WAVE PTY LTD (ADMINISTRATORS APPOINTED) - [2024] WASC 453

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   WAVE PTY LTD (ADMINISTRATORS APPOINTED) [2024] WASC 453
CORAM:   LEMONIS J
HEARD:   1 OCTOBER 2024
DELIVERED          :   6 DECEMBER 2024
FILE NO/S:   COR 91 of 2023
BETWEEN:   WAVE PTY LTD (ADMINISTRATORS APPOINTED) a division of WAVE PROJECTS PTY LTD (ADMINISTRATORS APPOINTED)
First Plaintiff
NICOLE JANE ALLMARK as joint and several administrator of JACK ROBERT JAMES
Second Plaintiff
PAULA LAUREN SMITH
Third Plaintiff

Catchwords:

Plaintiffs were the administrators of two companies and also administrators of deeds of company arrangement entered into in respect of those companies - Resolution passed at second creditors' meeting imposing a maximum limit on the remuneration recoverable by the plaintiffs for their work as administrators and deed administrators - Plaintiffs now seek a review of that remuneration determination for the purpose of significantly increasing their approved remuneration - Consideration of the circumstances in which a review should be ordered - Consideration of appropriate amount to be ordered on review

Legislation:

Corporations Act 2001 (Cth)
Insolvency Practice Rules (Corporations) 2016 (Cth)

Result:

Application allowed in part
Remuneration set for part of the period the subject of the plaintiffs' application

Category: B

Representation:

Counsel:

First Plaintiff	:	SP Tomasich
Second Plaintiff	:	SP Tomasich
Third Plaintiff	:	SP Tomasich

Solicitors:

First Plaintiff	:	Lavan
Second Plaintiff	:	Lavan
Third Plaintiff	:	Lavan

Case(s) referred to in decision(s):

Conlan v Adams [2008] WASCA 61
Higgins v JSS Logistics Pty Ltd (in liq) [2022] FCA 1320
In the matter of JPD Media & Design Pty Ltd (subject to deed of company arrangement) [2020] NSWSC 1311
In the matter of Re Sakr Nominees Pty Ltd [2017] NSWSC 668
Paddington Gold Pty Ltd v Wave Pty Ltd (Subject to a Deed of Company Arrangement) [2023] WASC 263

LEMONIS J:

The plaintiffs were previously the joint and several administrators of Wave Pty Ltd (Wave) and Wave Projects Pty Ltd (in Liquidation) (Wave Projects). The plaintiffs were also the deed administrators in respect of Deeds of Company Arrangement entered into by Wave and Wave Projects. On 23 October 2023, I made an order terminating the Wave Projects Deed of Company Arrangement. The Wave Deed of Company Arrangement has now been effectuated.
The plaintiffs apply to the court for additional remuneration in respect of work they undertook in connection with the administration, and deed administration, of Wave and Wave Projects. The application was initially brought under cl 60-10 of the Insolvency Practice Schedule (Corporations) (IPS).[1] However, for reasons which I will come to explain, cl 60-10 was not available to the plaintiffs as a source of power for the orders that they sought. On the hearing of the application, the plaintiffs applied to amend the application to bring it under cl 60-11, which I allowed.
[1] Schedule 2 to the Corporations Act 2001 (Cth).

