Supreme Court Rejects Application for Receiver Due to Insufficient Funds

The court dismissed an application for the appointment of a receiver, finding it inappropriate given the limited funds available to cover the costs of the appointment. The court also ordered the parties to provide detailed financial records related to the dissolved legal practice.

Supreme Court New South Wales

Medium Neutral Citation: [NAME] in his capacity as Executor of the estate of the late [NAME] v [NAME] [2019] NSWSC 1700 Hearing dates: 24 July 2019; 5 August 2019 Date of orders: 03 December 2019 Decision date: 03 December 2019 Jurisdiction: Equity Before: Ward CJ in Eq Decision:

1. Order the parties on or before 20 December 2019 to serve on the other party a list of all [NAME] and personal matters taken by that party (or in the case of the respondents, by the late [NAME] himself or in [NAME] with [NAME]) after the dissolution of the [NAME] on 21 June 2013 and, in respect of each such matter, to provide details of all costs or fees recovered in respect of those files; the costs written off or discounted on those files; the details of [NAME] paid and the amounts so paid; and the amounts of any moneys collected and not paid to [NAME] in respect of those files.

2. Dismiss with costs the notice of motion filed by the defendants seeking the appointment of a [NAME] in respect of the dissolved [NAME].

3. List the matter for further directions at 9am on 11 February 2020 before Ward CJ in Eq. Catchwords: CIVIL PROCEDURE — Interim preservation — Appointment of [NAME] – in relation to a dissolved law [NAME] – where principal proceedings include a claim against the applicant in relation to misappropriated [NAME] funds – whether a [NAME] will be appointed practically as a matter of course – whether would be futile to appoint a [NAME] – whether it would be ruinous to appoint a [NAME] – application dismissed with costs – not appropriate for a [NAME] to be appointed as not a proper use of [NAME] funds and not in the interests of the [NAME]'s [NAME]. Legislation Cited: Supreme Court Act 1970 (NSW), s 67 Uniform Civil Procedure Rules 2005 (NSW), r 26.4 Cases Cited: [NAME] v Council of the [COMPANY] of New South Wales [2019] NSWCA 119 Bernard v Davies (1862) 32 LJ Ch 41 Boehm v Goodall [1911] 1 Ch 155 Bolton v Darling Downs Building Society [1935] St R Qd 237 Byrne v Byrne [2011] NSWSC 1437 Choudhri v Palta [1994] 1 BCLC 184; [1992] BCC 787 Cuming v Hennessy [2005] NSWSC 1219 Daniels v Smith [2006] NSWSC 1424 [NAME] v [NAME] (Supreme Court (NSW), McLelland J, 16 May 1991, unrep) Duffy v Super Centre Development Corporation Ltd (1967) 1 NSWLR 382 Eady v Eady (1895) 16 LR (NSW) Eq 70 [NAME] v [NAME] (Supreme Court (NSW), Powell J, 1 March 1985, unrep) Gumbleton v Hewitt [2012] NSWSC 886 Hill v Venning (1979) 4 ACLR 555 In re Hallett's Estate; Knatchbull v Hallett (1880) 13 Ch D 696 Liquor National Wholesale Pty Ltd v The Redrock Co Pty Ltd [2007] NSWSC 392 [NAME] v [NAME]; Parkinson v Morkaya [2008] NSWSC 1050 Price v Price (1904) 29 VLR 719 Rosanove v O'Rourke [1988] 1 Qd R 171 Rowlands v MacDonald [2002] NSWSC 282 Shirlaw v Taylor (1991) 31 FCR 222 Tate v Barry (1928) 28 SR (NSW) 380 [NAME] v [NAME] (Court of Appeal (NSW), 2 November 1995, unrep) Texts Cited: P [NAME], Principles of Australian Equity and Trusts (3rd ed, 2016, LexisNexis Butterworths) [NAME], C [NAME] (9th ed, 2009, [NAME]) [NAME] (ed), [NAME] (19th ed, 2017, [NAME]) Category: Procedural and other rulings Parties: [NAME] in his capacity as Executor of the estate of the late [NAME] (First Plaintiff) [NAME] and [NAME] as trustees of the [COMPANY] ([NAME]) [NAME] (First Defendant) [NAME] as trustee of the [COMPANY] (Second Defendant) Representation: Counsel: [redacted] First Defendant (in person)

Solicitors: [redacted] File Number(s): 2013/327799 Publication restriction: Nil

Judgment 1. HER HONOUR: Before me for hearing on 24 July 2019 and 5 August 2019 was an application by the defendant ([NAME]) who is named as a defendant both in his personal capacity and as co-trustee of the [COMPANY] brought by notice of motion filed 27 June 2019 for the appointment of receivers to the dissolved legal [NAME] of [NAME] & [NAME] ([NAME]) and consequential orders.

