Adsett v Berlouis [2012] NSWSC 678 | Case summary

What happened

RMGA Pty Ltd had been ordered to be wound up. On 8 February 2010 White J stayed the winding up subject to undertakings, one of which required Ms Mignon Gardner to pay an amount to satisfy the liquidator's reasonable fees as agreed or assessed by the Court and to charge the company's Captains Flat property with payment of any amount payable to the liquidator ([4]). Mr David Lewis Clout, the official liquidator, sought declarations and directions principally that he was entitled to recover his remuneration for the period 9 February 2010 to 4 November 2011 and that the fixing of that remuneration be referred to a Registrar for assessment ([1], [8]). Ms Gardner objected to parts of the claim and had earlier (April 2010) sought a review of the liquidator's remuneration under s 473 and an inquiry into his conduct under s 536; Barrett J heard that interlocutory process and referred quantum up to 8 February 2010 to a Registrar, otherwise largely finding for the liquidator ([5]).

At the hearing before Black J the parties focused on whether remuneration incurred after the stay of the winding up was recoverable, and specifically whether costs of litigating questions of the liquidator's entitlement and defending a s 536 inquiry were properly costs of the liquidation ([10]–[14]). The Court held that, as a matter of principle, a liquidator is entitled to fair and reasonable remuneration but must establish that entitlement; that litigation incurred to defend or secure a liquidator's entitlement can be part of administering the winding up and therefore recoverable where it is reasonably and bona fide undertaken for that purpose; and that the question of quantum is ordinarily a matter for referral to a Registrar rather than determination by a judge ([7], [11]–[13], [20]). The Court thus referred the fixing of the liquidator's remuneration for the relevant period to a Registrar and directed the parties to bring in short minutes and provide submissions as to the form of directions and costs ([20]–[21]).

Why the court decided this way

The decision rests on two linked principles.

First, the statutory framework. The Court has power under s 473(3)(b)(ii) of the Corporations Act to fix a liquidator's remuneration and s 473(10) prescribes factors the Court must have regard to in considering reasonableness of remuneration (necessity of work, period, complexity, the nature and value of property dealt with, attributes of creditors, and if time-based, time properly taken) ([7]). The court reiterated that a judge's role is to decide matters of principle whereas the Registrar customarily determines quantum: "The Court, constituted by a judge, deals with matters of principle rather than conducting a review of quantum" ([7]).

Second, the authorities on trustee/liquidator remuneration and post-stay or post-annulment litigation. Black J relied on established authorities to support the proposition that a trustee's or liquidator's right to remuneration is limited to work properly undertaken in administering the estate but is not extinguished merely by a stay if the work was necessary for administration. The Court quoted Adsett v Berlouis on the limitation to work 'properly undertaken' for administering the estate ([11]). It then applied the Full Court's reasoning in Pantzer v Wenkart to hold that litigation which is necessary, in a practical sense, to maintain and realise a trustee's or liquidator's entitlement to remuneration may be recoverable as part of the administration even where it occurs after a stay or annulment ([12]–[13]). The court distinguished regulatory inquiries by ASIC (which may be overheads of the practitioner's practice) from statutory reviews/inquiries under ss 473 and 536 which are part of the scheme for administering the particular winding up and thus have a clearer connection to costs of the liquidation ([14]).

Finally, Black J observed that criticisms of particular time entries or allocation of senior staff time do not defeat, as a matter of principle, the liquidator's entitlement; such concerns go to quantum and to whether time was 'properly taken' under s 473(10)(k). Those are issues for review by a Registrar ([15]–[18]).

Before and after state of the law

Before this decision (and consistent with prior authority), the law recognised:

A liquidator's entitlement to remuneration is not absolute; it must be reasonable and for work properly undertaken in administering the estate (Adsett v Berlouis).
The Court has power to fix remuneration under s 473 and must consider the statutory matters in s 473(10).
Disputes about quantum are commonly referred to Registrars for detailed assessment (Ide v Ide).