Background

The second creditors' meeting of Wave and Wave Projects was held on 6 July 2023.
At each meeting, the majority of creditors by value voted against the proposed Deed of Company Arrangement (DOCA) and the majority of creditors in number voted in favour. The chairman of the meeting, Mr James, who is one of the administrators, exercised a casting vote as chairman in favour of each company entering into the proposed DOCA. The resolution for each company was passed on that casting vote.
Further at each of those meetings, a number of resolutions were passed regarding the plaintiffs' remuneration. Those resolutions were:
1.in respect of Wave:[2]
[2] Second affidavit of Ms Smith, dated 13 May 2024, pages 448 - 449.
(a)That the remuneration of the Voluntary Administrators, their partners and staff, for the period 12 May 2023 to 23 June 2023, calculated at hourly rates as detailed in the Rodgers Reidy Schedule of Remuneration Methods and Hourly Rates, is approved for payment in the amount of $172,745.00 exclusive of GST, to be drawn from available funds immediately or as funds become available.
(b)That the remuneration of the Voluntary Administrators, their partners and staff, for the period 24 June 2023 to the end of the Voluntary Administration, calculated at hourly rates as detailed in the Rodgers Reidy Schedule of Remuneration Methods and Hourly Rates, is approved for payment up to a capped amount of $25,000.00 exclusive of GST, to be drawn from available funds immediately or as funds become available.
(c)That the remuneration of the Deed Administrators, their partners and staff, for the period from the commencement of the Deed of Company Arrangement to the effectuation or termination of the Deed of Company Arrangement, calculated at the hourly rates as detailed in the Rodgers Reidy Schedule of Remuneration Methods and Hourly Rates, is approved for payment up to a capped amount of $15,000.00 exclusive of GST, to be drawn from available funds immediately or as funds become available.
1.in respect of Wave Projects:[3]
(a)That the remuneration of the Voluntary Administrators, their partners and staff, for the period 12 May 2023 to 23 June 2023, calculated at hourly rates as detailed in the Rodgers Reidy Schedule of Remuneration Methods and Hourly Rates, is approved for payment in the amount of $192,920.00 exclusive of GST, to be drawn from available funds immediately or as funds become available.
(b)That the remuneration of the Voluntary Administrators, their partners and staff, for the period 24 June 2023 to the end of the Voluntary Administration, calculated at hourly rates as detailed in the Rodgers Reidy Schedule of Remuneration Methods and Hourly Rates, is approved for payment up to a capped amount of $25,000.00 exclusive of GST, to be drawn from available funds immediately or as funds become available.
(c)That the remuneration of the Deed Administrators, their partners and staff, for the period from the commencement of the Deed of Company Arrangement to the effectuation or termination of the Deed of Company Arrangement, calculated at the hourly rates as detailed in the Rodgers Reidy Schedule of Remuneration Methods and Hourly Rates, is approved for payment up to a capped amount of $15,000.00 exclusive of GST, to be drawn from available funds immediately or as funds become available.
[3] Third affidavit of Ms Smith, dated 13 May 2024, pages 453 - 454.
As can be seen, these resolutions reflect charges on a time-costing basis with a cap on the amount of remuneration. That approach accords with cl 60-10(4) of the IPS.
On 6 July 2023, the DOCA for each of Wave and Wave Projects was executed and the administration then came to an end.
On 7 July 2023, Paddington Gold Pty Ltd (Paddington) commenced proceedings seeking, amongst other things, orders terminating the DOCA and also setting aside the casting vote. Paddington also sought interlocutory injunctive relief restraining each DOCA being carried into effect pending the determination of the proceedings. On 10 July 2023, I made interlocutory orders substantially to that effect.[4]
