Shanmugathaas & Anor v Paramanirupan & Ors

Two Couples and a Failed Property Development - 2013 to 2019

1. The plaintiffs and the defendants are two couples, who were once on friendly terms. The plaintiffs, Mr Sivapragasam Shanmugathaas and Mrs Suganthiny Shanmugathaas ("the plaintiffs"), and the defendants, Mr Sathyanparamatheva Paramanirupan and Ms Praveena Sathyanparamatheva ("the defendants") had a good relationship with one another, until 2013, when the idea emerged between them to develop a property together.

From Construction to Settlement Deed - October 2013 to December 2016

1. In October 2013, the defendants had contracted to buy a property in Wentworthville in western Sydney ("the property"), from its then owner. The defendants partially funded the purchase with a loan advance from Westpac Banking Corporation ("Westpac"). They became the registered proprietors of the property, subject to Westpac's first mortgage. The plaintiffs and the defendants formalised their mutual arrangement in a written document entitled "Joint Venture Agreement" ("the Agreement"), dated 6 October 2013, although this document was not actually signed until October 2014.
2. The Agreement provided for a simple structure. The defendants would complete their purchase of the property, which would then be redeveloped as a duplex. The two parts of the proposed duplex were simply named "Unit 1" and "Unit 2" of a duplex. The plaintiffs were to contribute the funds needed and much of the expertise for the development work. Upon completion of the development, the defendants would live in Unit 2. And Unit 1 would be sold to repay the monies contributed by the plaintiffs and enable the plaintiffs to realise their share of any profit from the venture. The defendants would benefit from the joint venture through their retention and enjoyment of Unit 2.
3. The Agreement provided that the joint venturers would sell Unit 1 immediately after obtaining the certificate of subdivision, or, if it were not sold, it would be immediately transferred to the plaintiffs after completion of the construction phase (clause 10). If the net sale proceeds from Unit 1 were insufficient to cover the total that was repayable to the plaintiffs under the Agreement, then the defendants were obliged to settle what was due to the plaintiffs by borrowing from a financial institution or by selling Unit 2 (clause 11). The Agreement had a curious dispute resolution clause (clause 12): that disagreements between the parties about whether the property should be sold would be resolved by the defendants accepting the plaintiffs' "determination or direction" in relation to the issue and "would act accordingly", provided the plaintiffs acted reasonably.
4. By September 2015, disputes had broken out between the two parties. The defendants questioned the extent of the plaintiffs' expenses on the development. At a later directions hearing, the defendants explained to the Court that they thought they had agreed with the plaintiffs on total construction costs of $500,000 for the development, but the plaintiffs had overspent by $250,000, bringing the total costs to $750,000. The plaintiffs wanted reimbursement of their expenses and to realise their profit. Despite their disagreements, the works were completed in December 2015. A final occupation certificate was issued in January 2016. The duplex subdivision was registered in March 2016.
5. The defendants moved into Unit 2 in July 2016. The parties continued to negotiate to try and resolve their differences. Both sides engaged lawyers. Mediation was attempted, but failed. Early unsuccessful attempts were made to sell Unit 1.
6. In October 2016, the plaintiffs commenced these proceedings, seeking relief in the nature of specific performance. They sought to compel the defendants to sell both Units 1 and 2, and to pay the sale proceeds into a jointly controlled bank account, or into Court, and to have an account taken to determine the final amount due to the plaintiffs. The defendants resisted this course, in part, because they did not want their continued family occupation of Unit 2 to be disturbed.
7. In late 2016, the parties settled their dispute, or at least they thought they had. In December 2016, they executed a "Deed of Settlement and Release" ("the Settlement Deed"), which provided for the sale of Unit 1 no later than 31 January 2017. Under the Settlement Deed, the defendants were obliged to notionally "purchase" Unit 2 from the joint venture, at a valuation to be determined by a valuer selected by agreement. The proceeds of these two sales were then to be paid into a jointly controlled bank trust account. This would allow the defendants to remain in occupation, provided they were able to pay the valuation price into the joint account.
8. The Settlement Deed provided a mechanism for the payment out to the parties of the amount held in the joint trust account. The mechanism involved an auditor appointed by the institute of chartered accountants, acting as an expert, to determine each respective parties' net entitlement, according to an agreed process.

The Settlement Deed Fails - January 2017 to July 2018

1. Unit 1 was sold. The notional purchase of Unit 2 did not proceed. But the auditors' work did not progress as expected. The parties agreed upon William Buck Business Recovery Services Pty Ltd ("William Buck") to conduct the audit. But they remained in dispute about precisely how the accounting was to be undertaken, and about the accounting treatment of particular items of expense and income.
2. On 23 February 2018, William Buck sent the parties an engagement letter containing proposed terms of retainer, including a proposed scope of work. The parties could not agree upon either. The defendants' notional purchase of Unit 2 stalled and they continued to occupy that unit.
3. After William Buck issued the draft engagement letter to the parties on 23 February 2018, extensive subsequent communication did not lead to agreement about the scope of the engagement of the independent expert. Disputation between the joint venturers became intense and spilled over into their communications with William Buck. This became very burdensome for William Buck. On 23 April 2018, Mr Sean Wengel of William Buck's office (who later appointed as one of the receivers) requested both parties to refrain from liaising with him, or his office, until they had agreed between themselves on a proper scope of engagement. Still no agreement emerged.
4. Tensions between the parties escalated. The defendants were occupying Unit 2. The plaintiffs had not realised their profit through accounting. So, the plaintiffs applied by motion to enforce the Settlement Deed: for the defendants to execute William Buck's engagement letter and for William Buck to define the scope of the work required to make a determination under the Settlement Deed.

