Taylor v Swaine [2004] NSWSC 213

New South Wales Supreme Court

CITATION : Taylor v Swaine [2004] NSWSC 213 HEARING DATE(S) : 22 March 2004 JUDGMENT DATE : 22 March 2004 JURISDICTION: Equity JUDGMENT OF : Austin J DECISION : Application dismissed

CATCHWORDS : PRACTICE AND PROCEDURE - court-appointed receiver - receiver's authority to delegate Stephen Kyrill Taylor (P/R1) PARTIES : Stephen Brian Swaine (D1/A) MST Services Pty Ltd (D2) Vincent Christopher Barilla (R2) FILE NUMBER(S) : SC 2453/01 COUNSEL : R Newton (D1/A) M Ashhurst (R2) SOLICITORS : Andrea Wilson & Associates (D1/A) Deacons (R2)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

AUSTIN J

MONDAY 22 MARCH 2004

2453/01 STEPHEN CYRIL TAYLOR V STEPHEN BRIAN SWAINE & ORS JUDGMENT (Ex tempore; revised 23 March 2004) 1 HIS HONOUR: This is an application filed on 15 December 2003 for an order setting aside an order by Senior Deputy Registrar Wearne entered on 17 October 2003 approving the remuneration of a receiver. The receiver, Mr Vincent Barilla, was receiver of the assets of a partnership between the plaintiff and the first defendant. The application is brought under Pt 40 r 9 or under Pt 61 r 3. 2 Essentially, two grounds have been put forward to support the application today. The first is that the remuneration which was the subject of the order should not have been allowed because the evidence shows that the receiver delegated work without the proper authority of the Court. The second is that the first defendant's solicitor failed to attend at the hearing before Deputy Registrar Werne due to inadvertence after a personal tragedy. 3 It seems to me that the second ground, though it reveals unfortunate circumstances, does not provide an independent ground for the Court to review the decision of the Deputy Registrar. The question is, rather, what objections would have been raised by the first defendant's solicitor had she been able to attend on the appointed date. When I put that question to counsel for the first defendant, he said that the essential point was the delegation point to which I have referred. 4 The evidence before me indicates that Mr Barilla resigned as a partner of the firm Prentice Parbery Barilla effective on 31 December 2001, but after that time employees of that firm assisted him in performing his duty as receiver. The claimed remuneration is in respect of a period which extends to 31 July 2002 and, therefore, part of the time in which the work was done was a time when Mr Barilla was no longer a partner of the firm. 5 He claims remuneration on hourly rates indicating that in the period from 13 August 2001 to 31 July 2002 the claim at the partner level is for 14.25 hours. Somewhat imprecisely, his affidavit does not say that the person referred to as "partner" for the purpose of discharging that work was Mr Barilla himself, but it seems to me, when one has regard to his affidavit and his report, that the proper inference is that it was Mr Barilla rather than any other partner of Prentice Parbery Barilla who was in the supervisory position of partner at all relevant times. 6 The report indicates that Mr Graham Stephenson, a manager of the firm, engaged in extensive work in respect of the receivership. There is a claim for remuneration at the higher of two manager levels for 114 hours. The heart of the first defendant's objection relates, as I understand it, to the delegation of work by Mr Barilla to Mr Stephenson. 7 Certainly, the bulk of the work in the receivership appears to have been attended to by Mr Stephenson rather than Mr Barilla, but that does not itself indicate that there was a lack of power to delegate or any impropriety in the delegation. The power of delegation, if there is one, is to be found on the proper construction of the orders of the Court by which Mr Barilla was appointed receiver. They were made on 13 August 2001 and entered on 16 August 2001. 8 By paragraph 3, Mr Barilla was appointed by name to act as receiver and manager without security. Paragraph 8 empowers the receiver to draw remuneration for his services in an amount equal to the cost and time actually spent in the performance of such services which the receiver "or any partner or employee of Prentice Parbery Barilla", at the rate specified in the scale of fees of the Insolvency Practitioners Association of Australia. 9 It is common ground that in August 2001 there was no longer any scale of fees promulgated by that Association. However, there is evidence before me that there was a scale of fees in place at an earlier time and that the rates promulgated by the Association, in its Guide to Fees of 1 July 1999, were the hourly rates used by Mr Barilla for the purposes of his claim, except that in relation to the claim at the partner level the hourly rate used by Mr Barilla was in fact less than the Association's guideline. 10 In my opinion, the proper construction of order 8 is that it authorises a degree of delegation by the person appointed as receiver. The orders as a whole require Mr Barilla to act at all times as the receiver and therefore he cannot abdicate his function entirely for any period of time, but the evidence does not indicate he has purported to do so. Instead, he has acted in the role of partner and (later) consultant of Prentice Parbery Barilla. Mr Stephenson has done most of the substantive work. 11 In my opinion that falls within the wording of paragraph 8, which expressly authorises the receiver to make a claim for time actually spent in the performance of the services of receiver by any employee of Prentice Parbery Barilla, such as Mr Stephenson. An authority to seek remuneration on that basis must imply a power to delegate to an employee in respect of the work for which remuneration is sought. 12 My conclusion, therefore, is that the application should be dismissed. **********