[4] See Paddington Gold Pty Ltd v Wave Pty Ltd (Subject to a Deed of Company Arrangement) [2023] WASC 263.
The plaintiffs now seek additional remuneration in respect of the same periods of time the subject of the remuneration resolutions passed on 6 July 2023. Specifically, the plaintiffs now make the following claims for additional remuneration. The amounts referred to in the following paragraphs are exclusive of GST.
In respect of Wave, the plaintiffs claim remuneration in the sum of $37,460 for the period from 24 June 2023 to 6 July 2023 (being when the administration came to an end). The maximum allowed pursuant to the resolution passed on 6 July 2023 was $25,000. The claim for remuneration exceeds that maximum by $12,460. The plaintiffs now seek to be awarded remuneration for that additional sum of $12,460.
Further in respect of Wave, the plaintiffs claim remuneration in the sum of $138,565 for the period from 7 July 2023 to 26 October 2023. The maximum amount allowed pursuant to the resolution passed on 6 July 2023 was $15,000. The claim for remuneration exceeds that maximum by $123,565. The plaintiffs now seek to be awarded remuneration for that additional sum of $123,565.
The net effect of the plaintiffs' application in respect of Wave is that they receive an additional remuneration of $136,025.
In respect of Wave Projects, the plaintiffs claim remuneration in the sum of $45,000 for the period from 24 June 2023 to 6 July 2023 (when the administration came to an end). The maximum amount allowed pursuant to the resolution passed on 6 July 2023 was $25,000. The claim for remuneration exceeds that maximum by $20,000. The plaintiffs now seek to be awarded remuneration for that additional sum of $20,000.
Further, in respect of Wave Projects, the plaintiffs claim remuneration of $103,567.50 for the period 7 July 2023 to 23 October 2023. The maximum amount allowed pursuant to the resolution passed on 6 July 2023 was $15,000. The claim for remuneration exceeds that maximum by $88,567.50. The plaintiffs now seek to be awarded remuneration for that additional sum of $88,567.50.
The net effect of the application in respect of Wave Projects is that the administrators receive additional remuneration of $108,567.50.
The plaintiffs have given notice of this application to the potential and known creditors for Wave and the two largest shareholders of Wave. The plaintiffs have not received any notice of objection.[5]
[5] Affidavit of Ms Smith, affirmed 7 June 2024, pars 5 - 8.
The plaintiffs have also given notice of this application to the potential and known creditors for Wave Projects and its largest shareholder, which is Wave. The plaintiffs also gave notice to six of the seven members of the committee of inspection in respect of Wave Projects. The one member to whom notice was not given represents employees who are creditors in their own right and who received notice of the application in that capacity. The plaintiffs have not received any notice of objection. [6]
[6] Affidavit of Ms Allmark, sworn 12 July 2024, pars 8 - 25.
The plaintiffs' revised remuneration claims are set out in further remuneration reports for Wave and Wave Projects. The plaintiffs also put into evidence the timesheets that substantiate the amounts claimed in the further remuneration reports.
Ms Smith (one of the administrators) says in her affidavit affirmed 13 May 2024 in respect of Wave, that she considers, as does Mr James and Ms Allmark, that the work referred to in the Wave remuneration report was necessary work that was properly performed.[7] She also explains that she has written off time to the value of $1,715 and has also reduced the hourly rate for some of the work charged by her colleagues to accurately reflect the level of the work that they performed.[8]
[7] Second affidavit of Ms Smith, par 34.
[8] Second affidavit of Ms Smith, par 36.

