First Plaintiff v Second Plaintiff

2 On 14 June 2011, Ferguson J (as her Honour then was) made comprehensive orders in respect of the remuneration and expenses of the Liquidators ('Orders'). The effect of those orders is summarised in an earlier judgment given by Gardiner AsJ in relation to the Liquidators' first application for their remuneration, and there is no need for me to repeat that here.[1]

3 Specifically, by this interlocutory process, the Liquidators seek the following relief ('Application'):

(a) An order that their Remuneration (as defined in the Orders) for the period between 1 October 2015 to 31 March 2018 ('Period') be assessed at $319,713 and that this be paid from the Scheme Assets (as defined in the Orders) in accordance with paragraph 2 of the Orders;

(b) An order pursuant to s 90-20 of Schedule 2 (Insolvency Practice Schedule)(Corporations) ('IPS') to the Corporations Act 2001 (Cth) ('Act') that:

(i) The Liquidators Remuneration for the Period be determined in the amount of $319,713; and

(ii) The Liquidators' internal disbursements ('Internal Disbursements') for the Period be determined in the amount of $3,921.20;

(c) Leave pursuant to s 60-20(3)(b) of the IPS to derive a profit or advantage from the external administration of TVM to the extent that the Internal Disbursements for the Period cause them to directly or indirectly derive a profit or advantage in breach of s 60-20(1) of the IPS;

(d) An order pursuant to s 90-20 of the IPS that the Remuneration and Disbursements be paid as follows:

(i) With respect to Remuneration and Internal Disbursements incurred in relation to the winding up of the Blue Diamond Deposits Trust No. 1 (ASRN 091 948 202) ('BDT'), from the Scheme Assets;

(ii) With respect to Remuneration and Internal Disbursements incurred in relation to the dual purpose of winding up BDT and TVM, from the Scheme Assets; and

(iii) With respect to Internal Disbursements incurred in relation to the winding up of TVM only, from the assets which TVM holds in its own right ('TVM Assets');

(e) An order that the Liquidators' remuneration, costs and expenses of this application be paid on an indemnity basis from the Scheme Assets and the TVM Assets in proportion to the total amount of Remuneration and Internal Disbursements to be paid from those assets in accordance with the order in paragraph (d) above.

4 In support of the Application, the Liquidators rely on the affidavits of:

(a) Mr Handberg, sworn 20 November 2018 ('Eleventh Affidavit');

(b) Lynette Anne Harding, sworn 21 January 2019 ('Harding Affidavit'). Ms Harding is an administration clerk employed by Mills Oakley Lawyers ('Mills Oakley'), solicitors for the Liquidators;

(c) Jennifer Claire O'Farrell, affirmed 22 January 2019 ('First O'Farrell Affidavit'). Ms O'Farrell is a solicitor employed by Mills Oakley; and

(d) Ms O'Farrell, affirmed 19 February 2019 ('Second O'Farrell Affidavit').

5 The Application was listed before Gardiner AsJ on 8 February 2019. His Honour made orders on that day referring the hearing and determination of the Application to me; that the Liquidators file and serve any further affidavit material upon which they intend to rely by 22 February 2019; and reserved costs.

6 Following that referral, the Application has been reviewed and determined by me on the papers.

Notification to ASIC and certain other persons of the intention to apply for Court approval of remuneration

7 Paragraph 6 of the Orders relevantly provides as follows:

(c) at least 21 days before filing the interlocutory process seeking the order, the Liquidators must serve on:

(i) each of the five largest unitholders in the Scheme (measured by the value of the interest they hold in the Scheme);

(ii) any representative party appointed by the Court pursuant to Order 7 below; and

(iii) the Australian Securities and Investments Commission;

(A) a notice in accordance with Form 16 of the Supreme Court (Corporations) Rules 2003 amended as necessary;

(B) a copy of the affidavit filed by the Liquidators in accordance with Order 6(b) above; and

(C) a copy of the Orders made on this application.

...