Parker J Makes Orders - 10 July 2018

1. The matter came before Parker J in July 2018. The entrenched nature of the dispute, at that time, had already led to a senior manager at William Buck, Mr Paul Ritchie, withdrawing the proposed engagement letter of 23 February 2018, on the basis that the proposed scope of their work could not be agreed.
2. But as Parker J explained in his judgment on the plaintiffs' application, it became apparent that the Settlement Deed contained its own drafting deficiencies: Shanmugathaas v Paramanirupan [2018] NSWSC 1232, (at [13], [14] and [15]). The deficiencies included: whether or not the "dispute" to be resolved under the Settlement Deed went beyond the original construction dispute; whether William Buck could determine the extent of the dispute; and, whether William Buck had the authority to prepare accounts and tax returns.
3. Parker J overcame these deficiencies. His Honour took the practical view that, in substance, the parties were in a partnership, and the Court had broad powers under Partnership Act 1892 to give directions to them for the resolution of their differences and the winding up of the partnership's business. His Honour said he would take this course whether or not the parties agreed upon a particular mode of winding up, such as they had attempted in the Settlement Deed.
4. The parties accepted Parker J's approach and formulated consent orders that were made on 10 July. Mr Sean Wengel and Mr Robert Whitton, both from William Buck, consented to and were appointed as receivers. The orders were to the following effect: "The Court: 1. Declares that the plaintiffs and the defendants entered into a partnership agreement for the conduct of a property development project in accordance with a written agreement styled Joint Venture Agreement dated 6 October 2013 (JV Agreement). 2. Declares that: (a) the monies held in the joint trust account held on behalf of the parties by Warren & Warren in Westmead (Joint Trust Account); (b) Unit 30A in the development, represent property of the Partnership. 3. Note the agreement between the parties that if not already dissolved the Partnership is to be dissolved as at today's date. 4. Order that Messrs Sean Wengel and Robert Whitton of William Buck Business Recovery Services Pty Limited ABN 47 136 612 514 (the Receivers) be appointed as Receivers to wind up the Partnership. 5. The Receivers are directed: (a) to prepare accounts (including tax returns) for the Partnership in accordance with applicable Australian Accounting Standards; (b) to lodge any tax returns of the partnership which may be required; (c) to retain the services of the valuer agreed by the parties, namely Mark Ellis of Independent Property Valuations, to obtain a valuation of unit 30A in the development as at such date or dates as may be determined hereafter by the Court, and to conduct such preliminary inquiries and inspections as may be necessary or convenient in advance of such determination; (d) following the Court's determination and the obtaining of the valuation referred to in (c): (i) to afford the defendants the option to buy out the partnership's interest in unit 30A at the valuation so determined, the option to be exercised within 28 days of the notification of that valuation to the defendants and the purchase to be completed within 3 months of that notification. (ii) in the event that the defendants do not exercise the option in (i), to sell unit 30A; (iii) to report to the Court on what are the parties' entitlements by way of income and by way of share of the Partnership property on realisation; (e) for the purposes of producing the report referred to in Order 5(d)(iii), to afford to the parties an opportunity to make submissions, the form and timing of such submissions to be determined by the Receiver subject to any application which may be made to the Court. 6. Orders that the parties take such steps as are required to remit the monies in the Joint Trust Account to an account controlled by the Receivers within 7 days of the date of these orders. 7. Orders that the parties do all things necessary to enable the Receivers to comply with the directions herein provided; and in particular that in the event that the defendants do not exercise the option provided for in Order 5(d)(i) they vacate unit 30A within 28 days. 8. Orders that the Receivers be entitled to charge at the rates specified at the schedule attached to their instrument of consent dated 9 July 2018 but limited in total to $30,000 plus GST and disbursements. 9. Directs that the Receivers shall be entitled to draw on funds under their control to make payment of their fees and disbursements within 21 days after having given notice to the parties of their intention to do so. 10. Grants liberty to the Receivers to apply to the Court with respect to any further directions or guidance that may be required. 11. Orders that the costs of the proceedings be reserved. 12. Lists the proceedings for determination of the date of dissolution of the Partnership and the date or dates of valuations for the purposes of Order 5(c) on 27 July 2018 in the Duty List."
5. A critical feature of the 10 July 2018 orders was that the defendants had the option of buying out "the partnership's interest" in Unit 2 at the valuation determined by the appointed valuer within 28 days of notification of the valuation, with the purchase to be completed within three months. The receivers were also directed to prepare accounts in accordance with applicable accounting standards and to lodge partnership tax returns.

The Foundation for Parker J's Orders

1. The cap Parker J imposed in his 10 July 2018 orders was based on correspondence from the receivers, which was before the Court when the orders were made.
2. William Buck's Senior Manager, Mr Paul Ritchie, indicated in an email on 18 June 2018 that despite the emerging difficulties confronting completion of their task William Buck was "still prepared to provide an expert opinion" to the parties. But Mr Ritchie made clear in that email, that William Buck would only do that "once the parties or the Court agreed to a scope [of work], which at that point in time we will provide an updated engagement letter and fee estimate for the parties' consideration".
3. And that is what happened. On 9 July 2018, the day before Parker J's orders, Mr Ritchie wrote to the solicitors for both parties about a proposal to appoint them as receivers. William Buck suggested that "the following submission be made to the Court on our behalf": "* Should there be any funds pertaining to the Joint Venture which are currently being held on trust by either party, an order be made directing those funds to be remitted to an account under the control of the Receivers within 7 days; and * An order be made approving the Receivers remuneration to a limit of $30,000 plus GST, plus any disbursements that are necessary and proper (and the Receivers remuneration and disbursements can be drawn from the Trust monies once the fees have been properly incurred in the course of the Receivership);and * Liberty is reserved to the Receivers to apply to the Court with respect to any further directions in the event that it proves necessary (e.g. increasing the remuneration limit)."
4. This correspondence informed the making of the Court's 10 July 2018 orders and, in particular, the cap that Parker J imposed. It stated clearly enough that the idea of a $30,000 cap came from the proposed receiver themselves.

