task from the very outset, not after any alleged difficulties arose. If he encountered difficulties, he ought to have reported them to the plaintiff’s solicitors, so that the plaintiff could seek appropriate relief.

    3. (3)

       Corresponding with the respondents’ solicitors, on 12 December and subsequently, in relation to the attempted lockout of the business of ABMG. If – which is doubtful, since the relevant assets of the Companies to which the Receiver was appointed were CFAM’s shares in ABMG, and not ABMG’s business – that amounted to an interference with or obstruction of the performance of his duties, that was a matter for the plaintiff, not the Receiver, to prosecute.

    4. (4)

       Advising in connection with a subpoena issued at the request of the respondents on 14 December 2016. There was nothing particularly complex about this subpoena; it was of a kind which most entities that have any exposure to commercial litigation – including insolvency practitioners – would be accustomed to dealing with. This is one matter in respect of which the Receiver’s own legal training and commercial experience equipped him better than most, and resort to external legal advice in respect of it was not justified.

    5. (5)

       Making the application for directions on 15 December and attending court with senior counsel on the hearing. For reasons already explained, this was unjustified.

    6. (6)

       Drafting and lodging the caveat in respect of Gondon’s real property. The importance of punctilious compliance with legal requirements pertaining to caveats is well known, and I accept that the Receiver was entitled to retain solicitors to draft and lodge the (single) caveat over the portfolio of Gondon’s units, in order to secure the assets of Gondon and ensure that there was no risk of dissipation, and also to deal with subsequent correspondence concerning the validity of the caveat. As I have indicated, while in its terms the caveat was expressed to secure the Receiver’s remuneration, rather than to secure the assets to which the Receiver was appointed, I accept that this formula was adopted, on legal advice, to ensure that a caveatable interest was claimed, and that its dominant purpose was to secure the assets.

    7. (7)

       Advising in connection with the signing and exchange of contracts for sale of units A206 and B206. I am prepared to accept that, given the potential for his duty to conflict with the interests of one or other of the parties, the Receiver was justified in retaining his own solicitors to advise as to whether he could proceed to exchange these contracts, and to act on the transaction.

    8. (8)

       Advising in relation to “concerns in relation to unit C307”. This related to the agreement on 8 December 2016 by Jinsong as director of Gondon to the deferral to 6 March 2017 of the sale of the subject apartment; on the Receiver’s instructions Piper Alderman informed the purchaser’s solicitor that Jinsong had no authority in light of the Receiver’s appointment. There was no reasonable requirement to engage solicitors for that purpose, and the Receiver could and should have done this himself.

    9. (9)

       Advising in relation to the settlement of units A206 and B206. This relates to work done after the Receiver was discharged. The Receiver says that he obtained legal advice on the issue of completing the sales, “in order to ensure I was proceeding appropriately in relation to that sale and to avoid any claims against me, as receiver and manager, for not completing the sales appropriately”, and “I wanted to ensure that the sale of the two units was within my powers as a court-appointed receiver and to confirm the scope of my duties with regard to obtaining market value for the sale of the units, as well as any tax implications from the sale”. These contracts were completed after the Receiver had been discharged, and he was not involved. I have accepted, above, that it was reasonable to retain solicitors to advise in connection with exchanging contracts. There was no reasonable requirement for him to obtain advice in connection with completion, after he had been discharged. However, I am prepared to allow instructing solicitors in connection with the withdrawal of the caveat which the receiver had caused to be lodged.

    10. (10)

        On 16 February 2017, corresponding with the parties’ solicitors seeking approval for the Receiver’s remuneration; and later reviewing the Remuneration Report “to better inform the Court about the relative expense and complexity of the tasks being performed by myself and my office during my appointment …”. Corresponding with parties about remuneration is a routine matter for an insolvency practitioner, and the Receiver was not justified in instructing lawyers to do this. I accept that it was reasonable to instruct solicitors in connection with a remuneration application to the Court, including to review the evidence, but this should be addressed as an aspect of the costs of the present application.

48. [101]

    Accordingly, I would accept that the Receiver was justified in instructing solicitors in connection with the caveat and its withdrawal, and the exchange of contracts in respect of units A206 and B206. As there was a single caveat, and as the contracts had already been negotiated and prepared by Marsdens, this should not have involved a great deal of work – either by the Receiver, or by his solicitors.

49. [102]

    Otherwise, the Receiver was not justified in retaining solicitors. In particular, he was not justified in instructing them to attend court on the various hearings of the substantive application, nor to make and attend on the application for directions. It follows that, insofar as the retainer extended beyond the caveat and the contracts, he is not entitled to remuneration for work done in so instructing Piper Alderman, nor to reimbursement of the costs rendered by and/or paid to that firm.

50. [103]

    Some $6,168.50 of the remuneration claimed relates to the period after the Receiver was discharged. A receiver is entitled to remuneration for those services necessary and reasonable to finalise the receivership, even if they are performed after discharge. [45] Some of the work in question appears to involve the preparation of ASIC forms, arrangements for the transfer of authorities for bank accounts, and seeking approval of his remuneration. Those are matters that were reasonable and necessary to finalise the receivership and return control of the Companies to the directors, and in principle the Receiver should be remunerated for them, although the quantum claimed for some items is surprising, and is considered further below. However, other aspects, including the settlement of the sales of the two units, were not.

Proportionality

1. [104]

   The respondents submitted that the question of proportionality was highlighted when the quantum of the claim was viewed against the progress made by the Receiver during the term of the appointment, and that the amount allowed should be very considerably reduced on that account.

2. [105]

   The respondents sought to emphasise that while 11 persons in the Receiver’s office, and five in the office of Piper Alderman, were engaged in the administration, the tangible results achieved by the Receiver were confined to entering into (though not completing) the sale of the units A206 and B206 (which contracts had already been negotiated and prepared by Marsdens), and lodging the single caveat in respect of the titles to 44 properties in the development. Against that, the Receiver stressed that the properties secured by the caveat were valued at in excess of $40,000,000, and that the two sold realised $1,519,000.

