Insolvency practitioner remuneration is a vexed topic globally and the role of courts in fixing and reviewing remuneration is controversial. This article compares the approaches adopted by the courts in the United Kingdom, Australia and Singapore to the issue of fixing and reviewing corporate insolvency practitioners’ remuneration. The analysis considers the factors that the courts in the three jurisdictions consider in deciding remuneration claims including reasonableness, proportionality and the need for insolvency practitioners to justify their claims. Measures taken in each of the jurisdictions to facilitate predictability in time-based remuneration, whether through legislation, professional codes or judicial development, are examined. Various initiatives towards greater participation of external experts in deciding remuneration claims are also considered. The analysis finds that the three jurisdictions share some similarities despite jurisdictional differences but also differ in some important aspects. The article argues that courts have taken the initiative in each jurisdiction to fill a perceived regulatory gap where legislation provides little or ambiguous guidance, or where the judiciary believes that legislation and regulation have not kept up with community expectations. The results also highlight the cross-pollination of ideas in these jurisdictions.
Associate Professor, Melbourne Law School, University of Melbourne.
Associate Professor, Faculty of Law, National University of Singapore.
Professor, Melbourne Law School, University of Melbourne.We are grateful to Ms Vivien Chen, Lecturer, Department of Business Law and Taxation, Monash University and former Research Assistant, Melbourne Law School for research assistance and in particular analytical insights and drafting contributions to Sections A and C of Part V of this article. We also thank the anonymous reviewers for helpful comments. This article is funded by the NUS Law-MLS Research Partnerships 2014–2016.
1. Brown and Symes describe fixing and reviewing remuneration as a ‘quasi-administrative exercise’: David Brown and Christopher Symes, ‘Submission to Senate Inquiry into Liquidators and Administrators’ (Submission No. 40, Parliament of Australia 2009), 6–7 <http://www.aph.gov.au/Parliamentary_Committees/Committees/Senate/Economics/Completed_inquiries/2008-10/liquidators_09/submissions> accessed 31 August 2017.
2. It is common in all three jurisdictions for practitioners to apply a discount to the fees charged either at the hourly-rate level or to the overall remuneration amount. This calculation method is used in industries as diverse as plumbing and legal and accounting services, as well as insolvency practitioners.
3. Dickfos argues, for example, that both Australian and English corporate insolvency markets may be divided into secured and unsecured markets: Dickfos, Jennifer, ‘The Costs and Benefits of Regulating the Market for Corporate Insolvency Practitioner Remuneration’ (2016) 25 International Insolvency Review 56, 66 .
4. The Practice Direction – Insolvency Proceedings came into force on 29 July 2014 and replaced all previous Practice Directions, Practice Statements and Practice Notes relating to insolvency proceedings.
5. See eg Dickfos (n 3) 61.
6.  SGHC 260,  1 SLR 21.
7. Elaine Kempson, ‘Review of Insolvency Practitioner Fees: Report to the Insolvency Service’ (Insolvency Service July 2013) (‘Kempson Report’).
8. A key difference between the rules determining the remuneration of liquidators and administrators arises, however, where a liquidation committee or creditors’ committee, as applicable, does not exist, or the applicable committee fails to fix remuneration. Unsecured creditors may vote in relation to a liquidator’s remuneration in such circumstances, but they do not vote in the same situation in administration where only the secured creditors, or the secured creditors and preferential creditors, fix the remuneration if the unsecured creditors are out of the money. Insolvency Rules 2016, r 18.18(4) (where there would be insufficient funds for distribution to unsecured creditors other than out of the prescribed part under s 176A(2)(a) of the Insolvency Act 1986). The different treatment highlights debates about whether only creditors in the money should have a vote in relation to remuneration given that they have an economic interest.
9. In the UK, where the liquidator is not the Official Receiver, the basis of remuneration is to be determined by the liquidation committee in the first instance. See Insolvency Rules 2016, r 18.1(2) read with r 18.20(2), r 18.22 (Insolvency Rules 1986, r 4.127(3C)). If there is no liquidation committee or the committee does not make the determination, the basis of remuneration may be fixed by a decision of the creditors: Insolvency Rules 2016, r 18.20(3) (Insolvency Rules 1986, r 4.127(5)). The equivalents for administrator are to be found in Insolvency Rules 2016, r 18.1(2) read with r 18.18(2), (3) (Insolvency Rules 1986, rr 2.106(3C) and 2.106(5)) (note that, as pointed out earlier, where the unsecured creditors are out of the money, the decision would be made by the secured creditors or the secured creditors and preferential creditors).
10. This applies to a winding up by the court and the scales are the realization scale and distribution scale set out in sch 11 of the Insolvency Rules 2016 (sch 6 of the Insolvency Rules 1986, rr 4.127(6) and r 4.127A).