The September 2018 Correspondence

1. The receivers accepted their appointments and embarked upon their task. By mid-August 2018, the parties gave them copies of their receipts for development costs, the construction certificate, initial loan documents and spread sheets detailing the plaintiffs' development costs. By 25 September 2018, the receivers had concluded that this documentation was insufficient to calculate the parties' respective claims and determine their entitlements. They explained this situation back to the parties in a lengthy letter dated 28 September 2018.
2. Mr Wengel later explained in evidence that the receivers' post July 2018 task emerged as more complex than they had originally thought. He formed the view that the parties' mutually hostile conduct was contributing to the difficulty in the receivers' undertaking the scope of works within the budget. So the receivers raised the issue of remuneration in the 28 September correspondence. It might perhaps be observed that this was hardly new information for the receivers, given the difficulties William Buck had experienced in gaining consent to their 23 February 2018 engagement letter.
3. On 28 September 2018, William Buck wrote to the plaintiffs and the defendants, recording their appointment as receivers on 10 July 2018, and defining their three main tasks by reference to the Court's orders. The letter laid out the problems of task execution within budget that the receivers believed they then faced. Their tasks, and the anticipated problems, fell into the three main categories of work assigned to them on 19 July 2018: (1) the preparation of accounts; (2) the preparation and lodgement of tax returns; and (3) the preparation of an expert's report for the Court on the parties and entitlements.
4. As to the preparation of accounts, William Buck's 28 September 2018 letter identified issues that "will impact our ability to prepare the financial accounts and tax returns; lack of supporting bank statements to evidence project costs; the sheer volume of project costs being claimed; and conflicting evidence supplied to support the project costs". They reiterated a suggestion that the parties meet at their Parramatta office to discuss those issues. But the letter made clear that the costs only to prepare financial accounts was estimated in the range of $15,000 to $20,000, plus GST, and the likely timing to prepare those accounts would be approximately six (6) to eight (8) weeks.
5. As to the preparation and lodgement of tax returns, the receivers said that the partnership was likely to be required to be registered for GST and that historical BAS statements would need to be lodged. The receivers identified a potential GST liability on the sale of the duplex. They anticipated that, although they could not then currently quantify the cost of lodging the relevant tax returns until a meeting was held at the Parramatta office, "it is expected to be in excess of $10,000 plus GST".
6. As to the preparation of the expert report requested for the Court, the receivers indicated they would consider the parties' submissions, the valuation of Unit 2, and then provide their report. But they estimated that the "cost to prepare this report will be in the range of $20,000 to $25,000 plus GST". They indicated they would not prepare the report until the issues surrounding the accounts and the tax returns had been resolved.
7. The sending of this letter foreshadowed fees and charges that, if incurred, would breach the cap of $30,000 the receivers had invited and Parker J had imposed. The receivers were saying to the parties in this correspondence that the total likely cost in aggregate of undertaking the tasks on which they were engaged was in the range $45,000 - $55,000, a figure at least 50 per cent more than (and potentially almost double) their estimate given on the 10 July 2018. None of these figures were expressly said to include disbursements.
8. The 28 September 2018 letter set out the cost of the receivership clearly enough. But curiously, neither the receivers nor the parties expressly adverted at that time to the $30,000 cost cap that Parker J had imposed on 10 July 2018. Nor did the receivers' letter point out that their current estimate foreshadowed a breach of the cap and suggest that the parties apply to the Court to revisit the cap.
9. The receivers' letter of 28 September 2018 is deficient in failing to request what was then quite obvious: that the completion of the three tasks (accounts, tax returns and report to the Court) ordered on 10 July 2018 could not be completed within the cap imposed by the Court. A receiver is an officer of the Court, who is required to act in conformity with the duties of receivers. The question that immediately presented itself was should the receivers proceed under the current Court mandate. The receiver has a duty not to unnecessarily incur costs in the receiver's own applications to the Court but should retain neutrality and remain at arms-length in the litigation, and should prompt the parties to relist the proceedings to clarify the orders, so the parties, rather than the property in receivership, is charged with the cost of clarifying the position: In the matter of Gondon Five Pty Limited and Cui Family Asset Management Pty Limited [2019] NSWSC 469 ("Gondon"), (at [83] - [87]).
10. A receiver has no legitimate interest in whether or not the receiver's appointment is continued: Gondon, (at [92]). That is a matter for the parties and the Court. What should have happened shortly after 28 September 2018 is the receiver's letter should have been taken to the Court by the parties. The receiver would not have had to be present. The Court should have been asked whether or not the Court wanted the receivership to continue with the existing tasks, at the rates and upon the terms that it had been ordered on 10 July 2018.
11. The rapid increase in the cost of the receivership at this early-stage would probably have signalled to a Court looking at the matter then that further cost escalations were likely. The Court may well have questioned the parties as to whether they wanted to continue with such an expensive receivership at all.
12. But this opportunity was lost both by the parties and by the receivers. If, after requests by the receivers to the parties to relist the matter to clarify the position the receivers did not get cooperation from the parties, then it would have been reasonable for them to have sought to relist the matter for directions about their remuneration: for example, about whether the cap should be increased, about whether their fees should be constrained in other ways, or about whether the receivership should be terminated. There is ample power for the receivers to have sought directions concerning the continued discharge of their functions in these circumstances: Mariconte & Anor v Batiste (2000) 48 NSWLR 724, (at [75]); [2000] NSWSC 288.
13. But this opportunity was lost. The receivers did not seek to have the matter relisted in the absence of the parties having done so. They continued to act and incur fees. In my view, this was a regrettable default on their part. They seem to have taken the view that they would keep incurring fees, notwithstanding the cap, to a point where their original task would be both complete and the cap would be exceeded.

The Receivers Get to Work - October 2018 to February 2019

1. Notwithstanding the lack of any reference back to the Court to reconcile the tension between the Court's cap and the receivers' current work estimate, the receivers continued their work. On 16 November 2018, they wrote to the parties declaring that their remuneration for the period 10 July 2018 to 15 November 2018 totalled $15,069 (plus GST). They foreshadowed their intention to "draw on the funds under our control to make payment of the above-mentioned remuneration on Friday, 7 December 2018". Half the cap was already exhausted. Yet, there was no motion of the $30,000 cap and no request that the parties return to Court.
2. It is obvious from the receivers' commentary in this November 2018 letter, on work undertaken, that they were still some way off producing the report on entitlements, or completing any of the other tasks. It must have been obvious to the receivers by this time, that the $30,000 limit would probably be exceeded in their undertaking the report on entitlements alone. But as they had declared in their 28 September 2018 letter, they believed their report on entitlements should not be completed without the accounts and tax returns also being completed. But again there was no request that the parties take the matter back to Court.
3. The receivers wrote again on 14 January 2019 seeking reimbursement for further remuneration for the period 16 November 2018 to 10 January 2019 totalling $6,775 (plus GST), together with an invoice from their solicitors Messrs Coleman Greig.
4. This 14 January 2019 letter adverted for the first time to the limit imposed in the July 2018 orders, in a way that the 28 September and the 16 November 2018 letters had not. At the foot of this letter was a box which the receivers describe as "a summary of our remuneration". Against a line entry "total remuneration incurred to date" was the sum of $21,844 (being $15,069 + $6,775), up to 10 January 2019. The table concludes with the line entry "Remaining Fee Approval per July Orders" against which the number $8,156 appears: implying that only this balance remained of the permitted expenditure below the cap. The 14 January letter set out the tasks undertaken to date. But again, the tasks completed to that date were well short of those required to complete the accounts, the tax returns, or the report on entitlements.
5. By then, the parties were self-represented. The matter was next due to come back before the Court for directions on 4 February 2019. But the receivers merely commented in this 14 January letter, under the heading "Court Proceedings", that apart from complying with the 10 July 2018 orders they could not advise the parties. They concluded this letter by simply observing: "We understand that both parties are now self-represented in those proceedings and note that as we are not a party to the proceedings, we cannot provide any advice or commentary in respect to same other than to comply with the July Orders. Accordingly, it will be a matter for the parties to determine the next steps by consent or alternatively appear before the Court to make submissions."
6. Nothing was said by the receivers to request these unrepresented parties to raise at the directions hearing the looming need to lift the cap on receivers' fees, or to take some other course. Once again, the receivers must have anticipated a breach of the cap was imminent. The unrepresented parties were probably unlikely to appreciate that they should seek to vary the Court's orders unless prompted by the receivers. No attempt was made by the receivers to seek a variation to the Court's orders.

