Supreme Court New South Wales Medium Neutral Citation: In the matter of Idylic Solutions Pty Ltd as trustee for Super Save Superannuation Fund and others [2016] NSWSC 1292 Hearing dates: 18, 19 August 2016 Decision date: 14 September 2016 Jurisdiction: Equity - Corporations List Before: Black J Decision: Pursuant to s 601EE(2) of the Corporations Act 2001 (Cth), the Court approves the remuneration sought by the liquidator(s) in respect of the unregistered managed investment schemes. The Court directs that the liquidator(s), in distributing assets of the schemes, would be justified in paying first the approved remuneration, costs, charges and expenses of the liquidator(s) in connection with the winding up of the relevant schemes. The Court orders that the liquidators' costs of the interlocutory application and the further consideration of the Third Amended Originating Process be paid out of the assets of the respective schemes to which those costs relate. Catchwords: CORPORATIONS — unregistered managed investment schemes — where liquidators of several unregistered managed investment schemes sought approval under s 601EE(2) of the Corporations Act 2001 (Cth) of their existing and anticipated future remuneration in respect of the winding up of the schemes on a time-based approach – where liquidators sought directions that they would be justified in distributing assets of the schemes on a basis giving liquidators' claims first priority – whether the Court should grant remuneration on a time-based approach as sought by the liquidators – whether the Court should approve prospective remuneration sought by the liquidators – whether liquidators' claims in respect of their remuneration and costs be given first priority – whether liquidators' costs of the proceedings be paid out of the assets of the respective schemes. Legislation Cited: - Corporations Act 2001 (Cth), ss 425, 473, 504, 556, 601ED, 601EE Cases Cited: - Australian Securities and Investments Commission v GDK Financial Solutions Pty Ltd (in liq) (No 3) [2008] FCA 448; (2008) 246 ALR 580 - Australian Securities and Investments Commission v Letten (No 23) [2014] FCA 985 - Conlan v Adams [2008] WASCA 61; (2008) 65 ACSR 521 - Hayes, Re Henry Walker Eltin Group Ltd (in liq) (No 4) [2015] FCA 656 - Ide v Ide [2004] NSWSC 751; (2004) 50 ACSR 324 - Korda, Re Stockford Ltd [2004] FCA 1682; (2004) 140 FCR 424 - Macks v Maka [2015] SASC 200 - Mirror Group Newspapers Plc v Maxwell (No 2) [1998] 1 BCLC 638 - Mohamed v Hurstville Tower Medical Clinic Pty Ltd (in liq) [2006] NSWSC 4 - Re AAA Financial Intelligence Ltd (in liq) (No 2) [2014] NSWSC 1270 - Re AAA Financial Intelligence Ltd (in liq) [2014] NSWSC 1004 - Re Anderson Group Pty Ltd; Mann v Anderson [2002] NSWSC 764 - Re Angstrom Assets Pty Ltd (in liq) [2014] NSWSC 1779 - Re Carton Ltd (1923) 39 TLR 194 - Re Clout (in his capacity as liquidator of Mainz Developments Pty Ltd) (in liq) [2016] NSWSC 1146 - Re Gramarkerr Pty Ltd (No 2) [2014] NSWSC 1405 - Re Hellion Protection Pty Ltd (in liq) [2014] NSWSC 1299 - Re Hewitt [2015] VSC 338 - Re Idylic Solutions Pty Ltd as trustee for Super Save Superannuation Fund [2016] NSWSC 907 - Re Independent Contractor Services (Aust) Pty Ltd (in liq) (No 2) [2016] NSWSC 106 - Re Koori Employment Enterprises Co-Operative Ltd (in liq) [2016] VSC 245 - Re Metal Storm [2015] NSWSC 1699 - Re Sakr Nominees Pty Ltd [2016] NSWSC 709 - Re Smith (in his capacity as former provisional liquidator of Australian Global Capital Pty Ltd (in liq)) [2016] FCA 644 - Re Traditional Values Management Ltd (in liq) (No 2) [2015] VSC 126 - Re Wine National Pty Ltd, James Estate Wines Pty Ltd and Liquor National Pty Ltd [2016] NSWSC 4 - Templeton v Australian Securities and Investments Commission [2015] FCAFC 137; (2015) 108 ACSR 545 - Thackray v Gunns Plantations Ltd [2011] VSC 380; (2011) 85 ACSR 144 - Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96 - Warner, Re GTL Tradeup Pty Ltd (in liq) [2015] FCA 323; (2015) 104 ACSR 633 - Wenkart v Pantzer [2005] FCA 1572; (2005) 223 ALR 384 Texts Cited: - ARITA Code of Professional Practice for Insolvency Practitioners (3rd ed, 2014) Category: Principal judgment Parties: Barry Anthony Taylor and Andrew Fletcher Needham (Applicants) Representation: Counsel: B Lim (Applicants) Solicitors: K & L Gates (Applicants) File Number(s): 2016/54337 Judgment Background 1. Messrs Taylor and Needham are liquidators appointed by the Court to several unregistered managed investment schemes which had been operated in contravention of s 601ED(5) of the Corporations Act 2001 (Cth). Mr Taylor was appointed as liquidator of one of those schemes, the Master Fund, by order dated 28 May 2012 and the terms of his appointment provided for payment of the reasonable costs and expenses of the winding up of the scheme out of the assets of the scheme (Ex A1, Tab 1). Messrs Taylor and Needham were appointed, relevantly, to several other schemes, including the Good Value Scheme, the Best Fund, the Enhanced Fund and the Prestige Scheme, on 21 February 2013 and the terms of their appointment also provided for payment of the reasonable costs and expenses of the winding up of the respective funds out of the assets of the schemes (Ex A1, Tab 2). 2. By a notice to investors in respect of the schemes other than the Master Fund dated 8 April 2013, the liquidators provided disclosure as to the manner in which they would seek to have remuneration fixed by application to the Court in respect of those schemes. They outlined four basic methods that could be used to calculate remuneration, including time-based or hourly rates; a fixed fee; a percentage of a variable such as gross proceeds of assets realisations; or a contingent fee, and indicated that the liquidators proposed that their remuneration be calculated on time-based or hourly rates and noted that: "This method ensures that each Scheme is charged only in respect of work performed and further at this early stage, the exact extent, nature and complexity of work required to be performed in respect of the Scheme is not readily ascertainable." That notice also provided disclosure as to the liquidators' firm's then hourly rates (Ex A1, Tab 4). Corresponding disclosure was given in respect of the Master Fund by notice to investors in that fund dated 26 June 2012 (Ex A4). The types of remuneration recognised in those disclosures correspond to the types of remuneration identified in the Code of Professional Practice for Insolvency Practitioners issued by the Australian Restructuring Insolvency and Turnaround Association ("ARITA"), to which I will refer below. 1. By a Third Amended Originating Process filed, by leave, on 28 June 2016, Messrs Taylor and Needham applied for directions under s 601EE(2) of the Corporations Act, and I dealt with the issues raised by that application, to the extent that they were pressed, in my judgment delivered on 30 June 2016 ([2016] NSWSC 907) ("Earlier Judgment"). The nature of and notice of this application 1. By paragraphs 7(a)(i) and 8 of the Third Amended Originating Process (Good Value Scheme), paragraphs 12(a)(i) and 13 (Best Fund), paragraphs 16(a)(i) and 17 (Enhanced Fund), paragraphs 20(a)(i) and 21 (Prestige Scheme) and paragraphs 32(a)(i) and 33 (Master Fund), the liquidators sought directions that they would be justified in distributing the assets of the schemes on a basis which gives first priority to the payment of their remuneration, costs, charges and expenses of and in connection with the winding up of the relevant schemes, and an order that their costs of the proceedings, to the extent that they relate to the relevant schemes, be paid out of the assets of those schemes on an indemnity basis in priority to the claims of unsecured creditors and investors in the schemes. The application for those directions was stood over, at the earlier hearing, to allow the liquidators to notify investors in the schemes of that application. By a further Interlocutory Process filed by leave on 22 June 2016, the liquidators also seek the Court's approval of existing and anticipated future remuneration and costs in respect of the winding up of the relevant schemes, to be paid from the assets of the relevant schemes. 2. On 22 June 2016, I made orders for notice of this application to be given to known investors in the schemes, by post or email to the last known address or email address of those investors, and by publishing Mr Taylor's primary affidavit in support of his claim for remuneration and the exhibit to that affidavit on the website of his firm. The form of notice given to investors of this application is set out in Mr Taylor's affidavit dated 12 August 2016, and was in accordance with directions made by the Court as to how such notice should be given. In particular, the notice given to investors identified the amount claimed for current remuneration and prospective remuneration to finalisation of the liquidation of the relevant scheme and the total amount claimed, and identified the amount of remuneration which was to be written off in respect of the relevant scheme, and identified the manner in which investors could take objection to Mr Taylor's claim for remuneration, by completing a notice of objection identifying the grounds of that objection and returning it to Mr Taylor. The notice to investors also identified how they could access the affidavit evidence and exhibit on which Mr Taylor relied in support of the application, which was made available on his firm's website in accordance with directions made by the Court. No investor advised the liquidators of any objection to the remuneration sought or appeared at the hearing when the matter was called. 3. The liquidators also served Mr Taylor's primary affidavit in support of this application, the exhibit to it, the notice of their intention to apply for remuneration and the orders made by the Court on 22 June 2016 on the Australian Securities and Investments Commission ("ASIC"). By email dated 18 August 2016, the liquidators' solicitors followed up with ASIC as to its position in respect of this application. By email dated 18 August 2016, ASIC advised that the application was a matter for the Court and ASIC neither consented to nor opposed the application and did not seek to appear. The Court may properly infer, from ASIC's position, that nothing in the material provided to it has caused it to form the view that any aspect of the liquidators' claim for remuneration requires regulatory intervention or warrants the making of submissions before the Court. 4. In the result, there is no contradictor to this application, and the Court does not have the advantage which, for example, the Federal Court of Australia had in Australian Securities and Investments Commission v Letten (No 23) [2014] FCA 985, of the appointment of an independent counsel, instructed by ASIC, to act as a contradictor to the application. I considered whether the liquidators ought to be required to join a representative of the investors of at least one of the schemes, or representatives of investors in several of the schemes, as a contradictor in the proceedings, which may have required that the costs of that representative or representatives be funded from the assets of that scheme or schemes. The difficulty with that course is, obviously enough, that assets of the schemes that would otherwise be available to investors would then potentially be reduced by those costs, without any certainty that there would be any benefit to investors in the schemes arising from any significant reduction in the amount of remuneration allowed to the liquidators. I have concluded that I should not take that course, when no investor has sought to appear as a contradictor, including on a basis that its costs might be paid from the relevant scheme. The affidavit evidence 1. The liquidators rely on four affidavits of Mr Taylor, sworn 12 February 2016, 21 June 2016, 12 August 2016 and 19 August 2016 in respect of this application. Mr Taylor has practised as a chartered accountant since 1982 and is both a registered liquidator and an official liquidator; has been a partner in his firm since 2007; and has previous experience in winding up large and complex unregistered managed investment schemes. Mr Lim, who appears for the liquidators, submits, and I accept, that Mr Taylor has substantial experience, which provides support for the opinions which he has expressed in respect of the systems in place within his firm and of the attribution of remuneration to particular issues. 