2. The respondents to the notice of motion are [NAME] (in his capacity as the executor of the estate of the late [NAME]) (the first plaintiff in the principal proceedings) and [NAME] and [NAME] (in their capacity as trustees of the [COMPANY]) (the second and third [NAME] in the principal proceedings). I refer to them collectively as the respondents and [NAME] interchangeably. They oppose the application.

3. The principal claim in the proceedings is a claim by the respondents (in their capacity as [NAME]) against [NAME] for a sum of about $58,000 (for half the deposit and proceeds of a particular sale transaction) and for misappropriation of [NAME] funds following the end of the [NAME]. Also sought in the principal proceedings (but no longer pressed on the basis that it is submitted that this would now be futile, see T 14; 24/7/19) was an order for the appointment of a [NAME].

4. The motion was listed for hearing in the applications list. I heard the motion on 24 July 2019. [NAME], a [NAME] solicitor, appeared for himself on the application. After I had heard the application and had reserved judgment, [NAME] communicated with my chambers complaining that he had been denied procedural fairness by not being able to make his submissions "as planned" (a complaint that he later clarified as being that his opponent, [NAME], had delivered his documents "very late in the piece" and that he, [NAME], did not have the same opportunity that his opponent had had). Without entering into debate as to the merits of that complaint (though it should be noted that [NAME] had in my opinion had ample opportunity on 24 July 2019 to put whatever submissions he wanted to put in relation to his application), and with a view to the just, quick and cheap resolution of the real issues in dispute, I listed the matter for further oral submissions to be made by [NAME] after usual court sitting hours on 5 August 2019 and (over the objection of the respondents) heard those submissions. To a large extent those submissions replicated the submissions that had already been made by [NAME] on 24 July 2019, though on the later occasion [NAME] took me through a supplementary folder of documents in support of his application.

5. Having considered those as well as the earlier submissions, I am of the view that it is not appropriate (particularly having regard to the history of the matter and the limited funds that are apparently available to bear the costs of a [NAME]) to make the orders sought by [NAME]. I set out my reasons for that conclusion below.

Background 1. The following summary of the background is taken from the materials and submissions put before me on this application. I make no findings here as to any disputed facts referable to the substantive dispute between the parties.

2. As adverted to above, the principal proceedings relate to disputes arising out of the dissolution on 21 June 2013 of [NAME], the legal [NAME] conducted for some time (in different iterations – see below) by the late [NAME] and [NAME] (in [NAME] for some of that period with [NAME]). At the time of dissolution of the [NAME], the late [NAME] and [NAME] were the two equity partners, and [NAME] was a salaried partner.

3. The legal [NAME] formerly known as [NAME] ([NAME]) was conducted from on or about 1 July 1997 until 1 July 2010 by the late [NAME] and [NAME]. Then, from 1 July 2010, the legal [NAME] was conducted under the name [NAME] by the late [NAME], as trustee of the [COMPANY], and [NAME], as trustee of the [COMPANY].

4. The [NAME] traded from a property at Gladesville (the Gladesville property), which was owned jointly, in equal shares, by the late [NAME] and [COMPANY] ([NAME]) (a company of which [NAME] was a director and shareholder and whose affairs were conducted or managed by [NAME]) and from another property in [ADDRESS], Sydney.

5. On or about 29 May 2013, following an audit of the [NAME]'s trust account in April 2013, the [COMPANY] of New South Wales ([COMPANY]) commenced an investigation into suspected breaches of the trust account regulations relating to the [NAME].

6. On 17 June 2013, following that investigation, the [COMPANY] concluded that there was a deficiency in the [COMPANY] of $205,258.86, which had been wrongly remitted out of the trust account by [NAME].

7. On or about 20 June 2013, [NAME], in his own capacity and as trustee of the [COMPANY], sent notice to [NAME] dissolving the [NAME] on and from 21 June 2013. ([NAME] harbours suspicions as to the timing of the decision to terminate the [NAME] – see below; however, nothing turns on this for the purposes of the present application.)

8. The respondents say that on or about 21 June 2013, [NAME] paid the sum of $205,258.86 into the [COMPANY] (being the amount of the deficiency identified by the [COMPANY]'s report).

9. On 1 July 2013, the [COMPANY] resolved: that [NAME] had misappropriated trust funds; to suspend his practising certificate; and to appoint [NAME] as Manager of the [COMPANY]. (There was litigation arising out of that suspension, to which [NAME] has referred to in his submissions but it is not necessary here to go into the details of that litigation.)

10. On or about 30 July 2013, [NAME] and [NAME] entered into a contract to sell the Gladesville property. [NAME] and [NAME] retained [NAME] to act for them on their sale of the Gladesville property. [NAME] was the [NAME] partner responsible for the conduct of the sale of the Gladesville property.