3. [106]

   Of course, I accept that the notion of proportionality is a relevant and often significant factor in the context of remuneration applications. [46] But I also accept the Receiver’s submission that the concept of proportionality is not confined to an exercise in assessing the “return gained”, having regard to the length of the appointment and the fees incurred (as the respondents suggest). In contrast to the cases in which the question of proportionality has loomed large, the main purpose for which this receiver was appointed was not to realise and/or distribute assets, but to protect the assets of the Companies and ensure that they were not dissipated while the dispute between shareholders was being litigated. In those circumstances, remuneration according to the value of assets realised would not incentivise the receiver. As Bathurst CJ has observed in connection with the concept of proportionality, the mere fact that the work performed does not lead to augmentation of the funds available for distribution does not mean a liquidator is not entitled to be remunerated for it, and if the work was necessary there is no reason the liquidator should not be remunerated for it. [47] Thus in valuing the services performed by the Receiver, the Court must have regard to the work actually (and necessarily or reasonably) done, including in compliance with statutory obligations.

4. [107]

   Whether work was reasonably done is judged against the objects of the appointment, and whereas in a liquidation or quasi-liquidation the realisation and distribution of assets means the value generated will often be an important consideration, it is much less so where the object is preservation. This being a receivership – and an interim one at that – which does not involve the realisation of assets, the payment of liabilities and the distribution of surplus, a commission or percentage-based approach provides little assistance. In this type of appointment, where the object is to secure and hold (but not realise) assets, notions of “return gained” are of little assistance, and a time-costed basis, despite its deficiencies, will often be the more useful methodology for valuing work necessarily or reasonably done, at least as a starting point. The urgency with which the work is required to be performed, and the difficulty and importance of the work, are also relevant considerations.

Analysis of the claim

1. [108]

   The revised remuneration reports contained in the Receiver’s second affidavit enable the Court to see with a high level of granularity what remuneration is claimed for what tasks, by allocating the work done in three ways – by the general “ARITA categories”, and by the “Issues” and the “Tasks” that were identified as relevant to this receivership.

2. [109]

   It has often been said that it is not the function of a judge to conduct a line-by-line or item-by-item review of a remuneration claim. While this is particularly so on review applications where there has been an earlier decision of a registrar, it remains important to remember that the court has a wide discretion in respect of remuneration, and the exercise – generally speaking – involves approximation and estimation rather than precise measure and calculation. Nonetheless in this case, while I do not propose to descend to a line-by-line review of each chronological entry in the time recording system, the evidence facilitates a relatively detailed analysis by each of the three approaches I have mentioned. The analysis by Tasks gives the greatest fidelity, granularity and accuracy, and I give most significance to it; but it is useful first to view the remuneration claim through the prism of the other two allocation methodologies.

3. [110]

   While the detail provided in the Receiver’s second affidavit and supplementary schedules has enabled a detailed analysis, it has inevitably required a close perusal of the entries, arranged in the various different ways that have been presented. This has been a laborious and time-consuming exercise, to accommodate which it has been necessary to find sufficient blocks of time to devote to it, which has contributed in part to the time which finalisation of this judgment has taken.

4. [111]

   Allocated according to the ARITA categories, as contemporaneously entered into the time recording system at the time of each entry by the relevant staff member, the remuneration claimed (GST exclusive) was as follows:

5. [112]

   The generality of the ARITA categories, and the relatively arbitrary nature of the allocation of work between them, makes this analysis of limited utility in this case, although it does serve to highlight the very great proportion of the claim – almost 65% – that is attributed to “Investigations”.

6. [113]

   Reference has already been made, in outlining the nature of the work done by the Receiver, to the ten “Issues” across which the Receiver has, when preparing his remuneration application, allocated the work done. This allocation was not contemporaneous with performance of the work, but represents the Receiver’s endeavour to provide a more descriptive presentation than the ARITA categories. Those issues provide a convenient approximate basis for identifying, in principle, work that was and was not within the scope of the appointment, which can then be applied in the more detailed review of the “Tasks”.

7. [114]

   The steps taken by the Receiver to obtain possession of the books and records of both companies – he says so that he could ascertain their financial position, and determine the nature of their businesses – included arranging for staff to attend at the registered office, and correspondence between Piper Alderman and the respondents’ solicitors Marsdens. The Receiver’s evidence is that significant costs and expenses were incurred before his firm was able to obtain access to the books and records of the Companies, due to the approach taken by the Respondents and their solicitors.

8. [115]

   It is not in dispute that it was within the scope of the appointment for the Receiver to take steps to obtain sufficient books and records of the Respondents to allow the Receiver to achieve the purpose of his appointment. However, what the Receiver did went well beyond this. On 6 December, without any prior notice or request, employees of the Receiver attended the registered office of Gondon, being premises occupied by Arise Constructions Pty Ltd. Having found those premises unattended, the Receiver caused correspondence to be sent to Marsdens, demanding delivery up of the books by close of business of 7 December 2016. Notwithstanding that deadline, on the morning of 7 December, the Receiver’s employees again attended the registered office and demanded the keys to the office. Only on 8 December, following a query from the Respondents’ solicitors, was a request made of the respondents for the books and records of the Companies, which were promptly made available on 9 December. The repeated demands that the Receiver be provided with the keys to the registered office – in circumstances where those premises were occupied by Arise Constructions, a third party albeit one related to Jinsong – were not reasonable, nor was the attendance of the Receiver’s staff in person.

9. [116]

   The steps taken by the Receiver to obtain details concerning the status of sales of the units in Gondon’s development were, as he says, for the purpose of ascertaining Gondon’s asset position and the progress of the sale of its assets. That information, when provided to the Receiver, appeared to him to contain some discrepancies. In an endeavour to resolve this, there was further correspondence with the respondents’ solicitors.

10. [117]

    Gondon’s assets and undertaking, to which the Receiver was appointed as Receiver and Manager, was the development of the North Ryde property and the sale of the units in it. It was properly within the Receiver’s function to ascertain the status of unit sales, and their ongoing marketing. The quantum claimed for this task is however surprisingly high, and is further addressed (in the analysis by Tasks) below.

