M2 Assets Pty Ltd v GT Capital Partners Pty Ltd (Subject to Deed of Company Arrangement) [No 2] - [2023] WASC 111

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   M2 ASSETS PTY LTD -v- GT CAPITAL PARTNERS PTY LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT) [No 2] [2023] WASC 111
CORAM:   STRK J
HEARD:   ON THE PAPERS
DELIVERED          :   5 APRIL 2023
FILE NO/S:   COR 158 of 2022
BETWEEN:   M2 ASSETS PTY LTD
Plaintiff
AND
GT CAPITAL PARTNERS PTY LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
First Defendant
COLIN JAMES GRAHAM
Second Defendant
GREGORY BRUCE DUDLEY & JEROME HALL MOHEN as former joint and several provisional liquidators of GT CAPITAL PARTNERS PTY LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Seventh Interested Party

Catchwords:

Corporations - Application by the former provisional liquidators for determination of remuneration pursuant to s 60-16 of the Insolvency Practice Schedule (Corporations) - Procedural requirements of the Supreme Court (Corporations) (WA) Rules 2004 r 9.3 satisfied - Remuneration claimed is fair and reasonable

Legislation:

Corporations Act 2001 (Cth) Sch 2 (Insolvency Practice Schedule (Corporations))
Supreme Court (Corporations) (WA) Rules 2004

Result:

Remuneration determination made

Category: B

Representation:

Counsel:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance
Seventh Interested Party	:	No appearance

Solicitors:

Plaintiff	:	McNally & Co
First Defendant	:	No appearance
Second Defendant	:	Blackwall Legal
Seventh Interested Party	:	Mills Oakley

Cases referred to in decision:

Higgins v JSS Logistics Pty Ltd (in liq) [2022] FCA 1320
Hundy (liquidator), re Renewable Energy Traders Pty Ltd (in liq) [2019] FCA 1795
M2 Assets Pty Ltd v GT Capital Partners Pty Ltd [2022] WASC 331
Re Barokes Pty Ltd (in liq) [2020] VSC 555

Table of Contents

Introduction

Background

The application

Evidence

First Mohen affidavit

Second Mohen affidavit

Pye affidavit

Remuneration determination - statutory requirements and applicable principles

Disposition

The procedural requirements

Remuneration claimed is fair and reasonable

Conclusion and orders

STRK J:

Introduction

Gregory Bruce Dudley and Jerome Hall Mohen acted as provisional liquidators of GT Capital Partners Pty Ltd from 21 September 2022 to 20 December 2022, when the provisional liquidation of GT Capital was terminated by court order. In these reasons I describe Mr Dudley and Mr Mohen as the former provisional liquidators.
By an interlocutory process filed on 15 March 2023, the former provisional liquidators seek a remuneration determination. In summary, it is the position of the former provisional liquidators that the remuneration they claim was in respect of necessary work, properly performed, in the conduct of the provisional liquidation of GT Capital. No interested party sought to be heard in opposition to the application.
Set out below are my reasons for granting the application and making a remuneration determination in the amount promoted by the former provisional liquidators.

Background

For reasons delivered extemporaneously which have since been published, the former provisional liquidators were appointed on 21 September 2022.[1] The appointment was made upon the urgent application of M2 Assets Pty Ltd, in circumstances where M2 Assets had on 24 August 2022 commenced proceedings in this court by way of an originating process seeking an order pursuant to the Corporations Act 2001 (Cth) s 459A, s 459P and s 462 (relying on s 461(1)(e), s 461(1)(f) and/or s 461(1)(k)), that GT Capital be wound up.
[1] M2 Assets Pty Ltd v GT Capital Partners Pty Ltd [2022] WASC 331.
Mace Angolino Raymond Turco and Colin James Graham are the two directors of GT Capital. Mr Graham is the registered holder of 80 fully paid shares in GT Capital and M2 Assets is the registered holder of 20 fully paid shares in GT Capital. M2 Assets holds the 20 fully paid shares as trustee for the M2 Assets Trust and Mr Turco is the director of M2 Assets.[2]
[2] M2 Assets Pty Ltd v GT Capital Partners Pty Ltd [2] - [3], [25].
GT Capital operated a litigation funding business and maintained an investment strategy described by Mr Turco as follows:[3]
(1) A person or entity with a claim, or potential claim (a litigant) approaches GT Capital.
(2) Once GT Capital agrees to fund an action, it enters into a funding agreement with the litigant.
(3) GT Capital creates a special purpose vehicle (SPV) company to act as a trustee. The naming protocol is 'GT Capital SPV [a number from 1 upwards] Pty Ltd' (SPV company). For each SPV company, Mr Graham and Mr Turco are each directors and Mr Turco is the company secretary. Each SPV company is a wholly owned subsidiary of GT Capital.
(4) GT Capital novates/assigns the funding agreement to the SPV company to hold as trustee for the relevant trust. The naming protocol for each trust is 'GT Capital Unit Trust [a number from 1 upwards]'.
(5) The investors pay their money into the Primary GT Account, sign a term sheet and are issued units.
[3] M2 Assets Pty Ltd v GT Capital Partners Pty Ltd [28].
I understand that GT Capital provided funding to claimants in two different ways. First, in its own right through GT Capital's cash reserves; secondly, through a specifically created special purpose vehicle which would raise capital from private investors to fund the subject claim.[4]
[4] Affidavit of JH Mohen sworn 15 February 2023 par 12.
At the time the former provisional liquidators were appointed:[5]
I accepted that there was evidence that GT Capital had funded litigation that in the past had resulted in a significant return on investment to GT Capital and third party investors. However, I was concerned that neither Mr Turco's nor Mr Graham's account of the financial position of GT Capital was reliable, nor the value they ascribed to assets of GT Capital was reliable. It was not possible on the evidence before me to form a reliable view as to solvency and whether M2 Assets had reasonable prospects of obtaining a winding up order on insolvency grounds. That was not however the end of the matter, as I was satisfied that M2 Assets had discharged its onus of demonstrating that it had reasonable prospects of obtaining a winding up order on other grounds.
[5] M2 Assets Pty Ltd v GT Capital Partners Pty Ltd [147].
Further, the appointment was made in the context described below:[6]
As to the treatment of investor funds, Mr Graham deposed in his first affidavit that the Primary GT Account does not contain investor funds, which are paid into a trust account separate from the corporate account, and that Mr Turco has control of the trust account and Mr Graham does not have access to it. Such approach would appear to accord with the trust deeds of each SPV unit trust, although I also understood Mr Graham to say that he holds a different view as to the proper construction of the trust deeds and his obligations as to investor funds. However, Mr Turco deposed that the litigation funding business had been predominantly conducted through the Primary GT Account and that 'the SPVs do not have any bank accounts'.
There was also no documentary evidence (by way of bank statements or otherwise) to support Mr Graham's evidence that moneys invested by third parties in the 'current investments' operated by each of GT Capital SPV3 Pty Ltd, GT Capital SPV5 Pty Ltd, GT Capital SPV6 Pty Ltd, GT Capital SPV9 Pty Ltd and GT Capital SPV11 Pty Ltd, as trustees, having been deposited and held in separate trust accounts. Indeed, the reconciliations of account undertaken by Mr Graham reference the Primary GT Account only.
[6] M2 Assets Pty Ltd v GT Capital Partners Pty Ltd [163] - [164] (footnotes omitted).
Upon their appointment, the former provisional liquidators were to take possession of all the assets and property of GT Capital, and the duties to be performed by them were to include the following:[7]
(a)to take possession of, collect and protect the assets of GT Capital;
(b) to receive and collect the debts due to GT Capital;
(c) to discharge rents, wages, salaries and other current expenses but so far only as may be necessary for the purpose of preserving the assets of GT Capital or for the purposes of sub‑order (d) hereof;
(d) to carry on the business of GT Capital until further order but so far only as is necessary for the beneficial disposal or winding up of that business;
(e) generally to exercise such of the powers conferred on a liquidator by s 477(2)(a) to (k) of the Corporations Act 2001 (Cth) as may be necessary for the foregoing purposes.
[7] Orders 3 and 2(a) - (e) of the orders made 21 September 2022.
Within 28 days of their appointment, the former provisional liquidators were also ordered to prepare a report as to the provisional liquidation of GT Capital, which report was to include the identification of the assets and liabilities of GT Capital; an opinion as to the solvency of GT Capital; an opinion as to the value of the assets of GT Capital; an opinion as to whether GT Capital had proper financial records; and any other information necessary to enable the financial position of GT Capital to be assessed.
In accordance with the orders made on 21 September 2022, a report (the October report) was prepared by the former provisional liquidators, together with employees of RSM Australia Partners, and by a further order made on 21 October 2022, access to the October report was restricted to the parties and their legal representatives; the provisional liquidators and employees of RSM Australia Partners; the legal representatives of the provisional liquidators; and interested parties who had filed a notice of appearance in the proceeding and their legal representatives (if any). These reasons have been prepared so as to not disclose the substance of the October report.
Mr Mohen deposed that as a consequence of the extensive investigations undertaken in preparing the October report, he formed the view that GT Capital was insolvent; and there was potential for the litigation funding business operated by GT Capital (or part thereof) to be restructured under an administration, which could (potentially) provide a better outcome than the immediate winding up of GT Capital.[8] During the course of their appointment, the former provisional liquidators appointed Simon Guy Theobald and Robert Scott Ditrich of PricewaterhouseCoopers as joint and several administrators of GT Capital. GT Capital is now subject to a deed of company arrangement, the proponent of which is Lex Funding Pty Ltd ACN 664 956 192, and Mr Theobald and Mr Ditrich are deed administrators.
[8] Affidavit of JH Mohen sworn 15 February 2023 par 18.

The application

First, pursuant to the Supreme Court (Corporations) (WA) Rules 2004 r 9.3(5)(b), the former provisional liquidators seek that unless the court requires to hear further from them in order to make the substantive orders sought, the application be dealt with in the absence of the public and without any attendance by, or on behalf of, the former provisional liquidators.
Secondly, they seek an order pursuant to s 60-16(1)(a) of the Insolvency Practice Schedule (Corporations) (IPS), being sch 2 to the Corporations Act, that the former provisional liquidators' remuneration be determined in the amount of $147,994 plus GST for the period 21 September 2022 to the making of this remuneration determination by the court.
Thirdly, the former provisional liquidators seek that the costs (including legal costs) of and incidental to this application be part of the costs, charges and expenses in the administration (or any subsequent deed of company arrangement or liquidation) of GT Capital, and be paid on an indemnity basis.
I note that upon filing the application, the former provisional liquidators also sought an order restricting access to certain affidavit evidence filed in support of the application on the basis that it concerned information that was confidential, commercially sensitive and subject to legal professional privilege. On 21 March 2023, I was satisfied that it was appropriate to order that the annexures marked 'JM‑04' and 'JM‑08' to the first affidavit of Mr Mohen sworn on 15 February 2023 be treated as confidential, and that access be restricted to all persons except the court. Ancillary orders were also made to give effect to the same.[9] Again, these reasons have been prepared so as to not disclose the substance of the confidential information which was before the court and which was weighed in the balance in the determination of this application.
[9] Orders 1(a) - (c) of the orders made on 21 March 2023.
I also note that while the application made by M2 Assets to wind up GT Capital was dismissed on 21 March 2023, it was made plain that the dismissal did not prejudice the determination of this application on the papers if no objection was taken.

Evidence

Three affidavits were filed on behalf of the former provisional liquidators in support of the application. Two were deposed by Mr Mohen, and one was deposed by Lucy Elizabeth Pye. Ms Pye is a special counsel employed by Mills Oakley and acts on behalf of the former provisional liquidators.

First Mohen affidavit

On 15 February 2023, Mr Mohen deposed on his own behalf and on behalf of Mr Dudley his first affidavit in support of the application to which he annexed documents marked JM-01 to JM-08. I summarise below Mr Mohen's first affidavit, however, as noted above, annexures JM-04 and JM-08 were marked as confidential and access to the same was restricted by orders made on 21 March 2023. I do not describe here the substance of annexures JM-04 and JM-08.
In his first affidavit, Mr Mohen deposed that both he and Mr Dudley are partners in the accounting firm RSM Australia Partners and were assisted by various members of staff in the performance of their obligations as provisional liquidators of GT Capital.
Mr Mohen deposed that the preparation of the October report involved significant work undertaken over an intensive 28 day period. At pars 43 to 60, Mr Mohen described in detail the work undertaken.
Mr Mohen deposed that given the volume of work required to be undertaken to prepare the October report, the nominal funds held by GT Capital were depleted, and following issue of the October report GT Capital had very limited funds. At the appointment of the former provisional liquidators, GT Capital held $47,435.07 cash at bank, and at the time Mr Mohen swore his first affidavit on 15 February 2023, the former provisional liquidators held GT Capital funds in the amount of $4,359.98.
Mr Mohen further deposed that in order to protect the position of the creditors of GT Capital in any subsequent administration and to ensure that they would not be in a position worse off than they would have been in the event of an immediate winding up, on or about 2 December 2022, the former provisional liquidators entered into a funding agreement (a copy of which was annexed to Mr Mohen's affidavit and marked JM-04).
For the purpose of this application, Mr Mohen prepared a remuneration report in which he collated and described information which supported the remuneration claimed over two distinct periods, the first being 21 September 2022 to 20 December 2022; and the second being 21 December 2022 to conclusion of this application.
The remuneration report, which was annexed to the affidavit and marked JM-07, was divided into a number of parts and sub-parts. It contained a declaration that the former provisional liquidators had undertaken a proper assessment of the remuneration claimed and were satisfied that the remuneration claimed was in respect of necessary work, properly performed or to be properly performed in the conduct of the provisional liquidation of GT Capital (pt 1); an executive summary (pt 2); an explanation of the hourly rates that had been applied (pt 3); the remuneration claim (pt 4.1); and details of remuneration (pt 4.2). In addition, appended to the remuneration report was a list of major tasks undertaken in the period 21 September 2022 to 20 December 2022 (sch 1.A); and a list of major tasks intended to be undertaken in the period 21 December 2022 to finalisation of this application (sch 1.B).
Annexed to Mr Mohen's affidavit and marked JM-08 was a work in progress (WIP) analysis in which the tasks carried out by Mr Mohen and staff of RSM Australia Partners in the conduct of the provisional liquidation during the period 21 September 2022 to 20 December 2022 were particularised.
At par 41, Mr Mohen deposed that from his review of the remuneration claimed, based on his own knowledge of the work required in respect of the administration of GT Capital, and having regard also to his experience as an insolvency practitioner more generally, in his opinion:
(a)the time spent by staff of RSM Australia Partners fairly reflected the work required to be undertaken in respect of the provisional liquidation; and
(b) the work was performed in an efficient and timely manner.
He also deposed to his belief that the rates applied and the allocation of particular staff to specific task areas was reasonable.
Mr Mohen further deposed to his belief that the work undertaken had:
(a)been reasonable and necessary in order to comply with the obligations prescribed by the court's orders of 21 September 2022;
(b)with respect to the October report, been undertaken in an intensive 28 day period;
(c)been completed to a high standard and by the appropriate level of staff;
(d)involved a complex business structure which required significant investigation and engagement with multiple third parties; and
(e)was performed at risk to the former provisional liquidators given the nominal funds held by GT Capital.
As deposed by Mr Mohen, the remuneration that the former provisional liquidators seek be approved is:
(a) $143,711 plus GST for the period 21 September to 20 December 2022; and
(b) $4,283 plus GST for the period 21 December 2022 to conclusion of this application.
Mr Mohen deposed that he estimated that the former provisional liquidators would write off approximately $12,088 until this application is determined, and gave particulars of the same. As recorded by Mr Mohen at par 32, court approval is not sought for disbursements reasonably incurred by the provisional liquidators.

Second Mohen affidavit

Mr Mohen made a second affidavit in support of the application on 15 March 2023, which again was made on his own behalf and on behalf of Mr Dudley.
In his second affidavit, Mr Mohen deposed to having instructed Mills Oakley to serve his first affidavit and a Form 16 (Notice of intention to apply for remuneration) on Mr Theobald and Mr Ditrich in their capacity as deed administrators of GT Capital; M2 Assets and Mr Graham as the shareholders of GT Capital; and the five largest creditors of GT Capital.[10]
[10] As required by the Supreme Court (Corporations) (WA) Rules 2004 r 9.3(3).
Mr Mohen further deposed that he had been informed by Ms Pye that she had caused them to be served; and as at the date of his second affidavit, he had not been provided with any notices of objection in response to the service of his first affidavit and the Form 16.

Pye affidavit

Ms Pye affirmed an affidavit on 15 March 2023 in support of the application, to which she annexed documents marked LEP-01 to LEP‑03.
Ms Pye deposed to having received instructions from the former provisional liquidators as to service of Mr Mohen's first affidavit and the Form 16 (Notice of intention to apply for remuneration), and to effecting email service of the same.
Ms Pye also deposed that at about 12.00 pm on 15 March 2023, she emailed a copy of the interlocutory process by which this application was made to the solicitors for the deed administrators, Norton Rose Fulbright. Ms Pye further deposed to receiving an email communication from Norton Rose Fulbright at about 2.51 pm on 15 March 2023 stating that the deed administrators intended to 'take no position' with respect to the application; and that as at the date of her affidavit, she had not been provided with any notice of objection in response to service of the first affidavit of Mr Mohen and the Form 16.

Remuneration determination - statutory requirements and applicable principles

A provisional liquidator is entitled to receive remuneration by way of percentage or otherwise as is determined by the court pursuant to s 60-16(1) of the IPS, and the provisional liquidators seek a remuneration determination under s 60-16.
By operation of s 60-16(2), s 60-12 applies to a determination made under s 60-16 in the same way as it applies to a remuneration determination made under s 60-10. That is, the court must have regard to whether the remuneration sought is reasonable, taking into account matters that relevantly include the following:[11]
[11] As also noted in Higgins v JSS Logistics Pty Ltd (in liq) [2022] FCA 1320 [15] (Jackson J).
(a)the extent to which the work by the external administrator was necessary and properly performed;
(b)the extent to which the work likely to be performed by the external administrator is likely to be necessary and properly performed;
(c) the period during which the work was, or is likely to be, performed by the external administrator;
(d) the quality of the work performed, or likely to be performed, by the external administrator;
(e) the complexity (or otherwise) of the work performed, or likely to be performed, by the external administrator;
(f) the extent (if any) to which the external administrator was, or is likely to be, required to deal with extraordinary issues;
(g) the extent (if any) to which the external administrator was, or is likely to be, required to accept a higher level of risk or responsibility than is usually the case;
(h) the value and nature of any property dealt with, or likely to be dealt with, by the external administrator;
(i) the number, attributes and conduct, or the likely number, attributes and conduct, of the creditors;
(j) if the remuneration is worked out wholly or partly on a time-cost basis - the time properly taken, or likely to be properly taken, by the external administrator in performing the work;
(k)whether the external administrator was, or is likely to be, required to deal with one or more controllers, or one or more managing controllers;
…
(m) any other relevant matters.
As was noted by Jackson J in Higgins v JSS Logistics Pty Ltd (in liq) [2022] FCA 1320 [16], these matters are similar to those previously set out in s 473(10) of the Corporations Act, and authorities based on that provision and its predecessors are still useful: Re Barokes Pty Ltd (in liq) [2020] VSC 555 at [29] (Hetyey AsJ); cf Hundy (liquidator), re Renewable Energy Traders Pty Ltd (in liq) [2019] FCA 1795 at [112] (Griffiths J).
The principles applicable to the determination of this application and supplementary to the statutory requirements of s 60-16 of the IPS are well established. In this regard, I again refer to observations made by Jackson J in Higgins v JSS Logistics Pty Ltd (in liq), as follows:
[18] The onus is on the provisional liquidators to establish that the remuneration claimed is reasonable. The initial task of the Court is to consider whether the provisional liquidators have made out a prima facie case on the evidence that the remuneration claimed is fair and reasonable. It is the function of the Court to determine the remuneration by considering the materials provided and bringing an independent mind to bear on the relevant issues. See Morgan, re Brighton Hall Securities Pty Ltd [2018] FCA 2029 at [17]-[20] (McKerracher J); Sanderson as liquidator of Sakr Nominees Pty Ltd (in liq) v Sakr [2017] NSWCA 38; (2017) 93 NSWLR 459 at [54] (Bathurst CJ, with whom the other members of the Court agreed); Conlan v Adams [2008] WASCA 61 at [28] (McLure JA, Buss JA and Newnes AJA agreeing); Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96 at 102 (Kennedy and Ipp JJ, Wallwork J agreeing).
[19] The time-costing based approach to remuneration and a percentage-based approach are both commonly used and no particular approach is preferred. There is also a need for proportionality between the cost of the work done and the value of the services provided. It is acknowledged that some of the work done by provisional liquidators may not generate a return to creditors but is necessary nonetheless: Re Sirrah Pty Ltd [2021] NSWSC 1636 at [17] (Rees J); Sakr at [55]-[60].
[20]The Court is not required to undertake a line-by-line review of bill narratives and can review them in a broad way, considering whether they are consistent with the provisional liquidators' affidavit evidence and any other evidence led in support of the claim for remuneration: Re Sakr Nominees Pty Limited [2017] NSWSC 668 at [29] (Black J). The provisional liquidators must lead evidence in sufficient detail to enable the Court to determine the reasonableness of the remuneration sought, including an itemised account: Sirrah at [17].
As to procedural requirements, the Supreme Court (Corporations) (WA) Rules 2004 r 9.3 provides as follows:
(1)This rule applies in relation to an application by a provisional liquidator of a company for a determination under the Insolvency Practice Schedule section 60-16(1) of the remuneration the provisional liquidator is entitled to receive.
(2)The application must be made by interlocutory process in the winding-up proceeding.
(3)At least 21 days before filing the interlocutory process seeking the determination, the provisional liquidator must serve a notice in accordance with Form 16 of the provisional liquidator's intention to apply for the determination, and a copy of any affidavit on which the provisional liquidator intends to rely, on the following persons -
(a)any liquidator (except the provisional liquidator) of the company;
(b)each member of any committee of inspection or, if there is no committee of inspection, each of the 5 largest (measured by amount of debt) creditors of the company;
(b)each member of the company whose shareholding represents at least 10% of the issued capital of the company.
(4)Within 21 days after the last service of the documents mentioned in subrule (3), the liquidator, or any creditor or contributory, may give to the provisional liquidator a notice of objection to the remuneration claimed, stating the grounds of objection.
(5)If the provisional liquidator does not receive a notice of objection within the period mentioned in subrule (4) -
(a)the provisional liquidator may file an affidavit, made after the end of that period, in support of the interlocutory process seeking the determination stating -
(i)the date, or dates, when the notice and affidavit required to be served under subrule (3) were served; and
(ii)that the provisional liquidator has not received any notice of objection to the remuneration claimed within the period mentioned in subrule (4);
and
(b)the provisional liquidator may endorse the interlocutory process with a request that the application be dealt with in the absence of the public and without any attendance by, or on behalf of, the provisional liquidator; and
(c)the application may be so dealt with.
(6)If the provisional liquidator receives a notice of objection within the period mentioned in subrule (4), the provisional liquidator must serve a copy of the interlocutory process seeking the determination -
(a)on each creditor or contributory who has given a notice of objection; and
(b)on the liquidator (if any).
(7)An affidavit in support of the interlocutory process seeking the determination must -
(a)state the nature of the work performed or likely to be performed by the provisional liquidator; and
(b)state the amount of remuneration claimed; and
(c)include a summary of the receipts taken and payments made by the provisional liquidator; and
(d)state particulars of any objection of which the provisional liquidator has received notice; and
(e)if the winding-up proceeding has not been determined - give details of -
(i)any reasons known to the provisional liquidator why the winding-up proceeding has not been determined; and
(ii)any reasons why the provisional liquidator's remuneration should be determined before the determination of the winding-up proceeding.
(8)The affidavit must also provide evidence of the matters mentioned in the Insolvency Practice Schedule section 60-12 -
(a)to the extent that they may be relevant to a provisional liquidator; and
(b)as if references in that subsection to "external administrator" were references to "provisional liquidator".
I had regard to all of the above in the determination of this application.

Disposition

The procedural requirements

It is convenient to first deal with the question of whether the procedural requirements have been met, and I note as follows.
First, the application was made by interlocutory process (Form 3) in the winding up proceeding, as contemplated by r 9.3(2),[12] and stated, as required, the section of the Corporations Act under which the application was made and the relief sought.[13]
[12] See also Rules of the Supreme Court 1971 (WA) O 4A r 5A(2)(c).
[13] See also Supreme Court (Corporations) (WA) Rules 2004 r 2.2(4).
Secondly, notice in accordance with Form 16 (Notice of intention to apply for remuneration) and the first affidavit of Mr Mohen were served on M2 Assets and Mr Graham, such that each member of GT Capital whose shareholding represented at least 10% of the issued capital of GT Capital was served as contemplated by r 9.3(3)(c).[14] Further, the five largest creditors of GT Capital were also served, as contemplated by r 9.3(3)(b).[15] Service was effected at least 21 days before filing the interlocutory process seeking the determination and notice was given in the prescribed form.
[14] First Mohen affidavit par 64(c); Pye affidavit pars 4(g), 4(h), LEP‑01; second Mohen affidavit pars 3(b), 4.
[15] First Mohen affidavit par 64(b); Pye affidavit par 4, LEP-01; second Mohen affidavit pars 3(c), 4.
Thirdly, no notice of objection was received from any relevant party within the 21 day period contemplated in r 9.3(4).[16] In reliance upon Mr Mohen's second affidavit (which met the requirements of r 9.3(5)(a)(i) and (ii)), the provisional liquidators endorsed the interlocutory process with a request that the application be dealt with in the absence of the public and without any attendance by, or on behalf of, the provisional liquidators (as contemplated in r 9.3(5)(b)), and I accede to that request (as permitted by r 9.3(5)(c)).
[16] Second Mohen affidavit par 5; see also Pye affidavit par 7.
Fourthly, the first affidavit of Mr Mohen complied with the requirements set out in r 9.3(7).
Fifthly, the first affidavit of Mr Mohen relied upon in support of the application provided evidence of the matters mentioned in s 60-12 of the IPS.
In light of the above, I am satisfied that the application is appropriately made in accordance with the relevant procedural requirements as set out in the Supreme Court (Corporations) (WA) Rules 2004 r 9.3, and that the application could appropriately be determined on the papers.

Remuneration claimed is fair and reasonable

I am satisfied that the provisional liquidators have made out a prima facie case on the evidence that the remuneration claimed is fair and reasonable. In so concluding, I had regard to the first affidavit of Mr Mohen, including the documents annexed and the outline of submissions filed in support of the application on 15 March 2023. I particularly weighed the following in the balance.
Attached to the remuneration report at sch 1.A and sch 1.B are comprehensive lists of major tasks performed by Mr Mohen and by staff of RSM Australia Partners. The schedules were particularly informative. The tasks described were consistent with the former provisional liquidators having been tasked upon their appointment with taking possession of all the assets and property of GT Capital, and the duties imposed upon them by the orders made on 21 September 2022.[17]
[17] Orders 3 and 2(a) - (e) of the orders made 21 September 2022.
Upon their appointment, the provisional liquidators were, among other things, tasked with preparing the October report within 28 days. Mr Mohen deposed in his first affidavit that with employees of RSM Australia Partners, he conducted a number of investigations into GT Capital's business, property, affairs and financial circumstances, which work included reviewing the books and records made available to him, from which the October report was prepared. I accept that such work was necessary and properly performed, within a relatively short timeframe.
Mr Mohen's first affidavit described in some detail the context in which work was performed by the former provisional liquidators. As was deposed by Mr Mohen, the appointment of the provisional liquidators was made against the backdrop of a dispute between the directors of GT Capital. Given the parties' conflicting versions of the circumstances leading to the appointment of the provisional liquidators, inconsistencies and errors in the books and records, and the complexity of the business structure, Mr Mohen deposed that significant work was undertaken to sift through the competing claims, deal with the investors and creditors of GT Capital and to ascertain the solvency position of GT Capital.
In this regard, Mr Mohen deposed in his first affidavit to, among other things, work undertaken to investigate shareholdings in eight subsidiaries which included:
(a) discussions with the directors, various litigants and the pre‑appointment solicitors engaged on partial investor-funded matters allegedly novated out to eight subsidiaries to determine the status of litigation, value of claims (if any), and likelihood of a return to GT Capital;
(b) investigation as to the funds raised and spent by GT Capital on each litigation to assist in verifying the accuracy of the books and records of GT Capital;
(c)attending to numerous enquiries and correspondence from various litigants and pre-appointment solicitors regarding the status of each funded claim, and further determining the funds required to progress a number of funded claims, which included conferral with solicitors; and
(d) correspondence with known investors regarding the appointment of the former provisional liquidators and attending to enquiries made by investors.
Such work was necessary and properly performed, and the context in which the application was made gave rise to considerable complexity, which informed the reasonableness of the remuneration claimed.
Further, I accept that the work associated with the former provisional liquidators entered into a funding agreement (described at [23] and [24] above), and bringing this application, was work necessarily and properly performed.
The amount of remuneration claimed by the former provisional liquidators was worked out on a time-cost basis. For the period of their appointment, remuneration in the amount of $143,711 exclusive of GST, is claimed, and a detailed itemisation of the work performed over 326.80 hours was provided to the court.
The work performed included work done by a partner (72.10 hours), senior manager (65.80 hours), assistant manager (105.20 hours), senior analyst (42.70 hours), principal (6 hours), and graduates and other support staff (35 hours). The WIP analysis (annexure JM-08) when read with the remuneration report reveals that work was delegated to staff at appropriate levels of experience, with varying hourly rates, reflecting the complexity of tasks performed and experience.
As to the description of the work completed, 117.1 hours and $53,686 was attributed to the category 'assets', 97 hours and $42,292.50 was attributed to 'creditors', 105.20 hours and $45,633 was attributed to 'investigation' and 7.5 hours and $2,099.50 was attributed to 'administration'. The 'administration' tasks included maintaining records of correspondence; work associated with insurance, including correspondence with insurer regarding initial and ongoing insurance requirements; bank account administration; Australian Taxation Office and other statutory reporting; the receipt, review and lodgement of Mr Turco's Report on Company Activities and Property; numerous attempts to follow up Mr Graham for completion of a Report on Company Activities and Property; and liaising with directors regarding books and records. The amount claimed for 'administration' appears to be relatively modest for tasks that on their face appear necessary.
Remuneration is also claimed for work performed in the period of 21 December 2023 to the determination of the application in the amount of $4,283 exclusive of GST. That work performed over 9.55 hours was particularised by Mr Mohen as work performed in preparing the remuneration report; assisting with the preparation of supporting affidavits; reviewing the remuneration application and supporting materials; and attendance at meetings with lawyers to discuss the remuneration application. Again, the amount claimed is relatively modest for tasks that on their face appear necessary.
I have had regard to the time taken in performing the work described in the remuneration report when considering whether the remuneration sought is reasonable. The time taken did not give rise to concern.
Finally, I note that work was undertaken by the provisional liquidators to enable the appointment of the administrators and a smooth handover of books and records to them, as deposed by Mr Mohen in his first affidavit. Such work was necessary and the remuneration claimed for the same reasonable.
The former provisional liquidators lead evidence in sufficient detail to enable the court to determine the reasonableness of the remuneration claimed, including an itemised account. I reviewed the WIP analysis in a broad way, and considered the entries to be generally consistent with the matters deposed to by Mr Mohen in his first affidavit. When regard is had to the first affidavit of Mr Mohen (including all annexures), having brought an independent mind to bear on the relevant issues, I find that it is appropriate that the former provisional liquidators' application be granted.

Conclusion and orders

For these reasons, I am satisfied that the former provisional liquidators have established that the remuneration claimed is fair and reasonable and I will make orders in the following terms:
1.Pursuant to s 60-16(1)(a) of the Insolvency Practice Schedule (Corporations) the remuneration of Gregory Bruce Dudley and Jerome Hall Mohen in acting in their capacity as provisional liquidators of GT Capital Partners Pty Ltd for the period of 21 September 2022 to 20 December 2022, and in otherwise acting as former provisional liquidators of GT Capital Partners Pty Ltd for the period of 21 December 2022 to the making of this order, be determined in the amount of $147,994 plus GST.
2.The costs (including legal costs) of and incidental to the application be part of the costs, charges and expenses in the deed of company arrangement of GT Capital Partners Pty Ltd and be paid out on an indemnity basis.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RW
Associate to the Honourable Justice Strk
5 APRIL 2023