11. Following termination of the [NAME] and [NAME] together commenced a new legal [NAME] in [NAME] ([NAME]); and [NAME] commenced trading under the previous [NAME] name ([NAME]) under the supervision of another solicitor (his cousin, [NAME]).

12. Following the termination of the [NAME] and [NAME] entered into an agreement as to the winding up of the affairs of [NAME], including the collection of debtors, banking of debtors funds recovered into [NAME]'s bank account and payment of [NAME] from those funds.

13. On 30 October 2013, [NAME] commenced the present proceedings against [NAME]. The claim brought against [NAME] in these proceedings is: for an amount of $57,333.75 (being [NAME]'s half share of the deposit and an alleged disparity in the amounts of the balance proceeds of sale received by [NAME] and [NAME] following the sale of the Gladesville property); that [NAME] misappropriated trust and other moneys of [NAME] and its clients (in that, after the dissolution of the [NAME] billed files of [NAME] clients for which he was the responsible partner, took steps to recover fees and pursued debtors, and, after recovering fees from debtors, did not deposit all recovered fees into a joint [NAME] bank account but instead appropriated at least about $663,310.81 to his own use and benefit); and that [NAME] has failed to render true accounts and information in relation to a substantial number of client files, totalling $581,698.

14. In his defence to the claim brought by the [NAME] has pleaded as follows. He admits that he was personally responsible for the conduct of the sale of the Gladesville property; however, he says that he conducted the sale as a director of [NAME] ([17A] of his defence); he disputes that the deposit for the sale of the Gladesville property was paid to the agent to hold on trust pending completion of the sale ([18] of his defence); he says that he has accounted to [NAME] for his one half share of the deposit ([19] of his defence); and agrees that [NAME]'s one half share of the deposit was paid to himself but says that he was entitled to take the money (on the basis that [NAME] was indebted to him for certain moneys) ([20] of his defence). [NAME] agrees that he received the "disparity" amount and says that he received it as fees and disbursements for the sale ([17B] of his defence). He otherwise denies liability to [NAME] as claimed. 15. [NAME] generally admits that he owed [NAME] fiduciary and other duties, and claims that [NAME] similarly owed fiduciary and other duties to him; generally denies that he breached his fiduciary and other duties and misappropriated clients' costs to himself; admits that, following the dissolution of the [NAME] he billed files of [NAME] clients for which he was the responsible partner, took steps to recover fees and pursue debtors, and after recovering fees from debtors of [NAME] did not deposit all recovered fees into a [NAME] bank account but does not admit that he appropriated at least about $663,310.81 for his own use and benefit. [NAME] denies that he has failed to pay to the respondents (i.e., the [NAME]) their entitlement, and says that he has accounted to them ([48] of his defence; and Schedule 1 thereto). 16. [NAME] says that [NAME] and [NAME] have failed to account in a substantial number of matters of which they had carriage ([60] of his defence and Schedules 1 and 2 thereto).

17. Further, [NAME] filed a cross-claim but has since discontinued that cross-claim.

18. On 7 April 2015, [NAME] died. On 16 November 2015, [NAME] (an accountant whose [NAME] had provided accounting services to the [NAME]) was appointed executor of [NAME]'s deceased estate.

19. On 27 November 2015, the late [NAME]'s sons ([NAME] and [NAME]) were appointed trustees of the [COMPANY].

20. The status of progress of the principal proceedings is not clear. From the Court file it appears that nothing has been filed since the amended defence was filed on 17 July 2019.

Submissions of [NAME] (the defendant)

