Palmer v Palmer[2024] QCA 263

SUPREME COURT OF QUEENSLAND

1. [1]
   MULLINS P:  The appellant Mr Garry Palmer and his brother Mr Keith Palmer are partners (the partners) in a partnership known as Lindsay Palmer & Sons.  Mr Cook and Mr Khatri who are the second respondents (but will be referred to as the respondents) were appointed by Davis J on 8 August 2019 to be the receivers and managers of the partnership without security including the assets of the partnership to conduct the winding up of the partnership with all equivalent powers prescribed by s 420 of the Corporations Act 2001 (Cth) (the Act) and for their costs and expenses to be paid from the assets of the partnership.  That order was varied by Boddice J on 24 February 2020 by specifying in greater detail some of the assets of the partnership and conferring specific powers on the receivers and managers in relation to the Commsec account held by the partnership.  Relevantly, the order dealing with the payment of the receivers and managers’ costs and expenses was varied by the order made on 24 February 2020 to:

“The receivers and managers’ reasonable remuneration, costs and expenses be paid from the assets of the partnership.”

2. [2]
   The respondents applied for an order pursuant to r 269 of the Uniform Civil Procedure Rules 1999 (Qld) and the orders made on 8 August 2019 and 24 February 2020 that their remuneration in acting as receivers of the property of the partnership from 8 August 2019 to the conclusion of their appointment be fixed in the sum of $1,152,396.26 and be paid from the assets of the partnership.  Ancillary orders were also sought in the application.  The orders were opposed by the appellant.  Mr Keith Palmer’s solicitors informed the Court that he did not wish to be heard on the respondents’ application and supported their application for remuneration.
3. [3]
   The application was heard by the learned trial judge, Crowley J, who made the orders sought by the respondents: Palmer v Palmer [2023] QSC 278 (the reasons).
4. [4]
   The appellant appeals against that decision and seeks orders that the appeal be allowed, the respondents’ application be dismissed, and that the respondents personally pay the costs of the appeal and the remuneration application.  The appellant also seeks an order that the respondents reimburse the partnership for all sums withdrawn by them for remuneration and all sums paid by them to their solicitors for work done in relation to the remuneration application.

Grounds of appeal

5. [5]
   There are 11 specific grounds set out in the notice of appeal.  They allege that the trial judge erred as follows:

   1. in concluding that the respondents had discharged their onus of proving that the work which they performed was necessary, reasonable and properly performed and was supported by sufficient information and material;
   2. in failing to determine the remuneration application in accordance with the principles established by Re Solfire Pty Ltd (in liq) (No 2) [1999] 2 Qd R 182 and Lancet Pty Ltd v Olholm Developments Pty Ltd [2001] 1 Qd R 22;
   3. in giving no weight, or no sufficient weight, to the opinions of Mr Clout which were unchallenged by cross-examination;
   4. in concluding that the amount $1,152,396.26 was fair, reasonable and proportionate remuneration for the work performed by the respondents;
   5. in failing to consider the nature of the fiduciary duty owed by the respondents to the partners and to evaluate whether their conduct discharged that duty;
   6. in concluding that the respondents were entitled to be paid for their reports, advices and communications to the partners pursuant to s 420(1) of the Act;
   7. in concluding (at [157] of the reasons) that the appellant placed “too much emphasis upon … the opinions expressed by Mr Cook in the first partner update letter”;
   8. in failing to conclude that the vast majority of the partnership assets were realised by 20 February 2020;
   9. in failing to conclude that the respondents had unduly delayed the winding up of the partnership for at least three years, thereby unnecessarily increasing the costs of the receivership;
   10. in failing to conclude that the costs claimed by the respondents for preparing their fee approval application in the amount of $178,879.60 was not proportionate to the work involved and was excessive.

Activities of the receivership

6. [6]
   The trial judge briefly described (at [21]-[25] of the reasons) the assets of the partnership and the major transactions carried out by the respondents.
7. [7]
   In summary, apart from cash balances, there was a 40 year rolling term lease over a working cattle station and the cattle, a hotel business at Mundubbera which included gaming activities, the land on which the hotel was conducted, a residential property at Sinnamon Park and shares, including a portfolio of shares in a CommSec Share Trading account held in the names of the partners.
8. [8]
   The cattle station was sold at auction on 20 December 2019 for $22.5m (exclusive of GST) and the cattle were sold under a separate contract of sale.  The settlement of both contracts completed in February 2020.
9. [9]
   The respondents carried on the business of the hotel and it was later sold as a going concern to an entity associated with the appellant.  The settlement of the sale of the hotel and the land on which the business was conducted took place in October 2020 for a total sum of $917,158.44.  The Sinnamon Park property was sold in August 2020 for $320,000 and the sale settled in September 2020.  Apart from a small quantity of shares that were sold, the majority of the shares were transferred in specie to the partners.
10. [10]
    The gross receipts for the sale of the principal assets were $26,353,647.90 and distributions of the sale proceeds totalling $19,572,922.00 had been made to the partners.
11. [11]
    Apart from the realisation of assets, other activities undertaken by the respondents were referred to in the reasons.  Even though the settlement of the hotel was effected in October 2020, the respondents had been notified of an employment claim made by the manager of the hotel, Mr Byrnes, on 23 September 2020 and that claim did not resolve until about 10 May 2022 after entry into a settlement deed.  See [96] and [103] of the reasons.  The trial judge noted (at [104]) that following resolution of Mr Byrnes’ claim, there was an investigation into a dispute concerning drawings by the partners; the second distribution to the partners was then made on 15 June 2022; the 2022 financial statements for the partnership were finalised on 4 October 2022; and the remuneration application was filed about six and one-half months later.

