Bastion v Gideon Investments Pty Ltd

Background

1. Mr Vaughan and Mr Hall became the liquidators of BBY, a securities broking and advisory company, and nine other companies in its associated financial services group (the BBY Group) on 22 June 2015 pursuant to a resolution of creditors under s 446A of the Corporations Act 2001 (Cth), having previously been appointed on 17 May 2015 as administrators of BBY and those other companies. On 18 May 2015, Mr Stephen Parbery and Mr Brett Lord were appointed receivers and managers of BBY by St George Bank, a division of Westpac Banking Corporation Limited. The receivers remain in office.
2. The BBY Group provided a range of financial services and products to clients in Australia, including asset management, broker dealer services, institutional sales, trading and financial advice, and online trading. BBY offered financial products broadly comprised in the following product lines: (1) exchange-traded financial products, being equities such as listed shares and units (Equities) and exchange traded options (ETOs), and futures contracts and futures options (Futures); and (2) "over the counter" financial products, being foreign exchange contracts (FX), a variety of products offered by Saxo Capital Markets Australia Pty Ltd (Saxo), such as FX contracts of difference and international products, and other miscellaneous financial products, including financial products offered by Interactive Brokers LLC (IB) and carbon trading (Other Products).
3. As a securities broker holding client monies, BBY was regulated by Pt 7.8 of the Corporations Act and associated regulations. Client funds deposited with BBY were held on trust for its clients in client segregated accounts (CSAs), maintained pursuant to Pt 7.8 of the Corporations Act.
4. In August 2015, the liquidators commenced these proceedings seeking directions and declarations in relation to the entitlement of clients of BBY to monies held in the CSAs, recoveries from counterparties of BBY, the distribution of those amounts, and ancillary matters. The Court appointed four representative defendants, each having different interests in the CSAs and recoveries, being:

• the first defendant (Mazzetti) as the representative of all clients of BBY with an ETO Account, that is, an account established with BBY in connection with exchange traded options, with open positions as at 15 May 2015;
• the second defendant (Haywood) as the representative of all clients of BBY with an Equities Account, and all BBY clients with an ETO account without an open position as at 15 May 2015;
• the third defendant (Riseam) as the representative of all clients of BBY with a Futures Account, FX Account, Saxo Account (being an account in respect of products offered by Saxo) or Other Products Account; and
• the fifth defendant (Nadin) as the representative of all clients with an account with BBY established in connection with financial products offered by IB.

1. The Court also appointed an additional contradictor as the fourth defendant, the Securities Exchanges Guarantee Corporation (SEGC), which administers the National Guarantee Fund (NGF), a fund made available to meet certain claims which arise from dealings with participants of the Australian Securities Exchange (ASX). SEGC is, in effect, the insurer of those clients with Equities and ETO Accounts.
2. Between 2016 and 2019, the Court delivered four substantive judgments:

• Re BBY Limited (Receivers and Managers Appointed) (in liquidation) [2016] NSWSC 1366; (2016) 116 ACSR 154 (BBY (No 1));
• BBY Limited (Receivers and Managers Appointed) (in liquidation) (No 2) [2018] NSWSC 346; (2018) 363 ALR 492 (BBY (No 2));
• Re BBY Limited (Receivers and Managers Appointed) (in liquidation) (No 3) [2018] NSWSC 1718 (BBY (No 3)); and
• BBY Limited (Receivers and Managers Appointed) (in liquidation) [2019] NSWSC 998 (BBY (No 4)).

1. The liquidators have also sought directions pursuant to an interlocutory process filed 13 April 2021 regarding a claim by BBY Nominees Pty Ltd, a wholly owned subsidiary of BBY, regarding its entitlement to submit a claim on behalf of its clients against the CSAs and recoveries in the amount of $3,671,058.77. That application was heard by Williams J on 26 April 2021 and judgment is currently reserved.

Approval of liquidators' remuneration, costs and expenses

1. During the course of these proceedings, the liquidators have made applications to the Court for approval of their remuneration, costs and expenses (including legal costs and disbursements) and payment of these out of the CSAs pursuant to a costs regime established by orders made on 19 October 2015, which were relevantly varied by orders made on 28 November 2018. It is well-established that the Court has power to allow remuneration of a liquidator in respect of the administration of trusts of which the company was a trustee: see Re North Food Catering Pty Ltd [2014] NSWSC 77 at [9], where Brereton J (as his Honour then was) restated the summary of principles by Black J in In re MF Global Australia Ltd (in liq) (No 2) [2012] NSWSC 1426 at [55].
2. Here, the secured creditor, St George Bank, is entitled to all BBY's assets, except for post-liquidation recoveries not covered by that security. The 19 October orders, as varied, recognised that the liquidators' reasonable remuneration, costs and expenses of administering the CSAs, pursuing and administering recoveries, and conducting these proceedings, must be paid out of trust assets. Those orders are consistent with the principle that where work done by a liquidator in relation to trust assets may properly be considered as having been done for the purpose of "winding up the affairs of the company", and there is not sufficient available non-trust property or funds to cover the remuneration and expenses attributable to that work performed, allowance can be made for a liquidator to be paid out of trust funds: Re G B Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674 at 688-689 (McLelland J); Re French Caledonia Travel Service Pty Ltd (in liq) (2003) 59 NSWLR 361; [2003] NSWSC 1008 at [201] (Campbell J); Bastion v Gideon Investments Pty Ltd (in liq) [2000] NSWSC 959; (2000) 35 ACSR 466 at [70] (Austin J); Re Independent Contractor Services (Aust) Pty Ltd (in liq) (No 2) [2016] NSWSC 106; (2016) 305 FLR 222 at [27] (Brereton J); In the matter of MINMXT Holdings Pty Ltd (in liquidation) [2017] NSWSC 156 at [14] (Barrett AJA).
3. The total liquidators' remuneration approved by the various decisions of the Registrar for the period 15 May 2015 to 30 September 2016 is $3,224,539.70 (incl GST) or $2,927,439 (ex GST). Any GST on the remuneration, costs and expenses is claimed by the liquidators as an input tax credit, with the value of that credit being returned to the CSAs such that the CSAs only bear the net cost, exclusive of GST.
4. In practical terms, the scheme for approval of the liquidators' remuneration, costs and expenses was paused in November 2018 by orders made pursuant to BBY (No 3), adjourning the hearing of the 2017 application pending the finalisation of the administration of the CSAs. The circumstances in which that adjournment occurred are referred to in more detail below: see [40] ff.
5. The liquidators have made an interim distribution to clients and, subject to the delivery of judgment on the outstanding application referred to at [8] above, are now in a position to make a final distribution in the last quarter of this year. In these circumstances, the liquidators seek to have determined the adjourned 2017 application for remuneration and the 2021 (final) application for remuneration, costs and expenses.

