Royds v Royds, in the matter of Caloola Holdings Pty Ltd

ORDERS ACD 24 of 2010 IN THE MATTER OF THE MATTER OF CALOOLA HOLDINGS PTY LTD (IN LIQ) ACN 000 822 462 BETWEEN: STEPHEN DAVID MOLYNEUX ROYDS Plaintiff

ANNE LOUISE CLIFTON Second Plaintiff

SUSAN LINDA FRASER Third Plaintiff

WILLIAM JAMES MOLYNEUX ROYDS Fourth Plaintiff

AND: WILLIAM JAMES MOLYNEUX ROYDS Defendant

IN THE FIRST INTERLOCUTORY APPLICATION: BETWEEN: WILLIAM JAMES MOLYNEUX ROYDS Applicant

AND: HENRY JOSEPH KAZAR IN HIS CAPACITY AS LIQUIDATOR OF CALOOLA HOLDINGS PTY LTD (IN LIQ) ACN 000 822 462 Respondent

IN THE SECOND INTERLOCUTORY APPLICATION: BETWEEN: HENRY JOSEPH KAZAR IN HIS CAPACITY AS LIQUIDATOR OF CALOOLA HOLDINGS PTY LTD (IN LIQ) ACN 000 822 462 Applicant AND STEPHEN DAVID MOLYNEUX ROYDS First Respondent ANNE LOUISE CLIFTON Second Respondent SUSAN LINDA FRASER Third Respondent WILLIAM JAMES MOLYNEUX ROYDS Fourth Respondent

JUDGE: GRIFFITHS J DATE OF ORDER: 30 JUNE 2017

1. The fourth respondent's appeal against the liquidator's Notice of Rejection of formal Proof of Debt or Claim be allowed in the sum of $7,276.50 and be included in the amount in Order 4(b) below.
2. The parties' costs of the interlocutory application filed on 20 April 2017 be part of the costs, charges and expenses of the winding up.
3. The liquidator's remuneration be set at $54,390.50 plus GST.
4. The liquidator distribute the available assets of Caloola Holdings Pty Ltd (In Liquidation) A.C.N. 000 822 462 (the Company) as follows: (a) In application to the liquidator's expenses, including approved remuneration and the costs in respect of the proceedings. (b) In payment of the fourth respondent's proof of debt, including but not limited to the amount of $7,276.50 as referred to in Order 1 above. (c) The cumulative preference shareholders of the Company in accordance with the value of their paid-up capital registered with the ASIC as follows: (i) Mr Stephen Royds: $4,170.00 (ii) Ms Anne Clifton: $4,170.00 (iii) Ms Susan Fraser: $4,170.00 (iv) Mr William Royds: $4,170.00 (d) The remaining assets be distributed between the Company's shareholders in accordance with their respective shareholding entitlements as follows: (i) Mr Stephen Royds: 30% (ii) Ms Anne Clifton: 20% (iii) Ms Susan Fraser: 20% (iv) Mr William Royds: 30%
5. Subject to the distribution of assets in accordance with Order 4 above, pursuant to s 480(d) of the Corporations Act 2001 (Cth) the liquidator be released and ASIC deregister the Company upon the liquidator notifying it that Order 4 has been satisfied.