The material before the trial judge

12. [12]
    In order to deal with the grounds of appeal, it is necessary to explain the ambit and content of the material that was put before the trial judge for the purpose of the application.  The trial judge dealt with this at length at [28]-[55] of the reasons.
13. [13]
    The first affidavit of Mr Cook filed on 21 April 2023 dealt with the overview of the assets of the partnership and the work undertaken during the receivership.  The first affidavit also dealt with the electronic file management system called “Workbench” used by the respondents’ firm in the administration of its practice and the manner in which details of work performed were recorded in Workbench.  (The trial judge summarised (at [31]-[35] of the reasons) the main features of Workbench.)  There is the time costing element of Workbench where time is recorded against a relevant charge code using work categories that are designated by the Australian Restructuring Insolvency & Turnaround Association and that work recorded in a file note is further allocated to a workstream performed in the receivership where the workstreams were related to the activities of the receivership.  The report generated through Workbench which collated all the time cost entries recorded in relation to the receivership for any given period is known as an “All Entries Time Cost Report” (AETCR).
14. [14]
    The respondents had opposed the appellant’s access to the Workbench electronic file management system on the basis that Workbench was proprietary software which contained information that was confidential, subject to legal professional privilege and otherwise commercially sensitive.  The respondents had therefore prepared a summary of the work undertaken, based on the information contained in the file notes within Workbench, supplemented with some further information to provide context in respect of the work undertaken.  That was referred to as the Workstream Summary Report and was exhibited to Mr Cook’s first affidavit: see [41]-[43] of the reasons.
15. [15]
    Another report exhibited to Mr Cook’s first affidavit was the Master Staff Time Report which was a further report produced by Workbench which the trial judge noted (at [45] of the reasons) showed “each of the staff members who have worked on the receivership and includes details of their position, average hourly rate, total hours worked and the total dollar amount charged for the time they have worked on the matter”.
16. [16]
    The appellant obtained an expert report dated 17 July 2023 from registered liquidator Mr Clout that was exhibited to his affidavit affirmed on 19 July 2023.  Mr Clout identified some issues which he had with the claim for remuneration by the respondents.
17. [17]
    The second affidavit of Mr Cook sworn on 9 August 2023 responded to some of the issues raised by Mr Clout.  The second affidavit of Mr Clout affirmed on 17 August 2023 responded to the second affidavit of Mr Cook.  The third affidavit of Mr Cook that responded to the second affidavit of Mr Clout was sworn on 18 August 2023.  That affidavit exhibited the entire consolidated AETCR spreadsheet covering 8 August 2019 to 19 April 2023 which was 1,297 pages containing thousands of entries listed in chronological order that recorded a short description of the work undertaken, together with the designated work category code for the work, identified the person who did the work and notes the date the work was done, the time spent on the work and the cost of the work.
18. [18]
    The hearing before the trial judge took place on 21 August 2023.  Neither Mr Cook nor Mr Clout was cross-examined.
19. [19]
    The trial judge concluded (at [72] of the reasons) that the material the respondents provided to the Court was sufficient to enable the trial judge “to generally determine the reasonableness of the remuneration they claim”.  The trial judge’s analysis of that material to support the conclusion as to sufficiency is set out at [73]-[82] of the reasons.  The trial judge set out (at [78]) an entry in the AETCR of details recorded for 36 minutes of work undertaken by a specified staff member on 21 February 2020 in relation to the sale of the hotel.  The trial judge noted (at [79]) that the information provided in the “Details” column of the AETCR in most cases provided sufficient information about the task undertaken but further noted (at [80]) that it was possible to cross-reference entries in the AETCR with the narrative description of the work undertaken recorded in the Workstream Summary Report.  The trial judge referred to the relevant entry in the Workstream Summary Report for the example used at [78].  The trial judge then showed (at [81]) how the cost shown in the AETCR for the 36 minutes of work can be confirmed with the rates of charge in the Master Staff Time Report.  There was no suggestion on the appeal that the trial judge erred in using the material adduced by the respondents as shown by this example.  The appellant’s focus was on the failure of the respondents to present the material in the form favoured in Solfire.  The appellant did make submissions on the appeal about the usability of the information provided by the respondents but the trial judge demonstrated by this example that the information was usable.

Should the trial judge have followed the practice for approval of remuneration in Solfire and Lancet?

20. [20]
    As it affects how some of the other grounds of appeal will be dealt with, ground (b) should be considered as a preliminary matter.
21. [21]
    The trial judge noted (at [62] of the reasons) that there was no dispute about the general principles that apply when the Court is required to consider the reasonableness of remuneration claimed by a receiver and set out the summary of Brereton J in Re Say Enterprises Pty Ltd [2018] NSWSC 396 at [6].  The trial judge also noted (at [63]) that there was no real dispute about the further general principles that can be summarised briefly as:

    1. a receiver is entitled to remuneration that is fair and reasonable and carries the onus of establishing that entitlement;
    2. the procedure of approving a receiver’s remuneration is a summary one in which the rules of evidence are ordinarily not strictly observed;
    3. the Court does not usually undertake a “line by line” analysis of the receiver’s time sheets;
    4. the receiver’s views as to what is reasonable are relevant but not determinative;
    5. the concept of proportionality between the work done and remuneration claimed to the value of the property is an important consideration in determining reasonableness.
22. [22]
    Even though there was general agreement between the parties about the general principles to be applied, the trial judge noted (at [64] of the reasons) that the parties disagreed about what the authorities required in respect of the nature and extent of the material which the receiver must provide to the Court on a remuneration application.
23. [23]
    Before the trial judge, the appellant had submitted that the approach of Shepherdson J in Solfire at 191 when reviewing a provisional liquidator’s claim for remuneration that was applied by Shepherdson J in Lancet at [93] when considering a claim for remuneration sought by a court-appointed receiver stated the law in Queensland and should be followed.  The statement made by Shepherdson J in Solfire at 191 was:

“In my view, when a provisional liquidator seeks to have his remuneration determined by the court he should provide a document not dissimilar in form to the Bill of Costs in taxable form provided by a solicitor to his client (see O. 91 r. 47). He should identify the person or persons and the grade or grades of the person or persons engaged in the particular task concerning the provisional liquidation, he should identify that task and dates on which time was spent on it, the amount of time spent on it and he should identify the relevant rate, according to the grade of the person or persons performing the work. I also consider that he should require the person performing the work to keep reasonably detailed diary notes and time sheets which documents should be open to inspection by persons entitled to see them.”

24. [24]
    In Solfire, the applicants who applied for an order to be heard on the approval or review of the provisional liquidator’s and the liquidators’ costs and expenses were the shareholders of the subject company in respect of which they were also seeking orders that the winding up be terminated or permanently stayed.  The applicants had paid into their solicitors’ trust account sufficient funds to satisfy the outstanding creditors and the issue was the proper costs and expenses of the provisional liquidator and the liquidators (including their solicitors’ costs).  Minimal information had been provided to the Court by the provisional liquidator and the liquidators as to the basis on which their remuneration was charged.  The solicitors had provided one line of information for each file which disclosed the file number, the subject matter of the file and the total amount of the fees and outlays.  The orders made by Shepherdson J responded to the dispute that arose in relation to the costs of the provisional liquidator and liquidators in working out the conditions in which the winding up would be terminated or stayed.
25. [25]
    Solfire was considered by the Full Court of the Supreme Court of Western Australia in Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96.  In Venetian, the respondent had succeeded before the Master in obtaining approval of his claim for remuneration as provisional liquidator and administrator of one company and as provisional liquidator of a second company.  The objectors at the hearing before the Master who included the creditors of the first company, some of the shareholders of the second company and the second company applied for leave to appeal to the Full Court.  The applicants succeeded before the Full Court.  Kennedy and Ipp JJ (with whose reasons Wallwork J agreed) stated at 102-103:

“As a starting point, in our view, the onus is on the provisional liquidator to establish that the remuneration claimed is fair and reasonable. 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 is to consider whether, prima facie, the provisional liquidator has made out a case for the determination of the amounts claimed. The fact that there may be no person who objects to the claim, or any part of the supporting testimony, or that objectors advance unsustainable arguments, or do not properly formulate their objections, cannot detract from the court's duty in this respect. The judicial officer conducting an inquiry under s 473(2) is required to make an independent determination of the remuneration claimed, even if there is an absence of objectors, or appropriately detailed objections, or objections advanced on arguable grounds. Of course, once the court is satisfied that the provisional liquidator has made out a prima facie case that the remuneration claimed should be allowed, the absence or inappropriateness of points taken by objectors becomes relevant.”

26. [26]
    The joint judgment in Venetian also identified at 103 what the provisional liquidator’s material should cover in bringing the application for determination of the remuneration.  There should be “a statement of account reflecting in appropriate itemised form, details of the work done, the identity of the persons who did the work, the time taken for doing the work, and the remuneration claimed accordingly” and the statement of account should itemise the expense incurred by the provisional liquidator accompanied by voucher proof with sufficient detail to enable the Court to determine whether the disbursements were reasonably incurred.  The joint judgment also noted at 103 that the statement of accounts should be verified by affidavit.
27. [27]
    The Court in Venetian concluded (at 105) that the information provided by the respondent was insufficient to enable the Master to assess what work was done, what each task involved, to identify which employee did the work, how long any particular category of work took or who performed any particular category of work.  The statement quoted above from Solfire at 191 was the subject of the following observation in the joint judgment in Venetian at 103:

“In our opinion, however, it is, with respect, unnecessary to lay down an absolute rule, in such detailed terms, concerning the statement of account to be provided by a provisional liquidator. It may well be that in a particular case information particularised as suggested by Shepherdson J would be appropriate. In other cases less detailed information may be required. Every case depends on its own circumstances. But the overriding principle remains: sufficient information must be provided to the court to enable it to perform its function under s 473(2).”

28. [28]
    Lancet which involved the application by Court appointed receivers and managers of property the subject of a joint venture agreement for approval of their remuneration in conjunction with the application for approval of the sale of the subject property was decided after Venetian.  Shepherdson J referred in Lancet (at [93]) to the statement he had made in Solfire at 191 and could see no reason why those comments should not apply in Lancet.  Shepherdson J noted (at [94]) the statement in Venetian at 103 that the overriding principle was sufficient information must be provided to the Court to enable it to perform its function in determining a provisional liquidator’s remuneration.  Shepherdson J concluded in Lancet (at [95]) that the receivers in that case had provided sufficient information to enable him to decide whether the remuneration sought was fair and reasonable and the quantum of the remuneration claimed was approved.
29. [29]
    Before the trial judge, the respondents submitted that the Court was not bound by what Shepherdson J stated in Solfire and Lancet and submitted the correct statement of principle was the observation of the Full Court in Venetian.
30. [30]
    The trial judge made the point (at [70] of the reasons) that his Honour was not bound by the decisions of a single judge in Solfire and Lancet.  The trial judge concluded (at [71]):

“I consider the correct statement of general principle is that identified by the Court in Venetian. That is not to say, however, that I consider Shepherdson J to be wrong. Rather, as the Court concluded in Venetian, whilst the particularity suggested by his Honour may well be required in a particular case, it is not necessarily required in every case. What is required is sufficient information to enable the court to perform its function. The relevant function of the Court here is to allow such remuneration, if any, the Court fixes and in doing so to determine whether the remuneration sought by the receivers is fair and reasonable.”