Ms Smith says in her affidavit affirmed 13 May 2024 in respect of Wave Projects that she considers, as does Mr James and Ms Allmark, that the work referred to in the Wave Projects remuneration report was necessary work that was properly performed.[9] She also explains that she has written off time to the value of $2,835 and has also reduced the hourly rate for some of the work charged by her colleagues to accurately reflect the level of the work that they performed.[10]
[9] Third affidavit of Ms Smith, par 35.
[10] Third affidavit of Ms Smith, par 38.
I accept these statements, however that does not necessarily mean that the plaintiffs are entitled to the relief which they now seek.

Relevant legislative provisions

Rule 70-45(3) of the Insolvency Practice Rules (Corporations Rules) 2016 (Cth) (Insolvency Rules) provides:
Before a remuneration determination for an external administrator of a company is made by resolution of the creditors under section 60‑10 of the Insolvency Practice Schedule (Corporations), the external administrator must:
(a) prepare a report setting out such matters as will enable the company's creditors to make an informed assessment as to whether the proposed remuneration is reasonable; and
(b) give a copy of the report to each of the company's creditors at the same time as the creditors are notified of the relevant meeting of creditors.
Clause 60-10(1) of the IPS provides:
(1)A determination, specifying remuneration that an external administrator of a company (other than an external administrator in a members' voluntary winding up) is entitled to receive for necessary work properly performed by the external administrator in relation to the external administration, may be made:
(a)by resolution of the creditors; or
(b)if there is a committee of inspection and a determination is not made under paragraph (a) – by the committee of inspection; or
(c)if a determination is not made under paragraph (a) or (b) – by the Court.
In this case, in respect of both Wave and Wave Projects, a resolution of the creditors has already been passed setting the plaintiffs' remuneration for the entirety of the period the subject of the applications before me.
Thus, a determination of the administrator's remuneration has been made under cl 60-10(1)(a). It necessarily follows that cl 60‑10(1)(c) is not engaged, as a determination has been made under paragraph (a). Accordingly, cl 60-10(1)(c) does not provide me with the power to award additional remuneration to the plaintiffs. This construction is consistent with the decision of Black J in In the matter of JPD Media & Design Pty Ltd (subject to Deed of Company Arrangement).[11]
[11] In the matter of JPD Media & Design Pty Ltd (subject to deed of company arrangement) [2020] NSWSC 1311 (JPD Media) [9].
At the commencement of the hearing, I raised my concern with the plaintiffs' counsel that cl 60-10(1)(c) did not apply. The plaintiffs' counsel sought instructions and did not press the application under cl 60-10(1)(c). Instead, the plaintiffs sought to amend to rely on cl 60‑11, which I allowed.
Clause 60-11 provides:
(1)Any of the following may apply to the Court for review of a remuneration determination for an external administrator of a company;
(a)ASIC;
(b)a person with a financial interest in the external administration of the company;
(c)an officer of the company.
(2)Paragraph (1)(c) has effect despite section 198G.
(3)On application under subsection (1), the Court may, if it considers it appropriate to do so, review the remuneration determination.
(4)After reviewing the remuneration determination, the Court must:
(a)affirm the remuneration determination; or
(b)vary the remuneration determination; or
(c)set aside the remuneration determination and substitute another remuneration determination.
…
The phrase 'external administrator' in the opening line of cl 60‑11(1) includes both an administrator of the subject company and the administrator under a DOCA.[12] The phrase 'external administration' in cl 60-11(1)(b) includes a company under administration and under a DOCA.[13]
[12] See cl 5-15(a) - (b) and cl 5-20(a) - (b) of the IPS.
[13] Clause 5-15(a) - (b) of the IPS.
Clause 60-11(1) identifies those who have standing to apply. In my view, cl 60‑11(1)(b) is wide enough to pick up the plaintiffs. The plaintiffs have a financial interest in the external administration of the company in both forms. This arises from the plaintiffs having an entitlement to claim remuneration for the work carried out as administrators and deed administrators. Accordingly, I am satisfied that the plaintiffs have standing to bring the application under cl 60‑11(1)(b).[14]
[14] In JPD Media [9], Black J was of the view that the court had jurisdiction to vary the previous remuneration determination made by creditors.
Clause 60-11 comprises three separate stages.
First, the court has to consider whether it is appropriate to review the remuneration determination.
The phrase 'considers it appropriate to do so' reflects broad considerations that will depend on the circumstances of the particular case. It should not be understood as conveying an automatic right for external administrators to receive remuneration for additional work they have undertaken which is not the subject of the existing remuneration determination.
In JPD Media, Black J was of the view that there was 'a sufficient change of circumstances to warrant a review and increase' in the administrator's remuneration. Thus, his Honour considered it appropriate to review the administrator's remuneration.
His Honour's observations direct attention to the extent to which there is a change of circumstances, and whether that change is of such a nature as to warrant a review of the remuneration determination. Underlying this approach is the notion that the changed circumstances are the predominant reason the additional work needed to be carried out. It follows that in assessing whether it is appropriate to undertake a review, ordinarily it will be necessary for the court to have regard to the nature of the additional work that was done.
In my view, another consideration is the extent to which third parties have acted in reliance on the remuneration determination and whether the party seeking the review has acted in a manner that induced that reliance.
Second, if the court determines to review the remuneration determination, the court undertakes the necessary review.
Third, after completing the review, the court must either affirm the remuneration determination, vary it, or set it aside and substitute another determination.
Clause 60-12 states that in reviewing a determination under cl 60‑11, the court must have regard to whether the remuneration is reasonable taking into account any or all of the matters set out in cl 60‑12(a) to (m).
In Higgins v JSS Logistics Pty Ltd (in liq), Jackson J made the following observations regarding cl 60-12 in the context of setting the remuneration of a provisional liquidator: [15]
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.
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.
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: 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.
(citations omitted).

The first stage

[15] Higgins v JSS Logistics Pty Ltd (in liq) [2022] FCA 1320 [18] - [20].