(e) within 21 days after the last service of the documents mentioned in Order 6(c), any interested person so served may give to the Liquidators a notice of objection to the remuneration which is claimed by the Liquidators to be Remuneration to be paid under Orders 2 and 3 above, stating the grounds of objection;

(f) if the Liquidators do not receive a notice of objection within the period mentioned in Order 6(e):

(i) the Liquidators may file an affidavit, made after the end of that period, in support of the interlocutory process seeing an order stating:

(A) the date, or dates, when the notice, affidavit and orders required to be served under Order 6(c) were served; and

(B) that the Liquidators have not received any notice of objection to the remuneration which is claimed by the Liquidators to be Remuneration to be paid under Orders 2 and 3 above within the period mentioned in Order 6(e);

8 Paragraph 7 of the Orders appointed Neil Campbell to represent himself and all unitholders in the Scheme ('Appointed Representative').

9 Ms Harding deposes that on 29 November 2018, she served a letter, a notice of intention to apply for remuneration and a USB containing the interlocutory process dated 20 November 2018 and the Eleventh Affidavit ('Application Documents') on the following persons:

(a) ASIC;

(b) K & L Gates. K & L Gates act for the Appointed Representative;[2]

(c) Holiday Concepts Pty Ltd - Tamarind Sands; Resort Securities Pty Ltd; Holiday Concepts Pty Ltd - Resort Vacation; Holiday Concepts Pty Ltd - Mainland Resorts; Leisuretime Concepts Pty Ltd; and Resort Systems Pty Ltd;

(d) Woo Wah Pty Ltd ('Woo Wah');

(e) Mr Harold Bailey Thomas; and

(f) WHO Investments Pty Ltd ('Who Investments').

10 I understand that the persons served with the Application Documents as set out in paragraph 9 above are those required to be served by paragraph 6(c) of the Orders.

11 Ms O'Farrell deposes that on or about 7 December 2018, she received via post the envelope enclosing the Application Documents addressed to Woo Wah. She says that she obtained a company search of Woo Wah from ASIC on that day, which recorded Woo Wah's registered office as the address to which the Application Documents had been sent.[3]

12 Ms O'Farrell also deposes that on or about 17 December 2018, she received via post the envelope enclosing the Application Documents addressed to WHO Investments, which had been marked 'RTS Left this address 3 years ago'. Ms O'Farrell then reviewed a current ASIC company search for WHO Investments which indicated a different address for the registered office of WHO Investments to that to which the Application Documents had been sent.[4] Ms Harding deposes that on 19 December 2018 she sent the Application Documents to WHO Investments by post, addressed to the current registered office as ascertained by Ms O'Farrell.[5]

13 Ms O'Farrell deposes that she has not received any objections from any person or entity in relation to the Application, and she says she is informed by the Liquidators and believes that they have not received any objections either.[6]

Correspondence with ASIC regarding the foreshadowed application

14 Ms O'Farrell says that on 18 December 2018 she received a letter by email from Patricia Hu of ASIC. Amongst other things, that letter stated that:[7]

it may be helpful to the Court for the [Liquidators] to provide additional information such as the liquidators' reports to creditors and unitholders. That would provide the Court with a summary of the fees paid to date, realisations, tasks that remain outstanding, and summary receipts and payments.

ASIC considers that this is a matter properly left for the determination of the Court and confirms that it does not propose to intervene in the Application or seek leave to appear at the next hearing.[8]

15 Ms O'Farrell says that she is informed by the Liquidators and believes that on 1 May 2018 they issued a report to the unitholders of BDT, of which TVM is the responsible entity for the scheme, which report was also filed with ASIC and made available to TVM's creditors upon request to the Liquidators ('BDT Report').[9]

Correspondence with the Appointed Representative regarding the foreshadowed application

16 Ms O'Farrell deposes that prior to making the Application, she sent an email to Andrew Chambers of K & L Gates, solicitors for the Appointed Representative. She attached to that email drafts of the interlocutory process, Mr Handberg's eleventh affidavit, and a draft remuneration report ('Draft Documents').[10] This was done on instructions from the Liquidators, who wished to allow the Appointed Representative the opportunity to give feedback on the Draft Documents, particularly the draft remuneration report. Through this process, the Liquidators hoped to resolve as many issues as possible and minimise costs, including the Appointed Representative's costs which are to be paid out of the Scheme Assets in accordance with the Orders.[11]