2. Mr Taylor identifies the members of his staff who assisted in investigations and attending to the winding up of the schemes (Taylor 21.6.16 [10]). Mr Taylor's affidavit evidence and the tender of remuneration records provided extensive information as to the work done by those staff. Section III of Mr Taylor's affidavit dated 21 June 2016 sets out the background to the operations of the schemes, to which I will refer below in identifying the nature of the issues which needed to be addressed by the liquidators, and the investigations that were undertaken following Mr Taylor's appointment. Section IV of that affidavit sets out the work performed by Mr Taylor, including communications with investors, investor meetings, document review, and reconciliation of the accounts maintained in respect of the schemes and investments in them, and dealings with a commodity trader with which the schemes operated trading accounts. Mr Taylor also refers to the issues raised in the application to the Court for directions, to which I will refer below in identifying the complexity of issues which arose in respect of the schemes. Mr Taylor also refers to steps which have been taken to deal with tax issues in respect of the schemes, and to other work involved, including in dealings with investors. Section V of that affidavit deals with steps taken in respect of proceedings brought in New Zealand which resulted in a substantial recovery for the Master Fund. 3. Mr Taylor's evidence is that the relevant schemes operated over a period of several years (Taylor 21.6.16 [20]–[24]) and through several transaction accounts in Australian and foreign currencies (Taylor 21.6.16 [54]), involving dealings with a commodity trader which maintained other trading accounts (Taylor 21.6.16 [59]–[65]); that investors in the schemes typically used corporate intermediaries registered in foreign jurisdictions, described as "international business companies", and there were occasions, to which reference was made in the Earlier Judgment, where those investors pooled their investments in other corporate vehicles (Taylor 12.2.16). Mr Taylor's evidence is also that, to the extent that returns were made to investors (other than in respect of the Good Value Scheme, as to which no returns were made), they were partly paid out of the capital contributed by other investors (Taylor 21.6.16 [20]–[24]); there were unauthorised transactions in the Master Fund by its promoters (Taylor 21.6.16 [24]); and the monies held in the Master Fund reflected both investments in that fund and monies paid to acquire shares in the corporate administrator of another scheme, the Enhanced Fund. Mr Taylor also points to the volume of documentation relating to the scheme that was initially provided by ASIC to the liquidators upon their appointment (Taylor 21.6.16 [30]–[31]). 4. Mr Taylor's evidence amply establishes the complexity of the task that the liquidators were required to undertake, which arose from the manner in which the relevant schemes have been conducted, and the position that existed when they were appointed. The complexity of the issues facing the liquidators is also evident in the number, and nature, of the matters that required directions from the Court in the Earlier Judgment. 5. Mr Taylor in turn identifies, within broad categories, the nature of the work undertaken by the liquidators. His evidence is that, in particular, work was required to trace transactions in respect of funds paid into or out of accounts operated for the benefits of the schemes, in circumstances that there were cross-investments between schemes, in order to assess and identify relevant investors and the quantum of their investment (Taylor 21.6.16 [52]). Mr Taylor's evidence is that it was also necessary to identify monies previously paid to investors that were paid out of capital of the schemes and needed to be taken into account in determining the amount to be distributed to those investors, a matter which was addressed in the Earlier Judgment. Mr Taylor also gives evidence of particular issues that arose in respect of transactions involving the Master Fund, which needed to be investigated and addressed by the liquidators, although directions from the Court were ultimately not sought in respect of them where they involved matters of fact rather than law. Mr Taylor also gives evidence of the work involved in recovering an amount of $AUD694,000 in respect of the Master Fund, by proceedings brought in the High Court of New Zealand, which were ultimately settled, and an application in this Court for approval of that settlement (Taylor 21.6.16 [80]–[99]). 6. The claim for remuneration is quantified by Mr Taylor by reference to time spent by him and his staff on work performed in winding up the schemes (Taylor 21.6.16 [104]–[113]). Mr Taylor's evidence is that, in the ordinary course, he reviewed timesheets entered into his firm's computerised time-recording system on an ongoing basis, and amended the time claimed if he considered that time was not reasonable for the relevant task, based on his expertise and experience. By his further affidavit dated 19 August 2016, Mr Taylor clarified a potential ambiguity in that evidence, making clear that any amendment to time records which he made, on his monthly review of whether time recorded is reasonable, had regard to the experience and level of the staff member and whether too much time had been spent on completing the task, and did not involve an increase in the amount of time recorded (Taylor 19.8.16 [9]). 7. Mr Taylor expresses the view in his 21 June 2016 affidavit that his firm's rates are reasonable, based on the experience of each staff member, and by reference to specific matters including the work performed by them, its complexity, the responsibility of each staff member in respect of the work, and costs and risks undertaken by his firm in respect of the appointment to the schemes (Taylor 21.6.16 [120]). He expresses the opinion that the work performed to date in relation to his appointment to the schemes was reasonably necessary (Taylor 21.6.16 [121]). Mr Taylor led substantial further evidence to support that opinion in his further affidavit dated 19 August 2016, to which I will refer below. Mr Taylor also expressed the belief that work performed by his partners, staff and himself was performed in an efficient and timely manner, having regard to the complexity of the schemes (Taylor 21.6.16 [122]). Mr Taylor also identifies time to be written off, for which approval for remuneration is not sought (Taylor 21.6.16 [123]). The discounting or writing off of such remuneration is properly taken into account in assessing the reasonableness of a liquidator's remuneration: Thackray v Gunns Plantations Ltd [2011] VSC 380; (2011) 85 ACSR 144 at [207]; Australian Securities and Investments Commission v Letten (No 23) above at [57]. Mr Taylor also identifies the amount claimed in respect of prospective remuneration for the schemes and identifies the tasks which still need to be undertaken, including communications with investors and steps involved in making a distribution to investors in respect of the schemes (Taylor 21.6.16 [124]). 8. By his further affidavit dated 19 August 2016, Mr Taylor gives evidence that he is a full member of ARITA and observes the principles and standards of conduct prescribed by the ARITA Code of Professional Practice for Insolvency Practitioners (3rd ed, 2014), ("ARITA Code of Professional Practice"), to which I will refer below. He draws attention to Parts 14 and 15 of the ARITA Code of Professional Practice, which deal with "necessary and proper" remuneration and with disclosure of remuneration and confirms that he has had regard to and observed the principles and standards of conduct prescribed in the ARITA Code of Professional Practice (Taylor 19.8.16 [6]–[7]). By that affidavit, Mr Taylor also provides further information as to the seniority of his staff and the manner in which that is determined, and provides a detailed account of the time recording process adopted by his firm. That process includes allocation of work done against particular categories, which are described as "milestones" but refer to the nature of the work undertaken. Those categories of work include administration, assets, investigations, creditors and dividend, and Mr Taylor provides further detail of the particular work which falls within those broader categories (Taylor 19.8.16 [24]). 9. The documentary evidence on which Mr Taylor relies, to which I will refer below, indicates that substantial time and resources were devoted to the category of investigations, involving work such as forensic accounting, tracing of funds and investments, tracing of profits and investments, drafting affidavits for use in the application to the Court for directions, and reconciliation of investments. That is consistent with what would be expected in the winding up of schemes involving the issues that arose in this matter. Mr Taylor also refers to the distribution of work among persons of different seniority, a matter which is also addressed by the tender of schedules recording the work done by person and by work category. Mr Taylor refers, inter alia, to the work done by a manager who specialises in transaction and forensic accounting, which seems to me to have been plainly necessary and appropriate given the nature of the issues raised by the schemes. Mr Taylor also refers to the work done by a supervisor under his employ, Ms Iffat, who has been substantially involved in the day-to-day management and administration of the schemes. Mr Lim submits, and I accept, that the complexity of the relevant issues would have required a significant degree of coordination of staff and of work activity, and Ms Iffat's role in both providing support for more senior staff, and supervision of more junior staff, together with coordination across schemes, is likely to have been an efficient way of addressing that need. 10. Mr Taylor in turn leads evidence of the remuneration claimed for each of the schemes, by work category as demonstrated by the schedules of costs by "milestone" printed from his firm's computer system. Mr Lim helpfully took me through those time records in detailed oral submissions. Mr Taylor also leads evidence of bills of costs by individual employees. Although the information recorded in those bills of costs is the same information as is recorded in the schedules of costs by milestone, they provide a means of assessing the appropriateness of the distribution of work, by reference to seniority of employees, to test whether work has been unreasonably performed by more senior staff. 11. Mr Taylor also refers to his earlier evidence as to the remuneration to be written off in each of the schemes and leads evidence that, in February 2013, the liquidators were also appointed to several other schemes managed and controlled by Mr Hobbs, the promoter of the relevant schemes, as to which no remuneration will be claimed because no recoveries were made and no distribution could be paid to investors (Taylor 19.8.16 [103]ff). It seems to me that the Court should properly have regard to that matter, although it is not directly relevant to the assessment of whether remuneration is reasonable in respect of a particular scheme, because it emphasises that Mr Taylor's appointment was to a number of schemes which had different level of assets, and whether his remuneration is reasonable needs to be tested, not only against each particular scheme, but against the conduct of the appointment as a whole, including those aspects of the appointment for which he will be unremunerated by reason of inadequacy of assets in other relevant schemes. Mr Taylor also expanded on a calculation of distributions to investors if the remuneration claimed was permitted, as set out in Ms Iffat's affidavit dated 17 August 2016 (Taylor 19.8.16 [116]ff). 