Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Warner Capital Pty Ltd v Shazbot Pty Ltd [2024] NSWCA 245 Hearing dates: 19 March 2024 Decision date: 15 October 2024 Before: Gleeson JA at [1]; White JA at [2]; Kirk JA at [82] Decision: Appeal dismissed with costs. Catchwords: PARTNERSHIPS AND JOINT VENTURES – partnership accounts – valuation of uncompleted insolvency administrations – where taking of account required hypothetical valuation of work in progress and residual goodwill of insolvency practice – whether lack of comparable transactions determinative – whether hypothetical vendor would pay a "discount" to hypothetical purchaser to acquire book of administrations – where impermissible for insolvency practitioner to require or accept a "discount" to take on book of administrations – where insolvency practitioner able to resign or seek leave to resign from unprofitable administrations. Legislation Cited: Bankruptcy Act 1966 (Cth), s 180 Corporations Act 2001 (Cth), ss 473(1), 545, 595 Cases Cited: In Re Trocevski (Trustee), Moran A Bankrupt [2023] FCA 355 Re Abdulrahman (Bankrupt) (No 2) [2011] FCA 899 Re Gollant [2017] FCA 1158 Shazbot Pty Ltd v Warner Capital Pty Ltd (No 2) [2019] NSWSC 1114 Shazbot Pty Ltd v Warner Capital Pty Ltd (No 5) [2023] NSWSC 1322 Shazbot Pty Ltd v Warner Capital Pty Ltd (No 6) [2024] NSWSC 81 Shazbot Pty Ltd v Warner Capital Pty Ltd [2018] NSWSC 1645 Spencer v The Commonwealth of Australia (1907) 5 CLR 418; [1907] HCA 82 Warner Capital Pty Ltd v Shazbot Pty Ltd [2020] NSWCA 121 Category: Principal judgment Parties: Warner Capital Pty Ltd (First Appellant) Anthony John Warner (Second Appellant) Clarence Street Partners Pty Ltd (Third Appellant) Debtfree Pty Ltd (Fourth Appellant) Shazbot Pty Ltd (First Respondent) Steven Barry Kugel (Second Respondent) Representation: Counsel: J Stoljar SC / J R Anderson (Appellants) E Finnane / D Farinha (Respondents) Solicitors: Emerson Lewis (Appellants) Uther Webster & Evans (Respondents) File Number(s): 2023/191618 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity Citation: Shazbot Pty Ltd v Warner Capital Pty Ltd (No 3) [2023] NSWSC 527 Shazbot Pty Ltd v Warner Capital Pty Ltd (No 4) [2023] NSWSC 1001 Date of Decision: 18 May 2023 Before: Parker J File Number(s): 2015/119465 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] HEADNOTE [This headnote is not to be read as part of the judgment] The second appellant (Mr Warner) and the second respondent (Mr Kugel) were insolvency practitioners who conducted their practice through a partnership known as CRS Warner Kugel from 19 September 2007 to 22 September 2014. The remaining parties in these proceedings were the companies controlled by Mr Warner and Mr Kugel. The partnership was profitable, and in the three years from 30 June 2012 to 30 June 2014 the net profits of the practice exceeded $1.8 million per annum. In September 2014, Mr Warner decided to bring the partnership to an end and to continue the insolvency practice by himself. At the date of dissolution of the partnership, the firm had on foot 461 insolvency administrations. The significant majority of the work and assets of the practice, including its employees, remained with Mr Warner. In 2018, the primary judge held that Mr Kugel was entitled to an order for an account as part of the dissolution of the partnership, and in September 2019 the primary judge made orders for the taking of accounts. Those orders were subject to an appeal in this Court in 2020, which was substantially unsuccessful but led to the variation of the orders made in 2019. Further variations were made to those orders under the slip rule in 2023. The orders as varied required the valuation of the "work in progress" (WIP) accrued as at 22 September 2014 as well as the valuation of any "residual goodwill", which represented a proxy for valuing the notional sale price for the book of administration matters in terms of what "premium" an incoming purchaser would be willing to pay (or "discount" the purchaser would have required to be paid to them) for the book as a whole. The taking of the accounts was remitted to the primary judge. Relevantly to this appeal, these orders included a requirement for Mr Warner and his companies to account for the "income collected" from 22 September 2014 which formed part of the partnership's WIP as at 22 September 2014. After a further hearing in early 2023 the primary judge directed the parties to bring in short minutes of order giving effect to his reasons. One question dealt with whether a purchaser could properly have paid a premium for the acquisition of the book or required a discount to take over the book, owing to the prohibitions contained in s 595 of the Corporations Act 2001 (Cth) and a cll 3.20 and 3.21 standard published by the Accounting Professional and Ethical Standards Board (APES 330 Insolvency Services) (the "APES Standard"). Without expressing a concluded view, the primary judge expressed a prima facie view that cl 3.21 of the APES Standard would be contravened if the hypothetical purchaser were to be paid money by the vendor as an inducement to acquire the book. The primary judge did not find that a purchaser acquiring the book would require such a payment to take over the book, and in doing so rejected the evidence of expert witnesses called by Mr Warner. These findings were based on the fact that there was no evidence of prior sales of this kind, a discount would never be required owing to the economies of scale that expanding a practitioner's book would have if they had capacity to take on the work, and that practitioners could resign from administrations which represented a liability. The appellants, in challenging these findings of the primary judge and the orders made on 6 September 2023, identified five interrelated issues on the appeal: (i) Whether the "discount" payment to a hypothetical purchaser to take on the entire book would have been permissible; (ii) Whether the primary judge erred in placing reliance on the fact that there was no evidence of actual market transactions in which a purchaser has insisted on payment by the outgoing practitioner to acquire the book; (iii) Whether the primary judge erred in not accepting the evidence of the appellant's expert witnesses and therefore finding that the appellants had not established that the book had a negative value; (iv) Whether the primary judge erred in concluding that the power of the court to appoint a replacement liquidator meant that a discount would never be payable; and (v) Whether the primary judge erred by not considering the detailed evidence available as to the stage and status of individual administrations which made up the book. By Notice of Contention the respondents submitted that on the first issue the primary judge should have held that such a hypothetical transaction would be impermissible, as it either breached cl 3.21 of the APES Standard and would not fall under cll 8.17-8.23 of the same, or that it would have been uncertain to the hypothetical vendor and purchaser if such an arrangement would breach cl 3.21 or fallen within cll 8.17 and 8.23. The Court (White JA, Gleeson and Kirk JJA agreeing) dismissed the appeal, holding: As to issue (i), per White JA (Gleeson and Kirk JJA agreeing at [1] and [82] respectively): It was common ground that sub-s 595(1) of the Corporations Act and cl 3.20 of the APES Standard have the effect that an insolvency practitioner who was a hypothetical purchaser of the book could not pay a premium to take over the book. Similarly, for a hypothetical purchaser to accept a substantial discount payment for the acquisition of the book would involve an impermissible acceptance of a monetary benefit: [53], [55]. Even though an arrangement permitted by cl 8.23 of the APES Standard could not be prohibited by cl 3.21, the arrangement regarding the entire book contemplated by the appellants did not fall within cl 8.23 as that provision addresses only a practitioner's acceptance of a particular administration: [57], [58], [60]. No hypothetical purchaser of the book could require or accept a discount payment without breaching the relevant professional obligations. This finding is sufficient to dismiss the appeal: [61]. As to issue (ii), per White JA (Gleeson and Kirk JJA agreeing at [1] and [82] respectively): It is not an answer to the appellants' claim that a hypothetical purchaser would require a discount payment to take over the book and a hypothetical vendor would be willing to pay this amount to say that there was no evidence of such transactions in the "market". The primary judge's orders required a valuation of the book on a hypothetical basis, and the absence of an actual market for a transaction of that kind is not a reason not to carry out the valuation exercise: [62], [64], [65]. Spencer v The Commonwealth of Australia (1907) 5 CLR 418; [1907] HCA 82, applied. Nonetheless, for the book to have a capital value, either positive or negative, the hypothetical vendor and purchaser must not only be assumed to be willing, but they must also be able to dispose of and acquire the book for a price. For the reasons in relation to issue 1, this was not permissible: [66]. As to issues (iii) and (iv), per White JA (Gleeson and Kirk JJA agreeing at [1] and [82] respectively): Noting the conclusions made as to issue (v), the elaborate analyses of the appellants' witnesses, and the responsive analyses of the respondents' witnesses, failed to address the real issues. In such circumstances, there is no reason that the Court should embark on a detailed analysis of their evidence, or the individual files, and the primary judge was right not to do so: [79], [80]. As to issue (v), per White JA (Gleeson and Kirk JJA agreeing at [1] and [82] respectively): In the case of court appointed liquidators, the ability to resign provided s 473(1) of the Corporations Act, and the fact that s 545 provides that a liquidator is not liable to incur any expenses if there is insufficient property, means that it would make no financial sense to make a discount payment where the vendor could simply provide a report to ASIC and resign: [71]-[73]. Whilst a trustee in bankruptcy does not have the right to resign solely because an administration is unfunded, the court has a discretion to allow resignation for that reason. The authorities suggest that such an application would likely be accepted by the court: [76]. In Re Trocevski (Trustee), Moran A Bankrupt [2023] FCA 355; Re Abdulrahman (Bankrupt) (No 2) [2011] FCA 899; Re Gollant [2017] FCA 1158, referred to. The primary judge's conclusion that a practitioner disposing of their practice would be unlikely to pay a discount as they could instead have resigned, or applied to resign and be replaced, without incurring any costs should be accepted: [77]-[78]. JUDGMENT 1. GLEESON JA: I agree with White JA. 2. WHITE JA: This is an appeal from orders of the Equity Division made on 6 September 2023 on the taking of an account between the second appellant, Mr Warner, and the second respondent, Mr Kugel, and companies they control (Shazbot Pty Ltd v Warner Capital Pty Ltd (No 3) [2023] NSWSC 527 (J3) and Shazbot Pty Ltd v Warner Capital Pty Ltd (No 4) [2023] NSWSC 1001) (J4). Shazbot Pty Ltd is a company controlled by Mr Kugel. Warner Capital Pty Ltd, Clarence Street Partners Pty Ltd, and Debtfree Pty Ltd are companies controlled by Mr Warner. The roles of the companies are explained in earlier judgments of the primary judge and are not relevant to the disposition of the appeal. 3. Mr Warner and Mr Kugel practised as insolvency practitioners. At an earlier stage of the proceedings, the primary judge (Parker J) held that they did so through a partnership known as CRS Warner Kugel from 19 September 2007 to 22 September 2014. His Honour found that this was so notwithstanding that the partnership was conducted through a unit trust (Shazbot Pty Ltd v Warner Capital Pty Ltd [2018] NSWSC 1645 (J1) at [208]). 4. In that judgment, the primary judge reached the following conclusions (at [246]): "I have concluded that: (1) Mr Warner and Mr Kugel conducted the insolvency practice of CRS Warner Kugel as partners between 19 September 2007 and 22 September 2014; (2) the business of the partnership included acting as company administrator, company liquidator, trustee in bankruptcy and administrator of Part X arrangements, but did not include the remaining Part IX debt agreement business operated by Debtfree Pty Ltd; (3) Mr Kugel is entitled to an order for an account accordingly; (4) Shazbot is entitled, at its election, to an account of profits or an award of equitable compensation arising from the transfer of its share in Debtfree Pty Ltd to Warner Capital on 22 September 2014." 1. There was a further hearing before the primary judge which led to orders for the taking of accounts (Shazbot Pty Ltd v Warner Capital Pty Ltd (No 2) [2019] NSWSC 1114 (J2)). Those orders were the subject of an appeal to this Court that was determined on 25 June 2020 (Warner Capital Pty Ltd v Shazbot Pty Ltd [2020] NSWCA 121) (CAJ)). The appeal was substantially unsuccessful but the orders made on 16 September 2019 were varied. After further variation of the orders pursuant to the slip rule (Shazbot Pty Ltd v Warner Capital Pty Ltd (No 4) [2023] NSWSC 1001) (J4), the orders for the taking of accounts were relevantly as follows: "1 Declare that from 19 September 2007 in acting as company liquidators, company administrators or bankruptcy trustee under the name 'CRS Warner Kugel' the second defendant [Warner] and the second plaintiff [Kugel] ('the Partners') carried on business in partnership within the meaning of the Partnership Act 1892 (NSW) ('the Partnership Firm'): and to the extent that the business was in the name of the third defendant [Clarence Street Partners] (including the holding of shares in the fourth defendant [Debtfree] by the third defendant), was conducted as trustee for the Partnership Firm. 2 Declare that from 19 September 2007, in acting as trustee of personal insolvency agreements under Part X of the Bankruptcy Act 1966 (Cth) under the name 'Debtfree', the second defendant [Warner] acted as a partner of the Partnership Firm; was part of and to the extent that that part of the business was conducted in the name of the fourth defendant [Debtfree], it was conducted as trustee for the Partnership Firm. 3. Declare that the Partnership Firm was dissolved by agreement between the parties on 22 September 2014. … 6. Order that: (a) The second [Warner] and third [Clarence Street Partners] defendants account for the income collected by either of them from 22 September 2014 onwards (and the income not collected but collectable as at the date of the account) which formed part of the company liquidation, company administration or bankruptcy trustee work in progress of the Partnership Firm as at 22 September 2014; (b) The second [Warner] and fourth [Debtfree] defendants account for the income collected by either of them from 22 September 2014 onwards (and the income not collected but collectable as at the date of the account) which formed part of the Part X agreement work in progress of the Partnership Firm as at 22 September 2014; (c) The second plaintiff [Kugel] account for collections which would in the ordinary course have been made of work in progress of the Partnership Firm as at 22 September 2014 for the following company liquidations: i. ABI Pty Ltd; ii. Erwin Fornasier Pty Ltd; iii. Virtual Resource Management Services Pty Ltd ACN 091 718 553; iv. Jamelin Roofing Pty Ltd ACN 91 751 950; v. VIC Duncombe Pty Ltd; and vi. Globalone Pacific Pty Ltd ACN 30 078 170, 7. Order that: (a) The second [Kugel] and first [Shazbot] plaintiffs account for the capital value of all assets of the Partnership Firm received or appropriated by them after 22 September 2014, less the amount of any debts or liabilities of the Partnership Firm assumed by either of them; (b) The second [Warner] and third [Clarence Street Partners] defendants account for the capital value of assets of the Partnership Firm received or appropriated by either of them after 22 September 2014, less the amount of any debts or liabilities of the Partnership Firm assumed by either of them; (c) The account in (b) is to include the capital value (if any) of the goodwill as at 22 September 2014 associated with the future conduct of the insolvency administrations being conducted by the partners as at that date (but excluding the collection of work in progress of the Partnership Firm as at 22 September 2014)." 