17 Between 29 October 2018 and 12 November 2018, Ms O'Farrell exchanged a number of emails with Alysha Tuziak, a solicitor at K & L Gates, in relation to the Draft Documents, particularly the draft remuneration report. On 13 November 2018, Ms O'Farrell received an email from Tom Trotman, a solicitor at K & L Gates, advising that their queries in relation to the Draft Documents had been sufficiently addressed.[12]

18 On 14 February 2019, Ms O'Farrell received a telephone call from Mr Trotman regarding the status of the Application. Ms O'Farrell sent him an email later that day which referred to the earlier consultation over the Draft Documents; indicated that the Application Documents had been served on K & L Gates on 29 November 2018 and that no objections had been received, so the Liquidators had understood that the Appointed Representative had no further objection to the claimed remuneration; the Application had been filed on 29 January 2019; and informed Mr Trotman of the directions made on 8 February 2019. Ms O'Farrell received a letter from K & L Gates on 14 February 2019 which stated that the Appointed Representative did not intend to file any material objecting to the remuneration claimed by the Liquidators in the Application.[13]

Background regarding the external administration of TVM, including previous remuneration applications and remuneration paid

19 The background to the insolvency administration of TVM is contained in the First Remuneration Judgment.[14]

20 This is the fourth application made by the Liquidators in respect of their Remuneration, as they have periodically sought approval for their Remuneration. The previous three applications were granted by the Court on terms set out in orders dated 18 December 2012, 9 April 2015 and 15 July 2016 made by Gardiner AsJ.[15]

21 The BDT Report sets out that the total remuneration drawn to date by the Liquidators is $4,617,221.32, drawn for the following periods:[16]

(a) $53,001.50 for TVM work only, for the period from 17 December 2009 to 30 June 2016;

(b) $178,634.82 for TVM and scheme related work for the period from 17 December 2009 to 2 February 2010;

(c) $1,519,886.50 for TVM and scheme related work for the period from 3 February 2010 to 8 July 2011;

(d) $1,546,124 for TVM and scheme related work for the period from 9 July 2011 to 31 December 2013; and

(e) $1,319,574.50 for TVM and scheme related work for the period from 1 January 2014 to 30 September 2015.

22 The amount in paragraph 21(e) above was approved by the Court and includes a disbursement approved by the Court for $60,000 relating to legal fees incurred and directly paid by the Liquidators under their professional indem[17]ty policy.17

23 The BDT Report also sets out that from the date of their appointment (3 February 2010) to 31 March 2018, the Liquidators had received a total of $18,764,706.93 and have paid total amounts of $17,537,280.27.[18] Since 1 April 2018 to 31 December 2018, the Liquidators have received further amounts of $3,798,393.52 and have paid further amounts of $148,039.94.[19]

24 As observed by Gardiner As J in the First Remuneration Judgment, the Application is not one where the Court is exercising the jurisdiction of determining and fixing the Liquidators' remuneration under the statutory provisions of the Act.[20] Rather,

the [Orders] involve the exercise of the inherent equitable powers of the Court. It will be seen by the definition of 'Remuneration' in [the Orders] that although my task is different to that which occurs under the exercise of the statutory powers, the criteria which I apply to the exercise of determining and fixing the Remuneration in this application is very much akin to that process.[21]

25 In the Third Remuneration Judgment, his Honour noted that he considered it appropriate in this series of applications to apply the statutory criteria prescribed by s 473(1) of the Act.[22]

26 The legal principles applicable to applications of this type were summarised by Gardiner AsJ in the First Remuneration Judgment and the Second Remuneration Judgment.[23] I have also summarised the statutory provisions and the legal principles in several judgments.[24] Other than what I have noted below, there is no need for these to be set out here. Since the earlier remuneration judgments in this liquidation, the IPS has been introduced and s 473 has been repealed.

27 As noted above, the Application is brought under s 90-20 of the IPS for orders pursuant to s 90-15, which includes orders relating to the remuneration of external administrators. Division 60 of the IPS applies to remuneration applications and in s 60-12 the matters to which the Court must have regard are set out. These are very similar to the matters which had been set out in s 473(10) of the Act. I have previously explained the operation of the transitional provisions for approval of remuneration,[25] and the approach to be taken by the Court is relevantly the same. For the same reasons as articulated by Gardiner As J for applying the criteria in s 473(10) of the Act, in my view the criteria now to be applied are those set out in s 60-12 of the IPS.