31. [31]
    This Court as an intermediate appellate court is bound to follow the decisions of other Australian intermediate appellate courts in both matters of statutory interpretation and matters of common law unless persuaded that those decisions are plainly wrong: see R v Falzon (2018) 264 CLR 361 at [49].  The observations of the Full Court of the Supreme Court of Western Australia in Venetian on what may constitute the provision of sufficient information to the Court to enable it to perform its function of determining a provisional liquidator’s remuneration (which has application to the fixing of remuneration of a court appointed receiver) may not fall strictly within the category of intermediate appellate decisions which should ordinarily be followed but the observations were on a matter of practice that is now the subject of national legislation and was the subject of uniform legislation throughout Australia at the time.  The observations merit appropriate consideration in other Australian jurisdictions.
32. [32]
    The decision in Venetian recognises that there can be flexibility in the presentation of the information to the Court for the purpose of the remuneration application (rather than being limited to the precise requirements proposed by Shepherdson J in Solfire).  Shepherdson J in Lancet did not demur from the statement in Venetian at 103 that the overriding principle was that sufficient information must be provided to the Court to enable it to perform its function of determining the receiver’s remuneration.  There was no error in the trial judge in applying the statement of general principle from Venetian and concluding that he was not bound to apply the precise requirements specified by Shepherdson J in Solfire and Lancet as to the form and content of the information provided in support of an insolvency practitioner’s claim for remuneration provided the Court was provided with sufficient information to enable it to determine the respondents’ remuneration.
33. [33]
    The appellant therefore does not succeed on ground (b) that the trial judge erred in failing to determine the remuneration application in accordance with the principles in Solfire and Lancet.

Had the respondents discharged their onus of proving by sufficient information and material that their work was necessary, reasonable and properly performed?

34. [34]
    The appellant dealt with grounds (a) and (c) together.
35. [35]
    There are two aspects to ground (a).  It is implicit in ground (a) that the appellant asserts that, even if the respondents did not have to comply with the statement in Solfire that was endorsed in Lancet as to the form and content of the information in support of the application, the information and material relied on by the respondents was insufficient to enable the Court to determine the respondents’ remuneration.  The second aspect is that the trial judge had erred in concluding that the information and material relied on by the respondents showed that their work was necessary, reasonable and properly performed.
36. [36]
    The first aspect is a threshold issue.  The issue before the trial judge was whether sufficient information was provided to the Court to enable it to perform its function of determining remuneration: Venetian at 103.  The conclusion on the threshold issue is amenable to appellate review on the basis of the correctness standard: GLJ v Trustees of the Roman Catholic Church for the Diocese of Lismore (2023) 97 ALJR 857 at [15].  There was either sufficient information to undertake the task required of the Court or there was not.  As the analysis of the trial judge showed (at [72]-[82] of the reasons), the trial judge was provided with sufficient information to determine the reasonableness of the remuneration claimed by the respondents by cross-referencing all the documents that were produced by the respondents for the application.  The appellant did not dispute that analysis.  The appellant’s focus was on the source documents that he asserted should have been provided and did not otherwise controvert the trial judge’s conclusion (at [72]) that what was provided was sufficient to enable the trial judge “to generally determine the reasonableness of the remuneration”.
37. [37]
    In dealing with the second aspect, ground (a) is expressed in terms that cover the broad issue of whether the work undertaken by the respondents was necessary, reasonable and properly performed.  In theory, ground (a) puts in issue all the work undertaken by the respondents, the propriety of the decisions made by the respondents and the manner in which the work undertaken by the respondents was performed.
38. [38]
    The trial judge identified (at [84] of the reasons) the specific concerns of the appellant relevant to the issues of whether the work undertaken by the respondents was necessary and the charges incurred reasonable as follows:

“The specific concerns of Mr Palmer are largely those identified by Mr Clout in his report. They are in respect of delays adding to costs, the possible duplication of work, overservicing and overcharging for work, undertaking apparently unnecessary and unauthorised work and the receivers failing to properly review and adjust the fees they were charging. Mr Palmer also expresses concerns about the lack of proportionality in respect of some particular tasks as well as with respect to the overall claim itself.”