This decision re-affirms those principles and applies the Full Court's reasoning in Pantzer v Wenkart to confirm that litigation defending a liquidator's entitlement to remuneration, including after a stay of winding up, may be recoverable as a liquidation cost provided it is necessary to maintain and realise the entitlement and bears a sufficient connection to the particular winding up ([12]–[13]). The decision clarifies the distinction between costs arising from the statutory review/inquiry regime (which may be recoverable) and costs arising from regulatory inquiries (which are more likely to be treated as practitioner overheads) ([14]).

Practically, the judgment signals that a liquidator will not automatically be denied recovery of fees incurred after a stay when challenged by a director or creditor; the focus will be on connection to administration and necessity, and detailed assessment of reasonableness will be conducted by a Registrar.

Key passages with plain-English translation

"A liquidator is entitled to fair and reasonable remuneration but it is a matter for the liquidator to establish that entitlement" ([7]).
- Plain English: The liquidator has a right to reasonable pay, but he must prove that he deserves it.
Quoted principle: "The trustee's right to remuneration is limited to work properly undertaken ... reasonably and bona fide undertaken for the purpose of administering the estate ..." ([11]).
- Plain English: Only tasks genuinely done to manage the company's affairs count towards recoverable fees; wasteful or irrelevant work does not.
"Litigation ... fall within the category ... necessary, in a practical sense, if Mr Clout was to maintain and realise his entitlement to remuneration" ([13]).
- Plain English: Suing or defending claims about the liquidator's fees can be a legitimate part of running the liquidation if that legal work is needed to secure the liquidator's rightful payment.
"The Court ... deals with matters of principle rather than conducting a review of quantum" ([7]).
- Plain English: The judge decides legal points; detailed billing and how many hours are reasonable is usually left to a Registrar.
Disposition: "I will order that the funding of Mr Clout's remuneration ... be referred to a Registrar" ([20]).
- Plain English: The court sends the detailed task of deciding how much the liquidator should be paid to a Registrar.

What fact patterns trigger this precedent

This judgment is triggered where:

A company is in court-ordered liquidation and there has been a stay of the winding up (so the liquidation continues in a constrained manner) ([4]).
The liquidator incurs significant fees after the stay, including legal costs, and a director or creditor objects to those fees ([8]–[10]).
There is a statutory review or inquiry under the Corporations Act (s 473 or s 536) concerning the liquidator's remuneration or conduct, such that litigation is required to defend or realise entitlement ([5], [12]–[13]).
The liquidator seeks declaratory relief and directions, and the court must decide in principle whether such post-stay fees can be recoverable before determining quantum ([1], [7], [20]).

If these elements are present, Black J’s reasoning supports a finding that litigation and associated costs that are necessary to secure the liquidator's entitlement can be charged to the liquidation, subject to Registrar review of quantum.

How later courts have treated it

The judgment itself expressly relies on and applies Federal Court authorities (Adsett; Pantzer v Wenkart) and NSW decisions addressing protocol for remuneration assessment (Ide; Onefone/One.Tel). It forms part of consistent supervisory practice where judges determine principle and refer quantum to Registrars. Lower and later courts assessing liquidator remuneration are likely to follow the distinction drawn here: litigation connected to the statutory scheme for a particular winding up is more likely to be recoverable as a liquidation expense than regulatory inquiries, and Registrar processes are the appropriate forum for granular assessment of hours and rates ([7], [12]–[14], [17]–[18]). Practitioners should therefore expect judges to determine entitlement in principle and to direct a Registrar to conduct detailed assessment.

(Users should consult subsequent decisions citing this judgment for any refinements; the present deep dive analyses only the primary judgment and links to prior authorities cited therein.)

