Staatz v Berry, in the matter of Wollumbin Horizons Pty Ltd

Federal Court of Australia|2023-02-17|Before: Derrington J

Solicitor for the Plaintiff: Mr B Le of Patane Lawyers

Counsel for the First Defendant: The First Defendant did not appear

Counsel for the Second Defendant: The Second Defendant appeared in person

Counsel for the Fourth Defendant: The Fourth Defendant appeared in person

Counsel for the Fifth Defendant: The Fifth Defendant appeared in person

Counsel for the Sixth Defendant: The Sixth Defendant did not appear

Counsel for the Seventh Defendant: The Seventh Defendant did not appear

Counsel for the Eighth Defendant: The Eighth Defendant did not appear

Counsel for the Ninth Defendant: The Ninth Defendant did not appear

Counsel for an Interested Party: Mr Alderman appeared in person

ORDERS QUD 32 of 2018 IN THE MATTER OF WOLLUMBIN HORIZONS PTY LTD (IN LIQUIDATION) ACN 606 581 364 BETWEEN: STEVEN NEVILLE STAATZ AS LIQUIDATOR OF WOLLUMBIN HORIZONS PTY LTD (IN LIQUIDATION) ACN 606 581 364 Plaintiff

AND: RON BERRY First Defendant

GILLIAN NORMAN Second Defendant

EMANUELE AGUS (and others named in the Schedule) Third Defendant

order made by: DERRINGTON J DATE OF ORDER: 17 february 2023

The remuneration of the plaintiff be paid from the proceeds of sale of the real property situated at 3222 Kyogle Road, Mount Burrell in New South Wales, being Lot 20 in Deposited Plan 755714A and 755714B and Lot 2 in Deposited Plan 1148316 (being all the land in folio identifiers 20/755714A, 20/755714B and 2/1148316) (the Property): (a) in his capacity as administrator of Wollumbin Horizons Pty Ltd (in liquidation) ACN 606 581 364 (the Company) for the period from 4 July 2017 to 7 August 2017 inclusive, in the amount of $20,000.00 plus GST; (b) in his capacity as liquidator of the Company for the period from 8 August 2017 to 11 November 2021, in the amount of $210,000.00 plus GST; (c) in his capacity as receiver of the Property for the period from 20 June 2019 to 30 October 2022, in the amount of $115,734.50 plus GST; and (d) in a maximum amount of $20,000.00 plus GST for prospective remuneration in his capacity as receiver of the Property for the period from 31 October 2022 to the finalisation of the receivership.
The costs, expenses and disbursements (excluding legal costs in this proceeding and in Federal Court of Australia proceeding QUD 429/2019) of the plaintiff, in his capacity as administrator and liquidator of the Company, and as receiver of the Property, be fixed in the amount of $38,120.00 plus GST and be paid from the proceeds of sale of the Property.
The plaintiff be paid his taxed costs in Federal Court of Australia proceeding QUD 429/2019 in the sum of $81,892.00 from: (a) the amounts (if any) payable to either or both of the first defendant and the second defendant from the proceeds of sale of the Property; and (b) to the extent that the costs are not recovered by the plaintiff under order 3(a) above, from the proceeds of sale of the Property generally.
It be ordered that: (a) the plaintiff's costs of and incidental to the interlocutory process filed in this proceeding on or about 18 May 2018 be assessed as a lump sum by a Registrar of this Court; (b) the plaintiff be paid the costs which are assessed by the Registrar pursuant to order 4(a): (i) from the amounts (if any) payable to the second defendant from the proceeds of sale of the Property; and (ii) to the extent that the said costs are not recovered by the plaintiff under order 4(b)(i) above, from the proceeds of sale of the Property generally; (c) the plaintiff's other costs of and incidental to the proceeding (including reserved costs) be assessed as a lump sum by a Registrar of this Court; (d) the plaintiff be paid the costs which are assessed by the Registrar pursuant to order 4(c) from the proceeds of sale of the Property generally.
The plaintiff is entitled to a lien over the assets of the constructive trust on which the Property is held in respect of the amounts referred to in orders 1, 2, 3 and 4 above and order 7 below.
The third, fourth, fifth and sixth defendants' costs of the proceeding (including reserved costs) be fixed in the amount of $207,233.55 and be paid from the proceeds of sale of the Property generally.
The plaintiff's costs of and incidental to this interlocutory application be paid from the proceeds of sale of the Property. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 Mr Steven Staatz has made an application for approval of the remuneration and expenses that he claims he has incurred as the administrator and liquidator of the company, Wollumbin Horizons Pty Ltd (in liquidation) (Wollumbin), and as the receiver of certain trust property in the form of real estate which that company held. The real estate has been sold and some expenses have been met, however, Mr Staatz now seeks the payment of his remuneration, reimbursements and remaining expenses from the sale proceeds. 2 The circumstances of Mr Staatz's tenure as administrator, liquidator and receiver are articulated to some degree in the decision of Staatz (as liquidator of Wollumbin Horizons Pty Ltd (ACN 606 581 364) (in liq)) v Berry and Others (No 3) (2019) 138 ASCR 231 (Wollumbin (No 3)). That decision identifies the circumstances in which Wollumbin was incorporated and came to be the holder of certain real property in Northern New South Wales. The decision also explains how a large number of persons sought to establish a commune on the land, that these persons contributed not insubstantial funds towards its acquisition and the discharge of its mortgage, and how the scheme in which these persons participated was both unlawful and doomed to fail, as it did. Upon the failure of the scheme, the real property was held on constructive trust by Wollumbin, as bare trustee, for those persons who had advanced money to become members of the commune. 3 It is relevant to note at the outset that, in his several roles, Mr Staatz was required to deal with a wide range of persons who had contributed, or believe they had contributed, funds towards the acquisition of the real property and who claimed an interest in it. Many of those persons were unfamiliar with both the law and the applicable court processes, although that did not in any way deter them from advancing myriad claims and allegations in relation to both their entitlements and Mr Staatz's conduct. As was recognised in the decision in Wollumbin (No 3), Mr Staatz has been required to deal with these numerous unmeritorious and unsupported claims and allegations. As a result, the costs of the liquidation and receivership have been substantially increased, as have the related litigation costs. 4 It is also important to observe that Mr Staatz has not drawn or been paid any remuneration for the work he has done to date in respect of any of his capacities. There were no funds available to meet his claims other than the proceeds of the sale of the real property and he has deposed that there is no likelihood of any further recoveries being made. It was submitted on his behalf, and it should be accepted, that he has taken on significant risk and responsibility in administering the affairs of Wollumbin and the trust where, for practical purposes, he has been unfunded.