28 Section 60-12 of the IPS states that 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.

29 While the criteria in s 60-12 of the Practice Schedule direct the Court to the factors that are to be taken into account, the ultimate question is whether the remuneration claimed by the Liquidators is reasonable.

Work performed by the Liquidators and their staff

30 In support of the Application, the Liquidators rely on a detailed remuneration report for the period 1 October 2015 to 31 March 2018 in respect of remuneration and for the period 1 August 2017 to 31 March 2018 in respect of internal disbursements ('Remuneration Report').[26]

31 Since their appointment, the Liquidators have categorised their work into the following three work categories ('Work Categories'):

(a) BDT Work - worn undertaken solely for the purpose of the proper administration of BDT;

(b) TVM Work - work undertaken solely for the purpose of the administration and then liquidation of TVM; and

(c) BDT/TVM Work - work undertaken for the dual purpose of both the administration and/or liquidation of TVM and for the purpose of the proper administration of BDT.

32 The Liquidators have not included their remuneration for the TVM Work in their claim for remuneration from the assets of BDT, as this falls outside the scope of the Orders.

33 The Remuneration Report is divided into three sections:

(a) An overview of the total remuneration and internal disbursements claimed ('Overview');

(b) Detailed summaries of the remuneration claimed under each of the following nine job codes ('Job Code Summaries'):

(i) BDT/TVM General Activities - remuneration and internal disbursements incurred in the winding up of TVM that relates to tasks that also needed to be undertaken as part of the proper administration and winding up of BDT;

(ii) BDT/TVM Remuneration Application - remuneration and internal disbursements incurred in the Liquidators' applications to this Court by originating process dated 25 March 2011 and for the Liquidators' remuneration for the periods 1 January 2014 to 30 September 2015 and for 1 October 2015 to 31 March 2018;

(iii) Personal Loan Assets - remuneration and internal disbursements incurred in the Liquidators' care, realisation and preservation of TVM's personal loan assets, which were personal loans to natural persons which were typically advanced to assist in the purchase of an interest in time share holiday units and apartments;

(iv) Spencer and Perovich - remuneration and internal disbursements incurred in the Liquidators' care, realisation and preservation of assets relating to funds loaned by TVM to Richard Spencer and Silvana Perovich;

(v) BDT General Activities - remuneration and internal disbursements incurred in the Liquidators' proper administration and winding up of BDT;

(vi) Legal Claims - remuneration and internal disbursements incurred in the Liquidators' claims against some secured creditors and related party unit holders of BDT;

(vii) Fraud Claims - remuneration and internal disbursements relating to several proceedings which were either initiated by or brought against the company and/or the Liquidators as a result of the admission of fraudulent activity by Lynne Philistin, a former employee of the company, on 4 March 2014, divided into two sub-codes: special purpose liquidator proceeding; and liquidators' personal liability proceeding; and

(viii) TVM Work - Internal Disbursements - internal disbursements (not remuneration) incurred solely in relation to TVM Work for the period 1 August 2017 to 31 March 2018.

(c) A breakdown of staff members' hourly rates from the date of the appointment and their various qualifications ('Rates and Qualifications Section').

34 Each of the Job Code Summaries sets out a more detailed description of the work undertaken in respect of that Job Code and a spreadsheet which sets out the time and costs charged, broken down by identification of the staff members concerned. Changes in rates for particular staff members over the period are reflected in the document. The spreadsheets are individual entries containing the date the work was performed, the Job Code, the person who performed the task, the time occupied, the hourly rate charged, the charge for the task, and a narrative of the actual work involved. There is also a breakdown of the internal disbursements (for example, photocopying/printing, storage, phone calls) for each Job Code.