6. The parties' costs of the interlocutory application filed on 12 April 2017 be part of the costs, charges and expenses of the winding up and payable in accordance with Order 4(a). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GRIFFITHS J: 1 The Court is asked to determine two interlocutory applications which arise in the context of the liquidation of Caloola Holdings Pty Ltd ACN 000 822 462 (Caloola). The first interlocutory application, filed on 20 April 2017, is brought by Mr William James Royds, who challenges inter alia the decision of Caloola's liquidator (Mr Henry Kazar) to reject the sum of $7,276.50 from Mr Royds' proof of debt. 2 The second interlocutory application, which was filed on 12 April 2017, is brought by Mr Kazar in his capacity as liquidator of Caloola. Mr Kazar seeks the Court's determination that his remuneration as liquidator: (a) for the period 27 August 2013 to 22 July 2016 be fixed in the amount of $51,990.50 plus GST; and (b) for the period 23 July 2016 to completion of the winding up be approved up to an amount of $12,400 plus GST. 3 Mr Kazar also seeks orders: (a) which would authorise him to distribute the available assets of Caloola in specified ways; (b) under s 480(d) of the Corporations Act 2001 (Cth) (the Act) that, as liquidator, he be released and Caloola be deregistered by ASIC; and (c) an order that the costs of his interlocutory application be part of the costs, charges and expenses of the winding up. 4 Before dealing with each of the interlocutory applications, it is desirable briefly to outline some relevant background matters. Mr Kazar was appointed liquidator of Caloola by order of the Court made on 13 July 2011. Prior to that time there were four liquidators of Caloola, all of whom were directors and shareholders of the company and are all related to each other. They are Mr William Royds, as well as his brother Mr Stephen Royds and his sisters Ms Anne Clifton and Ms Susan Fraser. It should be noted that the liquidation conducted by Mr Kazar has taken almost six years to reach this point. 5 The company was initially placed into voluntary liquidation on 25 August 2008, at which time the four persons described above were appointed as joint liquidators. 6 Caloola had the following three assets: (a) cash in the amount of approximately $200,000, held by a firm of solicitors in Goulburn; (b) land referred to as Lot 1 of DP 125418 in the Parish of Seymour, County of St Vincent, via Majors Creek in NSW (Lot 1); and (c) land referred to as Lot 192 of DP 755934 in the Parish of Elrington, County of St Vincent, via Majors Creek (Lot 192). 7 The joint liquidators were unable to agree upon the sale of Caloola's land assets and in June 2010 three of them (not including Mr William Royds) commenced proceedings in the Court. They sought an order removing the four liquidators as joint liquidators and appointing Mr Kazar as sole liquidator. The plaintiffs also sought an order that the costs of the application be treated as costs of the liquidation, to be paid from assets of the company. Mr Royds was the sole defendant and he actively opposed the orders sought by his fellow liquidators. He filed several affidavits in support of his defence. On 13 July 2011, Registrar Wall made orders as substantially sought by the plaintiffs. They included an order (Order 3) that the costs of the application be costs of the winding up. On 19 July 2011, Mr Royds filed an interlocutory application seeking a review of "the whole of the order of Registrar Wall dated 13 July 2011". That interlocutory application was subsequently withdrawn by consent in early September 2011 and Mr Royds agreed to pay the party-party costs of the plaintiffs in relation to his interlocutory application. 8 It is convenient to note at this point that orders had previously been made by the Registrar on 6 September 2010 following an application by the same three liquidators (not including Mr William Royds) relating to the sale of Lots 1 and 192. An order was also made at that time that all legal fees, costs and valuation associated with the orders concerning the sale of those assets and the proceedings, except where otherwise ordered, be paid from the assets of the company. 9 It might further be noted, by way of background, that orders were made in respect of the liquidator's applications under s 473(3)(b)(ii) of the Act to fix his remuneration for the periods 13 July 2011 to 14 June 2012 and 14 June 2012 to 26 August 2013 respectively. Those orders were made on 15 August 2012 and 18 October 2013 respectively. Mr William Royds filed an amended application for extension of time and leave to appeal, dated 14 November 2016, from the orders made on 15 November 2013. This application was dismissed by Jagot J on 22 February 2017. 10 It is convenient to now address the two interlocutory applications.

