Questions 7 and 8
106 I will deal with these two questions together. For convenience, I repeat them:
7. Does [s 562 CA] entitle [Mr Morgan] to deduct, from the Insurance Proceeds, [his] fees and expenses (including remuneration) incurred in determining the validity of claims in connection with the distribution of the Insurance Proceeds (including calling for and adjudicating on proofs of debts) and incurred in distributing the Insurance Proceeds to the rightful claimants?
8. [Mr Morgan's] costs of and incidental to this application be paid from the Insurance Proceeds.
107 As I understand it, there is no dispute to an affirmative answer being given to para [8] of the application. The insurance proceeds, of course, are the only asset of the Company, so that is the only source for payment of Mr Morgan's costs in relation to this application in respect of which he is entitled to be indemnified.
108 The main area of dispute insofar as ASIC is concerned (but not insofar as State is concerned as it makes no submissions) is the remuneration question.
109 First, it would be helpful to outline the scope of the issue. I have referred to s 562 CA above.
110 It is common ground, as I understand it, that s 562 CA, in effect for insurance policy proceeds, overrides the usual distribution regime specified in s 556 CA which is unnecessary to set out.
111 The evidence discloses that there are differing heads of costs and expenses relevant to the application. The first being, costs and expenses of and incidental to this application which are not contentious. The second is, costs and expenses of and incidental to 'getting in' the insurance proceeds (from s 562 CA) and, thirdly, to the extent they are not covered by the second description, costs and expenses associated with the assessment and distribution of the insurance proceeds.
112 Mr Morgan accepts that his remuneration is not encompassed by the word 'expenses': Re Beni-Felkai Mining Company Ltd [1934] 1 Ch 406 and Kardiasmenos v Pioneer Management Pty Ltd [2010] NSWSC 683 (at [39]). However, the argument is advanced that the costs and expenses fall within the expression 'the expenses of or incidental to getting in [the insurance proceeds]'.
113 Mr Morgan relies upon a decision of Young J in Butterell v The Douglas Group Pty Ltd (2000) 35 ACSR 398 in which a liquidator commenced proceedings to determine how reinsurance moneys should be dealt with pursuant to s 562A CA which provides:
562A Application of proceeds of contracts of reinsurance
(1) This section applies where:
(a) a company is insured, under a contract of reinsurance entered into before the relevant date, against liability to pay amounts in respect of a relevant contract of insurance or relevant contracts of insurance; and
(b) an amount in respect of that liability has been or is received by the company or the liquidator under the contract of reinsurance.
(2) Subject to subsection (4), if the amount received, after deducting expenses of or incidental to getting in that amount, equals or exceeds the total of all the amounts that are payable by the company under relevant contracts of insurance, the liquidator must, out of the amount received and in priority to all payments in respect of the debts mentioned in section 556, pay the amounts that are so payable under those contracts of insurance.
(3) Subject to subsection (4), if subsection (2) does not apply, the liquidator must, out of the amount received and in priority to all payments in respect of the debts mentioned in section 556, pay to each person to whom an amount is payable by the company under a relevant contract of insurance an amount calculated in accordance with the formula:
where:
particular amount owed means the amount payable to the person under the relevant contract of insurance.
reinsurance payment means the amount received under the contract of reinsurance, less any expenses of or incidental to getting in that amount.
total amount owed means the total of all the amounts payable by the company under relevant contracts of insurance.
(4) The Court may, on application by a person to whom an amount is payable under a relevant contract of insurance, make an order to the effect that subsections (2) and (3) do not apply to the amount received under the contract of reinsurance and that that amount must, instead, be applied by the liquidator in the manner specified in the order, being a manner that the Court considers just and equitable in the circumstances.