Background 5 Mr Staatz sought directions from the Court as to the appropriate means by which to give notice of the present application. He has complied with the Court's directions and has taken all reasonable measures to ensure that all interested persons and parties have been informed. Some of the persons have left their previous residences and their current whereabouts is not easily ascertained. Nevertheless, reasonable attempts have been made to inform them of this application. 6 The real property, which was the subject of a constructive trust, was sold at a public auction for a purchase price of $2 million. The completion of the sale occurred on 18 November 2020. After accounting for the costs of sale and the like, Mr Staatz holds the sum of approximately $1.8 million (inclusive of bank interest) for disposal in accordance with any directions of the Court.

Claims for remuneration 7 Mr Staatz seeks to recover the remuneration earned by him in his capacity as both the administrator of Wollumbin and its subsequent liquidator, as well as in his capacity as the receiver of its property. In broad terms, when ascertaining the remuneration to be allowed, the Court is required to determine whether the amounts sought are reasonable and whether they relate to the work undertaken by Mr Staatz in any of his relevant capacities.

The power of the court to make orders for remuneration in relation to Mr Staatz 8 On behalf of Mr Staatz, it was submitted that "[t]he Court also has power to fix and approve the payment of remuneration, costs and expenses for work undertaken by a liquidator, administrator or receiver in the administration of a trust from trust assets". The authorities relied upon were Application of Sutherland (2004) 50 ACSR 297 [10] - [13], Amirbeaggi, in the matter of Simpkiss Pty Ltd (in liq) [2018] FCA 2121 [41] and Quin, Re Harman Properties Pty Ltd (in liq) v Harman [2020] FCA 1671 [27]. This was the extent of the submissions advanced for the purposes of satisfying the Court that it had power to make the orders sought by Mr Staatz. 9 Although the proposition advanced on behalf of Mr Staatz may be stated too broadly, it is generally correct, so long as its limits are kept in mind. In the first of the authorities relied upon, Application of Sutherland, Campbell J (as his Honour then was) identified at 299 [10] that, where a liquidator or administrator administers trust funds in the course of winding up or administration, the Court will have inherent jurisdiction to allow remuneration to the liquidator or administrator for that work. In other words, the Court's inherent jurisdiction is concerned specifically with the work undertaken by the liquidator or administrator in administering the trust. The decision in Amirbeaggi, in the matter of Simpkiss Pty Ltd (in liq) merely recognised that this inherent jurisdiction may be exercised in addition to this Court's power under r 14.24 of the Federal Court Rules 2011 (Cth) to fix the remuneration of a receiver. Finally, in Quin, Re Harman Properties Pty Ltd (in liq) v Harman, it was observed that, where the company in liquidation acted only in the capacity of trustee, the liquidator's remuneration, and the costs and expenses of the liquidation, may be paid from the assets of the trust. 10 In this case, Wollumbin did not act solely as the trustee of the trust which was found to exist, being a constructive trust the beneficiaries of which were those persons who had contributed funds to become members of the commune. Whilst it is apparent that those directing Wollumbin believed that a unit trust would be created and Wollumbin would act as trustee for the proposed venture, that trust failed to materialise. The trust which came into effect was in the nature of a bare trust, in respect of which the duties were quite limited. Importantly, Wollumbin's creditors were not "trust creditors", to use an imprecise term, in the sense of being creditors of the constructive trust. However, the fact that such creditors existed demonstrates that the company did not act only in its capacity as trustee of the trust on which the real property was held. 11 The nature and scope of the costs recoverable from trust assets by the external controller of a trust company were referred to in Wollumbin (No 3) (at 285 - 287 [207] - [216]). In particular, the scope of the recoverable costs was identified at 285 - 286 [210], where it was said: [210] Here, no global order can be made allowing the liquidator to recover all of the costs of the administration and of the winding up from the assets of the trust. An apportionment will necessarily be required to be undertaken to separate the costs of the administration and winding up relating to the trust from other costs. As the Company's activities extended beyond its conduct as a trustee it is inappropriate that the trust assets bear the burden of the whole of the costs of winding up. In this respect, orders concerning the assets available to meet the costs of winding up do not have their origin only under the Corporations Act. In Lane (at [154]-[194]) there was substantial consideration of the application of the principles in Re Universal Distributing Co (in liq) (1933) 48 CLR 171; [1933] ALR 107 and Re Berkeley Applegate (Investment Consultants) Ltd (in liq) [1989] Ch 32; [1988] 3 All ER 71 concerning the entitlement of those engaged in winding up trustees to utilise trust assets for the purposes of discharging their costs, charges and remuneration. Those two cases had been carefully considered by Finkelstein J in 13 Coromandel Place Pty Ltd v C L Custodians Pty Ltd (in liq) (1999) 30 ACSR 377; [1999] FCA 144 and, in Lane, his Honour's views