- Ide v Ide

Quantification of the SPRs' remuneration

I am satisfied that the Court has jurisdiction to make the further orders now sought under s 283HB(1) of the Corporations Act or r 26.4 of the Uniform Civil Procedure Rules 2005 (NSW) or in the Court's inherent jurisdiction, and I note that Gleeson JA formed the same view in respect of the earlier remuneration application by the SPRs in Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) [2017] NSWSC 540 ("Banksia 3") and I took that view in Banksia 4 above.
The principles relevant to an application of this kind were also summarised by Gleeson JA in Banksia 3 above, which I applied in Banksia 4 above. His Honour there noted that common bases for calculation of remuneration included time-based charging and a commission based on percentage of recoveries, and that the approach to be adopted is directed to securing reasonable remuneration in the circumstances. His Honour referred (in Banksia 3 at [39]) to the observations of Young CJ in Eq in Ide v Ide [2004] NSWSC 751; (2004) 184 FLR 44 as to the role of the Court in dealing with such an application, and to the further observations of Branson J in Wenkart v Pantzer [2005] FCA 1572 and of Barrett J in Mohamed v Hurstville Tower Medical Clinic Pty Ltd (in liq) [2006] NSWSC 4 at [9]. His Honour also noted the analogy with the factors specified in s 425 of the Corporations Act as relevant to the Court's power to fix the remuneration of a person appointed as a receiver of a corporation's property under a power contained in an instrument.
In Banksia 3 above, Gleeson JA also referred to the Court of Appeal's decision in Sanderson, as liquidator of Sakr Nominees Pty Ltd (in liq) v Sakr [2017] NSWCA 38; (2017) 93 NSWLR 459; (2017) 343 ALR 524; (2017) 118 ACSR 333 and summarised the principles which arose from Bathurst CJ's judgment in that case (at [44]-[46]) as follows: "First, the onus is on the special purpose receivers to establish that the remuneration claimed is reasonable. It is the function of the Court, here under s 283HB of the Corporations Act, to determine the remuneration by considering the material provided and bringing an independent mind to bear on the relevant issues: Sakr at [54]. Second, many of the factors in s 425(8), in particular, pars (d)-(e) and (g)-(h) can be seen to have as their unifying theme the concept of proportionality. The question of proportionality in terms of work done as compared with the size of the property the subject of the insolvency 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) 108 ACSR 545; (2015) FCAFC 137. The work done must be proportionate to the difficulty and importance of the task in the context in which it needs to be performed. This is what is encompassed in assessing the value of the services rendered: Sakr at [55]. Third, the mere fact that the work performed does not lead to augmentation of the funds available for distribution does not mean that the special purpose receivers are not entitled to be remunerated for it. In the present case, the Trustee fee application and the time spent consulting with the committee of creditors on various issues, including obtaining approval of the special purpose receivers' remuneration will not result in the augmentation of the funds available for distribution. 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 the work: Sakr at [57]-[58].
I also observed in Re Idylic Solutions Pty Ltd as trustee for Super Save Superannuation Fund [2016] NSWSC 1292 ("Idylic Solutions") (at [58]) that it is not the role of the court, as constituted by a judge, to undertake a line by line review of the relevant narratives in an insolvency practitioner's billing record, but I there reviewed the relevant narratives in a broad way in order to satisfy myself that they supported the other evidence led in respect of the claimed remuneration. Gleeson JA adopted the same approach in Banksia 3 above at [48] and I also adopted that approach in Banksia 4 above. I have also taken that approach in this case.
