FEDERAL COURT OF AUSTRALIA Deputy Commissioner of Taxation v Starpicket Pty Ltd (No 2) [2013] FCA 699 Citation: Deputy Commissioner of Taxation v Starpicket Pty Ltd (No 2) [2013] FCA 699 Parties: DEPUTY COMMISSIONER OF TAXATION v STARPICKET PTY LTD (ACN 125 918 550), CHRISTOPHER MUNDAY (AS THE FORMER LIQUIDATOR OF STARPICKET PTY LTD (ACN 125 918 550) and CRAIG WHEATLEY SCOTT AND PATRINA MAREE SCOTT File number: QUD 433 of 2012 Judge: GORDON J Date of judgment: 17 July 2013 Date of hearing: Determined on the papers Date of last submissions: 4 July 2013 Place: Melbourne Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 73 Solicitor for the Applicant: Australian Government Solicitor Solicitor for the First and Third Respondents: Bennett & Philp Lawyers Solicitor for the Second Respondent: Allens IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 433 of 2012 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Applicant AND: STARPICKET PTY LTD (ACN 125 918 550) First Respondent CHRISTOPHER MUNDAY (AS THE FORMER LIQUIDATOR OF STARPICKET PTY LTD (ACN 125 918 550) Second Respondent CRAIG WHEATLEY SCOTT AND PATRINA MAREE SCOTT Third Respondents JUDGE: GORDON J DATE OF ORDER: 17 JULY 2013 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The interlocutory application dated 11 March 2013 is dismissed. 2. Pursuant to s 473(3)(b)(ii) of the Corporations Act 2001 (Cth) (the Corporations Act), the Second Respondent's remuneration in connection with the liquidation of the First Respondent be fixed in the amount of $46,183.50 (including GST). 3. Pursuant to s 1321(1) of the Corporations Act, the Second Respondent is entitled to his disbursements in connection with the liquidation of the First Respondent in the amount of $47,358.82 (including GST). 4. The Second Respondent is entitled to assert an equitable lien over the assets of the First Respondent securing his entitlement to the amounts referred to in paragraphs 2 and 3 above. 5. The First Respondent pay the Applicant's and the Second Respondent's costs of and incidental to the interlocutory application, such costs to be taxed in default of agreement. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 (Cth). IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 433 of 2012 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Applicant AND: STARPICKET PTY LTD (ACN 125 918 550) First Respondent CHRISTOPHER MUNDAY (AS THE FORMER LIQUIDATOR OF STARPICKET PTY LTD (ACN 125 918 550) Second Respondent CRAIG WHEATLEY SCOTT AND PATRINA MAREE SCOTT Third Respondents JUDGE: GORDON J DATE: 17 JULY 2013 PLACE: MELBOURNE REASONS FOR JUDGMENT INTRODUCTION 1 These reasons concern an application by the First Respondent, Starpicket Pty Ltd (ACN 125 198 550) (Starpicket), pursuant to s 35A(5) of the Federal Court of Australia Act 1976 (Cth) (the FCA) and r 3.11 of the Federal Court Rules 2011 (Cth) (the Rules), seeking to set aside certain orders made by a Registrar of this Court on 18 February 2013. That application was supported by Craig Wheatley Scott and Patrina Maree Scott, who appeared as the Third Respondents (the Scotts). The Scotts hold all of the issued shares in Starpicket and Mr Scott is the sole director. For the reasons that follow, the application should be dismissed. BACKGROUND 2 On 28 August 2012, the Applicant, the Deputy Commissioner of Taxation (the Commissioner) filed an originating application to wind up Starpicket. On 5 October 2012, District Registrar Baldwin made orders that Starpicket be wound up in insolvency, that the Second Respondent, Mr Christopher Munday, be appointed as the Official Liquidator (the Liquidator) and that the Commissioner's costs of the application fixed in the sum of $4,918.00 be reimbursed as a priority out of the funds in liquidation. 3 On 9 October 2012, the solicitors for Starpicket put the Liquidator on notice that Starpicket had not been served a copy of the Commissioner's statutory demand or the originating application and that Starpicket would be making an application to set aside the orders made on 5 October 2012. That application was filed with the Court on 12 October 2012. 4 On 31 October 2012, Justice Greenwood set aside the orders made on 5 October 2012 due to the irregularity of service of the statutory demand on Starpicket and ordered that the costs of the Liquidator "of and incidental to the winding-up" be reserved for further argument (the 31 October 2012 Orders): see Deputy Commissioner of Taxation v Starpicket Pty Ltd [2012] FCA 1196 (Reasons). 5 On 18 February 2013, District Registrar Baldwin made two orders. First, that the Commissioner's costs of the winding up application be fixed in the sum of $4,918.00 and be paid by Starpicket and, secondly, an order that the Liquidator's remuneration be fixed in the sum of $98,042.43 and be paid to the Liquidator by Starpicket (the Second February Order). The Second February Order is the subject of this application. NATURE OF REVIEW 6 The function of the Court, in reviewing a Registrar's decision under s 35A(6) of the FCA, is well established: see West International Pty Ltd v Ultradrilling Pty Ltd (2008) 68 ACSR 108 at [6]. The Court is to rehear the case and decide the facts for itself. It is a hearing de novo. ISSUES 7 There are three issues. First, whether the Court has power to fix the Liquidator's remuneration and disbursements. Second, assuming the existence of the relevant power, whether the Liquidator is entitled to the amount claimed by him: see [5] above. Third, whether the circumstances of this case are such that the Liquidator's remuneration and disbursements should be borne by the Commissioner rather than Starpicket. 