1. The effect of these orders was that the account was to be taken between the individuals being the second plaintiff, Mr Kugel, and the second defendant, Mr Warner. It is significant for some of the issues raised on this appeal that under Order 6(a) and 6(b) the second defendant, Mr Warner, and his companies were required to account for the "income collected" from 22 September 2014 which formed part of the partnership's work in progress (WIP) as at 22 September 2014, and not the net income after expenses of collection and overheads. 2. The partnership was brought to an end at the insistence of Mr Warner. As the primary judge found in J3 at [6]: "In September 2014, Mr Warner decided to bring his business relationship with Mr Kugel to an end and continue an insolvency practice on his own. Mr Warner presented this to Mr Kugel as a fait accompli and Mr Kugel did not contest it. There was a division of the work and of the assets of the practice. A handful of liquidations were retained by Mr Kugel, but all of the other administrations, corporate and personal, were retained by Mr Warner. … The employees of the firm continued to work for Mr Warner in his new practice." 1. At the date of dissolution of the partnership the firm had on foot 461 administrations consisting of corporate liquidations, personal bankruptcies, and personal Part X arrangements (J3 at [13]). Recorded WIP (which would reflect the number of hours worked by each practitioner or employee multiplied by his or her hourly rate of charge) was, in round terms, $4.2 million (J3 at [13]). 2. The primary judge found that of that work in progress Mr Warner had collected $1.56 million, and also found that "Mr Warner has also accrued a further $5.8 million on the book for work done after September 2014, of which he has collected $3.4 million" (J3 at [13]). 3. Mr Warner took over all but five of the administrations. 4. Only Mr Warner was a registered trustee in bankruptcy. Following the dissolution of the partnership, Mr Warner continued the administrations in bankruptcy and Part X administrations. For most of the company liquidations, Mr Warner and Mr Kugel had been appointed as joint liquidators. Mr Kugel resigned from those appointments and they were taken over by Mr Warner. The liquidations Mr Kugel retained were the subject of Order 6(c) and are not in issue on this appeal. 5. In the 2020 proceedings in this Court, the leading judgment was given by Gleeson JA, with whose reasons Macfarlan and Meagher JJA agreed. Gleeson JA recorded that the primary judge in his first judgment had identified two stages for the analysis of the value of WIP at the CWK practice. The first was to value WIP accrued as at 22 September 2014 and the second was to value what the primary judge described as "residual goodwill" (CAJ at [139]). It is useful to quote Gleeson JA's summary of the reasons of the primary judge in his first and second judgments leading to the orders made: "140 As to the first stage, his Honour said that if, as at that date, monies were held in the relevant administration which could have been drawn upon, either immediately or upon the making of an application for remuneration, then the value of the WIP is its book value. Where insufficient monies were held in the administration, then the value of the work-in-progress would have to be discounted for the delay in recovery, or possible non-recovery. His Honour acknowledged that it may be appropriate to look at actual recoveries, referring to Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281; [1995] HCA 4 at 293-295: PJ [239]. His Honour expressed the preliminary view that no just allowances would be appropriate: PJ [240]. 141 As to the second stage, his Honour described this as the opportunity Mr Warner gained to earn further fees in future in taking over the matters, against which allowance must be made for the burden of completing the administrations which had insufficient assets to meet the administration costs which must be considered as a single 'book': PJ [241]. His Honour continued at PJ [242]-[244]: [242] Had Mr Warner and Mr Kugel simultaneously become unable to practise and the partnership had been terminated on that account, it would have been necessary to dispose of the partnership business to a third party. Ignoring WIP accrued before the date of termination, some of the administrations might have represented liabilities, in that the completion of the administration would be likely to yield less than the cost of completing it. Other administrations might have been seen as likely to yield more, and might therefore have a 'goodwill' value to an incoming practitioner. The question is what such an incoming practitioner would pay, or require to be paid, in those circumstances, for the whole 'book' of uncompleted administrations, after allowing for WIP. This could be an asset or a liability depending on the overall value of the 'book'. Such an enquiry may not be worthwhile, but if either party requires it, I think it needs to be undertaken as part of the overall assessment. [243] Mr Warner was clearly content to allow Mr Kugel to take the benefit of the Insolvency Experts name and associated telephone number and domain names, in return for taking over the liquidations and insolvency matters. But if Mr Kugel seeks an allowance of the insolvency files, then Mr Warner is entitled to have the value of the Insolvency Experts intellectual property taken into account. [244] It will be recalled that the parties also agreed that Mr Warner would complete the official liquidations, on the basis that he would pay the necessary costs but would receive the benefit of anything obtained from Global One. Mr Kugel's conduct in having Mr Krejci appointed as liquidator and in waiving any entitlement to fees has deprived Mr Warner of the opportunity to receive funds from Global One. It seems to me that there will have to be an assessment of the amount which was recoverable for WIP on that administration up to 22 September 2014, and Mr Kugel will have to make an allowance in favour of Mr Warner for this. Second judgment 142 In his second judgment, his Honour noted that the parties had agreed on the distribution of many of the other assets of the business between them but unless the parties agreed to limit its scope (and they had not) there must be a full accounting which covers all of the assets and liabilities of the partnership, not just the WIP: SJ [15]. 143 His Honour rejected the parties' proposal that the Court should appoint a referee under UCPR, Pt 20, Div 3 and instead determined to appoint a receiver, given what his Honour referred to as the nature of the process of winding up a partnership: SJ [16]-[27]. 