The present applications

1. The 2017 application seeks approval of the liquidators' remuneration for the period 1 October 2016 to 30 April 2017 in an amount of $486,865.50 (incl GST).
2. The 2021 application seeks approval of: 1. the liquidators' remuneration for the period 1 May 2017 to 30 June 2021 in the sum of $1,762,825.13 (inclusive of GST); 2. the liquidators' future remuneration, costs and expenses, which is estimated to be incurred by the liquidators in connection with the work in finalising the distribution process, not exceeding the sum of $391,710 (inclusive of GST); and 3. the liquidators' legal costs and disbursements comprising: 1. Ashurst fees in the sum of $55,619.85 (inclusive of GST) for the period 23 April 2020 to 28 July 2021; 2. Ashurst disbursements in the sum of $15,971 (inclusive of GST) for the period 3 March 2020 to 27 July 2021; and 3. the estimated future Ashurst fees and disbursements, not exceeding the sum of $104,379 (inclusive of GST).
3. When the amounts for which approval is now sought, including estimated future remuneration, are combined with the remuneration already approved, this would lead to a total remuneration of $5,861,583.53 (incl GST) or $5,328,712.30 (ex GST) for the entire period from May 2015 to (it may be anticipated) the end of 2021. The total value of the assets (CSAs and recoveries) for which the liquidators have had responsibility is approximately $44.07 million.
4. The applications are in the nature of an approval of a trustee's remuneration, rather than a liquidator's remuneration per se. As such, the applications involve the Court's inherent equitable jurisdiction; the provisions of the Corporations Act concerning a liquidator's remuneration do not apply in the present context where the assets held by BBY as trustee form no part of the insolvent estate of BBY: Application of Sutherland [2004] NSWSC 798; (2004) 50 ACSR 297 at [10], [14], [17], [20] (Campbell J). The applications are separate from the remuneration of the liquidators for general liquidation work in their capacity as liquidators of the insolvent estate of BBY.
5. The applications come to the Court, rather than the Registrar, in the following circumstances. First, in response to the 2017 application, two defendants indicated an objection or possible objection to the reasonableness of the liquidators' remuneration. SEGC indicated in a letter dated 18 August 2017 that it reserved its right to object to the totality of the liquidators' remuneration on the basis of proportionality or otherwise at the appropriate time following delivery of judgment in BBY (No 2). Mazzetti filed submissions dated 19 June 2018 stating, among other things, "its concerns that the overall quantum of the liquidators' remuneration, costs and expenses appeared disproportionate to the issues falling for determination in the proceedings", and also made oral submissions on 22 June 2018 objecting to the reasonableness of the liquidators' remuneration the subject of the 2017 application.
6. Second, when adjourning the 2017 application pending the finalisation of the administration of the CSAs, Brereton J expressed the view in BBY (No 3) that "the issues that will arise on [the 2017] application are not of the kind that call for a "line-by-line" review; rather, they will be questions of reasonableness and proportionality having regard to the administration as a whole": at [98].
7. In anticipation of those objections being pursued, the liquidators have filed a significant volume of evidence directed to the reasonableness and proportionality of their remuneration, costs and expenses for the whole of the administration of the CSAs, including the collection of recoveries and the conduct of these proceedings.
8. Notice of the applications has been given to each of the representative defendants in these proceedings: see [5] above. None appeared at the hearing of the applications or otherwise indicated that they seek to be heard or oppose the orders sought by the liquidators.
9. The task of the Court on the present applications is not to undertake a "line-by-line" review of the liquidators' remuneration; there has been no objection to individual items of work expressed by any of the representative defendants at any time. The Court's task is to determine the questions of reasonableness and proportionality having regard to the whole of the administration of the CSAs, given that the administration is almost complete. Consistent with the just, quick and cheap determination of the real issues in the proceedings (Civil Procedure Act 2005 (NSW), s 56), it is appropriate that the Court determine the remuneration approval applications, rather than refer the applications back to the Registrar with the usual right of review of the Registrar's decision.

The BBY Group

1. To place the applications in context, it is necessary to briefly outline the nature of the business conducted by the BBY Group, its size and complexity, and the difficulties encountered by the liquidators in the administration of the CSAs of which BBY was trustee.

BBY

1. BBY was a participant on the ASX, Chi-X Australia (Chi-X) and the Asia Pacific Stock Exchange (APX). In addition, it dealt with a number of counterparties and intermediaries, including Saxo and IB, each of whom provided a platform enabling online trading by BBL clients in a wide variety of Australian and foreign financial products. These included certain OTC products and products traded on exchanges of which BBY was not a participant.
2. At the time of the liquidators' appointment, BBY had approximately 180 staff and contractors, operated from 6 locations around Australia, and had offices in New York and London. BBY was the main operating entity of the BBY Group, which comprised of ten companies.
3. BBY maintained 118 bank accounts in over 10 currencies in the lead up to the liquidators' appointment which, at least potentially, contained client monies. The liquidators classified those accounts as either "House Accounts" or "CSAs" based on various criteria and investigations. There were 14 House Accounts of which the movement of client funds through those Accounts was the subject of detailed investigation by the liquidators.
4. After BBY was placed into administration, the liquidators discovered that the CSAs designated to hold funds for clients in particular product lines appeared to be deficient when compared to the likely quantum of client claims in respect of those product lines. The liquidators ultimately identified 55 CSAs holding approximately $14.6 million. An additional $3.4 million was received after the liquidators were appointed to ASX Clear (referred to as the Returned Collateral), which the liquidators of BBY placed in a separate trust account. The liquidators' preliminary investigations indicated that there was likely to be a significant shortfall between client claims in relation to the CSAs and the funds held in them. Client claims were in the order of $56.9 million, whereas recoveries from counterparties were estimated at about $29.4 million, with the prospective shortfall in the order of approximately $17 million initially, and later $12 million (depending on the classification of certain pre and post-appointment receipts and the value of recoveries from counterparties). BBY had over 5,800 clients with a potential interest in the CSAs and recoveries from counterparties.
5. It appeared that BBY had not maintained records showing the client or clients who were entitled to the balance of any particular CSAs or the individual cash balances for each client in each account. There also appeared to have been transactions between CSAs, both within and across different product lines.
6. The examination by the liquidators of the available bank statements for many of the bank accounts maintained by BBY, and of other books and records maintained by BBY, was a very significant task, particularly as important records were not available in electronic form. The liquidators' investigations revealed convoluted and complex daily funding patterns between various BBY accounts and accounts controlled by counterparties, including the ASX. Further, BBY used separate software systems to manage its clients' accounts for each product line (six systems in total), but the software providers were no longer willing to provide support. Nor were BBY staff generally available to assist the liquidators' investigations.
7. The liquidators' findings in relation to the CSAs were recorded in a client monies investigations report of over 100 pages dated 22 December 2015, together with 71 appendices and 111 confidential exhibits, and in a supplementary report of over 80 pages dated 15 June 2016 containing 39 appendices and 117 confidential exhibits.

19 October 2015 orders

1. An interim costs regime was established by consent orders made on 19 October 2015 and amended on 23 February 2016 consequent upon the joinder of the fifth defendant: BBY (No 3) at [31]. The 19 October orders were to the effect that, until further order:

• the liquidators' remuneration, costs and expenses, and BBY's costs and expenses, in connection with administering the CSAs and these proceedings, reasonably incurred, be paid out of the CSAs on a pro rata basis having regard to the balance of the CSAs on the date of payment, on an indemnity basis (order 10);
• the liquidators' remuneration, costs and expenses, and BBY's costs and expenses, in connection with recovering or attempting to recover and administering recoveries, reasonably incurred, be paid out of the recoveries, to the extent they have been received, to which the relevant remuneration, costs and expenses are attributable, on an indemnity basis (order 11); and
• that for those purposes, the matter be referred to a Registrar for examination and approval of the liquidators' remuneration, costs and expenses, and BBY's costs and expenses, and the Registrar's decision be subject to review in the same manner as a Registrar's decision approving the remuneration of a liquidator (order 12).