39. [39]
    It is of relevance in dealing with ground (a) that the trial judge noted (at [85] of the reasons) that, apart from those specific concerns set out at [84], no issue was taken with respect to Mr Cook’s evidence about the nature and extent of the work undertaken for the receivership and the necessity and reasonableness of that work.  The appellant cannot be permitted to conduct a broader case on appeal than he did before the trial judge.  There is no ground of appeal that asserts that the trial judge failed to deal with any submission made by the appellant in the hearing before the trial judge.  Ground (a) should be confined to those aspects of the work that were the subject of the appellant’s specific concerns before the trial judge that were dealt with in detail at [86]-[161] of the reasons.
40. [40]
    In general terms, the issues raised in Mr Clout’s report were either accepted by Mr Cook in some small respects or explanations were given by Mr Cook that showed why the reservations of Mr Clout were not valid criticisms of the claim for remuneration.  When the remuneration application was originally filed on 21 April 2023, the respondents sought remuneration to be fixed in the sum of $1,156,061.29 inclusive of GST for the period from 8 August 2019 to 19 April 2023 and also sought an order that from 20 April 2023 until the discharge of the respondents, remuneration be fixed in such sum as is found to be reasonable with all the remuneration to be paid from the assets of the partnership.  The respondents conceded deductions in the total amount of $3,665.03 from the sum claimed in the application.  Mr Cook had also deposed in his second affidavit that the respondents were not pursuing the claim for additional remuneration for work undertaken since 19 April 2023.  At the trial judge’s request, the respondents filed an amended application on 22 August 2023 that sought the sum of $1,152,396.26 as the remuneration from 8 August 2019 to the conclusion of their appointment.
41. [41]
    The trial judge concluded (at [162] of the reasons) that the work done with respect to the receivership by the respondents was “necessary, performed properly and their claim for remuneration is supported by sufficient information and material”.  In view of the manner in which the appellant disputed the respondents’ remuneration claim before the trial judge, once the appellant failed on the threshold issue of the correctness of the trial judge’s conclusion that there was sufficient information and material to enable the remuneration claim to be determined, ground (a) will be disposed of, if no challenge can be sustained to the trial judge’s acceptance of Mr Cook’s evidence as to the nature and extent of the work undertaken by the respondents in the receivership.  That depends on ground (c).
42. [42]
    The implicit assertion in ground (c) that, as Mr Clout was not cross-examined, his opinions should have been accepted by the trial judge, loses its force when Mr Clout’s opinions were controverted by evidence and explanations from Mr Cook who was also not cross-examined.  To the extent that issues raised in Mr Clout’s report were not accepted by Mr Cook, the trial judge explained in the reasons as to why the evidence of the respondents on those issues was accepted.  In the manner in which the application was conducted, it was open to the trial judge to act on that evidence, despite the reservations expressed by Mr Clout.
43. [43]
    The appellant therefore does not succeed on either ground (a) or ground (c).

Was the amount claimed by the respondents fair, reasonable and proportionate remuneration?

44. [44]
    The applicable standard of appellate review on the quantum of the remuneration is that specified in House v The King (1936) 55 CLR 499 at 504-505: Sanderson as Liquidator of Sakr Nominees Pty Ltd (in liq) v Sakr (2017) 93 NSWLR 459 at [49].
45. [45]
    The reasons submitted by the appellant for why the trial judge erred in finding that the amount claimed by the respondents for remuneration was reasonable that is the subject of ground (d) were:

1. “a.
   it focused only on seeking indemnification for all the receivers’ costs charged to the administration;

1. b.
   it lacked proportionality:

1. c.
   the risks undertaken by the receivers were non existent;

1. d.
   the degree of difficulty of the tasks undertaken was minimal for a truly qualified and experience receiver;”

46. [46]
    The respondents’ time costing approach that resulted in the quantum claimed for their remuneration does result in their gaining indemnification to a large extent (but not entirely) of their costs charged to the receivership.  That does not preclude, however, that the amount claimed by them was not fair, reasonable and proportionate remuneration.  That issue was decided by the trial judge by reference to the material provided by the respondents in support of the application.  Despite the criticism of time costing in many decisions, including Mirror Group Newspapers plc v Maxwell (No 2) [1998] 1 BCLC 638 at 648-652, the position in Australia is that a time-based calculation may be appropriate in fixing reasonable remuneration on the evidence before the Court: Sakr at [59]-[60].  It is relevant that the trial judge accepted (at [131] of the reasons) the evidence of Mr Cook that he reviewed the remuneration claimed by the respondents before they issued interim certificates for remuneration and some entries that were identified as “unclear, duplicated, unnecessary or incorrect time recordings or narrations” were deleted or amended as appropriate.
47. [47]
    As to the submission that the respondents’ claim for remuneration lacked proportionality, the trial judge dealt with that submission at [144]-[161] of the reasons.  By ground (d), the appellant is seeking merely to make the same arguments that he made before the trial judge and is not pointing to error in the reasons that the trial judge gave for rejecting the appellant’s complaints about lack of proportionality between the fees charged and the size, value and nature of the property the subject of the receivership and the nature, value and complexity of the services provided.  The trial judge rejected (at [150]) the appellant’s assertion that the receivership was simple and accepted Mr Cook’s explanations about the “complexities and peculiarities involved with this receivership” which were detailed at [151]-[153].  The trial judge rejected the appellant’s complaints about lack of proportionality at [155] of the reasons.  The trial judge tested the respondents’ remuneration claim for $1,152,396.26 against the total receipts for sale of the partnership assets of $26,353,647.90 and observed (at [156]):

“The claimed remuneration therefore amounts to approximately 4.37% of the gross realisations of the receivership. Whilst it is a rough measure, it does not suggest excessive charging by the receivers, having regard to the nature and extent of the work they performed in discharging their roles.”

