New South Wales Supreme Court CITATION : Application of Crouch [2005] NSWSC 1122 HEARING DATE(S) : 31 October 2005 JUDGMENT DATE : 31 October 2005 JURISDICTION : Equity JUDGMENT OF : Campbell J DECISION : Remuneration approved. CATCHWORDS : RECEIVERS - remuneration - approval of remuneration of Court appointed receiver Nicholas James David Crouch - First Plaintiff PARTIES : Heritage Fines Wines Pty Ltd (In Liq) - Second Plaintiff FILE NUMBER(S) : SC 2928/05 M R Aldridge SC - Plaintiffs COUNSEL : J T Johnson (Investors) SOLICITORS : Parry Carroll - Plaintiffs LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST CAMPBELL J MONDAY 31 OCTOBER 2005 2928/05 APPLICATION OF NICHOLAS JAMES DAVID CROUCH & ANOR JUDGMENT – Ex Tempore 1 HIS HONOUR: This is an application for approval of fees of Mr Crouch. Mr Crouch was appointed as liquidator of Heritage Fine Wines Pty Limited (in liquidation) on 4 May 2005. That company was one which was in a business of receiving money from people on the basis that the money would be used to purchase wines of superior quality, which would then be stored for the particular purchasers. The liquidation arose in the circumstances where it appeared that not all the wine which had been purchased by investors was physically in the possession of the company, and where the accounting records relating to such wine was in the possession of the company were, to put it as neutrally as one can, difficult to follow. Mr Crouch was also appointed as receiver and manager of the wine, as it appeared that there was a realistic prospect that some, or perhaps all, of the wine might not be the property of the company but might be held by it as bailee for individual investors. 2 At the time of his appointment he disclosed to the Court a basis of remuneration which he proposed to charge. It was as follows: "CROUCH INSOLVENCY GUIDE TO HOURLY RATES OF REMUNERATION PERIOD 01 JULY 2005 TO 24 JULY 2005 CLASSIFICATION RATE EXPERIENCE Partner/ 320.00 + 32.00 GST Registered Liquidator/Trustee. Partner bringing his/her specialist skills to Administrations and/or Insolvency tasks. Senior Manager Manager 260.00 + 26.00 GST 6-10 years experience. May be qualified to take appointments in own name. Well developed technical and commercial skills. Supervisor 170.00 + 17.00 GST 4-6 years experience. Typically Qualified. Will have conduct of minor administrations and control junior staff. Senior 120.00 + 12.00 GST 2-4 years experience. Typically Graduate/Qualified. Assist in planning and control of small to medium sized jobs as well as performing some [of] the more difficult work on larger jobs. Intermediate 95.00 + 9.50 GST Up to 2 years experience. Graduate with little or no professional experience. Secretary 125.00 + 12.50 GST Appropriate skills including machine usage. Junior 55.00 + 5.50 GST Appropriate skills. Notes: 1. Time spent on matters is recorded and charged in six (6) minute intervals. 2. The firm rates are effective as at 7 October 2004. 3. Photocopying: - at cost plus GST 4. Facsimiles: - $1.50 per page (local), $2.00 per page (STD), $3.00 per page (international) – All add GST 5. Postage charged at $0.80 (Standard), $1.50 (Large) – All add GST 6. All clients incur a stationery and administration fee between $100 - $500 plus GST, depending on size of matter." 3 Today he comes to Court seeking approval of remuneration, covering in the main, a period from 25 July 2005 to 7 October 2005. In the course of that time, he has supervised the relocation of the wine from some of the sites at which it was stored - it being stored at five different sites originally – has conducted a stocktake of the wine, investigated which wine might be held for individual investors, convened, organised and attended investors meetings in Sydney and Melbourne, raised and invested collected levies to cover the cost of receivership, and also dealt with legal proceedings brought by both wineries and investors, which claim title. 4 The evidence shows a detailed breakdown of the actual work done by each of his employees who have performed it, and the time of each employee for each task performed. It also identifies the out of pocket expenses which he has paid. 5 While Mr Johnson, for one of the creditors or investors, draws my attention to particular items in the charge sheets, which, he submits, might excite my interest as to the reasonableness, it seems to me that in a receivership like this, where there has been a delegation of work to people of lesser skills and seniority than the receiver himself, it is inevitable that there will be some communication between the various people who are involved in carrying out the tasks, which ought properly be seen as part of the carrying out of the task itself, and is part of the price which is paid for obtaining the lower hourly charge rate of such people. I am satisfied that the charges are appropriate ones. 6 I make orders in accordance with paragraphs 3, 4, 5 and 6 of the interlocutory process filed in court today. I note the undertaking contained in paragraph 9 of that interlocutory process. ********** 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.