(5) The matters that the Court may take into account in considering whether to make an order under subsection (4) include, but are not limited to:
(a) whether it is possible to identify particular relevant contracts of insurance as being the contracts in respect of which the contract of reinsurance was entered into; and
(b) whether it is possible to identify persons who can be said to have paid extra in order to have particular relevant contracts of insurance protected by reinsurance; and
(c) whether particular relevant contracts of insurance include statements to the effect that the contracts are to be protected by reinsurance; and
(d) whether a person to whom an amount is payable under a relevant contract of insurance would be severely prejudiced if subsections (2) and (3) applied to the amount received under the contract of reinsurance.
(6) If receipt of a payment under this section only partially discharges a liability of the company to a person, nothing in this section affects the rights of the person in respect of the balance of the liability.
(7) This section has effect despite any agreement to the contrary.
(8) In this section:
relevant contract of insurance means a contract of insurance entered into by the company, as insurer, before the relevant date.
114 In Butterell v Douglas Group, Young J observed (at [64]):
Finally, there is the question of costs of these proceedings. As Mr Gleeson points out, the costs of the present application to the court by the liquidator for directions and orders are not strictly an "expense of or incidental to" the getting in of the reinsurance payments. I agree with that submission. However I consider that this matter is notorious enough not to be ousted by the words of the definition, and courts traditionally have the power to order that the costs of people bona fide disputing as to the distribution of a fund be paid out of that fund. It follows from this that the costs of the liquidator and the costs of the first defendant as representative defendant should be paid out of the fund. ...
115 In my view the reasoning of Young J is, with respect, correct. (Further, there is no reason, on this aspect, to distinguish an application under s 562 CA from an application under s 562A CA.) For those reasons, in my view, Mr Morgan should have costs of and incidental to the application.
116 The costs and expenses of 'getting in', assessing and distributing the insurance proceeds is more difficult. There was also a discussion of that question in Butterell v Douglas Group (at [55]-[62]).
117 The practical problem is that the getting in of the funds has already occurred and the real work to be undertaken is analysing the respective claims and deciding whether the claims, both within the group proceedings and potentially dormant unrepresented claims, should be treated pro rata.
118 ASIC and Mr Morgan have filed lengthy submissions on the topic of Mr Morgan's claim for remuneration from the insurance funds. (As the approach taken by Mr Morgan to this issue differed slightly on the hearing of the application, the parties were permitted the opportunity to file and serve submissions on the issue arising under s 562 CA.) The last of these submissions was received on 6 August 2013.
119 It is common ground that ordinarily 'expenses' would not include 'remuneration'. In Kardiasmenos, Barrett J noted (at [39]) that the distinction between a liquidator's remuneration and expenses that he or she incurs is clear and well recognised. The issue in that case (as indicated by Mr Morgan) was the distinction between remuneration and disbursements incurred by a liquidator, the former requiring approval but not the latter.
120 Mr Morgan argues that 'expenses' in the context of s 562 CA set out above is broad enough to encompass costs and charges by way of disbursements and actual remuneration. In support of that argument, reliance is placed on the structure of s 556 CA dealing with priority payments which, like s 562 CA, falls within subdiv D of Pt 5.6 headed 'Priorities'. Section 556(1)(a) provides:
556 Priority payments
(1) Subject to this Division, in the winding up of a company the following debts and claims must be paid in priority to all other unsecured debts and claims:
(a) first, expenses (except deferred expenses) properly incurred by a relevant authority in preserving, realising or getting in property of the company, or in carrying on the company's business;
…
121 It can be seen from s 556 CA that 'deferred expenses' means by reference to s 556(1C)(2) CA to include a relevant authority's remuneration. From this, Mr Morgan argues that it is clear that 'expenses', where used in s 556(a) would, but for the express exclusion of 'deferred expenses', include remuneration. If that were not so, it is argued, the carve out and deferral of priority of remuneration by the definition of 'deferred expenses' would be unnecessary. Mr Morgan argues that the cases relied upon in Kardiasmenos do not support an interpretation of 'expenses' in s 562 CA which would exclude remuneration. That is because those cases are concerned with whether the power to approve remuneration includes the power to approve disbursements. In each instance the focus is on the distinction between remuneration and other costs in the nature of disbursements which, on occasions, are, it is said, 'loosely', referred to as 'expenses'. Thus in Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96 it was held that the provisional liquidator's disbursements were not considered to be part of his remuneration and did not fall within the provision for court approval of remuneration. In Onefone Australia Pty Ltd v One Tel Ltd (2008) 69 ACSR 290 it was held that a committee of inspection had a role with respect to remuneration but did not in relation to disbursements. In Re Timeshare Resort Club Ltd (in liq) (2010) 187 FCR 13 Barker J held (at [41]-[44]) that the Court can only determine remuneration of the administrator under s 449E(1)(c) CA and such a concept does not include disbursements.
122 As noted above, in Onefone Barrett J used the word 'expenses' when referring to 'disbursements' but did (at [48]-[49]) note the proper ambit of 'expenses' as distinct from 'disbursements' under s 556(1) CA.
123 It follows therefore, according to Mr Morgan, that 'expenses' in s 562 CA should have a similarly broad ambit such that it includes remuneration. It is argued that nothing in s 562 CA suggests 'expenses' is to be given any narrower an ambit than it is given in s 556(1). Therefore, 'expenses of or incidental to getting in that amount' means remuneration and disbursements. Although the expression 'remuneration' is not used in Butterell v Douglas Group, nothing in the reasoning in that decision conflicts with the position that 'expenses' includes remuneration.
124 It is important, from a policy perspective, that it is clear that remuneration must be approved at some point as required by s 499(3) CA. In contrast, issues of quantum of expenses are not matters addressed by the Court at this stage. For those reasons, Mr Morgan argues that for the purpose of question 7, 'expenses' as that expression is used in s 562 CA includes the remuneration of the liquidator and staff.
125 This submission is strenuously opposed by ASIC.
126 ASIC argues that given that the word 'expenses' is to be given a meaning it would not normally have, it is necessary to consider statutory context, including the general purpose and policy of the provisions. In particular, the mischief that they are seeking to remedy. To do so, that the history of the particular provisions assists in working out the intended mischief that it is sought to be overcome. ASIC relies on the history of s 556 CA from Austin & Black's Annotations to the Corporations Act (LexisNexis), Ch 5 External Administration Pt 5.6 Winding Up Generally, Div 6 Proof and Ranking of Claims, subdiv D Priorities, where the learned authors say:
History and explanatory materials
[The] predecessors of this section include Companies Act 1929 (UK) s 264, Companies Act 1948 (UK) s 319, UCA s 292 (which was amended by the Companies (Amendment) Act 1971 to reverse aspects of the High Court's decision in Stein v Saywell (1969) 121 CLR 529; [1969] ALR 481; (1969) 43 ALJR 183…and further amended by the Companies (Amendment) Bill 1973 to confirm the priority of employees' right to payment in lieu of leave when a company goes into liquidation: see McEvoy v Incat Tasmania Pty Ltd (2003) 130 FCR 503; 46 ACSR 392; [2003] FCA 810…at [8] ff, CC s 441 and CL s 556. This section was amended by the CLRA 1992 to provide for ranking of the various components of the costs, charges and expenses of a winding up, implementing a recommendation of the ALRC General Insolvency Inquiry (Harmer Report); and s 556(1)(e) was amended by the CLRA 1992 to include a reference to superannuation contributions, to ensure that superannuation contributions were given the same priority as wages for the purpose of priority payments under s 556 (EM to the CLR Bill 1992 [905]-[906], [920]). As to s 556(1)(g), the ALRC General Insolvency Inquiry (Harmer Report) noted that the "reason generally put forward to support the priority given to debts due to employees is that they are in a particularly vulnerable position if their employer becomes bankrupt or is wound up" and that there was strong support for the retention of that priority ([721]-[727]). The terms "deferred expenses", "non-priority day", "official manager", "relevant authority", "spouse" and "superannuation contributions" were introduced in s 556(2) by the CLRA 1992: see EM to the CLR Bill [935]-[940].
Section 556(1)(ba) was introduced by the Corporations Amendment (Insolvency) Act 2007: see EM to the Corporations Amendment (Insolvency) Act [7.225]-[7.226]. Section 556(1)(e) was amended by the Corporations Amendment (Insolvency) Act 2007 to include the superannuation guarantee charge as well as superannuation contributions. Prior to that amendment, Superannuation Guarantee (Administration) Act 1992 s 52 (now repealed) provided for priority of the superannuation guarantee charge in a liquidation but did not confer the same priority on the superannuation guarantee charge as superannuation contributions had under s 556(1)(e): DP Excavation and Haulage Pty Ltd v Commissioner of Taxation (2005) 190 FLR 198; 54 ACSR 274; [2005] NSWSC 533… . Following the Corporations Amendment (Insolvency) Act 2007, the $2000 limit in s 556(1A) applies to the superannuation guarantee charge in respect of excluded employees as well as to wages and superannuation contributions, reversing the position in Deputy Commissioner of Taxation v Rathner (2004) 211 ALR 316; 50 ACSR 533; [2004] VSC 352… . The Corporations Amendment (Insolvency) Act 2007 also introduced s 556(1)(da) and 556(1AA); and introduced ss 556(1AB)-(1AF) to resolve uncertainty as to whether a superannuation guarantee charge arising after the date of a liquidator's appointment should be treated as having priority with post-appointment debts under s 556(1)(a) or with employee entitlements under s 556(1)(e).
127 ASIC starts with the history of the Australian Companies Legislation under the Companies Act 1961 (Cth) (the 1961 Act), s 292(1) which identified a priority for unsecured debts in an order that included:
(a) Firstly, the costs and expenses of the winding up including the taxed costs of a petitioner payable under s two hundred and twenty four, the remuneration of the liquidator and the costs of any audit carried out pursuant to section two hundred and eighty one …
128 ASIC stresses that what is important to the subsection it is the collocation of words 'the costs and expenses of the winding up' to which the extended definition was given, including 'remuneration of the liquidator' from which it may be taken that the liquidator's remuneration was something separate to the costs and expenses of the winding up. In terms of the regime in s 292(1) and its successor, s 441 of the Companies Code, the important change occurred following the recommendations of the Australian Law Reform Commission's General Insolvency Inquiry (Report No 45, 1988) (Harmer Report). At this time s 441(a) was in the same form as s 292(1) of the 1961 Act. The Harmer Report discussed the separation and reprioritising the costs, charges and expenses of administration using different expressions for the various terms. Following this the Public Exposure Draft and Explanatory Paper for the Corporate Law Reform Bill 1992 made specific reference to recommendations of the Harmer Report (at 550-552) and the recommendation that the exclusion of 'deferred remuneration' be defined separately and accorded later priority. It is suggested that 'deferred remuneration' was defined in terms to have an intended effect to exclude remuneration payable directly and indirectly to the liquidator, provisional liquidator or administrator, including professional fees of their partners and the salary or other costs incurred by them in paying their employees. There was a minor amendment to the terminology when it appeared on publication of the Explanatory Memorandum to the Company Law Reform Bill 1992 changing 'deferred remuneration' to 'deferred expenses'. The Explanatory Memorandum provided as follows:
Proposed paragraph 556(1)(a)
908. Proposed paragraph 556(1)(a) accords first priority to the expenses properly incurred by the 'relevant authority' (to be defined in subsection 556(2) as amended by paragraph 96(b) to mean a liquidator, a provisional liquidator, an official manager, an administrator of a company or an administrator of a deed of company arrangement) in preserving, realising or getting in the assets of the company or in carrying on the business of the company. Excluded from the priority to be accorded by paragraph (l)(a) will, however, be 'deferred expenses' (to be defined in subsection 556(2), as amended by paragraph 96(b) to mean remuneration or fees for services payable to the 'relevant authority'; expenses incurred by the relevant authority for the services of his or her partnership, employees or painters [sic]; and expenses incurred by the relevant authority that it is reasonable to expect that relevant authority or his or her partnership, employee or partner could have instead supplied). The effect of the exclusion will be to exclude remuneration payable directly and indirectly to a liquidator, provisional liquidator, official manager, administrator of a company or administrator of a deed of company arrangement, including the professional fees of their partners and the salary or other costs incurred by them in paying their employees or the employees of 'service' companies or other entities that may be interposed between them and the company that is being wound up.