Mr Redwood also refers to the summary of the applicable principles for court approval of remuneration by Brereton J in Re Say Enterprises Pty Ltd [2018] NSWSC 396 at [6] as follows: "The remuneration of court-appointed receivers is provided for by (NSW) Uniform Civil Procedure Rules 2005, r 26.4 but drawing on the qualifications expressed in later cases, the relevant principles may be restated as follows: (1) A receiver is entitled to the costs, charges and expenses properly incurred in the discharge of the receiver's ordinary duties, or in the performance of extraordinary services that have been sanctioned by the Court. (2) The ultimate question is what amount of remuneration is 'reasonable', and this involves considering whether the work in respect of which remuneration is claimed was reasonably undertaken in the due course of the receivership, and whether the amount claimed for it is a fair and reasonable reward for it. The objective is to award a sum or devise a formula which will reasonably and fairly compensate the receiver for the time and trouble expended in the execution of his or her duties and the responsibility he or she has assumed. (3) The receiver bears the onus of justifying the reasonableness and prudence of the tasks undertaken for which remuneration is sought, and the reasonableness of the remuneration claimed for them. (4) Remuneration may be allowed on the basis of a fixed salary, a commission on receipts, or a quantum meruit having regard to the time, trouble and responsibility involved. It is a matter for the Court to determine what basis is appropriate in the particular case, having regard to the principle that the remuneration must be reasonable. (5) If a time-based approach is adopted, the Court is guided by professional scales of charges, with emphasis on the broad average or general rate charged by persons of the relevant status and qualifications who carry out the relevant type of work. The Court will usually act on time sheets created in the receiver's office, provided that they do significantly more than merely detail the total number of hours spent by the receiver and officers of particular grades on his or her staff. (6) By analogy, the task involves consideration of the matters referred to in Corporations Act, s 425(8), which applies to receivers appointed under an instrument, namely: (a) the extent to which the work performed by the receiver was reasonably necessary; (b) the extent to which the work likely to be performed by the receiver is likely to be reasonably necessary; (c) the period during which the work was, or is likely to be, performed by the receiver; (d) the quality of the work performed, or likely to be performed, by the receiver; (e) the complexity (or otherwise) of the work performed, or likely to be performed, by the receiver; (f) the extent (if any) to which the receiver was, or is likely to be, required to deal with extraordinary issues; (g) the extent (if any) to which the receiver 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 receiver; (i) whether the receiver was, or is likely to be, required to deal with: (i) one or more other receivers; or (ii) one or more receivers and managers; or (iii) one or more liquidators; or (iv) one or more administrators; or (v) one or more administrators of deeds of company arrangement; (j) the number, attributes and behaviour, or the likely number, attributes and behaviour, of the company's creditors; (k) if the remuneration is ascertained, in whole or in part, on a time basis: (i) the time properly taken, or likely to be properly taken, by the receiver in performing the work; and (ii) whether the total remuneration payable to the receiver is capped; (l) any other relevant matters. (7) Many of those factors - in particular, pars (d)-(e) and (g)-(h) - have as their unifying theme the concept of proportionality (being the relationship of the work done and the remuneration claimed to the value of the estate), which is an important consideration in determining reasonableness. (8) It will rarely be appropriate for a Judge to review a decision of a Registrar on remuneration on an item-by-item basis. (9) In respect of disbursements, no Court approval or specific order is necessary in the absence of a challenge, although receivers should scrutinise them to ensure that they are reasonable and properly payable, and the Court has an inherent jurisdiction to review receivers' disbursements as they are officers of the Court. However, a receiver may seek a direction that he would be justified in paying certain disbursements in order to obtain prior protection in respect of such a disbursement." [footnotes omitted]
I now turn to the evidence on which the SPRs relied in this application. By his first affidavit dated 16 October 2018, Mr Lindholm, who is one of the SPRs, set out the background to the application, and referred to the approval of the settlement and the Approval Appeal. Mr Lindholm exhibited a remuneration report summarising the remuneration incurred in the special purpose receivership and referred to the calculation of remuneration on a time-costing basis, at rates that he considered are in line with market rates for firms of similar size and capability to his firm, and reflected the experience, seniority and capability of relevant staff. While that evidence is plainly not conclusive, it provides some support for the remuneration claimed. Mr Lindholm noted that the vast majority of the SPRs' remuneration during the relevant period fell within the categories of "Investigations" and "Creditors", and related to the continuing prosecution of the BSL proceedings and the Approval Appeal and dealings with a committee of inspection and debenture holders in relation to those matters. Mr Lindholm also summarised the broad categories of work for which remuneration had been incurred in the relevant period.