Mr Royds' interlocutory application 11 In September 2016, Mr William Royds lodged a formal proof of debt with the liquidator. It was in the total amount of $17,008.50. On 31 March 2017 the liquidator issued a Notice of Rejection of Formal Proof of Debt or Claim under sub-regulation 5.6.54(1) of the Corporations Regulations 2001 (Cth). The liquidator admitted invoices in the total amount of $8,349.00 but rejected invoices in the amount of $7,276.50. The balance of the proof of debt ($1,383.00) was also rejected on the basis that it was unsupported by invoices. The Notice was accompanied by an annexure which identified various invoices from counsel and solicitors in the total amount of $7,276.50, which had been supplied by Mr Royds in support of his proof of debt. The liquidator stated in the annexure to the Notice in relation to each of these invoices that Mr Royds had not established the nexus between the legal expenses incurred and their relevance to the Court's order dated 6 September 2010. In the case of one of the invoices, Mr Kazar stated that the legal fees of the solicitor were incurred subsequent to his appointment as liquidator of the company. 12 Mr Royds appeals against the liquidator's rejection of his claim in relation to legal fees amounting to $7,276.50. In his affidavit in support dated 19 April 2017, Mr Royds submitted that that amount is a debt owing to him on a proper reading of paragraph 3 of the Court's orders dated 13 July 2011. Mr Royds' submission relies upon a different order of the Court (ie an order made on 11 July 2013) than that referred to by the liquidator in rejecting these claims (ie. an order made on 6 September 2010). Paragraph 3 of the orders made on 13 July 2011 is in the following terms: 3. The costs of this application be costs of the winding up. 13 As noted above, the orders made on 13 July 2011 related to the application brought by the other three joint liquidators of Caloola. Mr Royds was the unsuccessful defendant in that proceeding. The plaintiffs sought to have the four joint liquidators removed and replaced by Mr Kazar. They were successful. It was in this context that Registrar Wall made the order for costs set out in [12] above. Order 3 substantially reflect the order sought in the originating application filed on 15 June 2010, in which the plaintiffs sought an order "that the costs of and incidental to this application to be treated as costs of the liquidation, to be paid from the assets of the company". 14 The legal fees sought by Mr Royds appear on their face to relate to the proceedings in relation to the originating process, having regard to the date of the fee notes and their contents. The liquidator did not suggest that the legal fees were unreasonable. 15 The issue is a simple one of the proper construction of Order 3. I consider that Mr Royds' construction is to be preferred. It would have been a simple matter for the Registrar to express the order in different terms if it was intended that only the plaintiffs' costs be covered by the order. In my view, Mr Royds' reasonable legal costs also fall within the terms of Order 3 and the liquidator was wrong to reject this aspect of his proof of debt.

Mr Kazar's interlocutory application 16 The liquidator's interlocutory application is made under provisions of the Act which have now been repealed, but there is no dispute that the application was validly brought having regard to relevant transitional provisions. The liquidator also seeks relief that he distribute the available assets of Caloola in specified ways, including payment of his remuneration, Mr Royds' proof of debt and to the shareholders of Caloola. 17 It is desirable to set out some of the relevant provisions of the Act which bear upon the Court's determination of a liquidator's remuneration. 18 Section 473(3) of the Act sets out the relevant provisions concerning the remuneration of liquidators. It provides as follows: 473 General Provisions about liquidators … (3) A liquidator is entitled to receive such remuneration by way of percentage or otherwise as is determined: (a) if there is a committee of inspection - by agreement between the liquidator and the committee of inspection; or (b) if there is no committee of inspection or the liquidator and the committee of inspection fail to agree: (i) by resolution of the creditors; or (ii) if no such resolution is passed -by the Court. 19 In the circumstances of this matter, s 473(3)(b)(ii) is the relevant provision. 