8 For the reasons that follow, the answers to those questions are: (1) yes; (2) yes, except for those amounts described as estimated "out of pocket expenses": see [64]-[65] below; and (3) no. These reasons for judgment first consider the power to fix the Liquidator's remuneration in connection with the liquidation of Starpicket and then the power to fix the liquidator's disbursements in connection with the liquidation of Starpicket. As will be apparent, these reasons for judgment do not address the question of the Liquidator's costs of and incidental to the 31 October 2012 Orders. That issue (the costs) was dealt with by District Registrar Baldwin and is not the subject of review. ANALYSIS Power to Fix the Liquidator's Remuneration 9 The Court has power to review and fix the remuneration of a liquidator pursuant to s 473 of the Corporations Act 2001 (Cth) (the Corporations Act). Section 473(3) relevantly provides: General provisions about liquidators … (3) A liquidator is entitled to receive such remuneration by way of percentage or otherwise as is determined: (a) if there is a committee of inspection – by agreement between the liquidator and the committee of inspection; or (b) if there is no committee of inspection or the liquidator and the committee of inspection fail to agree: (i) by resolution of the creditors; or (ii) if no such resolution is passed – by the Court. 10 In this case, no committee of inspection was appointed by the creditors, nor was there any resolution of creditors fixing the Liquidator's remuneration. That fact notwithstanding, the Court has jurisdiction to fix remuneration of the Liquidator pursuant to s 473(3)(b)(ii) of the Corporations Act: see Barbo Group Pty Ltd v Investment and Construction Enterprise Pty Ltd [2012] VSC 71 at [7]. 11 Rule 9.4 of the Federal Court (Corporations) Rules 2000 (Cth) (the Corporations Rules) stipulates that an application under s 473(3)(b)(ii) of the Corporations Act must be made by interlocutory process in accordance with Form 3 in the winding up proceeding: r 9.4(2)(a). Rule 9.4(3) requires the Liquidator to serve notice of its intention to apply for such an order in accordance with Form 16 at least 21 days before filing the interlocutory process. 12 The Liquidator accepts that no such notice or application, compliant with the requirements of r 9.4, has been filed in these proceedings. Nevertheless, both the Liquidator and the Commissioner submitted that it is permissible and appropriate for the Court to make an order fixing the Liquidator's remuneration (and disbursements) in connection with the liquidation of Starpicket. Neither Starpicket nor the Scotts opposed that submission. 13 The Court has a general power under r 1.32 of the Rules to make any order that the Court considers appropriate in the interests of justice. Following the 31 October 2012 Orders, the parties with an interest in the question of the Liquidator's remuneration in connection with the liquidation of Starpicket were on notice that the Court would be making a determination with respect to that issue and were afforded the opportunity to be heard. The Liquidator filed affidavit material in support of his claims on 3 December 2012. The relevant parties had ample time and opportunity to respond. In these circumstances, it is fair and just to dispense with the requirement for the Liquidator to make a formal application for his remuneration under s 473(3)(b)(ii) of the Corporations Act. Power to Approve the Liquidator's Disbursements 14 The Liquidator's claim for $98,042.43 includes fees for the work performed by the Liquidator and his staff and his disbursements (referred to as "out of pocket expenses"). It is necessary to address the question of whether s 473 of the Corporations Act empowers the Court to determine the Liquidator's claim for his disbursements or whether some alternative basis is required to assess that claim. 15 Pursuant to s 473(3)(b)(ii) of the Corporations Act, the Court has jurisdiction to review and fix the Liquidator's "remuneration". Notwithstanding the approach taken in previous cases such as Re Solfire Pty Ltd (in liq) (No 2) (1998) 16 ACLC 1156, it is now accepted that a Liquidator's "remuneration" does not include disbursements: see Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96 at 100; Re Korda; in the matter of Stockford Ltd (2004) 140 FCR 424 at [50]; and Huxtable, in the matter of Timeshare Resort Club Ltd ACN 009 085 358 (in liq) (2010) 187 FCR 13 at [36]-[37]. The same cases are also authority for the proposition that the Court's jurisdiction under s 473(3)(b)(ii) of the Corporations Act does not extend to legal fees incurred by the Liquidator, which fall under the head of disbursements and not remuneration. 16 Accordingly, the Court does not have power under s 473(3)(b)(ii) of the Corporations Act to review and approve the Liquidator's disbursements. 17 A liquidator who is entitled to remuneration normally has an equitable lien over the assets under his administration to secure payment of that entitlement as well as his disbursements: see Re Biposo Pty Ltd (No 2) (1995) 124 FLR 385; Prendergast v Rolcross (in liq) [2008] NSWSC 146 at [39]. Being of the equitable variety, a liquidator's lien is not dependant on possession and, as such, survives termination of the liquidator's appointment: see Nationwide News Pty Ltd v Samalot Enterprises (1986) 5 NSWLR 227 at 230-231; Shirlaw v Taylor (1991) 31 FCR 222 at 231. 