11. [118]

    Part of this claim was described as involving “obtaining valuations re Gondon’s units”, to which $3,467 was attributed. The Receiver says he undertook this task because he considered it necessary to obtain valuations as it was his duty to obtain market value for the sale of any property, and in particular for the sale of units A206 and B206. Although it was not the Receiver’s function to realise the property of which he was appointed receiver, it would have been reasonable to obtain valuations of A206 and B206 in contemplation of proceeding with those sales. However, he did not obtain valuations at all (one of his staff members simply prepared a file note about their valuation), and examination of the detail of the work attributed to this heading reveals that it was not for the purpose of obtaining valuations, but partly associated with ascertaining the status of the sales, and partly with investigations that went far beyond identifying assets for the purpose of receiving them. Despite the misdescription of the nature of this work, I have allowed about half.

12. [119]

    The respondents submitted that the remuneration and expenses claimed in connection with the single caveat (including those associated with its removal), which was drafted by Piper Alderman and executed by a member of that firm, and not by the Receiver personally, and which described the interest claimed as a charge for the Receiver’s costs and expenses, should not be allowed at all, for the reason that such a caveat was entirely unjustified, and that the lodgement of a caveat to secure the Receiver’s remuneration was not a step taken in the interests of the receivership (but in the Receiver’s personal interest). However, as I have already indicated, I accept that, notwithstanding the claim in the caveat, the Receiver’s dominant purpose was to secure the properties and prevent dealings without his consent.

13. [120]

    The apartments held by Gondon were in effect its trading stock. Securing them against the risk of unauthorised disposition was perhaps the most important task of the appointment. Lodging a caveat for that purpose was within the scope of the appointment. Given the importance of compliance with the law relating to caveats, it would ordinarily have been reasonable for a receiver who was not legally qualified to engage a solicitor for this purpose, and given the nature of the task, the value and extent of the property involved, and the restrictions on his practising certificate, it was not unreasonable for this receiver, despite his legal qualification, to retain solicitors to do so. However, the quantum claimed for what was involved is again surprisingly high, and is further addressed (in the analysis by Tasks) below.

14. [121]

    The attempted lock out of ABMG’s business premises potentially interfered with the operation of its business. The plaintiff was the director of ABMG. While the shares in ABMG were held by CFAM in its trustee capacity, the Receiver was appointed to secure the assets of the respondents CFAM and Gondon only; the relevant asset of CFAM was its shareholding in ABMG, not the business of ABMG. The Receiver’s function was to secure and preserve that shareholding; he was not appointed to ABMG’s assets or undertaking. The Receiver had no business in instructing solicitors to intervene in the attempted lockout.

15. [122]

    The matter was raised with the Receiver by the plaintiff’s solicitors, and even if (contrary to my view) it amounted to an interference with or disturbance of the receiver’s possession, it should have been left to the plaintiff to prosecute any such complaint.

16. [123]

    The respondents submitted that no application, let alone order, having been made under UCPR r 33.11 for the respondents to pay any amount of costs to the Receiver in connection with his compliance with the subpoena, the claim for remuneration and expenses in respect of complying with the subpoena should not be allowed.

17. [124]

    However, independently of UCPR r 33.11, a Receiver is entitled to be indemnified or compensated in respect of costs incurred and work done by him in that capacity. The Receiver received the subpoena because and by reason of his office as receiver, and he was obliged to respond to it. He is entitled to be remunerated and indemnified for time and expenses reasonably incurred in doing so. However, for reasons which have been explained above, it was not reasonable for him to incur expenses of obtaining legal advice in connection with what was a routine subpoena.

18. [125]

    The Receiver’s investigation of transactions made from the bank accounts of Gondon in the period between 1 August 2016 and 2 December 2016 involved reviewing the bank statements and liaising with the plaintiff’s solicitors and the Bank. These transactions, and the payment made to Marsdens on 28 October 2016 which was also investigated, took place before the Receiver’s appointment. It is clear that these investigations were carried out at the request of the plaintiff, and substantially for the purpose of ascertaining whether there had been contraventions of the freezing order, and/or in connection with the preparation of the Receiver’s proposed report to the Court.

19. [126]

    For reasons already explained, the suggestion that this was in aid of identifying potential loan accounts and recovering “money sitting in them” is misconceived and implausible: first because the relevant asset was the chose in action, not money “sitting” in it; secondly, because it is not conceivable that steps to recover any such loan account would have been instituted within the very short timeframe of the interim appointment; and thirdly, because the explanation which seems most obvious having regard to the work undertaken corresponds with the one the Receiver gave at the time, namely that he was carrying out investigations to ascertain whether there had been contraventions of the freezing orders and to inform the report he anticipated preparing.

20. [127]

    Although the Receiver protested that he undertook no work in anticipation of the then contemplated report which he would not otherwise have undertaken in any event, that does not avail him, because he was not required to carry out investigations into pre-appointment transaction, for any reason; as will be apparent from the above discussion of the scope of the appointment, that was not an object of his appointment and formed no part of the Receiver’s proper functions. If potential past contraventions of the freezing order were to be investigated, that was a matter for the plaintiff.

21. [128]

    This issue covers time incurred in connection with the substantive proceedings between the plaintiff and the defendants – in particular in connection with attendances at court on 5, 21 and 23 December 2016 – and work done in connection with the Receiver’s application for directions on 15 December 2016.

22. [129]

    The Receiver prepared for, attended at and reviewed, and instructed solicitors in relation to, all proceedings “related to but not limited to the scope of my appointment”, including attending the hearings on 5 December, 15 December (with senior counsel), 21 December and 23 December. He attended the hearings with multiple members of his staff. In his first affidavit the Receiver says:

23. [130]

    He instructed solicitors to make, and retain senior counsel in connection with, the application to clarify the scope of his appointment.