20 Section 473(5) empowers the Court to review the liquidator's remuneration in certain circumstances and s 473(10) identifies matters to be taken into account by the Court in exercising its powers under ss 473(3) and (5). It is in the following terms: (10) In exercising its powers under subsection (3), (5) or (6), 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 performed by the liquidator was reasonably necessary; (b) the extent to which the work likely to be performed by the liquidator is likely to be reasonably necessary; (c) the period during which the work was, or is likely to be, performed by the liquidator; (d) the quality of the work performed, or likely to be performed, by the liquidator; (e) the complexity (or otherwise) of the work performed, or likely to be performed, by the liquidator; (f) the extent (if any) to which the liquidator was, or is likely to be, required to deal with extraordinary issues; (g) the extent (if any) to which the liquidator 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 liquidator; (I) whether the liquidator was, or is likely to be, required to deal with: (i) one or more receivers; or (ii) one or more receivers and managers; (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 liquidator in performing the work; and (ii) whether the total remuneration payable to the liquidator is capped; (l) any other relevant matters. 21 Section 504 of the Act is the applicable remuneration provision for voluntary winding up generally and entitles any member or creditor or the liquidator at any time before deregistration of the company, to apply to a court to review the amount of the remuneration of the liquidator. Section 504(2) provides for the same matters to be taken into account as those referred to in s 473(10). Similar provisions are made in respect of the Court's power to fix the remuneration of receivers and administrators (ss 425(8) and 449E(4)). It is well established that the same principles are to be applied in fixing remuneration under each provision: Templeton v Australian Securities and Investments Commission [2015] FCAFC 137; 108 ACSR 545 (Templeton) at [28]. 22 Each of these provisions was inserted into the Act by the Corporations Amendment (Insolvency) Act 2007 (Cth). The background to the provisions and key changes to the legislation were described in the Explanatory Memorandum: 4.87 In Stockford [at para 2] [Korda, in the matter of Stockford Ltd [2004] FCA 1682; 140 FCR 424] the court called for 'closer judicial scrutiny [of administrators] fees'. In order to allow a more effective role for the court in reviewing and setting remuneration for insolvency practitioners, the Bill will provide greater guidance to the court by identifying relevant factors for consideration in setting remuneration. Key changes 4.88 The Corporations Act will be amended to require a court to give consideration to a number of factors when setting or reviewing the remuneration of an insolvency practitioner. 4.89 Relevant factors that the court must consider in setting remuneration include: [The Explanatory Memorandum then set out the matters referred to in s 473(10) of the Act]. 23 The relevant principles concerning the determination of a liquidator's remuneration are to be found in cases such as Templeton and the recent decision of the NSW Court of Appeal in Sanderson as Liquidator of Sakr Nominees Pty Limited (in liquidation) v Sakr [2017] NSWCA 38 (Sakr). They may be summarised as follows: (a) the liquidator carries the onus of persuading the Court that his claimed remuneration is reasonable, taking into account the relevant matters set out in s 473(10) (Sakr at [54] per Bathurst CJ); (b) it may be expected that, in discharging that onus, the liquidator will supply sufficient material to enable the Court to assess whether a remuneration claim is reasonable and that such material would be chosen by reference to the matters referred to in s 473(10) (Sakr at [54] per Bathurst CJ); (c) the Court must critically consider a liquidator's proposed remuneration with a view to satisfying itself that there is a commercial justification for the work undertaken by the liquidator, bearing in mind that the liquidator's primary purpose is to maximise return to creditors and not to maximise his or her own remuneration return (Warner, in the matter of GTL Tradeup Pty Ltd (in liq) [2015] FCA 323 (Warner) at [70] per Farrell J); (d) whether remuneration is reasonable cannot invariably be assessed solely by reference to time costing based on reasonable market rates or because it represents a particular percentage of the return which creditors achieve. Rather, each claim to remuneration must be evaluated on its own merits. In determining the value of the liquidator's work, consideration should be given not only to the absolute return to creditors but also to whether the work for which remuneration is claimed was necessary to be done (Warner at [71], as approved in Sakr at [57] per Bathurst CJ); (e) in an appropriate case, a question of proportionality may arise in considering the question of reasonableness of the liquidator's remuneration. Several of the factors in s 473 "have as their unifying theme the concept of proportionality" (Sakr at [55] per Bathurst CJ). In Templeton, the Full Court recognised at [32] that 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 obtained from the work is an important consideration in determining reasonableness; (f) the mere fact that work performed by a liquidator does not lead to augmentation of the funds available for distribution does not mean that the liquidator is not entitled to be remunerated for it, such as where work is done to comply with