18 In this case, it is clear that – subject to my ruling as to whether it is Starpicket or the Commissioner who should pay the Liquidator's remuneration – the Liquidator intends to assert his lien over the assets of Starpicket in order to secure the cost of his disbursements. In that context, there are grounds upon which the Court has power to direct the extent to which the Liquidator is entitled to assert such a lien. In Venetian Nominees, Kennedy and Ipp JJ referred (at 101) to ss 536 and 1321 of the Corporations Act as providing the Court with the necessary supervisory power. 19 Pursuant to s 536, the Court may make an inquiry and take "such action as it thinks fit" where: (a) it appears to the Court … that a liquidator has not faithfully performed or is not faithfully performing his or her duties or has not observed or is not observing: (i) a requirement of the Court; or (ii) a requirement of this Act, of the regulations or of the rules; or (b) a complaint is made to the Court … by any person with respect to the conduct of a liquidator in connection with the performance of his or her duties; … 20 Section 536 is inapposite in the present context. That section is concerned with the regulation, supervision, discipline and correction of liquidators in the public interest of honest and efficient administration of liquidations. It is not concerned in any direct way with vindication of private rights: see BL & GY International Co Ltd v HYPEC Electronics Pty Ltd (2010) 79 ACSR 558 at [37]-[41]. An inquiry under s 536 is directed to identifying acts of the liquidator which are likely to attract sanctions for disciplinary reasons. The objections of Starpicket and the Scotts do not include allegations of such misconduct on the part of the Liquidator. 21 Section 1321 is of greater relevance. Pursuant to s 1321, a person "aggrieved" by an act, omission or decision of a liquidator may appeal to the Court in respect of that act, omission or decision and the Court may confirm, reverse or modify the act or decision, or remedy the omission, as the case may be, and make such orders and give such directions as it thinks fit. Neither Starpicket nor the Scotts have expressly sought relief under s 1321. However, that does not preclude an order being made in relation to the Liquidator's disbursements under that section. Both Starpicket and the Scotts take issue with the Liquidator's claim, not only in respect of the Liquidator's fees, but also with the disbursements the Liquidator incurred shortly before the 31 October 2012 Orders. Finally, if it be necessary, the Court retains an inherent power to make an order giving directions to a court-appointed liquidator as an officer of the Court: see Re JW Murphy & PC Allen; Re BPTC Ltd (in liq) (1996) 19 ACSR 569; BL & GY International Co Ltd. Accordingly, I am satisfied that the Court has the power to review and determine the Liquidator's claim for disbursements. Applicable Legal Principles Remuneration 22 The Liquidator is entitled to such remuneration as is fair and reasonable. However, the onus is on the Liquidator to establish that entitlement: see Barbo at [14]. In Venetian Nominees, the Court said (at 102-103): 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 fail 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. 23 Although the Court in Venetian Nominees was determining the remuneration of a provisional liquidator, the principles extracted above are equally applicable to the present case. 24 The decision of Finkelstein J in Re Korda provides further guidance as to what is required of the Liquidator. In that case, his Honour referred (at [48]) to the following extract from Re Medforce Healthcare Services (in liq) [2001] 3 NZLR 145 at 155: In our view the exercise which must be undertaken by the court in fixing the reasonable costs of the liquidator is similar to that which is undertaken when approving solicitor and client costs or costs for legal aid purposes. In each case what is required is enough information to enable an assessment to be made as to whether the total costs charged are reasonable. As a minimum it seems to us that what is required is a statement of the work undertaken during the course of the liquidation, together with an expenditure account sufficiently itemised to enable the charges to be made related to the work done. The detail would have to be sufficient to enable the judicial officer to determine whether the personnel involved in the liquidation and their respective charge-out rates were appropriate to the nature of the work undertaken. This information may in some cases raise concerns as to whether there has been overservicing and overcharging. If there are suggestions of this in the information provided, the Court can request further information. 25 In considering the material proffered by the Liquidator in support of his claim, the Court must have regard to whether the Liquidator's remuneration "is reasonable, taking into account any or all of the following matters" specified in s 473(10): (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. 