February and Early March 2019 - Directions Hearings and Further Correspondence

1. The Court held directions hearings in this matter regularly in February and the first half of March of this year. Ward CJ in Eq presided over four directions hearings on 5 February, 26 February, 12 March and 19 March 2019. The unrepresented litigants appeared in each of those directions hearings. In none of those directions hearings did the parties raise the issue of the cap being breached, although it was mentioned on 12 March. None of the correspondence from the receivers before this period had prompted them to do so, so this is not a surprising outcome. Nor, in the absence of the parties doing so, did the receivers seek to force the issue.
2. Receivers should not knowingly continue to incur costs in the receivership, which they know to be in disregard of cost capping orders. As an officer of the Court, the receiver should not ignore such a cost capping order. That is what happened in this case, from a time somewhere in mid-February 2019. Notwithstanding the apparent acquiescence of the parties, the receivers' first duty is to obey the Court's command. The parties' acquiescence in a breach of the Court's orders is not an excuse for receivers to continue to ignore the Court's orders. Such acquiescence is likely to be fragile and the position of parties changeable. Moreover, in a case such as this where the parties were unrepresented, the acquiescence could hardly be said to be informed.
3. As will be seen, the picture presented by the events of February and early March 2019 is of professional receivers with ready access to legal advice doing nothing active immediately to rectify their own breach of Court orders, when they could only assume that the parties did not appreciate the need to rectify the position themselves.
4. The question arises as to whether the receivers had any implicit authorisation from the Court to continue. This requires a short examination of what happened at the directions hearings on 5 February, 26 February, 12 March and 19 March 2019.
5. On each of 5 February and 26 February 2019 the first plaintiff and the first defendant appeared in person. The receivers did not appear. The parties reported that the valuation of Unit 2 had been done and served upon them in early January 2019 and that the option to purchase which expired on 4 February 2019 had been exercised by the defendant. But the parties indicated they were still responding to the receivers' requests for information within deadlines imposed by the receivers.
6. On 13 February 2019, the receivers wrote again about their remuneration. This letter corrected an error in the 14 January letter concerning the previous remuneration period. The letter made clear the period during which the previously mentioned $6,775 had been incurred ended on 31 December 2018, not 10 January 2019, and that the receivers claimed remuneration from 1 January 2019 to 12 February 2019 was a further $8,156. The actual cumulative receivers' costs, including those incurred for this period, slightly exceeded the Court's cap. Actual receivers' fees were $9,881 (plus GST). But the letter acknowledged "Order 8 of the orders made in the Supreme Court of New South Wales on 10 July 2018 ('the July Orders') limited our fees to $30,000 (plus GST)". As to those orders, the receivers said in the 13 February 2019 letter the following: "In this regard and in accordance Order 9 of the July Orders, our remuneration for the period 1 January 2019 to 12 February 2019 will be limited to $8,156 (plus GST) we intend to draw on the funds under our control to make payment of the above-mentioned remuneration and solicitor fees on Thursday, 7 March 2019".
7. The letter then set this information out in the following table: Period Amount (excl GST) 10 July 2018 to 15 November 2018 15,069 16 November 2018 to 31 December 2018 6,775 1 January 2019 to 12 February 2019 (capped) 8,156 Total Remuneration Incurred to Date 30,000

Remuneration Exceeding Fee Approval 1 January 2019 to 12 February 2019 1,725

1. The receivers deducted this remuneration from the joint account on 7 March 2019. Once again, the receivers provided a "Commentary on Work Undertaken", making clear that notwithstanding that the cap had been reached that there was still work to be done to achieve the tasks that the Court had allotted to the receivers.
2. The 13 February 2019 letter says nothing about the receivers stopping work, because they were not authorised to act as receivers beyond doing work for $30,000. They did not request the parties to have the orders varied. They did not, in the absence of the parties doing so, apply to the Court to have the cap lifted. They proceeded on.
3. When the matter came before the Court on 26 February 2019, the matter was still in the same state and the Court ordered that the receivers attend on the next occasion, 12 March 2019, so they could either provide a report or tell the Court what further orders needed to be made.
4. On 12 March 2019, the receivers attended, represented by counsel, Mr Owen-Taylor. Counsel foreshadowed the Entitlements Report should be available within two weeks. The Court was taken to evidence, including the 28 September 2018 letter. But the receivers were not present.
5. At the directions hearing on 12 March 2019, the defendant raised the matter of the $30,000 cap and his concern that money had already been taken out of the joint account by the receivers whilst the report was incomplete. He asked for details of the work they did and the amount they were claiming. Finally, the matter of the cap was drawn to the Court's attention. But it was difficult to do much about the receivers' remuneration at that point. Time was running against the defendants in relation to the exercise of his option. He had three months to complete the purchase of Unit 2, which would expire in early April 2019. He needed a final receivers' report that indicated what his entitlement was from the partnership that he might be able to offset against the purchase of Unit 2.
6. But the receivers' affidavit of 12 March 2019, which was before the Court on this occasion, reported that remuneration incurred only up to 28 February 2019 was $43,646 plus GST. It indicated that Coleman & Greig lawyers had been engaged to assist with Court appearances and the conveyance of one of the duplex units at an estimated cost of between $7,000 and $12,000 plus GST. In addition to those amounts, the receivers estimated that finalising calculation of the parties' entitlements and reporting, finalising the sale of Unit 2 and distribution of partnership proceeds would take in the order of $25,000 to $30,000 plus GST to complete. Importantly, he foreshadowed that he anticipated seeking directions from the Court "in approximately two weeks' time to approve the further and increased costs". That forecast was not fulfilled. The receivers' present motion was not filed until 20 May 2019.
7. In the end, the Court directed on 12 March 2019 for the receivers to file and serve their report before 26 March 2019. Ward CJ in Eq expressed a degree of dissatisfaction with the fact that the report that was anticipated was not going to be final.
8. The matter was listed again on 19 March 2019 before Ward CJ in Eq. An affidavit of Mr Sean Wengel of 18 March 2019 was read, explaining that further information would be required before final accounts and tax returns could be prepared for the partnership. Many of the questions were reasonably easily answered, but a more difficult one was whether or not the land formed one of the partnership assets. Ward CJ in Eq sought to solve the problem of the requirement for further tax information by seeing if it was possible for the receivers to come up with a range of possible outcomes and for the maximum amount of any potential tax liability to be quarantined, so that the actual tax scenarios could be worked out later. The matter was then adjourned to 26 March 2019.

