Reported Decision: 79 ACSR 580 New South Wales Court of Appeal CITATION: Paul's Retail Pty Ltd v Morgan [2010] NSWCA 217 HEARING DATE(S): 30 July 2010 JUDGMENT DATE: 1 September 2010 JUDGMENT OF: Campbell JA at 1; Macfarlan JA at 2; Sackville AJA at 3 1. Leave to appeal granted. DECISION: 2. Appeal dismissed. 3. Applicant to pay the respondent's costs of the application for leave to appeal and of the appeal. CATCHWORDS: CORPORATIONS – deed of company arrangement – remuneration of administrator – whether administrator estopped from seeking a review of his remuneration under s 449E(2) of the Corporations Act 2001 (Cth) – effect of an agreement to "cap" administrator's fees – whether the administrator demonstrated a need to inquire into the originally determined quantum of remuneration. Civil Procedure Act 2005, s 7 Supreme Court Act 1970, s 101 LEGISLATION CITED: Corporations Act 2001 (Cth), ss 435C, 436A, 436E, 439A, 443D, 444A, 449E Corporations Amendment (Insolvency) Act 2007 (Cth) Supreme Court (Corporations) Rules 1999, r 9.2A CATEGORY: Principal judgment Dwyer v Morgan [2009] NSWSC 1343 Foran v Wight [1989] HCA 51; 168 CLR 385 Green v AMP Life Ltd [2005] NSWCA 354 CASES CITED: Legione v Hateley [1983] HCA 11; 152 CLR 406 Re Gidley [2006] FCA 102; 150 FCR 345 Waltons Stores (Interstate) Pty Ltd v Maher [1988] HCA 7; 164 CLR 387 Wellnora Pty Ltd v Fiorentino [2008] NSWSC 483; 66 ACSR 229 TEXTS CITED: Meagher Gummow and Lehane's Equity Doctrines and Remedies (4th ed, 2002) Paul's Retail Pty Ltd (First Applicant) PARTIES: Paul Andrew Dwyer (Second Applicant) John Maxwell Morgan (Respondent) FILE NUMBER(S): CA 2010/040930 COUNSEL: M Ashhurst SC (First and Second Applicant) S Golledge (Respondent) SOLICITORS: W Lawyers (First and Second Applicant) Blake Dawson Lawyers (Respondent) LOWER COURT JURISDICTION: Supreme Court LOWER COURT FILE NUMBER(S): 6211/08 LOWER COURT JUDICIAL OFFICER: Barrett J LOWER COURT DATE OF DECISION: 13 November 2009 LOWER COURT MEDIUM NEUTRAL CITATION: [2009] NSWSC 1222 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 2010/040930 CAMPBELL JA MACFARLAN JA SACKVILLE AJA 1 September 2010 PAUL'S RETAIL PTY LTD & ANOR v MORGAN Judgment 1 CAMPBELL JA: I agree with Sackville AJA. 2 MACFARLAN JA: I agree with Sackville AJA. 3 SACKVILLE AJA: This is an application for leave to appeal, pursuant to s 101(2)(r) of the Supreme Court Act 1970, against interlocutory orders made by a Judge of the Court (Barrett J). The respondent ("Administrator") is the administrator of the first applicant ("Pauls"), a company subject to a deed of company arrangement entered into pursuant to Part 5.3A of the Corporations Act 2001 (Cth) ("Corporations Act"). The second applicant ("Mr Dwyer") is the sole shareholder and sole director of Pauls. 4 The primary Judge identified two issues raised by the parties in the proceedings before him. The first was whether the Administrator was estopped from seeking a review under s 449E(2) of the Corporations Act of his remuneration as approved and capped by resolutions passed by a creditors' meeting held on 1 April 2008. The second was whether, if the Administrator was not estopped, an order should be made for the Court to undertake a review of the Administrator's remuneration approved at the creditors' meeting. 5 His Honour answered the first question in the negative and the second in the affirmative, except for one category of remuneration relating to work performed prior to 1 April 2008. He ordered that the remuneration of the Administrator, in relation to work performed after 1 April 2008 be reviewed pursuant to s 449E(2) of the Corporations Act. His Honour further ordered that the matter of conducting and determining the reviews be referred to a Registrar. The reviews have not yet taken place. THE LEGISLATION 6 The relevant legislation is s 449E of the Corporations Act, as amended by the Corporations Amendment (Insolvency) Act 2007 (Cth) and operative from 31 December 2007. Section 449E provides as follows: "(1) The administrator of a company under administration is entitled to receive such remuneration as is determined: (a) by agreement between the administrator and the committee of creditors (if any); or (b) by resolution of the company's creditors; or (c) if there is no such agreement or resolution – by the Court. (1A) The administrator of a company under a deed of company arrangement is entitled to receive such remuneration as is determined: (a) by agreement between the administrator and the committee of inspection (if any); or (b) by resolution of the company's creditors; or (c) if there is no such agreement or resolution – by the Court. (1B) To be effective, a resolution under paragraph (1)(b) or (1A)(b) must deal exclusively with remuneration of the administrator. (1C) The Court may determine remuneration under paragraph (1)(c) even if: (a) there has been no meeting of the committee of creditors; or (b) there has been no meeting of the company's creditors. (1D) The Court may determine remuneration under paragraph (1A)(c) even if: (a) there has been no meeting of the committee of inspection; or (b) there has been no meeting of the company's creditors. (2) Where remuneration is determined under paragraph (1)(a) or (b) or paragraph (1A)(a) or (b), the Court may, on the application of ASIC, of the administrator or of an officer, member or creditor of the company: (a) review the remuneration; and (b) confirm, increase or reduce it. (3) … (4) In exercising its powers under subsection (1), (1A) or (2), the Court must have regard to whether the remuneration is reasonable, taking into account any or all of the following matters: (a) the extent to which the work performed by the administrator was reasonably necessary; (b) the extent to which the work likely to be performed by the administrator is likely to be reasonably necessary; (c) the period during which the work was, or is likely to be, performed by the