1. In the first instance, by way of submissions, [NAME] relied upon an affidavit sworn by him on 22 July 2019 in which he deposed to various facts, matters and circumstances as to his claim that the late [NAME] and his successors (the [NAME]) have failed to act in the best interests of [NAME] (including, their alleged failure to exercise rights which [NAME] says he and the [NAME] had "to bind the partners of [NAME]" and "in so doing acquiesced in actions which denied [NAME] rights it had to inspect documents so as to get in its assets"). Reliance was also placed on an affidavit sworn by [NAME] on 3 June 2019. (A further affidavit filed on 27 June 2019 was not read but documents annexed thereto were tendered.) 2. [NAME] maintains that he seeks to protect the assets of [NAME] and that includes to: take action duly to recover debtors and/or [NAME] from its clients; appoint a [NAME] to take such action on behalf of [NAME] "since the efforts to achieve same by the parties jointly has proved unmanageable and unduly delayed which has resulted in loss and it appears there is no other course available than such actions by a [NAME]"; and protect the interests of [NAME]. In oral submissions the basis on which he sought the appointment of receivers was put by [NAME] by reference to the "great difficulty" he says there has been in reaching agreement on a variety of matters and where information he says has not been forthcoming despite his vigorous efforts to obtain [NAME] records (T 12.26; 24/7/19). Emphasis is placed on the fact that there is no good will as a result of past history between the parties (T 12.38, 24/7/19). 3. [NAME] relies on the proposition that a [NAME] will be appointed practically as a matter of course (Tate v Barry (1928) 28 SR (NSW) 380 ([NAME] v [NAME])). He does not believe that the appointment could cause serious loss or hardship; says (as adverted to above) that in the circumstances of this matter there is no value of goodwill; and maintains that it is prejudicial to [NAME] that the property of [NAME] "is not in all respect [sic] under the management of any sole person". [NAME] argues that it is materially beneficial to [NAME] to enable an independent person to act as [NAME] to manage [NAME] "and under that persons supervision that person engages others, as is reasonable". [NAME] believes the delay in such an appointment has seriously prejudiced [NAME]. 4. [NAME] further contends that provision of security for the [NAME]'s costs is not necessary in circumstances where [NAME] has approximately $85,000 in the trust account of the respondents' solicitor ([NAME]) and submits that it would be appropriate for orders to be made for the immediate payment of all funds in such trust account be paid to the [NAME] appointed or as such [NAME] directs. 5. [NAME] says that [NAME], who has consented to being appointed as [NAME] of [NAME], is not previously known to him and is not intended to be engaged in any capacity other than as such [NAME] by him or anyone associated with him.

6. In oral submissions on 24 July 2019, [NAME] made clear that he wants the [NAME] to recover money from [NAME] clients and, if not recovered, to investigate action taken by the [NAME] partners of the [NAME] (including him – in that he says that he expects equally to be examined by the [NAME] – T 31.21; 24/7/19) in relation to the debtors and for an accounting of sums received (see T 12; 24/7/19).

7. His complaint is that there has been no bookkeeping or accounting work and nothing done other than the tax returns from 2013 (the response from [NAME] to this is that there were substantial fees owed to [NAME] for work previously done and no funds for such an exercise).

8. Emphasis is placed by [NAME] on two particular sums of money that he says, if recovered, would be enough to pay out the [NAME] (T 13.16, 24/7/19): first, a sum that he asserts [NAME] directed to be paid to [NAME]'s ex-wife ([NAME]) out of court proceedings in which the [NAME] had acted and had obtained a costs order in her favour (an amount of $157,000); and, second, an amount of over $130,000 in cash that he claims was paid by a creditor (a [NAME]) (and that he believes was not properly accounted for) (see T 13.4; 24/7/19) (and see also the discussion at T 30; 24/7/19). 9. (Pausing here, as to the first of those complaints [NAME] says that "arguably" [NAME] would be entitled only to half the costs and that in any event the quantum claimed does not take into account that one of the costs in those proceedings was counsel fees. Further, he says that this was the subject of an agreement between the late [NAME] and [NAME] before [NAME] died (T 16.50; 24/7/19). [NAME] denies that there was ever an "agreement" in relation to the sums in respect of [NAME] (T 23.17; 24/7/19); he says that in November 2011 a document was left on his desk which is how he found out about the money that had been received in September 2009 (T 23-24; 24/7/19).)

10. On the present application, on 24 July 2019, [NAME] raised a multitude of complaints, including: as to a dispute with [NAME] in relation to documents; as to the reliability of the figures put forward by [NAME] (which he says are "awfully rubbery"); and as to obfuscation and delay (on the part of the respondents) in the process of winding up the [NAME] (see T 28; 24/7/19). 11. [NAME] says that it took the respondents three years to file their statement of claim and another year or so to appoint a joint accountant (and then some ten months to issue letters to [NAME]) (T 18; 24/7/19). [NAME] says that he has recovered $10,000 from one debtor; and that there are "serious matters" as to discounts and write-offs (T 18.48; 24/7/19).

12. At the hearing on 24 July 2019 (see T 19.8; 24/7/19), [NAME] accused the other side of taking money as a result of which he says he is now facing bankruptcy. (Though foreshadowed by [NAME] more than once, it does not appear that any trustee in bankruptcy has yet been appointed to his estate.) [NAME] accuses the respondents of frustration of the winding up of the [NAME]. He says that [NAME] could have helped to recover money and did not do so; and he says that the respondents have played "ducks and drakes" in relation to receipt and management of funds (T 22.35, 24/7/19). [NAME] says that he wants receipts from 2013 onwards – an account of receipts and distributions after the date of the "[NAME] report" (i.e., a report by a bookkeeper, [NAME] – discussed further below) to which [NAME] has referred (T 29; 24/7/19).

13. More than once, [NAME] has emphasised that he relies on contemporaneous documents; he says that [NAME]'s figures amount to speculation; and that the schedules to the statement of claim are arithmetically wrong (T 19; 24/7/19).

