NIDAMON PTY LTD v WAYLAND SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, MEAGHER and POWELL JJA 8 February 1994, 15 April 1994 [1994] NSWCA 234 RECEIVER — whether Receiver should take steps to procure discharge. COURT APPOINTED RECEIVER — Receiver delaying discharge in order to safeguard position re costs and fees — whether costs proper receivership costs — whether Receiver substantial cause of unnecessary continuation of receivership. RECEIVER — work outside scope of receivership — on what basis fees and expenses recoverable and from whom. In order to carry out a settlement as part of the winding up of Nidamon Pty Ltd (the company) the three shareholders of that company (B, C and H) agreed that Mr Wayland, an accountant, should be appointed as Receiver so that he could determine the price of its shares (being bought from him by B and C as part of the settlement) and any amounts owing by the company to H. The appointment was achieved by a consent order by the court. An Agreement, which was noted in a second consent order but which did not form part of that order, provided that the Receiver would retire from office on completion of the settlement between shareholders. The settlement was effected on 10 June 1982 but due to a dispute between B and C and the Receiver the Receiver's costs were still unpaid as at 19 July 1982. On this day the Receiver informed the shareholders that he intended to remain Receiver until his costs were paid in full. Hodgson J held that the Receiver could not be criticised for not having taken any steps towards having himself discharged before July 1982 and that the Receiver was entitled to fees and costs for activities reasonably necessary for protecting his remuneration and involving the obtaining of security in connection with fees chargeable for what he did in connection with ratification of the sale arranged by B and C of the company's land. In relation to the non receivership work done by the Receiver Hodgson J ordered his fees and expenses to be paid by B, C and H. Held: (1) Hodgson J was correct in deciding that the Receiver could not be criticised for not having taken any steps towards having himself discharged before July 1982. (2) A court appointed Receiver is not entitled to insist on or bring about the continuation of the receivership in order to strengthen his position for the recovery of costs for works not done in his office as Receiver. If continuation of receivership is in substance caused by the Receiver for such a purpose, then the court should ordinarily refuse to allow costs even for strictly receivership work which had to be done because of the continuation of the receivership. (3) In the circumstances of this case it is not the Receiver who should be regarded as the substantial cause of the continuation of the receivership after July 19 as no appropriate step had been taken to have him discharged as Receiver. (4) Hodgson J was correct in holding that disputed fees and expenses incurred between 1 June and 7 July 1982 were reasonably undertaken as an incident to the Receiver's performance of the non receivership work. Priestley JA Matters preceding judgments appealed against. The appeals in this case are against two judgments of Hodgson J. When, in the course of the argument of the appeals, the facts were to some extent sorted out, it became clear 2 UNREPORTED JUDGMENTS that the points to be dealt with by the court could be disposed of quite shortly. However, to make the points understandable it is necessary first to set out quite a lot of the factual history of the case. The appeals have their origin in what was an essentially sensible attempt, in 1982, to settle litigation arising from a dispute between the three shareholders in a private company. However, arguments developed in carrying out the settlement. Then there was a failure to use the court system to best advantage to settle those arguments. At length, in 1994, this court was presented with a somewhat dismal picture of what can go unnecessarily wrong in litigation. The three shareholders were Mr H Dorn, Mr B Dorn and Mr C Dorn. For the sake of shortness I will refer to them, without disrespect for them, as H, B and C. H was the cousin of B and C, who were brothers. H held forty-three, B twenty-nine, and C twenty-eight of the 100 shares issued by the company, Nidamon Pty Ltd, whose principal business was the conducting of a guest house in premises it owned. Early in 1982 H began proceedings to wind up the company on the ground of oppression and its inability to pay its debts. When the proceedings came before the court, H, B and C negotiated a settlement. No creditors had appeared to allege or support the allegation that the company could not pay its debts. On the materials before the court in these appeals, it does not seem that the company was in fact insolvent. The principal features of the settlement arrived at by the shareholders were that B and C were to buy H's shares and see to it that the company paid to H any amounts owing to him by the company. Before these things could be done it was necessary to fix a price for the shares and check the company books to establish the correct amounts of loans and wages owed to H. In regard to the valuation of the shares, although the parties were agreed that the sale value of the guest house premises should be taken as $438,000, the premises were subject to mortgage and the company had various creditors. The company books would have to be checked to obtain the current figures