11. This applies to a creditors’ voluntary winding up and administration: Insolvency Rules 2016, r 18.23 (Insolvency Rules 1986, r 4.127(7), r 2.106(6)).
12. Insolvency Rules 2016, r 18.24 read with r 18.28(1), (3) (Insolvency Rules 1986, r 4.130(1)). For administrators, see Insolvency Rules 2016, r 18.24 read with r 18.28(1), (2) (Insolvency Rules 1986, r 2.108).
13. Insolvency Rules 2016, r 18.34(2) (Insolvency Rules 1986, r 4.131(1) (liquidator), r 2.109(1) (administrator)).
14. Insolvency Rules 2016, r 18.34(1) (Insolvency Rules 1986, r 4.131(1A) (liquidator), r 2.109(1A) (administrator)).
15. Insolvency Rules 2016, r 18.16(2), (3) (Insolvency Rules 1986, rr 4.127(2), 4.127(3A) (liquidator), rr 2.106, 2.106(3A) (administrator)).
16. Re Carton Ltd (1923) 39 TLR 194, 197. See the discussion in Brook v Reed  EWCA Civ 331,  1 BCLC 379 .
17. Insolvency Rules 1986, r 4.127(2)(b) (liquidator), r 2.47(2)(b) (as they were then).
18. Department of Trade, Insolvency Law and Practice: Report of the Review Committee (Cmnd 8558, 1982) para 895. The Committee is also known as the ‘Cork Committee’.
19. Kempson Report (n 7) 10.
20. Insolvency (Amendment) Rules 2010, Sch 1, para 217 (liquidator), para 90 (administrator).
21. IR 2016, r 18.16(9), which applies to both liquidator and administrator. For IR 1986, see r 4.127(4), r 4.127(5) (liquidator) and r 2.106(4) (administrator).
22. IR 2016, r 18.16 (4), which applies to both liquidator and administrator. For IR 1986, see r 4.127(2A) (liquidator), r 2.106(2A) (administrator).
23. IR 2016, r 1.2 (IR 1986, r 13.13(18A)).
24. IR 2016, r 18.30(1), which applies to both liquidator and administrator (IR 1986, r 4.131AB(1) (liquidator), r 2.109AB(1) (administrator)). This may be the liquidation or creditors committee, creditors or the court; IR 2016, r 18.30 (2), which applies to both liquidator and administrator (IR 1986, r 4.131AB(2) (liquidator), r 2.109AB(2) (administrator)).
25. Practice Statement [21.2.3]. We are grateful to Ms Vivien Chen, Lecturer, Department of Business Law and Taxation, Monash University and former Research Assistant, Melbourne Law School, for the summary of the Practice Statement set out in this paragraph.
28. ibid [21.2.3(2)].
29. ibid [21.3.2]. A Costs Judge is a judicial officer appointed to assess the costs and expenses incurred in civil litigation in order to decide, for example, how much a successful party in litigation can recover from their opponent.
30. See for example the hard-hitting speech of Lightman J to the Insolvency Lawyer’s Association in November 1995, which was subsequently published as Lightman, Gavin, ‘The Challenges Ahead: Address to the Insolvency Lawyers’ Association’  Journal of Business Law 113 .
31. Mirror Group Newspapers plc v Maxwell (No 2)  1 BCLC 638.
32. ibid 647.
33. Ferris J thought that the rules on control were ‘somewhat sketchy, ill-expressed and consequently liable to be misunderstood’: ibid 648.
34. ibid 647.
35. ibid 648.
36. Ferris J’s approach is consistent with Equity’s traditional role in the supervision of what Finn has termed the fiduciary office holder. This refers to a class comprising of persons who, having assumed positions which require them to act for the benefit of others, draw their powers and duties not from agreements with those others but from some independent source, for example, a statute, a will, or a court order. Finn also discusses Equity’s imposition of a general obligation on the fiduciary to act bona fide in what he alone considers to be in the interests of his beneficiaries. See Finn, Paul, Fiduciary Obligations (Law Book Co 1977), .
37.  1 BCLC 638, 652.
39. Ferris, Francis, ‘Insolvency Remuneration – Translating Adjectives into Action’ (1999) 2 Insolvency Lawyer 48, 56 .
40. On the issue of creditor involvement, see Dickfos, ‘The Costs and Benefits’ (n 3) 66.
41. Brook v Reed  EWCA Civ 331,  1 BCLC 379 –.
42. This Committee should not be confused with the Insolvency Rules Committee which was established under Insolvency Act 1976, s 10 and continued under Insolvency Rules 1986, s 413(1). See Baister, Stephen, ‘Remuneration, the Insolvency Practitioner and the Courts’ (2006) 22 Insolvency Law & Practice 50 for further details of the workings of the Practice Statement.