14. Although he has discontinued his cross-claim (as noted above), [NAME] says he will allege the matters previously raised in his cross-claim in his defence to the proceedings (T 20; 24/7/19). 15. [NAME] spoke about issues in relation to recovery of debts and write-offs of discounts (T 29.2; 24/7/19). He says that serious matters arise in that regard. He clearly wants an investigation into what happened in the course of the [NAME] (not just as to the position now the [NAME] has been dissolved) and complains that he was barred and excluded from the premises (T 31.31; 24/7/19). He says he is seeking a review by the [NAME] to do precisely the same thing as if this were a court proceeding; and that it is a "mathematical enquiry" (T 31.6; 24/7/19).

16. As already noted, after judgment was reserved, [NAME] forwarded supplementary submissions and an additional court book (the contents of which were not tendered as such but will be treated as part of his submissions). In oral submissions on 5 August 2019, [NAME], in terms of any further submissions, was content to rely upon the affidavits he had filed and the submissions that he had filed; but drew attention to particular documents in the additional court book (explaining the significance he attributes to them). 17. [NAME]'s submission was that this matter involves "a very, very serious and unfortunate case of credit" (T 3.47; 5/8/19). [NAME] submitted that much of what the respondents (i.e., the [NAME]) had to say was not supported by contemporaneous documents; and that assertions were made by [NAME] that are contradicted by documents.

18. As to the documents to which I was taken during the hearing of the supplementary submissions, they were as follows.

19. First, [NAME] drew my attention to email communications between [NAME] and [NAME] in late May 2013 apparently relating to the imminent receipt of funds in a particular matter, in which [NAME] posed the question "[d]o we need to discuss how to deal with that money?" and then in a subsequent email said "[s]hould we hide it somewhere em?" to which [NAME] responded with a "smiley face" icon. (I assume that "em" was a reference to [NAME] as in a previous email in the chain of email communications [NAME] started an email to [NAME] with "[h]i emmy".) [NAME] maintains that the request was a peculiar request to be made in an email and that, for something as serious as that, they would have had a discussion about it or they have done it before. [NAME] asked rhetorically how often did this "happen after the event" and says that he was greatly troubled by that approach which he apprehends or is concerned was "a fairly routine kind of approach to the affairs of the [NAME]" (T 4; 4/8/17). 20. [NAME] said that he had often worried about the fact that the [NAME] had been dissolved on 30 June 2013 but, "[f]or some reason, on 21 June 2013, the partners decided to dissolve it that day". He suspects that this was something to do with the timing of money coming to the office and says that the appointment of a [NAME] will very quickly determine if he is right or wrong. He says that doing that process as a court process would be a costly, time-consuming exercise, "demanding a lot of wasted time of the Court and cost to the State".

21. Second, [NAME] pointed to an email from [NAME] to [NAME] indicating that the relationship between the two partners was more than a professional one. [NAME] says that that is a troubling thing, noting that "they are engaged in a process of dissolving a [NAME] which has been in operation at that time, 80 years, now it's 95 years since it's been established". He explained that it was a "very bewildering and distressing state of affairs" with which he now has to deal.

22. Third, [NAME] referred to a series of emails between a [NAME] and himself. From his email details it appears that [NAME] was an accounts bookkeeper with whom [NAME] had liaised with a view to him accepting an engagement as a debt collector client. [NAME] relies on these emails to demonstrate that [NAME]'s recollection (in his affidavit at [16]) as to a conversation with [NAME] on 17 June 2016 is inconsistent with the email communications. [NAME] deposes is that he had a telephone conversation with [NAME] (whom the parties had retained to collect certain assets of the [NAME] – debtors and some of the [NAME]) in which [NAME] said, in effect, that he resigned his retainer following approaches and comments by [NAME]; that [NAME] wanted him to do the debt collection for the money he was owed; and that [NAME] had been abusive and argumentative. [NAME] rejects the suggestion by [NAME] that he ([NAME]) was trying to favour his own [NAME] (i.e., his own [NAME] and debtors) as against the [NAME] and debtors of his partner; and says that the emails would prove that to the contrary. His complaint appears to be that [NAME] has not properly or responsibly deposed to the matters relating to this issue. [NAME]'s complaint is that (see T 5.23; 5/8/19): … I am trying to deal with it as best I can, and as truthfully as I can. These people have, in effect, destroyed my reputation. They've caused me to lose all my assets by spreading these stories and by even continuing, under affidavit, sworn documents, to say things that are not supported by, by contemporaneous records, to which they have access … .

1. The email communications range from dates from 2013 through to April 2016. It is difficult to draw anything from those communications as to the reliability or otherwise of the account [NAME] deposes he was given by [NAME] (nor is it relevant to the present issue, as I explain in due course).