Still-open questions

Degree of connection required: The decision accepts that litigation defending remuneration can be part of administration where necessary to maintain and realise entitlement. It does not set a bright-line test of how directly connected litigation must be to the winding up before costs are recoverable, leaving room for fact-sensitive analysis at Registrar review ([12]–[13]).
Quantification standards at Registrar: While the Registrar is to assess quantum, the judgment leaves unresolved the exact evidentiary thresholds or benchmarks (e.g. acceptable partner-hours vs junior-hours) that will apply in practice; registrars will need to apply statutory factors in s 473(10) to complex factual matrices ([15]–[18]).
Overlap with regulatory inquiries: The Court distinguished statutory inquiries under ss 473/536 from ASIC regulatory inquiries, but lines may blur in practice where an ASIC investigation overlaps with a statutory inquiry in a particular liquidation. Allocation between administration costs and practitioner overheads could be contested in future cases ([14]).
Consequences of inefficient time-recording: Black J noted inadequacies in time entries could be addressed but required evidence; the threshold of proof for inefficiency sufficient to disallow claimed costs remains procedural and fact-specific ([17]–[18]).
Practical effects of stalemate devices: In this case caveats over property and refinancing difficulties affected ability to comply with undertakings. How courts will manage third-party security and competing caveats in relation to liquidator fees under similar undertakings remains an operational issue outside the law of remuneration but relevant in practice ([6]).

Conclusion: Adsett v Berlouis (as applied here) and Pantzer v Wenkart are the anchoring authorities. Black J's judgment provides a clear, practicable approach: decide entitlement in principle, and refer quantum to a Registrar; allow recovery of litigation costs if they are properly, reasonably and bona fide incurred in administering the particular winding up. Parties should therefore prepare to litigate principle in court but expect detailed billing disputes and quantification to be resolved in Registrar review.