for these matters before a share valuation could be made. To enable the parties to carry through the proposed settlement it was going to be necessary to have some independent person determine the sale price for the shares and any amounts owing by the company to H. These were matters which could readily be done by a suitable accountant. The settlement was implemented by asking the court to deal with the winding up petition by making two orders by consent. The court made the two orders on 27 April 1982. By the first, an accountant, Mr M Wayland, was appointed as Receiver and Manager of the company's assets and undertaking, with specified powers. The second order was that the proceedings stand over generally, with liberty for them to be restored. At the time of making these orders, the court noted an agreement between the parties. The agreement contained the arrangement I have already described, but was put into a much more detailed form, which dealt with a number of matters ancillary to the achievement of the principal objects of the parties. This agreement was recorded by the court along with the orders it made, but was not part of them. One of the matters provided for in the agreement was that the Receiver would retire from office on completion of the settlement between H, B and C (para3(f)). H was to deliver to the Receiver a consent order for the dismissal of the winding up proceedings. The Receiver was to file this consent order "forthwith on his retirement from office" (para3(g)). Unfortunately, as it turned out, the consent order appointing the Receiver was not well adapted to the purposes the parties principally had in mind in having him appointed. The order gave the Receiver power to carry on the company's URJ NIDAMON PTY LTD v WAYLAND (Priestley JA) 3 business and also all the powers conferred on a liquidator by s236(2)(a) to (j) of the Companies Act 1961, with liberty to apply for directions as to the exercise. of his powers from time to time. The powers conferred by the order were those usually given to a liquidator for the purpose of winding up a company's affairs and distributing its assets. The powers were not designed for tasks such as the determination of the value of a company's shares or the amount owing to a particular shareholder for the purpose of fixing a price for the sale by one shareholder of his shares to other shareholders. Whether or not the divergence between what the parties were expecting the Receiver to do and what the powers conferred upon him by the court authorised him to do was fully appreciated by the parties and their advisers, on 28 April 1982, H, B and C as directors of the company, and the Receiver apparently in that capacity, entered into a deed which recited the making of the consent orders, conferred indemnities upon the Receiver and, in cl6, included an agreement by the directors to pay the Receiver his remuneration for his services as a Receiver upon a stipulated basis. It is not clear whether at this stage the parties appreciated that only some of the things the Receiver would be doing following his appointment would fall within the proper duties of a court appointed receiver and that the greater part of what he would be doing would be work which was not the work of a receiver. The non-receiver work would be that connected with determining the amounts the parties had asked the Receiver to determine, for purposes of settlement. When it is necessary to distinguish between the two types of work, I will refer to ode as receiver's work and the other as determination work. Similarly, I will refer to the proceedings in which the Receiver sought to recover fees for receiver's work as the receivership proceedings, and those in which he sought to recover fees for determination work as the determination proceedings. The need to have the determination work done was the principal reason the parties agreed to have the Receiver appointed. He did it promptly. The evidence shows him as actively embarking on the required determinations at least by 3 May 1982, and working through following weeks. During this time B and C became dissatisfied with aspects of the results that the Receiver was indicating he would be likely to reach. Their dissatisfaction reached a level which led to B, on 27 May, in a telephone conversation with the Receiver, saying he was unhappy with the Receiver's approach to H's loan account, and further, that "You have accepted fraudulent entries in the books. I will not pay you anything". On 1 June 1982 the Receiver wrote letters to H, B and C in each of which he said that pursuant to the court's order he determined, and stated, (1) the value of the shares in the company, (2) the amounts owing by the company to the shareholders and (3) that there were no amounts for wages owing by the company to any of H, Bor C. At the time of sending these letters the Receiver's calculation (i) of his costs for acting as Receiver was $1,390 and (ii) of his costs for making the determinations was $8,501.25, a total of $9,891.25. It would seem from the segregation of costs that the Receiver had some appreciation at this time of the distinction between his Receivership and determination duties. Solicitors for B wrote to the Receiver by letter dated 7 June 1982, enclosing a letter under the company's letterhead signed by B in which he said he agreed to the amounts of the Receiver's determinations except H's loan account figure 4 UNREPORTED JUDGMENTS of $41,300.44. In connection with this he raised a number