1. The 19 October orders were further amended by orders made on 19 May 2016 to include the costs and expenses of the representative defendants and the liquidators' remuneration, costs and expenses, and BBY's costs and expenses, with respect to separate proceedings (2016/77316) commenced by the receivers to recover certain monies held within the CSAs, which proceedings were heard concurrently with these proceedings.
2. The following orders have been made pursuant to the 19 October orders, as varied, with respect to the approval of the liquidators' remuneration, costs and expenses: 1. on 8 June 2016, the Registrar approved remuneration of $723,570 (incl GST) (and also $531,634.59 (incl GST) for solicitors' costs, $13,122.49 for disbursements, and $123,948 for counsels' fees). The amount drawn by the liquidators for remuneration (ex GST) is $652,007; 2. on 14 October 2016, the Registrar approved remuneration in the amount of $1,003,145.90 (incl GST) (and also $603,603 (incl GST) for solicitors' costs and disbursements, and $7,788 for counsels' fees). The amount drawn by the liquidators for remuneration (ex GST) is $907,990; and 3. on 31 May 2017, the Registrar approved remuneration in the amount of $1,497,823.80 (incl GST) (and also $206,676.80 (incl GST) for solicitors' costs, $23,891.10 for disbursements, and $7,788 for counsels' fees). The amount drawn by the liquidators for remuneration (ex GST) is $1,361,658.
3. The Registrar also approved a further $313,394.40 (incl GST) for solicitors' costs and $124,645.39 for disbursements on 31 May 2017: see BBY (No 3) at [89] fn 39.
4. As indicated, the total liquidators' remuneration approved by the various decisions of the Registrar is $3,224,539.70 (incl GST) or $2,927,439 (ex GST). No party has sought a review of the remuneration approved.
5. The regime established by the 19 October orders for allocating costs of administering the CSAs and the costs of these proceedings, including the representative defendants' costs, on a pro rata basis had regard only to the balance of the CSAs on the date of payment. That meant that counterparty asset positions were disregarded. As a consequence, product lines which held high cash balances bore the greater share of the costs, at least initially, while the extent of recoveries in product lines which had not yet been recovered were left out of the calculation (as costs, expenses and remuneration could not be paid out of unrecovered assets).
6. Following the judgment in BBY (No 2), applications were made by the representative defendants in respect of the basis on which "entitlements" were to be calculated and how the 19 October orders would be amended so as to reflect the correct costs sharing between product lines, including with respect to the value of the recoveries. Mazzetti applied (unsuccessfully) to be freed from any costs sharing. The outcome of those applications was reflected in the orders made pursuant to BBY (No 3), being the orders made on 26 November 2018 (as later amended by orders made pursuant to BBY (No 4)).

26 November 2018 orders

1. The 26 November 2018 orders addressed the costs reallocation among product lines, taking into account the value of recoveries, and provided in effect that:

• the liquidators would be justified in pooling the CSAs in the Saxo, Futures, FX and Other Product lines, and in not undertaking a reversal of transactions between any of those CSAs (order 2);
• with regards to the parties' remuneration, costs and expenses: (i) the liquidators' remuneration, costs and expenses (and the costs and expenses of BBY to the extent that they are distinguishable) in connection with administering the CSAs and the proceedings, reasonably incurred; and (ii) the legal expenses of the first defendant, second defendant, the third defendant and the fifth defendant in connection with the proceedings, reasonably incurred, be paid out of the assets of the product lines on a pro rata basis according to the value of assets in each product line as at a particular reference date as a proportion of the total value of the assets of all product lines as at that date, subject to certain exceptions (orders 4 and 5) and subject to examination and approval by a Registrar of the Court (order 6); and
• as soon as reasonably practicable, the liquidators are to transfer any amounts necessary between the assets of product lines (as specified), so as to give effect to orders 2, 4 and 5 with respect to the approvals of the parties' remuneration, costs and expenses given as at the date of transfer (order 6).

1. The effect of the 26 November orders was to "true up" the sharing of costs between the product line CSAs, taking into account the value of recoveries as at the relevant date, which was essentially the appointment date (15 May 2015).

The 2017 application

1. It is necessary to say something further about the 2017 application. The application was listed for hearing before a Registrar in accordance with the 19 October orders, however, the first defendant, Mazzetti, sought that the application be referred to Brereton J, which it was. The reference was heard on 22 June 2018. Mazzetti made written and oral submissions querying the proportionality of the amount of the liquidators' remuneration and expenses compared to what was described as "the potential fund of about $16 million." Brereton J dealt with the referral of the application in BBY (No 3), which judgment was given on 12 November 2018. His Honour decided that the 2017 application should be adjourned to the end of the administration of the CSAs. It is appropriate to reproduce in full part of his Honour's reasons at [96]-[100]: [96] The present application was, at the request of the first defendants, not heard and determined by the Registrar, but referred to me. The first defendants are concerned at the cumulative impact on the trust funds - and thus on the return to creditors - of the remuneration claimed, superimposed on that which has already been allowed, and on such legal costs as have been paid and are payable out of the CSAs. They submit that of available funds in the CSAs of about $16 million, the legal costs, remuneration and expenses of the Liquidators are now about $8 million, and the costs of the representative defendants about $4 million, so that if allowed in full, three-quarters of what might have been available for distribution has been consumed. Admittedly this is not a simple administration; the investigation of the CSAs, and the resolutions of the issues to which they have given rise in these proceedings, has involved and may yet involve significant complexity and responsibility. But it is also not a small administration, even when only the CSAs are considered; and at first sight, the expenditure of three quarters of a distributable fund of $16 million (if that be the correct figure, as the first defendants suggest) on liquidators and lawyers does raise questions of proportionality and reasonableness. The first defendants wish to contend that any further remuneration should be moderated, having regard to its reasonableness and proportionality to the funds in the liquidation. [97] No party proposed that I proceed forthwith to determine the application. There was a suggestion, on behalf of the first defendants, that I should refer it back to the Registrar, with some observations and guidance about reasonableness and proportionality. I do not think that it would be at all appropriate to pre-empt the Registrar's consideration with any such observations and guidance. If the Registrar were to consider the matter, the Registrar's decision would be amenable to review by the Court. [98] The Liquidators did not oppose referral back to the Registrar, and suggested that the Registrar might at least be able to undertake the "line-by-line" review that it has sometimes been said should not be expected of a judge. However, it seems to me that the issues that will arise on this application are not of the kind that call for a "line-by-line" review: rather, they will be questions of reasonableness and proportionality having regard to the administration as a whole. [99] It seems to me that such questions can best be dealt with in the context of the administration as a whole. Although, at least in the context of liquidations, a practice has developed of making interim claims for remuneration on a periodic basis, ultimately remuneration is allowed for the administration as a whole, not for discrete periods of it. Particularly when questions of proportionality arise, it may be desirable or even necessary to review the whole of the administration, and not just work done during the period of the latest claim. Moreover, there may well be further remuneration claims, up to the finalisation of the administration of the CSAs. [100] Accordingly, the remuneration application - and any further remuneration application in respect of work done in the administration of the CSAs - should be adjourned to await finalisation of the administration of the CSAs. (Emphasis added.)
2. The submission made by Mazzetti, recorded at [96] of BBY (No 3), was inaccurate because it ignored the value of recoveries. Prior to the hearing on 22 June 2018, a schedule identifying the current estimated value of the assets (as at 4 May 2018) (including CSAs and recoveries) had been provided by the liquidators' solicitors to Mazzetti's solicitors and the other representative defendants, pursuant to orders made on 5 April 2018. That schedule estimated that the value of the assets under administration was $41.4 million, comprising CSAs of $13.97 million, actual recoveries of $5.55 million and estimated future recoveries of $21.63 million, and interest income of $0.25 million. The schedule also recorded that the amounts paid from the CSAs included the liquidators' remuneration of $1,717,604 (incl GST) and the liquidators' costs of $1,758,519 (incl GST).