26 The breadth of the statutory language – requiring the Court to take into account "any or all" of the matters listed – confers upon the Court a broad discretion as to the particular weight to be given to any of those matters, subject to the overriding requirement of reasonableness: see Huxtable at [34]. Disbursements 27 An assessment of reasonableness must also be applied to the Liquidator's claim for disbursements. The Court must consider whether the disbursements have been reasonably incurred and are of a reasonable amount. In doing so, it is necessary to consider any complaint that the expenditures were not incurred in good faith or in the reasonable conduct of the liquidation. The Liquidator's Claim for Remuneration and Disbursements 28 In total, the Liquidator claims $98,042.32 (GST inclusive) for his remuneration and disbursements. The basis for that claim was set out in an affidavit sworn by the Liquidator on 3 December 2012. Annexed to that affidavit was: 1. a "Remuneration Request Approval Report" (the Remuneration Report), said to be prepared in accordance with Ch 23 of the Code of Professional Practice for Insolvency Practitioners published by the Insolvency Practitioners Association of Australia; and 2. a detailed summary of the work undertaken by the Liquidator and his staff with respect to the winding up of Starpicket (the Work Summary). That summary was in the form of an itemised bill commonly prepared by professional services firms, with each line item detailing the particular task undertaken, the date on which it was performed and by whom, their hourly rate, the time spent on the task and the total cost of that work. 29 The Liquidator asserted that the Remuneration Report and the Work Summary taken together show: 1. the nature of the work performed in the course of the winding up that was reasonably necessary; 2. the period during which that work was performed; 3. the time properly taken in performing the work; 4. the rate at which time was charged (there was no cap on the total remuneration payable); and 5. the payments made with respect to the winding up. 30 It is necessary to consider the Liquidator's material in some detail. The Remuneration Report indicates that the Liquidator's claim consists of: Detail $ Remuneration charges 5 October 2012 to 21 November 2012 46,183.50 Disbursements 5 October 2012 to 21 November 2012 47,358.82 Disbursements from 22 November 2012 (estimate) 4,500.00 98,042.32 The Remuneration Report then provides further detail as to how each of those three component figures were calculated. Remuneration Charges 31 In relation to the claimed "remuneration charges" for the period 5 October 2012 to 21 November 2012, the Remuneration Report identifies, at a high level and in table form, the total number of hours devoted to, and costs incurred in respect of, particular "task areas". The table also supplied examples of the tasks which corresponded to each "task area" and particular sub-categories. By way of example, information relating to the task area "Creditors" was presented in the following form: Task Area General Description Includes Creditors Hours: 34.70 Creditor Enquiries Receive and follow up creditor enquiries via telephone Cost: $10,112.50 Maintaining creditor enquiry register Review and prepare correspondence to creditors and their representatives via facsimile, email and post. Inclusive of creditor letter upon appointment and creditor letter once appointment was set aside Prepare a list of creditors from the supplier list (company unable to prepare current creditor list with addresses) Retention of Title Claims Receive initial notification of creditor's intention to claim Maintain enquiry register for Retention of Title phone calls and enquiries Receive emails from Retention of Title creditors in with unpaid invoices, signed credit applications and terms of trade documentation Maintain Retention of Title file Meeting claimant onsite to identify goods Secured creditor reporting Emails and phone calls with NAB Prepare letter of notification to NAB Provides updates to NAB during appointment Statutory creditors Corresponding with OSR, ATO and QLD govt. 32 The time entry narrations appearing in the Work Summary do not, in every case, precisely correspond to a particular "task area" identified in the table referred to above. A small number of those narrations appeared to relate to two or more "task areas". As such, the time and cost figures for those line items could not be precisely apportioned to each separate task. That said, by cross-referencing the time entry narrations in the Work Summary against the example tasks in the tabled overview, it is possible to identify (to a reasonable degree of certainty) which time entries relate to particular "task areas". As such, the Remuneration Report allows a reviewer to identify who was responsible for conducting particular tasks, when those tasks were conducted, how long was spent on a particular task and at what hourly rate that work was charged. 33 The Remuneration Report also identifies, separately for the Liquidator and for each member of his staff, the total hours each individual devoted to the liquidation of Starpicket, their charge out rate, the total amount of fees attributable to that individual and the amount of fees attributable to each task area. In total, for the period 5 October 2012 to 21 November 2012, the Liquidator and his staff recorded 144 hours in connection with the liquidation of Starpicket at an average hourly rate of $291.56 (excluding GST). The Remuneration Report indicated that the majority of the work (83.10 hours) was undertaken by a Mr Flannery, described as a "Manager 2" with an hourly charge out rate of $315.00 (excluding GST). The Liquidator himself recorded a total of 9.80 hours at an hourly rate of $495.00 (excluding GST). Disbursements 34 The Remuneration Report separately addresses the disbursements incurred by the Liquidator for the period 5 October 2012 to 21 November 2012 and those expected to be incurred after that period. 