of matters in regard to which he sought reimbursement from H. The letter ended: "As we are planning to complete the purchase of [H's] shareholding by this coming Thursday, subject to the claims listed above being resolved, it would be appreciated if you could attend to same immediately. Please be advised, however, that if need be, we are prepared to go back to Court rather than be the victims of a so-called peaceful sell-out orchestrated by a one-sided and_ inefficient performance by [the Receiver]." The letter from the solicitors to the Receiver which enclosed B's letter said they had been instructed to restore the matter to the list for a determination in relation to H's loan account. This issue was never pursued in the later litigation. In replying on the same day to the two letters, the Receiver noted the instructions to restore the matter to the list, said that the books and records of the company had always been available to B, enclosed a copy of his account for services rendered based on time costs incurred up to that day, 7 June 1982 (these now totalled $11,948.20), and described the last paragraph of B's letter as unjustified and offensive. On this occasion the fees for both receivership and determination work were charged together under the description "Fee for professional services rendered in acting as Receiver and Manager of the company in respect of the period 27 April 1982 to 7 June 1982", it is not possible, on the materials in the appeal papers, to see how much (if any) of the further $2,057 incurred since the account of 1 June 1982 was prepared was attributable to receivership as distinct from determination duties. incurred since the account of 1 June 1982 was prepared was attributable to receivership as distinct from determination duties. Notwithstanding the dissatisfaction of B and C with the Receiver's performance, they went ahead and settled their original dispute with H on 10 June 1982. On that day they paid for H's shares and the company paid to H what it owed to him. The figures determined by the Receiver were used in effecting the settlement. The payments were accompanied by statements that they were made "in protest" and that B and C would challenge the Receiver's decision. This issue was never pursued in the later litigation. Had everything proceeded smoothly in accordance with the original intention of the parties, and had the dispute between B and C and the Receiver not sprung up, at this stage the winding up proceedings should have been relisted for dismissal, and upon that order being made, the Receiver would have been discharged. Had there been no dispute, presumably the Receiver's fees would have been paid and there would have been no need for the court order of dismissal to make any provision safeguarding payment to the Receiver of his costs and remuneration. Even if that were not so, the court's order for dismissal could have made the customary provision protecting the Receiver's entitlement to payment for his services; for an example of the type of order commonly made, see Form 282 in Miller and Horsell, Equity Forms and Precedents p193. Such an order would have said nothing about payment for the determination work. But either way, H's connection with the company would have ended, B and C as the sole shareholders in the company would have been free to continue its business according to their own wishes, and the Receiver would have no further duties to or claims upon the company. For practical purposes, but for the dispute with the Receiver, the receivership would have come to an end with the settlement of 10 June 1982. URJ NIDAMON PTY LTD v WAYLAND (Priestley JA) 5 However, after that date the wrangle between B and C (principally carried on by B) and the Receiver continued. In particular, B was taking the position that the Receiver should be taking further action to recover from H what B claimed were moneys due by H in respect of various company transactions. For example, on 30 June 1982, B said to the Receiver that the Receiver had not done his job properly, that he had not finished, that the work the Receiver had done had not all been done correctly and that he would take legal action if all of the matters he insisted upon being done were not done by the Receiver. On this occasion, as on others during this period, the Receiver said that he had completed what he was required to do and he was not prepared to take further action, but pointed out that his fees had to be paid. A letter dated 29 June 1982 to the Receiver from the solicitors for the company, which was marked to be hand delivered, and so was likely to have been before the Receiver at the time of this conversation with B, requested the Receiver to "retire as Receiver immediately pursuant to the order in this matter". It continued that if the Receiver did not retire "we have been instructed to seek a declaration that he is no longer the Receiver in this matter". In another letter of the same date, also marked to be delivered, from the solicitors to the Receiver, the following appeared: "We refer you to Pt29 of the Supreme Court Rules in respect of your remuneration in this matter. We have been instructed that in the event that an application is made to fix the remuneration of the Receiver that we are to oppose such application and to seek an order that the costs in this matter be taxed." On | July 1982 a meeting was held at which the Receiver and his solicitor, and B and C together with the solicitor who had been writing the letters for