144 His Honour refrained from giving directions as to the approach to valuation in the accounting for assets and liabilities of the partnership as at 22 September 2014, except the question of how to deal with CWK's 'book' of insolvency of administrations, including the WIP accrued as at 22 September 2014: SJ [32]. 145 Consistently with the view expressed in his principal judgment, his Honour found that it is necessary to separate the insolvency 'book" into two components, the first being the income collected from the WIP accrued as at 22 September 2014, and the second being the "additional goodwill" in the form of an opportunity to earn further fees, from taking over the outstanding administrations: SJ [37]. 146 His Honour considered that given the lapse of time since the partnership was dissolved most, if not all, of the WIP which can be recovered will have been. Accordingly, the appropriate course was to require an account to be undertaken by reference to the collections actually made: SJ [38]. 147 His Honour continued at SJ [38]: If further work has been done on a particular administration after 22 September 2014, and the amount ultimately recovered is less than the value of the total work undertaken, there will need to be some sort of apportionment of the amount recovered between the WIP as at 22 September 2014 and the work done after that date. If there are still amounts in any of the administrations which may be collected in future, an estimate will need to be made of the future collection attributable to the WIP up to 22 September 2014. I will leave the parties to deal with this issue with the receiver in the first instance. If any further direction is required it can be given in due course. 148 His Honour observed that the goodwill component of the calculation would need to be valued as a capital item, and continued at SJ [40]: The goodwill component will need to be valued as a capital amount, excluding of course, the recovery of WIP accrued as at 22 September 2014. This could be a positive or a negative figure. In effect, the question is how much a third party would have paid (or would have required to be paid) to acquire the book of administrations on the basis that he or she was required to account for any of the WIP as at 22 September 2014 back to the partnership. (Emphasis added.) 149 His Honour took the view that it was not appropriate to give any detailed instructions on conducting the valuation and this should be left to the receiver to bring to bear his or her own experience and that any problems could be dealt with by future directions: SJ [41]. 150 His Honour confirmed his view, expressed in the principal judgment at [240], that for the purpose of accounting for income collected, in general, no deductions of later business expenses should be available to Mr Warner. This was subject to the qualification at SJ [42]: … It would only be if there were expenses specifically referable to the collection of particular fees that any claim for deduction could be made. If Mr Warner does claim that any such specific expenses were incurred, that can be dealt with between him and the receiver as part of the account." 1. Gleeson JA held that the primary judge was correct to require an accounting for the actual collections attributable to the WIP as at 22 September 2014 (CAJ at [158]) and was also correct in declining to allow the Warner interests a general deduction for later business expenses incurred by Mr Warner (CAJ at [162]). There was a qualification to that in that expenses "specifically referable to the collection of particular fees" could be deducted (CAJ at [162]). This would relate to the disbursements incurred in the collection of recoveries but not general business expenses. As to the interpretation of the words in Order 7(c) "… capital value (if any) of the goodwill as at 22 September 2014 associated with the future conduct of the insolvency administrations being conducted by the partners as at that date (but excluding the collection of work in progress of the Partnership Firm as at 22 September 2014)" Gleeson JA observed: "167 In the present case, his Honour used the term 'residual goodwill' as a proxy for valuing the notional sale price of the 'book' of administration matters. In describing as 'goodwill' what an incoming purchaser would have been prepared to pay (or would have required to be paid) for the prospect of earning further fees from the book as a whole, his Honour seems to have had in mind what otherwise would be described as a 'premium' if paid by the purchaser (or a 'discount' if paid by the vendor) to acquire the book of business as a whole. 168 Neither party challenged his Honour's finding concerning the 'goodwill' component of the valuation of WIP of the CWK practice. The narrow dispute on appeal is whether his Honour erred in finding that this component of the valuation of WIP does not require any analysis of the level of expenses in fact incurred after 22 September 2014 by Mr Warner: SJ [40], [43]. 169 In my view, there was no error in this finding. The focus of the valuation task, as his Honour found, is an assessment of what an incoming purchaser would pay (or would require to be paid) to take the whole book of business, given the prospect of earning further fees from the 'book' as a whole: SJ [43]. Importantly, the valuation of this component of WIP is to be undertaken on the basis that the incoming purchaser is required to account for the WIP as at 22 September 2014 back to the partnership. That is, there is no double counting; the value of 'goodwill', or what I would describe as either the 'premium' or 'discount', is either an addition or a deduction, as the case may be, in the valuation of the WIP as at 22 September 2014. 170 The level of expenses in fact incurred after 22 September 2014 by Mr Warner reflect how he conducted the administrations from that date making commercial and other decisions, including incurring further expenses which directly affected the extent of recoveries of WIP as at 22 September 2014. The Kugel interests submitted that those recoveries would not be a reliable guide to valuing any portion of the WIP, referring to Kizbeau at 296. I agree that the subsequent recoveries net of expenses incurred by Mr Warner may not give a reliable indication or reflection of what an incoming purchaser would have paid (or required to have been paid to it) to acquire the whole 'book'. 171 However, that is not to say that other subsequent events may not inform the likely value which an incoming purchaser would have put on acquiring the whole 'book', consistent with the principles in Kizbeau. Those principles provide that although the value is to be assessed as at 22 September 2014, subsequent events may be looked at insofar as they illuminate the value of that 'book' at that date. What that value is remains a matter for the person taking the account to determine." 1. The taking of the accounts was remitted to the primary judge. After a further hearing over five days in February and March 2023 the primary judge delivered his third judgment (J3) and directed the parties to bring in short minutes of order to give effect to his reasons. His Honour dealt with two issues. The first, which is the subject of the present appeal, concerned the value of the administrations taken over by Mr Warner (Order 7(b) and 7(c)). After dealing with an application for the correction of the orders made on 16 September 2019 after variation of those orders by the Court of Appeal on 25 June 2020 (J4), a complex series of orders was made on 6 September 2023 in relation to the parties' obligations to account to each other and for set-off. Two further judgments followed (Shazbot Pty Ltd v Warner Capital Pty Ltd (No 5) [2023] NSWSC 1322 (J5) and Shazbot Pty Ltd v Warner Capital Pty Ltd (No 6) [2024] NSWSC 81 (J6)). These judgments concerned the calculation of interest, questions of set-off, costs, and interest on costs. 