909. However, the term 'expenses' is otherwise intended to have a wide meaning, to include all payments properly made by the liquidator, provisional liquidator, official manager, administrator of a company or administrator of a deed of company arrangement including the payment of the fees of persons such as solicitors, real estate agents and stocktaking agents who are independent of the liquidator, provisional liquidator, official manager, administrator of a company or administrator of a deed of company arrangement and who are engaged by them for the purposes of preserving, realising or getting in the assets of the company or carrying on the business of the company.
…
Proposed paragraph 556(1)(dd)
916. Priority is next accorded to any other expenses (other than deferred expenses) properly incurred by the liquidator, provisional liquidator, official manager, administrator of a company or administrator of a deed of company arrangement.
Proposed paragraph 556(1)(de)
917. Priority is next accorded to 'deferred expenses', namely the remuneration excluded from priority under proposed paragraph (l)(a).
…
'deferred expenses'
935. 'Deferred expenses' will be defined to mean remuneration or fees for services payable to the 'relevant authority' (also to be defined in subsection 556(2)); expenses incurred by the relevant authority for the services of his or her partnership, employees or partners; and expenses incurred by the relevant authority that it is reasonable to expect that relevant authority or his or her partnership, employee or partner could have instead supplied). The effect of the definition will be to classify as 'deferred expenses' remuneration payable directly and indirectly to a liquidator, provisional liquidator, official manager, administrator of a company or administrator of a deed of company arrangement, including the professional fees of their partners and the salary or other costs incurred by them in paying their employees or the employees of 'service' companies or other entities that may be interposed between them and the company that is being wound up.
129 From all of this detailed historical analysis, ASIC argues that history demonstrates that from time to time there have been adjustments in terminology to better suit a reordering of priorities that had hitherto existed in the 1961 Act and was reflected in s 441 of the Code. The connections between 'expenses' and 'remuneration' and various forms of expression have been specifically directed at facilitating the policy response to that priority issue. This was unaffected by the change from state based to federal based legislation following Re Wakim; Ex parte McNally (1999) 198 CLR 511.
130 ASIC refers to the Full Court decision in Adsett v Berlouis (1992) 37 FCR 201 where the Full Court (Northrop, Wilcox and Cooper JJ) said (at 209-210) in relation to a similar provision dealing with a trustee in bankruptcy:
A trustee in bankruptcy is governed by the general law relating to trustees save where the position of the trustee is modified by the Bankruptcy Act or Rules: see Re Ladyman (1981) 55 FLR 383 at 394-396. The Act confers no right on a trustee to be reimbursed in respect of the costs, charges or expenses incurred in the administration of the estate. The trustee's right to an indemnity is provided under the general law. Under that law a trustee is entitled as of right to a full indemnity out of the trust estate against all costs, charges and expenses properly incurred by the trustee: see Turner v Hancock (1882) 20 Ch D 303 at 305; Re Love,· Hill v Spurgeon (1885) 29 Ch D 348
at 350; Re Beddoe; Downes v Cottam [1893] 1 Ch 547 at 558.