the company, were present. B and C were complaining that the Receiver had not done the determinations properly and was now obstructing them in their carrying on of the company's business. The Receiver said he was exercising his lien over the company's books and records until his fees were paid. There is no evidence of anything further happening between the conference of 1 July and 13 July, other than a letter dated 7 July to the Receiver from the company's solicitors asking for details relating to the calculations made by the Receiver in the course of his determinations. Then, by letter dated 13 July, the solicitors for the company wrote to the Receiver advising that the winding up proceedings had been listed before the court on 19 July. The letter asked that at court on that day the Receiver present the consent order in his possession for the dismissal of the petition. On 16 July the Receiver's solicitor rang the company's solicitor and told him the Receiver would do this. However, later on 16 July the Receiver and his solicitor conferred with counsel. It seems that by the time this conference took place the Receiver had become aware that B and C had caused the company to exchange contracts for the sale of its premises for approximately $538,000. The note of what took place in the conference recorded that counsel advised that the best protection for recovery of fees was to remain as Receiver; and that he therefore recommended "that the Consent Order be opposed and requested [the solicitor] to communicate this to the solicitors for the other parties". Counsel further advised that in the event that the court withheld the termination, which counsel expected, "... it was then open to the Receiver to take the normal actions available to a Receiver, including: (a) Taking possession of the premises; (b) Calling for any contracts on foot; 6 UNREPORTED JUDGMENTS (c) Collecting rents; (d) Changing locks and attending to security (e) And on [the Receiver's] suggestion, obtaining a real estate agent's opinion on the manner in which the property could be sold. However, it was noted that [the solicitor] should ensure that all parties were present and represented on Monday so that a suitable negotiated settlement could take place." This advice was in my opinion flawed, for reasons I will explain later, but no harm would have come of it had the sensible suggestion concerning settlement borne fruit. That, unfortunately, was not to be. Before ten on the following Monday morning (19 July) the Receiver's solicitor telephoned the solicitors for the other parties and told them the Receiver now intended to remain as Receiver until his costs relating to the receivership were paid in full. The costs referred to were for both Receiver's work and determination work. Later that day the petition to wind up came on to be dealt with before Needham J. The Receiver's counsel told the court that the Receiver had finished his task as receiver but could not get a clear statement from the parties as to the arrangements for payment of his fees. Needham J adjourned the proceedings so they could be fixed for hearing before another judge at a later date. The negotiations between the parties got nowhere. On 22 July, the Receiver wrote to the company's directors, (B and C), saying inter alia that they should not deal with any of the company's assets without reference to him. On 26 July, the Receiver filed a summons in the winding up proceedings seeking a declaration as to who was liable to pay his costs and expenses. On 16 August 1982, Rath J gave the Receiver leave to file and serve a summons in independent proceedings claiming payment for his work in doing the determinations. Dividing the Receiver's claims in this way showed a correct appreciation of the position that it was only his costs and remuneration for doing receivership work which could be dealt with in the winding up proceedings. His claim in respect of determination work did not arise from what he did in the office of Receiver and had to be separately claimed in proceedings outside the winding up proceedings. The form of summons filed pursuant to the leave granted by Rath J suggests however. that there may still have been some uncertainty on the part of the Receiver about his position in this respect. During September 1982, the Receiver proposed to retire when provided with security for his costs and expenses. Discussion about this then went on between the solicitors, but came to nothing. The security the Receiver was asking for was for his costs and expenses for doing both his receivership and his determination work. When H learned of the impending sale of the company's premises at the higher price than agreed on for the purpose of valuing his shares, he sought to set aside the arrangement which had been made to settle the winding up proceedings. Despite his efforts, the sale of the property was completed on 13 October 1982. The Receiver ratified the sale on condition that $10,000 be set aside from the proceeds to be held against what the company owed him, and $20,000 against what B and C owed him. The first amount appears to have been conceived of as URJ NIDAMON PTY LTD v WAYLAND (Priestley JA) 7 security for the costs of his receivership work and the second for the costs of his determination work. These sums were set aside from the settlement moneys. The Receiver, besides doing what he did in regard to the company's real estate, also, in the period after 19 July 1982, received claims from various creditors. At