The evidence

1. The evidence in support of the applications primarily comprises three affidavits of Mr Vaughan. The first, sworn 7 August 2017 in support of the 2017 application, deals with the period 1 October 2016 to 30 April 2017. The second, sworn 9 August 2021, deals with the period 1 May 2017 to 30 June 2021 and provides an estimate of future remuneration, costs and expenses thereafter to the conclusion of the distribution process. It also addresses the work the subject of the prior approvals by the Registrar referred to at [33] above. The third, also sworn 9 August 2021, deals with Ashurst's fees and disbursements for the period 23 April 2020 to 27 July 2021 and contains an estimate of future legal costs and expenses to the conclusion of the distribution process.
2. In each affidavit, Mr Vaughan describes the work performed by the liquidators during those periods and, in the case of Ashurst, the legal work done for the liquidators and BBY. There are also detailed remuneration reports covering each of the periods and narratives showing each time entry, comprising the claim for remuneration and a description of the work involved. In addition, there is an affidavit from Mr Gerard Kane, a solicitor from Ashurst, concerning notice given to the representative defendants of various matters, including these applications, and their responses.
3. The liquidators have calculated their remuneration on a time-cost basis.
4. The remuneration reports contain an explanation of the hourly rates for the liquidators and their staff which are calculated in accordance with KPMG's schedule of hourly rates as at May 2015. The rates have not been increased since that date. Mr Vaughan gave evidence that those rates are reasonable, in line with market rates of firms of a similar size and capability to KPMG, and accurately reflect the experience, seniority and capability of each staff member. One specific matter should be noted. One of the liquidators' staff, Mr Darsun Naran, who is undertaking much of the work in the administration, has since been promoted to the position of director. The rate charged for his work has not been increased to reflect his promotion (an increase of $50 per hour on the 2015 rates).
5. The evidence establishes that the work performed by the liquidators and their staff has been recorded with narrative descriptions in accordance with the guidelines published by the Australian Restructuring, Insolvency & Turnaround Association (ARITA) in respect of remuneration reporting and approvals for remuneration. Upon their appointment, the liquidators established a record of time spent in undertaking what was referred to as the "client work", separate from the general liquidation work. Mr Vaughan deposed, and I accept, that he has undertaken a detailed line by line review of all of the narrations and time recorded against the client work to ensure that all items listed relate to the client work and not to the general winding up of BBY.
6. Mr Vaughan deposed that he, rather than Mr Hall, was more actively involved in the direction and conduct of the client work, and in the liquidation of BBY generally, although he did consult and discuss various aspects of the client work with Mr Hall on a regular basis and kept him generally informed of that work. Given the size and complexity of BBY's operation in relation to the CSAs and the deficiencies in the books and records of BBY, the liquidators drew upon resources in KPMG's Insolvency and Forensics teams to assist in completing the client work. Whilst there were a large number of team members who assisted the liquidators in conducting the client work in the period between 1 May 2017 and 30 June 2021, most of the assistance was generally provided by Mr Naran, who is now a director in KPMG's Insolvency team. Mr Naran has acted as Mr Vaughan's main delegate and has helped to manage the team of junior employees to complete the client work, as well as to correspond with third parties as required, including the liquidators' solicitors.
7. Mr Vaughan deposed that at all times throughout the period 1 May 2017 to 30 June 2021, he attempted to keep costs to a minimum by delegating work, wherever possible, to junior members of staff who had the lowest charge-out rates and that this was consistent with his practice since the time of his appointment in May 2015. He explained that whilst this was generally effective, for more complex work it was often necessary to use more senior employees at a level of manager or above as over time, the employees gain knowledge of, and experience in, BBY's business and transactions. Mr Vaughan said that efficiency, timeliness and cost dictated that the liquidators use the most productive and efficient combination of resources available to them and often this required using more senior staff for the tasks to which they were assigned.
8. Mr Vaughan deposed that the administration has been a very complicated insolvency in which there were a number of difficult tasks that needed to be attended to, including significant forensic investigations and analysis. The number of transactions was also significant. Upon obtaining access to BBY's St George Bank and National Australia Bank (NAB) online banking portals, the liquidators' staff were able to download between 12-18 months of bank statements in electronic format, containing a total of approximately 56,000 transactions. Additional hard copy statements provided by St George and NAB had to be manually transferred into electronic format using text recognition software. Upon the liquidators' appointment, their staff took a forensic image of BBY's computer server, as well as a number of employees' personal computers in both Sydney and Melbourne. The data obtained was extensive and amounted to over ten terabytes, which Mr Vaughan understands is the equivalent to 50 million Word documents of four pages each. The liquidators also obtained possession of over 2,500 boxes of books and records which were held at five different sites. Documents relevant to the CSAs needed to be identified and assessed from these sources.
9. There is evidence that the liquidators made regular reports in respect of their remuneration, costs and expenses to the committee of inspection of BBY appointed at the second meeting of creditors on 22 June 2015. The third defendant, Mr Clive Riseam, was a member of the committee. Those reports included both the liquidators' remuneration, costs and expenses for general liquidation work and separately for client work.
10. The liquidators obtained the approval of the committee of inspection of BBY to pay amounts of their remuneration for specified time periods: 17 May 2015 to 30 November 2015; 1 December 2015 to 31 January 2016; 1 February 2016 to 30 September 2016; 1 October 2016 to 31 December 2016; and 1 January 2017 to 28 February 2018. As to the period 1 March 2018 to 31 August 2020, a quorum of committee members was not present at the committee meeting on 5 November 2020 and accordingly the liquidators' remuneration approval request for that period was not tabled for consideration or passed.

