Trio Capital Limited (Admin App) v ACT Superannuation Management Pty Ltd & Ors

CATCHWORDS : CORPORATIONS - VOLUNTARY ADMINISTRATION - TRUSTS - corporate trustees' assets insufficient to pay administrators' fees and expenses - numerous trusts administered by corporate trustee - some trusts insolvent - whether administrators entitled to structure payments out of corporate assets to throw burden of recoupment of their fees and expenses only upon assets of solvent trusts.

LEGISLATION CITED : - Corporations Act 2001 (Cth) - Chapter 5, s 443D, s 447D, s 601FC(2) - Trustee Act 1925 (NSW) - s 81, s 85

• Berkeley Applegate (Investment Consultants) Ltd (In liq), Re [1989] Ch 32 ([1988] 3 All ER 71) - 13 Coromandel Place Pty Ltd v CL Custodians Pty Ltd (in liq) (1999) 30 ACSR 377 CASES CITED : - Duke of Norfolk's Settlement Trusts, Re [1982] Ch 61 - French Caledonia Travel Service Pty Ltd (in liq), Re (2003) 59 NSWLR 361 - Sutherland, Re Application of (2004) 50 ACSR 297 - Suco Gold Pty Ltd (in liq), In re (1983) 33 SASR 99

Stephen James Parbery, Neil Singleton & Nicholas Martin in their capacity as Joint and Several Administrators of Trio Capital Limited (Administrators appointed) and others as defined in the schedule (Plaintiffs) ACT Superannuation Management Pty Ltd (First Defendant) Z. Rocksandic representing Millhouse IAG Private Equity Fund (Second Defendant) PARTIES : R. & E. Thornton, trustees for Raid Provident Fund and representing ARP Growth Fund (Third Defendants) G. & K. Kolsky, representing Asttar Portfolio Service (Fourth Defendants) Silverhall Holdings Pty Ltd, representing MARQ Capital Diversified Property Fund (Fifth Defendant) Huntley Management Pty Ltd, responsible entity of MillhouseIAG Private Equity Fund (Sixth Defendant)

COUNSEL : T.G.R. Parker SC (Plaintiffs) I.M. Jackman SC (First Defendant)

SOLICITORS : Norton Rose (Plaintiffs) Clayton Utz (First Defendant)

2010/011359 Trio Capital Limited (Admin Appointed) v ACT Superannuation Management Pty Ltd & Ors

1 The Plaintiffs are the joint and several Administrators of Trio Capital Limited and of two related companies, Astarra Funds Management Pty Ltd (AFM) and ASI Administration Pty Ltd (ASI). Trio is the Responsible Entity of twelve managed investment schemes registered under Chapter 5C of the Corporations Act 2001 (Cth). 2 The Administrators seek directions under CA s 447D as to the manner in which, and the extent to which, they may recover their remuneration and costs out of the assets of Trio and the assets of the managed investment schemes. The problem

3 Prior to 16 December 2009, Trio was the trustee of five superannuation entities, namely: Astarra Superannuation Plan, Astarra Personal Pension Plan, Employers Federation of NSW Superannuation Plan, My Retirement Plan and Astarra Pooled Superannuation Trust (the Super Entities). Trio, as trustee of the Super Entities, procured the funds of those entities, totalling approximately $300M, to be invested in the twelve registered managed investment schemes of which it is the Responsible Entity and also in an unregistered mortgage investment scheme of which it was trustee. I will refer to all thirteen of these managed investment schemes collectively as "the Schemes". 4 On 16 December 2009, the Australian Prudential Regulation Authority appointed ACT Super Management Pty Ltd (ACT Super) as acting trustee of the Super Entities in place of Trio. ACT Super Management is now the trustee of those Entities on a permanent basis. 5 Trio, as Responsible Entity, procured the funds of many of the Schemes to be invested in the acquisition of what the parties have delicately termed "Impaired Assets". What that really means is "assets which are illusory, worthless or untraceable". In short, many of the Schemes have suffered heavy losses and some have no assets left. The parties have called those Schemes with no assets left "Impaired Schemes" and those with remaining assets "Unimpaired Schemes". For the sake of consistency, I will adopt the same terminology. 6 The work of the Administrators has involved the investigation and administration of the affairs of Trio itself and, since Trio is still the Responsible Entity of the Schemes, the investigation and administration of the assets of the Schemes. The Administrators have a right of indemnity out of the property of Trio in respect of their remuneration as Administrators of Trio and in respect of the expenses which they have incurred in the administration: CA s 443D. The available property of Trio consists essentially of the fees and reimbursements to which Trio is entitled as Responsible Entity of the Schemes under the constitutions of the Schemes. That property is insufficient by a wide margin to meet in full the remuneration and expenses of the Administrators in carrying out their work, both in relation to the affairs of Trio itself and in relation to the investigation and administration of the Schemes of which Trio is the Responsible Entity. The orders made so far