some point, B and C; filed summonses in the winding up proceedings seeking orders for the termination of the receivership. The Receiver filed a notice with the Corporate Affairs Commission of his ceasing to act as receiver as at 10 May 1983, but in the proceedings which were eventually litigated before Hodgson J in 1986, nothing seems to have turned on this notice. The proceedings which came before Hodgson J comprised the Receiver's summons in the winding up proceedings, in which, in substance, he claimed payment of his costs and expenses for carrying out his receivership duties, the Receiver's separately instituted proceedings in which he claimed his costs and expenses for his determination work, and two summonses by B and C in the winding up proceedings in which they asked that the receivership be terminated. The facts as I have stated them are in accordance with what was found by Hodgson J after a hearing on 20, 21, 22 and 25 August 1986. I also need to state a further factual matter before turning to Hodgson J's decision and the grounds of appeal of B and C against his orders. At the trial, there was a contest as to the Receiver's bona fides in continuing to act as Receiver after 19 July 1982. Hodgson J accepted that the Receiver did act in good faith, stating the relevant findings as follows: "In my view, the reason why the Receiver did not seek or consent to a discharge on and after 19 July was in order to secure his remuneration; but I also accept that having decided to stay on as Receiver for that purpose, the Receiver was genuinely concerned that [B] and [C] had contracted to sell the company's property, and that there were claims being made by unpaid, unsecured creditors. In my view it was incumbent upon him as Receiver to inform himself about the contract, and decide whether he should ratify it or have it set aside. In my view also, the Receiver was genuinely concerned about claims coming in from creditors, which might suggest that the information on the basis of which he had prepared a statement of affairs was incorrect. Conceivably either of these matters could have given rise to some personal responsibility in the Receiver " The receivership proceedings. The Receiver's claim in the winding up proceedings for his costs and expenses of carrying out his receivership duties was $10,515. Of this, $2,840 was claimed for the period from 27 April 1982 to 7 July 1982. $7,675 was claimed for the period from 8 July 1982 to 25 October 1982. Hodgson J entered judgment against the company, H, B and C, in the sum of $8,670, which included interest. The appellants' basic contention was that the Receiver was not entitled to any fees or costs after 10 June 1982. They conceded they had always been liable to pay whatever amount was then owing. This was asserted to be of the order of $1,200, but as already mentioned, the figure in the Receiver's letter of 1 June 1982 was $1,390, and by 10 June 1982 it may have been greater. By 7 July 1982 it was $2,840, that is, $1,450 greater than at 10 June 1982. It was submitted that the proper course for the Receiver to have followed after 10 June was to have taken steps for an application to be made to the court for his discharge as Receiver, as soon as reasonably possible after that date; it was further submitted that upon such discharge, appropriate provision would have been made for his fees and costs. He had however stayed on as Receiver, after he 8 UNREPORTED JUDGMENTS received the advice of 16 July 1982, not only to protect his position in regard to fees and costs of his receivership work, but also those of his determination work. This latter aspect of his remaining on as Receiver was not something he was entitled to do as Receiver and in the winding up proceedings, and he could not therefore recover anything for receivership work after that date. Hodgson J dealt with this argument as follows. 1. He thought no criticism could be made of the Receiver for not having taken any steps towards having himself discharged as Receiver before 19 July 1982. This was because prior to that date none of the other parties had made or even suggested any application to the court to achieve such a result and it was his intention until the conference of 16 July to seek a discharge. From this conclusion, it would follow that, in Hodgson J's view, the Receiver was entitled to the amount of $2,840 he claimed for the period finishing 7 July 1982. There was no assertion made that any part of this amount was claimed for work other than receivership work. This would be consistent with the $1,450 increase from the amount claimed at 1 June 1982 all being part of the overall increase of $2,057 from 1 June to 7 June 1982. 2. Hodgson J said the Receiver's activities between 11 June and 19 July 1982 were apparently primarily undertaken to deal with B and C's objections to his valuation and his determinations and their claims against H. In his view the fees and expenses of this work could not be recovered by the Receiver in the receivership proceedings and should be dealt with in the determination proceedings. This conclusion reinforces that which follows from the conclusion mentioned in 1., in that it follows that although the amount of $2,840 dealt with under 1. was claimed in respect of the period from 24 June to 7 July 1982, that charge must in fact in his Honour's view have related to the period ending at 10 June 1982. 