12. The liquidators also rely on work in progress statements in respect of each of the schemes, which record the time spent and corresponding remuneration, calculated at relevant hourly rates, in respect of the particular categories of work done in relation to each scheme. Where the hourly rate of the relevant person has changed within the period then the calculation, appropriately, charges time at the rate applicable in the relevant period. Mr Lim points out, and I accept, that the average hourly rate disclosed by those statements indicates that the consequence of allocation of work between staff of differing seniority was to reduce the average hourly rate for all work charged, such that it is close to the rate of employees of an intermediate level of seniority. That also reflects the fact that, in the particular circumstances of these schemes, a substantial amount of work was done by staff at that level, in respect of forensic accounting, tracing, coordination and supervision. 13. The liquidators also rely on an affidavit of service of Mr Daniel Houghton sworn 11 August 2016 and on a further affidavit of Ms Iffat dated 17 August 2016 which provides some information as to the extent of the distribution which would be made to investors, after allowing for the remuneration and costs and disbursements claimed by the liquidators from the assets of the schemes. The liquidators' submissions as to the quantum of remuneration and the applicable legal principles 1. The liquidators rely on s 601EE(2) of the Corporations Act to found their application for an order for their remuneration. That section provides, inter alia, that ASIC may apply to the Court to have a managed investment scheme that is operated in contravention of s 601ED(5) of the Corporations Act wound up, and that the Court may make such orders as it considers appropriate for the winding up of the schemes. 2. Mr Lim submits, and I accept, that an order for remuneration can be made under s 601EE(2) of the Corporations Act, and such an order would ordinarily be made by reference to the principles that are applied in respect of the remuneration of court-appointed receivers or liquidators appointed to a company, including the statutory provisions dealing with the fixing of a receiver's remuneration under s 425 of the Corporations Act and a liquidator's remuneration under s 473 of the Corporations Act. Those sections identify factors to which the Court must have regard in determining whether such remuneration is reasonable including, relevantly, the extent to which work performed or likely to be performed was or is likely to be reasonably necessary; the period during which the work was or is likely to be performed; the quality of the work performed or likely to be performed; the complexity (or otherwise) of that work; the extent to which the insolvency practitioner was, or is likely to be, required to deal with extraordinary issues; the extent to which the insolvency practitioner was, or is likely to be, required to accept a higher level of risk or responsibility than is usually the case; the value and nature of any property dealt with, or likely to be dealt with, by the insolvency practitioner; whether the insolvency practitioner was, or is likely to be, required to deal with specified other persons; the number, attributes and behaviour, or likely number, attributes and behaviour, of the entity's creditors; and, where remuneration is ascertained, in whole or in part, on a time basis, the time properly taken, or likely to be properly taken, in performing the work and whether the total remuneration payable is capped. 3. The ARITA Code of Professional Practice also includes several principles relevant to the remuneration of insolvency practitioners. Principle 10 provides that a practitioner is entitled to claim remuneration and disbursements in respect of necessary work, properly performed in an administration, and explains those concepts. Principle 11 of the ARITA Code of Professional Practice in turn deals with disclosure of remuneration and provides that: "A claim by a Practitioner for Remuneration must provide sufficient, meaningful, open and clear disclosure to the Approving Body so as to allow that body to make an informed decision as to whether the proposed Remuneration is reasonable." The ARITA Code of Professional Practice also identifies several possible bases of calculation of remuneration, namely time-based charging; prospective fee approval, subject to a cap to a nominated limit; and a fixed fee or a "percentage of a particular factor", usually assets disclosed or assets realised. The ARITA Code of Professional Practice also seeks to mitigate several risks of time-based costing, to which I refer below, by providing (in paragraph 14.6) that: "[i]n time-based charging, the Practitioner must ensure that the number and qualifications of staff allocated to an Administration is appropriate for the nature of the work being performed so that the Administration is completed in the most efficient and effective manner." Paragraph 14.7 in turn provides that the practitioner should, in time-based charging, "ensure that appropriate hourly rates are set for the Administration". 1. Mr Lim submits that, in this case, it is appropriate for the Court to approve the liquidators' remuneration as calculated on a time-charging basis; that the winding up of the schemes was not of a small or straightforward character as to which some other approach to remuneration should be adopted; and that the Court should be guided by the professional scale of charges determined by Mr Taylor's firm "in a competitive commercial environment". Mr Lim also submits that the Court should be guided by the bills of costs and work in progress statements in evidence, which disclose the work performed and the seniority of the person performing that work, but will need to be satisfied that the work in fact performed was reasonably necessary in the circumstances. Mr Lim submits that that question should be assessed having regard to the significant sums proposed to be written off and the complexity of the winding up of the schemes. Mr Lim also recognises the importance of proportionality in a claim for remuneration of this character and submits that the remuneration claimed is here proportionate to the sums recovered and now available for distribution. Mr Lim submits that it is relevant, in this respect: "to consider the value to investors of the Liquidators' work. The Liquidators have successfully recovered monies for the benefit of investors and determined the appropriate distribution of Scheme funds to investors. It is unlikely that those recoveries and proposed distributions could have been achieved without the detailed factual investigations and other actions undertaken." 1. I will return to the approach for which Mr Lim contends below, by reference to the position in respect of each of the schemes. Before doing so, I should first address several wider issues as to the remuneration of insolvency practitioners. I will refer to the relevant case law in some detail, since potentially differing approaches have been adopted in recent case law. In dealing with these issues, I have drawn in part on Mr Lim's submissions and in part on a paper delivered, extra-judicially, at the Corporations Law Conference of the Law Council of Australia and the Federal Court of Australia in August 2016. I afforded the liquidators an opportunity to make submissions as to the matters addressed in that paper. 2. The courts have, at different times and in different cases, allowed remuneration of insolvency practitioners on either a percentage of recoveries or time-based approach, approaches which are also recognised in the ARITA Code of Professional Practice as I noted above. The case law has long recognised an issue as to the appropriateness of time-charging and that issue has recently received renewed focus in decisions of this Court in respect of the approval of liquidator's remuneration, to which I will refer below. 3. In Re Carton Ltd (1923) 39 TLR 194, the Court fixed a liquidator's fees as a percentage of the value of assets under the liquidator's control. In Mirror Group Newspapers Plc v Maxwell (No 2) [1998] 1 BCLC 638 ("Mirror Group Newspapers"), Ferris J (at 652) observed that time-based remuneration paid no regard to complexity, exceptional responsibility, the effectiveness of the work done or the value or nature of the property dealt with. His Honour also noted (at 652) that: "… time spent represents a measure not of the value of the service rendered but of the cost of rendering it. Remuneration should be fixed so as to reward value, not so as to indemnify against cost. Second, time spent is only one of a number of relevant factors … The giving of proper weight to these factors is an essential part of the process of assessing the value, as distinct from the cost, of what has been done. Third, it follows from the first two points that, as the task is to assess value rather than cost, the tribunal which fixes remuneration needs to be supplied with full information on all the factors which I have mentioned." 1. In Korda, Re Stockford Ltd [2004] FCA 1682; (2004) 140 FCR 424, Finkelstein J quoted the observations of Ferris J in Mirror Group Newspapers above with apparent approval. Finkelstein J there noted (at [2]) that insolvency practitioners' fees have been examined or subject to critical comment in several reports between 1988 and 2004, and I add that such criticism has continued in recent years. His Honour also referred to Re Carton Ltd above and noted (at [26]) that the practice that a liquidator's fee was either a fixed amount or a percentage of assets under the liquidator's control changed in the 1950s and 1960s and remuneration of liquidators began to be fixed on a time basis in complicated liquidations. His Honour observed (at [38]) that earlier English case law, fixing a liquidator's fees in a specific amount or a percentage of the estate, was "based on the notion of conservation of the estate and economy of administration" and recognised that: "The other view is simply to allow the market to operate in the normal way: insolvency practitioners should be entitled to charge their usual hourly rates which, at least to a degree, are likely to be competitive." His Honour also noted (at [39]) that the "conservation approach" may lead insolvency practitioners to forsake liquidations and administrations if they can earn higher incomes in other fields. While that risk could readily be overstated, there is plainly room for such a concern in respect of lower value or more complex insolvencies. 1. His Honour also recognised, by reference to United States case law, the difficulties with hourly rates as an incentive to over-servicing, and observed (at [40]) that: "It seems to me that some balance must be struck between the two opposing views. The balance must achieve some moderation in fees to protect the fund so that creditors can achieve the largest possible return, but not be so moderate as to discourage competent practitioners from providing their important services." His Honour identified several factors relevant to the assessment of remuneration, including the time properly given to attending to the company's affairs, the complexity of the case, any responsibility of an exceptional kind or degree in the particular case, the effectiveness with which the liquidator carried out his duties and the value and nature of the property with which he had to deal. Those factors have since been reflected in the statutory provisions to which I referred above. His Honour also recognised (at [42]) that it was inevitable that insolvency practitioners would wish to have their fees calculated on a time basis in complex or large administrations and that: "The Courts have endorsed this approach for so long … that it is now impossible to reverse the trend." 1. His Honour (at [47]) supported the adoption of a "lodestar" approach, drawn from United States case law, which first derives a working figure from time costs, as adjusted by reference to appropriate rates and whether the time is reasonably spent and work is adequately supported by evidence, and then further adjusts that figure to the extent that any particular heads of claim are disallowed or a wider further percentage reduction is imposed. The second stage of that approach allows the possibility of discretionary reductions made by the courts in determining whether to approve remuneration of liquidators on a time-based basis. 