Mr Lindholm's affidavit referred to further evidence which had been served in the BSL proceedings during the relevant period, and to his involvement, with members of his staff, in the preparation of reply evidence and giving instructions to solicitors in that period and the partial settlement of the proceedings, subject to court approval, to which I referred above and the appeal against the approval of that settlement. Mr Lindholm also referred to the approval of his remuneration by the committee of inspection, for the relevant period, with one member of the committee opposing that resolution on the basis that he supported Ms Botsman's appeal and contended that the SPRs' remuneration should be considered after that appeal. By his further affidavit dated 1 November 2018, Mr Lindholm referred to the delivery of the Court of Appeal's judgment in the Approval Appeal and to correspondence with the committee of inspection, including, inter alia, advising it of that judgment.
By his affidavit dated 2 November 2018, Mr Samuel Kingston, a solicitor acting for the SPRs in respect of the BSL proceedings, referred to correspondence with the Australian Securities and Investments Commission ("ASIC") in relation to this application. Mr Kingston identified two matters that had been noted by ASIC, which are not material to the determination of this application. By a further affidavit dated 5 February 2019, Mr Kingston referred to the remittal of proceedings for the approval of commission claimed by the funder of the Bolitho proceedings and other matters to another judge of the Supreme Court of Victoria and to the conduct of the remittal proceedings. Mr Kingston also referred to the application by the funder of the Bolitho proceedings for special leave to appeal the Court of Appeal's judgment to the High Court of Australia. The funder does not, it appears, challenge the Court of Appeal's conclusion that the commission and legal fees that it claimed should not have been approved, but now seeks to set aside the orders made at first instance and on appeal that approved the settlement of the Bolitho proceedings, on the basis that any settlement of those proceedings was conditional on approval of its commission and legal costs. Mr Kingston's evidence is that, although the funder had not sought to set aside approval of the settlement of the BSL proceedings brought by the SPRs, the settlement of the claims made against TrustCo by BSL and Mr Bolitho were inter-related, and a successful appeal by the funder would bring the settlement of the BSL proceedings to an end. Mr Kingston also referred to the responses of several parties who opposed the application for special leave to appeal, and to further communications by the SPRs with the committee of inspection and debenture holders.
Mr Redwood submits, and I accept, that the amount of remuneration sought by the SPRs in this application is relatively modest, having regard to the significance of the responsibilities that the SPRs had assumed in the conduct of complex proceedings, and the advantageous result which they had achieved for debenture holders, in the settlement against TrustCo and other recoveries, which will be further improved if the amount of commission and legal fees claimed by the funder of the Bolitho proceedings can be moderated as a result of the remittal in the Supreme Court of Victoria. Mr Redwood also submits, and I accept, that the approval of the remuneration sought in this application by the committee of inspection is a relevant matter, although not conclusive.
Mr Izzo, as contradictor, did not take issue with the SPRs' claim for remuneration in respect of the bulk of work identified in Mr Lindholm's affidavit. He specifically took no issue in respect to the claim for remuneration concerning the conduct of the BSL proceedings, a settlement reached with the underwriters to Insurance House in those proceedings, general attendances, including in relation to a GST liability of BSL, and remuneration attributable to dealings with the committee of inspection and debenture holders. Mr Izzo submitted, and the SPRs accepted, that a correction to the SPRs' comparison of the amount of their remuneration to the amount of realisations, but also accepted that that percentage was of limited importance in this case. That position was well-founded, where there is no suggestion that time-charging is not appropriate, subject to the issue as to remuneration for the Approval Application and Approval Appeal addressed below; there is no dispute that it was reasonable for the SPRs to do the work they did and that the remuneration sought is proportionate to the complexity of that work; and the amount of the SPRs' remuneration is in any event a relatively small proportion of their recoveries under the corrected calculation proposed by Mr Izzo.