48. [48]
    The last two matters the subject of submissions in support of ground (d) are different ways of expressing the same issue and are also aspects of proportionality.  The reference to non-existent risks undertaken by the receivers reflects the assertion of the appellant that the respondents supervised the performance of the tasks undertaken by others including auctioneers, valuers, solicitors, the partnership accountant and the manager of the hotel and personally assumed no risk, as there were only “minimal” difficulties in the realisation of the partnership assets.  As set out above, those arguments that the respondents assumed no risk and the degree of difficulty of the tasks undertaken by the respondents was “minimal” were rejected by the trial judge at [150]-[153] of the reasons.  The appellant does not point to any specific error in the extensive reasons of the trial judge in reaching the view that it was not accurate to describe the receivership as “simple”.
49. [49]
    By merely repeating assertions that had been made before the trial judge and not engaging with the trial judge’s reasons for rejecting those assertions, the appellant cannot succeed on ground (d).

Did the respondents breach their fiduciary duty by operating the hotel at a loss?

50. [50]
    There are two aspects relied on by the appellant for ground (e).  The first aspect is the assertion by the appellant that the trial judge failed to appreciate that the receivers’ management role of the hotel required them to exercise the same degree of care and skill in relation to the partnership assets, as if they were managing their own assets.  The second aspect is the assertion that the trial judge failed to evaluate whether the respondents’ conduct in continuing to operate the hotel at a loss of $30,000 per month discharged their fiduciary duty.  In submissions on the appeal, the appellant alleged that the respondents managed the sale of the hotel incompetently or negligently and that the respondents should never have entered into a contract to sell the hotel on a trade on basis.  The terms of ground (e) relate to breach of fiduciary duty and the assertion of incompetence or negligence which does not appear to have been the subject of the appellant’s contentions before the trial judge (as shown by [85] of the reasons) falls outside ground (e) and therefore will not be considered further.
51. [51]
    In setting out the relevant legal principles applicable to the respondents’ role as the receivers of the partnership, the trial judge noted (at [59] of the reasons) the fiduciary duty owed by the respondents to the partners in the performance of their roles.  One of the specific concerns raised by the appellant was the costs incurred by the respondents in continuing to conduct the hotel business.  The trial judge found (at [98]) that no criticism could be made of Mr Cook’s decision to trade on in the hotel, as it “was logical and supported by evidence from the selling agent” and Mr Cook “determined that it was preferable to continue trading as it was likely a higher return would be achieved for the partners”.  Even though the sale contract for the hotel was entered into on 27 February 2020, the trial judge noted (at [95]) that there were delays due to COVID-19, the inability to transfer the liquor and gaming licenses and various settlement extension requests made by the appellant that resulted in the date for settlement being extended to 1 October 2020.  In addition, under the sale contract, the respondents were obliged to continue trading while the contract was on foot.  The fiduciary duty of the respondents to the partners underpinned the trial judge’s consideration of the issues.  The appellant cannot succeed on either aspect of ground (e).

Reports pursuant to s 420(1) of the Act

52. [52]
    The trial judge dealt with the issue of overservicing by the regular partner updates that is the subject of ground (f) at [137]-[143] of the reasons.  Mr Cook had identified that the amount of the remuneration claim attributable to partner updates was $69,628.52.  Mr Clout had suggested that the respondents’ twice daily updates to its dedicated website for the receivership may have exceeded what was necessary by way of reporting.  The trial judge recorded (at [141]) that Mr Cook had stated that the twice daily updates was “an entirely automated process based on the information recorded in Workbench and no time was spent, and no costs were incurred, in this reporting”.  As to Mr Clout’s observation that there was no specific power or duty that provided for partner updates in the appointment orders, the trial judge concluded (at [142]) that the partner updates were not unauthorised, as it was an incidental activity that comes within s 420(1) of the Act.  The primary judge concluded (at [143]) that the partner updates were necessary and that the receivers had not incurred unnecessary or unreasonable costs in producing them.  It should be noted that Mr Clout had also accepted that reporting to stakeholders in an insolvency administration is entirely appropriate.  That was confirmed by the evidence of Mr Cook which was noted (at [140]) that he provided update reports as a matter of practice and believed it was appropriate where, in this case, there were two partners who each had a large financial interest in the outcome of the receivership.
53. [53]
    In view of the insolvency practice of regular reporting to stakeholders which is properly characterised as an incidental activity under s 420(1) of the Act, the value of the partnership assets and the hostility between the partners that resulted in the receivership, there was no error made by the trial judge in respect of either aspect of ground (f).

The first partner update

54. [54]
    The trial judge stated at [157] of the reasons:

“In my view, Mr Palmer unduly places far too much emphasis upon Mr Clout’s assessment of the realisation period and the opinions expressed by Mr Cook in the first partner update letter.”

55. [55]
    The effect of ground (g) is to submit that the trial judge erred in making this observation.  It is implicit that the trial judge did not place the same weight on the first update letter as the appellant’s submissions did.  This ground does not raise appellable error.

The significance of the majority of assets being realised by 20 February 2020

56. [56]
    The dates of the realisation of assets were apparent from the material before the trial judge.  The purpose of this ground (h) is to challenge the reasonableness of the remuneration because by 20 February 2020 the sale of the largest asset, namely the cattle station, had been settled.  As the primary judge accepted the respondents’ evidence of the activities undertaken in the receivership after the sale of the cattle station, this ground is one aspect of the general challenge to the trial judge’s findings that the work undertaken by the respondents in the receivership was necessary, reasonable and properly performed and adds nothing to ground (a).
57. [57]
    Ground (i) asserts error in the trial judge failing to conclude that the respondents had unduly delayed the winding up of the partnership and thereby unnecessarily increased the costs of the receivership.  Ground (i) is also related to ground (a) and adds nothing to ground (a).
58. [58]
    As the appellant does not succeed on ground (a), he also fails on grounds (h) and (i).