In respect of the first stage, the plaintiffs advance a similar argument to that advanced in JPD Media.
The plaintiffs say that since the initial remuneration report was sent to creditors in advance of the second creditors' meeting, there has been a significant change in circumstances.

Broadly speaking, the plaintiffs say that Paddington's (and other creditors') opposition to the companies entering a DOCA necessitated more work than was anticipated up to and including the creditors' meeting. Further, the plaintiffs say that the proceedings commenced by Paddington also necessitated more work being done during the period from the date of execution of the DOCAs through to their termination or effectuation.
In my view, it is necessary to look at the position separately in respect of the period from 24 June 2023 to the end of the voluntary administration, and for the period that the companies were subject to a DOCA. Separate creditors' resolutions were passed for each of those periods.

Period prior to the execution of each DOCA

Prior to the second creditors' meeting, the plaintiffs complied with r 70‑45(3)(b) of the Insolvency Rules by attaching the required remuneration report to the plaintiffs' report to creditors for each company dated 28 June 2023 (Initial Creditors' Report).[16]
[16] Second affidavit of Ms Smith, commencing at page 171. Third affidavit of Ms Smith, commencing at page 165.
The plaintiffs subsequently sent out a supplementary report to creditors dated 4 July 2023 in respect of each company. The supplementary report attached the Initial Creditors' Report, including the remuneration report.[17]
[17] Second affidavit of Ms Smith, par 14, with the remuneration report commencing at page 378. Third affidavit of Ms Smith, par 14, with the remuneration report commencing at page 373.
The remuneration report contained an appendix that set out a description of the work for the period 24 June 2023 to the end of the voluntary administration.[18] The description of the work was set out in a table that had the following column headings: 'Task Area', 'General Description' and 'Includes'. The 'Includes' column set out in more detail the work done in respect of the 'General Description' column.
[18]Third affidavit of Ms Smith, page 386 (Wave). Second affidavit of Ms Smith, page 391 (Wave Projects).
The supplementary report addressed matters that had been raised by Paddington in response to the Initial Creditors' Report. These matters included that Paddington had requested the second creditors' meeting be adjourned, asserting (amongst other matters) that the Initial Creditors' Report was misleading. The supplementary report did not provide an updated estimate of the plaintiffs' costs for the period 24 June 2023 to the end of the voluntary administration (6 July 2023).
On 10 May 2024, the plaintiffs prepared further remuneration reports in respect of Wave and Wave Projects.[19] Those reports also contained a table providing a description of the work undertaken in each major task area. The column headings followed the format of the tables included in the previous remuneration reports sent to creditors.
[19] Second affidavit of Ms Smith, par 30, further remuneration report commencing at page 484 (Wave). Third affidavit of Ms Smith, par 31, further remuneration report commencing at page 563 (Wave Projects).
The increased remuneration that the plaintiffs seek for the period from 24 June 2023 to 6 July 2023 is relatively substantial. In respect of Wave, it constitutes an uplift of just under 50%. In respect of Wave Projects, it constitutes an uplift of 80%.
I accept that the material reason for, and the extent of, the increased costs was not a matter that could have been anticipated by the plaintiffs when they issued the Initial Report. This is illustrated by the supplementary report, which was necessary to address matters raised by Paddington in response to the Initial Report.
However, by the time the plaintiffs issued the supplementary report, it must have been obvious to them that the value of the work they had undertaken well exceeded the proposed cap on remuneration to be imposed by the proposed remuneration resolutions for the period from 24 June 2023 to 6 July 2023.
On the evidence before me, the plaintiffs did not inform creditors prior to the second creditors' meeting that the value of their work exceeded the previous estimates, or that the plaintiffs wished to preserve their ability to seek a higher amount at a later stage.