24. [131]

    For reasons that have been explained, the Receiver was not justified in making an application to the Court for directions; he ought to have drawn his concerns to the attention of the plaintiff’s solicitors and invited them to make such an application, which would have inflicted no cost on the estate. Moreover, the Receiver had no business in attending at the various hearings in the proceedings. He says he did so, “in case the Court wanted to hear from” him. The Court had not asked him to do so. In any event, there was no good reason for him to attend, as he did, with multiple staff members and solicitors. On 5 December 2016, the Receiver and four of his staff charged 11 hours for attending Court and “considering” the orders of that date. On each of 15 December 2016, 21 December 2016 and 23 December 2016, he was accompanied by no less than two staff, as well as two solicitors from Piper Alderman. As I have indicated, I will with misgivings make allowance for his personal attendance only, on 5 and 21 December, but not otherwise.

25. [132]

    These sales (of units A206 and B206 for a total price of $1,519,000) had already been negotiated prior to the appointment, and the contracts had already been drafted by Marsdens. The Receiver merely obtained advice that he was entitled to proceed, instructed and liaised with his solicitors in connection with the execution of the contracts, executed the contracts, and had his solicitors attend on exchange. He was not involved in their completion (which took place in 2017, after the discharge of the Receiver on 23 December 2016).

26. [133]

    As I have indicated, I am prepared to allow that he was entitled to obtain separate legal advice as to whether he was entitled to proceed with the sales, and to instruct his own solicitors to act on them. However, given that the contracts had already been drafted by Marsdens, and that his only involvement was to execute and exchange contracts, the amount claimed appears disproportionate.

27. [134]

    The other work said to be necessary to fulfil the Receiver’s functions was described by the Receiver as including:

    1. (1)

       Perusing the judgments of the Court in relation to the background to the proceedings. I accept that it was reasonable for the Receiver to peruse the judgments of the court, to understand the background to the appointment.

    2. (2)

       Conducting investigations into the asset position of the Companies, liaising with real estate agents to ensure the ongoing trading of the business and to ascertain the progress of the sale of properties, and dealing with creditor inquiries. This appears largely to duplicate Issue 2 (Status of sales).

    3. (3)

       Liaising with the plaintiff’s solicitors regarding the background to the proceedings and the books and records of the company. This appears at least partly to duplicate Issue 1.

28. [135]

    Mandatory work, of an administrative nature, which does not relate to securing or preserving assets but is required to be performed by a receiver, should be remunerated. However, the amount claimed is surprisingly high.

29. [136]

    The result of the foregoing analysis is an indication that, once work outside the proper scope of the receivership is excluded, and work for which a disproportionate amount is claimed is reduced, the following amounts may be appropriate. In moderating amounts which appear disproportionate (for example, “Books and records” and “Status of sales”), I have also had regard to the analysis by Tasks which follows. The sub-categorisation of the Issues by the Tasks, in a schedule produced at the hearing, together with the review of the work by Tasks undertaken below, has facilitated this exercise.

30. [137]

    This is not a conclusion as to what amount is reasonable remuneration; as I have said, I give greater significance to the analysis by tasks. However, it provides a guide.

31. [138]

    As has been mentioned, the Receiver identified various “Tasks” of the receivership, which were referenced according to the paragraph of his second affidavit in which each was described: paragraph 29 described tasks relating to CFAM; paragraph 32 described tasks relating to Gondon during the period 2 to 5 December 2016; paragraph 33 described tasks relating to Gondon during the period 6 to 23 December 2016; and paragraph 34 described tasks performed in connection with both administrations following the Receiver’s discharge on 23 December 2016. In respect of each of those 53 Tasks, the Receiver provided an explanation as to why he considered it necessary to undertake it. As with the “Issues”, this allocation was not contemporaneous, but was undertaken by the Receiver in the preparation of his evidence, to indicate so far as practicable the task to which particular work was primarily referable. Recognising that there is some room for overlap between tasks, the Receiver used his judgment and experience to assign each time entry to the most appropriate Task; I have accepted his allocation, which was not the subject of challenge.

32. [139]

    In order to reflect that some work has in reality been apportioned between the two administrations, in the following analysis I have dealt with both administrations together, but indicated the item number allocated by the Receiver to the task, and the respective claims made in the Gondon and CFAM administrations. For these purposes, I have used $400 per hour as a yardstick for fair and reasonable remuneration for the Receiver’s time, regardless of whether the work was performed by the Receiver personally or a senior or junior member of his staff; given the rates which he has disclosed, as an average that errs in his favour. [55] There is one exception, which will become apparent, where I have specifically allowed for the Receiver’s own time, at the higher rate of $500 per hour.

33. [140]

    In the following review of the remuneration claim allocated by “Tasks”, I consider each of the 53 “tasks” compendiously, rather than by resort to individual time entries within each. The Court is not expected to undertake a line-by-line taxation. Analysis according to the 53 tasks provides a relatively refined indication as to the quantum of the remuneration claimed that is attributable to tasks within the proper scope of the receivership, and how much is not, which in turn informs, but does not dictate, the ultimate conclusion as to the value of the work properly undertaken by the Receiver. In this approach, there will likely be “swings and roundabouts”, as while some tasks which are disallowed might on closer examination include some individual items which might have been allowed, equally some tasks which are allowed might on more detailed review contain items which should have been disallowed.

34. [141]

    The results, with the amounts “allowed” and “disallowed” on this approach, are set out in tabular form in the summary.

35. [142]

    The reasons provided in connection with each Task below are to be read in the context of the more general discussion of the principles and issues above.

36. [143]

    Preparing letters to banks regarding bank accounts held by Gondon (32.1 - $883) and held by CFAM (29.1 - $714). Allowed: this was a reasonable step towards securing the assets of the companies, and in particular their bank accounts.

37. [144]

    Preparing and lodging the required forms with ASIC (Gondon 32.2 - $758) (CFAM 29.2 - $1055). Allowed: this was necessary work incidental to the appointment.

38. [145]

    Discussing with the solicitors for [the plaintiff] the background in relation to the appointment (Gondon 32.3 - $2549). Discussing with the solicitors for [the plaintiff] the background in relation to the appointment (CFAM 29.3 - $1320). Allowed: initial consultations with the plaintiff’s solicitors, to familiarise the Receiver with the background to and purpose of the appointment, are reasonably incidental to the appointment. That is particularly so given the role of the plaintiff’s solicitors in maintaining a general oversight of the appointment.