were summarised as follows: His Honour noted that the principles in Berkeley Applegate and Re Universal Distributing required that attention be directed to identifying the entities for whose benefit the work by the liquidator was conducted. In that case, it was held that to the extent to which the work was done by the liquidator in what was, effectively, the administration of the trust, the costs, expenses and remuneration were to be paid out of the trust assets (at p 385). To the extent to which the work done was in the ordinary winding up of the company, referred to by his Honour as "general liquidation matters", it was to be paid for out of the assets beneficially owned by the company. Where the company in liquidation only acted as a trustee of the relevant trust, and the trust itself is insolvent, it might be that much of the work involved in "general liquidation matters" was necessary in the proper administration of the trust and, therefore, chargeable against the trust assets. On the other hand, where the insolvent trustee has only non-trust creditors but insufficient assets of its own to meet the costs, expenses and remuneration of a liquidator or bankruptcy trustee, it is difficult to identify any basis on which an order might be made permitting recourse to the trust assets or the right of exoneration to satisfy the shortfall. 12 As was made clear by those reasons, and the aforementioned authorities cited on behalf of Mr Staatz, the extent to which the costs of the administration or liquidation can be taken from the trust assets depends upon the extent to which the work involved in the administration or liquidation can be regarded as work undertaken for the purpose of the administration of the trust. In that respect, work may have been undertaken for the administration of the trust even if, at the time that it was performed, it was not known that the trust existed. That is because the work may have been performed in the ordinary course of an administration or liquidation of a corporate trustee prior to a court's identification of the trust's existence. 13 It must be kept steadily in mind that there is a substantial difference between the liquidation of a company whose only business was the operation of a trust and of one which merely happened to be a trustee of a resulting or constructive trust. In the former case, the ascertainment of the business of the trust company, including the existence of its debtors and creditors, can well be seen to be referable to the care, preservation or realisation of the trust. In that situation, it can be surmised that nearly all of the costs of liquidation might be referable to the trust and accordingly recovered from the trust assets. In the latter case, the fact that the company in liquidation is also a trustee of a resulting or constructive trust might have very little to do with the company's business, such that the liquidation costs may not necessarily be recoverable as costs of the administration of the trust. After all, the only duty of a constructive trustee is to identify the beneficiaries of the trust and transfer to them that which is found to be the residue of the trust property. 14 This is an important matter to be taken into account in the calculation of the amount of remuneration, and it was highlighted in Wollumbin (No 3). It is unfortunate that, in his evidence, Mr Staatz did not articulate expressly the process by which he characterised certain work as work having been performed in the administration of the constructive trust, nor did he explain how it was that particular work could be attributed to the administration of a trust which required its trustee only to identify its beneficiaries and to distribute to them the proceeds of the sale of the trust property. On the contrary, disappointingly, he glossed over this issue. The Court expects that, on applications of the present nature, a liquidator or receiver, regardless of how they have been appointed, will be open and forthright as to how they have distinguished work relating to the administration of a trust from work relating to the conduct of the broader winding up or receivership. 15 It was submitted that, in determining the remuneration to be allowed to Mr Staatz, regard should be had to the general principle that the remuneration allowed must be fair and reasonable. Reference was made, in this connection, to Sanderson as Liquidator of Sakr Nominees Pty Ltd (in liq) v Sakr (2017) 93 NSWLR 459 at 470 [54]. Although that decision related to the remuneration of a liquidator in circumstances not involving any trust, the proposition for which it stands, that the remuneration for which approval is sought must be "reasonable", has been applied in the context of the Court's inherent jurisdiction to allow remuneration out of trust assets in connection with the administration of a trust: Re Houben Marine Pty Ltd (in liq) [2018] NSWSC 745 [20] - [21]. It can be supposed that only reasonable remuneration will be allowed by the Court for work undertaken in the course of an external administration, whether or not that work also happens to be work undertaken in the administration of a trust. 16 It is not inappropriate to note here that the Court retains a discretion as to whether it will exercise its inherent power to make an order for remuneration. It may well be that it is more appropriate to require an external controller to seek an order through the mechanisms provided by the Corporations Act 2001 (Cth). Those avenues may require the external controller to confront committees of inspection or a creditors' meeting. As this was not raised by any respondent, it is inappropriate to consider it further.