The plaintiffs have not put on any evidence explaining why that was not done.
Furthermore, it was open to the plaintiffs at the second creditors' meeting to either:
1.withdraw the remuneration resolution for the period from 24 June 2023 to 6 July 2023 and apply at a later stage to the court under cl 60-10(1)(c) of the IPS to set their remuneration for that period; or
2.inform the creditors that the value of the work performed for the period from 24 June 2023 to 6 July 2023 was now well above the cap imposed by the proposed resolutions and that the plaintiffs might seek further remuneration at a later stage.
There is no evidence before me as to why the plaintiffs did not take these steps.
The plaintiffs in their supplementary submissions accepted that it was open to them to withdraw the remuneration resolutions. The supplementary submissions then state:[20]
The consequences of not moving a resolution would have been the plaintiffs would:
not have the benefit of approval for any fees for work done during the period; and
have needed to seek subsequent creditor approval, or alternatively, approval from the Court for their fees.
[20] Plaintiffs' supplementary submissions dated 4 October 2024, par 6.
While this submission explains the commercial consequence to the plaintiffs of withdrawing the resolutions, it does not explain why creditors were not informed at the second creditors' meeting that the plaintiffs would, or may, seek greater remuneration than that provided for by the proposed resolution.
It is of fundamental importance that information presented to creditors at a creditors' meeting is materially accurate. That information is the basis on which creditors cast their votes. Here, the extent of the fees which the administrators could recover was a matter on which the creditors were entitled to be properly informed. In that respect, those fees formed part of the plaintiffs' calculation of the likely dividend to creditors in a winding up and under the proposed DOCA.[21]
[21] Third affidavit of Ms Smith, pages 143 and 163. Second affidavit of Ms Smith, pages 255 and 274.
The calculation in respect of Wave Projects set out that the fees were estimated to be between $20,000 and $25,000 on a liquidation and between $15,000 and $25,000 under the proposed DOCA. The note to these estimates referred to the remuneration report.[22] The calculation in respect of Wave set out that the fees were between $15,000 and $25,000 on both the liquidation and under the proposed DOCA. The note to these estimates referred to the remuneration report.[23]
[22] See note 'k' on page 143 of Third affidavit of Ms Smith, and note 'i' on page 163 of that affidavit.
[23] See note 'j' on pages 255 and 274 of Second affidavit of Ms Smith.
As I have said earlier, the plaintiffs must have been aware by the time they finalised the supplementary report dated 4 July 2023 that the value of their work for the period from 24 June 2023 to 6 July 2023 was well above the cap on fees imposed by the proposed resolutions. At the second creditors' meeting, the plaintiffs could have either withdrawn the remuneration resolution for that period, or informed the creditors that the resolution was in effect an 'interim resolution' and that the plaintiffs wished to preserve their ability to seek additional remuneration at a later stage. The latter course would have likely resulted in queries from creditors regarding what the quantum of those additional fees might be.
However, for reasons which are unexplained, the plaintiffs pressed ahead with the remuneration resolutions without telling creditors that the estimate contained in the Initial Report was no longer an accurate estimate.
The plaintiffs also rely on the fact that there have been no objections made to the application that is now before me. However, if anything, that is a neutral factor. The onus remains on the plaintiffs to demonstrate that in the overall circumstances, it is appropriate for the court to conduct the review that they seek.
In my view, the matters I have set out at [51] ‑ [55] and [57] ‑ [61] are powerful reasons why it is not appropriate for the court to review the remuneration determination constituted by the creditors' resolution in respect of the period 24 June 2023 to 6 July 2023. I therefore decline to do so, and disallow the plaintiffs' claim to that extent.
I now turn to the period post‑execution of the DOCAs.

