Stojanovski v Stojanovski

These proceedings arise out of a long, complex and hard-fought history of litigation concerning the financial and legal affairs of the Stojanovski family, including the ownership of the following three properties (together, Properties):

Earlier judgments in this court involving the parties include:

The plaintiff, Steven Stojanovski, is the brother of Robert Stojanovski. The fourth defendant, Angelina Stojanovski, is the wife of Robert. Due to the overlap in surname, for convenience I will refer to each of Steven, Robert and Angelina by their first name. No disrespect is intended.

On 30 June 2017, a bankruptcy order was made against Robert and the fifth and sixth defendants, Mr Carrafa and Mr Micheletto of SV Partners respectively (together, Trustees/Receivers), were appointed trustees in bankruptcy of Robert’s bankrupt estate. Both Steven and Angelina have made a claim in respect of the property of Robert’s bankrupt estate.

On 17 December 2018, the Trustees/Receivers were appointed as receivers in respect of rental income received from the Properties.

On 18 May 2022, the Trustees/Receivers were appointed as receivers with a power of sale in relation to Morts Road and Kemp Street.

Both Morts Road and Kemp Street have since been sold, with the proceeds of sale held in a ‘Receivers fund’.

The current dispute before me is of a rather narrow compass, specifically three categories of costs and expenses, which arise out of the orders made by Lindsay J on 18 May 2022 (May 2022 Orders), that have been claimed by the Trustees/Receivers in their capacity as receivers and trustees in bankruptcy of the estate of Robert.

The Trustees/Receivers seek to be fully indemnified for the reasonable costs and expenses incurred in, and to receive remuneration in respect of, the performance of their duties as trustees and receivers.

Angelina has objected to different aspects of the amounts claimed by the Trustees/Receivers on various grounds, including that the amount claimed is excessive and not proportional to the size of the estate, the value of the assets that they were appointed to sell, and the amount of income they have received.

As it currently stands, the amount held in the Receivers fund is insufficient to, after payment of the amount sought to indemnify and compensate the Trustees/Receivers, annul Robert’s bankruptcy.

The dispute I am to determine is the claim by the Trustees/Receivers for their remuneration, costs and expenses, which is made within the Supreme Court proceedings. This dispute only involves the Trustees/Receivers and Angelina, with no other party taking part in it.

Angelina relied on the affidavit of Peter Maatouk sworn 17 May 2023.

The Trustees/Receivers relied on the following evidence:

Mr A Paterson appeared for Angelina instructed by Maatouks Law Group. Ms E Holmes appeared for the Trustees/Receivers instructed by Polczynski Robinson.

On 30 June 2017, as stated above, the Trustees/Receivers were appointed as trustees in bankruptcy of Robert’s estate. At that time, Steven had already commenced proceedings in this court against Robert in March 2012 (Supreme Court Proceedings) and they were already part-heard before Robb J, with hearing dates held on 28 November 2016, 2 December 2016 and 17 February 2017.

The bankruptcy of Robert’s estate has, at all times, been unfunded, with the only assets of the estate being the Properties.

On 2 October 2017, the creditors of Robert’s bankrupt estate approved a resolution which provided for the Trustees/Receivers to receive $141,697.50 by way of remuneration and $5,158.25 by way of internal disbursements ‘to finalisation of the estate’.

The Trustees/Receivers gave evidence, which I accept, that due to the lack of liquidity in Robert’s bankrupt estate, no amounts have been drawn in respect of the Trustees/Receivers’ remuneration or disbursements.

On 19 March 2018, the Trustees/Receivers engaged Polczynski Robinson to act as their solicitors pursuant to a costs agreement (Initial Costs Agreement).

Following the appointment of the Trustees/Receivers, Steven commenced separate proceedings in the Federal Court of Australia seeking orders for leave to join the Trustees/Receivers to the Supreme Court Proceedings, which was granted by Flick J on 27 April 2018.

On 20 June 2018, Robb J granted the cross-vesting of various Federal Court matters to the Supreme Court Proceedings.