2. No issues arise directly in this appeal on those matters, although if the appeal were allowed there would be consequential effects on those matters. 3. In J3, the primary judge noted (at [17]) that on the first and second days of the hearing a question was identified as to whether a purchaser could properly have paid a sum of money for the acquisition of the book or could properly have required payment to take over the book. The issue arises under s 595 of the Corporations Act 2001 (Cth) and from a standard published by the Accounting Professional and Ethical Standards Board (APES 330 Insolvency Services cll 3.20 and 3.21 (see below at [51]-[61])). 4. The primary judge recorded (J3 at [18]): "The discovery of this issue led to a debate in court and a reconsideration by the parties of their positions. Eventually, Mr Kugel abandoned his claim to a premium. Mr Warner, however, maintained his claim to a discount payment." 1. Without expressing a concluded view on the question (J3 at [38]) the primary judge expressed a prima facie view that cl 3.21 of the Standard would be contravened if a hypothetical purchaser of the book were to be paid money by the vendor of the book as an inducement to acquire the book (J3 at [34]-[37]). 2. Mr Warner relied upon evidence of two chartered accountants and experienced insolvency practitioners, Mr Michael Hird and Ms Suelen McCallum. He also relied on evidence of another insolvency practitioner, Mr Nicholas Crouch, who gave evidence of an actual transaction in which he was asked to take over a book of personal bankruptcy administrations and the process that entailed. 3. The primary judge did not find that a purchaser acquiring the book of administrations subject to the conditions in Orders 6 and 7 would require payment of money to take over the book. The primary judge found that Mr Hird's calculations of premiums and discounts that a hypothetical purchaser would pay, or require to be paid to him or her, were not shown to be well based. His Honour found that Mr Hird's reasons did not provide any "… real objective basis for, or disclose any chain of expert reasoning to justify, the selection of those percentages" (J3 at [92]). His Honour found that the similar comment was applicable to the evidence of Ms McCallum (J3 at [95]). 4. Whilst the primary judge summarised the process of reasoning of Mr Hird (J3 at [39]-[58]) and Ms McCallum (J3 at [60]-[63]), his Honour did not descend into a detailed critique of their reasons. That was so for three principal reasons. 5. First, the calculations of Mr Hird and Ms McCallum were not based on any evidence of any prior sales but were a theoretical analysis based on a perception of what a typical purchaser would require to take on the book. There was no evidence of actual market transactions in which a vendor would be prepared to pay moneys to the purchaser to acquire the book (J3 at [81]). The only evidence of an actual transaction was that of Mr Crouch. His acquisition of part of a book did not involve him requiring a payment as a condition of taking it on. Rather he "cherry-picked" a small proportion of administrations and negotiated a subordination of the outgoing practitioner's WIP on those administrations (J3 at [83] and [93]). 6. Secondly, the primary judge considered that it was "… inherently unlikely that an incoming practitioner would require a substantial discount payment for the privilege of taking on more work of a similar character. For an incoming practitioner with spare capacity, expanding the size of the practitioner's book would almost always be likely to create economies of scale. A practitioner who did not have spare capacity would presumably not be interested at all" (J3 at [86]). 7. Thirdly, the primary judge was unable to accept that an outgoing practitioner who was selling the book of administrations would pay $1.94 million (the figure Mr Hird reached) to a purchaser to take over the book (J3 at [58], [99]). This was because rather than pay such a sum, the outgoing practitioner could resign from those administrations which constituted a liability for that practitioner or for a purchaser who acquired part of the book (J3 at [100]-[103]). 8. This last matter was not something which had been considered by any of the "experts". In relation to this matter the primary judge said (J3 at [104]): "Seen in this light, it may be that the true measure of the value of the book was the cost of bringing applications to the relevant insolvency courts to appoint someone else to each of the administrations. But there is no evidence as to what those costs would have been, and they are likely to have been no more than a few tens of thousands of dollars, if that. The defendants' case was not put in that way. The case put by the defendants fails." 1. The appellants challenged these conclusions. They identified five interrelated issues arising on the appeal. 2. The first issue was whether the "discount" payment which they contended a hypothetical purchaser would require be paid in order to take over the book would have been permissible. The primary judge did not decide that question but expressed a prima facie view that it would not have been permissible. The appellants contended that the payment would have been permissible. This is the subject of Ground 1 of the Further Amended Notice of Appeal. 3. Secondly, the appellants challenge the primary judge's reliance on there being no evidence of actual market transactions in which a purchaser has insisted on payment by the outgoing practitioner to acquire the book. The appellants submit that Orders 6(a), 6(b), 7(b) and 7(c), as varied by this Court and corrected under the slip rule, created a peculiar hypothetical framework for consideration of the issue of "value". This was because of the priority afforded to the vendor's WIP, the inability of the prospective purchaser to select which administrations within the book it might take on, and the legal and ethical prohibition on the purchaser paying any money to the vendor to acquire the book. These factors meant that there would have been no market in which the hypothetical purchase could have been made. This did not relieve the court from the task of assessing whether a hypothetical purchaser would require to be paid to take on the book, and if so, what payment would be made (Spencer v The Commonwealth of Australia (1907) 5 CLR 418 at 432; [1907] HCA 82). The question, so the appellants submitted, was not whether there was any purchaser in prospect who might have acquired the book on the terms stipulated by the orders of 16 September 2019, but what a hypothetical purchaser desirous to acquire the book would have required to be paid by the hypothetical vendor desirous to transfer the book on the stipulated terms. From the purchaser's perspective those terms were onerous. 4. This was the subject of Ground 2 of the Further Amended Notice of Appeal. 5. The third issue identified by the appellants concerned the primary judge's assessment of the evidence of Mr Hird and Ms McCallum. This is the subject of Ground 3 of the Further Amended Notice of Appeal. That ground contends that the judge erred in concluding that, in the case of a discount payable by a hypothetical vendor to a hypothetical purchaser within the framework of Orders 6 and 7, "the appellants failed to establish that the whole book of administrations had an overall negative value such that a discount was not payable by the prospective [vendor] to the prospective [purchaser]". 