Period post the execution of each DOCA

The position regarding the period after the execution of the DOCAs is quite different.
At the point in time that the creditors' resolutions were passed at the second creditors' meeting, the plaintiffs could not have determined with any certainty whether or not Paddington would bring proceedings challenging the proposed DOCAs. Nor could the plaintiffs have anticipated the scope of any such proceedings, or the extent to which they would need to be involved.
Further, the DOCAs were structured in such a way that they were to be effectuated by 11 July 2023.[24] Creditor' trusts were then to be created, with the creditors' rights arising under those trusts.[25] Thus, the anticipated period of operation of each DOCA was very limited. The work required of the plaintiffs in implementing each DOCA was likewise limited.
[24] Paddington [73].
[25] Paddington [72].
However, on 11 July 2023 I made an interlocutory injunction restraining the effectuation of each DOCA. The plaintiffs could not have predicted with any degree of certainty that such an interlocutory injunction would be granted. The consequence of the grant of the injunction was that each DOCA remained in existence for a significantly longer period than was anticipated.
To a large extent, the additional work carried out by the plaintiffs was made necessary by reason of the proceedings brought by Paddington, the allegations made in those proceedings and the interlocutory injunction restraining effectuation of the DOCAs.
In my view, having regard to the matters at paragraphs [66] ‑ [69] above, it is appropriate for the court to review the remuneration determination for Wave and Wave Projects in respect of the period from 7 July 2023 to 26 October 2023.
The applicable remuneration determination is constituted by the relevant creditors' resolutions passed on 6 July 2023. The maximum amount (the cap) permitted by those resolutions is manifestly inadequate in all of the circumstances. In particular, it is significantly less than the value of the work determined using a time‑costing approach.
There does not appear to be much utility in simply increasing the cap on remuneration as provided for by the existing resolutions. Rather, in my view I should fix the remuneration in respect of the period from 7 July 2023 to 26 October 2023.
In doing so, my principal task is to assess whether the remuneration claimed is reasonable, taking into account the matters set out in cl 60‑12 of the IPS. Proportionality is an important matter in considering whether remuneration is reasonable.[26] That is, the work done must be proportionate to the difficulty or importance of the task in the context of which it needs to be performed.[27]
[26] In the matter of Re Sakr Nominees Pty Ltd [2017] NSWSC 668 [23].
[27] Conlan v Adams [2008] WASCA 61 [47].
I have reviewed the time-costing claims for each of the matters, without undertaking a line-by-line analysis of them. I am familiar with the issues raised in the Paddington proceedings. I was the case manager, granted the interlocutory injunction and I was to be the trial judge if the proceedings had not been resolved. That involvement assists me in assessing what is reasonable remuneration for the period claimed.
I take into account that the Paddington proceedings included claims challenging the appropriateness of the plaintiffs' reports to creditors, and challenging Mr James' exercise of the casting vote. Thus, in part, the Paddington proceedings were directed to the plaintiffs' conduct.
To some extent though, the work undertaken by the plaintiffs in respect of the Paddington proceedings did not require any special expertise by the administrators but was instead directed to the relevant person keeping themselves abreast of the progress of those proceedings. I think this does warrant a slight reduction in the total amounts claimed. Otherwise, I am satisfied the amounts claimed are reasonable.
Ultimately, I have come to the view that in respect of Wave, the appropriate total remuneration for the period 7 July 2023 to 26 October 2023 is $125,000 excluding GST.
In respect of Wave Projects, I have come to the view that the appropriate total remuneration for the period 7 July 2023 to 26 October 2023 is $90,000 excluding GST.
To be clear, these amounts are not in addition to the existing caps. Rather, they constitute the total remuneration for the period.
My preliminary view is that the appropriate way of giving effect to these findings is to set aside the relevant remuneration determinations constituted by the applicable creditors' resolution and substitute a new remuneration determination fixed in the amounts at [77] and [78] above.

Conclusion

For these reasons, I decline to conduct a review of the applicable remuneration determination made in respect of the period 26 June 2023 to 6 July 2023 for each of Wave and Wave Projects.
For the period 7 July 2023 to 26 October 2023, I am satisfied it is appropriate to review the applicable remuneration determination for each of Wave and Wave Projects.
Having undertaken the necessary review, I consider that for the period 7 July 2023 to 26 October 2023, the plaintiffs' remuneration should be fixed as follows:
1.in respect of Wave, the plaintiffs' total remuneration should be fixed in the sum of $125,000 excluding GST;
2.in respect of Wave Projects, the plaintiffs' total remuneration should be fixed in the sum of $90,000 excluding GST.
In respect of costs, the plaintiffs seek an order that the costs of the application be paid out of the assets of Wave and Wave Projects. Given the plaintiffs have only partially succeeded on their application, my preliminary view is that the plaintiffs should only recover a proportion of the costs of the application.
I will hear from the plaintiffs' counsel as to the manner and form of the orders giving effect to these reasons, and as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
OM
Associate to the Hon Justice Lemonis
4 DECEMBER 2024