43. On the composition of the Committee which drafted the first version of the Practice Statement, see Brook v Reed  EWCA Civ 331,  1 BCLC 379 . The Committee currently comprises members of the Bar, the Law Society, the Insolvency Service and the Association of Business Recovery Professionals; Insolvency Service, Technical Manual (revised July 2015) [19.116] <www.insolvencydirect.bis.gov.uk/tehnicalmanual/Ch13-24/Chapter19/part10/part_10.htm> accessed 13 October 2016.
44. Brook v Reed  EWCA Civ 331,  BCLC 379  (David Richards J).
45. ibid .
46. Eg, Simion v Brown  EWHC 511 (Ch),  BPIR 412; Hunt v Yearwood-Grazette  EWHC 2112 (Ch),  BPIR 810; Korda, Re Clynton Court Pty Ltd  FCA 543; Flynn v McCallum, Re Roslea Path Ltd  NZHC 2318. More recently, it has also been approved in Kao Chai-Chau Linda (n 6) .
47. Brook v Reed  EWCA Civ 331,  1 BCLC 379 .
49. See the decisions of Ferris J in Re Independent Insurance Co Ltd  EWHC 1577 (Ch),  2 BCLC 709 and Re Independent Insurance Co Ltd (No 2)  EWHC 51 (Ch),  1 BCLC 640. One commentator described the appointment as a ‘progressive step forward’ which has ‘ensured that the true beneficiaries of an insolvent estate, the creditors, will have a reliable independent quantification of the office holder remuneration’. See Mulligan, Michael and Tribe, John, ‘The Remuneration of Office Holders in Corporate Insolvency – Liquidators, Administrators and Administrative Receivers: Part 1’ (2003) 3 Insolvency Lawyer 101, 104 . Others were more guarded. See for eg, Moss, Gabriel, ‘Independent Assessor Helps to Set “Independent” Fees’ (2003) 16 Insolvency Intelligence 61 .
50. Stewart, Gordon, ‘Provisional Liquidators’ Fees: Independent Assessor’ Recovery (London, The Association of Business Recovery Professionals, Summer 2003), 7 . See also Mulligan and Tribe (n 49) 104.
51. Stewart, ibid.
52. Where the court appoints an assessor under s 70 of the Senior Courts Act 1981, Civil Procedure Rules, r 35.15 sets out the role of the assessor and provisions for remuneration. The remuneration to be paid to an assessor is to be determined by the court and will form part of the costs of the proceedings: Civil Procedure Rules, r 35.15(5).
53. Re Independent Insurance Co Ltd (No 2)  EWHC 51 (Ch),  1 BCLC 640 .
54. ibid .
55. ibid .
56. See eg criticisms by Gabriel Moss QC in the Bernard Phillips Memorial Lecture 2005, which was reported in Insolvency Practitioner (Spring 2005) 1.
57.  EWHC 511 (Ch),  BPIR 412 .
58.  BPIR 28.
59. ibid ,  et seq.
60. ibid .
62. Moss QC, Gabriel, ‘Holding Hands Penalised in Fees’ (2005) 18 Insolvency Intelligence 61, 61 .
63. Kao Chai-Chau Linda (n 6) .
64. Office of Fair Trading, ‘The Market for Corporate Insolvency Practitioners’ (Office of Fair Trading June 2010).
65. Kempson Report (n 7) 33. For challenges to the Kempson Report, see eg, Association of Business Recovery Professionals, ‘Strengthening the Regulatory Regime and Fee Structure for Insolvency Practitioners: Response to a BIS consultation: R3, The Insolvency Trade Body’ (Association of Business Recovery Professionals March 2014).
66. Kempson Report (n 7) [6.1.2]. Insolvency Practitioners Association of Australia is now known as the Australian Restructuring Insolvency and Turnaround Association (ARITA) and its development of professional codes is discussed further below.
67. Kempson Report (n 7) [6.1.2], [6.1.4].
68. Insolvency Service, ‘Strengthening the Regulatory Regime and Fee Structure for Insolvency Practitioners’ (Insolvency Service February 2014).
69. See eg the responses of ICAEW, ICAS and R3, and the acknowledgment in the explanatory memorandum to the Insolvency (Amendment) Rules 2015 that ‘the responses revealed that the consultation proposal was not the preferred way of proceeding’. See also Umfreville, Chris and Walton, Peter, ‘Insolvency Practitioner Fees in the UK – All Alone in the World?’ (2014) Insolvency Intelligence 27, 86 .
70. The process was lengthy, including two rounds of consultation: Consultation on Reforms to the Regulation of Insolvency Practitioners and Strengthening the Regulatory Regime and Fee Structure for Insolvency Practitioners.