6. This ground did not identify with particularity why the judge erred in not accepting the evidence of the appellants' expert witnesses. 7. The fourth issue concerns the challenge to the primary judge's conclusion that the power of the court to appoint a replacement liquidator meant that a discount would never be payable. This was the subject of Ground 3A. 8. The appellants submitted that the primary judge only addressed the issue of the replacement by insolvency courts of liquidators and did not address the position of the replacement of trustees in bankruptcy in personal administrations. 9. The judge's general remarks were addressed to the replacement of "insolvency office holders". His Honour said (J3 at [100]): "As I have said, the replacement of insolvency officeholders by new insolvency practitioners is a matter for the insolvency courts. A practitioner who is unable or unwilling to continue cannot be forced to do so, and it becomes the court's responsibility to appoint a replacement." 1. That having been said, the primary judge's more specific remarks related only to the replacement of liquidators. 2. The fifth issue was the subject of Ground 4 of the Further Amended Notice of Appeal. The appellants submitted that the primary judge erred by not considering the detailed evidence available as to the stage and status of the individual administrations making up the book. They contended that if this were done it would have enabled an assessment and quantification of the extent to which individual administrations constituted liabilities, the monetary value of such liabilities and their overall effect on the value of the whole book, and hence the overall value of any discount payable to a theoretical purchaser. 3. By Notice of Contention the respondents say in relation to the first issue that the primary judge should have held, for the purposes of the hypothetical transaction involving the sale of the book, that a payment by the vendor to the purchaser to acquire the book would have breached cl 3.21 of APES 330 Insolvency Services and would not fall under cll 8.17-8.23 of the same. Alternatively, the respondents contend that the primary judge should have held that it would have been uncertain to a hypothetical purchaser and vendor of the book whether such arrangements would, if carried out, have breached cl 3.21 of the Standard or fallen within cll 8.17 and 8.23 (the "Cost Funding Provision"). 4. The respondents also contended: "6 In support of the primary judge's rejection of the appellants' case that the Book had a negative value his Honour ought further to have held that: a. The actual recoveries of fees earned on the said 'book' in the period since the dissolution of the Partnership was a matter that could and should be considered by the court, in accordance with the principles discussed in Kizbeau pty Ltd v WG & B Pty Ltd [1995] HCA 4; 184 CLR 281, insofar as those actual recoveries illuminated the value of the said 'book'; b. In circumstances where the actual recoveries from the said 'book' exceeded the so-called 'best case' projections in Mr Hird's evidence, any valuation of the 'book' ought to proceed on that basis that the so-called 'best case' projections were confirmed by later events, such that any valuation or calculation based on the so-called 'worst-case' and intermediate projections would be disregarded. 7 The primary judge should have adopted the reports of Messrs Crowe-Maxwell, Hayes and Halligan and thereby determined that: a. The Book could be expected to generate a positive net cashflow overall for a purchaser; and b. If the Book was capable of having a value, that value was a positive number such that the Book was an asset, not a liability." Amendment of 2018 orders 1. The appellants submit that the outcome of the taking of accounts is unfair. Pursuant to Order 6(a) and 6(b) the first, second, and fourth appellants have been required to account for the income collected by them from 22 September 2014 onwards in respect of the partnership's WIP as at 22 September 2014, without having to account for the costs incurred in that collection. 2. At J2 [42] the primary judge said: "For the purpose of accounting for income collected, in general no deductions of later business expenses will be available to Mr Warner. As I indicated in my judgment at [240] any fees subsequently collected were presumably collected as part of fee runs conducted in the ordinary course of business and would not have involved any additional marginal cost being incurred above the usual overhead cost of conducting such regular fee runs. Similarly, storage expenses and other disbursements associated with carrying on the administration after 22 September 2014 would not have the necessary relationship to the collection of WIP incurred as at that date. It would only be if there were expenses specifically referable to the collection of particular fees that any claim for deduction could be made. If Mr Warner does claim that any such specific expenses were incurred, that can be dealt with between him and the receiver as part of the account." 1. As noted above, in calculating the "collections", a deduction in relation to expenses "specifically referable to the collection of particular fees" was allowed (CAJ at [162]; J2 at [42]). 2. The issue of what were direct and indirect costs of collecting the partnership's WIP as at 14 September 2014 was determined by this Court's orders of 25 June 2020. 3. Belatedly, in the appellants' submissions in reply, senior counsel for the appellants invited the Court to treat the orders as interlocutory and to reconsider the orders. 4. Without deciding whether the orders were interlocutory or final, that invitation should be rejected. The case has been fought on the basis of the orders that were made. Additional evidence would be required if Orders 6(a) and 6(b) were to be set aside and there would yet be another hearing. That course cannot be contemplated. 5. In any event, given the way the dissolution of the partnership was effected, with Mr Warner presenting it as a fait accompli and taking over the premises and staff to pursue the business as his own, the complaint of unfairness rings hollow. Background facts 1. Insolvency practitioners are accountants but the features of their practice are very different from accounting practices generally. As Ms McCallum said: "• Each administration is a 'one off', i.e. when the administration is completed no further work is done for that client. In fact, legislation and industry codes of conduct do not generally permit repeat work for associates of these clients within specified timeframes; • The nature of the work in each administration has wide similarities and differences. There is a fair degree of similarity in compliance and reporting, but the issues encountered in each job result in a diverse set of actions; • There is a great deal of uncertainty about each job as often assets are not realised until investigations are complete, it is not known whether the IP will receive assistance from AFSA and ASIC (as these are subject to criteria that may not be met), and the actual work required to be done to complete the administration is usually not fully known at commencement; • The 'client' is insolvent and unable to pay the costs of the administration other than out of any assets of the insolvent entity that the IP may be able to recover. Unless the IP can get an undertaking or indemnity from a director or bankrupt or other party that they will meet the costs of the administration, the risk lies solely with the IP for recovery of fees, and it is an accepted fact that a certain proportion of all insolvency work is partially or totally unfunded; • The incumbent appointees may have such indemnities, but these are not generally transferable, and therefore the purchaser would need to obtain replacement indemnities from the parties. As the administrations have already commenced, there is little incentive to the parties to agree to provide such undertakings or indemnities and therefore this would be unlikely; • There are frequently factors which are out of the control of IPs which will impact their ability to control costs – these factors might be actions of other parties such as creditors, the need to seek judicial direction, disputes over ownership of assets and the like …" 1. Ms McCallum also opined that: "• Unlike accountants and solicitors and others in professional practice, IPs cannot simply 'down tools' if costs become too excessive or the work becomes too onerous. IPs have an obligation to complete the administrations over which they are appointed." 