On 25 June 2018, the Trustees/Receivers became parties to the Supreme Court Proceedings.

Throughout the Supreme Court Proceedings, Steven sought, inter alia, to have the Properties transferred to him for no consideration pursuant to various testamentary claims.

On 15 October 2018, the Trustees/Receivers filed a cross-claim in the Supreme Court Proceedings seeking orders pursuant to s 120 of the Bankruptcy Act 1966 (Cth) that the transfers of Robert’s interest in the Properties to Angelina, which had been made on 31 May 2013, be declared void and sought summary judgment on that claim.

On 5 December 2018, Ward CJ in Eq (as her Honour, the President, then was) heard the application by the Trustees/Receivers for summary judgment on their cross-claim.

On 17 December 2018, Ward CJ in Eq delivered judgment in respect of the cross-claim (Stojanovski v Stojanovski [2018] NSWSC 1967) and, inter alia, ordered (December 2018 Orders):

As a result, from this point onwards, the Trustees/Receivers acted as receivers of rent from the Properties.

On 1 February 2019, Angelina filed an affidavit of the rents, profits and benefits she had received from the Properties since 25 March 2016.

Following the December 2018 Orders, Angelina failed to comply with order 1 of them.

On 8 February 2019, Angelina commenced proceedings in the Family Court of Australia (Family Court Proceedings) seeking a declaration that she retains all right, title and interest at law and in equity in the Properties, filed an application in this court to stay the December 2018 Orders and sought to cross-vest the Supreme Court Proceedings to the Family Court (Stay and Cross-Vesting Application).

On 11 February 2019, the Trustees/Receivers filed a notice of motion seeking that Angelina be found in contempt (Contempt Application), in that she engaged in conduct constituting an improper interference with the performance by the Trustees/Receivers of the duties, and applying for the costs pursuant to the First Costs Order to be assessed by the court.

On 27 February 2019, the Trustees/Receivers filed an application to the Registrar of this court for the execution of the transfers of the Properties in accordance with the December 2018 Orders, which were subsequently filed in the New South Wales Land Registry to transfer Angelina’s interest to the Trustees/Receivers in accordance with the December 2018 Orders.

From March 2019 to June 2021, the Family Court Proceedings were stood over on numerous occasions to enable the Supreme Court Proceedings to be fully determined.

On 15 May 2019, executed transfers were filed with the New South Wales Land Registry registering the Trustees/Receivers as tenants in common of the Properties in accordance with the December 2018 Orders.

On 30 May 2019, the Stay and Cross-Vesting Application brought by Angelina was dismissed by Robb J.

From 30 May to 6 June 2019, Robb J continued the hearing of the Supreme Court Proceedings.

On 8 July 2019, the First Costs Order was assessed by this court and Angelina was ordered to pay the Trustees/Receivers’ costs assessed in the sum of $37,645.48 (First Costs Assessment).

The First Costs Assessment was reviewed by this court and, on 3 December 2019, Angelina was ordered to pay $72,280.25 under the First Costs Order (Amended First Costs Assessment).

The Trustee/Receivers’ evidence, which I accept, is that as at 16 February 2023, the Amended First Costs Assessment remained unpaid and as at 31 January 2023, had accrued $14,763.69 in interest.

On 4 December 2019, Robb J delivered judgment in Stojanovski v Stojanovski [2019] NSWSC 1713, in which his Honour made the following observations:

Robb J concluded that Breakwell Street and Morts Road are to be registered jointly by Angelina and the Trustees/Receivers as tenants-in-common and Kemp Street is to be registered in the names of the Trustees/Receivers.

On 2 November 2020, Robb J delivered judgment in relation to the costs of the proceedings decided on 4 December 2019: Stojanovski v Stojanovski (No 3) [2020] NSWSC 1540, in which his Honour reached the following conclusion in respect of the Trustees/Receivers’ costs of the proceedings:

The Trustees/Receivers’ evidence, which I accept, is that as at 16 February 2023, the Trustees/Receivers had not taken steps to assess and enforce the costs order contained in Stojanovski (No 3) against Steven (Second Costs Order). The Trustees/Receivers estimate the amount of costs and disbursements which are the subject of the Second Costs Order to be $741,168.35.