I am satisfied that, subject to the issue as to the remuneration for the Approval Application and Approval Appeal that I address below, the work undertaken by the SPRs was reasonably necessary and involved exceptional complexity, having regard to the scope of the BSL proceedings. The complexity of the issues with which the SPRs were required to deal was well beyond the ordinary and they accepted a significant degree of responsibility in that regard. I recognise that a significant amount of work was done by Mr Lindholm personally, and is claimed at the higher charge-out rate applicable given his seniority. That is not surprising, given the nature of the issues that the SPRs were addressing at this stage of the proceedings, including progressing the potential settlements of the several proceedings. The extent of recoveries which they have achieved is such that the remuneration claimed represents a small proportion of those recoveries, and time-based remuneration is significantly more favourable to debenture holders than would be a charge based on a proportion of recoveries. I am satisfied that it is appropriate that the SPRs' remuneration be determined on a time-charging basis and in the amount claimed in these particular circumstances.
Notice of this application has also been given to ASIC. ASIC advised that it did not object to the relief sought in the application. I infer, from ASIC's position, that nothing in the material provided to it has caused it to form the view that any aspect of the application requires regulatory intervention or warrants the making of submissions before the Court: Idylic Solutions above at [6]; Banksia 3 above at [23]; Banksia 4 above at [4].
For these reasons, subject to the issue as to the Approval Application and Approval Appeal that I address below, I would make an order in the form sought, that the remuneration of the SPRs for the period 1 October 2017 to 31 August 2018 is approved and fixed in the sum of $387,852 plus GST.

Whether any deduction should be made for issues arising in the settlement of the Victorian proceedings

Mr Redwood posed the relevant question as to whether disentitling conduct has been established, such as to deprive the SPRs of remuneration to which they would otherwise be entitled, and submitted that a high hurdle must be passed to establish such conduct. In opening submissions, Mr Redwood submitted that, while aspects of the Approval Application and the Approval Appeal and certain features of the relevant settlement deed (implicitly, referring to the SPRs' obligation to support the settlement, including the commission and fees claimed by the funder of the Bolitho proceedings, to which I refer below) were controversial, there is "nothing approaching the kind of disentitling conduct" by the SPRs that would warrant denying them their reasonable remuneration for the work undertaken. Mr Redwood also submits that, in assessing whether there was disentitling conduct of the SPRs, the court must not make that determination with hindsight, and should recognise that the question of the propriety of the amounts sought by the funder was not the primary or sole responsibility of the SPRs, and should also recognise that the proceedings in respect of the approval of the settlement in the Supreme Court of Victoria displayed unusual, or at least novel, features.
As contradictor, Mr Izzo submitted that the proper approach, in determining the extent of the SPRs' remuneration, to the extent that an issue arises as to their conduct of the settlement process, is to determine what would be a "fair and reasonable reward" for the work they have done, having regard to that issue: Re Anderson Group Pty Ltd; Mann v Anderson [2002] NSWSC 764; (2002) 20 ACLC 1607 at [12]; Re Banksia 3 above at [40]. It is not necessary to determine whether the approach proposed by Mr Redwood or that proposed by Mr Izzo is correct, where both would lead to the same result on the findings that I reach below.
Mr Izzo submitted that the conduct of the SPRs had contributed to the need for remittal of issues by the Court of Appeal for further hearing at first instance in the Supreme Court of Victoria. Mr Izzo submitted that the SPRs had a particular obligation to protect the interests of debenture holders and assist them in recovering the amounts they had lent to BSL under the debentures. The SPRs have proceeded on that basis, although their appointment as SPRs by this Court was defined in a more specific fashion. Mr Izzo submitted that the SPRs' obligation to act in the interests of debenture holders extended to ensuring that the reasonableness of costs incurred by Mr Bolitho's legal representatives was tested, particularly in the light of the risk of overlap with costs of conducting the BSL proceedings and having regard to the extent to which the conduct of the BSL proceedings had contributed to the settlement. Mr Izzo also submits that the significance of these points could not have been lost on the SPRs, and points to the fact that the legal fees claimed by the funder were almost the same as the legal costs incurred by the SPRs, although there were reasons to think that the SPRs had borne the much greater part of the burden of the conduct of the proceedings.