The Entitlements Report - 25 March 2019

1. The receivers produced an Entitlements Report on 25 March 2019. This was something of a misnomer as it did not identify the parties' final entitlements.
2. The Entitlements Report recorded the gross income of the partnership at $2,308,579.90 including the partnership's interest in Unit 2 by then valued at $1,170,000. Total development costs were recorded at $1,660,485.54. These development costs were allocated as to $1,089,721.54 to the plaintiffs and as to $570,764 to the defendants.
3. The balance of entitlements found to be due to each party were $476,951.99 to the plaintiffs and $806,752.01 to the defendants. The report concluded that in order to purchase Unit 2, the defendants would need to contribute $363,247.99 to the partnership, being the sum of $1,170,000 less their entitlements, totalling $806,752.01.
4. But the report was circumscribed. The receivers made clear they had not prepared financial accounts and tax returns. The receivers stated that, if they were required to prepare financial accounts and tax returns for completion of the sale of Unit 2, the defendants would have to await that outcome because to whom the tax liability attaches would not be known until it was properly determined and assessed by the Australian Taxation Office. The receivers foreshadowed that the additional costs of completing that work would be $178,656.50. The report also pointed out that, if the defendants failed to complete the purchase of Unit 2, they could not determine the partnership income and there would be additional receiver remuneration implications under that scenario.

The 26 March 2019 Directions Hearing

1. The matter came before Ward CJ in Eq on 26 March. The plaintiffs and the defendants represented themselves. Mr Ratnam of counsel represented the receivers. The directions hearing canvassed many issues about the Entitlements Report. But no application was made to extend the cap. The cap was mentioned to her Honour, by the parties. But the matter proceeded on.
2. On 19 March 201 Mr Wengel had been directed to provide an estimate of the potential tax liability that might arise under different scenarios but it was reported to the Court on his behalf on 26 March 2019 that he was not able to do that because of the complexity of the scenarios and the tax advice would be required before those sorts of estimates could be done. Counsel pointed out to Ward CJ in Eq the significant cost that would be associated with preparing the partnership accounts and tax returns. Her Honour directed Mr Wengel provide information to the Court about the time frame for the provision of tax advice and lawyers. The plaintiffs and the defendants criticised the report to her Honour and foreshadowed further disputes about it. But her Honour indicated that the defendants would have to prove that they had finance to pay the $343,000 to acquire Unit 2.
3. As the result of argument on that day, the Court made the following direction and stood the matter over to the Call Over list on 9 April 2019: "1. Direct that Mr Wengel advise the parties and Justice Ward's Associate by close of business on 27 March 2019 what is the timeframe within which he says advice from the tax advisory team and the lawyers will be provided if he is instructed to obtain that advice ."
4. Mr Wengel emailed Ward CJ in Eq's Associate the next day. The email made clear that he did not have approval for additional funding to prepare financial accounts and tax returns. He appropriately pointed out that he would either need to seek the leave of the Court to dispense with his obligations under Orders 5(a) and 5(b) of the 10 July 2018 orders to prepare accounts and tax returns or he would have to increase the $30,000 limit, because those tasks would be very expensive. He indicated that the combination of legal advice from M&K lawyers and his own tax advisory department would take up to four weeks to prepare the income tax advice to produce final accounts and tax returns.
5. But her Honour's directions of 26 March 2019 had also required the parties to keep moving. The plaintiffs and the defendants were required to put forward in writing their complaints about the Entitlements Report in writing. The receiver was required to respond. The defendants were required to show what steps they had taken to obtain finance. And both parties were to decide if they wanted the receiver to proceed with preparing the accounts and tax returns. By that time the Court was undoubtedly conscious of the fact that the $30,000 cap had been breached. But the pressing logic of the timetable had taken over and her Honour drove it to a conclusion. Her Honour's directions resulted in a first addendum to the Entitlements Report filed on 8 April 2019.

First Addendum to the Entitlement Report

1. The receivers completed their work on a First Addendum to their Entitlement Report on 8 April 2017. The report was clearly done under the Court's directions. It provided a revised receivers' determination, both of development costs, which led to other issues of no present relevance, affecting the parties' entitlements to distribution. In the result, the receivers determined that upon the parties' revised entitlements the defendants would need to contribute $414,000 to the partnership to acquire Unit 2, less their revised entitlements of $735,099.84.
2. But this first addendum also reminded the Court that additional unpaid remuneration (that is remuneration claimed on top of the $33,000 they had already applied towards their fees) of $43,719.50 inclusive of GST had been incurred up to 20 March 2019 and that since then, up to 5 April 2019 additional unpaid remuneration totalling $33,775.50 inclusive of GST had been incurred. The receivers declared in this first addendum that their current unpaid remuneration to date totalled $77,495, which did not include disbursements such as legal fees and council's fees.

The 9 April 2019 Directions Hearing

1. The matter came before Ward CJ in Eq again on 9 April 2019. Her Honour heard further argument on this occasion.
2. The receivers filed an affidavit of 8 April 2019 of Mr Wengel putting the first addendum before the Court and reporting on events since the last directions hearing. Mr Wengel also reported that William Buck's business advisory team informed him that it may take up to 16 weeks for the completion of the financial accounts and taxation returns for the partnership. Mr Ratnam of counsel foreshadowed that the receivers would be bringing an application formally to deal with approval of their remuneration. The parties also foreshadowed they would be filing notices of motion in relation to the receivers' report. That was duly done by the parties in late May and mid June 2019. Those motions are presently undetermined.
3. After hearing argument, the Court relevantly made Orders 3, 4 and 5 as follows: "3. Give leave for the Receiver to file and serve any application in relation to the Receiver's fees and any affidavit made in support thereof by Friday, 12 April, 2019 - such application to be returnable in the Applications List on 21 May 2019 for directions. 4. Direct the defendant to file any application, and affidavit in support, that he wishes to make for any stay or variation of the orders made by Parker J on 10 July 2018, by 14 May 2019; such application to be returnable for directions on 21 May 2019. 5. Direct that any application by either party for orders, for the acceptance or rejection, in whole or in part, of the William Buck's report, as amended on 8 April 219, be filed and served by 14 May 2019 with supporting affidavits, such application to be returnable for directions on 21 May 2019."
4. The receivers put on their current motion of 20 May 2019 pursuant to the leave granted by Order 3.