The claims in relation to the administration 17 In his affidavit of 1 November 2022, Mr Staatz identified that where he used the word "Trust" he was referring to "the constructive trust referred to in paragraph 2 of the Orders [made on 20 June 2019], pursuant to which Wollumbin held the Property as bare trustee". The word "Property", in this context, referred to the real property situated at 3222 Kyogle Road, Mount Burrell in New South Wales, being Lot 20 in Deposited Plan 755714A and 755714B and Lot 2 in Deposited Plan 1148316 (being all the land in folio identifiers 20/755714A, 20/755414B and 2/1148316). It is convenient hereinafter to adopt these defined terms for the sake of consistency and clarity. In relation to the work which was undertaken in the course of the administration, Mr Staatz deposed at paragraph [100] as follows: Annexed hereto and marked "SS-36" at pages 287 to 299 inclusive is a schedule I have generated from the electronic accounting records maintained by Vincents recording the work performed in the administration during the period from 4 July 2017 to 7 August 2017 inclusive (to the extent that I have assessed that that work relates to the administration of the Trust or to general insolvency matters concerning the administration of the Trust) ("Administration Schedule"). 18 The words in parentheses were used to indicate that the schedule in annexure SS-36 allegedly excluded work which did not relate to the constructive trust recognised by the order of 20 June 2019. Mr Staatz later affirmed this at paragraph [106] of his affidavit where he added that, in assessing whether work was undertaken for the purposes of the Trust, he had had regard to the substance of the work. At paragraph [107], he reaffirmed that the remuneration sought in relation to the administration of Wollumbin was work concerning the administration of the Trust or "general insolvency matters concerning the administration of the Trust". He also identified that the amount of $31,579.70 was not claimed as it was not incurred in the administration of the Trust. 19 In assessing whether an amount claimed can be said to relate to the administration of a trust recognised by the Court, it is necessary to adopt a broad brush approach and accord credit to the detailed understanding of the administrator, taking into account his appreciation of the substance of the work undertaken. However, even with that in mind, it is difficult in the present case to reach the conclusion that the substance of all of the work specified in annexure SS-36 can be said to relate sufficiently to the administration of the constructive trust on which the Property was held. The object of an administrator is to ascertain the way in which the property of the company can best be administered so as to maximise the chances of the company continuing, or otherwise to bring about a better return to creditors than would follow from an immediately winding up: s 435A of the Corporations Act 2001 (Cth). That necessarily requires an assessment of the property owned by the company and the nature of any business which it undertakes. Such a process may well produce results which inure for the benefit of a trust of which the company is trustee, and therefore pre-empt or replicate work which would have to have been performed by the trustee. However, in the present case, where the Property was held on a constructive trust and therefore unrelated to the Company's business, no issue arose as to the existence of creditors or other corporate conduct in relation to that trust. Wollumbin appears to have acted as if it were the trustee of a unit trust and it is fair to infer that it did not regard itself as a trustee of a constructive trust. Even though the administrator was unaware of the nature of the Trust on which Wollumbin held the Property, if the work performed did not relate to or benefit the actual constructive trust on which the relevant land was held, there is no power to make an order for remuneration from the trust assets in respect of that work. 20 In the schedule in annexure SS-36, there are several entries, representing components of the overall claim for time-based remuneration, that appear to relate strictly to administration work and which were not necessary for or relevant to the conduct of the Trust. Reporting to creditors of Wollumbin is an example, as is the listing of the company's books and records and inquiries as to the nature and extent of its creditors. Although dealing with some of the persons who contributed to the acquisition of the land as part of the intended commune scheme could be said to relate to the Trust, the dealing with Ms Norman in her capacity as a creditor, for instance, could not be so characterised. These matters satisfy me that Mr Staatz's analysis has proceeded, at least in part, upon an incorrect presumption. 21 In the circumstances, where the relevant Trust is a bare trust in respect of which the obligations of a trustee are limited, I am not satisfied that the total amount claimed by Mr Staatz in this capacity as administrator represents work done in the administration of the Trust, although it should be accepted that this question is one on which reasonable persons may disagree. After scrutinising annexure SS-36 and adopting the broad-brush approach suggested above, I am satisfied that the remuneration reasonably to be allowed to Mr Staatz for his work done in the administration of Wollumbin is $20,000.00.