3. As to the period from 19 July 1982, Hodgson J's opinion was that the Receiver would be entitled to fees and costs for activities reasonably necessary for protecting his remuneration as Receiver which he thought involved arranging for the provision of security in connection with his ratification of the sale by B and C. However, to the extent that the Receiver spent additional time in relation to the determination proceedings and associated litigation which did not involve receivership work strictly speaking, the Receiver was not entitled to charge for such matters against the company's assets. 4. Following from 3., Hodgson J said there should be an order that the Receiver's fees and costs arising up to 19 July 1982 should be paid out of the fund held on behalf of the company. Fees and expenses arising after that date should be limited to those referable to obtaining security for the Receiver's fees, releasing the company's property, and such incidental matters as preparing accounts, giving notice to the Corporate Affairs Commission and obtaining a discharge. Hodgson J published the reasons in which he expressed these conclusions on 2 October 1986, and directed that short minutes be brought in to give effect to his reasons. The matter next came before him on 18 November 1986, when the question arose whether any part of the $10,515 claimed in the receivership proceedings was attributable to matters which could only be claimed in the determination proceedings. The representative of the Receiver then present conceded that the figure of $10,515 did include a figure for such work. Hodgson J then noted that he had two alternatives available. URJ NIDAMON PTY LTD v WAYLAND (Priestley JA) 9 The first one he dealt with was that he direct an expensive inquiry into the question how much of the $10,515 was not attributable to receivership work; this, although it would probably work out the figures fairly precisely could well involve expense quite out of proportion to the value of the inquiry. He mentioned that in the course of the hearing of the case all parties had in substance asked him to determine the matter finally rather than leave anything to further inquiry or taxation. He then turned to what, implicitly but quite clearly, was the other alternative he had referred to, namely that he should determine the matter as best he could on the evidence before him. On that basis he said that he would be prepared to find that half of the sum of $10,515 was in respect of matters he had found to be proper subjects of charging in the receivership proceedings. He said he thought this assessment was, if anything, rather unfavourable to the Receiver. Nevertheless, the Receiver's representative then indicated the Receiver would be prepared to accept such a finding. Hodgson J accordingly ordered that judgment should be entered for the Receiver in the receivership proceedings for one half of the amount set out in the short minutes which had been put before him. This amount was $17,341, that figure representing the amount of $10,515 and the Receiver's calculation of interest on that amount. The other parties did not appear at this hearing, so Hodgson J noted that if any of them wished to raise any opposition to the course he had decided to take they would have an opportunity to do at the next mention. He then stood the matters over to 27 November 1986. The matter was in fact finally dealt with by him on 3 December 1986. On that day counsel for B and C and the company appeared. Hodgson J noted that counsel did not seek to argue against the approach the court had indicated on the earlier occasion, that is that the court would determine the money amount of the judgment in the receivership proceedings by taking the broad figure of 50% of what was claimed; counsel, while reserving the parties' rights in respect of any appeal against Hodgson J's findings, accepted that the figure proposed was appropriate in the light of those findings. Further argument on 3 December 1986 dealt with other matters, not presently necessary to mention. Accordingly, the judgment for $8,670 earlier mentioned, and consequential orders were made on the basis stated by Hodgson J in his reasons of 18 November 1986. A document entitled "Reconciliation of fees rendered" became Exhibit C before Hodgson J. This shows that from 8 July to 25 October 1982 the amount of $7,675 which was claimed for that period as receivership fees and costs in addition to the $2,840 already mentioned, which it would seem reasonably clearly Hodgson J intended to allow the Receiver in any event, itself consisted of three amounts, $1,687 to 6 August 1982, $4,665 from 7 August 1982 to 11 October 1982 and $1,322 from 12 October 1982 to 25 October 1982. The effect of Hodgson J's broad brush approach, taken in conjunction with his earlier reasons, seems to me to have been to disallow $5,258 (I have omitted any references to cents throughout these reasons); or, putting it in terms of what he allowed, to allow the Receiver $2,417 for the matters he had mentioned in his reasons of 2 October 1986 (at 30, 31) as being properly chargeable in the receivership proceedings for the period after 19 July 1982. I have said that it seems reasonably clear Hodgson J intended to allow the Receiver the $2,840 claimed from the commencement of the receivership to 7 July 1982. This is on the footing that, on the basis of the amounts claimed for 10 UNREPORTED JUDGMENTS receivership work at particular dates, which I have mentioned, it seems likely that Hodgson J considered that fees and costs to that extent had already been incurred by 7 June 