Second Addendum to the Entitlements Report - 24 May 2019

1. The receivers completed their work in a second addendum to their entitlements report on 24 May 2019. This second addendum was not ordered by the Court. It adjusted the parties' entitlements under the partnership agreement further in an amended determination taking into account the parties' claims for various financing costs.
2. This resulted in a further determination, now the final determination of the receivers that in order to purchase Unit 2 that the defendants would now need to contribute the amount of $197,835.02 to the partnership being the sum of $1,170,000 less their amended entitlements, totalling $972,164.98. This second addendum resulted from the receivers' considering further submissions by the parties. As it was not ordered by the Court the receivers are not making any claim for costs in respect of it. It costs can therefore be ignored.

The Issues for Determination

1. The Court now determines the three matters in issue. More detail concerning the receivers' claimed fees is set out in the course of analysis of the third issue below.

(1) Are the 10 July 2018 Orders Final Orders?

1. The defendants, supported by the plaintiffs, submit that the 10 July 2018 orders are final orders and cannot now be varied. The defendants submit that this case is governed by well-established legal principles stated by the High Court in Bailey v Marinoff (1971) 125 CLR 529, at 530; [1972] ALR 259; [1971] HCA 49, that, once an order disposing of proceeding had been perfected and drawn up as a record of the Court, it is beyond recall by that Court.
2. The defendants' submissions acknowledge limited exceptions to that principle, both at common law and by statute. At common law, the exceptions are confined to the correction of formal errors, fraud and denials of procedural fairness: DJL v Central Authority (2000) 201 CLR 226; (2000) 170 ALR 659; [2000] HCA 17. It is not suggested any of these would apply here to permit the 10 July 2018 orders to be set aside.
3. The defendants' argument acknowledges other sources of power in UCPR, rr 36.15 and 36.16, to set aside the 10 July 2018 orders. The defendants submit that the 10 July 2018 orders were not made "irregularly, illegally, or against good faith" and cannot now be set aside under UCPR, r 36.15. Moreover, the defendants submit that UCPR, r 36.16 is not enlivened here, because the 10 July 2018 orders were made when both parties were present and no motion was filed by any party within 14 days of entry of the orders to seek to set it aside.
4. The receivers argued that the 10 July 2018 orders were not final orders and could be varied at any time, and should now be varied to accommodate any approval of their remuneration on their motion. The receivers point to the text of the 10 July 2018 orders as strongly indicating that the orders are interlocutory.
5. The Court finds the receivers' contentions on this issue persuasive and concludes that the orders are interlocutory, both on the bases of those submissions and for the other reasons elaborated below.
6. First, as the receivers submit, the form of the orders indicates that they are interlocutory, not final. Although the declarations in paragraphs 1 and 2 of the orders are final orders made by consent, the machinery orders that accompany them are not final. Order 10 grants liberty to apply to the receivers for further directions, which could encompass the making of variations to the existing orders, for example, as to the tasks to be undertaken as defined by Order 5, or as to the remuneration to be allowed under Order 8. The range of matters that may be subject to "further directions" is not confined by Order 10. And the orders do not expressly prohibit variations to the terms of the receivers' appointment.
7. And the orders have a definite end date and are not intended on their face to be permanent. The tasks to be undertaken by the receivers are to a degree governed and shaped by the making of further determinations by the Court. For example, the obtaining of valuations by the receivers under Order 5(c) is to be completed as at valuation dates that are subject to the Court's further determination. The receivers cannot complete their task without further determinations by the Court.
8. It is further envisaged by the 10 July 2018 orders that once the receivers have undertaken their various tasks, such as the production of reports to the Court, accounts, and taxation returns, that they would retire from their position as receivers.
9. But the receivers' arguments are persuasive for a more fundamental reason that was not articulated in the submissions before the Court. The appointment of a receiver by the Court is necessarily an interim measure: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed, 2014, LexisNexis Butterworths) ("Meagher, Gummow & Lehane"), (at [29-015]), and Sweet & Maxwell, Kerr & Hunter On Receivers and Administrators (20th ed, 2018, Thomson Reuters) ("Kerr & Hunter"), (at [1-2]). The function of the receiver is to hold property so that it may be preserved for the benefit of the party ultimately found entitled to it, or distributed among competing parties in accordance with their entitlements. The present appointment falls well within that category, as the object of the appointment of the receivers in this case was to get in the partnership property (Order 6) and hold the property, until the receivers produced a report as to the parties' respective entitlements. The production of such report is not a necessary part of a receiver's functions, but, as it was here, it is not uncommonly ordered in the cases of partnership dissolution.
10. It is well established jurisdiction that in a suit instituted for the winding up of the partnership, such as Parker J found to be the underlying dispute in this case, the plaintiff is entitled "as a general rule and practically as a matter of course to the appointment of an interim receiver": Meagher, Gummow & Lehane, (at [29-050]), and Tate v Barry (1928) 28 SR (NSW) 380, at 383; (1928) 45 WN (NSW) 83. Moreover, the interim nature of such appointments is reflected in Supreme Court Act 1970, s 67, that authorises the Court to appoint receivers, at any stage of proceedings "by interlocutory order in any case in which it appears to the Court to be just or convenient to do so".
11. The 10 July 2018 orders were not final orders. They were capable of variation as circumstances changed. But the fact that a cap of $30,000 was imposed in the orders is a relevant consideration in determining whether receivers' remuneration should be approved, and what variations to those orders should be entertained. But it is not a ceiling which is incapable of further variation.

(2) Did the 10 July 2018 Orders Fix Receivers' Total Remuneration Under UCPR, Rule 26.4?

1. Next, the defendants argue that the 10 July 2018 orders have already fixed the receivers' remuneration under UCPR, r 26.4. That provision authorises the Court to allow remuneration to receivers in the following terms: "a receiver is to be allowed such remuneration (if any) as may be fixed by the Court". The defendants submit that has already occurred (on 10 July 2018) and cannot now be repeated.
2. This argument is not persuasive. The receivers' motion, the motion presently before the Court, is the first time that the receivers have applied under UCPR, r 26.4 for their remuneration to be allowed. The tasks assigned to the Court under UCPR, r 26.4 involve the Court allowing remuneration and fixing its amount. That language was not used in the 10 July 2018 orders. Those orders did not say that they were brought under UCPR, r 26.4. The 10 July 2018 orders did not expressly prevent the bringing of further applications to fix and allow remuneration.
3. Moreover, none of the evidence that one might expect upon an application under UCPR, r 26.4 was before the Court on 10 July 2018. All Parker J had was the email set out earlier in these reasons, indicating a range of fee estimates for the work which the receivers anticipated they would be doing. Not then having as yet entered upon their task, it could readily be assumed in all sides that they were not in a position to seek any particular fixed amount of remuneration to be allowed. The 10 July 2018 orders did not absolve them from making a UCPR, r 26.4 application. All the orders did was to place a limit on the amount of expenditure that the receivers could incur under the authority given to them by the Court. Even if their claimed fees fell short of the cap, they would still have had to seek the Court's approval for the amount of their remuneration to ensure that it was reasonable in amount and related to the task they had been given.
4. The defendants fail on this issue. The receivers can bring this motion. The question now is what fixed amount of remuneration should the receivers be allowed.