7 On 12 February 2010, the Administrators commenced proceedings seeking the Court's directions pursuant to CA s 447D(1) as to the manner of payment of their fees and expenses in the administrations. On 19 February 2010, ACT Super was joined as a defendant in the proceedings to represent the interests of the unitholders of some of the Schemes. 8 On 26 February 2010, representatives of unitholders of certain other Schemes were joined as defendants. 9 In the event, only ACT Super has appeared to make submissions in relation to the issues for determination. Before proceeding further, I acknowledge my indebtedness to Mr T.G.R. Parker SC, who appears for the Administrators, and Mr I. Jackman SC, who appears for ACT Super, for their thorough and very helpful submissions. 10 By an Amended Interlocutory Process filed on 26 February 2010, the Administrators sought directions and orders to the following effect:

(a) that Trio would be justified paying to itself fees under each of the Scheme constitutions in an amount which did not exceed the total of the fees referred to in each Scheme product disclosure statement;

(b) that, in the event that the assets of Trio (including fees referred to in paragraph (a)) are insufficient to pay the Administrators' 'Remuneration', the Administrators be paid the 'Remuneration' from the funds and assets forming scheme property of the Schemes;

(c) the Administrators be indemnified out of, or alternatively have an equitable lien over, the funds and assets forming scheme property of the Schemes for all the 'Expenses'; and

(d) that, if the assets of Trio (including fees referred to in paragraph (a)) are insufficient to pay the Administrators' 'Remuneration' and 'Expenses', the Administrators would be acting reasonably in causing their 'Remuneration' and 'Expenses' to be paid as follows: (i) to the extent that the 'Remuneration' and/or 'Expenses' are attributable to a particular Scheme, from that Scheme;

(ii) to the extent that the 'Remuneration' and/or 'Expenses are attributable to more than one Scheme, from each Scheme on a pro-rata basis according to the assets of the [relevant] Scheme; and

(iii) to the extent that the 'Remuneration' and/or 'Expenses' are not attributable to a particular Scheme, that they be payable on a pro-rata basis according to the assets of [all] the Schemes. 11 The expressions 'Remuneration' and 'Expenses' were defined expansively, so as to include, inter alia, fees and expenses incurred in:

(d) seeking expressions of interest for and providing information about any of the Schemes to a prospective replacement responsible entity;

(e) convening meetings of members of the Schemes. 12 On 4 March 2010, the Administrators filed in Court a Further Amended Interlocutory Process seeking directions and orders substantially to the same effect as those set out in paragraph 10. After submissions and some discussion between the parties, they were able to agree on orders and directions dealing with some of the questions. On 5 March, the following consent orders were made: "2. The Court orders that, subject to paragraph 4 below:

(a) in the event that the assets of Trio … are insufficient to pay the Remuneration and Expenses, the (Administrators) be paid the Remuneration and Expenses from the funds and other assets forming scheme property of the Scheme …; and

(b) the (Administrators) be indemnified out of, or alternatively have an equitable lien over, the funds and other assets forming scheme property of the Schemes for all the Remuneration and Expenses …

3. The Court directs that, pursuant to section 447D of the Corporations Act that, if the assets of Trio … are insufficient to pay their Remuneration and Expenses under paragraph 2, the (Administrators) would be justified, and would otherwise be acting reasonably in causing their Remuneration and Expenses under paragraph 2 to be paid from each Scheme to the extent that the Remuneration and/or Expenses are attributable to a particular Scheme.

(1) to the extent that any Remuneration and Expenses are not attributable to a particular Scheme, and are not otherwise met out of the funds of Trio, the question of the manner and source of the payment of such Remuneration and Expenses; and

(2) the question whether the costs and expenses of tasks undertaken by the (Administrators) other than those identified in the definitions of Expenses and Remuneration set out below are costs and expenses that may be recoverable from the Schemes

are reserved, with all parties having liberty to apply in respect of that question on reasonable notice to all other parties." 13 The questions reserved in Order 4 are now to be decided. Again, the only submissions made in opposition to those of the Administrators have been made by ACT Super. Some definitions

14 The parties have used some shorthand terms in their submissions which may conveniently be adopted in these reasons, as follows: " Corporate Assets: assets of which Trio is both legal and beneficial owner (including fees paid to Trio pursuant to paragraph 1 of the Orders);

Scheme Assets: assets held in the name of Trio as Responsible Entity or trustee of one or other of the Schemes;

Administrators' Costs: all costs (whether in the nature of remuneration or reimbursement of expenses) which the Administrators have incurred or will incur in relation to conducting and completing the administration of Trio under Part 5.3A of the Corporations Act and in relation to administering the Schemes;

Scheme Costs: those Administrators' Costs relating to one or more of the Schemes (defined in the Orders as 'Expenses' and 'Remuneration';

Corporate Costs: all Administrators' Costs other than Scheme Costs (also referred to as 'Pure Administration Costs'). The financial position of Trio and the Schemes

15 The following is a summary of the financial position of the Schemes and of the Trio administration as at 28 February 2010 taken from the affidavit of Mr M. Hill of 5 May 2010: Trio's assets and income (i.e. the Corporate Assets) $1,750,994 Less Corporate Costs and Scheme Costs excluding Administrators' remuneration $ 1,019,589 Surplus available out of Corporate Assets for Administrators' remuneration $ 731,405

Administrators' remuneration in respect of: Administration of Trio $210,000 Administration of Impaired Schemes with no capacity to pay $219,946 Administration of Unimpaired Schemes with capacity to pay $ 807,184 $ 1,237,130

Shortfall in Administrators' remuneration after payment of Corporate Costs and Scheme Costs $ 505,725

16 There is no dispute that Trio, in its capacity as Responsible Entity, holds the assets of the Schemes in its own name as trustee - the Scheme Constitutions expressly so provide, and see also CA s 601FC(2). There is no dispute that Trio, like any trustee, may apply to the Court, exercising its inherent jurisdiction in the administration of trusts, for authority to pay itself out of Scheme Assets in respect of remuneration and costs incurred in the administration of the Schemes for which it would otherwise go out of pocket, and that the Administrators may also apply for similar relief: see generally Re Berkeley Applegate (Investment Consultants) Ltd (In liq) [1989] Ch 32 ([1988] 3 All ER 71), and the extensive review of the authorities by Campbell J (as his Honour then was) in Re French Caledonia Travel Service Pty Ltd (in liq) (2003) 59 NSWLR 361, and in Re Application of Sutherland (2004) 50 ACSR 297, at [11]-[16]. The dispute in the present case is as to how the administrators may recoup themselves for any shortfall out of the Scheme Assets bearing in mind the difficulty that there are a number of Schemes of which Trio is trustee, some with capacity to pay the shortfall and others with no capacity. 17 The Administrators' submissions may be summarised thus:

• the Administrators have a right to payment of Administration Costs (i.e. both Corporate Costs and Scheme costs) out of the Corporate Assets in priority to all other unsecured creditors pursuant to CA s 443D;

• in addition, the Administrators, in administering the affairs of Trio as a corporate trustee, are entitled personally and directly to recover a proper allowance from the Scheme Assets for their remuneration and costs in administering those trusts: they rely upon the line of authority referred to in Berkeley Applegate and in Re Sutherland ;

• the personal right of remuneration and recoupment from Scheme Assets of the Administrators is independent of the right of Trio itself to remuneration and recoupment from Scheme Assets under the Scheme Constitutions and the right of the Administrators may be given effect without consideration of Trio's entitlement to remuneration and recoupment out of Scheme Assets under the Constitution;

• "once it is recognised that the Administrators have a right to recover Scheme Costs out of the Scheme Assets" , it follows that the Administrators have a right to payment of the Scheme Costs out of two funds, namely, the Corporate Assets and the Scheme Assets. The Administrators' rights against each fund have priority over the claims of other persons to those funds, such as the claims of Trio's unsecured creditors against the Corporate Assets and the claims of Scheme members against the Scheme Assets;

• the Administrators are under no obligation, either in law or by the terms of consent orders 2 and 3 made on 5 March 2010, to exhaust the Corporate Assets in payment of Corporate Costs and Scheme Costs before enlivening their entitlement to recover Scheme Costs out of Scheme Assets. It is open to the Administrators to recover Corporate Costs and Scheme Costs now out of both funds in such proportions as they, in their absolute discretion, choose. They may do so in such a way as will avoid entirely the shortfall which they would inevitably suffer if they could recover Scheme Costs of an Impaired Scheme only from the Scheme funds of that Scheme. 18 The Administrators say that, in exercise of their right to recover their costs and expenses from both Corporate Assets and Scheme Assets in any manner which they choose, they may avoid a shortfall in the following way:

• first, they will pay out of Corporate Assets all the expenses incurred in relation to Trio's administration and the administration of all Schemes (i.e. Corporate Costs and Scheme Costs of $1,019,589), leaving $731,405 remaining;

• out of that $731,405 they will pay in full their Remuneration of $210,000 relating to Trio's administration, leaving $521,405 remaining;

• out of that $521,405 they will pay in full their Remuneration of $219,946 relating to the administration of Impaired Schemes with no capacity to pay, leaving $301,459 remaining;

• all of that $301,459 will be applied in part payment of their Remuneration of $807,184 relating to the administration of unimpaired Schemes with the capacity to pay, leaving a shortfall of $505,725;

• that shortfall of $505,725 will then be paid out of the Scheme Assets of the Unimpaired Schemes, apportioned as between those Schemes in relation to the work referable to each Scheme. Do the Administrators have present rights against two funds?

19 I am unable to accept the Administrators' submission that they have a present entitlement to payment of the Administrators' Costs out of two funds, i.e. the Corporate Assets and the Scheme Assets, and that they therefore have a discretion as to how they may apportion those Costs between the funds. 20 I accept that the Administrators are, through their administration of Trio, administering funds of which Trio is trustee and that, for the purposes of the principles discussed in Re Berkeley Applegate and Re Sutherland, they are in the same position as liquidators of a company which is a trustee. However, as ACT Super correctly submits, the administrator or liquidator of a corporate trustee does not have an immediately enforceable right of recoupment for fees and expenses out of the trust funds. Rather, where the terms of the trust instrument, or the trustee's fees recoverable out of trust assets under the trust instrument, are inadequate to provide sufficiently for the costs and expenses of the administrator or liquidator, the administrator or liquidator may appeal to the Equity Court's inherent jurisdiction in the administration of trusts to seek allowance for remuneration and expenses out of the trust assets, where it appears clear that the remuneration and expenses are for work done for the benefit of the trust. Whether the administrator or liquidator is granted such an allowance out of trust assets is a matter in the Court's discretion, having regard to all the circumstances of the case: see e.g. Re Berkeley Applegate at 50H; Re Sutherland at [11]-[16]. 21 In this regard, and with the greatest respect, I am unable to agree, without some explanation, in the sentiment expressed by Campbell J in Re French Caledonian Travel at [211]: "Even though a liquidator needs to go to court to have it established that he has a right of remuneration from trust assets for work done in administering them, that right is one which is not accorded the liquidator in the exercise of some kind-hearted discretion of the court, but is accorded to him in accordance with equitable principle. The liquidator's right to receive such a payment, when the factual circumstances are made out, is every bit as much a matter of legal right as is a solicitor's 'fruits of the action' lien ( Firth v Centrelink (2002) 55 NSWLR 451), or a provisional liquidator's lien over property he or she has preserved ( Shirlaw v Taylor (1991) 31 FCR 222). As Lord Browne-Wilkinson said in Foskett v McKeown (at 109): ' … The rules establishing equitable proprietary interests and their enforceability against certain parties have been developed over the centuries and are an integral part of the property law of England. It is a fundamental error to think that, because certain property rights are equitable rather than legal, such rights are in some way discretionary. This case does not depend on whether it is fair, just and reasonable to give the purchasers an interest as a result of which the court in its discretion provides a remedy. It is a case of hard-nosed property rights.' " 22 With the greatest respect, I think that the passage quoted from Foskett v McKeown is taken rather out of context. That case was not concerned at all with a trustee's recoupment of fees and expenses from trust property but, rather, with the equitable rules of tracing misappropriated trust property. 23 While the recoupment of fees and expenses by the administrator or liquidator of a corporate trustee out of trust assets may properly be regarded as an equitable proprietary interest or right after the Court, in the exercise of its discretion, has granted the application for recoupment, I do not think that the administrator or liquidator has any such enforceable right or interest before the Court grants the application. This is in accordance with the authorities, such as Re Berkeley Applegate at 51-52, which speak of the Court's discretion to allow costs and expenses out of trust assets as one which is "sparingly exercised", or exercised "in exceptional cases": and see the authorities cited by Campbell J in Re Sutherland at [11]. 24 The Administrators' application for recoupment out of Scheme Assets has, to date, been granted only to the extent permitted in Order 2(a) of the Consent Orders made on 5 March 2010. That Order permits recoupment of Remuneration and Expenses out of Scheme Assets only "in the event that the assets of Trio (i.e. the Corporate Assets) are insufficient" to pay them. The terms of the Order do not permit the Administrators, in their discretion, to decide the sequence of payments of various liabilities out of Corporate Assets so as to bring about a situation in which Scheme Costs of Impaired Schemes will be paid out of Corporate Assets but the Scheme Costs of Unimpaired Schemes will be paid out of Scheme Assets. Whether the Scheme Administrators can structure payments so as to bring about that result is the very question reserved by Order 4 of the Consent Orders. Should the Administrators' proposal be accepted?

25 The Administrators' proposed course of payment would benefit themselves at the expense of the members of the Unimpaired Schemes. If they treated the members of Unimpaired Schemes in the same way as members of the Impaired Schemes - i.e. by taking, in the first instance, their remuneration in respect of all Schemes out of Corporate Assets equally - the Administrators would be worse off. For the Administrators to treat the members of Unimpaired Schemes differently from the members of Impaired Schemes and in a way which promotes their own interests would be a breach of their fiduciary obligations of loyalty as administrators of the trustee of the Unimpaired Schemes unless the Court, exercising its power to give directions under CA s 447D(1), authorised them to do so or authorised what would otherwise be a breach of trust by Trio itself pursuant to s 81 or s 85 of the Trustee Act 1925 (NSW). 26 I start from the position that the Court's power to allow a trustee - or the administrator or liquidator of a corporate trustee - recourse to trust assets for remuneration and expenses is sparingly exercised: see the authorities referred to in [23]. This is particularly so where the trust instrument itself provides the extent to which the trustee is to be remunerated and reimbursed from trust assets. 27 Such was the case in Re Berkeley Applegate. There, the contract between the trustee and the investors which constituted the trust expressly provided that, after payment of the trustee's stipulated remuneration from trust assets, the investors would have no further liability for the expenses of administration. However, the collapse of the investment scheme required the liquidator of the corporate trustee to carry out far more work in investigation and administering the trust assets than could have been envisaged at the conception of the scheme. The assets of the trustee, derived from its remuneration under the trust instrument, were insufficient to meet the liquidator's fees and expenses. The trust beneficiaries argued that, because of the terms of the trust instrument, the Court had no power to permit the liquidator to have recourse to trust assets for the shortfall. 28 The Court, however, held that the Court's inherent jurisdiction to allow recourse to trust assets for further remuneration and reimbursement could be exercised even though the terms of the trust instrument prevented it: see at 52G-53B. In this regard, the Court relied upon the decision of the Court of Appeal in Re Duke of Norfolk's Settlement Trusts [1982] Ch 61. 29 That was a case of an inter vivos settlement, in which express provision had been made for the remuneration and expenses of the trustees. The beneficiaries argued, and the trial judge accepted, that the Court had no power to authorise further remuneration or reimbursement from trust assets. The Court of Appeal disagreed. 30 Fox LJ said: "As to principle, it seems to me that, if the court has jurisdiction, as it has, on the appointment of a trustee to authorise remuneration though no such power exists in the trust instrument, there is no logical reason why the court should not have power to increase the remuneration given by the instrument."

At 79G, his Lordship said: "In exercising that jurisdiction the court has to balance two influences which are to some extent in conflict. The first is that the office of trustee is, as such, gratuitous; the court will accordingly be careful to protect the interests of the beneficiaries against claims by the trustees. The second is that it is of great importance to the beneficiaries that the trust should be well administered. If therefore the court concludes, having regard to the nature of the trust, to the experience and skill of a particular trustee and to the amounts which he seeks to charge when compared with what other trustees might require to be paid for their services and to all the other circumstances of the case, that it would be in the interests of the beneficiaries to increase the remuneration, then the court may properly do so." 31 The question in this case is not whether, as a matter of principle, the Court can or should authorise the Administrators to have recourse to the Scheme Assets of an Unimpaired Scheme to recoup a shortfall after the Corporate Assets have been exhausted. There would have been no difficulty in such a question if all that were involved were a single Scheme. The difficulty arises because there are many Schemes, some with an ability to pay a shortfall in Remuneration and Expenses and some with no ability - yet all Schemes are controlled by the Administrators who owe fiduciary duties equally to the members of all Schemes. 32 The conflicting influences referred to by Fox LJ in Duke of Norfolk are starkly prominent in this case. The Trio administration is, and will continue to be, extremely complex and difficult. It is in the interest of members of all Schemes that highly experienced and capable insolvency practitioners, such as the Administrators, be willing to undertake the administration. Insolvency practitioners will only do so if they are adequately remunerated and are not left out of pocket when means to pay them might be found out of assets under administration. 33 On the other hand, beneficiaries of a group of trusts are, in law, entitled to insist that the common trustee, or common administrators or liquidators of a common trustee, treat each trust separately and act in the best interests of each trust. The general equitable right of fiduciary loyalty in such a situation is clearly and expressly recognised in CA s 601FC(1)(c), which provides that a Responsible Entity must act in the best interests of the members and, if there is a conflict between the members' interests and its own interests, it must give priority to the members' interests. 34 It is clear that the trustee of several separate trusts cannot charge the beneficiaries of one trust with the costs and expenses incurred in relation to work done for the benefit of another trust. If the trustee cannot, with some accuracy, apportion the expenses of administration between the various trusts, "the maxim that equality is equity should provide the solution to the problem of apportionment": see In re Suco Gold Pty Ltd (in liq) (1983) 33 SASR 99, at 109 per King CJ; and 13 Coromandel Place Pty Ltd v CL Custodians Pty Ltd (in liq) (1999) 30 ACSR 377 per Finkelstein J. 35 In the present case, the exercise of the Court's discretion in the way proposed by the Administrators is finely balanced and I have given it much consideration. I would not have exercised the discretion "sparingly" if only one Scheme had to be considered. I sympathise with the Administrators' plight and I am reluctant to see them out of pocket for the considerable work they have done in the administration of all Schemes, for the benefit of all members of all Schemes. 36 However, I conclude that it would not be right for the Administrators to prefer their own interests to the interests of the members of the Unimpaired Schemes by structuring payments out of Corporate Assets in such a way that Scheme Costs of one set of Schemes is borne out of Corporate Assets and Scheme Costs of another set of Schemes is thrown onto the assets of those Schemes. It seems to me that if Corporate Assets were applied equally to the Scheme Costs of all Schemes, the Administrators would thereby prefer neither their own interests to the interests of members of Unimpaired Schemes, nor would they prefer the members of one Scheme to those of another, nor would they prejudice the members of one Scheme rather than another. How should recoupment from Scheme Assets be allowed?

37 ACT Super proposes that, in the event that the Corporate Assets are insufficient to pay the entirety of the Administrators' Costs, the proper course should be:

• to the extent that the Corporate Assets are sufficient to pay a proportion of the Administrators' 'Remuneration' and 'Expenses', those Assets should be used to pay, in the same proportion i) the Corporate Costs, ii) the Scheme Costs for the Impaired Schemes, and iii) the Scheme Costs for the Unimpaired Schemes

• the outstanding Scheme Costs that are attributable to a particular Scheme should then be paid out of the assets of the Scheme, consistent with Order 3 made on 5 March 2010. 38 To illustrate the course proposed by ACT Super, suppose that the Corporate Assets are $50, and the Administrators' Costs are $100, comprising: (a) $50 in Corporate Costs; (b) $10 in Scheme Costs for Impaired Schemes; and (c) $40 in Scheme Costs for Unimpaired Schemes. 39 ACT Super's submission is that, in this example, since the Corporate Assets are sufficient to pay 50% of the Administrators' Costs, those Assets should be equally apportioned between the three sub-categories, that is: (a) $25 (i.e. 50% of $50) to Corporate Costs; (b) $5 (i.e. 50% of $10) to Scheme Costs for Impaired Schemes; and (c) $20 (i.e. 50% of $40) to Scheme Costs for Unimpaired Schemes. 40 The Administrators would then have recourse to the assets of the Schemes for the balance of the Scheme Costs that are attributable to a particular Scheme consistent with Order 3 made on 5 March 2010. 41 Despite the fact that this method of payment will result in the Administrators being out of pocket for a proportion of fees and expenses incurred in relation to Impaired Schemes, I think that it accommodates all interests as fairly as may be done in the unfortunate circumstances of this case. I therefore propose to give directions under CA s 447D(1) embodying the course of action proposed by ACT Super. 42 It will be necessary for the parties to consult in the drafting of the directions to be given. I will stand the proceedings over for a short time to enable the parties to agree, if possible, on Short Minutes of Order. I will then hear argument as to costs.

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