35 For the disbursements of $47,358.82 (GST inclusive) incurred to 21 November 2012, the Remuneration Report summarises the nature of the disbursements incurred and includes copies of invoices for each of the amounts claimed. These disbursements included invoices for, inter alia, legal advice, the performance of a stock-take at Starpicket's premises in Charleville, Queensland, a valuation of Starpicket's plant and equipment, statutory advertising and the costs associated with employees from the Liquidator's firm travelling to Starpicket's premises in Charleville from the Liquidator's office in Brisbane. 36 For the disbursements expected to be incurred post 21 November 2012, the Liquidator estimated that a further $1,500.00 (GST inclusive) would be incurred in respect of insurance matters and a further $3,000.00 (GST inclusive) in relation to legal fees. The Objections of Starpicket and the Scotts 37 It was not disputed that the Liquidator is entitled to reasonable remuneration with respect to the winding up of Starpicket, despite the liquidation having terminated. This is consistent with s 473(9) of the Corporations Act (which provides that the acts of a liquidator are valid notwithstanding any defects that may afterwards be discovered in his or her appointment) and established authority: see Day v Mount (1984) 2 FCR 237; Nationwide News Pty Ltd and Re Deisara Pty Ltd (in liq) (1992) 107 FLR 235. 38 However, both Starpicket and the Scotts take issue with the amount of the fees claimed by the Liquidator. It was submitted that: 1. the Liquidator's affidavit material does not contain any evidence by which the Court (or the other parties) can assess the reasonableness or otherwise of the amount of fees claimed; and 2. the Liquidator improperly incurred fees after being put on notice of Starpicket's application to set aside the orders made on 5 October 2012 by District Registrar Baldwin (i.e. those fees and disbursements incurred after 9 October 2012). 39 For the following reasons, I do not agree with those submissions. 40 The first complaint may be dealt with quickly. In submissions, counsel for Starpicket and the Scotts referred to the following passage from the reasons of Shepherdson J in Solfire Pty Ltd (in liq) (No 2) at 191: In my view, when a provisional liquidator seeks to have his remuneration determined by the court he should provide a document not dissimilar in form to the Bill of Costs in taxable form provided by a solicitor to his client (see O. 91 r. 47). He should 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 should identify that task and dates on which time was spent on it, the amount of time spent on it and he should identify the relevant rate, according to the grade of the person or persons performing the work. I also consider that he should require the person performing the work to keep reasonably detailed diary notes and time sheets which documents should be open to inspection by persons entitled to see them. In my view a court armed with that information should be able to determine the remuneration for the provisional liquidator. 41 As set out at [31] to [36] above, the Liquidator's affidavit material addresses each of the matters referred to by Shepherdson J. Although, as noted above, the Liquidator did not file a formal application under r 9.4 of the Corporations Rules, the material he has filed is substantially in the form required by r 9.4(7). That is, he has filed an affidavit which, inter alia, addresses the matters referred to in s 473(10) of the Corporations Act, states the nature of the work performed by the Liquidator and his staff, states the amount of remuneration claimed and includes a summary of the receipts taken and payments made by the Liquidator. I am satisfied that the Liquidator has supplied sufficient information for the Court to assess the reasonableness of his claim for remuneration in accordance with s 473(10) of the Corporations Act. 42 As to the second complaint, there is no basis for the suggestion that the Liquidator should have ceased performing his duties as Liquidator of Starpicket by reason of his being put on notice of Starpicket's intention to apply for orders setting aside his appointment. On the contrary, it would have been inappropriate and impermissible for him to do so. The Liquidator had been appointed by order of this Court and had an obligation to continue to perform his duties accordingly. 43 Nevertheless, as the Liquidator was aware of Starpicket's application, he could not simply continue to act without regard to the possibility that his appointment might be terminated. The Liquidator was required to exercise his professional judgement as to what work was reasonable and necessary prior to the hearing and determination of Starpicket's application. Starpicket and the Scotts submitted that, in the particular circumstances of this case, it was unnecessary and unreasonable for the Liquidator to incur costs in relation to: 1. a stock-take performed at Starkpicket's premises in or around the period from 16 to 21 October 2012; 2. the attendance of two employees from the Liquidator's firm at Starpicket's premises from 16 to 18 October 2012; and 3. legal expenses, which Starpicket and the Scotts consider to have been avoidable, had the Liquidator "performed only those obligations which were reasonable and necessary upon his appointment and upon being put on notice that [Starpicket] had not been served with the [Commissioner's] statutory demand and originating application". 