DAVID KERR IN HIS CAPACITY AS LIQUIDATOR OF ANGEL'S CASTLE PRE-SCHOOL PTY LTD (IN LIQUIDATION) (ACN 118 076 994); DEPUTY COMMISSIONER OF TAXATION v ANGEL'S CASTLE PRE-SCHOOL PTY LTD

REASONS FOR JUDGMENT 1 I have before me this morning an interlocutory process filed by Mr Kerr in his capacity as receiver and manager of the GGS Girgin Family Trust (the "Trust"). Mr Kerr seeks an order that he be discharged and released from acting as receiver, that he be granted leave to dispense with the requirement that he pass his final accounts, and that he be paid remuneration for acting as receiver of the Trust in the sum of $36,095.40. There are a number of other orders sought in the interlocutory process, but I need not refer to them. 2 The basis upon which Mr Kerr seeks to be discharged is that the objects of the receivership have now been achieved. He makes this application on his own initiative. There is authority for the proposition that a court appointed receiver may be discharged where the object of the appointment has been achieved. See the decision of Campbell J in Lunn v Savage [2006] NSWSC 240 at [27]. 3 I am satisfied in this case that the objects of the receivership have been achieved. The reasons are fully set out in the written submissions handed up to me this morning, which I will mark as MFI1. The principal reasons are that the property and the business have now been sold, Mr Kerr has not identified any pre-appointment creditors of the Trust other than the St George Bank, and all the receivership liabilities except for the receiver's remuneration have been paid in full by the receiver. 4 The circumstances in which Mr Kerr was appointed are explained in my reasons for judgment in Kerr, in the matter of Angel's Castle Preschool Pty Ltd (In Liquidation) [2010] FCA 786. It is clear from what I said in that case and in what I have said above, that the authorities which inform the exercise of the power to discharge a receiver have been satisfied, and I propose to make that order. 5 As to the passing of final accounts, the principle may be stated shortly: it is that courts have dispensed with the requirement of passing final accounts in cases where the cost of complying with the formal procedure exceeds any benefit that may accrue from doing so. 6 Ms Rae, who appears this morning for Mr Kerr, has taken me to the decision of Young CJ in Eq in Ide v Ide [2004] NSWSC 751 at [24] and [26]. I am satisfied in the present case that a number of factors demonstrate that the cost of passing final accounts exceeds any benefit that would accrue from doing so. 7 The reasons are fully explained in the written submissions. In particular, all of the assets of the receivership have been sold and the St George Bank, which was the sole creditor of the Trust, received the balance of the proceeds of sale of the land and the business. However, the total amounts paid to the bank were insufficient to pay the debt owed to the bank. Nevertheless, the St George Bank consents to the quantum of the remuneration for which the receiver seeks approval and the other "interested parties", namely, the directors and principals of the company, have indicated they do not wish to attend the hearing this morning. 8 In those circumstances, adhering to the requirement to pass final accounts would incur additional costs, which would outweigh any benefit that would accrue from the formal passing of accounts. Accordingly, it seems to me that notwithstanding rule 14.25 of the Federal Court Rules 2011, which require a receiver to file accounts and to pass them, I ought to make the order which is sought. 9 The other order which I need to address is the claim by Mr Kerr for his remuneration. The relevant principles were stated by Young CJ in Ide v Ide [2004] NSWSC 751 at [39]ff. The principles were summarised and stated with approval by Barrett J in Mohamed & Anor v Hurstville Tower Medical Clinic Pty Ltd (in liquidation) & 9 Ors [2006] NSWSC 4 at [8]. Barrett J observed at [9] that the principle stated by Young CJ in Eq, that a court never considers a review of quantum, may have been stated "too strongly". His Honour referred to the decision of Branson J in Wenkart v Pantzer [2005] FCA 1572, in which her Honour made that observation, and went on to say that "it will rarely, if ever, be appropriate for the Court to review a decision of a taxing officer on a line by line basis". 10 In the present case, subject to one exception which I will refer shortly, I am satisfied that the claim for remuneration is made in accordance with the principles to which I have referred. The qualification is that the receiver's records to which I have been taken show that the total amount of the charges is $34,305.50. 11 The receiver's records demonstrate that the timesheets do significantly more than merely detail the total number of hours spent by the receiver and officers. The documents, and in particular, annexure F to Mr Kerr's affidavit, contain a breakdown of the tasks that were undertaken by particular members of staff, and the time taken in carrying out the work which is described in the timesheets. Although, as Young CJ in Eq stated in Ide v Ide, the Court is ordinarily guided by professional scales of charges, it appears that there is no such relevant scale presently in force. Nevertheless, Mr Kerr is an officer of the court, and I am satisfied from the evidence filed by him that the charges which are proposed are proper charges to be approved. 12 However, having regard to the disparity between the amount claimed in the interlocutory process and the amount shown in the timesheets, I can only make an order which is in accordance with the receiver's records, and I will therefore order that Mr Kerr be paid remuneration in the sum of $34,305.30. 13 For the reasons stated above, I propose to make orders in terms of paragraphs 1, 2 and 3 (as amended). I also make an order in terms of paragraph 4, and I will make an order for costs in terms of paragraph 5 of the short minutes of order, which I will sign and date, and place with the court papers. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.