Et, pour ces raisons, je suis d'avis que l'ancien liquidator n'a pas droit de réclamer de salaire et je retranche de sa réclamation cette somme de $900 qu'il réclame à titre de salaire. (Voir Laurent, vol 28, ed. de 1878, nos 10, 25 et 26)."
18 In Re Kal Assay Southern Cross Pty Ltd (1992) 9 ACSR 245, Acting Master Hawkins of the Supreme Court of Western Australia said:
"In the proceedings before me, I am of the opinion that the liquidator is not entitled to any remuneration for services rendered in breach of his duty or for work which should not have been done. I am unable to ascertain how much of the fees the subject of this application relate to work done in connection with the disputed dividend. I propose making orders to the effect that the liquidator's remuneration not be approved, with liberty to file a further account which clearly distinguishes between work done in relation to other matters, and work done in relation to the inquiry into the disputed dividend."
19 These statements are sufficient to show that propriety of conduct, from the perspective of due discharge of duty, is a factor relevant to the exercise by the court of the s.473(3)(b)(ii) jurisdiction to fix a liquidator's remuneration. Reverting again to the analogy with a trustee in bankruptcy, it is instructive to refer to the meaning afforded by Fullagar J in Mayne v Jaques (above) to a provision of now superseded bankruptcy legislation analogous with s.473(3)(b)(ii) to the effect that should the creditors fail to fix the remuneration of the trustee in bankruptcy, the court may do so:
"The Act presupposes and contemplates throughout that the trustee is entitled to remuneration for work and labour done by him - unless, no doubt, there is some specific reason why he should not receive remuneration, such as that he has had no work to do, or that he has misconducted himself in some way ." [Emphasis added]
20 There is recognition here that misconduct on the part of a trustee in bankruptcy may mean that the entitlement to remuneration is removed or, I would add, reduced. But the adjustment is not punitive in nature. Disallowance of the whole or some part of the remuneration claimed will be no more than a reflection of the reality that it is no part of the function of a trustee or liquidator to act in breach of duty and that conduct of that kind attracts no remuneration. The difference between adjustment to allow for such conduct and punishment emerges from the decision in Re Palmer; Ex parte Taylor (1988) 18 FCR 271 where a Deputy Registrar in Bankruptcy had denied remuneration to a trustee whose conduct he had found to be improper, an allegation the trustee had strenuously denied in detailed submissions made by him in writing. In holding that the Deputy Registrar had fallen into error, Spender J said:
"It seems to me that in the discharge of the Deputy Registrar's functions, he has proceeded upon an erroneous basis. It is not part of his function to discipline trustees by the imposition of any penalty, but he is to fix the remuneration to which a trustee is entitled by the Act at a figure that is reasonable in all the circumstances. It is, of course, not correct that a person is entitled to be paid only if his work manifests no error or is without fault. Such a standard of perfection would be unworkable."
21 I should mention at this point that I have considered the possibility that, faced with an application to determine a liquidator's remuneration under s.473(3)(b)(ii), the court should proceed by way of analogy with the principles applied on an application for commission by an executor. My conclusion is that the analogy is not apt. In the case of a liquidator, the statute provides for the payment of remuneration and says that the amount will, in the ordinary course, be fixed by the creditors or the committee of inspection. The court's power is no more than a power to fix the amount and becomes exercisable only in default of a decision in both of those forums. The court quantifies the sum to be paid in satisfaction of the independently existing statutory entitlement. In the case of an executor, by contrast, the primary expectation is that he or she should act gratuitously. There is no right to remuneration. Commission is allowable only at the discretion of the court.
22 The requirement that an executor seeking commission show that there has been no neglect on his or her part which has in any way prejudiced the estate (In the Will of Wallace (1934) 51 WN(NSW) 84) should therefore not be regarded as applying to a liquidator seeking a determination of remuneration by the court under s.473(3)(b)(ii). When determining such an application, the court must start from the position that the liquidator is entitled to reasonable remuneration: Re Fine Food Distributors Pty Ltd (1993) 9 ACSR 599. Matters said to amount to or involve misconduct will be relevant only to the extent to which they cause the amount claimed not to be reasonable.
23 It cannot be said, as Mr Mann contends, that proceedings under s.536 are the only (or even most) appropriate avenue for the pursuit of allegations of satisfactory conduct and that such matters should be pursued in that way divorced altogether from the question of remuneration. Indeed, it is suggested in the judgment of Drummond J in Leslie v Hennessy [2000] FCA 1532 that once the court has fixed a liquidator's remuneration under s.473(3)(b)(ii), it may not thereafter review that determination except upon appeal from the original order or on the ground that that order was obtained by fraud. The review of remuneration under s.536 in Burns Philp Investment (above) occurred in a context where the original remuneration had been agreed in a voluntary winding up, not where it had been fixed by order of the court under s.473(3)(b)(ii).