statutory obligations (Sakr at [57] per Bathurst CJ); (g) work may be undertaken in an unsuccessful attempt to recover assets and the liquidator should be remunerated for undertaking such work provided that it was reasonable to carry out the work and the amount charged for it was reasonable (Sakr at [58] per Bathurst CJ); (h) the practice of time-based charging has been criticised in several decisions largely on the basis of the fact that time spent represents a measure not of the value of the services rendered but rather of the costs of rendering them and also on the basis that time spent is only one of several factors to be considered (see, for example, Sakr at [59] per Bathurst CJ); (i) nevertheless, it is the Court's ultimate responsibility to fix reasonable remuneration on the basis of the evidence before it, taking into account the relevant matters referred to in s 473(10), which involves an evaluative process and may, in an appropriate case, take into account time-based charging (Sakr at [59] per Bathurst CJ); and (j) that is not to say, however, that time-based charging will always be appropriate (Sakr at [60] per Bathurst CJ. 24 There is another relevant feature in this case. It relates to the fact that, on 10 May 2017, Mr Royds filed a notice of objection to the liquidator's claim for remuneration. He objected to "each and every item of costs" on the ground that all items claimed "are unnecessary, excessive, exaggerated, double-ups from previous items claimed, not incurred and should never [have] been incurred in the proper course of the liquidation. They are unnecessary, frivolous, excessive, in some cases nonexistent and unjustifiable". It is notable that these claims were not particularised. 25 Mr Royds also filed an affidavit in support of his objection. He deposed that at the time of Mr Kazar's appointment as liquidator, Caloola's assets were about $200,000 cash in the bank and two small rural holdings, each of which he said had "signed contracts for their sale". 26 In respect of Lot 192, Mr Royds set out in his affidavit his knowledge of access roads to that property. He deposed that the western access to the land "is along what I believe a surveyed road and it has been the primary access rout (sic) from the village of Majors Creek to Deep Creek and other places since the 1850's gold rush". He said that he and his family had used the north, west and eastern access roads to Lot 192 during the period from about 1970 until 2012 and that there "has never been an access issue to Deep Creek". Mr Royds complained that Mr Kazar had never contacted him about the matter and that, if he had, he would have explained to him both the access roads and what Mr Royds described as "the previous potential buyers for the properties". Mr Royds said that he had only ever been contacted by Mr Kazar for the purpose of his claims for remuneration. 27 In his written outline of submissions in support of his interlocutory application, Mr Kazar indicated that, at the hearing, he would seek an order that his remuneration be set at $64,390.50 plus GST without reference to any future remuneration. He explained that this was because he had already incurred fees in excess of the capped amount. 28 Mr Kazar submitted that the Court should determine that his claimed remuneration was reasonable taking into account the following matters: (a) the work he undertook as described in the Remuneration Report was necessary in order to administer the company's liquidation in a proper and orderly manner and in accordance with Act; (b) the work has been performed over an almost four year period; (c) he has performed "quality work"; (d) the work has been complex; (e) he investigated and secured the sale of Caloola's land, "which lacked practical and legal access"; and (f) his claim for future remuneration was initially capped at $12,400 plus GST in circumstances where his time records show remuneration on an hourly basis totalling $23,281.50. 29 The Remuneration Report referred to above is a reference to a document titled "Remuneration Approval Request Report" which is attached to Mr Kazar's affidavit dated 17 August 2016. The Report was prepared in support of Mr Kazar's remuneration approval request. In the Report, Mr Kazar explained why he had chosen a time-based/hourly rates approach to remuneration, as opposed to a fixed fee, a percentage or a contingency basis. He said that the method chosen by him was appropriate to this particular administration because: (a) it ensures that creditors are only charged for work that is performed and that the time he and his staff spent on the matter is recorded and charged in six minute increments; (b) he was required to perform several tasks which do not relate to the realisation of assets, such as responding to shareholder inquiries, reporting to ASIC and distributing funds in accordance with the Act; and (c) he was unable to estimate with certainty the total amount of fees necessary to complete all tasks required in the administration. 