On 2 July 2021, the Trustees/Receivers gave notice to Angelina of their intention to take steps to deal with the Properties.

On 9 September 2021, there was an unsuccessful conciliation conference in the Family Court Proceedings.

On 22 September 2021, Angelina filed an application in the Family Court Proceedings seeking injunctive relief to restrain the Trustees/Receivers from taking any steps in relation to the Properties. This application has been before the Family Court on multiple occasions and has been adjourned but is still yet been resolved, including the question of the payment for the costs of it.

The Trustees/Receivers submitted that Angelina should pay the Trustees/Receivers’ significant costs related to the Family Court Proceedings, however, as they have not been resolved, it is not for me to decide how the costs of the Family Court Proceedings are to be apportioned.

On 27 September 2021, the Trustees/Receivers filed a notice of motion seeking orders to provide for the payment of their costs, expenses and remuneration for the work undertaken by them as both trustees in bankruptcy and as receivers, including in relation to defending the claims made by Steven against the Properties (Priority Costs Application). It is the Priority Costs Application which later led to the May 2022 Orders (over 9 months later), dealt with below.

On 30 November 2021, Polczynski Robinson sent a letter to the Trustees/Receivers varying the hourly rates which were contained in the Initial Costs Agreement, taking effect from 1 January 2022.

On 7 December 2021, Steven was made bankrupt by the Federal Court of Australia in relation to an act of bankruptcy on 17 August 2021. The Trustees/Receivers are liaising with Steven’s trustee in bankruptcy in relation to the Second Costs Order.

On 7 February 2022, Angelina filed a further application in the Supreme Court Proceedings seeking an order that they be transferred to the Family Court (Second Cross-Vesting Application).

On 25 February 2022, Lindsay J heard the Second Cross-Vesting Application and the Priority Costs Application.

On 28 April 2022, Lindsay J delivered judgment in relation to the Second Cross-Vesting Application and the Priority Costs Application: Stojanovski v Stojanovski [2022] NSWSC 508. His Honour concluded:

On 29 April 2022, Lindsay J heard the Contempt Application and made orders by consent in relation to it, as follows:

On 17 May 2022, the Contempt Application was again before Lindsay J and orders were made for it to be dealt with on the papers by Lindsay J.

On 18 May 2022, the Trustees/Receivers were appointed as receivers with a power of sale in relation to Morts Road and Kemp Street. The May 2022 Orders also provided for a fund to be established out of the proceeds of sale which is to be applied in respect of:

Relevantly, the entirety of the May 2022 Orders are as follows:

The Trustees/Receivers gave evidence, which I accept, that as at 16 February 2023 they have not taken steps to assess and enforce the costs order in order 15 of the May 2022 Orders (Third Costs Order). The Trustees/Receivers estimate the amount of costs and disbursements which are the subject of the Third Costs Order to be $262,421.87.

On 19 May 2022, Lindsay J made the following orders by consent in relation to the Contempt Application:

The Trustees/Receivers gave evidence, which I accept, that as at 16 February 2023 they have not taken steps to asses and enforce the costs order made on 19 May 2022 (Fourth Costs Order). The Trustees/Receivers estimate the amount of costs and disbursements which are the subject of the Fourth Costs Order to be $173,093.53.

On 31 August 2022, Lindsay J set the reserve price for the sale of Kemp Street and Morts Road at public auction.

On 24 September 2022, Kemp Street was sold at auction for $1,400,000 (above the reserve), with settlement taking place on 29 November 2022. The net proceeds from the sale of Kemp Street were $1,344,008.90.

On 24 September 2022, Morts Road was passed in at auction, with an offer of $850,000 well below the reserve price.