The claims in relation to the liquidation 22 Mr Staatz adopted a not dissimilar approach in relation to his claims for remuneration as liquidator for work done in the period between 8 August 2017 and 11 November 2021. For this, he claimed to be entitled to the sum of $237,463.80.80. As he did in relation to the amount claimed in respect of the administration, he deposed that the amount claimed was for work done in the liquidation of Wollumbin only to the extent that it related to the administration of the Trust. The comments made above therefore apply equally to this claim. 23 Mr Staatz has itemised the amounts claimed in relation to the work done in the liquidation in annexure SS-37 of his affidavit of 1 November 2022. Again, he has claimed that he has written off some amounts which relate to general liquidation work, albeit that those amounts are relatively small in comparison to the amount claimed. 24 Unfortunately for Mr Staatz, it was not possible in 2017 for him to know that Wollumbin would be found to be the trustee of the Property for those who had contributed to the Property's acquisition. At the time of the commencement of the liquidation, he would not yet have contemplated the making of an application to the Court for directions, let alone its outcome. Whilst it may well be that his work in seeking to ascertain the identity of those who contributed to the acquisition of the land as unit holders in the proposed unit trust may be considered equivalent in effect to the identification of the beneficiaries of the constructive trust ultimately recognised, such that it is sufficiently referable to the administration of the Trust to be remunerated, work concerning the creditors of Wollumbin, whether as general creditors or creditors of the intended unit trust, cannot be so characterised. Nevertheless, a large amount of the time spent by Mr Staatz and his staff was taken up with the litigation in which he sought directions from this Court about the entitlements to the Property held by Wollumbin. It is apparent that significant extra work was required to be undertaken in that setting in order to deal with the wide range of persons who claimed a beneficial interest in the Property. 25 The amount of work undertaken by Mr Staatz and his office in the course of the liquidation in relation to the administration of the constructive trust appears, on its face, to be significant. In the course of the hearing of the application, I raised concerns about this and the amount of work undertaken by the solicitors acting in the litigation that resulted in the decision in Wollumbin (No 3). Whilst I remain concerned about the level of legal fees charged, a consideration of annexure SS-37 discloses that Mr Staatz and his staff were required to perform a substantial amount of work in responding to the needs and conduct of the Trust beneficiaries. They were contacted regularly by those beneficiaries and were required to respond to their questions and concerns, all of which occurred at a great costs. In particular, Mr Staatz and his staff were required to deal with Ms Norman, one of the beneficiaries, who pursued multiple misguided actions in relation to the litigation, which together generated significant expense for the Trust. The substantial distraction caused by Ms Norman was echoed in her written and oral submissions made on this application, where she sought to raise a wide range of irrelevant and baseless issues, none of which was supported by any evidence. It is not unfair to say that she, along with a few other persons who claimed a beneficial interest in the land, substantially increased the cost of the liquidation. 26 Again, it is necessary to adopt a broad perspective when examining the claims which Mr Staatz makes in respect of the work involved in the liquidation. Nevertheless, a perusal of annexure SS-37 indicates that some of the liquidator's conduct in dealing with creditors and other non-trust matters has been incorporated into the amount claimed. Although Mr Staatz has deposed that all of the identified work related to the administration of the Trust, without additional information, I cannot be satisfied that the corresponding amounts are properly to be paid from the trust assets. As has been mentioned above, the constructive trust required very little of the trustee, whose task in the present circumstances was limited to holding the Property for those who could be identified as beneficiaries and distributing the proceeds once sold. Whilst work was performed to ascertain the beneficiaries, the identification and appraisement of Wollumbin's creditors and debtors was not a constituent part of that. In the result, there should be a reduction in the amount allowed for remuneration during this period to $210,000, being a reduction of some $27,000 to reflect that portion of the work which was concerned with dealing with creditors and other non-trust liquidation matters.