24 I am satisfied that alleged misconduct by a liquidator applying for a determination under s.473(3)(b)(ii) should be addressed in the context of that application and that the court should apply the principles to which I have referred in considering whether the alleged misconduct affects the remuneration sought. Such an approach seems to me to be correct as a matter of principle. A court charged with the duty of determining the amount of the remuneration to which a fiduciary is entitled could never be deaf to allegations that the fiduciary responsibility had not been faithfully performed.
25 Considerable care must, however, be exercised. A liquidator has, as I have said, an entitlement to be remunerated and it would not be right for all and any complaints of misfeasance to stand in the way of that unless there were seen to be substance to them. There must be an appropriate balancing of the right to remuneration against the need for investigation of the alleged misfeasance, with recognition of the position of an official liquidator as an officer of the court who conducts the winding up ordered by the court. It is clear that findings of wrongdoing on the part of such an officer will not be lightly made and would necessarily be based on facts established by evidence adduced, tested and scrutinised in the usual way.
26 This highlights the practical problem that the core tasks in fixing liquidators' remuneration are not suitable to be dealt with in the same way as the trial of alleged misfeasance. In the ordinary course, the core tasks to which I have referred are approached in a summary way and without strict regard to all the rules that would apply in an action: see the description and discussion in Venetian Nominees Pty Ltd v Conlan [1998] WASCA 273. The matter is dealt with in a quasi-administrative way by registrars and deputy registrars who, by dint of experience and familiarity with market trends and practices, are better equipped than most judges to make the necessary decisions. Judgments in relation to alleged misfeasance and its consequences, on the other hand, are more appropriately the province of a judge. (I note in passing that the powers of masters set out in Schedule D to the Supreme Court Rules do not extend to inquiries into liquidators' actions under s.536).
27 In the present case, it will not be appropriate to order that paragraphs 1 and 2 of Mrs Anderson's notice of objection be struck out, even assuming that it is a "pleading" as defined by Pt 1 r 8 of the Supreme Court Rules and amenable to the jurisdiction to strike out, whether under Pt 15 r 26 or otherwise. The application to strike out paragraphs 1 and 2 will be dismissed. What is appropriate is that suitable measures be put in place to deal with the determination of Mr Mann's remuneration in the light of Mrs Anderson's objections. This leads me to the question of directions for the further conduct of the proceedings initiated by Mr Mann's interlocutory process filed on 7 January 2002, that being the second matter raised in Mr Mann's interlocutory process filed on 24 April 2002.
28 The appropriate way forward has two stages. The first stage will entail attention to Mr Mann's claim by a registrar who will determine the amount of reasonable remuneration in the usual way, but ignoring the merits or otherwise of the matters in paragraphs 1 and 2 of Mrs Anderson's notice of objection. The matters in those paragraphs will, however, be taken into account by the registrar to the limited extent necessary to ensure that the assessment of appropriate remuneration made without reference to their merits nevertheless clearly and separately records the areas of work or the time periods (or both) to which Mrs Anderson's complaints relate, with allocation to each such area of work or time period of the applicable part of the overall quantification.
29 The registrar will be able to make these allocations only if there are available, first, a concise description of each separate activity and each separate time period in relation to which Mrs Anderson says that the liquidator's conduct was unsatisfactory in a way relevant to determination of remuneration; and, second, particulars from Mr Mann's records of the time spent on various items of work sufficient to enable the registrar to ascribe a separate figure to each of the several activities and time periods to which Mrs Anderson's complaints relate. Something resembling a solicitor's detailed bill of costs is needed.
30 The second part of the process will entail consideration by a judge of the objections advanced in paragraphs 1 and 2 of Mrs Anderson's notice of objection. Because the first stage will have concentrated on aspects relevant to quantification in the usual way - including vouching, as necessary, time spent and any argument about applicable rates and scales - the product of that first stage will represent a prima facie basis for determination which will be expected to prevail unless it is shown that any of the paragraph 1 and 2 objections is made out to such an extent to warrant some reduction in accordance with the principles to which I have referred. Mrs Anderson will face the task of making good to the necessary extent the allegations she has seen fit to make regarding the conduct of the liquidator. The outcome of the second stage will be an evaluation by the court (constituted by a judge) of the impact, if any, that findings made by the judge in relation to the matters the subject of those allegations are to have on the prima facie position with respect to remuneration emerging from the first stage.
31 As a formal matter, the s.473(3)(b)(ii) determination will be made wholly by the judge. To ensure that matters are put on a proper procedural footing, the preliminary (or first stage) assessment process I have described as being appropriately undertaken by a registrar will be referred to a registrar as contemplated by item 30 of Part 2 of Schedule E to the Supreme Court Rules.
32 It is to be hoped that the parties can agree some of the practical aspects needed to progress determination of Mr Mann's remuneration in accordance with the regime I have outlined. I therefore direct that they attempt to agree short minutes of orders and directions to implement that regime and that any agreed form be filed by delivery to my Associate within 14 days from today. If agreement is not achieved so as to enable that, each party must, within 21 days from today, file by delivery to my Associate the form of short minutes for which he or she contends. The proceedings will then be re-listed for the making of orders and directions.
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