2. In Ide v Ide [2004] NSWSC 751; (2004) 50 ACSR 324 at [39]ff, in dealing with a receiver's claim for remuneration, Young CJ in Eq observed: "First, the court constituted by a judge, never considers a review of quantum, but only matters of principle. Second … a receiver is entitled to have his costs, charges and expenses properly incurred in the discharge of his ordinary duties, or in the performance of extraordinary services which have been sanctioned by the court. Third …: The receiver must justify the reasonableness and prudence of the tasks undertaken for which remuneration is sought, in the same way as he must justify the reasonableness and prudence of incurring disbursements for which he seeks allowance and reimbursement. Thus, as with a falsification of accounts, the relevant onus is on the receiver. Fourth, it must always be remembered that a receiver's remuneration is not in the same category as costs … The receiver is making application for a fair recompense for what he or she has properly done. The award is in the discretion of the court according to well known guidelines … Fifth, the court's objective is to award a sum or devise a formula which will reasonably compensate the receiver for the time and trouble expended in the execution of his duties and, to some extent, the responsibility he has assumed … the vital question is what is the value to the estate of the work done by the receiver ... Sixth, the court will usually work off time sheets created in the receiver's office provided that they do significantly more than merely detail the total number of hours spent by the receiver and officers of particular grades on his or her staff … Seventh, the court is guided by professional scales of charges … What is important is the broad average or general rate charged by persons of the relevant status and qualifications who carry out the relevant type of work." [Citations omitted] 1. In Wenkart v Pantzer [2005] FCA 1572; (2005) 223 ALR 384, Branson J noted that Young CJ in Eq may have expressed the first principle noted above too strongly and that it was "sufficient to note that it will rarely, if ever, be appropriate for the Court to review a decision of a taxing officer on a line by line basis". The approach in Ide v Ide above was generally approved by Barrett J in Mohamed v Hurstville Tower Medical Clinic Pty Ltd (in liq) [2006] NSWSC 4 at [9], although his Honour also noted the observation of Branson J in Wenkart v Pantzer above. 2. In Conlan v Adams [2008] WASCA 61; (2008) 65 ACSR 521, McLure JA (as her Honour then was) referred to the earlier decision in Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96 and summarised the principles that emerged from it as follows (at [28]): "A liquidator is entitled to remuneration that is fair and reasonable and the liquidator carries the onus of establishing that entitlement. The court also said that in determining the remuneration to which a liquidator is entitled: ● a summary procedure is involved, not unlike that applicable to the taxation of solicitors' costs, which is not necessarily subject to all the rules that would apply in an action; ● it is the function of the court to determine the remuneration by considering the material proffered and bringing an independent mind to bear on the relevant issues, the initial task being to consider whether, prima facie, the liquidator has made out a case for the determination of the amounts claimed. The court must make an independent assessment even in the absence of objectors, appropriately detailed objections or arguable objections …" Her Honour also there noted (at [39]) the disadvantages associated with a time-based approach, which the parties had there adopted, and also emphasised (at [47]) the importance of proportionality. Those observations were approved by Brereton J in Re AAA Financial Intelligence Ltd (in liq) (No 2) [2014] NSWSC 1270 ("Re AAA Financial Intelligence Ltd"), to which I will refer below. 1. In Thackray v Gunns Plantations Ltd above at [63], Davies J observed that the reasonableness of remuneration may be established by evidence of an appropriate benchmark for comparative work by persons with the relevant skills and qualifications and justification of the time spent, and could be adjusted up and down to reflect other factors including unusual complexity of the work or the novelty and difficulties of the issues and the ultimate outcome obtained by the insolvency practitioner. Her Honour also noted (at [64]) that: "Excessive charging may be indicated if there is a lack of proportionality between the cost of the work done relative to the value of the services provided. But there is no universal approach applicable in all circumstances by which the "reasonableness" of remuneration claimed or expenses incurred should be measured. The size, importance and complexity of the tasks performed are all factors to be taken into account. What is needed is sufficient information for the Court and any objector to have a clear view about what was done so that an assessment can be made about the reasonableness of the claim." [Citations omitted.] 1. In Warner, Re GTL Tradeup Pty Ltd (in liq) [2015] FCA 323; (2015) 104 ACSR 633, Farrell J also noted (at [70]) community concern as to cases where there was little return to creditors after a liquidator's remuneration, but also recognised that liquidators may be unlikely to take on work which would bring about positive results for creditors without reasonable remuneration. Her Honour noted (at [71]) that whether remuneration was reasonable was not to be assessed solely by time costing or as a percentage of return, and that the value of the work would have to be assessed not only by the return to creditors but also by whether it was necessary to be done, even if it did not generate a return to creditors. Her Honour also referred, with apparent approval, to the factors relevant to the assessment of "reasonable remuneration" identified by Brereton J in Re AAA Financial Intelligence Ltd (in liq) [2014] NSWSC 1004. Mr Lim also refers to my decision in Re Metal Storm [2015] NSWSC 1699 at [11] as recognising that the court's ability to appoint insolvency practitioners as receivers depends, at least in part, on its ability to make orders for their remuneration. 2. The importance of proportionality was also emphasised in Templeton v Australian Securities and Investments Commission [2015] FCAFC 137; (2015) 108 ACSR 545 (on appeal from the decision in Australian Securities and Investments Commission v Letten (No 23) above), where the Full Court of the Federal Court rejected (at [26]) a contention that whether a court-appointed receiver's remuneration was reasonable could be determined solely by whether the time spent was reasonable and the application of fixed rates to that time. The Court observed (at [26]–[35]) that the question of proportionality, involving a comparison of the claim to remuneration with the property or activity that was the subject of the insolvency administration or the benefit or gain to be obtained, was an important consideration in determining the overall reasonableness of remuneration. The Court also observed (at [30]) that: "[T]he question of proportionality is an anterior question to consider in order to determine whether time was reasonably spent. If the relevant work plan underpinning the actual time spent and the allocation of personnel at the requisite level of seniority was disproportionate to the nature, importance and complexity of the task and the benefit to be achieved from the task, then it might be said that the time spent on the task was not time reasonably spent." 1. The Court noted (at [34]) that a lack of proportionality between the cost of the work done and the value of the services provided may support a conclusion of overcharging or excessive remuneration. The Court also recognised (at [60]) that a court could appropriately apply a discount to a claim, after making findings as to whether work was necessary and appropriate to be done, and whether it had been done by an appropriate level of staff and efficiently, although their Honours allowed an appeal against the discount that had been applied in that case. 2. Several other decisions in the State Supreme Courts and in the Federal Court of Australia have also applied time costing as at least the starting point for a calculation of remuneration, although those decisions also emphasise the need for proportionality between the cost of the work done and the value of the services provided: Hayes, Re Henry Walker Eltin Group Ltd (in liq) (No 4) [2015] FCA 656; Re Traditional Values Management Ltd (in liq) (No 2) [2015] VSC 126; Re Hewitt [2015] VSC 338; Macks v Maka [2015] SASC 200; Re Koori Employment Enterprises Co-Operative Ltd (in liq) [2016] VSC 245; Re Smith (in his capacity as former provisional liquidator of Australian Global Capital Pty Ltd (in liq)) [2016] FCA 644. 3. On the other hand, in several recent decisions, Brereton J has emphasised the significance of the percentage that a liquidator's remuneration bears to the level of asset realisations achieved in the liquidation. In Re AAA Financial Intelligence Ltd above, his Honour referred to Korda, Re Stockford Ltd above and also expressed scepticism as to the ability of market forces to control liquidator's remuneration and noted (at [41]) that "creditors are rarely in a position robustly to negotiate a liquidator's remuneration" and that "comparative cost is rarely a factor in selection of a liquidator". His Honour observed (at [45]) that: "In my view, reasonable remuneration cannot be assessed solely by the application of the liquidator's quoted standard hourly rates to the time reasonably spent." His Honour also noted (at [45]) that the application of standard hourly rates would not (or, I interpolate, would not necessarily) reflect several of the factors specified in s 504(2) of the Corporations Act, particularly the quality of work performed, the degree of risk and responsibility and the value and nature of the property involved. 1. His Honour also identified (at [45]) a wider criticism of time costing, of a similar character to that previously made in Mirror Group Newspapers above, that it: "does not reward liquidators for value, but indemnifies them against costs. It disregards considerations of proportionality. … This must mean that it is wrong to assess 'reasonable remuneration' by reference only to time reasonably spent at standard rates. … [W]hile time reasonably spent at standard hourly rates is a relevant consideration, it is only one of several, should not be regarded as the default position or dominant factor, and is to be considered in the context of other factors, including the risk assumed, the value generated, and proportionality." His Honour's reference to the need to consider those other factors reflects the statutory requirements of ss 473 and 504 of the Corporations Act. It seems to me that there can be little room for controversy as to the relevance of those factors, although views may differ as to how they are to be addressed. His Honour also recognised (at [47]) that ad valorem remuneration, based on a percentage of realisations, also had shortcomings, but observed that it was proportionate and incentivised the creation of value. 1. In that case, his Honour allowed the liquidator remuneration of $36,000, amounting to total remuneration of about 20% of total realisations. In arriving at that amount, his Honour took into account that debt collection had been outsourced by that liquidator, so as to reduce the risk and responsibility borne by the liquidator and noted that, absent a reduction in the liquidator's remuneration, the liquidator's claim for remuneration and expenses would have exhausted the recovered funds. I note that the issues to be addressed by the liquidator in that case were substantially less complex than those facing the liquidators in the winding up of these schemes. 2. Brereton J has taken a similar approach in several subsequent cases. In Re Hellion Protection Pty Ltd (in liq) [2014] NSWSC 1299, Brereton J indicated that he would have approved a lesser amount than had been approved by the creditors, on a basis of 10% of the first $50,000 of recoveries, broadly equating to the statutory starting point of $5,000, and 5% on GEERS realisations although they were not strictly recoveries in the liquidation. In Re Gramarkerr Pty Ltd (No 2) [2014] NSWSC 1405, Brereton J approached remuneration by reference to a proportion of the funds realised, noting that he would have been inclined to allow 10% of the first $100,000 of realisations and 5% on the balance, which was a slightly higher amount than the liquidator's revised claim in that case. In Re Independent Contractor Services (Aust) Pty Ltd (in liq) (No 2) [2016] NSWSC 106 ("Re Independent Contractor Services (Aust) Pty Ltd"), a large part of the liquidator's claim for remuneration was referrable to an application for directions that had been made to the Court. Brereton J accepted that the liquidator was entitled to remuneration for activities relating to that application, although his Honour also noted that the risk of that issue had been (at least to some extent) shifted to legal practitioners. His Honour recognised (at [47]) the importance of not discouraging liquidators from conducting small but difficult liquidations, and allowed 2% on realisations (where little work was done by the liquidator) and 15% on distributions, approximating to remuneration of about 14% of gross realisations in that case. 3. In Re Sakr Nominees Pty Ltd [2016] NSWSC 709, Brereton J also noted (at [22]) that, where an ad valorem approach is adopted, then: "[N]ormally, the larger the liquidation, the lower the rate of commission will be: rates of commission will decline, as the amount of assets increase, on a sliding scale." His Honour there noted that an allowance of commission at the rates in Re Gramarkerr Pty Ltd (No 2) above, of 10% on the first $100,000 and 5% on the balance, would be generous in those circumstances, although he allowed additional remuneration for additional work that the liquidator had been required to undertake. An appeal has been brought from that decision. 1. Mr Lim submitted that the reasoning in Re AAA Financial Intelligence Ltd above and Re Independent Contractor Services (Aust) Pty Ltd above was particularly directed to the position in smaller liquidations. I recognise that Brereton J had referred, for example, in AAA Financial Intelligence Ltd above at [37] to the fact that the shortcomings of time-based costing as the basis of remuneration, particularly in smaller liquidations, have been highlighted in a number of cases. His Honour had also drawn attention to the small size of the fund in Re Independent Contractor Services (Aust) Pty Ltd above at [47]. However, I do not understand his Honour's observations as to the extent of a competitive market in setting liquidator's remuneration, or as to the incentives created by time-based remuneration, to have been limited only to smaller liquidations. I do accept that the case for time-based remuneration will be significantly stronger in complex insolvencies, and the difficulties involved with time-based remuneration, particularly at standard hourly rates, will be more acute in smaller liquidations. 2. Mr Lim also submitted that a potential inconsistency could arise between the approach of Brereton J in Re AAA Financial Intelligence Ltd above and the approach of the Full Court of the Federal Court in Templeton v Australian Securities and Investments Commission above, at least in a case where the remuneration claimed reflected work that was reasonably and properly undertaken, but payment of that remuneration would nonetheless result in a disproportionate outcome when compared with the value of the assets realised. (Such an inconsistency should generally not arise if the liquidator's claim for remuneration reflects work reasonably done and charged at a reasonable rate, and the outcome is proportionate to the value of the assets realised, when it would likely be approved on either a time costing or percentage of assets realised basis; or if the amount claimed does not reflect work reasonably done or is not charged at an appropriate hourly rate, when it would likely not be approved on either a time costing or a percentage of assets realised basis). Mr Lim submitted that, if such an inconsistency arose, the approach adopted by the Full Court of the Federal Court in Templeton v Australian Securities and Investments Commission above should be adopted and the costs of the liquidator's work would be allowed, with a possible consequence that there would be no distribution to creditors of the relevant entity. Mr Lim submits that that course should be taken because the decision in Templeton v Australian Securities and Investments Commission above is one of an intermediate appellate court, and because the Court would have difficulty in appointing insolvency administrators, in complex administrations, if they were left at risk that such appointments would generally be unprofitable. 3. The evidence to which I will refer below indicates that that issue does not need to be determined in this case. However, I will make several tentative observations given the significance of the issue. I accept that a case could arise where work was reasonably done, for example because it was necessary so as to allow a rational basis for distribution to investors, but the costs of it, charged at reasonable hourly rates, will nonetheless exhaust or substantially exhaust the assets of the relevant entity that would have been available for distribution to investors if (contrary to the hypothesis) a distribution could have been made without that work being done. There may also be some cases where the complexity of the issues in an insolvency, or the scarcity of assets, are such that the insolvency practitioner's remuneration for work that is reasonably necessary to address those issues, if charged at his or her ordinary rates, and costs and disbursements, would exhaust or substantially dissipate the assets of the insolvent company, extinguishing or significantly reducing any return to creditors. That difficulty cannot always be resolved by a suggestion that the insolvency practitioner should not undertake that work, because that work may be required by statutory requirements, or because assets may not be recoverable, or a distribution to creditors may not be possible on any reasonable basis, without undertaking that work. 4. A case of this character will always be a hard case which will need to be addressed on its merits and on the basis of appropriate evidence. Relevant factors may well include that fairness, and necessity, require that insolvency practitioners are reasonably remunerated for their work. As Mr Lim noted, absent a position where insolvency practitioners are bound to accept appointment in smaller or more complex insolvencies, parties would potentially have difficulty in obtaining insolvency practitioners' consents to such appointments, and courts would have consequential difficulty in making such appointments, if those appointments were generally unprofitable for insolvency practitioners and their firms. However, it does not necessarily follow that a liquidator should be entitled to recover his or her full hourly rates in every case. In a fully informed and competitive market, a discount of those rates might well have been negotiated to reflect the particular circumstances of the liquidation and allow at least some return to creditors. The case law to which I have referred above at least leaves open the possibility that the quantum of that remuneration may have to be discounted or a percentage of realisations approach adopted to achieve proportionality. 5. The relationship between a time-based approach and an approach that has regard to percentage of realisations was also recently considered by Robb J in Re Clout (in his capacity as liquidator of Mainz Developments Pty Ltd) (in liq) [2016] NSWSC 1146, and I afforded the liquidators an opportunity to make further submissions as to that decision after I had reserved judgment. In supplementary submissions, Mr Lim noted that Robb J observed (at [131]) that consideration of a proportion of realised assets, in determining remuneration, would take place in the context of, and not in isolation from, "all of the other relevant circumstances of the winding up". His Honour also noted (at [134]) that, in the several cases that have had regard to percentage-based remunerations, liquidators had generally formulated opening claims for a particular amount, based upon time expended and a scale of fees: for example, Re AAA Financial Intelligence Ltd above at [43]; Re Gramarkerr Pty Ltd (No 2) above at [10]; Re Independent Contractor Services (Aust) Pty Ltd above at [37]; Re Sakr Nominees Pty Ltd above at [11]. His Honour observed (at [134]–[135]): "That [ie the claim on a time-based basis] provided a rational and objective starting point for the liquidator's claim for remuneration, which could be assessed in the context of the other factors made relevant by ss 473(10) or 504(2) of the Act. Thereafter, the court considered in each case specific factors relevant to the work undertaken by the liquidator. Then, having regard to the assets realised and distributed by the liquidator, the court called in aid percentages that appeared reasonable in the particular case to assist the court in judging how to achieve proportionality between the liquidator's remuneration and the value to creditors of the work done. The process in which the court engages does not involve the direct adoption of any particular proportion or percentage, but, in a process that involves an evaluative assessment of a number of discretionary factors, the court in an appropriate case – more likely where the value of the assets realised is low, or where the remuneration claimed is a substantial proportion or exceeds the value of the assets realised – the court will adopt an appropriate percentage having regard to the court's experience of other cases as a guide to assessing the appropriate remuneration for the liquidator in the particular case." Mr Lim also referred to Robb J's observation (at [135]) that, particularly in a case where the value of the assets realised were low, the court "will adopt an appropriate percentage having regard to the court's experience of other cases as a guide to assessing the appropriate remuneration" and submitted that approach would largely be adopted in smaller liquidations. It seems to me that his Honour was not limiting the relevance of that approach to smaller liquidations, but recognising its particular significance in that situation. 1. Robb J also helpfully referred to several of the cases that have considered time-based claims for remuneration (at [158]ff) and emphasised what may be seen as the overriding consideration, as identified by Barrett J in Re Anderson Group Pty Ltd; Mann v Anderson [2002] NSWSC 764 at [12] that: "In the ordinary course, the process of determination comes down essentially to ensuring that the work upon which the claim was based was work undertaken in the due course of administration and that the amount claimed for having done that work is a fair and reasonable reward for it." 1. It seems to me that the recent case law suggests that a claim for remuneration based on hourly rates should at least be tested by reference to a percentage of realisations and possibly, in an appropriate case, displaced by remuneration on that basis or by a mixed approach. In my view, evidence as to the percentage that remuneration constitutes of realisations will at least provide a measure of objective testing of the proportionality of the remuneration claimed and will identify those cases in which there ought to be real concern in that respect. In this case, the liquidators, properly, also led evidence that allowed their claim for remuneration on a time-based basis to be tested against the result on a percentage of realisations basis, which I will address below. 2. For completeness, I should note that Mr Lim also submits that a significant factor weighing in favour of approval of the liquidators' remuneration is that neither ASIC nor any investor has objected to the remuneration claimed. Mr Lim refers, by way of analogy, to the fact that court approval for a liquidator's remuneration is not required where a committee of inspection or resolution of creditors approves that remuneration. It seems to me that that submission requires substantial qualification. First, the absence of objection by ASIC or creditors is not equivalent to the positive act of approval which is involved in the giving of approval to a claim for remuneration by a committee of inspection or resolution of creditors. Second, there is no evidence whether investors have actively engaged in any consideration of the material which has been made available to them, or whether their lack of objection to the liquidators' remuneration claim reflects the fact that they have paid no attention to it. I do proceed on the basis that at least ASIC will have considered the material served upon it before advising that it does not seek to intervene in the proceedings. Review of the time-based claim for remuneration in respect of the schemes 1. I now return to the background to the relevant schemes, and the issues arising in respect of them, which provides context to the remuneration claimed by the liquidators. I have drawn both on Mr Taylor's evidence and the Earlier Judgment in that respect. The several schemes to which the liquidators were appointed were related because Mr Hobbs, the promoter of the schemes, ultimately controlled each of them, either directly or through other promoters acting under his direction, and the schemes were related also by a number of co-investments and commingling of funds between the schemes (Earlier Judgment at [10]). That relationship, and the extent of commingling, has the result that it may not be appropriate to assess the costs of the liquidation of each scheme on a stand-alone basis, without reference to the other schemes. The complexities involved in administering the smaller schemes were plainly increased by their relationship with the Master Fund. Complex legal and factual issues arose in the liquidation of the schemes, some but not all of which were addressed by directions in the Earlier Judgment. They included the investigation of, and treatment of, investments made by international business companies associated with investors in the schemes. 2. Mr Taylor's evidence is that he considers the Master Fund, the Best Fund and the Prestige Scheme were the most complex of the schemes, because of the extent of intra-scheme investments and offshore transfers, although he notes that each scheme had its complexities (Taylor 19.8.16 [11]). He also indicates that he formed the view that it was not possible to complete the winding up of the less complex schemes, until the Master Fund had been wound up (Taylor 19.8.16 [12]). That view seems to me to have been well-founded, both because of the common issues across the schemes, and because, as Mr Taylor points out, there are occasions on which a distribution to be paid from a smaller scheme was to be paid to the Master Fund. The Master Fund 1. Dealing first with the Master Fund, Mr Taylor is the liquidator, rather than a joint liquidator, in respect of the Master Fund. The Master Fund, which was the largest in number of participants and value, was administered by an entity incorporated in the British West Indies and operated from October 2004 to March 2008; there were 45 investors in the scheme; amounts of approximately USD$1,783,550 and AUD$1,214,191 were invested and the "returns" paid out from the scheme were USD$171,437 and AUD$76,509 (Earlier Judgment at [8]). 2. Issues arose in respect of the Master Fund as to whether distribution should be paid to the particular international business company that made the relevant investment, or to several entities that had pooled their investments in that company; as to several other matters that needed to be resolved by the liquidator although they were not appropriate for directions by the Court; as to the treatment of payments which were intended to be investments in the Master Fund, but were ultimately not received into that scheme; and as to the treatment of a substantial amount, sourced from the Integrity Scheme, that appeared to have been used to pay a return to or effect a withdrawal of capital by an investor in the Master Fund. An issue also arose in respect of the Master Fund as to the treatment of a substantial amount, recorded as an investment by an entity in the scheme, where that entity was associated with an administrator of that scheme who had withdrawn substantial funds from the scheme by other means. There can be no doubt as to the complexity of these issues. 3. Mr Taylor's evidence is that the amount available for distribution to eligible investors in the Master Fund is now US$963,765.80 (Taylor 12.2.16 [789]), prior to remuneration, costs and disbursements. Mr Taylor and his staff undertook nearly 580 hours of work in respect of the Master Fund, which I accept reflects the complexity of issues in respect of that scheme. A Registrar of the Court previously made orders approving Mr Taylor's remuneration in relation to the Master Fund in the amount of $237,508.50 plus GST on 5 July 2013. Mr Taylor now seeks approval of further remuneration in the Master Fund in the sum of $232,091 plus GST which includes remuneration of $197,091 plus GST from 2 July 2013 to 29 April 2016 and prospective remuneration of $35,000 plus GST for the period 30 April 2016 until finalisation of the liquidation of the Master Fund. Mr Taylor does not seek approval for further remuneration in the amount of $92,671.96 plus GST in respect of the Master Fund, which is to be written off. The amount of remuneration claimed by Mr Taylor in respect of the Master Fund, including previously approved remuneration, is nonetheless substantial, totalling $469,599 plus GST. 4. I have had regard to Mr Taylor's evidence, which is evidence on oath by an experienced insolvency practitioner, that he believes that his remuneration is reasonable, while that conclusion must also be tested by reference to objective material. I have also had regard to the evidence of the complexity of the issues involving the Master Fund; the allocation of time spent across different categories of work and employees of different seniority, which indicates that the nature of the work done was focussed in the areas of greater complexity, and was appropriately allocated between staff of different seniority; and to the evidence as to the controls which are in place, including by regular review of time spent by Mr Taylor; and the write-offs which have been undertaken, which assist in preserving proportionality of the claims. 5. As I have noted above, it is not the role of the court, constituted by a judge, to undertake a line by line review of the relevant narratives, but I have reviewed them in a broad way and they support the other evidence led in respect of the claim for remuneration. Review of the bill of costs schedule by milestone in respect of the Master Fund indicates, as might be expected, that Mr Taylor and Ms Iffat both devoted substantial work to the New Zealand proceedings which, as I noted above, resulted in a substantial recovery for the fund. The bill of costs schedule by person indicates that Mr Duncan's work, consistent with his experience and expertise in forensic accounting, was directed to issues relating to the investments into the funds, and includes significant involvement with the preparation of the application for directions to the Court. Mr Duncan's work was also directed to addressing issues of intermingling of funds as between the Master Fund and the Best Fund. The bill of costs schedule by person indicates that Ms Iffat had substantial involvement in administrative, coordination and supervision tasks, and also her involvement in receiving and dealing with communications from investors of the schemes, and in working with Mr Duncan in respect of forensic accounting issues in respect of the schemes. The bill of costs schedules by person for more junior staff indicate that those staff generally appear to have been undertaking less complex work, or work directed to particular issues, consistent with an allocation of work to less senior staff where appropriate. 6. I am satisfied that, having regard to the complexity of the relevant issues, my review of the time records, and a testing of the outcome against the percentage of realisations across all the relevant schemes to which I refer below, Mr Taylor's claim for remuneration in respect of the Master Fund, calculated on a time costing basis, should be approved. The Good Value Scheme 1. The Good Value Scheme was administered by a company incorporated in Vanuatu and operated from December 2006 to December 2008; there were five investors in the scheme; an amount of USD$90,087.39 was invested and there was no "return" (in the sense noted in the Earlier Judgment) from the Scheme (Earlier Judgment at [4]). The issues that needed to be addressed by the liquidators in respect of the Good Value Scheme included whether a particular payment to that scheme was an investment by the Master Fund in that scheme and whether a pari passu distribution of funds was appropriate, which turned on the manner in which investors had contributed capital to the schemes. 2. Mr Taylor's evidence is that the amount now available for distribution in respect of the Good Value Scheme, prior to remuneration, costs and disbursements, is $127,067.33 (Taylor 12.2.16 [106]). The total hours spent by the liquidators and their staff in respect of the Good Value Scheme was substantially less than in respect of the Master Fund, in the order of 83 hours. The liquidators seek approval of remuneration in relation to the Good Value Scheme in the amount of $36,873.60 plus GST, comprised of remuneration in the amount of $31,873.60 plus GST for the period from their appointment date, 21 February 2013, to 29 April 2016, and prospective remuneration in the amount of $5,000 plus GST for the period from 30 April 2016 until finalisation of the liquidation of the Good Value Scheme. The liquidators do not seek approval for time costs in the amount of $18,542.50 plus GST in respect of the Good Value Scheme which is to be written off. Review of the bill of costs schedule by milestone in respect of the Good Value Scheme indicates that Mr Taylor's work was consistent with his maintaining an overview of the administration of that scheme, and that work was substantially done by those reporting to him. Mr Taylor's work appropriately focussed on matters relating to the "investigation" category of work, including work that necessarily had to be done by Mr Taylor in respect of his affidavit in the application for directions. I have referred to my review of the bill of costs schedules by person for other staff in dealing with the Master Fund above. 3. I am satisfied that, having regard to the complexity of the relevant issues, my review of the time records, and a testing of the outcome against the percentage of realisations across all the relevant schemes to which I refer below, the liquidators' claim for remuneration in respect of the Good Value Scheme, as calculated on a time costing basis, should be approved. The Best Fund 1. The Best Fund was administered by an entity incorporated in Vanuatu and operated from January 2005 to June 2009; there were five investors in the scheme; amounts of USD$180,912 and AUD$31,200 were invested and there were several "returns" from the scheme, paid from a combination of capital contributed by investors and exceeding the profit earned on the scheme (Earlier Judgment at [5]). The issues that needed to be addressed by the liquidators in respect of the Best Fund included, inter alia, whether two separate entities that existed at different times, under the control of the same person, should be treated as a single international business company in distributing the scheme funds; whether the controller of the relevant schemes should be treated as the investor behind those entities; how an investment in the fund purportedly made by that entity should be treated; the treatment of other investments made by other entities in the fund; and whether a distribution of monies from the scheme should be made on the basis that investors must first bring into hotchpot any "returns" that they received during the operation of the scheme. 2. Mr Taylor's evidence is that the amount now available for distribution in respect of the Best Fund, again prior to claims for remuneration, costs and disbursements, is $116,050.76 (Taylor 12.2.16 [263]). The liquidators and their staff spent nearly 128 hours in respect of the Best Fund. The liquidators seek approval for remuneration in respect of the Best Fund in the amount of $51,085 plus GST, comprised of remuneration in the amount of $43,085 plus GST from their appointment date, 21 February 2013, to 29 April 2016 and prospective remuneration in the amount of $8,000 plus GST for the period 30 April 2016 until finalisation of the liquidation of the Best Fund. The liquidators do not seek approval for a substantial amount of remuneration, referable to time costs in respect of the Best Fund, of $78,222.10 plus GST. I am satisfied that, having regard to the complexity of the relevant issues, my review of the time records, and a testing of the outcome against the percentage of realisations across all the relevant schemes to which I refer below, the liquidators' claim for remuneration in respect of the Best Fund, as calculated on a time costing basis, should be approved. The Enhanced Fund 1. The Enhanced Fund was administered by another entity incorporated in Vanuatu and operated from August 2007 to December 2008; there were 13 investors in the scheme; amounts of USD$15,725 and AUD$317,093 were invested and the "return" paid out from the scheme was USD$35,876.36 (Earlier Judgment at [6]). A complex issue needed to be addressed by the liquidators in relation to the Enhanced Fund, as to the treatment of persons who had purchased shares in the administrator of the fund, where the funds for those share purchases had been intermingled with investor funds in respect of the Master Fund. The complexity of that issue was identified in paragraph 52 of the Earlier Judgment. Issues also arose as to the treatment of investments where several international business companies that invested in the Enhanced Fund appear to have pooled their investments, and as to the application of hotchpot principles. 2. Mr Taylor's evidence is that the amount of $194,370, again prior to claims for remuneration, costs and disbursements, is now available for distribution in respect of the Enhanced Fund (Taylor 12.2.16 [341]). The liquidators and their staff spent nearly 113 hours of work in respect of the Enhanced Fund. The liquidators seek approval of remuneration in respect of the Enhanced Fund of $48,735.62 plus GST, comprising remuneration in the amount of $40,735.62 plus GST from their appointment date, 21 February 2013, to 29 April 2016 and prospective remuneration in the amount of $8,000 plus GST for the period from 30 April 2016 until finalisation of the liquidation of the Enhanced Fund. The liquidators do not seek approval for an amount of $46,387.60 plus GST on a time charging basis in respect of that fund. Review of the bill of costs schedule by milestone in respect of the Enhanced Fund indicates that Mr Taylor's work was consistent with his maintaining an overview of the administration of that fund, and work was substantially done by those reporting to him. Mr Taylor's work again appropriately focussed on matters relating to the "investigation" category of work, including work that necessarily had to be done by Mr Taylor in respect of his affidavit in the application for directions. I have referred to my review of the bill of costs schedules by person for other staff in dealing with the Master Fund above. 3. I am satisfied that, having regard to the complexity of the relevant issues, my review of the time records, and a testing of the outcome against the percentage of realisations across all the relevant schemes to which I refer below, the liquidators' claim for remuneration in respect of the Enhanced Fund, as calculated on a time costing basis, should be approved. The Prestige Scheme 1. The Prestige Scheme was administered by an entity incorporated in the British West Indies and operated from February 2005 to March 2008; there were seven investors in the scheme; an amount of approximately $1.9 million was invested and the "return" paid out from the scheme was USD$129,826 (Earlier Judgment at [7]). An issue arose in respect of the Prestige Scheme as to whether the liquidators would be justified in treating an entity ("PJCB"), which was the administrator of another scheme, the "Integrity Scheme", as a creditor of the Prestige Scheme. The complexity arising from dealings between the Prestige Scheme and PJCB, as administrator of the Integrity Scheme, was noted in paragraph 61 of the Earlier Judgment. These matters also involved a detailed inquiry as to the circumstances in which a third party, Mr Yarak, had received payments from the Integrity Scheme in respect of his investment in the Prestige Scheme. A question also arose as to whether the promoter of the schemes, Mr Hobbs, should be treated as an investor in the Prestige Scheme, and issues again arose in respect of hotchpot in respect of this scheme. 2. Mr Taylor's evidence is that the amount now available for distribution in respect of the Prestige Scheme, prior to claims for remuneration, costs and disbursements, is $522,050.53 (Taylor 12.2.16 [469]). The liquidators and their staff spent approximately 299 hours of work in respect of the Prestige Scheme, reflecting the additional issues arising in respect of that scheme to which I have referred. The liquidators seek approval for remuneration in relation to the Prestige Scheme in the amount of $123,183 plus GST, comprising $108,183 plus GST from the date of their appointment, 21 February 2013, to 29 April 2016 and prospective remuneration in the amount of $15,000 plus GST for the period from 30 April 2016 until finalisation of the liquidation of the Prestige Scheme. The liquidators do not seek approval for remuneration in the amount of $5,120.40 plus GST in respect of the Prestige Scheme, which is to be written off. Review of the bill of costs schedule by milestone in respect of the Prestige Scheme indicates that Mr Taylor's work again reflected a particular focus on investigation, which is appropriate given the issues which existed in respect of that scheme to which I have referred above. The bill of costs schedule by person indicates that Mr Duncan undertook more substantial work in respect of the Prestige Fund, as might be expected given the issues relating to Mr Yarak's investment in that fund to which I have referred above. I have referred to my review of the bill of costs schedules by person for other staff in dealing with the Master Fund above. 3. I am satisfied that, having regard to the complexity of the relevant issues, my review of the time records, and a testing of the outcome against the percentage of realisations across all the relevant schemes to which I refer below, the liquidators' claim for remuneration in respect of the Prestige Scheme, as calculated on a time costing basis, should be approved. Review of the claim for remuneration on a percentage of realisations basis 1. I have also tested the amount of remuneration claimed by the liquidators on a time costing basis by reference to the outcome based on percentage of realisations. As I noted above, it seems to me that the decisions commencing with Re AAA Financial Intelligence above and the recent decision in Re Clout (in his capacity as liquidator of Mainz Developments Pty Ltd) (in liq) above indicate that liquidators should generally lead evidence of that matter, and courts should generally have regard to it in assessing remuneration. 2. As I also noted above, the liquidators also led evidence that allowed their claim for remuneration on a time-based basis to be tested against the result on a percentage-based approach. The liquidators calculated the total receipts in respect of each scheme, adding (where relevant) an amount reflecting the total payments made out of the scheme by way of "return" to investors, paid out of the capital of the scheme. It seems to me that that approach was correct, since the amount that will be brought into hotchpot by investors claiming a distribution from the relevant scheme reflects part of the realised assets of the relevant scheme. The liquidators then calculated remuneration as percentages of total receipts, including the hotchpot amount. It also seems to me that, as I noted in the course of oral submissions on 19 August 2016, the overall percentage of remuneration across all the relevant schemes, compared with realisations across all the schemes, is a relevant factor in this case, where the applicants were appointed as liquidators of the Good Value Scheme, Best Fund, Enhanced Fund, Prestige Scheme and several other schemes by a single order of the Court, and it is plain, as I have observed above, that there was an intermingling of the assets of those schemes and the Master Fund. As I will note below, I am satisfied by reference to these alternative calculations on a percentage of realisations basis that the liquidators' claim for remuneration on a time-based basis was reasonable and proportionate in any event. 3. Testing Mr Taylor's claim for remuneration as to the Master Fund on a percentage of realisations basis, on a stand-alone basis, the total receipts in the Master Fund, including amounts that were available at the point of Mr Taylor's appointment and subsequent returns on investment, and also including the substantial recovery from the New Zealand proceedings are in the order of $2,102,000. The liquidator's remuneration amounts to 22% of receipts. I note, for completeness, that legal fees incurred in respect of the New Zealand proceedings in respect of the Master Fund amount to a further 12% of receipts, but brought in a substantially higher recovery than the amount of fees incurred, and domestic legal fees, including counsel fees, amount to 9% of receipts, which is not surprising given the complexity of the issues and the need for two court applications. 4. The percentage of remuneration claimed by Mr Taylor in respect of the Master Fund on a stand-alone basis is consistent with the level of remuneration permitted, on a percentage of recoveries basis, by Brereton J in Re AAA Financial Intelligence above, on a much smaller asset base, and exceeds the percentage of remuneration allowed in Re Independent Contractor Services (Aust) Pty Ltd (in liq) above and the amount that would be derived by the approach his Honour adopted in Re Gramarkerr Pty Ltd (No 2) above of 10% on the first $100,000 and 5% on the balance. However, it seems to me, as it did to Robb J in Re Clout (in his capacity as liquidator of Mainz Developments Pty Ltd) (in liq) above, that these cases do not require that a fixed percentage be applied in each case. It also seems to me that the percentage properly allowable on a percentage of recoveries basis might well be higher where an insolvency (as in this case) involved very complex issues, although that percentage would also generally be reduced as the amount of assets increased. 5. Turning to the Good Value Scheme on a stand-alone basis, the liquidators' receipts in respect of that scheme total approximately $143,000, comprising the amount available to the liquidators at the point of their appointment, bank interest on that amount and a modest GST refund. The liquidators' claimed remuneration constitutes 26% of receipts referable to that scheme on a stand-alone basis and, for completeness, solicitor and counsel fees constitute a further 25% of receipts referable to that scheme on a stand-alone basis. Plainly, the amount of remuneration claimed exceeds that which would generally be permitted on a percentage of realisations basis, although that result is readily explicable where a fund with limited assets involved complex issues, and where this analysis does not have regard to the position across the several interrelated schemes to which I refer below. In some circumstances, that result would potentially warrant a reduction in the liquidators' remuneration claimed on a time costing basis, or a determination of a remuneration on an alternative percentage of realisations basis. I do not consider that I should take that approach in this case, where it seems to me that the liquidators' claim for remuneration is reasonable across the relevant schemes as a whole, for the reasons noted below. 6. The position in respect of the liquidators' claim for remuneration as a percentage of receipts in respect of the Best Fund on a stand-alone basis is similar to that in respect of the Good Value Scheme, with total receipts in the order of $184,500, which were largely available to the liquidators at the point of their appointment, as increased by bank interest subsequently earned and GST refunds received, and a further recovery of $32,668.29 from the receiver appointed to the assets of Mr Hobbs. The amount of remuneration claimed constitutes 28% of total receipts and legal costs constitute a further 32% of receipts. That figure is also significantly higher than would ordinarily be allowed as a percentage of realisations, although I consider that position is qualified by the need to assess that position against all the relevant schemes, as I noted above in respect of the Good Value Scheme. 7. Total receipts in respect of the Enhanced Fund constitute $245,376.26, substantially all of which was available to the liquidators at the point of their appointment or results from bank interest and GST refunds since their appointment. The liquidators' remuneration constitutes 20% on a stand-alone basis and, for completeness, legal fees incurred constitute 25% of receipts on a stand-alone basis. It seems to me that the same approach should be adopted as in respect of the Good Value Scheme and the Best Fund. 8. Total receipts in the case of the Prestige Scheme constitute nearly $1,700,000, including monies returned to the Integrity Scheme and recoveries from investors by the application of the hotchpot principle. The percentage of liquidators' remuneration to receipts constitutes 7.26% on a stand-alone basis and, for completeness, legal costs constitute 4.24% of receipts on a stand-alone basis. The lower percentage in this scheme reflects the fact that, although the liquidators' claimed remuneration and legal costs are in fact higher than the corresponding amounts in respect of the Good Value Scheme, the Best Fund and the Enhanced Fund, they are here compared with a substantially larger amount of realisations. The difference in outcome emphasises that any approach based on percentage of realisations must be applied with care, so far as it will be significantly impacted by the size of the relevant asset base. That analysis gives rise to no reason to question the proportionality of the remuneration claimed in respect of this scheme. 9. It seems to me that the most useful calculation, on a percentage of realisations basis, is that which the liquidators have performed having regard to all the schemes associated with Mr Hobbs to which they were appointed, including several schemes where they undertook significant work, for which no remuneration can be claimed because those schemes have no assets. The result of that calculation indicates that total receipts are in the order of $2,270,585; the liquidators' claimed remuneration constitutes 11% of total receipts; remuneration incurred but not claimed also constitutes 11% of total receipts; and legal costs constitute 10% of total receipts. 10. It seems to me that, when adjustment is made for capital of the schemes that had been improperly paid out and will be recovered by adjusting distributions made to investors, and to the fact that the percentage of realisations should properly be tested not only on a fund by fund basis but also across the several interrelated schemes, the proportion that the remuneration claimed bears to the assets, and recovered assets, of the schemes does not undermine the conclusion I have otherwise reached that the liquidators' claim for remuneration is reasonably made in respect of the Master Fund and the other schemes. It seems to me that the Court may allow remuneration in a time-based approach in respect of each of the relevant schemes, on that basis, while recognising that an approach based on percentage of realisations may be appropriate where there are indications that a time-based approach would lead to a disproportionate outcome. Claim for approval of prospective remuneration 1. The liquidators also submit that, in an appropriate case, the Court may approve prospective remuneration, where a prospective approval would avoid the further legal costs that would be involved in making a further application to the Court in respect of such remuneration: Re Wine National Pty Ltd, James Estate Wines Pty Ltd and Liquor National Pty Ltd [2016] NSWSC 4 at [56]. Mr Lim submits that approval should be given, in advance, for the remuneration claimed by the liquidators for work likely to be performed in finalising the winding up, because the identified tasks are appropriate, the sums claimed are modest and unlikely fully to indemnify the liquidators in respect of the prospective work, and doing so will avoid the costs of a further application in respect of the relevant schemes. 2. I am satisfied that the claims for prospective remuneration are reasonably based and should be approved. I gave consideration to whether the liquidators should be requested to give an undertaking to reimburse any prospective remuneration that is approved, to the extent that work done does not support that remuneration. However, the preferable course seems to be, as Mr Lim submits, to approve prospective remuneration to a maximum amount, as the Court did in Re Angstrom Assets Pty Ltd (in liq) [2014] NSWSC 1779, such that that approval will not authorise payment of remuneration unless that remuneration is earned by work that is actually required to be done. The liquidators' application as to priority in respect of their remuneration 1. Mr Lim submits that the liquidators should be entitled to meet their remuneration, liabilities and outgoings from the assets under administration, in priority to other claims on the assets. Mr Lim submits that: "The Court must preserve the efficacy of its power to appoint insolvency practitioners to wind up unregistered managed investment schemes … It is only in exceptional circumstances that the management of such a scheme would be permitted to conduct a winding up. The efficacy of that power can be preserved only if there are insolvency practitioners willing to accept appointment, and the security and priority of their reasonable costs and expenses is necessary for that purpose." 1. This submission has substantial force. In a case where a managed investment scheme which required registration has been conducted in contravention of the Corporations Act, there will be a strong and possibly overwhelming case for the appointment of an independent liquidator to the scheme on a winding up. Plainly, this matter was not one where there was any realistic possibility that the winding up of the schemes could have been left in the hands of their prior management. It seems to me unlikely that insolvency practitioners would, generally, accept appointment to undertake a complex and time consuming liquidation of one or several unregistered managed investment schemes, unless they had confidence that their remuneration, or at least a substantial part of it, would be paid from the assets of the fund or, possibly, by their appointor if those assets were insufficient: compare Australian Securities and Investments Commission v GDK Financial Solutions Pty Ltd (in liq) (No 3) [2008] FCA 448; (2008) 246 ALR 580 at [19] (referring to United States law); Australian Securities and Investments Commission v Letten (No 23) above at [51]. Mr Lim also rightly points out that an approach of allowing priority to the liquidators' claim to remuneration, liabilities and outgoings is consistent with the approach adopted in s 556 of the Corporations Act. 2. For these reasons, I am satisfied that directions should therefore be given and an order made, as sought by paragraphs 7(a)(i) and 8 of the Third Amended Originating Process (Good Value Scheme), paragraphs 12(a)(i) and 13 (Best Fund), paragraphs 16(a)(i) and 17 (Enhanced Fund), paragraphs 20(a)(i) and 21 (Prestige Scheme) and paragraphs 32(a)(i) and 33 (Master Fund), that the liquidators would be justified in distributing the assets of the schemes on a basis which gives first priority to the payment of their remuneration, costs, charges and expenses of and in connection with the winding up of the relevant schemes, and that their costs of the proceedings, to the extent that they relate to the relevant schemes, be paid out of the assets of those schemes on an indemnity basis in priority to the claims of unsecured creditors and investors in the schemes. Orders 1. Accordingly, I note the following matters and make the following orders in the form proposed by the liquidators: THE COURT NOTES THAT: Good Value Scheme, Best Fund, Enhanced Fund, and Prestige Scheme 1. In relation to the Good Value Scheme, Best Fund, Enhanced Fund and Prestige Scheme, on 21 February 2013 the Court ordered that "The reasonable costs and expenses of the winding up of the respective Liquidation Funds be paid out of the assets of the Liquidation Funds". Master Fund Scheme 2. In relation to the Master Fund Scheme, on 28 May 2012 the Court ordered that "The reasonable costs and expenses of the winding up of the Scheme be paid out of the assets of the Scheme". THE COURT ORDERS THAT: Good Value Scheme 3. Pursuant to s 601EE(2) of the Corporations Act 2001 (Cth), approve the remuneration of Barry Anthony Taylor and Andrew Fletcher Needham as Liquidators of the Good Value Scheme (In Liquidation): a in the amount of $31,873.60 plus GST in the amount of $3,187.36 for the period of 21 February 2013 to 29 April 2016; and b prospective remuneration of a maximum of $5,000 plus GST in the maximum amount of $500 for the period of 30 April 2016 to the finalisation of the liquidation. 4. Direct that the Liquidators, in distributing the assets available to them in their capacity as Liquidators of the Good Value Scheme, would be justified in paying first the Liquidators' approved remuneration and costs, charges and expenses of and in connection with the winding up of the Good Value Scheme. Best Fund 5. Pursuant to s 601EE(2) of the Corporations Act 2001 (Cth), approve the remuneration of Barry Anthony Taylor and Andrew Fletcher Needham as Liquidators of the Best Fund (In Liquidation): a in the amount of $43,085.00 plus GST in the amount of $4,308.50 for the period of 21 February 2013 to 29 April 2016; and b prospective remuneration of a maximum of $8,000 plus GST in the maximum amount of $800 for the period of 30 April 2016 to the finalisation of the Liquidation. 6. Direct that the Liquidators, in distributing the assets available to them in their capacity as Liquidators of the Best Fund, would be justified in paying first the Liquidators' approved remuneration and costs, charges and expenses of and in connection with the winding up of the Best Fund. Enhanced Fund 7. Pursuant to s 601EE(2) of the Corporations Act 2001 (Cth), approve the remuneration of Barry Anthony Taylor and Andrew Fletcher Needham as Liquidators of the of the Enhanced Fund (In Liquidation): a in the amount of $40,735.62 plus GST in the amount of $4,073.56 from 21 February 2013 to 29 April 2016; and b prospective remuneration of a maximum of $8,000 plus GST in the maximum amount of $800 for the period of 30 April 2016 to finalisation of the Liquidation. 8 Direct that the Liquidators, in distributing the assets available to them in their capacities as Liquidators of the Enhanced Fund, would be justified in paying first the Liquidators' approved remuneration and costs, charges and expenses of and in connection with the winding up of the Enhanced Fund. Prestige Scheme 9. Pursuant to s 601EE(2) of the Corporations Act 2001 (Cth), approve the remuneration of Barry Anthony Taylor and Andrew Fletcher Needham as Liquidators of the of the Prestige Scheme (In Liquidation): a in the amount of $108,183.00 plus GST in the amount of $10,818.30 for the period of 21 February 2013 to 29 April 2016; and b prospective remuneration of a maximum of $15,000 plus GST in the maximum amount of $1,500 for the period of 30 April 2016 to the finalisation of the Liquidation. 10. Direct that the Liquidators, in distributing the assets available to them in their capacity as Liquidators of the Prestige Scheme, would be justified in paying first the Liquidators' approved remuneration and costs, charges and expenses of and in connection with the winding up of the Prestige Scheme. Master Fund Scheme 11. Pursuant to s 601EE(2) of the Corporations Act 2001 (Cth), approve the remuneration of Barry Anthony Taylor as Liquidator of the Master Fund Scheme (In Liquidation): a. in the amount of $197,091.00 plus GST in the amount of $19,709.10 from 2 July 2013 to 29 April 2016; and b prospective remuneration of a maximum of $35,000 plus GST in the maximum amount of $3,500 for the period of 30 April 2016 to the finalisation of the Liquidation. 12. Direct that the Liquidator, in distributing the assets available to him in his capacity as Liquidator of the Master Fund Scheme, would be justified in paying first the Liquidator's approved remuneration and costs, charges and expenses of and in connection with the winding up of the Master Fund Scheme. All schemes 13. The Liquidators' costs of the interlocutory application and the further consideration of the Third Amended Originating Process be paid out of the assets of the respective Scheme to which those costs relate. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 September 2016