The claim for remuneration in respect of the receivership 27 Mr Staatz separately claimed remuneration in respect of his receivership of the Property for the period from 20 June 2019 to 30 October 2022 in the amount of $115,734.50. 28 In his affidavit, he adopted the same approach as he did in relation to his claims for remuneration from the administration and liquidation phases of his work. Indeed, at paragraph [124] of his affidavit of 1 November 2022 he said: Annexed hereto and marked "SS-38" at pages 350 to 378 inclusive is a schedule I have generated from the electronic accounting records maintained by Vincents recording the work performed during the period from 20 June 2018 to 30 October 2022 inclusive in the receivership (to the extent that I have assessed that that work relates to the administration of the Trust or to general insolvency matters concerning the administration of the Trust) ("Receivership Schedule"). 29 It should be noted that this paragraph contains an error, and annexure SS-38 in fact relates to the period from 20 June 2019 to 30 October 2022, being that period following the handing down of judgment in Wollumbin (No 3). 30 This Court has the power to make orders for the fair and reasonable remuneration of a receiver, which it has appointed, from the assets under receivership: Federal Court Rules 2011 (Cth) r 14.24; Australian Securities and Investments Commission v Linchpin Capital Group Ltd (No 3) (2020) 142 ACSR 193 at 195 [7]. However, in the present case, it is apparent that Mr Staatz has attempted to link the work involved in the sale of the land in his capacity as receiver to the obligations of Wollumbin as the trustee of the land under the constructive trust. He therefore, in effect, claims remuneration as if he had performed the relevant tasks qua trustee. This approach is not impermissible, and accords with the authorities previously discussed. 31 It is apparent that the amount sought relates to the carrying out of the receivership by the selling of the land, which was, in any event, work necessary for the carrying out of the Trust. Mr Staatz deposed to as much in his 1 November 2022 affidavit and deposed further that the work was necessary for the conduct of the receivership. These matters should be accepted, and a perusal of annexure SS-38 supports Mr Staatz's evidence in this regard. An order should be made allowing Mr Staatz, in his capacity as receiver, the sum of $115,734.50.

Future work as receiver 32 Mr Staatz also seeks an order that the Court fix his remuneration for future work not yet performed in his capacity as receiver. He claims that he will become entitled to a further amount of $20,000 plus GST in respect of his duties as receiver from 31 October 2022 to the end of the receivership. In his affidavit of 22 November 2022, he identified the nature and extent of the work that he anticipates will be required, including the giving of notice of his intention to make a dividend from the proceeds of the sale of the property, preparing dividend calculations and bank account administration. He also identifies the persons who will be involved in that work and the time that he expects they will expend in undertaking it. 33 There is no doubt about that the Court has the power to make orders as to the future payment of remuneration: Australian Securities and Investments Commission v A One Multi Services Pty Ltd (No 2) [2022] FCA 1100 [24] - [26]. The evidence put on by Mr Staatz is sufficient to establish that the amount sought is fair and reasonable. That amount should be allowed.

Disbursements 34 Mr Staatz also seeks orders in respect of legal costs in the sum of $38,120, which he has been required to pay in the course of his receivership of the trust assets. Technically, Court approval for the payment of these disbursements is not necessary, although in order to obtain protection a receiver may seek a direction that he would be justified in paying them: Re Say Enterprises Pty Ltd [2018] NSWSC 396 [6]. 35 Mr Staatz has deposed in his affidavit of 22 November 2022 that he engaged Patane Lawyers to provide him advice and assistance regarding the steps and processes for calling for, and adjudicating upon, proofs of trust debts, including whether such debts had properly been incurred by Wollumbin as trustee and the application of the clear accounts rule. He also sought and obtained advice about the costs awarded in favour of various of the beneficiaries, the progress of the taxation of those costs, and the nature and extent of the work which might be characterised as unrelated to the Trust or to general insolvency matters only. Mr Staatz deposed to having reviewed the amounts charged and, upon doing so, determined that the expenses were reasonable and properly payable, and were incurred in respect of work that was necessary for the conduct of the receivership. These observations and conclusions were not challenged or questioned in any way. In the circumstances, it is appropriate that the amount be paid from the proceeds of the sale of the Property.