1982. However, Hodgson J did not make specific findings from which it can be deduced as more than a matter of likelihood that his view about the $2,480 was as I have stated. However, I do not think this matters. The reason why Hodgson J was not more specific was that, as he made plain in his reasons of 18 November 1986, the method by which he arrived at his final figures in regard to the receivership proceedings, acquiesced in by all counsel, either on that day or 3 December 1986, was that he would not do so on a precise basis but by making an assessment as best he could on the evidence before him, which (so far as I can see) was not sufficiently detailed to base any more accurate method. As a result of the positions adopted by the parties before Hodgson J, the basis of the appellants' appeal in regard to the receivership proceedings had to be an attack on two of the conclusions basic to his disposition of the case, the first that the Receiver could not be criticised for not having taken any steps towards having himself discharged before July 1982 and the second that the Receiver was entitled to fees and costs for activities reasonably necessary for protecting his remuneration as Receiver and involving the obtaining of security in connection with fees chargeable for what he did in connection with ratification of the sale arranged by B and C of the company's land. In regard to the first of these conclusions, despite the strenuous argument advanced for the appellants in regard to any fees and costs charged after 10 June 1982, I do not think there can be any serious question about the reasonableness and correctness of the view taken by the trial judge. I have noted above (see paral. on p13) what Hodgson J said about this matter. I do not see any need to add to his reasons. On the facts as he found them, which are not seriously challengeable in this court, his reasons were, in my opinion, short, clear and correct. The second conclusion of Hodgson J attacked in the appeal seems to me to raise the only point of any substance in the appeal. It is, in my opinion, clear that the advice received by the Receiver from counsel on 16 July 1982, and upon which he thereafter acted, although largely sound, was wrong to the extent that the Receiver was entitled to remain as Receiver as protection for recovery of fees due for his determination work. I do not think there can be any doubt about the proposition that a court appointed Receiver is not entitled to insist on or bring about the continuation of the receivership in order to strengthen his position for the recovery of costs to which he is entitled from the company to which the court appointed him Receiver when those costs, although properly payable by the company, are costs for work not done in his office as Receiver. If the continuation of the receivership after 19 July 1982 had in substance been caused by the Receiver for such a purpose, then I think the court should refuse to allow him costs even for strictly receivership work which had to be done because of the continuation of the receivership. Ordinary rules of equity would also bring about the same result even in the position where the receivership continued because of a mixture of purposes by the Receiver, that is, where he simultaneously felt obliged to continue as Receiver to carry out receivership duties but also intended to use the continuation of the receivership for purposes of securing his non receivership costs. In such circumstances equity does not ordinarily try to dissect the proper purpose from the improper one. URJ NIDAMON PTY LTD v WAYLAND (Priestley JA) 11 I do not think however that either of the two situations that would lead to the Receiver being deprived of his receivership fees and expenses from 19 July onwards occurred in the present case. In my opinion it was not the Receiver who should be regarded as the substantial cause of the continuation of the receivership after 19 July. The company could at that date have obtained his discharge as Receiver upon acquiescing in proper provision being made for his receivership costs. The letter from the solicitors for the company dated 13 July was asking that on 19 July the Receiver present the consent order in his possession for the dismissal of the petition. There was no reference in this letter to any provision for the Receiver's proper costs. Had the Receiver done what he was asked by the letter of 13 July the petition would have been dismissed, his discharge would have occurred automatically along with the dismissal of the petition and he would be left to pursue whatever remedies were available to him, which in such circumstances could present difficult questions. His counsel's advice of 16 July was right to the extent that he was not obliged to acquiesce in the dismissal of the petition on 19 July on the basis required by the solicitors for the company. He was thus left in the position where, until some appropriate step was taken to have him discharged as Receiver, he remained Receiver, obliged to carry out receivership duties. When, on 16 July the Receiver's solicitor had rung the company's solicitor and told him the Receiver would comply with the request in the letter of 13 July the Receiver was indicating agreement to a position more unfavourable to him than he was obliged to agree to. He was entitled to resile from that position before 19 July. That left the position as I have said, one where he remained Receiver. Part of his motive in resiling from his position of 16 