The costs of preparing the fee approval application

59. [59]
    The amount of $178,879.60 was claimed for the preparation of the remuneration approval application.
60. [60]
    The trial judge dealt with the costs claimed by the respondents for preparing the fee approval application at [100]-[110] of the reasons.  The trial judge accepted the evidence of the respondents that costs for the fee approval application reflected the substantial amount of work required to collate and prepare the application material as well as to defend the application brought by the appellant for access to Workbench.  The trial judge concluded (at [109]) that the fees attributable to the work done by the respondents to defend that application were neither unnecessary nor unreasonable and that (at [110]) it was evident from the appellant’s repeated requests for the respondents to provide further information about their work and their costs, the appellant’s unsuccessful application to seek access to Workbench and the acrimonious relationship between the partners, it was necessary for the respondents to undertake substantial work to prepare the application.
61. [61]
    On the material before the trial judge, it was open to the trial judge to make the findings of fact that supported the conclusion that the costs claimed for the preparation of the remuneration approval application were not excessive.  The appellant does not succeed on ground (j).

Order

62. [62]
    The appellant has not succeeded on any of his grounds of appeal.  It follows that the order which should be made is: Appeal dismissed with costs.
63. [63]
    BOND JA:  I have had the benefit of reading in draft the reasons for judgment of Mullins P.  Her Honour’s reasons enable me to express in a relatively summary way my reasons for agreement with the order which her Honour proposes.
64. [64]
    Mullins P has explained the nature of the application which was brought before the primary judge.  It was common ground that the nature of the task before his Honour was to make a determination of the amount of the remuneration which should be fixed for the receiver, “by applying and taking into account a broad range of evaluative factors, but ultimately [by] fixing reasonable remuneration”.^[1]
65. [65]
    In GLJ v Trustees of the Roman Catholic Church for the Diocese of Lismore (2023) 97 ALJR 857^[2] the High Court observed as follows (footnotes in original, emphasis added):

“The reasoning in House v The King applies to judicial decisions involving an exercise of discretion.^[3] It has been said that the concept of a "discretion" is "apt to create a legal category of indeterminate reference"^[4], but the presently relevant essential characteristic of a discretionary judicial decision is that it is a decision where more than one answer is legally open. In Norbis v Norbis^[5], for example, the power of a court to make an order altering the interests of parties to a marriage was characterised as a judicial discretion because the decision called for "value judgments in respect of which there is room for reasonable differences of opinion, no particular opinion being uniquely right"^[6]. The line separating discretionary decisions (in which appellate review is confined to the House v The King standard) and other decisions (in which the "correctness standard" applies) was identified as that between questions lending "themselves to differences of opinion which, within a given range, are legitimate and reasonable answers to the questions" in which event "it would be wrong to allow a court of appeal to set aside a judgment at first instance merely because there exists just such a difference of opinion between the judges on appeal and the judge at first instance"^[7], and questions to which there is but one legally permissible answer, even if that answer involves a value judgment^[8].”

66. [66]
    The footnote in the last sentence in the quote referred with approval to passages from Minister for Immigration and Border Protection v SZVFW.^[9]  In that case, Gageler J (as the Chief Justice then was) made these observations as to the line between the correctness standard of review (Warren v Coombes) and the deferential standard (House v The King) (emphasis added):

“The line is not drawn by reference to whether the primary judge's process of reasoning to reach a conclusion can be characterised as evaluative or is on a topic on which judicial minds might reasonably differ. The line is drawn by reference to whether the legal criterion applied or purportedly applied by the primary judge to reach the conclusion demands a unique outcome, in which case the correctness standard applies, or tolerates a range of outcomes, in which case the House v The King standard applies. The resultant line is not bright; but it is tolerably clear and workable.”

67. [67]
    In Moore (a pseudonym) v The King^[10], the High Court reiterated that:

“A determination of which standard of review is applicable does not depend on whether the reasoning to be applied is evaluative or in respect of which reasonable minds may differ. Instead, the determination turns on whether the legal criterion to be applied "demands a unique outcome, in which case the correctness standard applies, or tolerates a range of outcomes, in which case the House v The King standard applies".”

68. [68]
    In the present case, the primary judge was fixing remuneration by the application of the legal norm of reasonableness.  Although not exercising a discretion, by seeking to fix the amount of the receiver’s remuneration the primary judge was making an evaluative judgment by the application of a legal criterion which necessarily would tolerate a range of outcomes.  It would have been different if the task for the primary judge was to decide whether the amount claimed was reasonable, because that decision would tolerate only one outcome.^[11]  Having regard to the approach to the identification of the correct standard of appellate review articulated in GLJ, the applicable standard in the present case is the deferential standard identified in House v The King.^[12]  I acknowledge that my reasoning in this regard reaches a different conclusion from that expressed in Sanderson v Sakr (2017) 93 NSWLR 459 at [49], but I am unable to see how the reasoning there expressed is consistent with the approach now articulated by the High Court in GLJ and in Moore v The King and which I regard myself as bound to apply.
69. [69]
    Accordingly, the appellant in the present case was required to demonstrate –

    1. specific (or process) error, in that the primary judge –
       1. (i)
          acted upon a wrong principle;
       1. (ii)
          allowed extraneous or irrelevant matters to guide or affect him;
       1. (iii)
          mistook the facts;
       1. (iv)
          did not take into account some material consideration; or
    2. inferred (or outcome) error, in that upon the facts the outcome reached by the primary judge was unreasonable or plainly unjust, so that the appellate court could infer that in some way there had been a failure properly to exercise the evaluative judgment concerned.
70. [70]
    I turn to the grounds of appeal to apply that standard of review, addressing them in the same way as did Mullins P.
71. [71]
    As to appeal ground (b):