In their submissions, the SPRs accept that their obligation to act in the interests of debenture holders extended to ensuring that the reasonableness of the costs claimed by Mr Bolitho's lawyers was tested and that the amounts claimed required scrutiny, but point out that there were several mechanisms for that scrutiny, including a requirement that the funder provide an external cost consultant's report as to whether the costs had reasonably been incurred, and that the claim for costs would be scrutinised by the Supreme Court of Victoria, in circumstances that the SPRs disclosed their own costs to the Court, so that it could assess the relativities between the costs incurred by the SPRs and those incurred by Mr Bolitho. Mr Redwood also submits that the SPRs proceeded on the reasonable understanding that the substantial funding commission claimed by the funders would be scrutinised by the Supreme Court of Victoria. There is no suggestion that that did not occur.
It is convenient to deal first with a wider question raised by Mr Izzo, whether the SPRs' agreement to cll 3.10 and 3.11 of the relevant settlement deed, by which the SPRs undertook to support the application by the funder of the Bolitho proceedings for commission and reimbursement of legal costs, neglected the interests of debenture holders, where a higher commission and legal costs payable to the funder would lower the ultimate return to debenture holders. Mr Izzo fairly acknowledges that Mr Lindholm's evidence was that: "The terms of the [settlement] deed including as to the distribution of the settlement sum, represent the best possible outcome that could be achieved in all the circumstances and after extensive negotiations." (Lindholm 9.1.18, [9(b)]).
Mr Lindholm was not cross-examined and it was not suggested that he was incorrect in that assessment. Mr Izzo fairly recognises that Mr Lindholm's evidence suggests that the support required by those clauses was a necessary condition of any settlement. Mr Izzo submits that the Court need not make findings about that matter where, if the SPRs had no choice but to accept those clauses, the appointment of a contradictor was an alternative means to ensure that the amounts sought for legal costs and funding commission were properly tested. I will address the position as to the appointment of a contradictor below. Mr Redwood puts the position in respect of cll 3.10 and 3.11 of the settlement deed more strongly, asking the Court to infer that the provisions were required by the funder, and represented Mr Lindholm's commercial judgement that they were necessary to secure the benefits to debenture holders from the wider settlement.
It seems to me plain from Mr Lindholm's evidence that the SPRs considered they needed to give the commitment in cll 3.10 and 3.11 of the settlement deed to secure that settlement, and there is no reason to doubt that proposition. It is not to the point to say that it ought not to have been necessary for them to do so, had the funder of the Bolitho proceedings or Mr Bolitho's legal representatives taken a different approach. It is not self-evident that it would have promoted debenture holders' interests for the SPRs to allow the opportunity for settlement of the BSL proceedings to be lost, by refusing to give that commitment, particularly where the return to the funder of the Bolitho proceedings and the legal fees claimed by Mr Bolitho's legal representatives would be subject to court scrutiny in due course.
Mr Izzo, fairly, notes that the SPRs' written submissions in the Approval Application at first instance in the Supreme Court of Victoria had properly pointed out that the Court would need to closely scrutinise the payments sought to be made for funding commission and legal costs, and that the SPRs had not been provided the costs report for which Mr Bolitho had claimed confidentiality and did not know the basis on which it was contended that the costs claimed by Mr Bolitho were reasonable. Counsel for the SPRs also went further in the Approval Application, to draw the Court's attention to Ms Botsman's submission that the funder's commission would amount to a potential windfall. Mr Izzo submits, however, that these were not a "substitute for ensuring that a proper contest on the issue of legal costs and funding commission occurred so that debenture holders might potentially benefit from an increased return".