July which was unnecessarily favourable to the company, was to protect not only his proper receivership costs but also his determination costs. Nevertheless, the actual decision communicated to the solicitors for the company on the morning of 19 July, resiling from his acquiescence of 16 July in what the company was seeking, was a correct one. When the matter came before Needham J on 19 July the Receiver's counsel accurately told the judge that the Receiver had finished his task as Receiver but could not get a clear statement as to arrangements for payment of his fees. What should have happened at that stage was that the company and H, B and C should have agreed to an order being made by the court providing for the payment of the Receiver's proper fees. In his reasons of 3 December 1986, while dealing with a costs argument, Hodgson J said "while it may be that Mr Wayland was incorrect in insisting that security be given for the whole of the fees" before retiring as receiver, it could not reasonably be said that it was that which brought about the litigation. The judge's view was that in substance, it was the unreasonable conduct by H, B and C and the company which led to the events following 19 July. I think this court should accept the view thus expressed by the trial judge on the causation question. It was not the Receiver's motive of wishing to protect his non receivership costs that led to him remaining as Receiver after 19 July. He already was Receiver, could not cease to be so except by discharge, had not been presented with any proper basis for acquiescing in procedures for his discharge, and could not, unilaterally on 19 July secure his discharge on proper terms (even though he was then asserting an excessive entitlement). Once this point is reached, then it follows in my opinion that what I have referred to as the second of Hodgson J's conclusions attacked by the appellants in this appeal was correct. On this basis the amount allowed by Hodgson J for 12 UNREPORTED JUDGMENTS receivership fees and costs for the whole period from the commencement of the receivership to 25 October 1982 should not be disturbed. I would therefore dismiss the appeal in the receivership proceedings. The determination proceedings. In the determination proceedings the Receiver claimed $14,249. $8,500 of this was claimed to have accrued by 1 June 1982 and the balance by 7 July 1982. In my opinion it appears clearly from his Honour's reasons (2 October 1986, pp 26 to 28) that he found in the Receiver's favour in regard to the whole sum claimed. Hodgson J entered judgment against H, B and C that they pay the plaintiffs (the Receiver and his partners) $23,397. The difference between this amount and $14,249 was interest. In the proceedings in this court no point was made about the $8,500 accrued by 1 June 1982. The contest was only about the $5,749 claimed as accrued after that date and by 7 July; 1982. Hodgson J's view was that the fees and expenses incurred in that period were reasonably undertaken as an incident to performance of the Receiver's determination work. In the course of argument in the appeal about the disputed amount, it became clear that no particular question of law was involved; the appellants were asserting that the determination work had been completed at 10 June and the Receiver could therefore charge nothing for anything in respect of determination work after that date. As to this argument, I do not think there is anything more to say than what was said by Hodgson J: "In my view these fees and expenses are not strictly fees and expenses for actually calculating the purchase price and making the conclusive determinations. however, in my view, they are fees and expenses for activities reasonably undertaken incidentally to performing those functions: and in my view, the deed of indemnity is wide enough to entitle the receiver to be paid such fees and expenses, the liability for such payment being the same as that for the actual calculation and determination. In my view, the receiver acted reasonably in performing the work and seeking the advice which he did in that period, because it was in the interests of all parties that the disputes which had arisen by resolved without further expensive litigation. Although the determinations had been made conclusive, this does not absolutely prevent their being the subject of further litigation, and in any event, the calculation of the purchase price itself was not made conclusive. Furthermore, all the activities of the receiver were in direct response to actions taken by Bernard and Christopher, and I do not think that they at least can object to the fees and expenses for activities undertaken at their instigation. I do not think Howard can complain either: he raised no objection to the receiver's attempts to resolve the matter, and some of the problems arose due to Howard's refusal to contribute to fees in respect of which I have found that he is liable to contribute." I agree with these statements of the trial judge. They answer the only question that was raised in this court in the determination proceedings. In my opinion this appeal should be dismissed also. Meagher JA I agree with Priestley JA. Powell JA I agree with Priestley JA. Both appeals dismissed with costs. Counsel for the Appellant: S D Rares SC and T D Castle URJ NIDAMON PTY LTD v WAYLAND (Powell JA) Solicitors for the Appellant: Victoria Sydun Counsel for the Respondent: R W White Solicitors for the Respondent: Blake Dawson Waldron