44 I will address each of these matters in turn. 45 First, the stock-take. I note that neither Starpicket nor the Scotts made any submissions criticising the extent or the cost of the work. Rather, they contend that the stock-take simply should not have been performed until after 31 October 2012. The difficulty with that submission is the prior conduct of Starpicket and the Scotts. A minute of proposed orders by consent dated 17 October 2012 was filed by the solicitors for Starpicket. That minute recorded certain undertakings given to the Court by both the Liquidator and the Scotts. The undertaking given by the Liquidator was recorded in the following form: The [Liquidator] undertakes to the Court that until further order (and the parties agree that this undertaking will not prevent the second respondent from continuing to collect payments from debtors and paying such receipts into the liquidation account) save for: 1. completing the stock take / valuation currently underway; and 2. dealing with any goods the subject of retention of title claims, the [Liquidator] will not take any steps to sell any of the assets of [Starpicket] without either: (i) giving two business days written notice to the solicitor for the [Scotts]; or (ii) the express written consent of the [Scotts]. (Emphasis added.) 46 The Scotts also gave an undertaking to the Court. For present purposes, the first and second paragraphs of that undertaking are relevant: The [Scotts] undertake to the Court that: 1. they will permit the [Liquidator], his staff and their agents to access the Property at 127 Alfred Street, Charleville in the [S]tate of Queensland ("the Property") at any time and will take all reasonable steps not to obstruct this access, whilst arrangements are put in place to identify and value [Starpicket's] assets at the Property, and that they acknowledge that all actions by these parties whilst on the Property will be at [Starpicket's] risk, not the [Scotts]; 2. If requested, they will permit the [Liquidator], his staff and their agents at the direction of the [Liquidator] access to the Property to remove [Starpicket] owned plant and equipment and inventory and any other property belonging to [Starpicket] to facilitate its orderly sale; (Original emphasis.) 47 Orders in the form agreed by the parties were made on 18 October 2012. 48 From the terms of the undertakings given to the Court, the Scotts were aware that the stock-take was being performed and that the Liquidator, his staff and/or his agents would be attending Starpicket's premises to conduct this work. Moreover, the Scotts and Starpicket consented to the Liquidator conducting the stock-take and acknowledged that the work was to be conducted at Starpicket's risk. That being the case, it is unreasonable for them to now resile from that position. In the circumstances, the acquiescence of Starpicket and the Scotts tends to the conclusion that the Liquidator was acting reasonably in performing the stock-take. 49 As to the attendance of the Liquidator's staff, I have reviewed the narrations recorded in the Liquidator's Work Summary for the relevant dates. The time entries for James Flannery and Dallas Gourley indicate that their attendance at Starpicket's premises related, in part, to their meeting with the stock counters onsite. Those narrations also reveal that Mr Flannery and Mr Gourley also: 1. engaged in discussions "with suppliers regarding [retention of title] issues"; 2. sought to "locate additional books and records" and "outstanding superannuation details"; and 3. undertook a "[r]eview of computer systems" and the download of "relevant financial information" for review including "debtors invoices to provide to ARMS global" (a debt collection agency). 50 Such work was clearly contemplated by the parties when the undertakings were given to the Court. It was necessary for the Liquidator's staff to be onsite while the stock-take was being conducted. Further, the Work Summary reveals that the tasks undertaken by the Liquidator's staff at Starpicket's premises were the sort of investigative enquiries a liquidator would ordinarily be expected to conduct at the beginning of their appointment, some of which could only be conducted onsite. I do not accept the submission that this work was clearly inappropriate in the circumstances. 51 Finally, the Liquidator's legal expenses. An invoice from the Liquidator's solicitors was annexed to the Remuneration Report. That invoice is in the form of an itemised bill. A review of the time entries recorded on that invoice indicates that the work performed by the Liquidator's solicitors was undertaken only in relation to those matters to which the Liquidator was required to attend (i.e. complying with the orders appointing him as Liquidator of Starpicket and the associated requirements; correspondence with the solicitors for Starpicket and the Scotts regarding their application to set aside the winding up; and preparing for and attending court in relation to that application and the Liquidator's remuneration application). Accordingly, this submission also fails. Assessment of the Liquidator's Claim 52 Having dealt with the specific objections of both Starpicket and the Scotts, I turn now to consider the overall reasonableness of the Liquidator's claim in light of the principles identified at [22] to [26] above. I will separately address the Liquidator's claims for "remuneration charges" and his disbursements. Remuneration 53 Having regard to the material filed by the parties, including the Remuneration Report and the Work Summary, I consider that the work performed