administrator; (d) the quality of the work performed, or likely to be performed, by the administrator; (e) the complexity (or otherwise) of the work performed, or likely to be performed, by the administrator; (f) the extent (if any) to which the administrator was, or is likely to be, required to deal with extraordinary issues; (g) the extent (if any) to which the administrator was, or is likely to be, required to accept a higher level of risk or responsibility than is usually the case; (h) the value and nature of any property dealt with, or likely to be dealt with, by the administrator; (i) whether the administrator was, or is likely to be, required to deal with: (i) one or more receivers; or (ii) one or more receivers and managers; (j) the number, attributes and behaviour, or the likely number, attributes and behaviour, of the company's creditors; (k) if the remuneration is ascertained, in whole or in part, on a time basis: (i) the time properly taken, or likely to be properly taken, by the administrator in performing the work; and (ii) whether the total remuneration payable to the administrator is capped; (l) any other relevant matters …" COURSE OF EVENTS 7 There was a factual dispute as to the existence and content of conversations involving the Administrator immediately before the meeting of Pauls' creditors held on 1 April 2008. Otherwise, the facts were not in contest. 8 Pauls operates as a discount sports retailer under the name Paul's Warehouse. In early 2008, Pauls operated 19 stores in three States and the Australian Capital Territory. 9 Pauls appointed the Administrator to be the administrator of the company on 24 January 2008. The appointment was made pursuant to s 436A of the Corporations Act, which allows a company to appoint an administrator if the board has resolved that, in the opinion of the directors voting for the resolution, the company is or is likely to become insolvent. 10 On 28 February 2008, the second meeting of Pauls' creditors was held pursuant to s 439A of the Corporations Act. On 1 April 2008, the second meeting of creditors was reconvened. The meeting considered a proposal for a deed of company arrangement ("DOCA"). 11 The creditors' meeting of 1 April 2008 passed the following resolutions relating to the remuneration of the Administrator: " First resolution: That the remuneration of the Administrator, his partners and staff be approved for the period 24 January 2008 to 1 April 2008 to [sic] be calculated on a time basis and charged at the hourly rates of PKF Chartered Accountants & Business Advisors and that the Administrator be authorised to make periodical payments on account of such accruing remuneration at his discretion, fixed in the amount of $540,000 exclusive of GST and disbursements. Second resolution: That the remuneration of the Administrator, his partners and staff be approved for the period 2 April 2008 to the execution of the Deed of Company Arrangement be calculated on a time basis and charged at the hourly rates of PKF Chartered Accountants & Business Advisors and that the Administrator be authorised to make periodical payments on account of such accruing remuneration at their discretion, up to a cap of $90,000 exclusive of GST and disbursements. Third resolution: That the remuneration of the Administrator of the Deed (if appointed), his partners and staff be approved for the period from the execution of the Deed of Company Arrangement to the effectuation of the Deed of Company Arrangement be calculated on a time basis and charged at the hourly rates of PKF Chartered Accountants & Business Advisors and that the Deed Administrator be authorised to make periodical payments on account of such accruing remuneration at their discretion, up to a cap of $120,000 exclusive of GST and disbursements." There was no dispute that s 449E(1)(a) of the Corporations Act permits the remuneration of a deed administrator to be determined prospectively at a meeting of creditors that resolves to adopt a DOCA: Re Gidley [2006] FCA 102; 150 FCR 345 (Gyles J). 12 The creditors' meeting of 1 April 2008 also resolved, pursuant to s 439C(a) of the Corporations Act, that Pauls execute a DOCA. The DOCA was duly executed on 21 April 2008. The execution of the DOCA terminated the administration of the company: ss 435C(1)(b), (2)(a). The Administrator became the administrator of the DOCA: s 444A(2). 13 The creditors' meeting of 1 April 2008 further resolved, pursuant to s 436E(1) of the Corporations Act, to appoint a committee of creditors. The committee of creditors continued as a committee of inspection for the purposes of the DOCA. 14 The DOCA provided for the creation of a Deed Fund, which was to include moneys introduced from an outside source. The Deed Fund was to be distributed in accordance with a specific order of priority. The first priority was accorded to each "Administration Liability" and "the Administrator's Remuneration". The latter term was defined to mean: "the remuneration and other fees to which the Administrator is lawfully entitled (under section 449E of the Corporations Act, under the Deed or otherwise) by reason of the performance of his duties as voluntary administrator and deed administrator under this Deed during the period from the Appointment Date to the Termination Date." 15 The Deed Fund, after meeting higher priorities, was to be distributed by paying a dividend of 60 cents in the dollar to seven named "Pool A Creditors", with the balance being paid to Pauls. Creditors other than the Pool A Creditors were to receive nothing. 