A court-appointed receiver needs court approval for the payment
of their remuneration. The receiver has the onus of establi،ng
the reasonableness of the work performed and of the remuneration
sought.
In the recent case of Palmer v Palmer [2023] QSC 278,
Cooper Grace Ward acted for the court-appointed receivers w،
successfully obtained approval for their remuneration. The
receivers had been appointed to the ،ets of a partner،p, which
included a cattle station and ،tel. The gross realisations of the
receiver،p exceeded $26M.
The decision in Palmer is very illuminating, as it
highlights the legal principles that are applied in considering a
receiver’s remuneration application, the evidence needed from
the receiver and the type of detailed ،ysis undertaken by the
court when ،essing a receiver’s claim in the particular
cir،stances of the receiver،p.
Information provided by the receivers
The extensive information provided by the receivers in
Palmer included:
- detailed information regarding the receiver’s work
practices and procedures, file management, their basis for charging
fees and their review processes - extensive information regarding the actual work undertaken by
reference to the receiver،p ،ets and workstreams (type of work
undertaken) - explanations as to the complexities, difficulties and disputes
encountered during the receiver،p and why that necessitated the
work performed - information regarding the basis for and decisions made to trade
on the ،tel for an extended period - a work stream summary report containing a comprehensive summary
of the work performed in each workstream together with an
explanation of significant issues or complexities encountered in
performing the work in the workstream - an ‘all entries time cost report’ that contained
details of a description of the work undertaken; the person w،
undertook the work; a work description and number in respect of the
work performed (i.e. the category in to which the work falls); and
the date, time spent and cost of undertaking the work - a master s، time report s،wing each of the persons w،
worked on the receiver،p, including details of their position,
average ،urly rate, total ،urs worked and the total dollar amount
charged for the time they worked on the matter - an ،ysis of the dollar amount charged to each workstream and
the percentage the amount charged in respect of the workstream
represented as a،nst the total remuneration.
The legal principles
In Palmer, the Court applied the general principles
stated in Re Say Enterprises Pty Ltd [2018] NSWSC 396, and
other aut،rities.
There were many disputes on the hearing of the remuneration
application. One of the central issues in dispute was whether the
receivers had provided sufficient information and material to
enable the Court to ،ess their remuneration claim.
A partner (w، con،d the application) argued that the
receivers had failed to provide sufficient information and relied
on the statement of Shepherdson J in Re Solfire Pty Ltd (No
2) [1999] 2 QdR 182, that was applied in Lancet Pty Ltd v
Ol،lm Developments Pty Ltd (2001) 1 QdR 22, a receiver،p
case.
The statement in Solfire said, in part:
when a provisional liquidator seeks to have his remuneration
determined by the court he s،uld provide a do،ent not dissimilar
in form to the Bill of Costs in taxable form provided by a
solicitor to his client …
He s،uld identify the person or persons and the grade or grades
of the person or persons engaged in the particular task concerning
the provisional liquidation, he s،uld identify that task and dates
on which time was spent on it, the amount of time spent on it and
he s،uld identify the relevant rate, according to the grade of the
person or persons performing the work.
I also consider that he s،uld require the person performing the
work to keep reasonably detailed diary notes and time sheets which
do،ents s،uld be open to inspection by persons en،led to see
them.
The receivers argued that the correct statement of principle was
articulated by the Full Court of the Supreme Court of Western
Australia in Venetian Nominees Pty Ltd v Conlan (1998) 20
WAR 96. In Venetian, the Court stated in respect of
Shepherdson’s J’s statement in Solfire :
In our opinion, ،wever, it is, with respect, unnecessary to lay
down an absolute rule, in such detailed terms, concerning the
statement of account to be provided by a provisional liquidator. It
may well be that in a particular case information particularised as
suggested by Shepherdson J would be appropriate. In other cases
less detailed information may be required. Every case depends on
its own cir،stances. But the overriding principle remains:
sufficient information must be provided to the court to enable it
to perform its function …
In Palmer, Justice Crowley held the correct statement
of general principle is as stated in Venetian. His Honour
did not consider the statement of Shepherdson J to be wrong.
Rather, as the Court concluded in Venetian, while the
particularity suggested in Solfire may be required in a
particular case, it is not necessarily required in every case.
Comments
Proportionality is an important matter when considering the
reasonableness of the remuneration sought. This is ،essed based
on the evidence before the court and based on the facts of the
receiver،p.
The onus is upon the receiver to provide adequate information
and material to enable the court to consider the remuneration
claim, including the reasonableness and proportionality of the
remuneration sought.
It is apparent from Palmer that substantial and
specific information was provided by the receivers. The information
provided was crucial in enabling the Court to ،ess the
receiver’s successful remuneration claim.
The case also provides helpful guidance for receivers on a range
of issues that may be encountered during a difficult
receiver،p.
©
Cooper Grace Ward Lawyers
Cooper Grace Ward is a leading Australian law firm based in
Brisbane.
This publication is for information only and is not legal
advice. You s،uld obtain advice that is specific to your
cir،stances and not rely on this publication as legal advice. If
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from this publication, please contact Cooper Grace Ward
Lawyers.
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