Judgment 1By Interlocutory Process dated 30 January 2012, Mr David Lewis Clout in his capacity as official liquidator of RMGA Pty Limited (in liq) ("RMGA") seeks, relevantly, directions as to the further conduct of the liquidation of RMGA, a declaration that he is entitled to recover from RMGA the amount of his approved remuneration for the period of 9 February 2010 to 4 November 2011 ("relevant period"), an order that the fixing of that remuneration be referred to a Registrar for the purpose of conducting and determining the review of the liquidator's remuneration, and directions as to the manner in which that review is to be conducted. Mr Clout's application was supported by affidavits of Richard Rowley dated 24 January 2012, Katie Jones dated 24 January 2012 and Rolf Howard dated 20 February 2012. 2Mr Clout's application for a declaration as to his entitlement to remuneration for the relevant period was opposed, at least in part, by Ms Mignon Gardner, a shareholder in and director of RMGA. However, Ms Gardner conceded that certain costs incurred by the liquidator would be properly recoverable, although she also contended that other costs would not. I directed Ms Gardner to provide a schedule indicating which costs were conceded; however, that schedule did not substantially narrow the matters in dispute. Ms Gardner relied on an affidavit of her solicitor, Luke Spartalis, affirmed 15 March 2012 in support of her opposition to part of the costs claimed by the liquidator. 3Mr Clout also sought several further orders before me, which were not pressed in submissions on the basis that they would be consequential upon any decision which I reach as to the matters noted above and upon any determination of Mr Clout's remuneration by a Registrar. I will, for good order's sake, order that questions 1-4 of the Interlocutory Process dated 30 January 2012 be determined separately from and before the determination of any other matter raised by that Interlocutory Process. Factual background 4The proceedings have a substantial history. RMGA was ordered to be wound up on 20 July 2009. On 8 February 2010, White J made orders (which were varied by Hammerschlag J on 19 March 2012) to stay the winding up of RMGA until further order on the terms of undertakings contained in paragraphs 1(a)-(c) of an Interlocutory Process filed by Ms Gardner dated 1 December 2009. Those undertakings included two which have been complied with and a third that Ms Gardner would: "Pay within 28 days of agreement or assessment by the Court to Woodgate & Co an amount to satisfy their reasonable fees in acting as liquidator for the company". His Honour also ordered that a property situated at Captains Flat be charged with the payment of such amount as may be payable to the liquidator in respect of his reasonable fees as agreed or assessed by the Court. 5On 12 April 2010, Ms Gardner filed an Interlocutory Process seeking a review of Mr Clout's remuneration under s 473 of the Corporations Act 2001 (Cth) and an inquiry into his conduct under s 536 of the Corporations Act. That Interlocutory Process was heard by Barrett J in November 2010 and his Honour delivered judgment on 2 December 2010, reported as Kennards Hire Pty Ltd v RMGA Pty Ltd [2010] NSWSC 1387. His Honour referred issues in respect of the quantification of Mr Clout's remuneration up to 8 February 2010 (the period prior to the relevant period) to a Registrar and Ms Gardner was otherwise unsuccessful. In his costs judgment delivered on 30 March 2011 ([2011] NSWSC 226), Barrett J noted that the only matter on which Ms Gardner was successful in those proceedings was in raising four discrete items which indicated a need for further examination of the liquidator's remuneration; that she had not established that Mr Clout's fees or disbursements were excessive or not properly incurred so as to breach his duties in a way relevant to s 536 of the Corporations Act; and that the outcome was a "comprehensive victory" for Mr Clout and a "comprehensive defeat" for Ms Gardner. Registrar Musgrave subsequently made orders in relation to the quantification of Mr Clout's remuneration for the earlier period. 6Mr Spartalis' affidavit drew attention to several complexities in respect of compliance with the existing undertaking given by Ms Gardner in order to indicate the need for a determination as to whether Mr Clout's remuneration since the grant of the stay by White J on 8 February 2010 is reasonable. Mr Spartalis gives evidence, on instructions from Ms Gardner, that she would need to draw funds from RMGA's sole asset, the residential property at Captains Flat, in order to pay Mr Clout's fees and has been unable to obtain finance to do so because Mr Clout has lodged a caveat on that property. Ms Gardner's solicitors have also lodged a caveat on the property for their fees, but Mr Spartalis gives evidence that they are prepared to withdraw the caveat in order to allow her to obtain finance. Mr Clout has indicated that he would be unwilling to remove his caveat to enable Ms Gardner to obtain refinancing. Mr Clout's entitlement to remuneration over the relevant period 7A liquidator is entitled to fair and reasonable remuneration but it is a matter for the liquidator to establish that entitlement: Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96 at 102; Onefone Australia Pty Ltd v One.Tel Ltd [2010] NSWSC 1120 at [24]. The Court has power to fix the liquidator's remuneration under s 473(3)(b)(ii) of the