1. I will return to this matter below. 2. The partnership practice was profitable. In the three years from 30 June 2012 to 30 June 2014 the net profits of the practice exceeded $1.8 million per annum before distribution of salaries for the partners. In the financial year ended 30 June 2014, the revenue from bankruptcies, liquidations, and Part X arrangements totalled $2,991,886 and the costs incurred in deriving that revenue totalled $1,802,821. Ms McCallum calculated that the profit component over the 2011 to 2014 financial years (being the fees earned less the expenses incurred in earning those fees), reflecting all costs assumed to be covered by an hourly charge rate, was 24.58%. 3. Having regard to the historical profitability of the practice, it is counterintuitive that a hypothetical purchaser of the book as at 14 September 2022, which would include both profitable and unprofitable administrations, would require payment of a "discount" to take on the book, or that the vendor would be willing to pay such a "discount", even though the purchaser would have to account to the vendor for the value of the WIP at the date of acquisition that was later collected. The first issue 1. There were two versions of APES 330 Insolvency Services, one issued in November 2011 and the second being a revised version issued in September 2014. The second would be the relevant version for a purchaser considering acquisition of the book after 22 September 2014. It relevantly included the following: "3.20 A Member in Public Practice shall not provide any Inducement to any Entity to secure an Appointment for the Member or to secure or prevent the Appointment or nomination of another person. 3.21 A Member in Public Practice shall not accept an Appointment or perform an Administration that involves: (a) referral or other commissions, or monetary or non-monetary benefits; (b) spotter's fees; (c) understandings or requirements that work in the Administration will be given to a referrer; or (d) any other such arrangements that restrict the proper exercise of the Member's judgement and duties. … 8.23 Where a Member in Public Practice receives monies prior to acceptance of an Appointment to meet the costs of the proposed Administration, the Member shall ensure: (a) the monies are held in a bank account that is separately identifiable from the Firm's bank accounts; (b) there are no conditions on the conduct or outcome of the Administration attached to the monies; (c) full disclosure is made to creditors in the Declaration of Independence, Relevant Relationships and Indemnities; (d) approval of Professional Fees is obtained prior to them being paid to the Appointee; and (e) the monies are accounted for as funds of the Administration." 1. Section 595 of the Corporations Act at all relevant times has relevantly provided: "Inducement to be appointed liquidator etc. of company (1) A person must not give, or agree or offer to give, to another person any valuable consideration with a view to securing the first - mentioned person's own appointment or nomination, or to securing or preventing the appointment or nomination of a third person, as: (a) a liquidator or provisional liquidator of a company; or (b) an administrator of a company; or (c) an administrator of a deed of company arrangement executed, or to be executed, by a company; or (ca) a restructuring practitioner for a company; or (cb) a restructuring practitioner for a restructuring plan made, or to be made, by a company; or (d) a receiver, or a receiver and manager, of property of a company; or (e) a trustee or other person to administer a compromise or arrangement made between a company and any other person or persons. …" 1. Both sub-s 595(1) and cl 3.20 of the Standard have the effect that an insolvency practitioner who was a hypothetical purchaser of the book could not pay a premium to the firm as vendor of the book to obtain the right to be nominated as liquidator in the corporate insolvencies. That is common ground. It was the basis for the respondents not pressing their claim (in support of which they adduced evidence) that on a hypothetical sale of the book the hypothetical purchaser would have been prepared to pay a premium to acquire the book. 2. It is unnecessary to consider whether under s 595(1) the payment of a "discount" by the hypothetical vendor to the hypothetical purchaser of a book would breach the subsection. On one view, such a payment might have the object of preventing the appointment or nomination of other persons as liquidator. But that is not an issue raised by the respondents' Notice of Contention. It was not the subject of submissions and can be put aside. 3. In my view, for the hypothetical purchaser to accept a substantial "discount" payment for the acquisition of the whole of the book would involve his or her acceptance of a monetary benefit. Even if it be assumed that the "discount" paid reflected the parties' agreement as to the negative value of the book as a whole, the receipt of a sum certain in advance of acquiring the book, where the purchaser could take steps to reduce his or her future liability for expenses by resigning or obtaining the leave of the court to resign (if required), would be an immediate monetary benefit. 4. I do not accept that cl 8.23 affects this conclusion. 5. The appellants submitted that an arrangement permitted by cl 8.23 could not be prohibited by cl 3.21. That may be accepted. 6. The appellants also submitted that an arrangement contemplated by cl 8.23 would mirror the appellants' proposed structure for payment of a discount sum. That is not so. Clause 8.23 (and the clauses which precede it) are addressed only to an insolvency practitioner's acceptance of an appointment for a particular administration. This is reflected by the requirements for disclosure to creditors in a particular administration and, in particular, the requirement that moneys received in advance be accounted for as "funds of the administration". 7. The effect of this latter requirement is that if all of the moneys paid are not required to fund the insolvency practitioner's administration, the surplus must be accounted for, either to the creditors, or to the party providing the funds. 8. The "discount" payment the appellants contended a hypothetical purchaser would have required is not of the kind contemplated by cl 8.23. 9. The respondents' Notice of Contention on this issue should be upheld. This is itself a sufficient reason for dismissing the appeal. No hypothetical purchaser of the book could require or accept a "discount" payment without breaching his or her professional obligations. The second issue 1. I accept the appellants' submissions that it was not an answer to their claim that a hypothetical purchaser would have required payment of a "discount" to take over the book and a hypothetical vendor would have been prepared to pay such a "discount", that there was no evidence of any such transaction in the "market". 