35 A summary of the work done under each Job Code during the relevant period is set out in the following paragraphs.

36 In respect of the BDT/TVM General Activities Job Code, the Liquidators have performed the following work:

(a) Receiving and responding to queries and correspondence from TVM's creditors and/or their representatives;

(b) Preparing and forwarding monthly reports to 6 secured creditors;

(c) Receiving and responding to telephone enquiries from the secured creditors in relation to the Liquidators' continued management and collection of TVM's personal loan assets;

(d) Lodging information with ASIC re BDT and TVM;

(e) Attending on ATO and ATO related matters - including preparing and lodging BAS statements;

(f) Calculating payments to be made to secured creditors and corresponding with them regarding those payments; and

(g) Reconciling reports to secured creditors against reports obtained from Mission software.

37 In respect of the BDT/TVM Remuneration Application Job Code, the Liquidators have performed the following work:

(a) Liaising with solicitors regarding the applications, including the notice of objection and formulating a response;

(b) Compiling remuneration information;

(c) Calculating remuneration and expenses;

(d) Preparing supporting workings for the affidavits and swearing affidavits;

(e) Preparing staff profiles in response to the objections received to the remuneration application;

(f) Preparing and reviewing remarks reports for the third and fourth remuneration applications;

(g) Reviewing correspondence from stakeholders;

(h) Preparing supporting documents for affidavits for third and fourth remuneration applications;

(i) Attending Court hearing for third remuneration application; and

(j) Reconciling fees approved by creditors and by the Court and maintaining controls regarding fees approved by the Court and paid to Liquidators.

38 In respect of the Personal Loan Assets Job Code, the Liquidators have performed the following work:

(a) Planning and implementing payments to secured creditors and preparation of monthly reports;

(b) Developing and implementing strategies to reduce the number and value of personal loans in default;

(c) Managing and controlling the administration and collection of the personal loans, including arranging for settlement of loans, monitoring expenses incurred in collecting loans and paying those expenses;

(d) Considering and implementing enforcement action against personal loan debtors who are in default, including referring particular loans to debt collection agencies and liaising with them, or liaising with bankruptcy trustees;

(e) Preparing daily reports for the personal loan assets;

(f) Liaising with individual borrowers and the Liquidators' solicitors to arrange for removal of caveats lodged by TVM; and

(g) Analysing and reviewing performance of timeshare loans.

39 In respect of the Spencer and Petrovich Job Code, the Liquidators have performed the following work:

(a) Liaising with solicitors regarding all aspects of the litigation involving recovery of the TVM loan to Spencer and Petrovich;

(b) Preparing defence and affidavit material for the litigation;

(c) Dealing with the security for costs application against TVM, including preparing affidavits and liaising with solicitors; and

(d) Liaising with solicitors regarding litigation funding options, and preparing memorandum to commercial funders and reviewing and considering merits of proposals submitted by them.

40 In respect of the BDT General Activities Job Code, the Liquidators have performed the following work:

(a) Reporting to and corresponding with BDT unit holders;

(b) Reviewing the assets and liabilities held by TVM in its capacity as responsible entity of BDT;

(c) Compiling a time line analysis of unit holder redemptions in relation to secured creditors' unit holdings;

(d) Corresponding with ASIC;

(e) Performing financial control and accounting tasks;

(f) Dealing with unit holder transfer requests;

(g) Preparing and adhering to statutory obligations and lodgements regarding the Trust;

(h) Analysing potential returns from legal recoveries and calculating net recoveries for reporting to unit holders; and

(i) Administrative tasks.

41 In respect of the Legal Claims Job Code, the Liquidators have performed the following work:

(a) Liaising with solicitors regarding settlement matters;

(b) Monitoring repayment of settlement instalments;

(c) Performing financial control and accounting tasks regarding bad debts, and reconstructing BDT's financial statements;

(d) Reviewing information to determine claims against related entity unit holders;

(e) Liaising with solicitors regarding all aspects of the various proceedings and preparing/reviewing court documents;

(f) Obtaining independent advice on certain topics; and

(g) Attending mediations.

42 In respect of the Special Purpose Liquidator Proceeding Job Code, the Liquidators have performed the following work:

(a) Reviewing the Special Purpose Liquidator's report;

(b) Corresponding with creditors regarding the conclusion of the Special Purpose Liquidation; and

(c) Liaising with the Special Purpose Liquidator regarding payment of his final fees and costs, and his resignation.

43 In respect of the Liquidators Personal Liability Proceeding Job Code, the Liquidators have performed the following work:

(a) Liaising with solicitors regarding settlement and implementing settlement agreement.