On 14 October 2022, on the application of the Trustees/Receivers to reduce the reserve price for Morts Road, which was opposed by Angelina, the reserve price for Morts Road was reduced by Lindsay J.

On 21 October 2022, the creditors of Robert’s bankrupt estate approved a resolution which provided for the Trustees/Receivers to receive $265,312.00 by way of remuneration and $5,000.00 by way of internal disbursements ‘to finalisation of the estate’.

On 2 November 2022, on the application of the Trustees/Receivers which was opposed by Angelina, Lindsay J ordered that the reserve price for Morts Road be again reduced to enable an offer received to be accepted.

On 4 November 2022, Morts Road was sold for $1,200,000, with settlement taking place on 2 December 2022. The net proceeds from the sale of Morts Road were $1,170,808.08.

In selling Kemp Street and Morts Road, the Trustees/Receivers appointed a real estate agent and auctioneer, obtained a valuation of the Properties from a registered valuer, applied to the court for the setting of a reserve price, and auctioned both of them.

By way of this application, the Trustees/Receivers seek that the Priority Costs be fixed at $1,555,193.44, the Receivership Costs (not otherwise claimed as Priority Costs) be fixed at $245,267.18 and the Sale Costs be fixed at $154,648.60, totalling $1,955,109.22. Each of these categories covers amounts for the remuneration of the Trustees/Receivers and for the disbursements incurred by them, including the fees and disbursements charged by Polyczynski Robinson.

I am not required to determine the Bankruptcy Costs as defined in order 8(l) of the May 2022 Orders, save to the extent they are Priority Costs. I am satisfied that the Trustees/Receivers have avoided duplication of claims in relation to the remuneration approved by the creditors ($265,312.00 excl GST) by ensuring that where the remuneration related to the Supreme Court Proceedings and is claimed as a Priority Cost (being $165,871.50 excl GST), it is being claimed as a Priority Cost, and where the remuneration cannot be claimed as a Priority Cost, it is claimed as a Bankruptcy Cost but the approved remuneration has been reduced by the amount claimed as a Priority Cost ($265,312.00 less $165,871.50 excl GST).

If payment of the three categories of Priority Costs, Receivership Costs and Sales Costs set out in the May 2022 Orders in the total amount of $1,955,109.22 is made, there will be insufficient funds to pay an amount to annul the bankruptcy of Robert (as provided by order 8(m) of the May 2022 Orders), and there will not, accordingly, be any balance to be paid into court (as provided by order 8(n) of the May 2022 Orders).

According to the Trustees/Receivers, the current proceedings in this court have involved 19 substantive (meaning “more than directions hearings”) hearings. The Trustees/Receivers submit that they have obtained six judgments in their favour and four substantial costs orders, valued by the Trustees/Receivers at over $1,200,000. On any view, the Trustees/Receivers have been engaged in lengthy, complex and protracted litigation on behalf of the bankrupt estate of Robert.

As stated above, shortly after the appointment of the Trustees/Receivers, they engaged Polczynski Robinson pursuant to the Initial Costs Agreement. The Initial Costs Agreement provides that Polczynski Robinson is only entitled to receive payment of its legal costs in the event that a successful outcome is achieved, including a realisation of funds. Under the terms of the Initial Costs Agreement, Polczynski Robinson were engaged to act on behalf of the bankrupt estate of Robert in relation to:

As part of the Initial Costs Agreement, any disbursements incurred by Polczynski Robinson were to be invoiced and paid by the Trustees/Receivers.

On 30 November 2021 the hourly rates charged under the Initial Costs Agreement were varied with effect from 1 January 2022.

The calculation of each category of costs, comprising the Priority Costs, Receivers Costs and Sale Costs were set out in the Micheletto affidavit and the Lyne affidavit as follows:

The Receivers rely on an independent report prepared by Kerrie-Ann Rosati of DGT Costs Lawyers dated 16 February 2023, which concluded as follows:

Putting aside the May 2022 Orders, the entitlement of trustees in bankruptcy to their remuneration is legislatively provided.