71. Insolvency Act 1986, s 391C(3); Small Business, Enterprise and Employment Act 2015, s 138.
72. Small Business, Enterprise and Employment Act 2015, ss 137–144; Insolvency Act 1986, s 391–391T.
73. Other than s 425 of the Corporations Act 2001 (Cth), the content of the provisions is consolidated in the new ‘Schedule 2 Insolvency Practice Schedule (Corporations)’ inserted into the Corporations Act 2001 (Cth) by the Insolvency Law Reform Act 2016 (ILRA 2016), Schedule 2, s 2 (see Division 60). The amendments did not deal with receiver remuneration. Corporations Act 2001 (Cth), ss 449E, 473 and 504 are repealed by the ILRA 2016 (see ss 135, 144, and 165). The provisions listed below continue to apply to remuneration of external administrators appointed before ILRA 2016 commencement day (ILRA 2016, s 322 introduces a new Part 10.25 into the Corporations Act 2001 (Cth) dealing with transitional issues). References to the provisions in the new Schedule 2 in this article are preceded by ‘ILRA 2016’.
74. Corporations Act 2001 (Cth), s 425(1), s 425(5).
75. ibid s 425(6).
76. ibid s 425(8).
77. ibid s 425(8)(k).
78. ibid s 449E(1), s 449E(1A).Note that a resolution must deal exclusively with remuneration to be effective: Corporations Act 2001 (Cth), s 449E (1B).
79. ibid s 499E(2).
80. ibid s 499E(4).
81. ibid s 472.
82. ibid s 473(2).
83. ibid s 473(3).
84. ibid s 473(4A). ILRA 2016, ss 60–65 provides that where no remuneration determination is made, the insolvency practitioner may receive reasonable remuneration for work properly performed in an amount of up to a maximum default, initially A$5,000 excluding Government and Sales Tax.
85. Where remuneration has been determined by agreement, application for review may be made by a member or members whose shareholdings represent in the aggregate at least 10% of the issued capital of the company; creditors whose debts against the company that have been admitted to proof amount in the aggregate to at least 10% of the total amount of the debts of the company; or ASIC: Corporations Act 2001 (Cth), s 473(5). Where remuneration is fixed by a resolution, the liquidator or a member or members whose shareholding or shareholdings represents or represent in the aggregate at least 10 % of the issued capital of the company may apply to the court for a review: ibid s 473(6).
86. Corporations Act 2001 (Cth), s 473(10).
87. Corporations Act 2001 (Cth), s 504(1), s 504(2).
88. Senate Economics References Committee, ‘The regulation, registration and remuneration of insolvency practitioners in Australia: the case for a new framework’ (Parliament of Australia September 2010).
89. Australian Government, ‘Options Paper: A modernization and harmonization of the regulatory framework applying to insolvency practitioners in Australia’ (The Australian Government Treasury June 2011).
90. Australian Government, ‘Proposals Paper: A modernization and harmonization of the regulatory framework applying to insolvency practitioners in Australia’ (The Australian Government Treasury December 2011).
91. Insolvency Law Reform Bill 2012 and Insolvency Law Reform Bill 2014.
92. Productivity Commission, ‘Productivity Commission Inquiry Report, Business Set-up, Transfer and Closure’ (Report No 75, Australian Government Productivity Commission 30 September 2015).
93. For criticism of the profession, see eg Senate Economics References Committee (n 88) ch 5.
94. Australian Law Reform Commission, General Insolvency Inquiry (Australian Law Commission Report No 45, 1988). Dickfos highlights that the Harmer Report proposed a ‘scheme of approval to apply to the remuneration of IPs’: Dickfos, Jennifer, ‘The Regulation of Corporate Insolvency Practitioners: 25 Years on from The Harmer Report (or Everything Old is New Again!)’ (2014) 2 Nottingham Insolvency and Business Law eJournal 3, 23, 27–29 . Anderson, Colin and Brown, Catherine, ‘Mind the insolvency gap: Lessons to be learned from audit expectations gap theory’ (2014) 22 Insolvency Law Journal 178 list other significant reviews in 1997 and 2004.
95. Explanatory Memorandum, Insolvency Law Reform Bill 2015, Diagram 9.1.
96. ibid [9.17].
97. Australian Securities and Investments Commission, ‘ASIC Regulation of Registered Liquidators: January to December 2014’ (April 2015), 17.
98. Australian Securities and Investments Commission, Australian Insolvency Statistics Series 3, October 2015, Table 18.104.22.168. Based on statistics for 1 July 2014 to 30 June 2015.