2. Fourth, [NAME] next points to emails and other documents relating to the separation of [NAME] and [NAME]'s wife ([NAME]). [NAME] says that he had access to part of the [NAME] records in relation to the separation file in circumstances where he was "looking for the $157,000" that he said [NAME]'s wife denied ever having received (and which he says [NAME] told the Office of the State Legal Services Commissioner he gave to her or directed to her). [NAME] emphasises a portion of what appears to be the text of a letter from [NAME] to [NAME] (referred to as a draft proposal that [NAME] was apparently proposing to send to [NAME] and about which he was seeking his solicitor's thoughts). In particular, [NAME] emphasises that (in part of the draft proposal that [NAME] was proposing to send to [NAME] in which reference was made to [NAME]'s decision to split with [NAME]) [NAME] refers to an "uncomfortable issue" between he and [NAME] being the "need to account for the legal costs" in the [NAME] case, which it is said [NAME] had negotiated and which it is said resulted in the payment of $120,000 to them personally "even tho[ugh] it was with respect to legal costs payable to the [NAME]"; and in which concern was expressed that there might be tax consequences involved. Reference is also made to a passage that reads "[w]hile I appreciate that what we did not was not 100% kosher, I have never considered it to be morally wrong". The context in which that remark is made includes the statement by [NAME] that: [NAME] [[NAME], presumably] had, and has, been using the resources of the [NAME] for his own personal benefit for decades, and up until recently I have not held him to account. It was only until after three years ago when we introduced a very helpful management system of regular weekly reports did it become apparent as to the extent of what he was doing and the cost to the [NAME]. At that time we had huge arguments and I demanded he repay all the disbursements he had taken out f [sic] the [NAME] in recent times. This led to him looking thru the files and discovering the Michel[l] Sillar issue. 1. [NAME] says (on its face inconsistently with the proposition that he found the separation file when he was looking for a $157,000 sum) that he found those papers on his desk and he assumes that a staff member must have left them there for him to become aware of the transaction. 2. [NAME] emphasises that he is being sued by the [NAME] for the disbursements and says in relation to this amount (which he says in a later email is acknowledged as having been paid), $8,000 of which was part of a process in the [NAME], that he obtained nothing for the work that he did for himself, nor did he claim any fees from [NAME] for work he did for himself. As to the case referred to in the above emails, it is said that costs were awarded by the court to a successful litigant and that "[t]hese people [i.e., [NAME] and [NAME]] simply directed the costs to themselves". 3. [NAME] also perceives there to be contradictions as to the amount of moneys paid to [NAME]'s barrister who was briefed on his separation and property settlement (referring to a sum of $20,000 and a sum of $157,000) and informing me that the issue of Counsel's fees was a matter of "having some accounting" between he and his partner some six months before (the barrister's brief being said to be in February 2012).

4. The submission for [NAME] in this regard was that "there are a whole list of contradictions that appear which unfortunately for them [i.e., the [NAME]/respondents], [are] contained in contemporaneous records", including reference to an issue between [NAME] and [NAME] about who owned the Bondi property in which they lived. [NAME] submitted in relation to the Bondi property that (from T 7.3; 5/8/19): … Now it was in [NAME]'s name. That's the wife of [NAME]. But it was half owned by each other. Now that throws up other problems, your Honour, for these people. First of all, in a property settlement it was finally accepted it was a property of the partner's, of family, of a husband and wife. There, I've attached there, your Honour will find, a, a, a list of assets that they - a, a schedule, a, a spreadsheet by [NAME] of their assets and liabilities, and she shows the parties having total assets of about $5 million and shared, looking at different ratios given what they'll settle on their property matter is concerned, at least $2 million each. There's a statement behind that where, where there's a form of application for the finance completed where [NAME] puts the property value at $8 million where [NAME] had put the property value at about $5 million. But here is, here's an estate which I'm told by [NAME], that's my partner, it's got - the assets over liabilities in the court file, in the probate application, surplus $68,000. Now one has to ask oneself, "Well, how is that, how is that so?" Now Mr - the plaintiff is an accountant, close friend of [NAME]. He swore the executor's affidavit. I [NAME]'t know how it's possible that the affidavit would show that the estate is worth $68,000. But there's, there are documents there which would suggest quite significantly a different state of affairs.