16 At a meeting of the committee of inspection held on 4 December 2008, the Administrator moved the following motions: " First motion That the remuneration of the Deed Administrator, his partners and staff be approved for the periods 22 April 2008 to 30 June 2008 to be calculated on a time basis and charged at the hourly rates of PKF Chartered Accountants & Business Advisors and 1 July 2008 to 22 September 2008 to [sic] be calculated on a time basis and charged at the hourly rates of Rodgers Reidy Chartered Accountants and that the Deed Administrator be authorised to make periodical payments on account of such accruing remuneration at his discretion, fixed in the amount of $215,000 exclusive of GST and disbursements. Second motion That the remuneration of the Deed Administrator, his partners and staff be approved for the period 23 September 2008 to the conclusion of the Deed of Company Arrangement be calculated on a time basis and charged at the hourly rates of Rodgers Reidy Chartered Accountants and that the Deed Administrator be authorised to make periodical payments on account of such accruing remuneration at their discretion, up to a cap of $40,000 exclusive of GST and disbursements." There was no seconder for the motions and they were defeated. 17 A meeting of creditors held on 26 March 2009 rejected a further series of resolutions proposed by the Administrator. Those resolutions were as follows: " First proposed resolution That the additional remuneration of the Administrator, his partners and staff be approved for the period of 24 January 2008 to 31 March 2008 be calculated on a time basis and charged at the hourly rates of PKF Chartered Accountants and that the Administrator be authorised to make periodical payments on account of such accruing remuneration at his discretion, fixed in the amount of $170,231 exclusive of GST and disbursements. Second proposed resolution: That the additional remuneration of the Administrator, his partners and staff be approved for the period 1 April 2008 to 21 April 2008 be calculated on a time basis and charged at the hourly rates of PKF Chartered Accountants and that the Administrator be authorised to make periodical payments on account of such accruing remuneration at his discretion, fixed in the amount of $60,590 exclusive of GST and disbursements. Third proposed resolution: That the additional remuneration of the Deed Administrator, his partners and staff be approved for the period of the 22 April 2008 to 30 June 2008 be calculated on a time basis and charged at the hourly rates of PKF Chartered Accountants and that the Deed Administrator be authorised to make periodical payments on account of such accruing remuneration at his discretion, fixed in the amount of $76,882 exclusive of GST and disbursements. Fourth proposed resolution That the additional remuneration of the Deed Administrator, his partners and staff be approved for the period of the 1 July 2008 to 31 January 2009 be calculated on a time basis and charged at the hourly rates of Rodgers Reidy Chartered Accountants and that the Deed Administrator be authorised to make periodical payments on account of such accruing remuneration at his discretion, fixed in the amount of $176,492 exclusive of GST and disbursements. Fifth proposed resolution That the additional remuneration of the Deed Administrator, his partners and staff be approved for the period of the 1 February 2009 to the effectuation of the Deed of Company Arrangement be calculated on a time basis and charged at the hourly rates of Rodgers Reidy Chartered Accountants and that the Deed Administrator be authorised to make periodical payments on account of such accruing remuneration at his discretion, up to an interim cap of $50,000 exclusive of GST and disbursements." 18 It appears that the Administrator has continued in his role and that the Pool A Creditors have received the maximum dividend payable to them. The balance of the Deed Fund will accordingly be distributed to Pauls subject to payment of any further "Administration Liabilities" and of the "Administrator's Remuneration". THE PROCEEDINGS 19 The proceedings were instituted by the present applicants. The principal relief they sought was an order that the maximum remuneration of the Administrator, as administrator and deed administrator, "be confirmed to … that which was determined by resolution of company creditors and the [Administrator] on 1 April 2008 ('The Agreed Fee')". The applicants also sought an order that the fees paid by Pauls to the Administrator be reviewed by a Registrar of the Court, having regard to the criteria specified in s 449E(4) of the Corporations Act, any such order being limited to a sum no greater than the Agreed Fee. 20 The Administrator filed a cross-claim seeking the following orders: "1. The [Administrator's] remuneration for acting as administrator of the first plaintiff for the period from 24 January 2008 to 31 March 2008 (inclusive) be fixed in the sum of $710,231.00 (exclusive of GST) 2. The [Administrator's] remuneration for acting as administrator of the first plaintiff for the period from 1 April 2008 to 21 April 2008 (inclusive) be fixed in the sum of $150,590.00 (exclusive of GST). 3. The [Administrator's] remuneration for acting as deed administrator of the first plaintiff for the period from 22 April 2008 to 30 June 2008 (inclusive) be fixed in the sum of $196,882.00 (exclusive of GST). 4, The [Administrator's] remuneration for acting as deed administrator of the first plaintiff for the period from 1 July 2008 to 31 January 2009 (inclusive) be fixed in the sum of $176,492.00 (exclusive of GST). 5. The [Administrator's] remuneration for acting as deed administrator of the first plaintiff for the period from 2 February 2009 to effectuation of the [deed of company arrangement] be fixed in the sum of $80,000.00 (exclusive of GST)." 