39. [146]

    Attending the hearing on 5 December 2016 (Gondon 32.4 - $2539) (CFAM 29.4 - $2082). Allowed only as to the Receiver’s personal attendance, otherwise disallowed: the Receiver attended with four members of his staff (as well as two solicitors, although no formal appearance was announced), for which he claims remuneration for almost 11 hours for their attendances and consideration of the Court’s orders. For reasons already explained, I allow, with misgivings, the Receiver’s personal attendance (but not that of his staff), at $825 for Gondon and $825 for CFAM.

40. [147]

    Securing Gondon’s cash at bank (Gondon 33.1 - $1306). Allowed: this was a reasonable step in securing the assets of Gondon, and in particular its bank accounts.

41. [148]

    Opening new accounts for the companies (Gondon 33.2 - $235). Allowed: the Receiver says that this was undertaken in order to enable the transfer of account balances into an account controlled by him. Although arguably unnecessary once the existing accounts were secured, I have allowed this as reasonably incidental to securing the cash assets.

42. [149]

    Conducting land title searches in relation to Gondon (33.3 - $325) and in relation to CFAM (29.5 - $589). Allowed: conducting land title searches was a reasonable step in identifying, for the purpose of getting in and securing, the real assets of the companies, for the purpose of the receivership.

43. [150]

    Notifying ATO of appointment (Gondon 33.4 - $225). Allowed: this was necessary work incidental to the appointment.

44. [151]

    Reviewing and preparing Director’s packages (Gondon 33.5 - $450) (CFAM 29.7 - $450). Allowed: this was a reasonable step in identifying and taking control of the Companies’ assets and undertaking.

45. [152]

    Meeting with plaintiff’s solicitors re background and ongoing proceedings (Gondon 33.6 - $342). Disallowed: an initial meeting for backgrounding was appropriate and has been allowed, to the extent of $3,869, which should more than have covered this requirement (see Tasks 29.3 and 32.3). Although the Receiver says that this further meeting was to obtain an understanding of the company’s affairs and asset position, the task description, and the time records and file note of 6 December 2016, makes clear that a significant aspect was discussing the ongoing proceedings, which ought not have been the Receiver’s concern.

46. [153]

    Issuing various notices in relation to the books and records of Gondon (33.9 - $3775) and CFAM (29.10 - $414). Allowed: seeking access to the books and records of the Companies was a reasonable step to be taken for the purpose of identifying the assets which the Receiver was obliged to get in. Although the amount in respect of Gondon appears surprisingly high, I have not discounted it, bearing in mind that I have disallowed in full the following two items; a more precise exercise might well have involved partial allowances under all three.

47. [154]

    Attending Gondon’s premises to obtain books and records (Gondon 33.7 - $3157). Disallowed: while I have allowed notices seeking access to the books and records, it was not the Receiver’s function to endeavour to enforce, by self-help means, access to books and records by attending on the registered office (of which a third party was the occupier), in an attempt to take possession of them.

48. [155]

    Instructing and liaising with solicitors re requests for books and records (Gondon 33.8 - $4736) (CFAM 29.11 - $858). Disallowed: while the Receiver says that he involved Piper Alderman more extensively than he would in the ordinary course, because the Companies and their solicitors hindered his endeavours, in fact he engaged them from the outset, before the supposed difficulties had emerged. While it was reasonable for the Receiver to seek access to the books and records, if he encountered any difficulties he ought to have reported the matter to the plaintiff’s solicitors, so that if so advised the plaintiff could apply for further relief. It was not reasonable for the Receiver to retain his own solicitors in this respect.

49. [156]

    Reviewing the books and records provided by CFAM’s accountant and directors (CFAM 29.12 - $1249). Allowed in part: perusal of the books to identify the company’s assets was reasonably incidental to securing the assets. However, the review appears to have involved much more than this, and to have been dominantly for the purpose of identifying “suspicious transactions” for further investigation, which was not part of the Receiver’s function. The Receiver speculated that such transactions might result in “loan accounts” which would be company assets which he might recover, but if so, they were a chose in action and not readily alienable, and it was not his function as an interim receiver to recover outstanding loans. I have allowed $450, being approximately one-third of the amount claimed.

50. [157]

    Instructing and liaising with solicitors re lodgement of caveats (Gondon 33.10 - $2885). Allowed in part: it was reasonable to retain a solicitor to advise in respect of, draft and lodge the caveat. However, as only one caveat was involved, albeit that it related to between 40 and 61 titles, the charge of $2,885 is extraordinarily high. I have allowed $1,200.

51. [158]

    Instructing and liaising with solicitors re signing and exchange of contracts for sale of A206 and B206 (Gondon 33.11 - $6307). Allowed in part: it was reasonable for the Receiver to retain solicitors to advise as to whether he was entitled to proceed with these sales, and to assume the conduct of them. However, given that the contracts had already been prepared by Marsdens, and that all that was involved was execution and exchange, this ought not have required the more than 15 hours’ work by the Receiver and his staff that is implicit in the charge of $6,307. Erring on the side of generosity, I have allowed six hours ($2,400).

52. [159]

    Liaising with solicitors regarding correspondence in relation to ABMG (CFAM 29.13 - $3058). Disallowed: for reasons that have been explained, the appointment to secure the company’s assets, albeit that they included the shares in ABMG, did not extend to the assets and undertaking of ABMG, a distinct though subsidiary entity. Instructing solicitors to correspond with Marsdens in relation to the alleged “lockout” was not within the scope of the Receiver’s appointment. In any event, prosecution of any complaint about the “lockout” was a matter for the plaintiff, not the Receiver.

53. [160]

    Correspondence with Gondon’s secured creditors (33.12 - $2137) and with CFAM’s secured creditors (29.6 - $1039). Disallowed: the Receiver says that this work was done in order to ascertain whether any assets that came into his possession were encumbered, and whether any creditors such as the ATO had claims against the assets, in particular under the Superannuation Guarantee charge. In the context of a short-term interim appointment, which was not going to involve realisation of any assets, this was quite unnecessary.

54. [161]

    Obtaining the bank statements of Gondon (33.13 - $934) and of CFAM (29.8 - $50). Allowed: this was reasonably incidental to securing the assets, in particular the bank accounts.

55. [162]

    Reviewing the bank statements of Gondon (33.14 - $2228) and of CFAM (29.9 - $589). Allowed in part: a scan of the bank statements to ensure that the account details were correct and all accounts had been captured and the correct balances secured was reasonably incidental to securing the assets. However, the review involved much more than this, and was dominantly for the purpose of identifying “suspicious transactions” for further investigation, which was not part of the Receiver’s function. I have allowed approximately one-third of the amounts claimed, being $725 and $200 respectively.

56. [163]

    Investigating questionable transactions including arranging traces (Gondon 33.15 - $4791). Disallowed: as already explained, it was no part of the Receiver’s function to undertake investigations into “questionable transactions” which had taken place prior to his appointment, whether or not it was done for the purpose of a contemplated report that was not required.

57. [164]

    Liaising with Gondon’s agents re marketing units (Gondon 33.16 - $2908); Attending meetings with agents re status of sales of units (Gondon 33.19 - $2006). Allowed in part: Gondon’s undertaking, to which the Receiver was appointed as receiver and manager, was the development of the property and the sale of the units in it. It was properly incidental to the Receiver’s function to ascertain the status of the sales of unit sales, and their ongoing marketing. However, when these items are combined, the total of close to $5,000 (implicitly more than 12 hours) is excessive. I have allowed about two-thirds of each: $2,000 for marketing, and $1,336 for status of sales.

58. [165]

    Obtaining valuations re Gondon’s units (Gondon 33.17 - $3467). Allowed in part: as already explained, the Receiver says he undertook this task because it was his duty to obtain market value for the sale of any property, but he did not obtain valuations at all, and the work attributed to this heading was not for the purpose of obtaining valuations but partly associated with ascertaining the status of the sales, and partly with investigations that went far beyond identifying assets for the purpose of receiving them. I have allowed about half, that is $1,800.

59. [166]

    Liaising with solicitors re concerns re units C307 (Gondon 33.18 - $690). Disallowed: this formed part of the investigation of suspicious or questionable pre-appointment transactions, which was outside the proper scope of the Receiver’s appointment.

60. [167]

    Liaising and attending offices of external accountant (Gondon 33.20 - $0). Nothing was claimed under this task.

61. [168]

    Investigating moneys paid to respondents’ solicitors (Gondon 33.21 - $302). Disallowed: this formed part of the investigation of suspicious or questionable transactions, which was outside the proper scope of the Receiver’s appointment.

62. [169]

    Reviewing affidavits in proceedings (Gondon 33.22 - $1842). Disallowed: the Receiver’s role was to secure the assets. He had no role in considering the evidence adduced by the parties as to whether or not the receivership should continue. I am unable to accept the Receiver’s evidence that this was undertaken for the purpose of understanding the Companies’ history, structure, affairs and asset position; the affidavits were not substantially addressed to those issues, and the work was undertaken primarily in connection with the proposal that the Receiver would swear an affidavit in support of the plaintiff’s application for continuation of the appointment.

63. [170]

    Arranging for Gondon’s compliance with its statutory obligations (Gondon 33.23 - $5991). Allowed in part: the Receiver says that this task was undertaken in compliance with various (unspecified) requirements of the Corporations Act, and included registering the Receiver’s ABN with the ATO, ensuring that the company complied with fire regulations for units, reviewing strata regulations and understanding the companies’ taxation position. To the extent that this was required at all, it did not justify more than $1,000 worth (2.5 hours) of work.

64. [171]

    Seeking directions from Court in relation to scope of appointment (Gondon 33.24 - $2112). Disallowed: for the reasons explained above, the Receiver should not have sought directions from the Court, but should have reported his difficulty to the plaintiff, and asked the plaintiff to obtain clarification of the scope of the appointment to the extent that it was required.

65. [172]

    Liaising with solicitors regarding subpoena (Gondon 33.26 - $1633) (CFAM 29.15 - $165). Disallowed: the Receiver says merely that having been issued with a subpoena he considered it necessary and appropriate to obtain legal advice in relation to his obligations to comply with it. The subpoena was not exceptional, and not of a kind which required legal advice, especially given the Receiver’s experience as an insolvency practitioner, and his legal training and qualification.

66. [173]

    Complying with subpoena (Gondon 33.27 - $1311) (CFAM 29.16 - $715). Allowed: although the Receiver did not apply for the costs of compliance, he is nonetheless entitled to be compensated for work done in his receiver capacity, and he received the subpoena in that capacity.

67. [174]

    Preparing and attending hearings on 21 and 23 December 2016 (Gondon 33.25 - $6971) (CFAM 29.14 - $5362). Allowed only as to the Receiver’s personal attendance on 21 December, and otherwise disallowed: as already explained, the Receiver had no legitimate interest in whether or not his appointment was continued, which was the issue before the court on 21 December. He says that he attended “to make himself available to the Court, if required”, but he was not required, and there was no indication that he would be. This is accentuated in respect of the proceedings on 23 December, which were for short minutes only. With misgivings, I make an allowance for Receiver’s personal attendance on 21 December (but not 23 December), and not for his staff or solicitors, of $1,375 for Gondon and $1,375 for CFAM.

68. [175]

    Arranging for transfer of funds in accordance with Court’s orders (Gondon 34.1 - $3685) (CFAM 34.1 - $704). Allowed in part: the Receiver says that this was undertaken to ensure that the Companies’ funds were transferred out of the accounts which had been opened by his firm, and returned to the companies. While this was a necessary step in conjunction with the Receiver’s discharge, it should not have required ten hours’ work. I have allowed approximately half, namely $1,885 and $350 respectively.

69. [176]

    Obtaining advice re tax implications of sale of A206 and B206 (Gondon 34.2 - $2530). Disallowed: the Receiver says that he was concerned that there may be tax implications for him following the sale of units A206 and B206, and he considered it necessary to obtain legal advice on that issue. Although he asserts that the implications were for him “as receiver and manager”, he had ceased to be receiver and manager; the advice was obtained for his own personal benefit. This was not a proper estate expense.

70. [177]

    Liaising and instructing solicitors re withdrawal of caveats (Gondon 34.3 - $358). Disallowed: although this would have been a reasonable, if not necessary, consequence of the Receiver’s appointment, the individual time entries attributed to this task show no relationship to such a task.

71. [178]

    Liaising and instructing solicitors re settlement of A206 and B206 (Gondon 34.4 - $495). Allowed: the Receiver was required to facilitate the withdrawal of caveats to enable settlement, although he had been discharged.

72. [179]

    Lodging required forms with ASIC (Gondon 34.5 - $215) (CFAM 34.5 - $265). Allowed: this was required in conjunction with the Receiver’s discharge.

73. [180]

    Fee approval (Gondon - $948) (CFAM - $275). Allowed: this was properly incidental to the Receiver’s discharge.

74. [181]

    Thus I am satisfied that the following was work reasonably undertaken within or incidental to the scope of the appointment to CFAM:

75. [182]

    In respect of CFAM, I have disallowed the following:

76. [183]

    I have allowed the following as work reasonably undertaken within or incidental to the scope of the appointment to Gondon:

77. [184]

    In respect of Gondon, I have disallowed the following:

Conclusion as to remuneration

1. [185]

   Unsurprisingly, the two analyses produce very similar results. As I have indicated, the analysis by Tasks provides greater fidelity. Bearing in mind that the Receiver bears the onus of proving the reasonableness of the work done and his remuneration for it, I am not persuaded that their remuneration should exceed $10,000 (plus GST) for CFAM, and $30,000 (plus GST) for Gondon.

2. [186]

   Total remuneration of $40,000 for the two administrations represents close to $3,000 per day for the 14 business days for which the appointment was in place.

Expenses

1. [187]

   As has been noted, in addition to his remuneration claim, the Receiver also sought approval of his expenses, being legal costs incurred by him to his solicitors Piper Alderman, amounting to $73,904.75, and on 17 October 2017 filed an application for assessment of costs as between client and law practice; he now seeks an order that he be entitled to payment of his expenses as so assessed. The total costs and disbursements rendered by Piper Alderman were $78,340.71 (GST inclusive); the Receiver seeks reimbursement for only $73,904.75 pursuant to an agreement with the plaintiff.

2. [188]

   Receivers are entitled to be indemnified by the estate in respect of expenses properly incurred in the discharge of their duties. [56] The right of a court-appointed receiver to indemnity in respect of out-of-pocket expenses depends on the general law relating to a trustee’s right of indemnity, and for that reason such expenses (for which prior approval is not required), are distinct from remuneration, which a receiver cannot draw without the approval of the Court. [57] In respect of disbursements, as Ferris J explained (in the context of liquidators, but the principles are the same for receivers) in Mirror Group Newspapers plc v Maxwell (No 2), [58] there are two questions. First, the liquidators (or receivers) must decide to what extent they are bound to pay the liabilities they have incurred, and to the extent that they accept that they are bound to pay they must do so, as they are personally liable. The second question is whether and to what extent they are entitled to recoup what they have paid from the estate. [59] Recognition that there are thus two separate questions reflects that what may properly be recoverable by the solicitors from the Receiver does not necessarily correspond with what the Receiver is entitled to be indemnified in respect of by the estate; that is why the proposal to refer the legal costs for assessment, and to authorise payment by the Receiver of the costs as assessed, is not a complete solution: the solicitors may be entitled as against the Receiver to costs for work which they were instructed to do, but which as between the Receiver and the companies were not properly incurred.

3. [189]

   The second question ordinarily arises upon the taking of accounts, or upon a misfeasance summons. [60] However, in some circumstances liquidators or receivers may seek a direction in the Court’s advisory jurisdiction that they would be justified in paying certain disbursements, and in that way obtain prior protection in respect of such disbursements. [61] The Receiver’s application in this case is of that character, and in circumstances where the Receiver has been discharged and a Court order is necessary to facilitate reimbursement of his expenses, and the nature and quantum of the disbursements are controversial, it is appropriate for him to invoke the advisory jurisdiction.

4. [190]

   As to the Court’s approach to such matters, in AAA Financial Intelligence Ltd (in liquidation) (No 2), [62] I explained:

5. [191]

   As to the particular claim for legal costs in that case, I said: [63]

6. [192]

   The following guidelines may be extracted from the authorities discussed above. Although those authorities were in the context of liquidations, not receiverships, for present purposes there is no relevant distinction, and they are as applicable to receivers as they are to liquidators:

   1. (1)

      liquidators (and receivers) bear the onus of justifying their disbursements;

   2. (2)

      the Court will generally be supportive of liquidators (and receivers) who have incurred disbursements and paid them out of the estate in the exercise of their commercial judgment;

   3. (3)

      liquidators (and receivers) should ensure that they obtain legal services of appropriate quality at the best possible rate; and

   4. (4)

      liquidators (and receivers) should subject the bills received from their lawyers to critical scrutiny.

7. [193]

   The Receiver’s evidence in support of the application for approval of the legal costs payable to Piper Alderman was, in substance, that he has previously engaged Piper Alderman in respect of insolvency matters and has always been satisfied with the work they have performed; that he considered that the rates to be charged by them were reasonable and in line with market rates; and that he reviewed their invoices and considered that they were appropriate and reasonable and was satisfied that the work performed was in accordance with his instructions and necessary for the purposes of the receivership.

8. [194]

   The respondents submitted this was inadequate to justify the expenses, and in particular that while the Receiver’s evidence went into some detail in justification of Mackay Goodwin’s professional fees (including by reference to ARITA codes, work categorisation and tasks), the same could not be said of Piper Alderman’s fees; and there was no affidavit from anyone at Piper Alderman.

9. [195]

   I do not accept – as is implicit if not explicit in the respondents’ submissions – that the Court scrutinises expenses in the same way as it does remuneration, and requires the same type of evidence. It is correct, as the Receiver submitted, that remuneration and disbursements in this context are not the same thing; as appears from the authorities discussed, the exercise is different. In particular, I do not regard the absence of an affidavit from Piper Alderman as significant; the issues to which it is necessary to direct evidence in respect of disbursements, as just identified, are more in the province of the Receiver than his solicitors. Detailed bills of costs have been provided, based on contemporaneous time records, which identify the work done and the charges for it, and enable the Court to scrutinise them.