1. Fifth, [NAME] took me to an itemised bill in a matter where [NAME] says that [NAME] handled the [ADDRESS] proceedings. [NAME] says that the matter could not be heard because a second application to vacate the hearing was refused by the magistrate. He says that [NAME] speculates that he ([NAME]) was to blame for this. He says (from T 7.32; 5/8/19): … That's what it is, speculation. They make up stories to speculate about what is evil about me. Now in that particular matter, they, they tell the Court that I took care of the [ADDRESS] matter and I was to blame, I was to blame for the matter being so badly prepared, a whole page of directions being made, not, not complied with, and the magistrate refused a second application to, to set - to vacate the hearing, because she would not allow us to file affidavits which were late. Now that's a kind of - what the parties are willing to do to create a state of affairs and appearance about what - whether my word is true or not. Your Honour, these people are bolstering their case which has no foundation - I'm, I'm reasonably confident, your Honour, one can't be in court, but I'm, there's no foundation that any monetary claim against me in the Supreme Court proceedings, the main action, and, and not only that, I have directed their attention to emails that prove it, but they won't bother reading them, your Honour. That's the problem. … Now your Honour, I've seen no evidence as is claimed by the other side that they paid the disbursements, the barristers' fees nor the, nor the filing fees of the Court. So there's nothing produced. I've asked for material, I get nothing. There's no document produced to support contemporaneously versions of facts which they give which are absolutely diametrically opposed by documents which are contemporaneous, which I have and they had access to.

1. As to the assessment of costs which [NAME] says he had sought against [NAME] for the sum of $157,000, [NAME] says that the assessment was unsuccessful principally because the assessor took the view that [NAME] could not claim legal fees because he was suspended from [NAME]. [NAME] accepts that he did not seek to have that decision reviewed (he says he was constrained in what he could spend his money on, particularly because he was defending himself in respect of [COMPANY] proceedings) but he says that in the correspondence [NAME] says throughout that she has not received papers; and he argues that the fundamental point is that [NAME] never denies that she received the money (just that she says she had not received documents). He says the "peculiar thing" is that [NAME] never lodges an objection (rather, she threatens to refer [NAME] and his cousin, a solicitor, [NAME], to the [COMPANY] "because we're recovering money that I believed as a partner I'm entitled to claim from her" and that "[h]er husband directed it to her"). [NAME] says he had no other way to try and get the money from her. 2. [NAME] says that it was at a conference on 17 December 2016 that [NAME] said for the first time (in four years) that she did not receive the money (having been through an assessment process "where she did not utter those words"); pointing out that this is in the face of the email where [NAME] talked to her about the dilemma they were facing over the $120,000 amount. [NAME] says that [NAME] was copied into that email and [NAME] there mentioned concerns he had about the unpaid income tax and says that he is not prepared to be left in a position where he could get into trouble about unpaid tax. [NAME] then appears to have reported this transaction to various entities (including the Australia Taxation Office (ATO), the Prime Minister and the Treasurer) as to unpaid tax, from whom he says he has heard nothing; and nothing from anyone on behalf of the [NAME].

3. Sixth, is an email from [NAME]'s secretary attaching an extract from a "Combined Matter Ledger as at 20/07/15" in relation to the [NAME] file and a "[NAME]" file, in which email [NAME]'s secretary asserts that someone has deliberately destroyed records. [NAME] says that there are parts missing in those files (i.e., the [NAME] file, where it is said that all the correspondence virtually is missing and there has been some interference with the financial records; and another file of his other partner in terms of fees that she ought to have paid but has not paid).

4. Seventh, [NAME] points to an email dated 26 September 2011 from [NAME] to him which refers to "[t]he personal disbursements you took from the firms overdraft without discussing with me (now adjusted)". He says that this is part of the litigation against him in the main claim and that the claim against him is not only the disbursements (which he says that this document acknowledges he paid, being a $8,000 adjustment between them); rather, he says that they are claiming all fees on all files which [NAME] handled to do with his family and himself. [NAME]'s complaint to me is that "they [NAME]'t look at the emails …, but they take - issue proceedings willy-nilly" (T 11.32; 5/8/19).

5. As to the submissions made by [NAME] about the importance of paying [NAME]'s complaint is that he had asked for a list of [NAME] time and time again; and that he was not told. He says that one creditor he did know about (the service provider for the [NAME]'s computers) had been very supportive but had recently had to sue the [NAME] (something to which [NAME] points in order to say "this is the [NAME] through their solicitor telling your Honour how virtuous they are about paying [NAME] and [NAME]'t let the [NAME] get some fees to check on us, pay, pay me first, [NAME], pay me as a priority, and then your Honour, oppose the [NAME] who they were sought in the first instance").

6. Following his survey of the above documents, [NAME] submitted that this is a situation "classically deserving of proper review by a [NAME] and not to take up the time of this Court and the cost of this Court and the allowing of further delays, obfuscation and delay by the [NAME] simply causing expense to everybody so that they can keep concealing their dishonesty". He submits that: … in those circumstances, the most - the, the, the, the most just, quick and cheap approach to getting to the bottom of this whole saga your Honour, is to have a [NAME] appointed who independently and objectively calls us both to account, helps pay the [NAME] and helps to properly adjust moneys between the parties which, your Honour, they can't challenge me anywhere near and nor can they challenge me anywhere in, in the deception that I discovered that they were engaged in for a long time and as far back as 2009 and 2010 … .