Relevant principles: approval of trustee/liquidator remuneration

1. The Court's approach when exercising its inherent equitable jurisdiction to allow remuneration out of trust assets in connection with the administration of a trust fund is described in In the matter of Houben Marine Pty Ltd (in liq) [2018] NSWSC 745 at [20]-[21], where I said: [20] In allowing remuneration to the liquidator, the Court treats the work done in administering the trust as an incident of the liquidation, and approaches the application for remuneration as analogous to one by an official liquidator for approval of remuneration: Alphena Pty Ltd (in liq) v PS Securities Pty Ltd (ACN 141 021 445) (as trustee of the Joseph Family Trust) [2013] NSWSC 447; (2013) 94 ACSR 160 at [53], [63]-[64]. Accordingly, regard may be had, by analogy, to the factors listed in the now repealed s 473(10) of the Corporations Act (which continues to apply to the administration of Houben by reason of the transitional provisions in the Corporations Act, s 1581(1)). [21] The essential question which arises on the present application, as arises under the applicable provisions of the Corporations Act with respect to court appointed liquidators, is whether the remuneration of which approval is sought is 'reasonable': Sanderson, as liquidator of Sakr Nominees Pty Ltd (in liq) v Sakr [2017] NSWCA 38 (Sakr).
2. The essential task of the Court, constituted by a judge, when asked to approve remuneration of a liquidator is encapsulated in the statement by Barrett J in Re Anderson Group Pty Ltd [2002] NSWSC 764 ; (2002) 20 ACLC 1607 at [12]: In the ordinary course, the process of determination comes down essentially to ensuring that the work upon which the claim was based was work undertaken in the due course of administration and that the amount claimed for having done that work is a fair and reasonable reward for it.
3. That proposition was repeated by the Court of Appeal in Sanderson as Liquidator of Sakr Nominees Pty Ltd (in liq) v Sakr (2017) 93 NSWLR 459; [2017] NSWCA 38 (Sakr) at [69]-[72], where Bathurst CJ (the other members of the Court agreeing) said that the essential task of the Court is to allow reasonable remuneration.
4. As explained in Re Houben Marine at [23]-[25], several of the propositions in Sakr have relevance, by analogy, to an application such as the present for approval of a liquidator's remuneration out of the assets of a trust of which the company in liquidation is a trustee.
5. First, the onus is on the liquidator to establish that the remuneration claimed is reasonable. It is the function of the Court to determine the remuneration by considering the material provided and by bringing an independent mind to the relevant issues: Sakr at [54].
6. Second, the question of proportionality - in terms of work done as compared with the size of the property the subject of the administration or the benefit to be obtained from the work - is an important consideration in determining reasonableness: Templeton v Australian Securities and Investments Commission [2015] FCAFC 137 at [32]; (2015) 108 ACSR 545. The work done must be proportionate to the difficulty and importance of the task in the context in which it needs to be performed: Templeton citing McLure JA in Conlan (as liquidator of Rowena Nominees Pty Ltd) v Adams [2008] WASCA 61; (2008) 65 ACSR 521 at [47]. This is what is encompassed in assessing the value of the services rendered: Sakr at [55].
7. Third, the mere fact that the work performed does not lead to augmentation of the funds available for distribution does not mean that the liquidator is not entitled to be remunerated for it. Provided it was reasonable to carry out the work and the amount charged is reasonable, there is no reason a liquidator should not recover remuneration for undertaking such work: Sakr at [57]-[58].
8. Counsel for the liquidators submitted that the present applications are analogous to one by a liquidator for approval of remuneration and that the Court may have regard to the factors listed in the statute for approval of the liquidators' remuneration. So much can be accepted insofar as the factors in s 60-12 of the Insolvency Practice Schedule, being Schedule 2 to the Corporations Act, may be taken as an indication of the types of considerations that inform the question of reasonableness in the present case. Section 60-12, which applies to external administrators of a company including liquidators, lists the following relevant factors: 60-12 Matters to which the Court must have regard In making a remuneration determination under paragraph 60-10(1)(c) or (2)(b), or reviewing a remuneration determination under section 60-11, the Court must have regard to whether the remuneration is reasonable, taking into account any or all of the following matters: (a) the extent to which the work by the external administrator was necessary and properly performed; (b) the extent to which the work likely to be performed by the external administrator is likely to be necessary and properly performed; (c) the period during which the work was, or is likely to be, performed by the external administrator; (d) the quality of the work performed, or likely to be performed, by the external administrator; (e) the complexity (or otherwise) of the work performed, or likely to be performed, by the external administrator; (f) the extent (if any) to which the external administrator was, or is likely to be, required to deal with extraordinary issues; (g) the extent (if any) to which the external administrator was, or is likely to be, required to accept a higher level of risk or responsibility than is usually the case; (h) the value and nature of any property dealt with, or likely to be dealt with, by the external administrator; (i) the number, attributes and conduct, or the likely number, attributes and conduct, of the creditors; (j) if the remuneration is worked out wholly or partly on a time cost basis - the time properly taken, or likely to be properly taken, by the external administrator in performing the work; (k) whether the external administrator was, or is likely to be, required to deal with one or more controllers, or one or more managing controllers; (l) if: (i) a review has been carried out under Subdivision C of Division 90 (review by another registered liquidator) into a matter that relates to the external administration; and (ii) the matter is, or includes, remuneration of the external administrator; the contents of the report on the review that relate to that matter; (m) any other relevant matters.
9. Counsel for the liquidators submitted that the Court should take into account the matters listed in s 60-12(a)-(k) of the Insolvency Practice Schedule. Those submissions are addressed below.

A. Review of claim for liquidators' remuneration

1. The 19 October orders, as varied, provide for remuneration reasonably incurred by the liquidators in connection with three kinds of tasks: (a) administering the CSAs, (b) conducting these proceedings, and (c) recovering, or attempting to recover, amounts from counterparties.
2. The affidavits of Mr Vaughan provide a breakdown of the liquidators' tasks into those broad areas covering the whole of the administration of the CSAs. I am satisfied that the liquidators have provided sufficient information for the Court to properly assess the claim for remuneration.
3. Mr Vaughan deposed that the bulk of the time spent by him and his team was taken up with investigating the affairs of BBY in relation to the CSAs, investigating the assets held on behalf of BBY, as well as on behalf of its clients and counterparties, recovering those assets, administering those CSAs and the recoveries, and distributing assets and their proceeds to clients and beneficiaries pursuant to the court orders.
4. The allocation of the liquidators' remuneration across the three broad categories of work can be seen in the following table summarising the orders made by the Registrar with respect to approval of the liquidators' remuneration covering the period 17 May 2015 to 30 September 2016: Date of Order Period covered Amount claimed (ex GST) Amount ordered (ex GST) 8 June 2016 17 May 2015 to 31 October 2015 $657,791 $657,791 Comprising: Administering the CSAs $489,541 Conducting the proceedings $142,660 Pursuing/administering recoveries $25,590 14 October 2016 1 November 2015 to 31 January 2016 $907,990 $907,990 Comprising: Administering the CSAs $33,385 Conducting the proceedings $869,640 Pursuing/administering recoveries $4,965 31 May 2017 1 February 2016 to 30 September 2016 $1,361,658 $1,361,658 Comprising: Administering the CSAs $185,415 Conducting the proceedings $1,164,303 Pursuing/administering recoveries $11,940 Total $2,927,439 $2,927,439

1. The following table summarises the allocation of the liquidators' remuneration with respect to the present applications covering the period 1 October 2016 to 30 June 2021, and the liquidators' estimated future remuneration from 1 July 2021 to the finalisation of the distribution process: Date of Application Period covered Amount claimed (ex GST) 9 August 2017 1 October 2016 to 30 April 2017 $442,605.00 Comprising: Administering the CSAs $58,490.00 Conducting the proceedings $378,770.00 Pursuing/administering recoveries $5,345.00 12 August 2021 1 May 2017 to 30 June 2021 $1,602,568.30 Comprising: Administering the CSAs $1,299,607.50 Conducting the proceedings $198,880.80 Pursuing/administering recoveries $104,080.00 12 August 2021 1 July 2021 to finalisation of distribution process $356,100.00 Comprising: Estimated administering the CSAs $142,350.00 Estimated final distribution $154,350.00 20% contingency $59,350.00 Total $2,401,273.30