Divisions 60-5 and 60-10 of the Insolvency Practice Schedule (Bankruptcy) are set out in Schedule 2 to the Bankruptcy Act 1966 (Cth) and provide:

Rule 26.4 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) provides:

Rule 42.25 of the UCPR provides:

None of the disentitling considerations in r 42.25(2) of the UCPR arise in the present case.

The external disbursements of a trustee are subject to the trustee’s right of indemnity from the trust property for obligations incurred in the bankrupt’s capacity as a trustee: Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49, Bell, Nettle, Gordon and Edelman JJ at [92].

The principles to be applied to determine the issues before me are well settled on the authorities.

In the matter of Cannuli Holdings Pty Ltd (in liq) (Court-appointed receiver acting) [2017] NSWSC 1562, Black J at [8]-[9] said:

In the matter of Banksia Securities Ltd (in liq) (Receivers and managers appointed) [2017] NSWSC 540, Gleeson JA at [37]-[46] stated:

In Re Octavia Administration Pty Ltd (in liq) [2020] NSWSC 927 at [49], Rees J distilled the following principles:

In circumstances where a time-based approach is adopted, In the matter of Gondon Five Pty Ltd and Cui Family Asset Management Pty Ltd [2019] NSWSC 469, Brereton J at [34(7)] said:

Emphasising the reference made in Cannuli by Black J above, court-appointed trustees and receivers are entitled to remuneration and it is rarely if ever appropriate for the court to undertake a line-by-line analysis of their time recordings: Wenkart v Pantzer [2005] FCA 1572, Branson J at [35]; Mohamed v Hurstville Tower Medical Clinic Pty Ltd (in liq) [2006] NSWSC 4, Barrett J at [9].

In respect of contested disbursements, In the matter of Say Enterprises Pty Ltd [2018] NSWSC 396, Brereton J at [6(9)] explained (citations omitted):

The application of the principle of proportionality to the question of reasonableness of remuneration has been considered in a number of authorities.

The issue was considered in Templeton v Australian Securities and Investments Commission [2015] FCAFC 137, Besanko, Middleton and Beach JJ at [32]-[34] stating:

In Sanderson as Liquidator of Sakr Nominees Pty Ltd (in liquidation) v Sakr (2017) 93 NSWLR 459; [2017] NSWCA 38, Bathurst CJ (with whom Beazley P; Gleeson JA; Barrett AJA and Beach AJA agreed) at [55]-[58] stated:

In the matter of Idylic Solutions Pty Ltd as trustee for Super Save Superannuation Fund and others [2016] NSWSC 1292, Black J at [36]-43] stated:

The Trustees/Receivers submitted that they are entitled to be fully indemnified for the expenses incurred and to receive remuneration in respect of their performance of their obligations, on the following grounds:

In respect of the legal costs incurred by the Trustees/Receivers, being third party disbursements, the Trustees/Receivers submitted that they acted reasonably in obtaining an independent report to ensure they were properly payable. Accordingly, in those circumstances, they say it is not for Angelina to insist on an assessment of those costs.

Further, the Trustees/Receivers submitted that the application of the principles stated by Brereton J in Say Enterprises as set out above places the burden on Angelina in the case of disbursements (including legal costs) to establish that the Trustees/Receivers did not fulfil their obligation to ensure that they were reasonable and properly payable.

In respect of the Trustees/Receivers’ remuneration, the Trustees/Receivers submitted that the court’s role is to value or determine a reasonable value for the services or the actions which have been performed.

Angelina submitted that the question of proportionality is relevant in the following ways:

Accordingly, Angelina submitted that where issues of proportionality arise, the time records of the Trustees/Receivers ought to be scrutinised carefully due to the significant criticisms that have been made about time costing (see Idylic Solutions at [38]-[41]; Re Solfire Pty Ltd (No 2) [1998] QSC 92; Venetian Nominees Pty Ltd & Ors v Mark Anthony Conlan & Ors [1998] WASCA 273).