30 The report also noted that prior approval had been given by the Court to a total remuneration in the amount of $31,904.00 and that approval was being sought in respect of his remuneration for the period 27 August 2013 to 22 July 2016. He noted that his estimated fees for completion of the liquidation "have increased primarily due to the additional resources required to realise the Company's residual property located at Lot 192… and also in dealing with potential creditor claims". In his description of work completed during the relevant period (27 August 2013 to 22 July 2016), Mr Kazar stated that a total of 43 hours (with a remuneration value of $20,630.00) had been expended on the sale of real property, which is presumably a reference to Lot 192 because Lot 1 was sold well before the period covered by the Remuneration Report. He identified the work as involving such matters as review of documentation relating to access issues; liaison with and instructions to solicitors concerning a possible application for an easement in the Supreme Court; consideration of topographic maps, instructions to a surveyor and site attendance to consider access issues; consideration of cost/benefit analysis of road build and consultation with relevant parties; liaison with a property valuer and agents; extensive liaison with solicitors, relevant government authorities and neighbouring landowners; drafting of correspondence to shareholders; engagement of and instructions to a property agent; review of sale and purchase contracts; receipt and account of funds from the sale of real property and finalisation of the sale. 31 It is relevant to note in this context that the sale of Lot 192 was finalised in mid-2016 and the sale price was $50,000.00. For reasons which I will develop shortly, I consider that this starkly raises an issue of proportionality, given that the claimed remuneration exceeds $20,000.00 in relation to the sale of an asset for $50,000.00. 32 The liquidator emphasised that Mr Royds had not particularised his objections notwithstanding that the generalised nature of his objection was expressly raised at the directions hearing held on 21 April 2017. Nevertheless Mr Kazar was on notice from the contents of Mr Royd's affidavit filed on 10 May 2017 (at [5]) that his fees relating to access to Lot 192 were a matter of particular concern to Mr Royds. 33 Mr Royds represented himself and cross-examined Mr Kazar at some length. Mr Kazar acknowledged that, when he had consented to be the liquidator, he was a partner of a firm known as Kazar Slaven and that this firm had been taken over by Ernst & Young in October 2015. Mr Kazar was asked various questions concerning his knowledge of various time entries of various staff involved in the liquidation as set out in time cost reports annexed to his affidavits. Mr Kazar acknowledged that staff were responsible for entering the time they spent on particular matters and that their entries were subject to an internal review. 34 Applying the relevant principles set out above, and having regard to evidence of both Mr Kazar and Mr Royds, I am satisfied that the Court should make an order setting the liquidator's total and final remuneration at $54,390.50 plus GST (which represents a deduction of $10,000.00 from the proposed capped amount). I have taken into account the discount reflected in the liquidator's willingness to cap his fees in circumstances where his fees already exceed that amount. For reasons which I will develop shortly, however, I have concerns regarding the proportionality between the proposed amount claimed in respect of Lot 102 relative to the sale price in mid-2016 of $50,000.00. 35 Lot 1 was sold at auction on 26 May 2012 for $110,000 and settlement occurred in July 2012. The liquidator's work in relation to this matter was the subject of previous orders. 36 According to [17] of his affidavit sworn 21 June 2012, as at that time, the liquidator held the view that there were a number of access issues affecting the sale of Lot 192 which required he and his staff to spend considerable time in getting the property ready for sale. He considered that marketing could not commence until trafficable access to the land was established. Lot 192 was landlocked and primary access was via a rough formed track from the village of Majors Creek, which was difficult due to topography and was only generally available in dry weather conditions. He further explained that the track did not align in its entirety with the allocated Crown Road Reserve which traversed adjoining properties. He also said that the track was obstructed by a locked gate and that he had involved the NSW Land and Property Management Authority about its removal. 37 In [16] of his affidavit dated 19 September 2013, the liquidator described how, as at that time, he and his staff were continuing to liaise with National Parks NSW Department of Lands and the NSW Crown Lands Office in relation to obtaining an easement for the track which accessed Lot 192. At this time Mr Kazar remained of the view that "Lot 192 cannot be sold until right of way (easement) access is obtained". He described how, as at September 2013, the process of obtaining an easement had been underway for approximately 12 months and that the NSW agencies were unable to state when an easement would be granted. 