1. It is undeniable that these proceedings and the administration of the CSAs and recoveries has involved complex legal and factual issues. The evidence in relation to the four applications in the proceedings is that there were 35 listings of the matter for directions; 8 days of substantive hearings; numerous affidavits and voluminous exhibits from multiple parties; each representative defendant was represented by senior counsel with junior counsel in the main hearing the subject of BBY (No 2), except for the fifth defendant who was represented by senior counsel alone; and the liquidators were initially represented by both senior and junior counsel in BBY (No 1) and thereafter by junior counsel alone in order to reduce the costs of their legal representation.
2. The liquidators had no practical alternative but to bring the present proceedings and to assist the Court by participating in them. This involved providing the parties and the Court with the necessary evidence in order that the proceedings be determined efficiently. The proceedings were necessary to define the rights of the parties (including, indirectly, the rights of the SEGC), and to enable the client-beneficiaries to receive their entitlements in a deficient, and often mixed, trust. The liquidators were required to lead that process, assist the Court and respond to the parties.
3. The liquidators' task of identifying the potential entitlements of clients to monies in the CSAs and to the recoveries was made more difficult by the deficiencies in the books and records maintained by BBY, and the absence, after their appointment as administrators, of support from the software providers of the six separate software systems used by BBY to manage its clients' accounts for each product line. The difficulty was accentuated by the fact that BBY staff were generally unavailable to assist with the liquidators' investigations. This initial investigative work led to the preparation of the client monies report and supplementary report.
4. Although the time spent by the liquidators in investigating the CSAs and conducting these proceedings has not resulted in the augmentation of the funds available for distribution (except to the extent of identification of recoveries from counterparties), I accept that the work done was necessary and properly performed: Sakr at [57]-[58]. The liquidators' remuneration, costs and expenses in undertaking those investigations and conducting the proceedings may be regarded as necessarily incurred.
5. The liquidators' work has also involved managing and collecting the recoveries, setting up distribution systems, processing and adjudicating client claims, and making specific distributions to clients having claims in respect of erroneous deposits and erroneous withdrawals, as well as clients having claims to in specie distribution in relation to the IB product line. In addition, a total of 1,173 clients (excluding claims from the SEGC) representing approximately $27.4 million in entitlements, responded to the verification stage of the distribution process. An interim distribution of 85 per cent of client entitlements was made in September 2020. The total declared interim distributions made by the liquidators is $23.932 million, of which $6.373 million is unclaimed monies of clients who have not yet proved in the administration which will be paid to ASIC if not claimed by those clients. The return to clients to date across product lines was assessed by Mr Vaughan as "ranging between 22 and 63 cents and representing a total of 34 cents across all product line".
6. It is appropriate to have regard to the attitude of client-beneficiaries to the remuneration claimed by the liquidators, noting that the clients are also unsecured creditors of BBY to the extent that their proprietary claims are not paid from the CSAs and the recoveries. The liquidators' remuneration covering the period 17 May 2015 to 28 February 2018 was approved by the committee of inspection of BBY. The absence of approval for the later period of 1 March 2018 to 31 August 2020 is a consequence of the lack of a quorum.
7. None of the representative defendants (of the client-beneficiaries) or the SEGC has appeared on the present hearing in opposition to the remuneration approvals sought by the liquidators. Specifically, the foreshadowed earlier objections by Mazzetti and the SEGC to the 2017 application on the ground of proportionality have not been pursued. Although the SEGC has a real economic interest in minimising losses to the NGF, and that economic interest is maximised if the SEGC can persuade the Court that the liquidators' claims to remuneration, costs and expenses should be reduced, the SEGC did not seek to do so.
8. Turning to the matters referred to in s 60-12(a)-(k) of the Insolvency Practice Schedule, counsel for the liquidators submitted that: first, all of the work performed by the liquidators was necessary, including that which was subject to the court orders that it be done, and was also properly performed. Second, the work likely to be performed in the future by the liquidators, the subject of the estimated future remuneration, costs and expenses, including legal fees and disbursements, is likely to be necessary and properly performed because the work is necessary to finalise the distribution process. Third, the period during which the work the subject of the applications was, or is likely to be, performed by the liquidators is greater than four years. Fourth, the quality of the work performed by the liquidators is high as exemplified by the detailed analysis contained in the client monies investigation reports. Fifth, the work performed by the liquidators was complex, as acknowledged by Brereton J in BBY (No 3) at [96]. Sixth, the liquidators have been required to accept a high level of responsibility over a number of years for what has not been a simple administration, as recognised by Brereton J in BBY (No 3) at [96]. Seventh, the value of the property the subject of the administration is over $40 million and the nature of the property was complex given the different product lines. The collection of recoveries also required the closing out of various positions with counterparties involving the exercise of commercial judgements. Eighth, the number of client-beneficiaries is over 5,800. Ninth, the time properly taken, or likely to be properly taken, by the liquidators in performing the work is the subject of detailed remuneration reports and is explained in detail in Mr Vaughan's affidavits. Tenth, the liquidators have been required to deal with another controller, being the receivers of BBY, including in relation to separate proceedings brought by the receivers which were heard together with these proceedings.
9. Each of these submissions is supported by the evidence adduced on these applications and can be accepted.
10. It has been said that it is not the role of the Court, constituted by a judge, to undertake a line by line review of the relevant bill narratives of the insolvency practitioner: In the matter of Idylic Solutions Pty Ltd as trustee for Super Save Superannuation Fund and others [2016] NSWSC 1292 at [58] (Black J). Nonetheless, in Idylic Solutions Black J reviewed the bill narratives in a broad way in light of the other evidence led in respect of the claim for remuneration. I have adopted a similar approach.
11. Having reviewed the remuneration reports, together with the relevant bill narratives of time and work performed, and considered the affidavit evidence of Mr Vaughan and Mr Kane, as well as the other evidence adduced on the present applications, I am satisfied that the work performed by the liquidators was necessary. Taking into account the nature and complexity of the work performed by the liquidators and their staff, the evidence establishes that the work was delegated to staff at the appropriate level of seniority.
12. Turning to the question of the proportionality of the remuneration claimed by the liquidators to the funds under administration, the estimated outcome of the administration of the CSAs and the recoveries as at 31 August 2021, as shown in Ex G, can be broadly summarised as follows: 1. the total value of assets (CSAs and recoveries) for which the liquidators have had responsibility is approximately $44.07 million; 2. the total expenses of the administration approved for payment is $11.534 million (incl GST), of which the major items (incl GST) are liquidators' paid remuneration ($3.215 million); liquidators' legal fees and disbursements ($3.104 million); legal fees of representative defendants ($4.35 million); fees of Link Market Services ($0.477 million); and loss on foreign exchange recovery ($0.379 million); 3. the total interim distribution to clients is $23.932 million, of which $6.373 million is unclaimed monies yet to be paid which will be paid to ASIC if not claimed by clients; and 4. after allowance for the liquidators' unpaid remuneration the subject of the present applications and estimated future remuneration, costs and expenses, including legal fees and disbursements, up to the future caps proposed by the liquidators, the liquidators' estimate a final general distribution to clients of $5.946 million which, as I have said, is anticipated to occur by the end of this year.
13. When combined with the amount of the liquidators' remuneration already approved, the amounts for which approval is now sought, including the estimated future remuneration, leads to the liquidators' remuneration (ex GST) representing approximately 13 per cent of the funds under administration. Plainly, that is a significant proportion of the funds under administration. Two questions arise from this. First, is the liquidators' total remuneration reasonable and proportionate to the funds under administration? Second, have the clients received value for the services rendered by the liquidators?
14. I am satisfied on the evidence that the work performed by the liquidators in administering the CSAs and recoveries, and in conducting these proceedings over six years (including the future work in finalising the distribution process), is proportionate to the difficulty and importance of the administration in the context in which it needed to be performed to determine the clients' entitlements to the CSAs and recoveries: Sakr at [55].
15. I have considered alternatives to time-charging, such as remuneration on an ad valorem basis, based on assets realised or assets distributed. I accept the submissions of counsel for the liquidators that, in the circumstances of this administration, these alternatives bear little connection with the reality of the work that was required of the liquidators.
16. First, to a large extent, the work was independent of the precise value of the CSAs, although undertaken because of the high value of the CSAs and the need to distribute the funds to over 5,800 clients that have an interest in the CSAs and recoveries. Second, the work predominantly involved extensive investigation and determination of the rights or possible rights of client-beneficiaries, the bringing of proceedings, and preparing for and conducting the hearing to facilitate the distribution of the trust funds to the appropriate beneficiaries whilst assisting the Court to give directions to that end. Third, although much of the time spent by the liquidators has not resulted in the augmentation of the funds available for distribution, the work performed was necessary and properly performed: Sakr at [57]-[58]
17. It is appropriate that the liquidators' remuneration be determined on a time-charging basis, rather than some other basis. I do not consider that either a percentage of realisations (here approximately $30 million, in addition to the amounts in the CSAs) or an ad valorem basis (based on funds in the administration of approximately $44.07 million) are appropriate ways to calculate the liquidators' remuneration. Neither reflects the extent to which the work undertaken by the liquidators, given the difficulty and complexity of the administration and the need for proceedings to determine the entitlements to clients to the CSAs and recoveries, was necessary and properly performed.
18. I am satisfied that the liquidators' remuneration for the period 1 October 2016 to 30 April 2017, and the period 1 May 2017 to 30 June 2021, is reasonable and should be determined in the amounts claimed.