Appeal costs 36 In the course of the liquidation, Ms Norman and Mr Berry sought to appeal the decision in Wollumbin (No 3). As it transpired, leave was apparently required, perhaps because the appeal was filed out of time. Mr Staatz brought an application for summary judgment in respect of the appeal and was successful. The appellants were ordered to pay his costs. A certificate of taxation has issued in respect of those costs in the amount of $81,892. Mr Staatz seeks an order that he be entitled to payment of those costs from the amounts, if any, which might be payable to Ms Norman and/or Mr Berry from the proceeds of the sale of the Property. That would appear to be a sensible and rational position to adopt. No substantive submissions were made in opposition to the order so proposed. 37 Mr Staatz seeks a further order that, to the extent to which the costs are not recoverable from the proceeds that might be payable to Ms Norman and/or Mr Berry, he be entitled to recover his costs from the proceeds of the sale of Property generally. Again, an order to this effect is in apparent accord with the general principles referred to above. The litigation engaged in by Mr Staatz was for the purpose of attempting to identify those who had a beneficial interest in the Property and that, in itself, was part of the process of the sale and realisation of the Property and the distribution of the proceeds. It follows that the cost of the litigation were necessary and proper costs incurred in the performance of the receivership. In these circumstances, the further order sought by Mr Staatz should be made to ensure that he will not be out of pocket in the event that costs cannot wholly be recovered against the interests of Ms Norman or Mr Berry.

Legal costs of the trial 38 In Wollumbin (No 3), an order was made that Mr Staatz be entitled to his costs of the proceedings, including reserved costs, calculated on an indemnity basis to be paid out of the assets of the Trust. 39 Within the present application, Mr Staatz seeks a further order pursuant to r 40.02 of the Federal Court Rules 2011 (Cth) that the costs be payable by way of a lump sum. There is no doubt that, by exercise of the discretion in s 43 of the Federal Court of Australia Act 1976 (Cth), the Court may order that costs be awarded in a specified sum. Such an order can be made subsequent to the original making of the order as to costs. 40 In his application, Mr Staatz, as the liquidator, seeks an order that his costs of an interlocutory application filed by Ms Norman on 18 May 2018 be assessed as a lump sum in the amount of $75,292.75. He seeks a further order that this lump sum be paid from any amount that Ms Norman might otherwise receive from the sale of the Property, although, as a matter of reality, any amount to which Ms Norman might be entitled would not come close to meeting that claim. 41 Mr Staatz also seeks an order that the costs of the proceedings that led to the decision in Wollumbin (No 3) be assessed in a lump sum in the amount of $617,876.55. This amount, it is said, consists of the sum of $470,804.65 (allegedly discounted from an initial sum of $540,804.65) for work done by his solicitors and charged to him, and a further sum of $147,071.90 for disbursements from the proceeds of the sale of the Property. 42 These sums are said to be evidenced by an itemised bill attached to the affidavit of Mr Bruce Patane sworn on 22 November 2022. Mr Patane claimed that he has prepared bills of costs in relation to both the interlocutory application as well as the other costs and disbursements of and incidental to the proceedings. He annexes copies of those itemised accounts and asserts that the bills of costs have been prepared by him in accordance with the requirements for such bills of costs, as provided for in Sch 3 to Federal Court Rules 2011 (Cth). 43 In Mr Staatz's written submissions, it was accepted that costs awarded on an indemnity basis must be reasonably and properly incurred. However, there is no evidence from any suitably qualified person that the amounts sought in respect of the interlocutory application or the main proceedings were reasonable and properly incurred. It is conspicuous that Mr Patane does not depose to that fact and, more particularly, neither does Mr Staatz. 44 Prima facie, the amounts sought might be described as substantial. Ms Norman's interlocutory application of 18 May 2018, by which she sought to turn the current proceedings into a class action and, in doing so, join a substantial number of cross-claimants and respondents, was self-evidently most unlikely to succeed. Its prospects were all the poorer in the context of a liquidator's proceedings for directions. That is not to deny Mr Staatz's duty and obligation to respond to the application, including by analysing the 35-page affidavit filed in support. That affidavit contained multiple scurrilous and unfounded allegations, as is Ms Norman's wont. Indeed, Mr Staatz's written submissions in response to Ms Norman's application correctly identified the application and affidavit as serving only to introduce scandalous and otherwise unmeritorious claims against him and other non-parties. The application was devoid of merit and was properly treated as such. 45 Whilst Mr Staatz was no doubt vexed and probably annoyed by the application, and yet was required to deal with it, it is difficult to conceive that his doing so would give rise to a bill in the sum of $75,292.75. 46 Despite the Court's inherent knowledge of its file, and of the circumstances surrounding the making of the application and its determination, there is insufficient evidence to support any lump sum assessment of costs. Neither Mr Staatz nor Mr Patane has gone on oath to explain the nature and extent of the work required, nor has either explained why the amount claimed was reasonably and properly incurred. Given that the application involved largely issues of law and matters for submission, the amount claimed in respect of solicitors' costs, being $57,417.75, prima facie seems excessive. 47 Similar comments can be made in relation to the bill issued in respect of the proceeding which led to the decision in Wollumbin (No 3). The amount claimed by Mr Staatz is $617,876.55. The written submissions filed on his behalf allege that this sum comprises $470,804.65 (which was allegedly discounted from $540,804.65) for the solicitors' work and $147,071.90 in disbursements. Again, whilst one can appreciate that the proceedings were rendered more difficult by reason of the baseless and scurrilous allegations made by Ms Norman, it is difficult to understand how the solicitors' costs could amount to $470,804.65. Whilst it can be accepted that additional time, effort and costs may have been incurred by Mr Staatz's solicitors corresponding with the numerous respondents, it is difficult to see the involvement of any significant professional costs in that regard. It can also be accepted that additional costs and expenses were incurred in having to deal with an array of affidavit material from the various persons claiming to be entitled to an interest in the Property. However, most of those affidavits were of only passing relevance to the issues to be determined in the proceedings before this Court. Rarely did any require the preparation of evidence in response. 48 Again, the liquidator has provided insufficient supporting detail to warrant the making of an order for costs to be paid in a lump sum in respect of either the interlocutory application or the proceedings more generally. That being so, it is inappropriate to make the orders which are sought. Rather, orders should be made that the costs of the interlocutory application and the proceedings be assessed as lump sums, and, in conjunction, a direction should be given that the amount be assessed by a Registrar of this Court. Mr Staatz should have the opportunity to demonstrate why, in the circumstances, the lump sum amounts were reasonably and properly incurred.

Legal costs of the defendants 49 By paragraph 16 of the Orders made on 20 June 2019, the costs of the third, fourth, fifth and sixth defendants, including any reserved costs, calculated on a full indemnity basis were to be paid out of the assets of the Trust. The defendants were necessary contradictors for the purposes of the proceedings and Mr Staatz has very properly acknowledged that the costs incurred by the defendants in this capacity should be paid out of the assets of the Trust. The amount identified is $207,233.55 inclusive of GST. Again, very properly, Mr Staatz has reviewed the tax invoices and documents provided by the third to sixth defendants in respect of their costs and deposed to his belief that they support the sum claimed, being consistent with the work that, to the best of his knowledge, was carried out on the defendants' behalf. 50 Although the costs payable to the solicitors of the third to sixth defendants have not been taxed, given the imprimatur of Mr Staatz, I am prepared to accept that the nominated sum properly represents the amount that should be paid out of the Trust assets. Mr Staatz has accorded those defendants both a courtesy and some indulgence, and his professionalism is to be respected. In any event, given that the third to sixth defendants are no longer represented, requiring them now to produce properly itemised bills of account would add significant additional expense to an already costly process. In all probability, the additional amounts would ultimately be paid from the Trust assets. In those circumstances, and adopting a very broad-brush approach, one might infer that it would be less deleterious to the amount available to the beneficiaries if the amount of the solicitors' bills was to be paid forthwith, rather than requiring itemised bills and verification of the same. Moreover, the amount of costs is self-evidently reasonable for proceedings of this nature. 51 For all of those reasons, an order should be made that the sum of $207,233.55 inclusive of GST be paid out of the Trust assets for the third through to sixth defendants' costs.

Lien to secure payment 52 Finally, Mr Staatz seeks an order that he be entitled to a lien to secure payment of the amounts referred to herein. The lien arises as a matter of equity, consequent upon Mr Staatz's efforts in the performance of his duties as trustee and/or receiver: Kite (in their capacity as liquidators of Mooney's Contractors Pty Ltd (ACN 144 726 296) (in liq)) and Another v Mooney and Another (No 2) (2017) 121 ACSR 158; Hewett v Court (1983) 149 CLR 639 at 663 - 664. There is no reason why a lien should not be ordered in this case. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington.

SCHEDULE OF PARTIES QUD 32 of 2018 Defendants Fourth Defendant: MELISSA HIRSCH Fifth Defendant: STUART NEWMAN Sixth Defendant: NORMA GEELIN MOU Seventh Defendant: PHILLIP MORANDINI Eighth Defendant: DEAN MOONEY Ninth Defendant: CRAIG SCOTT

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