21 The primary Judge summarised the effect of the Administrator's claims as follows: "(a) for the period of the administration up to 31 March 2008 (or 1 April), $710,231 is sought as against the fixed sum of $540,000 determined by creditors on 1 April 2008 (the increase of $170,231 being the same as that sought but not granted at the creditors meeting of 26 March 2009); (b) for the balance of the voluntary administration, $150,590 is sought as against a time-based fee capped at $90,000 determined by creditors prospectively on 1 April 2008 (the excess of $60,590 over the cap being the same as the additional remuneration sought but not granted at the creditors meeting of 26 March 2009); (c) for the whole of the period as deed administrator, a total of $453,374 is sought as against a time-based fee capped at $120,000 determined prospectively by creditors on 1 April 2009 (the excess of $333,374 over the cap being greater by $30,000 than the aggregate of the amounts sought but not granted at the creditors meeting on 26 March 2009)." 22 His Honour noted that the Administrator's application, although framed as a claim to have his remuneration "fixed" by the Court, was "really" a claim under s 449E(2) of the Corporations Act to have the Court review the remuneration already determined by creditors. His Honour also noted (at [89]) that the Administrator's application for review had been made in accordance with the requirements of the Supreme Court (Corporations) Rules 1999, r 9.2A. The parties did not dispute his Honour's characterisation of the Administrator's application. THE PRIMARY JUDGMENT 23 The primary Judge noted that a voluntary administrator has a right conferred by s 443D of the Corporations Act to be indemnified out of the company's property for his or her remuneration as fixed by s 449E. However, his Honour, following his own judgment in Wellnora Pty Ltd v Fiorentino [2008] NSWSC 483; 66 ACSR 229, at 235-236 [23]-[26], said that an administrator of a DOCA did not have a statutory right to be indemnified but did have an equitable right to an indemnity enforceable against the company's assets. 24 The primary Judge recognised (at [17]) that a company subject to a DOCA is not liable to pay the deed administrator's remuneration, as quantified under s 449E, unless the liability is created by the DOCA itself. However, the DOCA executed by Pauls had made it clear that the company was subject to such a liability. 25 The primary Judge dealt first with the applicants' claim that the Administrator was estopped from seeking review of his remuneration pursuant to s 449E(2) of the Corporations Act. His Honour rejected the estoppel argument. I shall return to that issue later. 26 The primary Judge noted (at [74]) that there were two competing applications under s 449E(2). The application by Pauls was a nullity as it had no standing to apply. However, Mr Dwyer, as an officer and the sole member of Pauls, did have standing. 27 His Honour observed (at [76]) that the question posed by s 449E(4) was whether the remuneration of the Administrator already fixed was reasonable, or was unreasonable because it was either too high or too low. His Honour continued as follows (at [76]-[77]): "Thus, although the statute says nothing about the aim of the initial remuneration fixing process, the objective has been accepted by the courts as that of producing a reasonable remuneration. It must follow, in my view, that the aim of the review process is to determine whether the initial fixing process has miscarried, in the sense that the initially fixed remuneration can be seen to be not reasonable remuneration and, if it has, to substitute a reasonable remuneration for that originally fixed. … The assessment whether the initially fixed sum is fair and reasonable will be made in the light of all relevant circumstances brought to the court's attention upon the review. These may include circumstances that were not known or foreseen at the time the remuneration was fixed. They may include the circumstance that some work actually done was outside the proper performance of the administrator's functions or was unnecessary …" 28 The primary Judge held (at [79]) that when an application for review comes before the Court, it: "must first decide whether, in the light of the statutory provisions, it is just that a review be conducted. Because the s 449E(2) power is obviously discretionary, there is a threshold question whether there is some demonstrated need to inquire into the appropriateness of the originally determined quantum. Only if some need is shown will the court actually proceed to a review." His Honour considered that the question whether a need for a review had been shown had to be asked separately in relation to each element of the remuneration already fixed. 29 In his Honour's view, there was no need for a review of the Administrator's remuneration as voluntary administrator for the period 24 January 2008 to 1 April 2008 as determined by the first resolution of creditors passed on 1 April 2008. All relevant work had been completed by 1 April 2008 and the Administrator had made and communicated a decision to seek less than he might have. These circumstances left no room for (at [85]): "a possibility that the remuneration determined by resolution of creditors for past services was not a fair and reasonable remuneration. There was informed and free consent on both sides to the particular quantum." The Administrator has not challenged this conclusion. 30 His Honour considered (at [86]) that the same could not be said of the elements of the Administrator's remuneration determined prospectively on 1 April 2008. His Honour reasoned as follows: "In relation to each of those elements both [the Administrator] and the creditors asked to determine remuneration were, in a real sense, dealing with the unknown. The 'cap' was, in each case, applied in the sense to which reference has already been made, that is, to mark a limit beyond which there could be no remuneration without either a further determination of creditors or an order of the court. The existence of the 'cap' did not imply that remuneration could never exceed the stated amount. It is no doubt relevant that both the committee of inspection and a meeting of creditors were later asked to determine additional remuneration and that each did not do so. The proposal was, in each case, raised at the relevant meeting but not approved. But the relevance of that matter is not such as to indicate that the court should not embark upon a review – merely that there is a need for it to be particularly astute and vigilant. If the committee and the meeting of creditors were unwilling to vote additional remuneration, there is a need to be sure that anything more is indeed reasonable. This leads to another point. The court, upon a s 449E(2) review, is not confined to adopting the position for which the administrator contends or that for which an objector contends. As the section makes plain, the court may 'confirm, increase or reduce' the remuneration determined by creditors. Once the matter is before it, the court must simply decide, in accordance with s 449E(4), the appropriate quantum." 31 His Honour pointed out that it had been recognised in the authorities that a Registrar of the Court is best equipped "to perform the court's function of determining remuneration". This assessment applied to a review under s 449E(2). Accordingly, he referred the matter of conducting and determining the review to a Registrar. 32 His Honour ordered that: the remuneration determined by the Second and Third Resolutions passed at the creditors' meeting of 1 April 2008 be reviewed pursuant to s 449E(2) of the Corporations Act ; the conduct and determination of each of the reviews be referred to a Registrar pursuant to Item 7 of the delegation under s 13 of the Civil Procedure Act 2005, made on 9 April 2009; and the evidence admitted upon the hearing of the proceedings before his Honour be evidence upon the reviews, subject to any determination as to relevance. His Honour also ordered that the applicants pay the Administrator's costs of the proceedings to date. 33 After delivery of the primary judgment, the applicants applied to the primary Judge for an order recalling the judgment. His Honour rejected the application: Dwyer v Morgan [2009] NSWSC 1343. There is no need to refer to his Honour's reasons for doing so. REASONING Estoppel 34 The applicants contended before the primary Judge that the Administrator had forfeited access to the remuneration review process provided by s 449E(2) of the Corporations Act. They accepted that the Court had jurisdiction to review the remuneration determined by a resolution of creditors and to confirm, increase or reduce it and that the jurisdiction could be exercised even if the resolution imposed a "cap". Their argument was that the Administrator was estopped, as against Pauls and Mr Dwyer, from invoking the jurisdiction. 35 This argument was put on two bases, contract and estoppel. It is only the estoppel argument that is relevant to the application for leave to appeal. 36 According to the primary Judge (at [32]), the estoppel relied on by the applicants was said to have arisen as the result of words spoken by the Administrator on 1 April 2008, during the period immediately before the start of the creditors' meeting held on that day. Reliance was placed on two conversations. One was between the Administrator and Mr Vouris, an experienced insolvency practitioner who had been retained by Mr Dwyer as an adviser. The second conversation was said to have taken place between the Administrator and Mr Dwyer. 37 The applicants alleged that the Administrator represented in each conversation that he would not seek remuneration in the future beyond the caps approved by the creditors' resolutions. Mr Dwyer relied on the representations in giving his support to the creditors' resolutions and thus acted to his detriment. In these circumstances, so the applicants argued, equity would not permit the Administrator to resile from the representation that he would not apply to the Court for a review of the approved remuneration. 38 The primary Judge found that a one-to-one conversation took place between the Administrator and Mr Vouris to the following effect: "[Administrator]: I will agree to fix my fees in the following manner. 1: Work done to date. I incurred $630,000 billable time. I will fix this at $540,000. 2: 2 April to signing of DOCA, I will cap it at $90,000 plus GST and disbursements. 3: For the DOCA period, I will cap it at $120,000 plus GST and disbursements. Mr Vouris: I will advise Paul to agree to that and get him to move the motions approving your fees. [Administrator]: If Paul [Dwyer] agrees to put my fee proposal to the creditors, I will agree to discount my fees for work done to date and cap my fees for future work. This is a 90 k discount on the work done to date." 39 His Honour rejected Mr Dwyer's evidence that he had a one-to-one conversation with the Administrator in which the latter said he would not charge a cent more than the "fixed and capped" maximum amounts. His Honour found (at [54]) that the alleged conversation simply did not take place. The applicants do not challenge this finding. 40 In relation to the conversation between the Administrator and Mr Vouris, the primary Judge made the following additional findings: "Neither Mr Morgan nor Mr Vouris claimed to be under any impression that a 'cap' imposed by a resolution could operate to displace statutory provisions permitting the approval of further remuneration or review (by increase or decrease) of remuneration already fixed … It is noteworthy that the conversation between Mr Morgan and Mr Vouris, as related by each of them, referred in several places to a 'cap' and that there was no reference to a 'maximum'. In their conversation, they were talking the language of their profession as understood by members of it and reflected in the publication of the professional association already quoted. Mr Vouris accepted that he used the word 'maximum' when he spoke to Mr Dwyer about the position he had reached with Mr Morgan. But that can have no effect on the content and effect of the agreement between Mr Morgan and Mr Vouris. … It is, to my mind, clear