Corporations Act. Section 473(10) specifies matters to which the Court must have regard in determining whether remuneration is reasonable, which include the extent to which the work performed by the liquidator was reasonably necessary; the period during which the work was performed by the liquidator; the complexity of the work performed; the value and nature of any property dealt with or likely to be dealt with by the liquidator; the number, attributes and behaviour of the company's creditors and; if the remuneration is ascertained, in whole or in part, on a time basis, the time properly taken by the liquidator in performing the work; and any other relevant matters. The Court, constituted by a judge, deals with matters of principle rather than conducting a review of quantum: Ide v Ide [2004] NSWSC 751; (2004) 50 ACSR 324 at [39]. If the Court determines that it is appropriate to fix that remuneration, then the usual course is for the question of the quantum of that remuneration to be referred to a Registrar in order to determine that amount. 8Mr Clout has claimed a further $92,940.90 plus GST for work done after the stay of the winding up was ordered by White J on 8 February 2010. On 19 August 2011, Mr Clout sent a circular to members and creditors of RMGA advising that he would be seeking approval of his remuneration for the period 9 February 2010-24 June 2011 in the sum of $72,682.70 plus GST from the Court. Ms Gardner sent a Notice of Objection in respect of that claim for remuneration on 9 September 2011. A further circular to members and creditors dated 16 December 2011 indicated Mr Clout's intention to seek approval of his remuneration for the period 25 June 2011-4 November 2011 in the sum of $20,258.00 plus GST from the Court. 9In each case, in accordance with r 9.4 of the Supreme Court (Corporations) Rules 1999 (NSW), Mr Clout attached a Notice of Intention to apply for remuneration and a copy of the affidavit on which he intended to rely. Although Mr Clout's affidavits were not read in the proceedings before me, I do not consider that anything turns on that where affidavits of Mr Rowley and Ms Jones dated 24 January 2012 were read annexing Mr Clout's affidavits, and Mr Clout's affidavits were tendered without objection. Mr Clout claims that the work performed was complex because of Ms Gardner's application for a review of his remuneration for the earlier period under s 473 of the Corporations Act and for a review of his conduct under s 536 of the Corporations Act. 10Mr Spartalis' evidence, which I admitted as a submission, was that a significant component of the amount claimed by Mr Clout related to instructions given in respect to the dispute in respect of Mr Clout's claim for remuneration brought by Ms Gardner. That raises a question of principle whether Mr Clout's costs of dealing with that dispute are properly recoverable as costs of the liquidation. Ms Gardner submitted that Mr Clout should not be entitled to remuneration after the stay of the winding up other than for tasks incidental to completing his appointment (T38). In particular, Ms Gardner submitted that Mr Clout was not entitled to remuneration in respect of the costs of his defence of her application for an inquiry under s 536 of the Corporations Act or to his costs of progressing his claim for remuneration in respect of periods prior to the stay over Ms Gardner's opposition. 11The proposition that Mr Clout is entitled to remuneration in respect of activities properly undertaken in respect of the liquidation, notwithstanding the stay of the winding up, finds support in the authorities. In Adsett v Berlouis (1992) 37 FCR 201, the Full Court of the Federal Court reviewed the authorities as to a trustee's right to remuneration and observed that a trustee is entitled to just and proper remuneration and that right is only lost for a specific reason, for example, if no work was done or needed to be done or for misconduct by the trustee. Their Honours observed that: "... The trustee's right to remuneration is limited to work properly undertaken. In this context 'properly' means work reasonably and bona fide undertaken for the purpose of administering the estate or performing any public duty imposed by the Act, conformably with the trustee's duty to perform the work with reasonable care and skill and in an efficient and economical way". In Burns Philp Investment Pty Ltd v Dickens (No 2) (1993) 31 NSWLR 280 at 283, Young J observed that the position in relation to a trustee in bankruptcy and the liquidator did not seem to him to be very different so far as entitlements were concerned. 12At first instance in Wenkart v Pantzer [2005] FCA 1572; (2005) 223 ALR 384, Branson J accepted that work which the Bankruptcy Act requires, or allows, to be performed by a trustee after the annulment of the bankruptcy was performed while acting in that capacity; the same view was adopted by the Full Court in Pantzer v Wenkert [2006] FCAFC 140 at [31], [43]-[45]; (2006) 153 FCR 466; 235 ALR 273. In that case, after the annulment of the bankruptcy of the first respondent, his former trustee in bankruptcy became involved in litigation to defend his claim to remuneration at the time of the annulment. The Full Court of the Federal Court reversed the decision of Branson J that the trustee was not entitled to remuneration associated with that litigation on the basis that it was undertaken for the trustee's own benefit rather than for the purpose of administering the estate. Their Honours observed that the proper administration of a bankrupt estate by a trustee may include litigation into which the trustee was drawn concerning his or her entitlement to remuneration, and that the trustee's remuneration was properly incurred for the purpose of administering the estate because the litigation involved significant issues relating to the realisation of his entitlements as trustee which had been contested by the former bankrupt. That decision necessarily determined, given its factual circumstances, that the relevant work could be treated as undertaken for the purpose of administering the estate notwithstanding that it occurred, in that case, after the annulment of a bankruptcy. 