B. Approval of liquidators' estimated future remuneration, costs and expenses

1. To the extent the liquidators seek approval in advance of their estimated future remuneration, costs and expenses, it is not practicable nor desirable to defer such approval until after finalisation of the distribution process in respect of the CSAs.
2. As Mr Vaughan explained in his first affidavit of 9 August 2021, approval of these amounts in connection with the work required to be undertaken in the period 1 July 2021 to the end of the distribution process is necessary in order to make a timely and final distribution to clients having an entitlement to the funds in the CSAs and recoveries. In order to pay a "final" dividend to clients, the liquidators need to know how much should be deducted from the funds in the CSAs and the recoveries for their remuneration, costs and expenses. This can only be achieved after payment of the liquidators' estimated future reasonable remuneration, costs and expenses, the remission of the relevant GST component to the ATO and after BBY claims and receives the corresponding input tax credit from the ATO which would then be reimbursed to the CSAs and the recoveries, such that the ultimate impact on the CSAs and recoveries is exclusive of GST. Conversely, making a second interim distribution followed by the final distribution after final remuneration, costs and expenses are approved would be of little benefit to clients since an additional distribution will unnecessarily add to costs.
3. I do not read the reasons of Brereton J in BBY (No 3) for adjourning the 2017 application pending finalisation of the administration of the CSAs as precluding the approval of the liquidators' estimated future remuneration, costs and expenses in circumstances where the liquidators are now close to the finalisation of the administration of the CSAs. Plainly, the question of remuneration should be determined first in order to complete the administration of the CSAs. Any approval is to be subject to the qualification that the amount actually charged, not exceeding the cap, is reasonable.
4. The liquidators' estimated future remuneration of $356,100 (ex GST) covers two broad tasks: administering the CSAs ($142,400) and administering the final distribution process ($154,350). The figure includes a 20 per cent contingency fee for unanticipated costs ($59,350).
5. Mr Vaughan deposed that the estimate has been prepared using the ARITA remuneration framework but is necessarily at a level of generality to reflect the fact that the work has not yet been performed and is only an estimate of likely costs. The estimate assumes that remuneration is calculated based on the liquidators' hourly rates guide (as at May 2015), and that costs will be controlled by delegating work, wherever possible and appropriate, to junior members of staff who have the lowest charge-out rates (such as analysts). Mr Vaughan also deposed that the staffing allocation sought to produce an efficient combination of staff to reduce the overall costs. It is anticipated that Mr Naran will be required to undertake much of the work, given his familiarity with the matter, the complexity of the matter, and his role in supervising more junior staff.
6. I accept Mr Vaughan's evidence that all of the work in this final phase of the administration is concerned with the tail-end of the distribution process ordered by the Court and is both necessary and unavoidable.
7. I am satisfied that the liquidators' estimate in respect of future work is reasonable. Of course, approval of a maximum amount for the liquidators' estimated future remuneration, costs and expenses (including a 20 per cent contingency) does not mean that this is the amount which the liquidators can and should charge. The amount actually charged by the liquidators for their future work in finalising the administration of the CSAs and finalising the distribution process must, subject to the cap imposed, be no more than the reasonable remuneration for the work actually done based on the liquidators' hourly rates guide applicable in May 2015.