As Mr Izzo recognises, the SPRs had identified the relevant issues (albeit, I interpolate, in a measured way) in the hearing of the Approval Application. Ms Botsman's submissions had also emphasised those issues, pointing to the possibility that the funder was obtaining a windfall of more than $7.5 million, by comparison with the result that would follow if recoveries were apportioned between the BSL proceedings and the Bolitho proceedings, in the manner that had been adopted in an application to approve an earlier settlement also heard in the Supreme Court of Victoria. To the extent that these matters should have been apparent to the SPRs, as Mr Izzo contends, there is no reason to think that they were not also apparent to the other parties in the application for settlement approval, or to the Court, or that the SPRs needed to do more than they did to identify them as matters that warranted the Court's attention. There is also no reason to think that these matters did not receive that attention, notwithstanding that different results were reached in the Approval Application and the Approval Appeal in respect of the approval of the funder's commission and the legal fees claimed by Mr Bolitho's legal representatives.
Mr Izzo also submits that it was within the power of the SPRs to ensure that these issues were adequately addressed at the hearing of the Approval Application, by asking the Court at first instance to appoint a contradictor. Mr Izzo fairly recognises that Ms Botsman's written submissions had identified the need for a contradictor and that Mr Pitman's oral submissions in the hearing of the Approval Application had emphasised the need for a contradictor, with particular reference to the payment sought for the funder's commission and legal costs claimed by Mr Bolitho's legal representatives. Mr Izzo also fairly acknowledges that the judge hearing the Approval Application had expressed a preliminary view, after Mr Pitman's oral submissions, that a contradictor need not be appointed. Mr Izzo fairly acknowledges that the SPRs' submissions in the hearing of the Approval Application had identified the absence of a contradictor, had then accepted that the appointment of a contradictor was a matter for the Court and had indicated the SPRs would not oppose that appointment if the Court was of the view that it could be assisted by it, but submits that that position gave no reason for the Court to depart from the preliminary view that it had previously expressed. Mr Izzo also points to the possibility that the Court would have made such an appointment in the Approval Application had the SPRs more strongly put the need for such an appointment.
Mr Redwood responds, with some force, that Mr Izzo's submission that the appointment of a contradictor was an "obvious" course reflects a degree of hindsight. He also submits, also with substantial force, that the suggested "obviousness" of that course means there is less, rather than more, reason to criticise the SPRs for not more strongly urging that course upon the Supreme Court of Victoria, when the objectors had already strongly done so. Mr Redwood also advances several submissions as to the approach adopted by the judge hearing the Approval Application to the appointment of a contradictor, and refers to his Honour's finding in his reasons for judgment that that would be a "gratuitous waste of limited resources now available for distribution to debenture-holders". I do not consider it necessary to address those aspects of his Honour's reasoning in order to determine this application.
Mr Redwood also submits that the question whether a contradictor was required was a matter of practice or procedure, or case management, and in the discretion of the judge who was hearing the Approval Application. Mr Redwood also submits that, under Part IVA of the Supreme Court Act 1986 (Vic), the Court would exercise vigilance and scrutiny in hearing the Approval Application and, I should emphasise, there is no suggestion that the Court at first instance did not do so, although the Court of Appeal reached a different result. Mr Redwood also identifies the several relevant matters that were brought to the attention of the Court by the SPRs, and, I again add, there is no reason to think that the Court did not have regard to those matters. Mr Redwood also points out, importantly, that the judge hearing the Approval Application had particular familiarity with the issues at stake in the BSL proceedings and the Bolitho proceedings, where he was case managing those proceedings as the trial judge.
I do not consider that I can find that the position adopted by the SPRs, which noted the possibility of the appointment of a contradictor but did not strongly support it, was causative of the events that followed. The question of a contradictor was squarely raised, including by Ms Botsman and Mr Pitman, who made reasoned submissions in that respect. It does not seem to me that there was anything that the SPRs could have put in favour of the appointment of a contradictor that Ms Botsman and Mr Pitman had not already put, or that the submission in favour of that appointment would have been more persuasive, merely because it was put by the SPRs rather than by Ms Botsman's representatives in writing or Mr Pitman orally.