99. Black, Ashley, ‘Three recent developments in insolvency law’ (Corporations Law Conference, Sydney, August 2016).
100. Anderson and Brown (n 94) 182.
101. Australian Securities and Investments Commission, ‘Insolvency Practitioner Complaints Statistics’ (March 2011).
102. Anderson and Brown (n 94) 183.
103. ibid 189.
104. ibid 190. They argue that there is no clear data on whether there is any wrongdoing by practitioners when it comes to remuneration.
105. Education for creditors on how to protect themselves in the first instance, including by using the personal property securities registration system as appropriate, would seem to be a priority. Dickfos, ‘The Cost and Benefits’ (n 3) 67. She also considers the European Bank for Reconstruction and Development (EBRD) benchmarks for assessing the performance of insolvency office holders and finds Australia mostly compliant.
106. ibid 66–67.
107. ibid 71.
108. Productivity Commission (n 92) 407.
110. On average 14.2 cases are heard each year based on data from 2011 to 2015, mostly in New South Wales. See Steele, Stacey, Chen, Vivien and Ramsay, Ian, ‘An Empirical Study of Australian Judicial Decisions Relating to Insolvency Practitioner Remuneration’ (2016) 24 Insolvency Law Journal 165 .
113. Northern Territory and Tasmania heard none between 2000 and 2015 according to Steele, Chen and Ramsay, ibid. The study on insolvency practitioners’ remuneration from 2000 to 2015 also found an increase in judicial decisions over time, with the highest number of cases recorded in 2014 and 2015. The analysis also suggests that economic events may influence the volume of remuneration cases. While there was a reduction of cases from 2007 to 2009, there was a sharp increase in cases from 2010 in the wake of the global financial crisis. The rise in cases involving insolvency practitioner remuneration over time, along with greater public awareness of the issue, arguably places further strain on the courts’ increasing case load.
115. Productivity Commission (n 92) 27.
116. ‘Most detailed review of regime in a decade’ (2015) 27(2) Australian Insolvency Journal 4, 7. The article is based on a presentation by Dr Warren Mundy of the Productivity Commission at ARITA’s National Conference.
117. ibid 8.
118. Murray recommends that given ‘corporate insolvency requires either creditor or court approval’ of fees, ‘liquidators should try to have creditors approve their remuneration as the law allows’. He also notes that ‘on the other hand, bankruptcy avoids the court being involved in remuneration, with the Inspector-General having that power under s 167’. Murray, Michael, ‘Insolvency case reports’ (2015) 27(4) Australian Insolvency Journal 54, 54 .
119. Australian Restructuring Insolvency and Turnaround Association (ARITA), ‘About ARITA’ <http://www.arita.com.au/imis_prod/ARITA/About_Us/ARITA/About_Us/About-Us.aspx?hkey=ff7b83c4-fc70-4eb8-9001-08420d81582e> accessed 29 August 2017. Membership of ARITA is not compulsory and an insolvency practitioner may still practice even if he or she is not a member.
120. ARITA, ‘Code of Professional Practice for Insolvency Practitioners, 3rd edn of 1 January 2014 as amended 18 August 2014’ (ARITA, 18 August 2014) <http://www.arita.com.au/imis_prod/ARITA/For_members/Technical__library/code-of-professional-practice.aspx> accessed 6 September 2017.
121. Michael Murray, ‘Practitioners Remuneration – UK Report Picks Up Ideas from IPA Code’ (ARITA 16 July 2013) <www.arita.com.au/in-practice/insolvency-law-reform/corporate-insolvency-law-reform/2013/07/15/practitioners-remuneration---uk-report-picks-up-ideas-from-ipa-code> accessed 14 October 2016.
122. See ARITA, ‘Remuneration: Necessary and Proper’ <www.arita.com.au/education/professional-standards/remuneration> accessed 22 October 2015.
123. ARITA, ‘Making a complaint about an ARITA member’ <www.arita.com.au/insolvency-you/making-a-complaint> accessed 14 October 2016. For a discussion of ARITA as an alternative to courts in cases of fixing and reviewing remuneration, see Steele, Chen and Ramsay (n 110).
124. In chronological order, the following decisions have been released since 2014: Re AAA Financial Intelligence Ltd (in liquidation) ACN 093 6161 445  NSWSC 1004; Re AAA Financial Intelligence Ltd (in liquidation) ACN 093 616 445 (No 2)  NSWSC 1270; Re Hellion Protection Pty Ltd (In Liquidation)  NSWSC 1299; Re Gramarkerr Pty Limited (No 2)  NSWSC 1405; Re On Q Group Limited (In Liquidation) (Subject to Deed of Company Arrangement) ACN 009 104 330  NSWSC 1428; Re Independent Contractor Services (Aust) Pty Limited ACN 119 186 971 (in liquidation) (No 2)  NSWSC 106; Re Sakr Nominees Pty Ltd  NSWSC 709. These decisions emanate from the Equity Division – Corporations List and were decided by Brereton J. The liquidator lodged an appeal from the decision in Sakr which was decided after the submission of this article.
125. Re Stockford Ltd; Korda (2004) 140 FCR 424,  FCA 1682. Black J recently helpfully documents the historical development of this line of reasoning, including the amendments to the Corporations Act (Cth) in 2007 which were influenced by Finkelstein J’s decision. See Black (n 99) 3–6.
126. Re Sakr Nominees Pty Ltd  NSWSC 709.
127. ibid , .
128. ibid .
129. ibid .
131. ibid .
132. Explanatory Memorandum, Insolvency Law Reform Bill 2015 [9.324].
133. Rules are to be made in relation to reviews in the Insolvency Practice Rules (see ILRA 2016, s 90-29).
134. Explanatory Memorandum, Insolvency Law Reform Bill 2015 [6.22].
135. Insolvency Law Reform Act 2016, s 60-10(4).
136. ibid s 60-10(4).
137. ibid s 90-23 and s 90-24.
138. The idea of an ombudsman in Australia is well documented. See Symes, Christopher and Fitzpatrick, Jeffrey ‘A Primal Sketch of an Insolvency Ombudsman’ (2011) 13 Flinders Law Journal 1 . On a professional body’s proposal to establish a tribunal, see Narelle Ferrier, ‘ARITA’s Proposed Independent Insolvency and Bankruptcy Tribunal’ (March 2015) Australian Insolvency Journal 14. ARITA acknowledges that the issue of funding remains unanswered. Further, ARITA’s Code of Professional Practice already requires members to have a complaints management system. Principle 17 requires members to implement policies, procedures and systems to ensure effective complaints management. See ARITA’s Code of Professional Practice (n 120) 98. An independent complaint-handling body was recommended in UK by the OFT: Office of Fair Trading (n 64) 7. The OFT’s idea was cited in the Australian Senate Economics References Committee (n 88) [11.20]. The Senate Committee suggested Ombudsmen at no cost to the creditor [10.35]–[10.41]. In the end, the Senate Committee recommended that an ombudsman only be adopted if its recommended new insolvency regulator failed to handle complaints ‘promptly and effectively’. Senate Economics References Committee (n 88) [11.22]. The idea of an ombudsman was floated in UK as early as 1994: Symes and Fitzpatrick (n 138).
139. Insolvency Law Reform Act 2016, s 90-26(2).
140. ibid s 90-26(3).
141. ibid s 90-27(1)(a).
142. ibid s 90-27(1)(b).
143. Explanatory Memorandum, Insolvency Law Reform Bill 2015 [9.300].
144. ibid [9.300].
145. ibid [9.321].
146. ibid Table 13. The Explanatory Memorandum cites its sources as being ASIC, Treasury assumptions and ARITA.
147. On regulatory capture, see Brown and Symes (n 1). Dickfos also points out that creditors may avoid appointing reviewing registered liquidators because the costs will be borne by the external administration: Dickfos, ‘The Costs and Benefits’ (n 3) 70. For other criticisms, see Steele, Chen and Ramsay (n 110).
148. See Exposure Draft, Insolvency Practice Rules (Corporations) 2016. On reporting by reviewing liquidators, see Insolvency Practice Rules (Corporations) 2016, r 90-24.
149. The Insolvency Law Review Committee proposed new legislation which brings together personal bankruptcy and corporate insolvency laws. The Committee recommended that the legislation should include regulations on the licensing, qualifications and discipline of insolvency practitioners, but the recommendations did not extend to remuneration: Insolvency Law Review Committee, ‘Final Report’ (Ministry of Law 2013), ch 10. For a recent announcement on the legislative efforts, see Ministry of Law, Singapore, ‘Opening Address by Mr Ng How Yue, Permanent Secretary for Law, At the 2nd National Insolvency Conference 2015’ (Speeches, Ministry of Law 14 September 2015) <https://www.mlaw.gov.sg/content/minlaw/en/news/speeches/opening-address-by-mr-ng-how-yue--permanent-secretary-for-law--a.html> accessed 4 November 2016.
150. Companies Act (Cap 50, 2006 Rev Ed), s 268(3)(b).
151. ibid s 268(3)(c)
152. ibid s 297(3).
153. ibid s 303.
154. Companies (Winding Up) Rules (Cap 50, R1, 2006 Rev Ed), r 142(1). The rule only applies to court-appointed liquidators: ibid r 142(2).
155.  SGHC 49,  2 SLR(R) 264.
156. ibid .
157. Law Reform Committee, Singapore Academy of Law, ‘The Remuneration of Corporate Insolvency Practitioners and Certain Related Matters: A Discussion Paper’ (Singapore Academy of Law October 2005), 14 <http://www.sal.org.sg/Lists/Law%20Reform%20Committee%20Reports/Attachments/24/Remuneration%20of%20insolvency%20practitioners%20-%20final.pdf> accessed 18 January 2017.
159.  SGHC 49,  2 SLR(R) 264.
160. ibid .
161. ibid .
162. A-G of Cayman Islands v James Cleaver  UKPC 28,  1 WLR 2245.
163.  SGHC 167,  4 SLR 955.
164. ibid .
165. ibid .
166. ibid . The liquidators claimed the sum of S$1,213,961 and were awarded the sum of S$750,000.
167.  SGHC 260,  1 SLR 21.
168. (2004) ACSR 279.
169. As cited by Chong J in Kao Chai-Chau Linda (n 6) .
170.  BPIR 28 , which is discussed in the text to n 58 above.
171. Kao Chai-Chau Linda (n 6) .
172. ibid . Paragraph A.41 of Kao Chai-Chau Linda states that ‘all classes of insolvency practitioners who owe their offices to curial appointment and whose fees are subject to curial approval should be required to submit a costs schedule if their fees are expected to exceed S$200,000, irrespective of whether they are working on a solvent or insolvent company’. In the UK, IR 2016 applies to administrators and liquidators. ARITA’s Code applies to its members.
173. ibid [A.57].
175. ibid [A.61].
176. Kao Chai-Chau Linda (n 6) .
178. ibid at [A.61]. Chong J refers to ‘considerable input and support I have received from the parties (who comprised a representative cross section of the insolvency practice), and perhaps most significantly, IPAS [Insolvency Practitioners Association of Singapore], which represents the interests of the professionals who work in this area’.
179. Steele, Chen and Ramsay (n 110).
180. Practice Statement [21.2.3]. See also Theobald, Katharine, ‘The Ferris Report – Insolvency Practitioner Fees and Remuneration’ (1998) 14 Insolvency Law & Practice 300 .
181. ASIC v Letten  FCA 985; Re Lowery Classic Homes Pty Ltd (in liq)  NSWSC 719; Re Morago Nominees Pty Ltd (in liquidation)  FCA 1240.
182. ACN 104 635 369 Pty Ltd (in liq) (formerly Total Plant Services Pty Ltd) v Hamilton  FCA 985; ASIC v Letten  FCA 985. Nevertheless, where creditors supported the insolvency practitioner’s remuneration claim, the courts took the view that they should not interfere with creditors’ commercial judgment; Re On Q Group Ltd (ACN 009 104 330) (in liq)  NSWSC 1438 .
183. In Australia, ARITA’s Code of Professional Practice specifies the need to specify a cap when seeking approval for prospective time-based fees, and disclosure of details: Rules 15.2 and 15.3 of ARITA’s Code of Professional Practice (n 120).
184. Rule 15.2.2 of the ARITA’s Code of Professional Practice (n 120). The rule allows hourly rates to be increased by ‘an agreed formula where the escalation factors are objectively and independently determinable’, such as an annual increase in accordance with the consumer price index. The formula must be included in the resolution for approval of prospective remuneration. However, any increase approved does not affect the total remuneration cap, and approval is still needed before the cap can be exceeded. Note also the cap specified under the ILRA 2016 discussed above and due to become effective in 2017.
185. Kao Chai-Chau Linda (n 6) [A.5]–[A.20].
186. ibid [A.31].
187. ibid [A.20].
188. Australian Securities and Investments Commission (ASIC) ‘Creditors – Fees of Insolvency Practitioners’ (ASIC) <asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/creditors-fees-of-insolvency-practitioners/> accessed 14 October 2016; Law Reform Committee, Singapore Academy of Law (n 157).
189. Anderson and Brown argue that there is a gap in expectations between what the public expects of an insolvency practitioner and what s/he is required, prepared or capable of doing. They argue that any reforms in this area should consider how to close this gap based on ‘audit expectations gap theory’: Anderson and Brown (n 94).
190. On the case for regulating insolvency practitioners, see Brown, David and Symes, Christopher, ‘The Regulation of Insolvency Practitioners: Getting to “Trust and Confidence”’ (2013) 19 New Zealand Business Law Quarterly 226 .
Brown and Symes acknowledge the ‘public purpose’ behind insolvency appointments which leads to high expectations of insolvency practitioners (page 6). For a summary of regulation of Australian insolvency practitioners and the Insolvency Law Reform Bill 2014, see Dickfos, ‘The Costs and Benefits’ (n 3) and Anderson and Brown (n 94) 180–82. As noted above, the UK substantially reformed the law on the regulation of insolvency practitioners through the Deregulation Act 2015 and the Small Business, Enterprise and Employment Act 2015.
191. On the creditors’ conflict, see Dickfos, ‘The Costs and Benefits’ (n 3) 57.
192. Lubben, Stephen J, ‘What We “Know” About Chapter 11 Cost is Wrong’ (2012) 17 Fordham Journal of Corporate and Financial Law 141, 145 .
195. Steele, Chen and Ramsay (n 110). The study found that insolvency practitioners’ remuneration claims were approved in the amounts sought by insolvency practitioners in 40 % of cases. The analysis was based on 71 judicial decisions involving the fixing or reviewing of insolvency practitioners’ remuneration from 2011 to 2015.
196. Finch, Vanessa, Corporate Insolvency Law: Perspectives and Principles (2nd edn, CUP 2009) 186–187 .
197. Re Independent Insurance Co Ltd (No 2)  EWHC 51 (Ch),  1 BCLC 640.
198. Helen Anderson et al ‘Defining and Profiling Phoenix Activity’ (2014), Australian Research Council Discovery Projects Research Reports <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2536248> accessed 29 August 2017.
199. ARITA’s Code of Professional Practice [25.6.3]; Corporations Act 2001 (Cth) s 439A.
200. Corporations Act 2001 (Cth) s 422, s 438D, s 533.
201. Anderson et al (n 198) 31.
202. For example, under s 7A of the Company Directors Disqualification Act 1986 (UK), the office-holder in respect of a company which is insolvent must prepare and send to the Secretary of State a report about the conduct of each director of the company (a ‘conduct report’). The conduct report must describe any conduct which may assist the Secretary of State to decide whether to begin disqualification proceedings or to accept a disqualification undertaking. Under s 149 of the Companies Act (Cap 50, 2006 Rev Ed), if it appears to a liquidator that the conditions for disqualifying a director of the company on the ground of unfitness are satisfied, he shall immediately report the matter to the Minister.
203. Insolvency Service, ‘Consultation on Reforms to the Regulation of Insolvency Practitioners’ (Insolvency Service February 2011), 5.
204. Amanda Phillips, ‘An Analysis of Official Liquidations in Australia’ (IPA Terry Taylor Scholarship Report, 2013) 2.
206. Stacey Steele, ‘Appointing and Remunerating Insolvency Practitioners in Japan: The Roles of Japanese Courts’ (2017) 26 International Insolvency Review 82.
207. Dickfos, ‘The Regulation of Corporate Insolvency Practitioners’ (n 94) 39.
208. Law Commission (New Zealand), ‘Insolvency Law Reform: Promoting Trust and Confidence, An advisory report to the Ministry of Economic Development’ (Study Paper 11, May 2001), –.
209. Steele, Chen and Ramsay (n 110).
210. Insolvency Service, ‘Strengthening the Regulatory Regime and Fee Structure for Insolvency Practitioners’ (Insolvency Service 17 February 2014). So far as the proposals on insolvency practitioners’ fees are concerned, the most important was the proposal to ‘remove the option for an insolvency practitioner to propose time and rate as a basis for remuneration except in cases in which there is tight control over the work being done (generally, by either a creditors’ committee or secured creditors)’. This radical suggestion was not found in the Kempson Report.
211. Explanatory memorandum to the Insolvency (Amendment) Rules 2015, [8.4]. UK Government, ‘Consultation Outcome: Insolvency Practitioner Regulation and Fee Structure’ (Gov.UK) <www.gov.uk/government/consultations/insolvency-practitioner-regulation-and-fee-structure> accessed 14 October 2016.
212. Law Reform Committee, Singapore Academy of Law (n 157) –.
213. Kao Chai-Chau Linda (n 6) .
214. See Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed), s 10A(1).
215. Kao Chai-Chau Linda (n 6) .
216. Steele, Chen and Ramsay (n 110). On Ferris J’s early commentary, see the text to n 51 above.
217. Kao Chai-Chau Linda (n 6) .
218. For a critique of the Australian reforms, see Steele, Chen and Ramsay (n 110).
219.  NSWCA 28.
220. ibid .
221. ibid .
222. ibid .
* Associate Professor, Melbourne Law School, University of Melbourne.
† Associate Professor, Faculty of Law, National University of Singapore.
‡ Professor, Melbourne Law School, University of Melbourne.We are grateful to Ms Vivien Chen, Lecturer, Department of Business Law and Taxation, Monash University and former Research Assistant, Melbourne Law School for research assistance and in particular analytical insights and drafting contributions to Sections A and C of Part V of this article. We also thank the anonymous reviewers for helpful comments. This article is funded by the NUS Law-MLS Research Partnerships 2014–2016.
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