Case: Dean-Willcocks v Companies Auditors and Liquidators Disciplinary Board (2006) 59 ACSR 698 ; [2006] FCA 1438
Outcome: followed
Law did not specify that a cap was required. In Dean-Willcocks v Companies Auditors and Liquidators Disciplinary Board &amp; Anor (2006) 59 ACSR 698 ; [2006] FCA 1438 ( Dean-Willcocks ), however, Tamberlin J accepted that in determining whether a registered liquidator has failed to carry out or perform "adequately and properly" any duties or functions required by Australian law to be carried out or performed by a registered liquidator for the purposes of s 1292(2)(d)(ii) , it was permissible to test performance of the registered liquidator in the office of administrator against professional standards and codes (at [21]-[34]). Moreover, his Honour held that the concept of the performance of the function of an administrator was wide enough to include the acceptance of appointment to that office (at [32]). Tamberlin J's views must apply a fortiori to s 1292(2)(d)(i) and the office of a liquidator a fortiori because an argument, based on the presence of the words "required by an Australian law to be carried out or performed by a registered liquidator" in para (ii) of s 1292(2)(d) , that subsection (2) refers only to legislative prescriptions (an argument rejected by his Honour) is not available in respect of para (i). ASIC's proposition was that by not including a cap or upper limit, Mr Gould had fallen short of a professional standard which was stated in the Capping provisions of the Guide and the Statement. Before the Tribunal ASIC relied on the tender of those documents unsupported by any expert testimony. The Guide and the Statement of the IPAA On 20 December 1997 the IPAA issued the Guide, called a "Guide to Hourly Rates", to have effect from 1 December 1997. The Guide included certain Classifications by reference to insolvency experience and Hourly Rates chargeable in respect of persons falling within the various classes. In Dean-Willcocks , two Codes of Professional Conduct issued by the IPAA and the Institute of Chartered Accounts in Australia dealt with professional independence, conflicts of interest, and disclosure of relationships that might be thought to impinge on the independence of a registered liquidator acting as administrator. Moreover, CALDB relied on evidence of an expert (Mr Lombe). The words "or is otherwise not a fit and proper person to remain registered as a liquidator" provide an alternative to the criteria that precede in subparas (i) and (ii). Paragraph (d) must, however, be read as a whole. Its criteria can be analysed as follows (I will refer only to para (i) but the same analysis applies to para (ii)): (1) failure to perform adequately and properly the duties of a liquidator; or (2) being otherwise not a fit and proper person to remain registered as a liquidator. The word "otherwise" shows that the provision takes it for granted that a failure of the kind described in (1) will, without more, demonstrate that the person is not a fit and proper person to remain registered as a liquidator. Consistently with this understanding, the expression "the duties of a liquidator" directs attention, not to a specific duty or even to two or more specific duties, but to the duties in general of a liquidator. Of course, whether a registered liquidator has failed to perform adequately and properly the duties in general of a liquidator will be decided by reference to his or her failure to perform specific duties. Both limbs (1) and (2) call for an exercise of assessment, evaluation and judgment in relation to the registered liquidator's conduct. It is not enough, for example, in a mechanical and arithmetical way, simply to seek to identify a minimum of two failures to perform adequately and properly particular duties. Whether the Capping provisions in the Guide and the Statement were "professional standards" of the kind to which Tamberlin J was referring in Dean-Willcocks , depends on whether they purported to establish levels of "adequate" and "proper" performance that a registered liquidator must attain at peril of enlivening criterion (1) or criterion (2) above a serious matter. I do not think that they did. Two considerations lead me to this conclusion. First, neither Capping provision was contained in a document that purported to lay down standards of professional conduct of that kind. Second, the ambiguous and loose language of the Capping provisions themselves is not what one would expect of such a standard. The Guide purported to provide guidance, and stated that it was not to be used in every instance. These features characterised the Guide as a whole. There is no reason to exclude from them the Capping provision. I turn now to the language of the Guide's Capping provision. No doubt a professional standard of the kind contemplated by Tamberlin J in Dean-Willcocks may be attended by ambiguity. Moreover, as indicated above, I accept that in the present cases remuneration was approved prospectively. However, the loose language and uncertainty of the Capping provision of the Guide suggests that it was not intended by the IPAA to be a professional standard in the sense described. The Statement likewise does not establish a professional standard in that sense. First, it is a Statement of "Best Practice", not of a minimum required. As the "Conclusion" makes clear, the Statement was not intended to be prescriptive (see [69] above). Secondly, there are again certain ambiguities touching the Capping provision. I referred to two of these at [67] and [107] above. Whereas the Capping provision in the Guide predicated a "resolution for remuneration", that in the Statement predicates a "resolution for approval of remuneration". As in the Guide, it is unclear what the "specified amount" is to be a specified amount of. Mr Gould submits that in the absence of expert evidence, it was not permissible for the Tribunal to find that he had not carried out or performed his duties as liquidator of Popwing "adequately and properly". Mr Gould submits that this question is one of judgment, not a pure question of law, and that the answer must be informed by evidence of accepted proper practice: Mr Gould refers to Re Vouris; Epromotions Australia Pty Ltd and Relectronic-Remech Pty Ltd (in liq) [2003] NSWSC 702 ; (2003) 47 ACSR 155 at [101] and [103] Goodman v Australian Securities and Investments Commission (2004) 50 ACSR 1 at [26]; Dean-Willcocks at [24]-[26]; Albarran v Companies Auditors and Liquidators Disciplinary Board [2007] HCA 23 ; (2007) 231 CLR 350 at [18] , [20] and [24].