(3) Should the Receivers' Fees Beyond $30,000 be Approved?

1. Applicable Legal Principles. Some applicable legal principles when a receiver seeks approval of remuneration may be shortly stated. On an application for approval of receiver's remuneration, the Court should not undertake a taxation of the receiver's bill on an item by item basis but evaluate the task in an impressionistic manner: In the matter of Australasian Barristers Chambers Pty Ltd [2019] NSWSC 799, (at [21]).
2. Brereton JA's judgment in Gondon, (at [34]), fully restates the principles. Some of the more relevant ones are set out here: a receiver is entitled to costs, charges and expenses properly incurred in the discharge of ordinary duties; the ultimate question is what amount of remuneration is reasonable; the receiver bears the onus of justifying the reasonableness and prudence of the tasks undertaken, and of any remuneration claimed; remuneration may be allowed on the basis of fixed salary, a commission on receipts, or quantum merit; if a time based approach is adopted, the Court will be guided by professional charges and will act on time sheets; the task involves concepts of proportionality; and, no Court approval or specific order is necessary for the approval of disbursements in the absence of a challenge, although receivers should scrutinise them to ensure they are reasonable and properly payable: In the matter of Say Enterprises Pty Ltd [2018] NSWSC 396; Venetian Nominees Pty Ltd v Conlon (1998) 20 WAR 96, at 100-101, (1998) 16 ACLC 1653; In the matter of Wine National Pty Limited, James Estate Wines Pty Limited and Liquor National Pty Limited [2016] NSWSC 4, (at [12]); and Deputy Commissioner of Taxation v Starpicket Pty Ltd (No. 2) [2013] FCA 699, (at [21]).
3. And, importantly, when a receiver seeks to satisfy the criterion of reasonableness "whether the total remuneration to the receiver is capped" is a relevant consideration: Gondon, (at [34(4)]).
4. The Receivers' Claim for Fees and Disbursements. The receivers' claim for fees and disbursements on the present application falls into three parts. These are conveniently set out in an aide memoire handed up by the receivers to the Court on the application: (1) they were fees and disbursements already incurred by the receivers in the discharge of their duties under the orders of 10 July 2018; (2) legal costs incurred in respect of the present motion for approval of the current receivers' motion; and (3) estimates of future fees and disbursements.
5. These three claims are conveniently set out in the tables below. The claim for costs incurred in execution of the 10 July 2018 orders is in the first table below: Fees and Disbursements incurred by the Receivers Fees/disbursements General description of works Amount (incl. GST) Fees Administrative tasks; review and investigation and verification of parties submissions; preparation of report on parties' entitlements; Dealing with parties; sale of property; Accounts and Tax Return (pre-work); consider and providing instructions in relation to directions hearing $137,271.20 Less Money applied towards fees ($33,000.00) Outstanding fees $104,271.20 Legal Costs Advising in relation to the Receivers' appointment; appearing at directions hearing; taking instructions and preparing affidavit in accordance with Court orders; Liaising with Counsel $16,978.25 (Excluding costs incurred in respect of the current motion) Total $121,249.45

1. The receivers also claim for legal costs incurred on the current motion. These are set out in the next table. These are dealt with later in these reasons. Legal Costs incurred in respect of the Current Motion General Description of works Amount (incl. GST) Legal costs (including WIP as at 14 August 2019) Preparing the current motion and affidavit evidence; reviewing plaintiff and defendant's evidence; drafting further affidavit evidence in reply; attending on client and counsel; attending directions and matters concerning the entitlements report $48,423.10 Total $48,423.10

1. The receivers' claim includes advance approval for an estimate of future fees and disbursements. These are set out in the table below. The claim for future fees and disbursements will not be determined at this time. Estimate for future fees and disbursement Business Recovery Services Instructing in relation to future directions hearing; dealing with parties and any further addendums; sale of property; preparing accounts and tax returns; attending to administrative task $32,967.00 Tax Advisory and Business Advisory Receive and review tax legal advice from Macpherson Kelly Lawyers ("M&K"); liaising with M&K re advice(s); Detailing finding and conclusions; Finalise accounts and BASs; ATO GST review; Prepare Financial Reports; Prepare Income Tax Returns FY2014, 2015, 2016 & 2017 $77,984.50 Legal Costs General advice $16,000.00 Tax Return Legal advice regarding tax return preparation $10,100.00 Total $137,051.50

1. There is still insufficient certainty: about the future disposition of these proceedings; and about whether or not management accounts and tax returns will remain part of the receivers' tasks. For these reasons the Court should not give advance approval for future fees and disbursements.
2. The Court will adjourn this motion to a date to be fixed with my Associate for the consideration for such approvals, once future receivers' work is done.
3. As has already been noted, the receivers are not claiming for the second addendum to their Entitlements Report. The principal affidavit the receivers rely upon to estimate costs, remuneration and disbursements is Mr Wengel's affidavit of 17 May 2019. This contains an estimate of costs for attending to the sale of a property. But when, and if, Unit 2 is going to be sold is unknown. The receivers have submitted, and the Court accepts, the approval of these costs should be deferred.
4. Analysis of the Receivers' Claim for Remuneration. Mr Wengel's affidavit of 17 May 2019 discloses that he has incurred $137,271.20 including GST up to 14 May 2019, to which $33,000 has already been applied. The receivers seek approval to be remunerated in this sum plus legal fees and other disbursements incurred to this date. The balance is $104,271.20. The receivers handed up at the hearing a convenient coloured table dividing those costs up to 14 May 2019 into cost categories including: administrative tasks; review, investigation and verification of the parties' submissions; preparation of the report on the parties' entitlements; and dealing with the parties' generally (the Court has now marked as Exhibit B on this application). In addition to those main cost categories in the table, there were smaller categories in respect of preliminary work on the sale of Unit 2, and the preparation of accounts and tax returns. At various times, the Court has asked the receivers to undertake preliminary analysis of the costs of the sale of the property, and the costs of doing accounts and tax returns. Some costs were incurred in these categories simply to the undertaking of work to comply with the Court's orders to give estimates about what future costs might be. Finally, another category of "directions hearings" was in the table. The receivers attended a number of directions hearings at the specific request of the Court. The breakdown of tasks in the table according to these categories was as follows: Administrative Tasks Review, Investigation & Verification of Parties' Submissions Preparation of Report on Parties' Entitlements Dealings with Parties $4,388 $33,539 $29,395 $28,842