44 In respect of the TVM Work - Internal Disbursements Job Code, the Liquidators have incurred internal disbursements for photocopying/printing and storage.

45 The Liquidators have not previously sought Court approval in respect of internal disbursements incurred with respect to the Work Categories. However, they do so now in respect of the Internal Disbursements relating to each Job Code and for the Job Code 'TVM Work - Internal Disbursements', due to changes to the Act as a result of the Insolvency Law Reform Act 2016 (Cth). As a result of these changes, external administrators and their firms are now prohibited from receiving a profit or advantage from the external administration of a company, unless (among other things) the Court grants leave. Mr Handberg deposes that Rodgers Reidy charges disbursements at rates which may recoup both fixed and overhead costs, which are items of expenditure which may lead the Liquidators to derive a marginal profit or advantage.[27] Accordingly, the Liquidators seek leave of the Court under s 60-20 of the IPS to derive profit or advantage in respect of the Internal Disbursements.

The Liquidators' rates and method for calculating remuneration

46 The Liquidators have calculated their remuneration using the time costing method, which is a suitable method, especially for a liquidation of this type, which is large, lengthy and complex.

47 The rates applied by Rodgers Reidy effective 1 January 2015, I July 2017 and 1 January 2018 are all set out in the Rates and Qualifications Section of the Remuneration Report.

48 The remuneration has then been calculated by taking the time spent on each task (calculated in 6 minute units) and applying the hourly rate for the applicable staff member to that.

49 The Overview in the Remuneration Report sets out the following amounts as comprising the remuneration claimed by the Liquidators for the period 1 October 2015 to 31 March 2018:

50 The Overview also sets out the following amounts comprising the Internal Disbursements claimed for the period 1 August 2017 to 31 March 2018:

51 Based on all of the evidence provided, I am satisfied that the Liquidators have made out a prima facie case for payment of their remuneration, as described in Venetian Nominees Pty Ltd v Conlan[28] and the other authorities referred to in Imagebuild.[29] That is, they have made out a prima facie case that the remuneration is fair and reasonable, and there is sufficient information in the Remuneration Report to enable potential objectors to review the amounts claimed and to ascertain whether there are matters to which objection should be taken.

52 It is clear from the correspondence between Mills Oakley and K & L Gates regarding the Draft Documents that the Appointed Representative and his advisers reviewed the draft remuneration report in some detail, as the matters raised in the correspondence by them were by reference to specific items. Mills Oakley responded to all of these and K & L Gates confirmed that the Appointed Representative was satisfied with those responses and that he did not object to the Application. The Court takes comfort from the process engaged in by the Liquidators and the Appointed Representative in this respect. Nonetheless, the Court must still assess whether the remuneration claimed is reasonable in the circumstances.

53 Further, from my experience in matters associated with insolvency administrations, I know the hourly rates applied by the Liquidators as set out in the Rates and Qualifications Section of the Remuneration Report to be commensurate with the hourly rates typically charged by insolvency practitioners.

54 As noted in paragraph 27 above, I consider it appropriate to apply the criteria set out in s 60-12 of the IPS.

55 In the earlier remuneration judgments in respect of this liquidation, Gardiner As J stated that in his view:

The administration and liquidation of TVM were 'at the higher end of complexity and involve considerable responsibilities on the part of the liquidators'.[30]

56 For the same reasons articulated by Gardiner As J and by reference to the work performed by the Liquidators as summarised in these reasons, I agree with his Honour's conclusion.

57 The Remuneration Report addresses the statutory criteria and I am satisfied that they have been met.

58 In respect of the remuneration claimed in respect of each Job Code, the Job Code Summaries set out the staff member, their classification, their hourly rate, the total hours and the total claimed in respect of that staff member for that Job Code. It is readily apparent from those tables that the bulk of the work has been performed by senior accountants, or senior accountants in conjunction with managers for the more complex Job Codes, with the work done at the appointee level minimal for most Job Codes except those where the situation warranted it (for example, the litigation and mediation involving Spencer and Perovich, and the Legal Claims), such that there has been an appropriate level of delegation by the Liquidators.