A trustee's right to remuneration for his or her own efforts, as distinct from reimbursement of outgoings, is not conferred by the general law. A trustee, generally speaking, has no right to remuneration. Neither does the right to remuneration arise out of the indemnity in respect of "costs, charges or expenses". That collocation of words does not include the value of services provided by the trustee in administering the estate. The concepts of remuneration and outgoings are distinct. It is true that in some statutory provisions - for example, s 109 of the Bankruptcy Act - the trustee's remuneration is specifically included amongst the "costs, charges and expenses of the administration of the bankruptcy". But such special provisions, giving an extended meaning to "costs, charges and expenses", do not remove the conceptual dichotomy between remuneration and outgoings. Rather, they group the two concepts for the limited purposes of the relevant sections.
(emphasis added)
131 On the topic of the role of the liquidator specifically in relation to insurance proceeds which might be used to meet claims against a company by third parties, ASIC points to the joint judgment of Kirby and Hayne JJ in AssetInsure Pty Ltd v New Cap Reinsurance Corporation Ltd (in liq) (2006) 225 CLR 331 (at [79]-[80]) where their Honours said:
79 When this problem was first revealed, by the decision in In re Harrington Motor Co Ltd; Ex parte Chaplin, legislation was enacted to produce a different result. The Third Parties (Rights against Insurers) Act 1930 (UK) provided that the insolvent company's rights against the insurer under the contract in respect of the liability were transferred to and vested in the third party to whom the liability was incurred. Reinsurance arrangements were explicitly excluded from the operation of this provision. Section 1(5) of the Third Parties (Rights against Insurers) Act provided that:
"For the purposes of this Act, the expression 'liabilities to third parties,' in relation to a person insured under any contract of insurance, shall not include any liability of that person in the capacity of insurer under some other contract of insurance."
80 Australian companies legislation took a different path from that taken by the Third Parties (Rights against Insurers) Act. Rather than proceed by vesting the insolvent company's rights against the insurer in the third party to whom the liability was incurred, provision was made in the companies legislation for preferential treatment of such a liability. Thus, s 297(5) of the Companies Act 1936 (NSW) provided that:
"(a) Where the company is, under a contract of insurance, insured against liabilities to third parties, then in the event of any such liability being incurred by the insured (either before or after the commencement of the winding up) the amount of the liability so incurred shall upon being received by the liquidator be held by him in trust and be paid by him to the third party to whom such liability was incurred to the extent necessary to discharge any liability remaining undischarged.
(b) If the liability of the insurer to the insured is less than the liability of the insured to the third party, nothing in this subsection shall limit the rights of the third party in respect of the balance.
(c) The provisions of this subsection shall take effect notwithstanding any agreement to the contrary entered into after the commencement of this Act."
Provisions of this kind were to be found in Australian companies legislation until 1992. In 1992, the Corporate Law Reform Act 1992 (Cth) made two changes to the Corporations Law that are immediately relevant. First, it amended s 562 of the Corporations Law by excluding contracts of reinsurance from the reach of that provision. Secondly, it inserted s 562A. That section, in its terms, deals with contracts of reinsurance.
(footnotes omitted)
132 So ASIC submits that it would be a peculiar result if 'expenses' were to be read as remuneration for the purposes of the CA. Section 562 does not itself create any entitlement to payment but only for priority. It is necessary to look elsewhere in the CA, it is argued, for the creation of the entitlement to remuneration should 'expenses' have the meaning that Mr Morgan contends for.
133 As this was a creditors' voluntary winding up commencing before the Corporations (Amendments Insolvency) Act 2007 (Cth) on 31 December 2007, the entitlement to remuneration is to be found in s 499(3) CA as it stood prior to that date. The result is that where there is a committee of inspection in office, the task of fixing the liquidator's remuneration is for it alone. Only if there is no committee in office may the creditors as a body fix the remuneration: s 499(3) CA as it stood prior to 31 December 2007. The Court has no role in fixing the remuneration under s 499(3) CA apart from the process under s 499(3) breaking down or there being no committee or the committee failing to agree in which case there may be recourse under subs 511(1)(a) or (b) CA.