38 Mr Royds submitted that there were common law easements affecting the land and that, in his view, they were sufficient. He submitted that there was an excessive and unnecessary amount of work done in relation to access issues affecting Lot 192. 39 As has been emphasised, the eventual sale price for Lot 192 in mid-2016 was $50,000.00. This figure was achieved after the liquidator and his staff were involved over a period of several years in seeking to address what was perceived by the liquidator to be issues relating to access which affected that asset. It is evident from the relevant time sheets that this issue occupied a considerable amount of time by Mr Kazar and those assisting him. It is also apparent that fees were charged in relation to this matter before the period the subject of the current application. As to the period 27 August 2013 to 22 July 2016, the liquidator seeks remuneration in respect of a total of 43 hours spent on this issue. This amounts to fees in excess of $20,000 being sought in relation to an asset which was ultimately sold for $50,000.00. 40 More than half (22.5 hours) of the 43 hours claimed by Mr Kazar in relation to Lot 192 during the relevant period were performed by Mr Kazar personally. Another 8.5 hours of the 43 hours were performed by two Senior Managers. Mr Kazar's hourly rate was the highest hourly rate listed in the schedule of rates for the relevant period and the hourly rate of the two Senior Managers was the third highest. Comparatively little work was conducted by more junior consultants with lower hourly rates, notwithstanding that many of the tasks for which fees were charged were relatively straightforward and involved things like arranging site visits, liaising with real estate agents regarding the property and inquiring as to the status of the matter with various third parties, including government agencies etc. 41 The issue of access to Lot 192 dragged on from at least 2012 to mid-2015. Mr Kazar explained the position in the Liquidator's Circular to Shareholders dated 25 February 2016. He said then that after "extensive liason with my legal advisors, relevant government authorities and neighbouring land owners", he had "reached a determination that it would not be commercial to continue with attempts to have the practical access route formally recognised as the legal access route". He referred to the costs and uncertain prospects if an application was made to the NSW Supreme Court for an easement, and that considerable cost was also likely to improve the existing route to make it suitable for two wheel drive access. He said that this determination was reached after a member of his staff attended the site with a surveyor, road builder and solicitor on 4 June 2015. He explained that the cost of building a road across the creek "would be absolutely prohibitive and that environmental issues would be likely to prevent this process being approved in any event". He also explained that the highest offer he had received under an expression of interest process was $50,000, which was the same value ascribed to the property in a valuation report provided previously by Doug Walker & Associates. Mr Kazar also stated that this valuer had confirmed that same value prior to the date of the Circular. He reported that the valuer told him that "in all probability, the property [valuation] has not changed". 42 In brief, therefore, it took more than three years for the liquidator to decide to sell the land "as is" and without resolving the access issues which took up so much time over several years. The sale price obtained was the same as the valuation that Mr Kazar originally received some years previously and prior to all the work which was done over a lengthy period in respect of the access issues. 43 In my respectful view, and without doubting the accuracy of the time cost reports in relation to this matter, the fees sought by the liquidator in respect of Lot 192 for the relevant period are disproportionate. It appears that the matter of access was allowed to drift over several years and has resulted in a claim for remuneration which is significantly disproportionate to the value of the asset. Accordingly, I propose to reduce the liquidator's fees in relation to this matter by $10,000.00. 44 The liquidator provided further detailed information in [25] and [26] of his affidavit sworn 17 August 2016 which described the work done since 26 August 2013 in relation to other aspects of the liquidation, including attending to shareholder inquiries and attending to Caloola's taxation obligations. 45 In his affidavit dated 10 April 2017, Mr Kazar described other work performed by he and his staff since 17 August 2016, which included work relating to his latest interlocutory application; receiving and determining Mr Royd's proof of debt; matters arising from Mr Royd's extension of time and leave to appeal application; preparing and lodging statutory forms with ASIC; attending to Caloola's taxation obligations and reconciling Caloola's banking account. Annexed to the liquidator's affidavits were itemised records recording work performed, the time taken and the person responsible for this work as well as disbursements. 