by the Liquidator during the liquidation of Starpicket was reasonably necessary. The tasks performed by the Liquidator and his staff are those which one would ordinarily expect a liquidator to undertake in the early stages of their appointment. The work was undertaken by staff at an appropriate level and there is no reason to believe that the Liquidator's staff acted unreasonably in performing their work. In the short time that Starpicket was in liquidation, the Liquidator arranged for a valuation of Starpicket's stock which was its main asset. It was necessary for the Liquidator's staff to travel from Brisbane to Charleville. Further, the Liquidator did not incur unnecessary expense by participating in the application to set aside the winding up order. On the contrary, the Liquidator prepared two short affidavits addressing matters which were directly relevant to the issue confronting the Court and notified the parties that he would abide by the orders of the Court. 54 It should be noted that the Liquidator's claim for remuneration covers the period from 5 October 2012 to 21 November 2012. As the winding up of Starpicket ended on 31 October 2012, a portion of the Liquidator's claim relates to work performed after the termination of his appointment. I do not consider that this portion of the claim should not be allowed. The work conducted after 31 October 2012 accounts for less than one tenth of the Liquidator's claimed remuneration. The Liquidator is entitled to reasonable remuneration for work performed after the winding up was set aside, to the extent that such work was performed in accordance with his duties and the law. This entitlement encompasses not only the filing of the requisite forms with the Australian Securities and Investments Commission (ASIC), but also those acts required of the Liquidator to transfer control of Starpicket back to its directors. It also includes preparation of the Liquidator's application for remuneration currently before the Court. As stated by Zeeman J in Re Reiter Brothers Exploratory Drilling Pty Ltd (1994) 12 ACLC 430 at 441: [T]he applicant is entitled to be remunerated for work necessarily done by him by way of complying with the law subsequent to the termination of his appointment. … In my view, work properly done by the applicant by way of preparing his claim for remuneration falls to be dealt with as part of his remuneration. 55 I turn now to consider the method in which the Liquidator's fees were calculated. The Scotts' written submissions appeared to take issue with the time-based method of charging employed by the Liquidator. The concerns relating to time-based charging are well known and have previously been the subject of judicial comment in the context of remuneration applications: see, for example, Re Solfire at 191-192. Nevertheless, it has been accepted by the courts that, given historical acquiescence, it is now too late in the day to pronounce that time-based charging is unreasonable: see Burns Philp Investment Pty Ltd v Dickens (No 2) (1993) 31 NSWLR 280 at 285; Re One.Tel Ltd (in liq) (2005) 55 ACSR 558 at [18]; and Onefone Australia Pty Ltd v One.Tel Ltd (2010) 80 ACSR 11 at [74]. The mere fact that the Liquidator has charged for time does not, in and of itself, tend to the conclusion that the claim for remuneration is unreasonable. 56 As to the hourly rates charged by the Liquidator, the rates applied in the Remuneration Report are significantly lower than those set out in the Liquidator's notice of consent to act dated 24 August 2012. While the position descriptions do not precisely correspond (for example, the notice of consent refers to "directors" and "consultants", while the Remuneration Report refers to "managers" and "accountants"), it is apparent that the Liquidator's claim would be for a greater sum if the originally specified rates were to have been applied. The fact that the fees have been discounted is not conclusive. However, it is a factor which supports the Liquidator's claim of reasonableness. 57 In the circumstances of this case and on the material before the Court, I am satisfied that the Liquidator's claim for remuneration is reasonable and should be allowed. Disbursements 58 Having reviewed the Remuneration Report and considered the reasons for which each of the disbursements were incurred, I see no reason why the Liquidator should not be entitled to assert a lien against the assets of Starpicket to secure those amounts incurred by the Liquidator up to 21 November 2012. 59 For the same reasons as those set out at [45] to [51] above, I do not consider that the disbursements incurred by the Liquidator in respect of the stock-take, the valuation of Starpicket's plant and equipment, or legal advice were unreasonable. In respect of the Liquidator's legal fees, it is not necessary for those fees to be taxed: see Venetian Nominees at 101. 60 It was necessary for members of the Liquidator's staff to travel from their office in Brisbane to Starpicket's premises in Charleville to carry out necessary work in the liquidation. The expense incurred in relation to the transportation and accommodation of those staff members was not improper or unreasonable in amount. Contrary to the Scotts' submissions, the Liquidator was entitled to change the locks in order to secure Starpicket's premises and its stock. This was not an unreasonable expense and does not appear to be unreasonable in its amount. 61 The costs associated with statutory advertising were fees which the Liquidator had no choice but to incur and must be allowed. 