Further, Angelina submitted that a detailed analysis of the conveyancing costs is appropriate as the total number of items is relatively small and it will provide an insight into the way in which the solicitors acting for the Trustees/Receivers charged.

In support of this submission, Angelina relied on the evidence of Mr Maatouk, her solicitor, said to be experienced in conveyancing, the thrust of which is that the amounts charged by Polczynski Robinson in respect of the conveyances of Kemp Street and Morts Road were unreasonably high.

Angelina also submitted that as the Trustees/Receivers owed fiduciary duties to her, arising out of her 50% direct interest in one of the Properties and a family law claim over the balance, the Trustees/Receivers ought to have undertaken negotiations in order to ensure that they obtained the services of a solicitor at the best possible rate.

Angelina also alleged that the hourly rates charged by the Trustees/Receivers were relatively high and that the solicitors charged excessively for research, there was a lack of adequate costs disclosure, there was a duplication of disbursements, there were inadequate narrations contained in invoices, and the costs for the conveyance were above (in excess of 400%-500%) the going rate.

It is clear from a review of the authorities cited above that the relevant considerations before me are ones of reasonableness and proportionality, requiring the court to assess the extent to which the work performed by the Trustees/Receivers was reasonably necessary and to arrive at a sum or devise a formula which will reasonably compensate the Trustees/Receivers for the time and trouble expended in the execution of their duties. It is clear that the question of proportionality is one of the factors involved in the overall consideration of reasonableness.

The authorities direct me to approach the matter as one of principle and not by undertaking a line-by-line analysis of time entries. I reject the suggestion of Angelina that I should look at individual time entries to determine whether the costs were reasonable, including those in relation to the conveyancing of Kemp Street and Morts Road.

There are several considerations which lead me to the conclusion that the work undertaken by the Trustees/Receivers was at all times reasonably necessary, including:

Relevantly, the Trustees/Receivers have been required to actively participate in numerous legal proceedings of significant complexity over a period of more than 5 years due to consistent attempts by Angelina to frustrate the performance of their obligations, and have been successful in obtaining four successive costs orders in those proceedings.

Having reviewed the affidavits and reports relied upon by the Trustees/Receivers, I am satisfied that the remuneration sought is appropriate. In addition, where possible, the Trustees/Receivers appear to have appropriately delegated tasks to employees of SV Partners with lower charge-out rates than the Trustees/Receivers, with little involvement or reliance on counsel.

The quality of the work undertaken by the Trustees/Receivers, including having successfully obtained the four costs orders in their favour, appears to have been diligently performed. The Trustees/Receivers have been successful in maintaining an interest, on behalf of the Robert’s bankrupt estate, in all of the Properties.

It is clear to me that charges for the work undertaken by the Trustees/Receivers was proportionate to the difficulty, complexity and importance of the tasks in the context in which they were required to be performed.

In any event there is nothing disproportionate about the remuneration components of what the Trustees/Receivers seek to recover for their work. They are seeking $182,458.65 for their remuneration as part of the Priority Costs, $109,848.20 for their remuneration as part of the Receivership Costs and $40,535.00 for their remuneration as part of the Sale Costs. The remuneration they are seeking to recover totals $332,841.85, which is well in proportion to the nature, importance and complexity of the tasks that were required to be conducted by the Trustees/Receivers and the benefit to be achieved by the task to secure the Properties for Robert’s bankrupt estate, thereby supporting them as fair and reasonable amounts for remuneration in respect of work reasonably undertaken (applying Templeton). Both in qualitative and quantitative terms, the remuneration of the Trustees/Receivers was clearly reasonable.

In addition, the nature of Robert’s bankrupt estate being unfunded leads to the conclusion that the participation of the Trustees/Receivers in the various proceedings involved significant risk on behalf of the Trustees/Receivers for the benefit of the creditors, with minimal involvement from counsel. This underlines even more that the work undertaken was reasonable.