13In my view, litigation in respect of an inquiry sought under s 536 of the Corporations Act and the review of Mr Clout's remuneration, in which he was substantially successful, both fall within the category to which the Full Court referred in Pantzer v Wenkart at [43] as necessary, in a practical sense, if Mr Clout was to maintain and realise his entitlement to remuneration. As in Pantzer v Wenkart, Mr Clout was drawn into these matters as an incident of having acted as liquidator and his costs of defending his right to remuneration in respect of these matters was incurred for the purpose of administering the winding up, notwithstanding that it had been stayed by the orders of White J. This result is consistent with the authorities to which I have referred above and also consistent with policy, since there is no reason why Mr Clout should be deprived of his right to remuneration in respect of the challenges brought by Ms Gardner merely because Ms Gardner had delayed those challenges until after the winding up had been stayed, where he would have been entitled to that remuneration had they been brought prior to that stay. It might be added that, in the present case, the winding up had not been terminated, but merely stayed. Ms Clout accepted that a stay of a winding up does not mean that subsequent attendances required to complete the winding up are not properly recoverable and the question must be whether any particular attendance was properly undertaken for a proper purpose. 14Ms Gardner also contended that Mr Clout's remuneration in respect of the challenge to his remuneration and the claim for an inquiry under s 536 of the Corporations Act were analogous to the costs of an inquiry into the liquidator's conduct commenced by a regulator which, Ms Gardner contended, was an overhead of the liquidator's practice rather than a cost properly recoverable in the liquidation. In my view, the situation in this case is distinct from an inquiry made by the Australian Securities and Investments Commission ("ASIC") in respect of a liquidator's remuneration which was considered by Barrett J in OneFone Australia Pty Ltd v One.Tel Ltd at [53]-[54]. In dealing with an inquiry made by ASIC, a liquidator is in the same position as any other individual who may face such an inquiry. The risk of that inquiry will often properly be treated as an incident of the liquidator's practice and its costs as an overhead of that practice. By contrast, the regime for assessment of a liquidator's remuneration under s 473 of the Corporations Act and for an inquiry into the liquidator's conduct under s 536 of the Corporations Act are part of the statutory mechanism applicable to the conduct of a particular winding up, and a liquidator's costs when that mechanism is invoked have a clear connection with that winding up. 15Ms Gardner also focussed, in cross-examination of Mr Rowley, on particular attendances included in the claim for remuneration. Ms Gardner criticised the extent of the costs claimed on the basis that time had been spent by Mr Rowley, a partner in the liquidator's firm, in locating missing diaries and printing off a work-in-progress report for out-of-pocket expenses which, Mr Rowley conceded with hindsight, could have been performed more cheaply by a junior or intermediate staff member. However, Mr Rowley also pointed out that that work was done at the time that orders had been made by the Court for the production of documents. In my view, this matter has no impact upon the legitimacy of Mr Clout's claim to remuneration generally, although it may be a matter that is taken into account by the Registrar in determining the reasonable amount of that remuneration. 16Ms Gardner also criticised Mr Rowley's having incurred time in commenting on the pleadings in the inquiry before Barrett J, and Mr Rowley's evidence was that the time spent included reviewing the relevant documents. Mr Rowley also spent time in reviewing the draft defence to be filed by Mr Clout in the proceedings. I do not accept Ms Gardner's criticism that these attendances were inappropriate where Mr Rowley was not a legal practitioner; to the contrary, Mr Rowley had knowledge of the relevant facts and it was appropriate for him closely to engage with the factual accuracy of documents which would be filed before the Court in those proceedings. 17Both parties draw attention to the Code of Professional Practice for Insolvency Practitioners ("IPA Code") published by the Insolvency Practitioners Association of Australia, which provides that, inter alia: 14.1 Necessary work A practitioner is entitled remuneration only in respect of work done that was necessary for the Administration. The term 'necessary' means work that was done that was: connected with the Administration; and done in furtherance of the exercise of the powers and performance or the duties of a Practitioner as required by the law, Code and applicable professional standards. 14.8 Costs of claiming remuneration Practitioners may claim the necessary and proper costs of record keeping and seeking approval or determination of their claim for remuneration. If additional costs are incurred because of inadequacies of the Practitioner or Firm's time recording systems, or due to staff not properly recording their time, these costs would not be necessary and proper. It is not appropriate to charge this additional cost to the Administration and it should not form part of the claim for remuneration. 18Ms Gardner submitted before me that Mr Clout was not entitled to claim his costs of preparing the claim for remuneration on the basis identified in paragraph 14.8 of the IPA Code, because of inadequacies of his or his firm's time recording systems or due to staff not properly recording their time. Although the costs attributable to that claim are substantial, there is no evidence before me to indicate they were incurred because of inadequacy of his or his firm's time recording systems or due to staff not properly recording their time. While Mr Rowley accepted in cross-examination that one time entry was less fulsome that it might have been, that cross-examination did not establish any general inadequacy in respect of Mr Clout's or his firm's time recording system. No evidence was led before me as to what might reasonably have been expected to have been the costs of undertaking that work in the relevant circumstances, so as to allow me to form a view that that remuneration was excessive. It is not self-evident that the liquidator's costs are unreasonably large, given that he had been exposed to the application for the inquiry under s 536 of the Corporations Act as well as the challenge to his earlier remuneration. Even if it appeared that Mr Clout's bill was unusually large, that would warrant review of those costs rather than denial of his remuneration: Burns Philp Investment Pty Ltd v Dickens (No 2) above. To the extent that the size of Mr Clout's claim raises an issue as to the extent of the time "properly taken" in respect of particular attendances for the purposes of s 473(10)(k) of the Corporations Act, this is not an issue to be determined by a judge of the Court, as a matter of principle, but a matter which is properly the subject of review by the Registrar. Other matters 19The Interlocutory Process sought directions as to the further conduct of the liquidation. A liquidator in a court-ordered winding up in insolvency may seek directions from the court in relation to any particular matter arising under the winding up: s 479(3). The function of a liquidator's application for directions under this section is to give the liquidator advice as to the proper course of action for him or her to take in the liquidation: Sanderson v Classic Car Insurances Pty Ltd (1985) 10 ACLR 115 at 117; (1986) 4 ACLC 114; Re Ansett Australia Ltd (admins apptd) and Korda [2002] FCA 90; (2002) 115 FCR 409; 40 ACSR 433 at [46]. The court also has inherent jurisdiction to provide assistance to a court-appointed liquidator by determining any question arising in the winding up: Re Reid Murray Holdings Ltd (in liq) [1969] VR 315. However, such a direction does not allow a binding determination of substantive issues: Re Murphy and Allen; Re BPTC Ltd (in liq) (1996) 19 ACSR 569 at 570; Bastion v Gideon Investments Pty Ltd (in liq) [2000] NSWSC 939; (2000) 35 ACSR 466; 18 ACLC 854. The court will also not generally give a direction under s 479(3) as to the commercial prudence of a proposed transaction: Sanderson v Classic Car Insurances Pty Ltd, above at 117; GB Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674 at 686-7; 5 ACSR 673; 9 ACLC 1291. I do not consider that I should give such directions in this application. The question as to what direction was sought was not identified with any precision and it would not be appropriate for the Court to give directions to an official liquidator as to how he should conduct a liquidation generally. Orders and costs 20I will order that the funding of Mr Clout's remuneration for the period 9 February 2010 to 4 November 2011 be referred to a Registrar for the purpose of determining that remuneration. No submissions were made to me as to the form of any suggested directions as to the manner in which the review was to be conducted by a Registrar and I will hear the parties as to that matter and as to costs. 21I direct the parties, within 14 days, to bring in short minutes of order to give effect to this judgment; provide written submissions as to the form of any directions which are sought as to the conduct of the reference to the Registrar and as to costs; and advise whether they seek a further oral hearing or are content for me to deliver a judgment in Chambers dealing with those matters.

Adsett v Berlouis

At a glance

Result

Key principles

Issues before the court

Plain English Summary

Cited legislation

Deep Dive

What happened

Why the court decided this way

Before and after state of the law

Key passages with plain-English translation

What fact patterns trigger this precedent

How later courts have treated it

Still-open questions

Catchwords

Judgment (2 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (16)

Cited By (3)

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