62 While I am satisfied that the invoices annexed to the Remuneration Report are reasonable in their amount, the amounts claimed in that Report for future disbursements are a different matter. Notwithstanding the fact that those disbursements would have long since been incurred, and that the parties were requested to file any further material they sought to rely upon by 4 July 2013, the Liquidator chose not to file any evidence identifying the amounts actually incurred. 63 The Court cannot approve the Liquidator's claim without evidence of the disbursements actually incurred. Accordingly, I am not satisfied that the Liquidator is entitled to assert a lien in respect of the amounts described as "estimated expenses" in the Remuneration Report. Who Should Pay the Liquidator – the Commissioner or Starpicket? 64 In the normal course of a winding up, a liquidator's remuneration and disbursements, once determined, will be paid out of the assets of the insolvent company. However, the Liquidator, Starpicket and the Scotts submitted that, in this case, the Court should make an order that the Commissioner pay the Liquidator's remuneration and disbursements. 65 In the Liquidator's submission, there are two reasons for making such an order. 66 First, the Liquidator submitted that there was a real risk that he will no longer be able to receive his remuneration from the assets of Starpicket – as he would have in the ordinary course of the winding up – because he lost control of the assets once the orders to wind up Starpicket were set aside. In this respect, the Liquidator submitted that Re Bridal Centre Co Pty Ltd and the Companies Ordinance 1962 (1985) 59 ACTR 1 was distinguishable in that the Liquidator does not hold any funds of Starpicket from which to recoup his remuneration. 67 The Liquidator's fear in this regard is unfounded. In other cases, an order setting aside winding up orders has been postponed for a short period to allow a liquidator to deduct their remuneration and disbursements from the assets of the company while they remained under the liquidator's control: see, for example, Nationwide News Pty Ltd and Prendergast v Rolcross (in liq) [2008] NSWSC. It is true that no such order was made in this case. However, as noted at [17] above, the Liquidator's lien securing his remuneration and disbursements survives the termination of his appointment and it is open to the Liquidator to enforce that lien. 68 The Liquidator's second submission was that the Commissioner sought and obtained an order that Starpicket be wound up, and opposed the termination of that winding up, in circumstances where the winding up was liable to be set aside. The Liquidator referred to the decision of Kelly J in Re Bridal Centre Co at 9: … There may be a question as to who should be responsible for payment of the remuneration decided by the court to be appropriate. In many cases where the petition is dismissed it would seem unjust that the remuneration should come out of the assets of the company and in those circumstances one would expect that those who seek the appointment of the provisional liquidator would eventually be responsible for his remuneration. 69 The Liquidator acknowledged that Kelly J was concerned with the remuneration of a provisional liquidator, but submitted that there was no reason the same should not be true for a liquidator. The Liquidator also acknowledged that no such order was made in that case. That was because counsel acting for the company had previously indicated to the Court that the provisional liquidator's costs would be paid out of funds held by him in the course of his duties. 70 The Court was not referred to any case in which an order had been made such as that envisaged in Re Bridal Centre Co. While I do not doubt that there may be circumstances in which such an order may be appropriate – for example where a winding up application has been brought in circumstances which amount to an abuse of process – this is not such a case. 71 As noted by Greenwood J at [58] of his Reasons, ASIC maintains a register under Pt 9.1 of the Corporations Act which records, inter alia, the address of Starpicket's registered office. The Commissioner acted in reliance upon the information recorded in the ASIC register. The Commissioner was entitled to rely upon those details for the purpose of addressing mail to Starpicket. The fact of the matter is that the combination of Australia Post's delivery practices and Mr Scott's failure to establish a redirection of mail from the company's registered office to its daily working PO Box number has defeated the Commissioner's reliance upon the address recorded in the ASIC register: Reasons at [51]. The Commissioner had no way of knowing, or any reason to suspect, that the statutory demand would not be delivered to Starpicket at its registered office. The mail addressed to Starpicket was not returned to the sender. In these circumstances, an order directing the Commissioner to pay the Liquidator's remuneration and disbursements cannot be justified. CONCLUSION 72 For the above reasons, the Liquidator is entitled to his remuneration and disbursements claimed in respect of the liquidation of Starpicket in the amount of $93,542.32 (including GST). There should be a declaration that the Liquidator has an equitable lien upon the assets of Starpicket for the payment to him of the sum of $93,542.32. 73 Starpicket should pay the costs of the Liquidator of these proceedings. I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. Associate: Dated: 17 July 2013