2. The primary judge's reasons included the following (J3 at [90]): "I am concerned with the value of the book as at the termination of the CWK partnership in September 2014. If the question was the value of a car owned by the partnership, the question would be purely one based on the then state of the car, and the then state of the market, as at that date. It could not depend upon whether the car in fact lasted longer or shorter than might have been expected by the purchaser. I cannot see in principle why the valuation of the book should be any different." 1. There is a reason in principle why the valuation of the book should be different. That is because there was no market for the acquisition of the book. Instead, the orders required a valuation of the book on the hypothetical basis that there could be a purchaser desirous to acquire the book and the partners could be desirous of selling it. In Spencer v The Commonwealth of Australia, Griffith CJ said at 431-432: "… Bearing in mind that value implies the existence of a willing buyer as well as of a willing seller, some modification of the rule must be made in order to make it applicable to the case of a piece of land which has any unique value. It may be that the land is fit for many purposes, and will in all probability be soon required for some of them, but there may be no one actually willing at the moment to buy it at any price. Still it does not follow that the land has no value. In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring 'What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?' It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together. …" 1. The absence of an actual market for a transaction contemplated by the orders of 16 September 2019 is not a reason for not carrying out the valuation exercise required by those orders. 2. Nonetheless, for the book to have a capital value, either positive or negative, the hypothetical vendor and purchaser must not only be assumed to be willing, they must also be able to dispose of and acquire the book for a price. It is now common ground that the vendor could not extract a price for sale of the book. For the reasons above in relation to issue 1, the hypothetical vendor could not demand a price to acquire the book. The third and fourth issues 1. As noted at [30] above, ground 3 of the Notice of Appeal did not identify with any particularity why the primary judge erred in not accepting the evidence of the appellants' expert witnesses, Mr Hird and Ms McCallum. 2. One of the reasons the primary judge did not descend into a critical analysis of their opinions was that his Honour found that those opinions did not address the ability of the insolvency practitioner to resign from unfunded administrations. It is desirable to address issue 5 before coming back to issues 3 and 4. The fifth issue 1. It is noted at [47] that Ms McCallum opined that insolvency practitioners had an obligation to complete the administrations over which they had been appointed and could not "down tools" if costs became too excessive or the work became too onerous. 2. As a general proposition that should be accepted. But it does not address the question as to when an insolvency practitioner can relieve himself or herself of those obligations by resigning. 3. In the case of court appointed liquidators, s 473(1) of the Corporations Act relevantly provided (as at 22 September 2014) that: "473 General provisions about liquidators (1) A liquidator appointed by the Court may resign or, on cause shown, be removed by the Court. …" 1. Section 545 provided: "545 Expenses of winding up where property insufficient (1) Subject to this section, a liquidator is not liable to incur any expense in relation to the winding up of a company unless there is sufficient available property. (2) The Court or ASIC may, on the application of a creditor or a contributory, direct a liquidator to incur a particular expense on condition that the creditor or contributory indemnifies the liquidator in respect of the recovery of the amount expended and, if the Court or ASIC so directs, gives such security to secure the amount of the indemnity as the Court or ASIC thinks reasonable. (3) Nothing in this section is taken to relieve a liquidator of any obligation to lodge a document (including a report) with ASIC under any provision of this Act by reason only that he or she would be required to incur expense in order to perform that obligation." 1. It follows that in the case of the court appointed liquidations, the hypothetical vendor would not pay a "discount" to a hypothetical purchaser to acquire the administration of those liquidations for two reasons. The first is that it would be a breach of his or her professional obligations to do so. The second is that it would make no financial sense to do so because the vendor could meet his or her obligations by complying with his or her obligations to provide a report and by resigning. 2. In the case of the bankruptcies and Part X administrations, the position is more complex. 3. Section 180 of the Bankruptcy Act 1966 (Cth) provides: "Resignation of trustee The Court may, subject to such terms and conditions as it thinks just, accept the resignation of a registered trustee from the office of trustee of an estate." 1. Thus, the bankruptcy trustee does not have the right to resign because the bankruptcy is unfunded. But the court has a discretion to allow resignation for that reason. The authorities suggest that any such application for resignation would be likely to be accepted (In Re Trocevski (Trustee), Moran A Bankrupt [2023] FCA 355 at [4], [9], [25]; Re Abdulrahman (Bankrupt) (No 2) [2011] FCA 899 at [3], [9]-[12]; Re Gollant [2017] FCA 1158 at [10], [13], [14], [20]). 2. The primary judge concluded (J3 at [103]-[104]: "103 … it is difficult to see that practitioners disposing of their practice could ever face a practical compulsion to pay a sum on the scale claimed by the defendants in these proceedings. Why would such practitioners not, as a last resort, simply apply to the relevant insolvency court to be replaced as insolvency officeholders? If no-one was prepared to volunteer, a replacement, or replacements, would just have to be appointed by rotation, or in some other way, from among the remaining pool of officeholders receiving appointments from the court. 104 Seen in this light, it may be that the true measure of the value of the book was the cost of bringing applications to the relevant insolvency courts to appoint someone else to each of the administrations. But there is no evidence as to what those costs would have been, and they are likely to have been no more than a few tens of thousands of dollars, if that. The defendants' case was not put in that way. The case put by the defendants fails." 1. That conclusion should be accepted. 2. The elaborate analyses of the appellants' witnesses, and the responsive analyses of the witnesses called for the respondents, failed to address the real issues. 3. In these circumstances there is no reason this Court should embark upon a detailed analysis of their evidence, or the asserted details of the individual files, as the appellants asserted with respect to the third and fourth issues The primary judge was right not to do so. 4. For these reasons I propose that the appeal be dismissed with costs. 5. KIRK JA: I agree with White JA. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 October 2024