that the discussion between Mr Morgan and Mr Vouris before the meeting of creditors on 1 April 2008 was not the occasion of any promise or representation by Mr Morgan that, come what may, he would never seek remuneration as administrator beyond the fixed sum stated in the first resolution eventually approved by creditors on that date plus a sum calculated in accordance with (and subject to the 'cap' in) the second resolution or remuneration as deed administrator beyond the 'cap' in the third resolution . The agreement reached in the conversation as to 'caps' was an agreement about the content of the resolutions that would be put to creditors at the meeting that was about to take place. The agreement was reached on the clearly implied footing that a resolution of creditors fixing remuneration represents part only of the overall machinery created by s 449E for fixing remuneration and that other parts of that overall machinery may operate to cause remuneration already fixed to be supplemented by additional remuneration or to be increased or reduced." (Emphasis added.) 41 His Honour concluded (at [70]) that the representations upon which the applicants' estoppel case was founded was not made out. His Honour did not identify any other submissions made by the applicants in support of their estoppel argument. 42 Mr Ashhurst submitted to this Court that the findings made by the primary Judge, despite his Honour's rejection of Mr Dwyer's evidence, should have led his Honour to conclude that the Administrator was estopped from seeking review of his remuneration pursuant to s 449E(2) of the Corporations Act. Mr Ashhurst invoked the principles of estoppel by representation stated in Waltons Stores (Interstate) Pty Ltd v Maher [1988] HCA 7; 164 CLR 387, esp at 428-429 [33]-[34], per Brennan J. 43 Mr Ashhurst relied on the primary Judge's apparent acceptance (at [40], [42]) of Mr Vouris' evidence that he had conveyed to Mr Dwyer the Administrator's agreement to discount his fees and to cap them for the future. Mr Ashhurst argued that Mr Dwyer believed that the Administrator had agreed to fixed maximum amounts by way of remuneration and that these would not be altered; that Mr Dwyer's subjective beliefs were induced by Mr Vouris' communications with him; and that in making these communications, Mr Vouris was a mere "conduit" for the representation made by the Administrator. 44 There are a number of flaws in this argument. First and foremost his Honour found that the Administrator did not represent to Mr Vouris that he (the Administrator) would not in any circumstances seek remuneration beyond the caps approved by the creditors. The applicants did not put forward any basis for challenging the finding. That being so, the foundation for the applicants' estoppel argument, as his Honour concluded, is wanting. 45 Secondly, to the extent that Mr Vouris communicated with Mr Dwyer after his (Mr Vouris') meeting with the Administrator, he was more than a mere "conduit". The primary Judge found that there was no reference to a "maximum" in the conversation between the Administrator and Mr Vouris, but that Mr Vouris had used the word in his conversation with Mr Dwyer. (There seems to have been a finding earlier (at [42]) that Mr Vouris had not in fact used the word "maximum" in his conversation with Mr Dwyer, but this is likely to reflect a typographical error in the judgment.) If Mr Vouris used his own language to convey the substance of the agreement reached with the Administrator and Mr Dwyer misunderstood Mr Vouris' meaning, that is hardly a basis for establishing an estoppel against the Administrator which would prevent him from denying something he never said. 46 Thirdly, this Court was not taken in argument to any evidence given by Mr Dwyer that he relied to his detriment on anything said by the Administrator in his conversation with Mr Vouris (as distinct from relying on his own alleged conversation with the Administrator or on what Mr Vouris told him following the latter's conversation with the Administrator). It is an essential element of equitable estoppel based on an alleged representation that the representor has induced the representee to act or refrain from acting on the basis of the representation and that the representee does so to his or her detriment: Waltons Stores v Maher, at 426-427, 429; Meagher Gummow and Lehane's Equity Doctrines and Remedies (4th ed, 2002), at [17050]. The Court was not taken to any evidence that could satisfy this element of equitable estoppel. 47 Mr Ashhurst put forward an alternative estoppel argument. He submitted that statements made by the Administrator at the creditors' meeting were sufficient to found an estoppel preventing him from seeking additional remuneration above the agreed caps. The statements relied on were made immediately after the meeting had resolved to approve the Administrator's remuneration for the period from 24 January 2008 to 1 April 2008, capped at $540,000. The Administrator is recorded as saying this: "Now the next resolution that needs to be passed is from this point in time to until we actually sign the deed of company arrangement. It's a – we don't think it's going to take anything because we're staying as voluntary administrator during that time frame until we've actually executed, once it's executed then we become the deed administrators we need to get those fees capped at a certain amount as Paul just said we don't know if we're going to be using the amount that we've estimated but we get it capped to that limit. So if we don't use that full amount we don't get it obviously. It's as simple as that. So what we're looking to get is $90,000 exclusive of GST and disbursements. The resolution that needs to be passed is that the remuneration of the administrator, his partners and staff be approved for a period of from the 2 nd April until the execution of the deed of company arrangement to be calculated on a time basis and charged at the hourly rates of PFK's chartered accountants and business advisors and the administrator be authorised to make periodic payments on account of such accruing remuneration at his discretion up to cap $90,000 exclusive of GST and disbursements," 48 It is far from clear that the applicants put this argument to the primary Judge, who made no reference to it. Mr Ashhurst pointed to a passage in his written submissions at trial, but the passage does not explicitly raise an estoppel argument based solely on what was said at the creditors' meeting. 