10. [196]

    However, the circumstance that the Receiver has not identified a single dollar to object to is a matter of concern; it suggests that that degree of critical scrutiny to which Finkelstein J referred in Stockford Ltd has not been brought to bear. That is particularly so where there are, on any view, some fairly obvious areas for objection, including that time is claimed for the attendance at court on 15 December of two solicitors with senior counsel, again for the attendance of two solicitors at court on 21 December (notwithstanding that there was no formal appearance on behalf of the Receiver), and yet again on 23 December (when the matter was listed for short minutes only). That concern is fortified by aspects of the costs assessment application filed by the Receiver, no doubt with the intention that any such concern could be mitigated by referring the lawyers’ bills for assessment. The Receiver’s application was prepared and filed by his solicitors – the very firm whose costs were to be assessed. The application form identifies the total amount claimed by the law practice claimed as $78,340.71, and in answer to the requirement to state how much the client contended was proper, the Receiver stated “$78,340.71” – that is, the full amount. In answer to the requirement to state how much was objected to, the response was “None”. Further information included:

11. [197]

    As instructions were first given after 1 July 2015, the (NSW) Legal Profession Uniform Law applies in respect of the costs assessment. The facility for the assessment of costs as between client and solicitor is found in Division 7, ss 196 to 205, of Part 4.3 of the Uniform Law. Section 170, in Division 1 of Part 4.3, provides:

12. [198]

    Although this is an extraordinary and presumably unintended result, prima facie this has the effect that receivers are not entitled to apply for assessment of costs rendered to them by their solicitors. However, if a concern that appropriate scrutiny had not been brought to bear was the only issue, this difficulty could be addressed by referring the matter of Piper Alderman’s costs to a costs assessor as a referee for inquiry and report.

13. [199]

    However, that concern is not the only issue. To the extent that I have concluded above that the Receiver was not justified in retaining external solicitors, except in respect of limited matters, it necessarily follows that he is not entitled to reimbursement of his legal expenses paid or payable by him to them, because those expenses were not reasonably and properly incurred. Assessment will resolve only the first question (the amount for which the receiver is liable to his solicitors, which prima facie would include all work which he instructed them to do, whether or not properly within the scope of the receivership), and not the second (the amount for which the Receiver is entitled to be indemnified, which would not include work that it was not reasonable and proper for him to instruct the solicitors to do).

14. [200]

    It would be an option to refer, for inquiry and report, the amount of Piper Alderman’s costs that were attributable to the issues I have identified as those in respect of which it was reasonable for the Receiver to engage them. However, that would visit additional costs on the parties and protract their dispute. Piper Alderman’s bills are in sufficient detail, although they are not the subject of categorisation into Issues or Tasks, that it is possible to obtain from them, without undertaking a line-by-line examination, an approximation of the costs attributable to the caveat and contract issues.

15. [201]

    There are items which refer to work associated with lodging or withdrawing the caveat that total $3,610.50. Many of them include other work, and some involve internal conferences between solicitors in the same firm. I regard an allowance of $3,000 as more than ample to cover what should reasonably have been required. In addition, I would allow disbursements for property search fees ($79.85), and registration fees for the caveat ($408.90) and withdrawal of caveat ($408.90).

16. [202]

    Entries totalling $2,728.50 which potentially relate in whole or in part to the contract issue can be identified; again, some involve internal conferences, and some relate to multiple issues. $2,500 is ample to cover what should reasonably have been required.

17. [203]

    Accordingly, expenses totalling $6,397.65 (plus GST) were reasonably incurred in the due course of the receivership. As I have foreshadowed, this determines only the amount for which the Receiver is entitled to be indemnified; it does not determine the amount to which Piper Alderman are entitled as against the Receiver. If necessary – but subject to the jurisdictional issue to which I have referred – that can be determined on assessment, but as the Receiver does not dispute Piper Alderman’s charges, that would now appear unnecessary.

Conclusion and orders

1. [204]

   My conclusions may be summarised as follows:

2. [205]

   The work for which the Receiver claims remuneration was in large part not reasonably undertaken in the course of a short-term interim appointment as receiver and manager for the purpose of securing assets. In particular, work in relation to investigation of pre-appointment transactions, the substantive litigation and the directions application, and the ABMG lockout, was not justified; and the amount claimed in respect of ascertaining the status of sales, and what the Receiver called “other necessary work” and “mandatory work” was excessive. Bearing in mind that the Receiver bears the onus of proving the reasonableness of the work done and his remuneration for it, I am not persuaded that his remuneration should exceed $10,000 (plus GST) for CFAM, and $30,000 (plus GST) for Gondon. That represents $2,850 per day for the 14 business days that the appointment was in place.

3. [206]

   The Receiver was not justified in instructing solicitors to act for him, except in relation to the lodgement and withdrawal of the caveat, and the contracts for sale of two units. His lawyers’ reasonable costs and disbursements for that work, for which the Receiver is entitled to be indemnified, do not exceed $6,397.65 (plus GST).

4. [207]

   The Court orders that:

   1. (1)

      the remuneration of the applicant as receiver of CFAM be fixed at $11,000 (GST inclusive);

   2. (2)

      the remuneration of the applicant as receiver of Gondon be fixed at $33,000 (GST inclusive);

   3. (3)

      the applicant would be justified in reimbursing himself in respect of expenses (being the legal costs paid or payable by him in his capacity as Receiver of Gondon to his solicitors Piper Alderman) to the extent of $7,037.42 (GST inclusive); and

   4. (4)

      the applicant would be justified in drawing the amount of $51,037.42 from the money remaining in his trust account to the credit of the respondents.

5. [208]

   I will hear the parties on the question of costs of the application, pending which it would be premature to determine the destination of the balance remaining in the Receiver’s trust account. If there is any issue about the moneys retained by Marsdens on their undertaking, that can be addressed in connection with the question of costs, and liberty to apply in that respect, and in respect of any other consequential matter, is reserved.