134 As ASIC notes, in terms of incurring 'expenses', Mr Morgan is in a fiduciary relationship with the Company's creditors. The committee of inspection approval route for remuneration under s 562 CA has a strange effect on the fiduciary relationship. Consent to the fiduciary's remuneration is not required from the very persons that are most directly affected by it. It would follow that if the argument advanced for Mr Morgan is correct, one would have to attribute intention to the legislature of a conflict laden process for the fixing of remuneration for the purposes of s 562 CA.
135 ASIC relies upon observations of Needham J in Saltergate Insurance Co Ltd and the Companies Act (No 2) [1984] 3 NSWLR 389, not referred to by Young J in Butterell v Douglas Group but referred to with apparent approval in Young, PW, Croft, C, Smith, ML, On Equity (Lawbook, 2009 at p 1012) without criticism. In Saltergate, Needham J dealt with a submission that the sum payable under s 292(5) could not be decreased in any way except for the deduction referred to in the subsection. It will be recalled that the deduction was for 'any expenses of or incidental to getting in such amount'. Justice Needham noted that the section included the words 'be paid by the liquidator to the third party in respect of whom the liability was incurred to the extent necessary to discharge that liability or any part of that liability remaining undischarged …' (emphasis added). Justice Needham considered (at 393) that the equitable principle in Cherry v Boultbee (1839) 4 My & Cr 442 is applicable when one comes to consider what is 'necessary to discharge the liability' which is the subject of the claim by the policy holder.
136 ASIC suggests that there is a distinction between s 562 and s 562A CA because the words 'to the extent necessary' (which appeared in s 292(5)) remain in the present version of s 562 CA but do not appear in s 562A CA. This would be explained by the complexity of reinsurance arrangements which prompted the need for s 562A CA in the first place. Instead of including the expression 'to the extent necessary', subs 4 and subs 5 of s 562A CA set out a separate statutory regime for adjustment based upon a 'just and equitable' criteria. Accordingly, ASIC argues that Butterell v Douglas Group is distinguishable. If it is authority for s 562A CA, it is not authority in respect of the operation of s 562 CA.
137 ASIC also contends that the more recent judgment of Barrett J in Re HIH Casualty and General Insurance Ltd (2005) 215 ALR 562 (at [100]-[102]) cast doubt on either the applicability or correctness of Butterell v Douglas Group. ASIC argues that Barrett J appears to have accepted that the principle in Re Universal Distributing Company Ltd (In Liq) (1933) 48 CLR 171 could be adopted by analogy in respect of the creation of funds for the purpose of s 562A CA such that Mr Morgan would be entitled to receive reasonable remuneration and expenses incurred with the assembling and preservation of the fund. There would remain the important distinction between remuneration and costs of the administration generally and those for assembling and preserving the subject property. Remuneration and costs of the administration generally would not fall within this principle. The liquidator could only claim in respect of work necessary for remuneration and costs reasonably incurred where there was a sufficient nexus with the salvage objective. Consistent with this, ASIC emphasises that the words 'getting in' point to the taking of possession of assets or proceeds which are in the possession of someone else: Australian Industry Development Corporation v Co-operative Farmers & Graziers Meat Supply Ltd (1978) 3 ACLR 543 (at 549).
138 'Incidental' would not be broad enough to extend to remuneration for work carried out after the 'getting in'. As a matter of ordinary English usage, ASIC points to the fact that incidental means, amongst other things, 'happening or likely to happen in fortuitous or subordinate conjunction with something else' or 'occurring or liable to occur in fortuitous or subordinate conjunction with something else of which it forms no essential part; casual'. In other words, it must be referrable at least to the object of 'getting in' the proceeds. Nothing in the words 'incidental to' would extend to the consideration of and disbursement of insurance moneys once they had been 'got in'.