Mr Izzo also raises, properly in a tentative way, the possibility that some part of the time and costs of the Approval Appeal and the consequent remitter might have been avoided had a different course been taken by the SPRs. Mr Redwood submits that the submission that the time and costs of the appeal "might have been avoided" had the SPRs urged the appointment of a contradictor involves several levels of speculation and should not be accepted. Mr Redwood also submits that, even if that had occurred, the appeal would still have occurred, had the Court not approved the costs and funding commission claimed by Mr Bolitho and the funder, and the costs now incurred on the remittal stage would also have been incurred in the scrutiny of costs and the funding commission by the contradictor and in the Approval Application.
It seems to me that there is little prospect that the costs of an appeal would in fact have been avoided, where there is every prospect that Ms Botsman would have appealed a decision that allowed the funder's commission and legal costs of the Bolitho proceedings in full, as she did. While Mr Izzo points to an observation made by Mr Pitman, in submissions, that he and Ms Botsman (who was not represented at that hearing) would withdraw their objections if a contradictor were appointed and considered the settlement fair and reasonable to debenture holders. I do not doubt that submission was made in good faith, but it does not seem to me that it would have bound Ms Botsman. It also seems to me that there was every prospect that the funder of the Bolitho proceedings would have appealed a decision adverse to its recovery of the substantial funding commission or legal fees that it claims, noting that it is now seeking special leave to appeal to the High Court from the decision of the Court of Appeal, albeit in a somewhat different context. There is no reason to think that the position taken by the SPRs increased legal costs in that respect, if an appeal was likely or inevitable in any case.
Mr Redwood also points out, and I accept, that the remittal to the Supreme Court at first instance is also unlikely to have increased the legal costs incurred, because it will involve that Court now taking the steps which would have been taken in the initial Approval Application, had a contradictor been appointed when that course was proposed by Ms Botsman or Mr Pitman in the Approval Application, or if it had been more strongly pressed by the SPRs.
On the premises (which I have not accepted) that some part of the costs of the appeal and the remitter might have been avoided had a contradictor been appointed, and the failure to seek the appointment of a contradictor involved neglect of the SPRs' duties to protect the interests of the debenture holders, Mr Izzo submits that it is open to the Court to conclude that the SPRs should not receive the entirety of the remuneration they claim. Mr Izzo submits the possibilities would be to disallow some or all of the remuneration sought by the SPRs in respect of the conduct of the Approval Application; to disallow the remuneration sought in respect of the conduct of the Approval Appeal; or to disallow, at a future point when it is sought, any remuneration sought in respect of the remitter ordered by the Court of Appeal. Mr Izzo tentatively submitted that the preferable course was to allow the SPRs' remuneration for preparation of the Approval Application, which had to be done in any event, but to disallow their remuneration in respect of the hearing of that application and in respect of the Approval Appeal, and leave their remuneration in respect of the remitter for consideration at a future time. Where I have not accepted either premise of Mr Izzo's submission, it is not necessary to determine the extent of any reduction which might have been appropriate, had I accepted its premises.
Mr Izzo also submits that the SPRs' position is not improved by the fact that the Court of Appeal ordered that they have their costs of the appeal as costs in the special purpose receivership, and made no order as to costs for or against them, where the conduct of the appeal was undertaken by the SPRs in pursuance of their duties, and, he submits, the appeal might have been avoided had the appointment of a contradictor been sought. Again, I do not accept that submission. As I have noted above, it does not seem to me that the SPRs' position in respect of the appointment of a contradictor was causative of subsequent events, where the case for that appointment had been clearly articulated, and the SPRs had not opposed it and I have not accepted that the appointment of a contradictor would have avoided the need for an appeal, which was likely to have occurred in any event.

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