Sale of Property Accounts and Tax Returns pre-work Directions Hearings Costs Application $1,617 $2,150 $17,531 $7,330

1. The plaintiffs, supported by the defendants, have lodged a number of general and specific objections to the receivers' claim for fees. These can now be dealt with individually, commencing with the general objections and then moving to the more specific.
2. The Court is dealing with the receivers' claim for $137,271.20. So that the receivers and the parties have a definite sum to take away from this judgment, the Court will deal with the various objections of the parties by either rejecting them or allowing a specific amount in reduction of the receivers' claim.
3. But before analysis of the plaintiffs' objections commences, the Court will make a general deduction from the receivers' claim on account of the receivers' failure to take steps to require the parties, or in default itself, to re-list the proceedings in September/October of last year, with a view to addressing the obvious tension between the receivers' then estimates and the existing cap of $30,000 on the receivers' fees.
4. As earlier indicated in these reasons, the receivers' failure to do this denied the parties, and the Court, an opportunity to explore whether cheaper alternatives were available to execute the tasks to which the receivers had been appointed, before they became too committed to their task. In my view, that opportunity was available until September/October 2018, and was then lost. Just what could have been saved, had the opportunity been taken, is very difficult, at this point, to discern. But it was a real opportunity and, in my view, a figure of a little over 10 per cent of the receivers' claim should deducted on this account. The Court will deduct $15,000 from the claim on this account.
5. The plaintiffs first raise a number of general matters. They submit the receivers' evidence has not discharged the onus of justifying the reasonableness and prudence of the tasks undertaken. But in my view, the quality of the evidence for a claim of this size is generally appropriate.
6. The plaintiffs submit that the receivers should not have had to continue to waste resources taking input from the partners, rather than simply completing their report. Whilst a lot of the receivers' expenses are on this account, in my view, they cannot be greatly criticised for this. They were not acting purely as traditional receivers. They were really acting as both receivers and as referees reporting to the Court. And in that respect, looking at the detail and quality of their reports, and of the litigious nature of these parties, it is difficult to fault the commitment of resources to both these tasks.
7. The plaintiffs' next general objection is that a quantity surveyor could have been engaged to eliminate the substantial resources quantifying expenditure on the project. Rather, Mr Wengel did more of this work in-house. Mr Wengel answers the criticism by saying that there were contractual interpretation questions about the allocation of expenditure among the parties that could not just be left to a quantity surveyor. In my view, this answer has merit and the criticisms substantially fail. But in my view, there were savings available had they been searched out and a further $7,000 should be deducted on this account.
8. The plaintiffs criticised the receivers for not completing the necessary accounting and taxation work, which is claimed to be a simple exercise. In my view, they have appropriately stayed away from those tasks, awaiting further directions from the Court. But the preliminary work they have done on those tasks, in my view, is justified.
9. The plaintiffs claim that the receivers have not explained why the original estimate they gave to the Court was so grossly incorrect or why the Court was not approached immediately when it was clear the limit would be breached. The Court has already dealt above with the latter of these matters. As to the former, the receivers have explained that the matter was far more complex than they anticipated. Having seen the parties in action in these proceedings myself, I am not entirely surprised that the receivers did underestimate the degree of work involved. The plaintiffs and the defendants are highly intelligent critics of one another and of the receivers, and have inundated the receivers with correspondence, much of which simply could not be ignored. None of these matters indicate that the receivers have failed to meet their onus in establishing the reasonableness and prudence of their remuneration.
10. The plaintiffs criticise the receivers for not putting in sufficiently detailed timesheets to identify the tasks undertaken and whether they were reasonable. In my view, they have and the descriptions with their timesheets are adequate and the receivers have put forward what is reasonable.
11. The plaintiffs then field a number of more specific criticisms. The plaintiffs take issue with $4,826.80 for administering bank accounts and having strategy meetings. In my view, $2,000 should be deducted from this figure. It is difficult to see what strategy meetings would have been required by the receivers. The Court's directions to them were clear enough. And strategy misfired in not applying to the Court in a timely way. And the receivers' bank account administration could almost wholly be done at a fairly minor low cost level.
12. The plaintiffs criticise the incurring of legal costs (excluding costs incurred in respect of the current motion of $16,978.75). Much of this includes attendances at directions hearings. Whilst the plaintiffs say this could "not possibly be reasonable", in my view, much of it is. The receivers did not attend directions hearings until requested by the Court. This is not one of those cases where the receivers unnecessarily thrust themselves into the contest of the Court proceedings. Nevertheless, they only attended towards the end. Given the limited number of directions hearings they attended, in my view, $3,000 should be taken off this figure. It was appropriate for the receivers to retain solicitors and counsel to appear at these directions hearings.
13. The plaintiffs criticise the receivers for excessive iterations of their report. This is largely answered by the observation that the receivers are not charging for their second addendum to the report. As to the first addendum, it results from the directions of Ward CJ in Eq to deal in an orderly way with the parties' oral submission on 26 March 2019 at the directions hearing in criticism of the report. Her Honour directed that this be done in writing and that led to the written first addendum on 8 April 2019.
14. A total of $27,000 (being $15,000 + $7,000 + $2,000 + $3,000) should be deducted from the receivers' claim for remuneration. The net amount of costs allowed is therefore $137,271.20 minus $27,000, which totals $110,271.20. This figure is appropriate in the circumstances, particularly because in March and April 2019 of this year the receivers responded rapidly to the Court's directions to finish their Entitlements Report in circumstances where the Court was made aware that the $30,000 cap had been substantially exceeded.
15. Receivers' Application Costs. Finally, the plaintiffs have taken issue with the claim for recovery of legal costs up to 14 August 2019. The recovery of legal costs should be determined in light of what of the receivers' remuneration has been approved and disapproved. Whilst the receivers plainly had to bring this application, they have not been entirely successful. Some discount should be allowed to their legal costs at least on that account. In my view, they should recover approximately 70 per cent of their legal costs of $48,423.10. That would lead to recovery of $33,896.17. The difference between what is claimed and what is allowed is $14,526.93. The Court will round that figure up to $15,000 and deduct that amount from the costs claimed, which will therefore be allowed at $33,423.10.

Conclusion and Orders

1. The orders of the Court are as follows: 1. Allow the receivers' claim for fees and disbursements up to 14 May 2019 at $110,271.20. 2. Allow the receivers' claim for legal costs on the present motion at $33,423.10. 3. Grant liberty to apply to the receivers to re-list any application for future fees and disbursements.

Amendments 27 September 2019 - 120: plaintiffs to receivers in orders DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 September 2019