59 I have reviewed the detailed descriptions of the work performed in relation to each Job Code. I have also reviewed a random sample of the entries in each of the spreadsheets which form part of each Job Code Summary. From that review, I consider that the tasks performed were necessary, that the time taken to perform them was reasonable and that the task were performed by persons at the appropriate level of qualification and experience and charge out rates within Rodgers Reidy.

60 For these reasons, the remuneration claimed by the Liquidators is reasonable, as it was necessary and properly performed. The remuneration claimed should be allowed, without reduction.

61 Accordingly, there will be orders made as follows:

(a) The Liquidators' Remuneration for the Period be determined in the amount of $319,713; and

(b) The Liquidators' Internal Disbursements for the Period be determined in the amount of $3,921.20;

(c) Leave is granted to the Liquidators pursuant to s 60-20(3)(b) of the IPS to derive a profit or advantage from the external administration of TVM to the extent that the Internal Disbursements for the Period cause them to directly or indirectly derive a profit or advantage in breach of s 60-20(1) of the IPS;

(d) Pursuant to s 90-20 of the IPS that the Remuneration and Disbursements be paid as follows:

(i) With respect to Remuneration and Internal Disbursements incurred in relation to the winding up of the Blue Diamond Deposits Trust No. 1 (ASRN 091 948 202) ('BDT'), from the Scheme Assets;

(ii) With respect to Remuneration and Internal Disbursements incurred in relation to the dual purpose of winding up BDT and TVM, from the Scheme Assets; and

(iii) With respect to Internal Disbursements incurred in relation to the winding up of TVM only, from the assets which TVM holds in its own right ('TVM Assets');

(e) The Liquidators' remuneration, costs and expenses of this application be paid on an indemnity basis from the Scheme Assets and the TVM Assets in proportion to the total amount of Remuneration and Internal Disbursements to be paid from those assets in accordance with the order in paragraph (d) above.

62 I will ask the Liquidators' solicitors to provide a draft form of order to my Associate.

[1] IMO Traditional Values Management Ltd (in liq) [2012] VSC 650, [1]-[5] ('First Remuneration Judgment').

[8] Exhibit JCO-3 to the First O'Farrell Affidavit.

[9] First O'Farrell Affidavit, [10]. Exhibit JCO-4 to the First O'Farrell Affidavit is a copy of the BDT Report.

[10] Second O'Farrell Affidavit, [8].

[11] Second O'Farrell Affidavit, [9].

[12] Second0 O'Farrell Affidavit, [10]-[11].

[13] Second O'Farrell Affidavit, [12]-[13].

[15] Exhibit GNH-55 to the Eleventh Affidavit. Gardiner AsJ also published reasons for those orders, being: the First Remuneration Judgment; Re Traditional Values Management Ltd (In Liq) (No 2) [2015] VSC 126 ('Second Remuneration Judgment'); and Re Traditional Values Management Ltd (In Liq) (No 3) [2016] VSC 475 ('Third Remuneration Judgment') (together, the 'Remuneration Judgments').

[16] Exhibit JCO-4 to the First O'Farrell Affidavit.

[17] First O'Farrell Affidavit, [11(b)(iv)]. See also the Third Remuneration Judgment, [44].

[18] Exhibit JCO-4; First O'Farrell Affidavit, [13].

[19] First O'Farrell Affidavit, [14].

[20] Such as s 473(3) of the Act for liquidators appointed before 1 September 2017 or the IPS after that date.

[21] First Remuneration Judgment, [9].

[22] Third Remuneration Judgment, [23].

[23] First Remuneration Judgment, [18]-[25], [40], [63]-[69]; Second Remuneration Judgment, [18], [20]-[21], [43]-[44], [48], [66].

[24] For example, see In the Matter of Imagebuild Group Pty Ltd [2019] VSC 213, [39]-[47] ('Imagebuild').

[25] For example, see Re Tuscan Property Development Pty Ltd [2018] VSC 511, [22].

[26] A copy of the Remuneration Report is Exhibit GNH-56 to the Eleventh Affidavit.

[28] (1998) 20 WAR 96.

[30] First Remuneration Judgment, [64]; Second Remuneration Judgment, [66]; Third Remuneration Judgment, [23].