In this case, the Trustees/Receivers have submitted a time-based approach to the determination of the amount sought and, in those circumstances, the court is guided by professional scales of charges. This is a common basis for charging: Banksia at [37] and Gondon at [34(7)]. In my opinion, that is a reasonable approach to be taken for the charging of their remuneration.

Accordingly, I reject Angelina’s submission that detailed analysis of the Trustees/Receivers’ costs is appropriate.

The vast majority of the costs that the Trustees/Receivers seek to recover are the amounts they have incurred as disbursements for the fees and disbursements of Polczynski Robinson acting for them across the period in which they have been acting for Robert’s bankrupt estate. Within this context, Ms Rosati, an officer of the court who was not challenged and whom I have no reason to doubt, has provided a report which concludes that the fees charged by Polczynski Robinson to the Trustees/Receivers are fair and reasonable.

It is clear from the statement of Brereton J in Say Enterprises at [6(9)] that the Trustees/Receivers were required to scrutinise disbursements to ensure that they are reasonable and properly payable. In my opinion, including by obtaining a report from an independent costing expert who has reviewed and analysed the charges of Polczynski Robinson, they have done so. In addition, it is clear to me that the rates charged by individual solicitors at that firm were within the range of what is reasonably accepted to be charged by a Sydney CBD-based law firm.

In addition, the submission from Angelina that the Trustees/Receivers ought to have undertaken negotiations in order to ensure that they obtained the services of a solicitor at the best possible rate is not made out when Angelina has not provided me with any evidence indicating in what manner they contend that the solicitors obtained did not provide the services they did at the best possible rate. The word best must be distinguished from the word cheapest in this context. Accordingly, in circumstances where the Trustees/Receivers, with assistance from Polczynski Robinson and minimal involvement from counsel, were successful in recovering the Properties and the rent from them, and in the absence of evidence to the contrary, the only conclusion I can reach is that this submission ought to be rejected.

In this regard, I was not assisted by the evidence of Mr Maatouk, which was most general in nature and did not bear on precisely what had been done on the conveyance of Kemp Street and Morts Road. Those conveyances were made all the more complex by Angelina’s efforts to frustrate them, including by opposing applications to reduce the reserve price for the sale of them.

In regard to proportionality, it is clear to me that in the circumstances whereby the only assets of any real value within the bankrupt estate were the Properties, the task that the Trustees/Receivers embarked upon, being to ensure that a portion of the proceeds of sale of the Properties and any rent from them would be available for distribution to the creditors, was clearly proportionate as absent those actions, the estate would not be able to satisfy any amount sought by the creditors.

In regard to the amount of time spent recovering the rent as compared to the amount of rent received, that must be viewed in the context whereby the Trustees/Receivers were appointed as receivers of the rental income in circumstances where Angelina was improperly retaining it. The logical conclusion, in the absence of any evidence from Angelina to the contrary, is that the expense incurred in relation to recovering the rental income was significantly inflated as a direct result of the opposition actions of Angelina. Accordingly, I reject Angelina’s submission that the charges made by the Trustees/Receivers for the recovery of rent ought to be reduced.

Whilst the Full Court of the Federal Court in Templeton at [34] noted that a lack of proportionality between the cost of the work done and the value of the services provided may support a conclusion of overcharging or excessive remuneration, this is clearly a case whereby the work undertaken by the Trustees/Receivers, regardless of the amount (if any) which is ultimately available for distribution to the creditors, was a reasonable attempt to recover and retain assets on behalf of the creditors: Sanderson at [58]; Hall v Poolman (2009) 75 NSWLR 99; [2009] NSWCCA 64 at [128]-[129].

Consequently, the decision to undertake that course of action was clearly not an improper exercise of the Trustees/Receivers’ powers.

In addition, the submission by Angelina that the costs incurred by the Trustees/Receivers in prosecuting the Contempt Application were not proportionate must be rejected in circumstances where the application was, by consent, dismissed with indemnity costs in favour of the Trustees/Receivers. There was nothing improper in them taking that action.

Accordingly, in light of the conclusions I have reached above, the orders I propose to make are as follows: