Onefone Australia Pty Ltd v One.Tel Ltd

[2010] NSWSC 1120

CITATION:	Onefone Australia Pty Ltd v One.Tel Ltd [2010] NSWSC 1120
HEARING DATE(S):	28/07/10
JUDGMENT DATE :	1 October 2010
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
DECISION:	Short minutes to be brought in.
CATCHWORDS:	CORPORATIONS - winding up - creditors voluntary winding up - remuneration of liquidator - where process for determination by committee of inspection breaks down - question for court to determine as to quantum of remuneration - delineation of functions attracting remuneration - whether certain activities are within those functions - whether "benefit" test applies - whether "but for" test applies - sufficiency of particulars given to allow court to assess work done - possibility of duplication - onus on liquidator to show proper quantum - onus not discharged - directions for further progress of application
LEGISLATION CITED:	Australian Securities and Investments Commission Act 2001, s 30 Corporations Act 2001 (Cth), s 473(10), 499(3), 511, 533, 549(3), 1322
CATEGORY:	Principal judgment
CASES CITED:	Cordiant Communications (Australia) Pty Ltd v The Communications Group Holdings Pty Ltd [2005] NSWSC 1005; (2005) 194 FLR 322 Deloughery v Weston [2010] NSWCA 148 582 St Kilda Road v Campbell, unreported, VSC, Lush J, 5 September 1975 Ide v Ide [2004] NSWSC 751; (2004) 184 FLR 44 Magna Alloys and Research Pty Ltd v Coffee (No 2) [1982] VR 97 Onefone Australia Pty Ltd v One.Tel Ltd [2008] NSWSC 1335; (2008) 69 ACSR 290 Onefone Australia Pty Ltd v One.Tel Limited [2010] NSWSC 401; (2010) 78 ACSR 98 Onefone Australia Pty Ltd v One.Tel Ltd [2010] NSWSC 498; (2010) 78 ACSR 163 Re Broad; Smith v Draeger [1901] 2 Ch 86 Re Independent Insurance Co Ltd (No 2) [2003] 1 BCLC 640 Re Stockford Ltd; Korda [2004] FCA 1682; (2004) 52 ACSR 279 Re Walker [2009] NSWSC 1172; (2009) 74 ACSR 616 Slingsby v Attorney-General [1918] P 236 Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96
PARTIES:	Onefone Australia Pty Limited - First Plaintiff DCA Resources Australia Pty Limited - Second Plaintiff Pacific Finance Group Pty Limited - Third Plaintiff Concept Systems (Australia) Pty Limited - Fourth Plaintiff One.Tel Limited - First Defendant Steven Sherman - Second Defendant Peter Walker - Third Defendant Paul Gerard Weston - Special Purpose Liquidator - Applicant
FILE NUMBER(S):	SC 2003/86446
COUNSEL:	Mr N A Cotman SC/Mr R D Glasson - Special Purpose Liquidator Ms S Macdonald - Committee of Inspection Members Mr D L Cook - ASIC - by leave
SOLICITORS:	O'Neill Partners Commercial Lawyers - Special Purpose Liquidator Baker & McKenzie - Committee of Inspection Members

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

FRIDAY, 1 OCTOBER 2010

2003/086446 ONEFONE AUSTRALIA PTY LTD v ONE.TEL LIMITED

JUDGMENT

Background

1 For reasons published on 7 May 2010 (Onefone Australia Pty Ltd v One.Tel Limited [2010] NSWSC 401; (2010) 78 ACSR 98), the then pending application of the special purpose liquidator of One.Tel Ltd with respect to his remuneration was, on that day, adjourned. The court made certain directions with respect to the further conduct of the application.

2 The basis on which the application is advanced was stated in the earlier reasons at [5] and [6]:

“[5] As has been noted on earlier occasions (most recently in Onefone Australia Pty Ltd v One Tel Ltd (2009) 74 ACSR 716 ; [2009] NSWSC 1231), the court may, under s 511 of the Corporations Act 2001 (Cth), deal with the quantification of a liquidator’s remuneration in a creditors voluntary winding up such as this governed by s 499(3) as it stood before 31 December 2007, where the remuneration fixing mechanism created by s 499(3) has broken down and proved unworkable. Ordinarily, where (as here) there is a committee of inspection, the committee alone has power to fix remuneration; but if it is shown that that mechanism is incapable of operating to determine remuneration, the situation is one in which a question that s 511 allows the court to answer has arisen in the winding up.

[6] On this occasion as on several earlier occasions, the special purpose liquidator maintains that the s 499(3) mechanism has broken down and proved unworkable. He has placed before the court evidence of his requests made to the committee of inspection with respect to quantification of remuneration and deliberations of the committee in relation to those requests.”

3 The observations that follow must be read in conjunction with the reasons of 7 May 2010.

4 After publication of those reasons, the several things specified in the directions made by the court occurred and, as a result, the hearing of the special purpose liquidator’s remuneration application was concluded on 28 July 2010, with further submissions being made by counsel for the special purpose liquidator and by the solicitor for three members of the committee of inspection. Submissions were also made by counsel for Australian Securities and Investments Commission which sought and was granted leave to participate as amicus curiae.

The “resolution” of 14 December 2009 – s 1322(2)

5 My first task, at this stage, is to return to the circular “resolution” of 14 December 2009 (and the payment of $215,436.10 to the special purpose liquidator pursuant to it) and to the special purpose liquidator’s claim for an order that the “resolution” and the payment were “not invalid by reason of any provision of the Corporations Act 2001 (Cth)”: see paragraph [38] of the reasons of 7 May 2010. These matters relate to the special purpose liquidator’s remuneration claim for the period 1 July 2009 to 31 October 2009.

6 The contention of the special purpose liquidator, in this respect, is that the “proceeding” which was the meeting (or adjourned meeting) of the committee of inspection of 8 December 2009 was affected by a “procedural irregularity” as referred to in s 1322(2) of the Corporations Act and that, by virtue of that section, the “proceeding” was “not invalidated” by the “procedural irregularity”. The “procedural irregularity” is said to consist of the circumstances referred to at paragraphs [26] and [27] of the reasons of 7 May 2010 which entailed actions outside a meeting of the committee in the form of a series of unilateral communications made to the special purpose liquidator by three out of the five committee members, two confirming a particular proposal and the third rejecting it.

7 It cannot be disputed that the meeting (or adjourned meeting) of the committee of inspection on 8 December 2009 was a “proceeding” for the purposes of s 1322. The question is whether the events that followed the conclusion of that meeting when the telephone link among participating members was terminated at 12.55pm on 8 December 2009 amounted to a “procedural irregularity” in relation to that “proceeding”.

8 A number of cases elucidate the meaning of “procedural irregularity”. The decision of Palmer J in Cordiant Communications (Australia) Pty Ltd v The Communications Group Holdings Pty Ltd [2005] NSWSC 1005; (2005) 194 FLR 322 draws attention to the important distinction between doing the “thing to be done” in a way that departs from the prescribed way and doing something other than the “thing to be done”. The former involves procedural irregularity. The latter does not.

9 The special purpose liquidator submits that the irregularity in this case was procedural. The three members of the committee of inspection submit to the contrary. I accept the latter submission. The “thing to be done”, to use Palmer J’s phrase, was to consider and, if he thought fit, pass a resolution of the committee of inspection. The legislation made a meeting of the committee (which includes the permitted method of telephone conference) the only legitimate forum and context for the passing of such a resolution. The legislation therefore proceeds on the clear footing that no resolution of the committee can be passed except at a time and place (and I include in “place” a means of telephone conference available to all) of which all committee members had notice (and hence an opportunity to participate) and that all who chose to participate at that time and place should be able to consult together, to debate the proposal, to consider one another’s expressed opinions and, having done all these things, to indicate acceptance or rejection of the proposal.

10 The course of events that in fact occurred was such that two members of the committee expressed approval of the “Alternative Resolution”, one expressed disapproval of the “Alternative Resolution” and the remaining two expressed no opinion on the “Alternative Resolution”. The three expressions of opinion (two positive and one negative) were in the form of separate emails to the special purpose liquidator. The “Alternative Resolution” was never put before any meeting of the committee (by which I mean to refer also to the permitted means of telephone conference) and was therefore never subjected to the statutorily required process entailing consultation and discussion followed by decision-making.

11 None of the members of the committee had, in relation to the “Alternative Resolution”, any opportunity to participate in the particular form of decision-making made mandatory by the Corporations Act. In short, therefore, the “thing to be done” was not done. The thing that was done – by means of the separately communicated messages sent by the three committee members to the special purpose liquidator – differed in form, substance and effect from the thing that was to be done.

12 Section 1322(2) does not operate in the way for which the special purpose liquidator contends. This is not a case of procedural irregularity

The “resolution” of 14 December 2009 – s 1322(4)(a)

13 The special purpose liquidator next says that there should be an order under s 1322(4)(a):

“Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes:
(a) an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation;
…

and may make such consequential or ancillary orders as the Court thinks fit.”

14 The power to make such an order is regulated by s 1322(6):

“The Court must not make an order under this section unless it is satisfied:
(a) in the case of an order referred to in paragraph (4)(a):
(i) that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature;
(ii) that the person or persons concerned in or party to the contravention or failure acted honestly; or
(iii) that it is just and equitable that the order be made; and

. . .

(c) in every case--that no substantial injustice has been or is likely to be caused to any person.”

15 For s 1322(4)(a) to be available, it is first necessary to identify the “act, matter or thing purporting to have been done” or the “proceeding purporting to have been instituted or taken”.

16 A “purported” act, matter, thing or proceeding is one that appears to have been done or taken but in truth has not been. The following example is given in Re Broad; Smith v Draeger [1901] 2 Ch 86 at 91:

“… one might have an office copy of an affidavit on the Court paper, and yet if it did not bear the official stamp the Court would not admit it; because, although ‘purporting’ to be an official document, it would not really be one.”

17 Section 1322(4) will be available only if there is a “purported” resolution agreed to by a majority of the members of the committee of inspection present at a meeting, that being, by force of s 499(3) (as it stood at the relevant time) and s 549(3), the act or proceeding necessary to fix the remuneration of a liquidator in a creditors voluntary winding up.

18 There exists a document which, on its face, is “minutes” of “adjourned COI meeting reconvened on 8 December 2009” and records, among other things, that contact among the participants ended at 12.55pm on 8 December 2009 and that, on 14 December 2009, the Alternative Resolution was “declared passed by the majority of COI members voting”. But there is nothing that “purported” to be a resolution agreed to by a majority of the committee members present at a meeting on 14 December 2009 since, as the document made clear, there was no meeting on that day.

19 I therefore reject the proposition that s 1322(4)(a) is available in this case.

20 I would add that the order sought under that section would, in my opinion, cause “substantial injustice” to the persons who were entitled to be in direct communication with one another for the purposes of discussion and debate on the remuneration question with a view to their then expressing, through votes, their respective decisions on the question. The procedure in fact adopted deprived them of the ability to consult together – to express views to one another and to hear one another’s views – on the question whether the Alternative Resolution should be approved.

Conclusion on the “resolution”

21 The Alternative Resolution was not a resolution of the committee of inspection. It is not and cannot be saved or validated by resort to s 1322. There was accordingly never any fixing of the special purpose liquidator’s remuneration in the terms there set out. The position remains as stated in paragraph [37] of the reasons of 7 May 2010:

“The special purpose liquidator has been paid $215,436.10 to which he has no legal entitlement.”

The s 511 question

22 Because there has been no relevant determination of the committee of inspection, it is necessary for the court itself to address, under s 511 of the Corporations Act, the question of the appropriate quantification of the special purpose liquidator’s remuneration for the period 1 July 2009 to 31 October 2009, being the matter to which the s 1322 application related. For consideration also is the like question for the period 1 November 2009 to 28 February 2010 (see paragraph [2] of the reasons of 7 May 2010). The two matters are conveniently addressed together.

23 There was, at an earlier stage, a submission that the remuneration questions should await the trial of pending proceedings in which an order for the removal of the special purpose liquidator is sought (see paragraph [46] of the reasons of 7 May 2010). I do not regard that as an appropriate course. There is no clear connection between the two matters. The special purpose liquidator is entitled to have the assistance of the court in the matter of the quantification of his proper remuneration for past services regardless of the pendency of the other proceedings.

The special purpose liquidator’s entitlement

24 In approaching the matter of determining remuneration, I start from the position that a liquidator is entitled to fair and reasonable remuneration but, importantly, that it is for the liquidator to establish that entitlement. I refer, in that connection, to the following passage in the judgment of Kennedy J and Ipp J (Wallwork J concurring) in Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96 at 102:

“As a starting point, in our view, the onus is on the provisional liquidator to establish that the remuneration claimed is fair and reasonable. It is the function of the court to determine the remuneration by considering the material proffered and bringing an independent mind to bear on the relevant issues. The initial task is to consider whether, prima facie, the provisional liquidator has made out a case for the determination of the amounts claimed. The fact that there may be no person who objects to the claim, or any part of the supporting testimony, or that objectors advance unsustainable arguments, or do not properly formulate their objections, cannot detract from the court's duty in this respect. The judicial officer conducting an inquiry under s 473(2) is required to make an independent determination of the remuneration claimed, even if there is an absence of objectors, or appropriately detailed objections, or objections advanced on arguable grounds. Of course, once the court is satisfied that the provisional liquidator has made out a prima facie case that the remuneration claimed should be allowed, the absence or inappropriateness of points taken by objectors becomes relevant.

Should the provisional liquidator fall to provide adequate evidentiary material to enable the court to determine whether the amounts claimed are fair and reasonable, no order should be made: Re Solfire Pty Ltd (In liq) (No 2). Thus, for example, the mere listing of the persons who performed the work, the hours worked by each, and the amounts claimed, may well be insufficient material for the court to come to a proper decision: Re Reiter Bros Exploratory Drilling Pty Ltd .”

25 A useful analogy is identified in Re Independent Insurance Co Ltd (No 2) [2003] 1 BCLC 640 at [19] where it is said that the court “is in effect a hypothetical client negotiating the terms after the event”.

26 In performing its task, the court should have regard, by analogy, to the principles set out in s 473(10) of the Corporations Act that apply to the fixing or review of the remuneration of a court-appointed liquidator:

“In exercising its powers under subsection (3), (5) or (6), the Court must have regard to whether the remuneration is reasonable, taking into account any or all of the following matters:
(a) the extent to which the work performed by the liquidator was reasonably necessary;
(b) the extent to which the work likely to be performed by the liquidator is likely to be reasonably necessary;
(c) the period during which the work was, or is likely to be, performed by the liquidator;
(d) the quality of the work performed, or likely to be performed, by the liquidator;
(e) the complexity (or otherwise) of the work performed, or likely to be performed, by the liquidator;
(f) the extent (if any) to which the liquidator was, or is likely to be, required to deal with extraordinary issues;
(g) the extent (if any) to which the liquidator was, or is likely to be, required to accept a higher level of risk or responsibility than is usually the case;
(h) the value and nature of any property dealt with, or likely to be dealt with, by the liquidator;
(i) whether the liquidator was, or is likely to be, required to deal with:
(i) one or more receivers; or
(ii) one or more receivers and managers;
(j) the number, attributes and behaviour, or the likely number, attributes and behaviour, of the company's creditors;
(k) if the remuneration is ascertained, in whole or in part, on a time basis:
(i) the time properly taken, or likely to be properly taken, by the liquidator in performing the work; and
(ii) whether the total remuneration payable to the liquidator is capped;
(l) any other relevant matters.”

27 Elements of this list of factors were identified by Finkelstein J in his Honour’s landmark judgment in Re Stockford Ltd; Korda [2004] FCA 1682; (2004) 52 ACSR 279 and its reasonable to assume that that judgment inspired the subsequently adopted legislative provision.

28 A valuable summary of principles relevant to the fixing of remuneration of court-appointed receivers appears in the judgment of Young CJ in Eq in Ide v Ide [2004] NSWSC 751; (2004) 184 FLR 44. It is instructive for present purposes. His Honour said at [37] to [53]:

“[37] I have consulted the standard works on receivers, particularly Kerr on Receivers ; Picarda , The Law Relating to Receivers, Managers & Administrators 3rd ed ( Butterworths, London, 2000 ) ; Lightman & Moss , The Law of Receivers and Administrators of Companies ( Sweet & Maxwell, London 2000 ) and O'Donovan, Company Receivers and Managers (LBC, Sydney, 1981).

[38] One can find in those works, broad, general statements about the principles on which a receiver's remuneration is fixed, but little on the specific problem with which I have to deal. It is, however, of some use to set out some of those general statements.

[39] First, the court constituted by a judge, never considers a review of quantum, but only matters of principle: ReCatlin (1854) 52 ER 200; Australian Coal and Shale Employees' Federation v Commonwealth (1953) 94 CLR 621.

[40] Secondly, as Kerr says at p 233, a receiver is entitled to have his costs, charges and expenses properly incurred in the discharge of his ordinary duties, or in the performance of extraordinary services which have been sanctioned by the court. It is important to note that Kerr at page 235 says that where a receiver has undertaken such extraordinary services without the approbation of the court, allowances for them will not generally be sanctioned: Bristowe v Needham (1847) 41 ER 914; Malcolm v O'Callaghan (1837) 40 ER 844 and Viola v Anglo-American Cold Storage Co [1912] 2 Ch 305 at 311.

[41] Picarda elaborates at page 482, noting that a receiver who, without applying to the court for directions, performs extraordinary or extra services going beyond what it was his duty as a receiver and manager to perform may be allowed remuneration in addition to his salary or commission if what he has done has benefited the receivership assets.

[42] Thirdly, as Lightman & Moss say at 22-029:
‘The receiver must justify the reasonableness and prudence of the tasks undertaken for which remuneration is sought, in the same way as he must justify the reasonableness and prudence of incurring disbursements for which he seeks allowance and reimbursement.’


[43] Thus, as with a falsification of accounts, the relevant onus is on the receiver.

[44] Fourthly, it must always be remembered that a receiver's remuneration is not in the same category as costs: Mirror Group Newspapers plc v Maxwell (No 2) [2001] BCC 488. The receiver is making application for a fair recompense for what he or she has properly done. The award is in the discretion of the court according to well known guidelines: Lindley on Partnership 18th ed (Sweet & Maxwell, London, 2002) [23-177].

[45] Fifthly, the court's objective is to award a sum or devise a formula which will reasonably compensate the receiver for the time and trouble expended in the execution of his duties and, to some extent, the responsibility he has assumed: Re Alexander McLean (1912) 14 GLR 561 at 562. As Dennison J said in that case the vital question is what is the value to the estate of the work done by the receiver.

[46] This point was taken up by Ferris J in Mirror Group Newspapers plc v Maxwell (No 1) [1998] BCC 324 where His Lordship said that the court's task in assessing a receiver's remuneration is to reward value not indemnify against cost. His Lordship repeated this in Re Independent Insurance Co Ltd (No 2) [2003] 1 BCLC 640. This, of course, does not mean that the receiver is only remunerated if successful in adding value to the assets; see Waldron v MG Securities A/asia Ltd [1979] CLC 32,200 (40-541).

[47] However, the mere fact that the work done is of value to the partnership is not enough if the work done is outside the receiver's remit. Thus in Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96, a provisional liquidator was not remunerated for preparing statutory returns which were the duty of the directors to prepare.

[48] Sixthly, the court will usually work off time sheets created in the receiver's office provided that they do significantly more than merely detail the total number of hours spent by the receiver and officers of particular grades on his or her staff. As Ferris J said in Mirror Group Newspapers plc v Maxwell (No 1) [1998] BCC 324:
‘They must explain the nature of each main task undertaken, the considerations which led them to embark upon the task, and, if the task proved more difficult or expensive to perform than first expected, to persevere in it .... The amount of detail which needs to be provided will, however, be proportionate to the case.’

See also Re Solfire Pty Ltd (No 2) [1999] 2 Qd R 182 and Re Medforce Healthcare Services Ltd (in liq) [2001] 3 NZLR 145.

[49] Seventhly, the court is guided by professional scales of charges: Re Queensland Forests Ltd (in liq) [1966] Qd R 180; Waldron v MG Securities A/asia Ltd [1979] CLC 32,200 (40-541) and see Picarda p 480. What is important is the broad average or general rate charged by persons of the relevant status and qualifications who carry out the relevant type of work: Mirror Group Newspapers plc v Maxwell (No 1) [1998] BCC 324.

[50] There are few examples given in the cases and textbooks as to how taxing officers or the like apply these principles in practice. There are few examples as to what is reasonably included in billable hours and disbursements.

[51] One example comes from a taxation of costs case, which, for reasons earlier, might not be the best source of material. In Corwest Management Pty Ltd v Deputy Commissioner of Taxation (WA) (1987) 18 ATR 823 at 826, Onley J in the Western Australian Supreme Court said in a dispute over costs that whilst all expenses reasonably necessary to get a case ready for trial were allowable, a party could not say that he would not have brought a document into the State were it not for the trial and thus should be allowed the stamp duty paid on it. Even though the duty was a necessary expense, it was really part of the payer's ordinary civic responsibilities to pay it.

[52] In Mirror Group Newspapers plc v Maxwell (No 1) [1998] BCC 324, Ferris J considered the situation where the receiver had to spend some hours dealing with the enquiries being made by the Serious Fraud Office into the activities of Mr Maxwell, one of the directors of the relevant company. His Lordship allowed the initial conference with the Serious Fraud Office. However, he said he would not allow the time spent later on if it in any way was attributable to the receivers justifying their own conduct. However, he considered that, apart from this, time spent answering the inquiries of the Serious Fraud Office, though extraordinary, should be allowed.

[53] His Lordship put some weight on the point that the inquiries were not initiated by the receivers and arose out of the activities of the companies of which they were presently in control.”

The “benefit” question

29 A question debated before me is whether a liquidator seeking remuneration for specified activities must show that “benefit” flowed from those activities. I was taken to pronouncements said to support the proposition and pronouncements said not to support it. The debate is, to my mind, a sterile one, if the question of “benefit” is approached in some undefined evaluative sense.

30 The real question is whether the activities for which remuneration is claimed are within the scope of the liquidator’s functions. This may be illustrated by an example used in the course of argument. In the present case, a central aspect of the special purpose liquidator’s functions was to attempt to obtain litigation funding. It was therefore within the scope of the liquidator’s functions to seek out potential funders and to negotiate with them. The activity of negotiating with a particular potential funder would therefore qualify as an activity to be remunerated. That characterisation would not suddenly change when the negotiations broke down and no “benefit”, in the form of a litigation funding commitment, was achieved.

31 This is not to say that qualitative assessment of activities within the scope of the liquidator’s functions is not appropriate. There may be situations in which time spent on activities nominally within the scope of the liquidator’s functions is obviously not calculated to advance the administration in a practical and business-like way. The “reasonably necessary”, “quality of the work performed” and “time properly taken” criteria in s 473(10), set out at paragraph [26] above, reflect that thinking.

Whether certain matters are within the scope of the liquidator’s functions

32 Against that background, I deal first with a question raised by the three members of the committee who participated in the hearing of this application. ASIC, as amicus curiae, also made relevant submissions. The question is whether certain activities are properly regarded as part of the special purpose liquidator’s functions.

33 Those functions derive, in the first instance, from orders made by the court in 2003. The original orders have been supplemented by further orders over time. As they presently stand, the functions extend, in broad terms, to pursuit of causes of action perceived to be available to One.Tel against particular persons by reason of the cancellation of the company’s proposed rights issue shortly before its financial collapse in 2001.

34 The specification of functions by the court operates, of course, in the context of statutory provisions with respect to powers and duties of liquidators in a creditors voluntary winding up. The statutory powers may be used in aid of the pursuit of the court-assigned functions. The statutory duties must be performed in any event.

35 It is not in contest that a liquidator can only be remunerated for work that is necessary for or properly incidental to the conduct of the particular administration. But in ascertaining what is so necessary or properly incidental, a liquidator is not entitled to say, in effect, “Had I not been the liquidator of this company, I would not have spent time doing this particular thing”. The test is not a “but for” test related to the holding of the appointment. It is a test related to the due conduct of the administration.

36 It is the contention of the three committee members that certain of the work in respect of which the special purpose liquidator claims remuneration lies beyond the proper scope of conduct of the administration, even allowing for the fact that the particular specification of functions must carry with it some implied power to do what is necessarily incidental to the pursuit of the stated purposes. The challenged work falls into six categories, as follows:

1. Briefing of and attendances on a media adviser.

2. Dealing with “alleged defamation” of the special purpose liquidator.

3. Discussions with members of the press.

4. Transfer of the special purpose liquidator from Deloitte to Pitcher Partners.

5. Investigations into associations of members of the committee of inspection.

6. Certain contacts with ASIC.

Items 1, 2 and 3

37 Items 1, 2 and 3 are related in that each concerns the 2009 annual general meeting of creditors which was the occasion of widely publicised acrimony between the special purpose liquidator and the committee of inspection.

38 In relation to item 1, the special purpose liquidator states in his affidavit that the media adviser was in fact retained by his firm (Pitcher Partners) and that the firm paid the adviser’s fees. The remuneration claim includes time actually spent with the adviser. Item 2, the special purpose liquidator explains, relates to time spent in relation to draft written material for the meeting which, at different stages, drew an allegation from committee members that they were defamed by the special purpose liquidator and then a counter-allegation by him against them in like terms.

39 There can be no doubt that it was incumbent upon the special purpose liquidator to give an account of his administration at the meeting of creditors and by means of the report he prepared in advance of the meeting. His duty was to the creditors. To the extent that the preparation of the material by means of which he proposed to discharge that duty raised questions of defamation (whether by him or of him), it was incidental to the performance of his functions to resolve those questions. It was part of the proper function to ensure that relevant information was made available to creditors in non-actionable form. It is beside the point to say, as the committee members do, that any cause of action in defamation that the special purpose liquidator had would have been personal to him. His aim was simply to ensure that the administration was not complicated by allegations of defamation and that the material published for the purposes of the meeting did not entail any such complication.

40 On this basis, item 2 in the list at paragraph [36] above must be regarded as properly incidental to the performance of the special purpose liquidator’s functions.

41 Items 1 and 3 stand in a different light. It is true that the meeting of creditors attracted media interest. But that was of no concern to the special purpose liquidator, so far as the due performance of his functions was concerned. His ability to do what he was required to do would be in no way affected by anything the press might report. Whether he and his activities as special purpose liquidator received favourable media coverage, unfavourable media coverage or neutral media coverage was irrelevant to the tasks that it was his duty to perform. It was likewise irrelevant that the media might misunderstand some aspect of the administration or have some incomplete understanding. In short, it was of no consequence to the administration to which the special purpose liquidator was committed that media coverage might take any particular line. Any concern that the special purpose liquidator had to ensure that he was dealt with by the media in a particular way was a personal concern.

Item 4

42 I turn now to item 4 in the list at paragraph [36] above. The special purpose liquidator explains in his affidavit that most of the charged time arising from his transfer from Deloitte to Pitcher Partners was incurred because of the need for Pitcher Partners staff (particularly Mr Cooksley) to become familiar with the administration (he adds that Mr Cooksley also spent a large quantity of reading time for which no claim is made). It is not uncommon, as the special purpose liquidator points out, for staff turnover to occur during a long administration and for a new staff member to have to spend time becoming familiar with relevant matters.

43 Item 4 raises quite different considerations. The special purpose liquidator holds a personal appointment. He was, at the time of his appointment, a partner of Horwath. He transferred to Deloitte in 2007 and to Pitcher Partners in July 2009. From the perspective of the present administration, his membership of a particular firm is irrelevant. He did not approach the court in advance of either of his moves to a new firm. Nor was there the slightest expectation that he should do so. But a decision by the special purpose liquidator to change firms must be completely neutral as regards his remuneration. The reward to which he is entitled will be the same whether he is a member of one firm or another firm, stays with the one firm throughout, changes firms or chooses to be a sole practitioner.

44 If the special purpose liquidator’s move from one firm to another meant that there was a need to introduce new staff members who spent time familiarising themselves with the administration, that is an overhead that the special purpose administrator must absorb. The resignation of one staff member and his or her replacement by another in the ordinary course is an incident of the employment of staff and the employment of staff is, in turn, an unexceptionable aspect of the conduct of insolvency administrations by a liquidator. But action of the liquidator for his own private purposes which brings about an unavoidable turnover in staff is not an unexceptionable aspect of the conduct of that liquidator’s insolvency administrations.

Item 5

45 I refer next to item 5 in the list at paragraph [36] above. The relevant expenditure of time and effort by the special purpose liquidator related to his investigation of certain associations of members of the committee of inspection. He apparently thought it appropriate to inquire “whether Garry Phillips was a fit and proper person to remain a member of the COI” (these are the words in his affidavit). To that end, he spent time “reviewing the role of Garry Phillips as a business associate of Stuart Ariff, who was sued by ASIC”. This was followed by an unsuccessful move by the special purpose liquidator at the 2009 annual meeting of creditors to obtain a resolution for Mr Phillips’ removal from the committee of inspection. Another aspect of item 5 is explained by the special purpose liquidator as follows:

“There was an issue as to the time that I had spent determining whether there was a conflict of interest as a result of representatives of Optus attending COI meetings concerning the SPL Proceedings, when Optus had a substantial commercial relationship with 2 of the major defendants. In my view, this work was necessary as neither Optus nor its COI nominee had disclosed the details of the relationship when requested by me and I considered it critically important to be aware of potential conflicts when dealing with commercially sensitive confidential and privileged information.”

46 Item 5 thus reflects a view of the special purpose liquidator that it was part of his function to be concerned with the composition of the committee of inspection and to become actively involved in moves to change it.

47 The committee of inspection in a creditors voluntary winding up is entirely a creation of statute. It has defined powers. They are discussed in Onefone Australia Pty Ltd v One.Tel Ltd [2008] NSWSC 1335; (2008) 69 ACSR 290. The only statutory power of any consequence reposed by statute in the committee in this particular case is the power to fix the liquidators’ remuneration. There is no power to direct a liquidator. There is no statutory requirement that the liquidator consult with the committee (except, in a practical sense, as is necessary to determination of remuneration). Where particular functions relevant to exercise of a liquidator’s powers are given by statute concurrently to the committee and to the court (and perhaps to the general body of creditors), the liquidator is free simply to by-pass the committee altogether, if that is what the liquidator thinks is the desirable course (the special purpose liquidator has done this on at least one occasion in this administration: see Onefone Australia Pty Ltd v One.Tel Ltd [2010] NSWSC 498; (2010) 78 ACSR 163; Deloughery v Weston [2010] NSWCA 148).

48 In this particular administration, the court has specified certain of the special purpose liquidator’s functions in a way that requires him to consult with the committee of inspection. There is thus a non-statutory overlay. In addition, the court has, from time to time, expressed a wish or hope that the special purpose liquidator and the committee of inspection might work constructively together. Such a committee may be a source of advice. On occasion, a liquidator may find it useful to be able to resort to a sounding-board at his or her option.

49 The wish or hope that there might be a constructive relationship in this case has not been realised. That being so, it is open to the special purpose liquidator, if he chooses to do so, virtually to ignore the committee except in relation to specific matters on which the court has directed consultation (a requirement, it may be noted, that entails nothing more than consultation) and in relation to the matter of remuneration which is something that will certainly arise for consideration from time to time and in which the committee has a clear statutory role to play. That course of minimal contact has, in fact, always been available to the special purpose liquidator.

50 How was it, then, any part of the function of the special purpose liquidator in this administration to spend time delving into associations of members of the committee of inspection? Let it be assumed that Mr Phillips is or was “a business associate” (whatever that means) of Stuart Ariff (who, in August 2009, was banned for life from acting as a liquidator) and that Singtel Optus, an employee of which is a member of the committee of inspection, has or had “substantial commercial relationships” (whatever that means) with two of the defendants in the proceedings at the suit of One.Tel for which the special purpose liquidator has responsibility. What follows?

51 The answer, to my mind, is not obviously such as to make it part of the special purpose liquidator’s incidental function (it is certainly not part of his specifically conferred functions) to spend remunerated time inquiring into those matters, given that the committee’s functions lie within the very limited compass I have mentioned. Because the predominant function of a committee of inspection in a creditors voluntary winding up is to fix the liquidator’s remuneration, one might expect a liquidator in such a winding up to be wary of taking an active role in matters potentially related to re-constitution of the committee lest it be thought that he or she was attempting to exert undue influence in relation to the fixing of remuneration. And, bearing in mind that the court has, to a limited extent, required consultation by the special purpose liquidator with the committee, there is no apparent reason why he should see it as within his functions to seek to influence the composition of the body with which the court has required him to consult.

Item 6

52 I turn now to item 6 in the list at paragraph [36] above. There can be no doubt that due performance of a liquidator’s functions entails contact with ASIC. Ongoing statutory requirements of a routine nature necessitate such contact. Certain extraordinary ASIC matters are also within the proper scope of a liquidator’s functions: for example, the special purpose liquidator refers in his affidavit to having lodged with ASIC a report under s 533 of the Corporations Act. That is an exceptional event but one clearly within a liquidator’s responsibilities.

53 The particular matter to which item 6 relates is, however, not of this kind. It relates to a requirement imposed by ASIC through s 30 of the Australian Securities and Investments Commission Act 2001 that the special purpose liquidator produce to ASIC all documents recording or identifying his remuneration and expenses incurred since appointment. This was preceded by correspondence quoted at paragraphs [41] and following of 7 May 2010. It is clear from that correspondence - I refer, in particular, to ASIC’s letter to the special purpose liquidator dated 11 September 2009 in which there is reference to a meeting to discuss “your role” as special purpose liquidator - that the subject matter of ASIC’s review is the special purpose liquidator’s own conduct in the matter of his incurring of expenses and his claiming of remuneration – in other words, matters related to his personal performance as a practitioner, as distinct from any element of the administration itself.

54 This aspect cannot be related directly to any aspect of the assigned functions of the special purpose liquidator. It cannot be said that, by spending time on ASIC’s request for information about his actions as a practitioner, the special purpose liquidator did anything relevant to those functions. If a solicitor acting on the purchase of a house gives an undertaking which he then allegedly dishonours, he cannot charge his purchaser client for time spent on dealing with any allegation of professional misconduct that follows. That is, in a somewhat blasé sense, an overhead of the solicitor’s practice. So too here, in my view, the ASIC request of the special purpose liquidator for information about his remuneration and expenses is an overhead of the special purpose liquidator’s practice. Just as he must file an income tax return that includes his remuneration from his several appointments and maintain his registration as a liquidator to be able to continue those appointments, so he must deal with periodic audits and the like to which he is subjected, whether or not it is a particular administration that prompts them.

The need for further information

55 The foregoing discussion of items 1 to 6 in the list at paragraph [36] above means that the court cannot answer the s 511 question now before it simply by saying, in effect that the special purpose liquidator’s remuneration claims should be accepted as submitted. Nor can it say that the claims should simply be rejected. Some adjustment is required on account of the matters of in principle demarcation discussed.

56 A related matter is also relevant and may necessitate further adjustment. It concerns the form in which the special purpose liquidator put material before the court and the capacity of that material to make clear what has actually been done. For each relevant period, there is a summary of work performed, a listing of time spent by the special purpose liquidator himself and by staff members and an amount for each item calculated by reference to an hourly rate. It is necessary to review that system of presentation of supporting information.

The form of the material before the court

57 In addressing the general issue of the form of the material placed before the court by the special purpose liquidator, I take as an illustrative example the information given for 6 November 2009. There are eleven recorded entries for that day, four for Mr Weston (the special purpose liquidator) and seven for Mr Cooksley (a senior employee of Pitcher Partners). The entries reveal the following:

1. Mr Weston spent two hours (at $600 per hour) on “Litigation – Funding”, the narration for which is:
“At OP Legal from 11.15 – 19.30 (less 15 min lunch brk) to finalise prep for adjourned agm inclng fees review; SPL prsntion; Telecons with Telstra (Sue L) and Roadhound (Ben S); emails and corres incl w/ASIC; COI Lwyrs; RVW & Finalise ext appn for funding.”
2. Mr Weston spent half an hour (at a rate of $600 per hour) on “Legal – Fees Reporting/Review & Analysis” with exactly the same narration.
3. Mr Weston spent one hour ($600) on “Creditor-Meetings” with exactly the same narration.
4. Mr Weston spent four and half hours (at $600 per hour) on “COI-General” with exactly the same narration.
5. Mr Cooksley spent 0.58 hour (apparently 34.8 minutes) at a rate of $457 per hour on “Legal – Fees Reporting/Review and Analysis” with a narration “Analysis of October WIP narrative for allocation to task areas”.
6. Mr Cooksley spent 0.75 hour at a rate of $457 per hour on “Legal – Fees Reporting/Review & Analysis” with a narration “Complete fee matrix for October 2009”.
7. Mr Cooksley spent 0.58 hour at a rate of $457 per hour on “Legal – Fees Reporting/Review & Analysis” with a narration “Finalise July 07 to June 09 analysis”.
8. Mr Cooksley spent one hour at $457 on “Creditor – Meetings” with a narration “Discuss fee matrices with PGW. Create file for fee analysis and USB drive”.
9. Mr Cooksley spent 0.92 hour at a rate of $457 per hour on “Litigation – Funding” with a narration “Meeting at OP regarding affidavit for extension of time for service of claim.
10. Mr Cooksley spent two hours at a rate of $457 per hour on “Creditor – Reports” with a narration “Telecon with Telstra and debrief. Telecon with Roadhound and debrief”.
11. Mr Cooksley spent 5.67 hours at a rate of $457 per hour on “Creditor – Reports” with a narration “Finalise presentation to creditors for AGM”.

58 According to these entries, Mr Cooksley was directly involved in the performance of the special purpose liquidator’s functions for a total of 11.5 hours on 6 November 2009.

59 The understanding one can gain from the 6 November 2009 entries is very limited. On the surface, each entry seems to have something to do with the special purpose liquidator’s administration, but there is no way of knowing any of three important things: first, whether the charges are, as to time spent and reasonable charges; second, what was actually done during the recorded time; and, third, whether the time spent relates to progressing of the special purpose liquidator’s administration or protection of his personal position.

60 The inability to understand precisely what the entries cover is illustrated by an example. Item 1 in the above list relates to Mr Weston; item 10 relates to Mr Cooksley. Item 1 is the only two hour entry for Mr Weston; item 10 is the only two hour entry for Mr Cooksley. Each refers to telephone conversations with people at Telstra and Roadhound from which it might be inferred that Mr Weston and Mr Cooksley were together participating in a conference call. Mr Cooksley’s entry suggests that the whole of the two hours was spent on the two telephone conversations and “debrief” which, one might infer, involved discussion with Mr Weston (and perhaps others if, as Mr Weston’s entry tends to imply, both were at the office of O’Neill Partners) about the telephone conversations and their content.

61 Mr Weston’s narration for item 1 refers to “Litigation-Funding”. This, one surmises, did not involve the two telephone conversations (and “debrief”) on which Mr Cooksley spent two hours since there is no apparent reason why telephone conversations with people at Telstra and Roadhound would be related to litigation funding. Perhaps, if there were conference calls (followed by “debrief”) in which both Mr Weston and Mr Cooksley participated for two hours, this is covered, in Mr Weston’s recording, as part of the 4.5 hours labelled “COI-General”. One simply cannot know, particularly since Mr Cooksley booked the two hours of telephone conversations and “debrief” to “Creditor-Reports”.

62 Submissions made by ASIC as amicus curiae refer to an aspect of the material presented to the court that ASIC has chosen to call “narrative duplication”. Mr Weston’s entry of 6 November 2009 already mentioned is among a significant number of such duplications said by ASIC to be evident from the special purpose liquidator’s material. A few other instances chosen at random will illustrate the point ASIC seeks to make:

1. On 27 July 2009, there are two entries in respect of Mr Cooksley each of which relates to “Creditors”, records 0.42 hour at $457 per hour ($190.42) and carries the narration “Review draft report to creditors”.

2. On 29 September 2009, there are three entries in respect of Mr Wohlfiel each of which relates to “ASIC” and carries the narration “Perused file and made copies of minutes of meetings of the COI approving fees”. One entry is for 2.08 hours ($435.42), another for 1.17 hours ($243.83) and another for 1.33 hours ($278.67).

3. On 13 November 2009, there are two entries in respect of Mr Weston each of which relates to “Legal/Strategy”. Each is for one hour ($600) and carries the narration “Strategy matters comprising brief with DC and Telecons with MFO and TP”.

63 The obvious question in each of these cases is whether one item has been recorded more than once or whether, for example, Mr Weston spent two distinct periods, each of one hour, on the same activity on 13 November 2009. The material as presented raises the question in these and a number of other instances but does not answer it.

64 Other uncertainties arise from the records put into evidence. Mr Weston’s narration set out in item 1 at paragraph [57] above refers to emails and correspondence with ASIC. Indeed, “ASIC” appears on a separate category in the records, with a total of $2,852.00 allocated to it in the period 1 November 2009 to 28 February 2010, $2,700.00 (4.5 hours) on the part of Mr Weston and 0.33 hours on the part of Mr Cooksley. The particular entries in the “ASIC” category are:

Mr Weston recorded half an hour ($300.00) on 11 November 2009 for “Telecon with John Laird (ASIC) on AGM, Funding and fees review”
Mr Weston recorded half an hour ($300.00) on 17 November 2009 for “Review final o/s docs for ASIC review on Fees and Costs”
Mr Weston recorded half an hour ($300.00) on 24 November 2009 for “Review final o/s doc’s for ASIC review on fees and costs”
Mr Weston recorded three hours ($1,800.00) on 27 November 2009 for “ASIC v Rich judgment review in part including discuss with MFO & TP thereon”
Mr Cooksley recorded 0.08 hour ($38.08) on 2 December 2009 for “meeting at O/Ps – ASIC review meeting”
Mr Cooksley recorded 0.25 hour ($114.25) on 22 December 2009 for “review of AF email regarding ASIC fee review information. Review of Deloitte folder for letter to SC of 09/04. Email to AF”

65 This particular matter raises a question to which attention was devoted in submissions made by counsel for ASIC, Mr D L Cook. Those submissions contain a table assembled from the special purpose liquidator’s fee schedules in which time and amounts for the composite period 1 July 2009 to 28 February 2010 are broken down according to the several categories. The table is as follows:

Tasks	Fees $	Hrs	%
ASIC	17,985	52	4%
COI	217,608	456	48%
Creditors	58,387	131	13%
Funding	77,492	146	17%
GPL	3,373	7	1%
Legal/strategy	55,014	100	12%
Other	21,388	49	5%
Total	451,247	940	100%

66 As Mr Cook pointed out, this shows that only a relatively small percentage (17%) is directly related to the special purpose liquidator’s allotted task of seeking litigation funding. Of the remaining 83%, no less than 65%, totalling some $275,000 relates to the committee of inspection and creditor tasks.

67 It may be acknowledged at once that the period 1 July 2009 to 28 February 2010 included the annual general meeting of the creditors of One.Tel (which was adjourned on several occasions) and that the proper functions of the special purpose liquidator included reporting to creditors in relation to that meeting and actually attending the meeting. There was also a need to participate in proceedings preparatory to the resumption of the adjourned meeting: see Re Walker [2009] NSWSC 1172; (2009) 74 ACSR 616. It may likewise be acknowledged that there were meetings of the committee of inspection during the period in question and that the special purpose liquidator properly spent time at and in relation to such meetings.

68 The difficulty is to obtain an appreciation of precisely what was done under the “COI” and “Creditors” headings to warrant remuneration of, respectively, $217,608 and $58,387. The same comment applies to the composite item “Legal/strategy” that accounts for $55,014 – not to mention the unexplained “Other” of $21,388. And then there is “ASIC” accounting for $17,985 of which the $2,852 attributable to the period 1 November 2009 to 28 February 2010 is dealt with at paragraph [64] above.

69 The special purpose liquidator has sought to deal with these questions or criticisms by including further information in submissions responding to ASIC’s submissions. For example, in relation to the $58,387 for “Creditors”, those submissions say that $57,471.76 concerned dealing with creditors between 1 July 2009 and 31 October 2009, the period that covered the 2009 annual meeting of creditors and the events related to it, including the preparation of the special purpose liquidator’s report. It is explained that $36,200 (or 62%) of the $57,471.76 related to those aspects and that a further $7,696 (or 13%) was for communications with major creditors. There was also a further $20,615 related to applications to the court concerning material to be provided to creditors for the purpose of the meeting.

70 The special purpose liquidator seeks to explain these matters further by reference to a table in his submissions providing a break-down of the $57,471.76 into sub-categories as follows:

Sub-category	Hours	Total
3 August 2009 report	63.83	$ 26,668 . 67
Creditor data capture	7.00	1,284 . 17
Meetings and telecoms with major creditors	14.42	7,696 . 50
Prep for attendance at AGM	18.66	9,531 . 66
Debriefs/transcripts	1.00	333 . 00
Correspondence with GPL	1.42	647 . 42
Other	22.16	11,310 . 34

71 In this and other areas, the special purpose liquidator takes issue with the ASIC submissions because, it is said, ASIC has not adopted categories corresponding with those used by the special purpose liquidator. That, it seems to me, is a reflection on the special purpose liquidator’s presentation. If, as the special purpose liquidator seems to suggest, ASIC has misunderstood the material the special purpose liquidator has placed before the court in support of the present application, one must have strong reservations about the utility of that material – the more so when the special purpose liquidator’s answer to one aspect of the ASIC assessment was to seek to place further information of a detailed kind before the court through the medium of submissions in reply.

72 Had the special purpose liquidator provided at an earlier stage the break-down recorded at paragraph [70] above, ASIC’s submissions may have been different. In one respect, however, one can be confident that they would have been the same: the sub-category “Other” ($11,310.34) is, of itself, wholly uninformative and remains unexplained.

Time charging

73 The special purpose liquidator’s approach to quantification of remuneration is wholly time based. Hours spent on tasks are recorded and an hourly rate is applied.

74 This is a recognised and acceptable method of quantification. But it emphasises the particular need to be certain that the time for which claims are made is in truth time that was devoted to performance of relevant functions.

75 Time charging can lead to abuses. This is particularly so if individuals’ performance and worth within a firm is judged according to time they record and the same time records are used for client billing. I hasten to say that there is no evidence that that is the case here. I mention the matter merely to emphasise the need to be certain that the time recording system used in a particular case is in truth focussed on performance of relevant functions.

76 Another drawback is that unnecessary duplication may be rewarded. At paragraph [62] above, there is reference to Mr Wohlfiel, a junior employee, having spent time perusing the file and making copies of committee of inspection minutes approving fees. It is not possible to know precisely what this entailed or why it was done. Nor, on the material available, can the matter be the subject of criticism. But it can be said that, since resolutions of the committee of inspection were the means by which Mr Weston was able to obtain payment of remuneration by the general liquidators of One.Tel, it would be surprising if he did not have readily to hand copies of those claims and the resolutions supporting them. One would expect, therefore, that Mr Wohlfiel’s efforts were directed to something more than finding those resolutions. But what that was is not made clear.

Conclusions

77 I accept, in general terms, the proposition advanced by ASIC that the evidence and explanations placed before the court by the special purpose liquidator on this application are not such as to permit a clear view to be formed of the work the special liquidator performed in the periods in question and the relevance of that work to the special purpose liquidator’s administration.

78 Subject to what has been said about the matters referred to in items 1, 3, 4, 5 and 6 at paragraph [36] above, the various narrations provide, as on earlier similar applications, an indication, in a general sense, of connection between time recorded and the special purpose liquidator’s administration. But in the light of the detailed assessment carried out by ASIC (something not available on earlier similar applications), I accept ASIC’s submission that it is not possible, as things now stand, for the necessary quantification task to be undertaken by the court, bearing in mind that it is the special purpose liquidator who carries the onus of establishing the quantum of reasonable remuneration. The difficulty stems from the method of presentation and the problems it creates for seeing, first, precisely what was done and, second, how what was done forms part of the functions of the special purpose liquidator.

79 Having regard to what was said in Venetian Nominees Pty Ltd v Conlan (above) – which I regard as equally applicable to the present unusual case in which the question of quantification comes before the court under s 511 - the proper course, it seems to me, is to require the special purpose liquidator to re-present the material and to re-formulate his claim in respect of the periods 1 July 2009 to 31 October 2009 and 1 November 2009 to 28 February 2010: compare, in the case of taxation of solicitors’ costs, Slingsby v Attorney-General [1918] P 236 where it was said that an itemised bill of costs might be rejected if items are so inextricably mixed up that it is impossible to say what was really chargeable or what should fairly be allowed for the items chargeable.

80 In view of the course the present application took, it will be appropriate, in the first instance, for the re-formulated claim and the materials supporting it to be served on both ASIC and the members of the committee of inspection who participated in the hearing of this application. Then, when any remaining matters of principle that either ASIC or the committee members may wish to raise have been considered and determined by the court constituted by a judge, there will be a referral to the registrar to deal with the details of assessment and quantification on the basis that the registrar will report back to the court constituted by a judge so that such order under s 511 of the Corporations Act as the circumstances require may be made.

81 In specifying this method of proceeding, I have regard to what was said by Young CJ in Eq at paragraph [39] of his judgment in Ide v Ide (above) which is in line with the approach to taxation of costs by the court. His Honour’s statement is to the same effect as that of Fullagar J in Magna Alloys and Research Pty Ltd v Coffee (No 2) [1982] VR 97 at 102 – 103 concerning taxation of party and party costs:

“The court must distinguish in its approach between, on the one hand, cases where a matter of principle is involved and, on the other hand, cases, "where it is a question whether the master has exercised his discretion properly, or it is only a question as to the amount to be allowed", in which latter cases, "the court is generally unwilling to interfere with the judgment of its officer, whose peculiar province it is to investigate and to judge of such matters, unless there are very strong grounds to show that the officer is wrong in the judgment which he has formed".
It has thus been said that "it is only in an extreme case" that the court will interfere with the master's decision on a matter involving nothing but quantum, though it must be remembered that such phrases are not the words of any statute or rule, but a very compendious judicial summary of the general approach to determinations of an officer whose peculiar province it is to investigate and judge of such matters, by judges whose special or particular province or training it certainly is not.”

(The quoted passages in this extract are from the judgement in 582 St Kilda Road v Campbell , unreported, VSC, Lush J, 5 September 1975.)

82 I will direct that the special purpose liquidator, the three committee members and ASIC formulate and deliver to my Associate short minutes of order to put in place the regime I have described.

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