C. Approval of past and future estimated legal fees and disbursements

1. Mr Vaughan's evidence establishes that Ashurst were instructed to maintain separate matter numbers and files for (a) the general liquidation work with respect to BBY and companies in the BBY Group, and (b) these proceedings and the administration, distribution and recovery of client monies held by BBY (referred to as the Client Monies Matter).
2. The amount of Ashurst's fees for the period 23 April 2020 to 28 July 2021 of $55,619.85 (incl GST) relate to work done in these proceedings falling into three categories: (1) an application before the Registrar on 20 May 2020 for approval of the liquidators' legal costs, (2) preparation of evidence in support of the 2021 application, and (3) incidental matters in connection with the proceedings.
3. The legal fees charged by Ashurst is calculated on a time basis using a scale of hourly rates with different rates for solicitors and staff depending on their level of experience. Mr Vaughan has deposed, based on information from Mr Emanuel Poulos, the Ashurst partner with responsibility for this proceeding, that the legal work has been allocated to Ashurst staff having regard to the level of experience necessary for completion of the relevant task, the experience of the staff member with the matter, and their likely efficiency in being able to properly complete the task. Mr Vaughan deposed, based on information from Mr Poulos, that Ashurst used staff at the most economical rate and who possess the necessary experience with the object of completing the work required in the most efficient and economical way.
4. With the exception of the most recent application heard by the Registrar on 20 May 2020, previous applications by the liquidators for approval of legal fees and disbursements were supported by an independent expert report from an expert costs consultant, Ms Deborah Vine-Hall. Ms Vine-Hall closed her practice in February 2020. The liquidators consider that it is not necessary or proportionate (in terms of likely costs) to incur the additional expense of engaging a new expert costs consultant to provide an independent expert report in support of the present application given that: the May 2020 legal costs application was approved by the Court, notwithstanding the absence of an independent expert costs consultant report; the legal costs the subject of the present application are considerably less than the amounts which were the subject of the previous costs approval applications made prior to the May 2020 application (where an independent expert report was obtained); and the liquidators anticipate that there will be additional costs associated with briefing a new expert costs consultant who is not familiar with the proceedings.
5. The last report of Ms Vine-Hall dated 11 March 2019 was in evidence (Ex F). This report considered the liquidators' legal costs and disbursements for the period 31 March 2017 to 24 January 2019 in the amount of $201,571.58. Ms Vine-Hall expressed her opinion concerning the range of rates charged in 2017-2019 by practitioners in several major CBD law firms and by junior counsel for commercial litigation having experience similar to that of counsel appearing for the liquidators in these proceedings. Although the rates charged by Ashurst and by junior counsel in 2020/2021 have increased slightly from the rates charged in 2017-2019, the rates for Ashurst and junior counsel in 2020/2021 are still within the range generally charged by large firms in the Sydney CBD and by barristers of a similar experience in the period 2017-2019. Ms Vine-Hall considered that these rates were not unreasonable for the work required to be undertaken in connection with the proceedings in that earlier period. In these circumstances, and given the relatively small amounts involved, I am satisfied that it is not necessary that the present applications be supported by an independent expert costs consultant report.
6. A review of the invoices of Ashurst indicates that the majority of the work was done by a senior associate, who, on the evidence, has familiarity with the matter, with occasional assistance of a junior lawyer. The partner responsible for the matter has only charged for one telephone conference with junior counsel. As indicated, the scale of hourly rates charged by Ashurst is not materially higher than the rates charged with respect to previous applications for approval of legal fees and disbursements. The description of the work in the Ashurst invoices is consistent with, and reflects the volume of, evidentiary material filed by the liquidators in support of the 2021 application. I am satisfied that the amount claimed is reasonable.
7. Turning to the disbursements of $15,971 (incl GST), the amount is mostly comprised of counsel's fees in relation to the May 2020 legal costs application and the present applications. Given the evidence of Ms Vine-Hall, the fees charged by junior counsel are well within the range of reasonableness for a junior counsel of his standing. It should also be observed that counsel has not charged for all attendances on his instructing solicitors such as incidental telephone calls and email correspondence.
8. Insofar as the liquidators seek approval in advance of the estimated future fees and disbursements of Ashurst (and counsel) from August 2021 to the finalisation of the administration of the CSAs, the estimate of $94,890 (excl GST) includes an estimate for counsel's fees of $5,000 and a 25 per cent contingency of $25,000. For the reasons given at [85]-[86] above, it is not practicable nor desirable to defer such approval until after finalisation of the distribution process in respect of the CSAs.
9. I am satisfied that the Ashurst estimate of legal fees and disbursements is reasonable in the circumstances. Again, approval of a maximum amount for the future Ashurst fees and disbursements does not mean that this is the amount which Ashurst (and counsel) can or should charge. The amount actually charged for future legal work must, subject to the cap imposed, be no more than the reasonable remuneration for the legal work actually done by Ashurst and counsel at the rates set out in the estimate of those costs.

Conclusion and Orders

1. I am satisfied that it is appropriate to make orders substantially in accordance with the short minutes of order provided by the solicitors for the liquidators, subject to the addition of the word "reasonable" in proposed orders 4 and 8 in relation to the interlocutory process filed 12 August 2021.
2. Accordingly, the Court makes the following orders: 1. In respect of the first plaintiffs' interlocutory process filed on 8 August 2017: 1. the first plaintiffs' remuneration in the sum of $486,865.50 inclusive of GST for the period 1 October 2016 to 30 April 2017 is approved for the purposes of order 12 of the orders made in this proceeding on 19 October 2015 (19 October Orders) and orders 4 and 6 of the orders made in this proceeding on 26 November 2018 (26 November Orders); 2. direct that Exhibit B (formerly Confidential Exhibit SV-27 to the affidavit of Stephen Ernest Vaughan affirmed 7 August 2017) be returned to the first plaintiffs; 1. In respect of the first plaintiffs' interlocutory process filed on 12 August 2021: 1. the first plaintiffs' remuneration in the sum of $1,762,825.13 inclusive of GST for the period 1 May 2017 to 30 June 2021 is approved for the purposes of order 12 of the 19 October Orders and orders 4 and 6 of the 26 November Orders; 2. the first plaintiffs' reasonable remuneration, costs and expenses estimated to be incurred in connection with the Liquidators' Future Work, up to a total amount not exceeding $391,710.00 inclusive of GST, is approved and is to be paid in accordance with order 12 of the 19 October Orders and order 6 of the 26 November Orders; 3. direct that Exhibit D (formerly Confidential Exhibit SV-33 to the affidavit of Stephen Ernest Vaughan affirmed 9 August 2021) be returned to the first plaintiffs; 4. the Ashurst Fees in relation to the Client Monies Matter in the sum of $55,619.85 inclusive of GST for the period 23 April 2020 to 28 July 2021, are approved for the purposes of order 12 of the 19 October Orders and orders 4 and 6 of the 26 November Orders; 5. the Ashurst Disbursements in the sum of $15,971 inclusive of GST for the period 3 March 2020 to 27 July 2021, are approved for the purposes of order 12 of the 19 October Orders and orders 4 and 6 of the 26 November Orders; 6. the reasonable legal fees and disbursements of Ashurst in connection with Ashurst Future Work, up to a total amount not exceeding $104,379 inclusive of GST, are approved and are to be paid in accordance with order 12 of the 19 October Orders and order 6 of the 26 November Orders; and 7. direct that Exhibit E (formerly Confidential Exhibit SV-34 to the affidavit of Stephen Ernest Vaughan affirmed on 9 August 2021) be returned to the first plaintiffs. SCHEDULE 1 Definitions Client Monies Matter - this proceeding and the administration, distribution and recovery of client monies held by BBY. Ashurst Disbursements - the disbursements incurred by Ashurst, including counsel's fees, in relation to the Client Monies Matter, as set out in the invoices in Tab 1 of Exhibit E (formerly Confidential Exhibit SV-34 to the affidavit of Stephen Ernest Vaughan affirmed 9 August 2021). Ashurst Future Work - the work to be undertaken by Ashurst and counsel on behalf of the liquidators and BBY since 28 July 2021 in connection with the interlocutory processes filed 9 August 2017 and 12 August 2021 and the conclusion of the Client Monies Matter, including but not limited to legal advice in relation to the final distribution notices and advertising, final distribution circulars to clients, unclaimed monies, and other ancillary matters that may arise during the distribution process. Liquidators' Future Work - the work required to be undertaken by the liquidators in administering the Client Segregated Accounts (CSAs) in the period 1 July 2021 to the end of the distribution process in order to finalise and complete the Client Work being: (a) administering the CSAs; (b) conducting these proceedings; and (c) recovering or attempting to recover the recoveries from counterparties, as more particularly defined in the 19 October 2015 orders in these proceedings.

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