46 Having reviewed this material I accept the liquidator's statement of opinion that the work undertaken in respect of matters other than Lot 192 were necessary in order to administer the liquidation of Caloola in a proper and orderly manner and in accordance with statutory requirements. 47 As noted above, the liquidator sought orders concerning the distribution of the available assets of Caloola. At the hearing, it was confirmed that this order was sought under s 511 of the Act in circumstances where the liquidation was part of a voluntary winding-up. Section 511 relevantly provides: 511 Application to Court to have questions determined or powers exercised (1) The liquidator, or any contributory or creditor, may apply to the Court: (a) to determine any question arising in the winding up of a company; or (b) to exercise all or any of the powers that the Court might exercise if the company were being wound up by the Court. … (2) The Court, if satisfied that the determination of the question or the exercise of power will be just and beneficial, may accede wholly or partially to any such application on such terms and conditions as it thinks fit or may make such other order on the application as it thinks just. 48 An application under s 511 is generally dealt with in the same way as when a company is being wound up by the Court under s 479(3) (see Dean-Wilcocks v Soluble Solution Hydroponics Pty Ltd (1997) 42 NSWLR 209 at 212; Re M F Global Australia Ltd (In Liq) [2012] NSWSC 994; 267 FLR 27 at [8] per Black J and Warner at [35]-[36] per Farrell J). It is well established that, under s 511, the Court will not generally give a direction where the matter relates to the making or implementation of a business or commercial decision, however, the Court may give such a direction where it will be of advantage in the liquidation, including where there is a prospect that the reasonableness of the liquidator's action may be challenged. Having regard to the history of this liquidation, I consider that that is the case here. Mr Royds performed the role of contradictor in respect of the liquidator's application. It is also relevant to note that notice of the liquidator's application was given to each of the directors and shareholders of Caloola. Only Mr Royds sought to participate in the application. Subject to the dispute relating to Mr Royds' proof of debt and his objection to the liquidator's remuneration, Mr Royds and his three siblings did not oppose the making of the order sought by the liquidator regarding distribution of the available assets. 49 In these circumstances, I consider that it is appropriate to make such an order. 50 As noted above, Mr Kazar also seeks orders under s 480 of the Act, which provides: 480 Release of liquidator and deregistration of company When the liquidator: (a) has realised all the property of the company or so much of that property as can in his or her opinion be realised without needlessly protracting the winding up, and has distributed a final dividend (if any) to the creditors and adjusted the rights of the contributories among themselves and made a final return (if any) to the contributories; or (b) has resigned or has been removed from office; he or she may apply to the Court: (c) for an order that he or she be released; or (d) for an order that he or she be released and that ASIC deregister the company. 51 Mr Kazar acknowledged that the finalisation of the liquidation application had mistakenly omitted notices required by r 7.5(2) of the Federal Court (Corporations) Rules 2000 (Cth) and that the contributories had not been allowed 21 days in which to object prior to the hearing date. At the hearing, however, the liquidator tendered an email dated 20 June 2017 from solicitors who acted for Mr Royds' three siblings. The email stated that their clients had given instructions that they did not intend to object to the release of the liquidator and that they did not wish to participate in the hearing. 52 Mr William Royds also confirmed at the hearing that he did not object to an order being made to release the liquidator and have ASIC deregister the company. 53 In those circumstances, I consider that it is appropriate to make the order sought by the liquidator under s 480.

Conclusion 54 For these reasons, orders will be made substantially in the terms sought by the liquidator in his interlocutory application filed on 12 April 2017, save that there will be a reduction of $10,000 by application of the concept of proportionality. Mr Royds did not oppose the order for costs sought by the liquidator in respect of that interlocutory application and I consider that such an order is appropriate. I certify that the preceding fifty four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths.