Pursuant to liberty to apply which was previously reserved to Mr Peter Hillig, as court-appointed receiver and manager of the assets and undertakings of Gandangara Local Aboriginal Land Council ("GLALC") and several other entities, Mr Hillig now applies for orders that he be discharged as a receiver and manager of several of those entities; that he be relieved, under s 14 of the Civil Procedure Act 2005 (NSW) from requirements in respect of preparing accounts in respect of each of those entities under r 26.5 of the Uniform Civil Procedure Rules 2005 (NSW); and for approval of his remuneration properly incurred in respect of the entities of which he has been receiver and manager.
This application is brought following an earlier application relating to the four continuing entities associated with GLALC. For the reasons set out in my judgment in that application ([2015] NSWSC 2011) ("my earlier judgment"), I made orders that Mr Hillig be discharged as receiver and manager of those entities and noted his intention to file an application under s 601AA of Corporations Act 2001 (Cth) for voluntary deregistration of several other entities associated with GLALC, and after that had been done, to seek his discharge as receiver and manager of each of those entities. In the event, it has emerged, for reasons to which I will refer below, that it is not practical to deregister those entities while they are in external administration and Mr Hillig now moves for his discharge as receiver and manager prior to the deregistration of those entities.
The application before me on the previous occasion was supported by an affidavit of Mr Hillig sworn 7 December 2015, which is to be treated as in evidence in this application, which included evidence that the receivership of the relevant entities had been completed. Mr Hillig also relies on his affidavit dated 10 March 2016 in support of this application. His further evidence is that ASIC will not proceed to deregister the remaining entities until the external administration of those entities is finalised. Mr Hillig notes that, given ASIC's position, he cannot complete the deregistration of those entities while he remains as receiver and manager and any application in that respect will need to be made by the relevant entities, or their member, after the receivership is finalised. He now seeks his discharge as receiver and manager prior to the deregistration of those entities.
In my earlier judgment (at [9]), I summarised the circumstances in which the Court may make an order for discharge of a court-appointed receiver and I need not repeat that summary. The evidence establishes that the purposes for which Mr Hillig was appointed had been completed, since four continuing entities associated with GLALC have been restructured, GLALC has been returned to the control of a new board, and the Minister for Aboriginal Affairs has not continued Mr Hillig's appointment as administrator of GLALC. I there noted that there was no reason to continue the receivership, so far as it was ancillary to Mr Hillig's appointment as administrator of GLALC and the other entities within the group. At that point, Mr Hillig was discharged as receiver and manager of these four continuing entities. There was no reason, at that point, that he could not also have been discharged as receiver and manager of the other entities associated with GLALC, although he had deferred seeking that discharge to proceed with their deregistration, as I have noted. Where it has now emerged that that deregistration of those other entities is not possible, until after he is discharged as receiver and manager, the matters to which I referred in my earlier judgment support his discharge as receiver and manager of those other entitites. Accordingly, I will make the first order that is sought.
Mr Hillig's also seeks dispensation with the requirement to prepare an account, in the manner contemplated by UCPR r 26.5. I reviewed the principles which were applicable to dispensing with such a requirement in my earlier judgment (at [12]) and noted that the Courts have made orders dispensing with that requirement on previous occasions, where the Court can be satisfied that the requirement is not necessary or would involve unreasonable costs, given other steps that have been taken. In Kerr, Re Angel's Castle Pre-School Pty Ltd (in liq) (No 2) [2012] FCA 57, Jacobson J, having referred to earlier authorities including Ide v Ide [2004] NSWSC 751; (2004) 50 ACSR 324, noted that the Court could dispense with the requirement for accounts where the cost of passing final accounts exceeded any benefit that would accrue from doing so.
The matters to which I referred in my earlier judgment support the dispensation that is sought. The accounts of the relevant companies have been audited, and the remuneration that is claimed by Mr Hillig, and the expenses which have been incurred in the receivership have been placed before and, as I will note below, approved by the board of GLALC, subject to a condition which has been satisfied. I had noted in my earlier judgment that those matters, and specifically the approval of Mr Hillig's remuneration by GLALC's board, would provide a strong case for dispensing with a requirement for the filing and passing of accounts, where that would simply duplicate the process of financial reporting which has already occurred in respect of the relevant entities. It seems to me that, consistent with the authorities to which I have referred, the Court should here dispense with the requirement for accounts, which would add little of substance to the financial reporting which has already occurred, and expose GLALC and its associated entities to the further costs of that process.
Mr Hillig also seeks the Court's approval of his remuneration in respect of each of the relevant entities. The remuneration of a court-appointed receiver may be approved by the Court which appoints that receiver: Australian Securities and Investments Commission v Lawrenson Light Metal Die Casting Pty Ltd [1999] VSC 500; (1999) 33 ACSR 288. The Court's role in determining an application for such remuneration was set out by Young CJ in Eq in Ide v Ide above at [39]ff and his Honour's approach was generally approved by Barrett J in Mohamed v Hurstville Tower Medical Clinic Pty Ltd (in liq) [2006] NSWSC 4 at [9], and his Honour there noted that the Court would typically not conduct such a review on a line by line basis. In Australian Securities and Investments Commission v Letten (No 23) [2014] FCA 985 Gordon J noted that such remuneration must be reasonable and properly incurred and can be calculated on the basis of time reasonably spent at specified rates, and that a receiver must provide sufficient information for the court to properly to assess the claim. I in turn followed that approach in Re Metal Storm Ltd [2015] NSWSC 1699 at [11] and in Re Wine National Pty Ltd [2016] NSWSC 4 at [13]-[16].
Mr Hillig's affidavit sets out a detailed analysis of the time spent, by reference to particular entities and by reference to particular staff members and also summarises the work which was done in respect of the related entities. The Court can have added assurance as to the reasonableness of the remuneration because of the internal processes of GLALC that have been adopted in reviewing it. A board meeting of GLALC, initially scheduled for 15 February 2016, which proceeded on 22 February 2016, was provided with details of the remuneration claimed in respect of the 12 companies, including the narrative of the work done and the breakdown of that remuneration by entity and the more detailed supporting information to which I have referred. The board of GLALC passed a resolution approving that remuneration at that meeting, subject to a further review by the New South Wales Aboriginal Land Council and its agreement that the remuneration was fair and reasonable. By letter dated 23 February 2016, GLALC requested the New South Wales Aboriginal Land Council to undertake that review and by letter dated 26 February 2016, the New South Wales Aboriginal Land Council indicated that its Executive Director, Financial Investments and Governance, had reviewed the amount and considered that the amounts claimed were fair and reasonable, and the Acting Chief Executive Officer of the Aboriginal Land Council recorded his view that the costs claimed were fair and reasonable on that basis satisfying the condition of the resolution passed by GLALC.
It is not necessary for me to review the costs claimed on a line by line basis, but I have regard to the nature of the work performed, the relatively modest amount of remuneration claimed in respect of the individual companies, and the relatively modest total amount of remuneration claimed, and I am also satisfied that the remuneration is properly claimed in the relevant circumstances. I am satisfied that, under s 425 of the Corporations Act and UCPR r 26.4 that the remuneration claimed by Mr Hillig in respect of each of the companies in the amounts claimed can properly be approved by the Court.
For these reasons I make orders in accordance with the short minutes of order, initialled by me and placed in the file. These orders can be entered forthwith.
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Decision last updated: 07 April 2016