49 In any event, in my opinion the argument cannot succeed, for two independent reasons. First, the authorities insist on a clear and unambiguous representation as a necessary foundation for estoppel: Foran v Wight [1989] HCA 51; 168 CLR 385, at 410-411 [51], per Mason CJ, citing Legione v Hateley [1983] HCA 11; 152 CLR 406, at 435-437 [10], per Mason CJ and Deane JJ; Green v AMP Life Ltd [2005] NSWCA 354, at [28], per Basten JA (with whom Spigelman CJ and Giles JA agreed). The statements made by the Administrator at the creditors' meeting (at which Mr Vouris was present) cannot be said to be a clear and unambiguous representation that the Administrator would not invoke the statutory jurisdiction to increase his remuneration above the agreed cap. 50 The significance of reference to the cap was that the Administrator was authorised to make periodic payments on account of proper charges up to the limit imposed by the cap. As s 449E(4)(k)(ii) recognises, the capping of an administrator's remuneration does not preclude the Administrator seeking review of the remuneration so capped, although the Court must take the cap into account in determining whether the remuneration is reasonable. There was nothing said by the Administrator at the meeting that attributed a greater significance to the cap than that which is implicit in the statutory scheme. 51 The second reason is that this Court was not taken to any evidence suggesting that Mr Dwyer did or refrained from doing anything in reliance on what the Administrator said at the creditors' meeting. Indeed, we were not taken to any evidence suggesting that Mr Dwyer understood what was said at the meeting to imply that, if circumstances changed from those anticipated at the meeting, the Administrator would not ask creditors or, if they refused, the Court to sanction additional remuneration. Review 52 The applicants' second contention was that the Administrator had not shown, in the words of the primary Judge (at [79]), any: "demonstrated need to inquire into the appropriateness of the originally determined quantum." 53 Mr Ashhurst submitted, in particular, that the primary Judge had erred in the exercise of his discretion to allow review of the previously determined fees. The error was that the finding that there was a demonstrated need to inquire into the appropriateness of the original determination, failed to take into account material considerations. In particular, his Honour had failed to take into account that the Administrator had not adduced any evidence that he had incurred additional fees not within his reasonable contemplation at the time the capped fees were approved at the creditors' meeting. 54 Mr Ashhurst did not challenge the following propositions: (i) s 449E(2)(4)(k)(ii) contemplates that the Court may review an administrator's fees even where the total remuneration has been capped by a creditors' resolution; (ii) the primary Judge was entitled to approach his task on the basis that s 449E(2) of the Corporations Act envisages a two-stage process, whereby the Court first determines whether a review under s 449E(2) is justified and, if so, proceeds to conduct the review, usually through a Registrar; and (iii) it was appropriate for his Honour, in determining whether a review of the Administrator's remuneration was justified, to apply the criterion he did, namely that the applicant must establish a demonstrated need to inquire into the appropriateness of the original determination. Mr Ashhurst's contention was that the evidence was incapable of satisfying the criterion formulated by the primary Judge. 55 Mr Golledge, who appeared for the Administrator, also did not take issue with any of the three propositions set out above. The Administrator resisted the applicants' case on two grounds: (i) there was nothing in s 449E(4) that required the Court to identify circumstances that were " unforeseen " at the time of the prior determination before it could direct a review of the Administrator's determination under s 449E(2); and (ii) in any event, the Administrator had adduced a substantial body of evidence showing that unforeseen circumstances had created a need for the Administrator to perform substantial extra work and that the additional work had resulted in extra costs and fees. 56 Having regard to the approach taken by the parties, it is not necessary to consider the correctness of the three propositions I have identified. Nor is it necessary to consider whether an Administrator, in order to secure a review of remuneration under s 449E(2) must adduce evidence showing that he or she undertook work that was not foreseen at the time the original remuneration, including caps, was approved by the creditors. Assuming such evidence to be necessary, the Administrator in the present case adduced evidence that amply satisfied the requirement. Mr Ashhurst's submission to the contrary cannot withstand scrutiny. 57 The Administrator's Report to Committee of Creditors of 23 September 2008, recorded that he "incurred considerable additional time costs" as deed administrator because, among other things, he had to: continue trading at Pauls' outlets for an additional six weeks until 7 May 2008 because of a delay in refinancing; attend various meetings and respond to queries from Mr Dwyer, his staff and his solicitor regarding the financial position of the DOCA and of Pauls itself; and' obtain legal advice in response to various allegations and threats made by Mr Dwyer. 