    1. The appellant alleged the primary judge erred in failing to determine the remuneration application in accordance with the principles established by Re Solfire Pty Ltd (in liq) (No 2)^[13] and Lancet Pty Ltd v Olholm Developments Pty Ltd^[14].
    2. I agree with Mullins P, for the reasons advanced by her Honour, that the primary judge did not make the alleged error of principle and, accordingly, this ground fails.
72. [72]
    As to appeal grounds (a) and (c):

    1. The appellant alleged the primary judge erred (a) in concluding that the respondents had discharged their onus of proving that the work which they performed was necessary, reasonable and properly performed and was supported by sufficient information and material and (c) in giving no weight, or no sufficient weight, to the opinions of Mr Clout which were unchallenged by cross-examination.
    2. I respectfully disagree with the observations by Mullins P as to the standard of appellate review.  An appeal lies from orders made by the primary judge, not from reasons.  As the High Court reasoned in Moore v The King, the question of the appropriate standard of appellate review turns on whether the legal criterion applied or purportedly applied by the primary judge to reach the conclusion demands a unique outcome, or tolerates a range of outcomes.  The question is answered by reference to the decision which the primary judge had to make and must be answered in the way I have done so above.  The standard of appellate review does not vary by reference to questions addressed along the way to reaching the conclusion which must be made by the application of the legal criterion.
    3. However, I agree with her Honour that the primary judge’s reasons demonstrate that the primary judge concluded that he was provided with sufficient information to determine the reasonableness of the remuneration claimed by the respondents by cross-referencing all the documents that were produced by the respondents for the application.  Mullins P has explained why the primary judge’s view was open to him.  The contrary view contended for by the appellant was based on the appellant’s erroneous argument concerning the application of Re Solfire Pty Ltd (in liq) (No 2) and Lancet Pty Ltd v Olholm Developments Pty Ltd.
    4. In principle the weight to be given to particular relevant factors in reaching an evaluative judgment is a matter for the judge making the evaluative judgment.  A contention that the judge gave insufficient weight to a relevant factor is not a contention that the judge made a specific error in the House v The King sense.^[15]  I agree with Mullins P, for the reasons her Honour gives, that the manner in which the primary judge had regard to the evidence of Mr Clout was open to him.
    5. I agree that these grounds fail.
73. [73]
    As to appeal ground (d):

    1. The appellant alleged the primary judge erred in concluding that the amount $1,152,396.26 was fair, reasonable and proportionate remuneration for the work performed by the respondents.
    2. The appellant did not advance an argument of specific error.  The way in which the argument on this ground was put was to challenge the outcome and to invite this Court to reach a different conclusion than was reached by the primary judge.  But it was not arguable that the outcome was of the nature of that which would justify this Court inferring error.
    3. Mullins P’s analysis identifies why the conclusion reached by the primary judge was open to him.  I agree that this ground fails.
74. [74]
    As to appeal ground (e):

    1. The appellant alleged the primary judge erred in failing to consider the nature of the fiduciary duty owed by the respondents to the partners and to evaluate whether their conduct discharged that duty.
    2. This ground did advance a ground of specific error.  But, for the reasons given by Mullins P, the primary judge did not fail to consider this issue.  I agree that this ground fails.
75. [75]
    As to appeal ground (f):

    1. The appellant alleged the primary judge erred in concluding that the respondents were entitled to be paid for their reports, advices and communications to the partners pursuant to s 420(1) of the Corporations Act 2001 (Cth).
    2. This ground does not identify specific error in the House v The King sense.  There was no misapplication of principle, or mistaking of the facts, or errors concerning relevance or irrelevance.
    3. This ground merely disagrees with a particular outcome of the primary judge’s application of the legal criterion of reasonableness to the facts without identifying specific error or inferred error.
    4. This ground fails.
76. [76]
    As to appeal ground (g):

    1. The appellant alleged the primary judge erred in concluding (at [157] of the reasons) that the appellant placed “too much emphasis upon … the opinions expressed by Mr Cook in the first partner update letter.”
    2. I agree with Mullins P, for the reasons her Honour gives, that this ground does not raise specific error.  It is merely a challenge to the weight which the primary judge gave to some aspects of the evidence.  This ground fails.
77. [77]
    As to appeal grounds (h) and (i):

    1. The appellant alleged the primary judge erred (h) in failing to conclude that the vast majority of the partnership assets were realised by 20 February 2020 and (i) in failing to conclude that the respondents had unduly delayed the winding up of the partnership for at least three years, thereby unnecessarily increasing the costs of the receivership.
    2. Again, these grounds simply allege that there were aspects of the facts which the primary judge should have found to be more significant as sounding against the reasonableness of the remuneration claimed than the primary judge did find them.  They must be dealt with in the same way as appeal ground (g).
78. [78]
    As to appeal ground (j):

    1. The appellant alleged the primary judge erred in failing to conclude that the costs claimed by the respondents for preparing their fee approval application in the amount of $178,879.60 was not proportionate to the work involved and was excessive.
    2. This appeal ground does not raise specific error in the House v The King sense.  I agree with Mullins P, for the reasons her Honour gives, that it was open to the primary judge to reach the conclusion he reached.
79. [79]
    All the appeal grounds having failed, I agree with Mullins P that the appeal must be dismissed with costs.
80. [80]
    CALLAGHAN J:  I agree with the reasons of Bond JA, and join in the order proposed by Mullins P.