58 The Administrator's affidavit of 5 March 2009, set out at length the principal tasks undertaken in his capacity as administrator of Pauls and administrator of the DOCA. The affidavit stated that the tasks had been complicated and "made more difficult" by a number of factors, including: the limited funding available during both periods of administration; a realisation shortly after the voluntary administration commenced that the assets available amounted to $2 million less than the liabilities that had been incurred in the course of trading; alleged beaches by Mr Dwyer of his duties under the Corporations Act and repeated (alleged) aggressive conduct on his part; the notification, apparently after the Administrator's appointment, of approximately 50 retention of title claims totalling $6.2 million; the inaccuracy of Pauls' stock recording system, revealed after the Administrator's appointment; and legal proceedings commenced against the Administrator after the latter's appointment. This evidence plainly implies that the factors identified by the Administrator had not been anticipated at the creditors' meeting of 1 April 2008. In any event, the primary Judge was entitled to interpret the evidence in this way. 59 In addition, the Administrator said that: "at the time that [the original] resolution was proposed (namely, on 1 April 2008), I thought that the negotiation of a deed of company arrangement would be prompt and that the DOCA would be executed within a week or so. However, the negotiations in relation to the DOCA were not straightforward and the DOCA was not signed until the very last day on which it could be signed, namely 21 April 2008. In the meantime, I continued to trade the business." Further, the Administrator gave unchallenged evidence, in relation to his claim to greater remuneration for work done after execution of the DOCA, that the work had proved to be more extensive than anticipated. His affidavit set out at some length the nature of the work that fell into this category. 60 The documentary evidence before the primary Judge included detailed Remuneration Reports for four separate periods: 24 January 2008 to 31 March 2008; 1 April 2008 to 21 April 2008; 22 April 2008 to 30 June 2008; and 1 July 2008 to 31 January 2009. These Reports recorded the nature of the work undertaken, divided into "Task Areas", the hours worked in relation to each Task Area and the amount of costs attributable to these hours. This material was supported by documentation recording the hours worked by staff and the hourly rates used in each case for the calculations. 61 Mr Ashhurst submitted that the evidence was not enough to show that there was a demonstrated need to inquire into the appropriateness of the original determination by the creditors' meeting. He contended that the evidence was deficient because it did not identify the specific tasks that were not anticipated at 1 April 2008 and the precise fees that were allocated to these tasks. 62 The evidence adduced on behalf of the Administrator was clearly capable of showing that the Administrator had performed a great deal of work after 1 April 2008 that he had not expected at that time would be required in the course of the voluntary administration or in his role as Deed Administrator. The evidence was also clearly capable of showing that in consequence of the unanticipated work, the Administrator and his staff had devoted a very large amount of time for which, subject to the creditors' resolutions and the operation of the Corporations Act, fees would normally be charged at specified rates. 63 The primary Judge was entitled to take this material into account in deciding that there was a demonstrated need for an inquiry. There is nothing in s 449E(4) that can be read as preventing an administrator from obtaining a review of capped remuneration unless he or she adduces, in addition to the evidence to which I have referred, evidence precisely allocating a dollar figure to each item of unanticipated work. 64 Contrary to fears expressed by Mr Ashhurst, the primary judgment does not preclude Mr Dwyer arguing on the review that the Registrar should not increase the Administrator's remuneration beyond that approved on 1 April 2008. There is nothing in his Honour's reasoning or orders that leads to that result. Nor is Mr Dwyer precluded from identifying and relying on any deficiencies in the Administrator's evidence. It will be a matter for the Registrar to apply the statutory criteria in determining whether the approved remuneration was reasonable and, if not, what consequences should flow. 65 The applicants' second contention therefore fails. CONCLUSION 66 The Administrator supported the grant of leave on the ground that, since the applicants wished to challenge the validity of the review process, it would be efficient to resolve the challenge prior to the parties incurring the cost of a hearing before the Registrar. 67 I have had some doubt as to whether the Court should adopt this course. The application for leave to appeal, given the way it was argued, raises no issue of principle. Further, the arguments advanced on behalf of the applicants lack substance and would not ordinarily warrant a grant of leave to appeal. It is highly unlikely that the applicants could successfully revisit on an appeal as of right (assuming the Registrar makes orders increasing the Administrator's remuneration) the issues they have sought to agitate in this application. 68 Nonetheless, to put the position beyond doubt I propose that the application for leave to appeal should be granted but the appeal should be dismissed. The applicants should pay the Administrator's costs of the application for leave to appeal and of the appeal. ********** 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.