1. As to the issue regarding the client, [NAME] emphasises that the client claims he paid [NAME] $130,000 cash for fees; that when [NAME] found out about the matter being unpaid, he found $30,000 in the ledgers and "not charged", and that he then found a document which said "[NAME]'t send out a costs agreement". [NAME] said: … that's how I felt and I stumbled [on] that your Honour, because I was chasing [NAME] with oppression and obstructions - sorry not [NAME], debtors, with oppression, obstruction I received for four years your Honour and longer not to do anything to chase up money that they had not been chasing, and I can only speculate as to how they conducted their affairs in terms of property of the [NAME] and property accounting to the [NAME]. 1. [NAME] again claims he has supported all his submissions and assertions with contemporaneous records; and that [NAME] has provided few documents to support his assertions and/or submissions. He submits that [NAME] would have access to all relevant material including emails and financial records (and submits that [NAME] ought not be allowed to rely upon his assertions and/or submissions without attaching and/or tendering such documents). [NAME] says that: I believe I have demonstrated … the considerable and serious errors he is relying upon. The frequency and availability of contrary evidence, I believe, suggests that is intentional. It is patently apparent he has chosen not to check many of his assertions and/or submissions. 1. [NAME] further says that he was advised by his counsel many times that he could not proffer evidence as to the differences between he and his partners as it was not relevant to the issues; and that the "closest" he came to so doing was: tendering the itemised bill in the matter of [NAME] to [NAME]; tendering the letter of [NAME] to [NAME] to the Registrar of the Court of Appeal; and calling for cross-examination of [NAME] and [NAME] in the proceedings before [NAME] (as to whether their relationships with him were "toxic"; to which [NAME] is said to have responded "no" and [NAME] "yes"). 2. [NAME] says that [NAME] was the accountant and Mr [NAME] was the auditor of [NAME]; that neither he nor any accountant has done accounts as to the dissolved [NAME] since dissolution; and that insofar as [NAME] claims there are unpaid fees he ([NAME]) would like to be informed what fees have been charged and paid for accounting work for his late partner. 3. [NAME] says that his [NAME] partners have, since early 2012, conducted the accounts of [NAME] ([NAME] having been managing partner since about 2008 and she and [NAME] having sacked the [NAME]'s manager in about late 2011, without informing him of their actions). [NAME] says that his serious concerns were "heightened" on intentions to dissolve being expressed in about June 2012; and that his "initial many requests" made in early 2013 to be included in decisions were never facilitated (and cheque signing was possible without his signature being needed). 4. [NAME] says that there were a considerable number of meetings with [NAME] and his partner and their staff with [NAME]'s partners, and emails between them, without [NAME] being included. He says that his partners had absolute discretion as to payments and he is puzzled why they did not pay his [NAME] fully. [NAME] says that it "is easy to say shortage of funds however the list of [NAME] and total due is relatively small and none have taken action for over 5 years". He says that gross turnover was over $3 million and that it is surprising he has not been paid and he has not agitated for payment. 5. [NAME] says that [NAME] was, at July 2012, a [NAME] of three offices, three partners, five employed solicitors and about 30 staff. He recounts the history of the development of the [NAME] and says that the [NAME] was "trashed" by his partners in the period October 2012 to 21 June 2013 and that: Their goal it, appeared to me, was to take over the [NAME] work and otherwise the [NAME]. The latter has been accomplished and avoidance of accounting is being sought to be accomplished principally by exhausting my resources. [NAME] has lost over $3,000,000 which comprised about 12 properties and now we have assets of about $15,000 and no properties. I accept I made an error in the belief I was able to retain the [NAME] monies which I did since I expected my partners would block my receipts. In all other respects I have believed I tried to obey my duties and achieve the best interests of my clients and to be a model in all I have done. The [NAME] transaction was properly recorded in our records, correspondence, including her family, and financial records in the usual way. I accepted the likelihood that my receiving the funds it would be interfered with. I always said anytime [NAME] wanted 50% I would pay him. I was aware from about early 2011 my partners read my emails and indeed invited them to continue to and I declined advice I should change my password. 1. [NAME] says it is surprising that the auditor appears never to have asked [NAME] about the payment directed to [NAME] and that it is claimed the bills and payments in the matter of [NAME] (the subject of action by the [COMPANY] against [NAME]) to [NAME], which he says were conducted in the usual way, were not noticed. [NAME] asserts that he promptly paid all he had been paid in the [NAME] matter back to the trust account of [NAME] but that [NAME] has never repaid the money of which he had benefit (about $15,000). He submits: Surely, I was entitled to expect protection against payment to members of the family of [NAME] as [NAME] ought to have been from payments to [NAME] which indeed was raised against me by the auditor and no remarks ever about the payment to the wife of [NAME] of which they ought to have been aware and I believe were. 1. [NAME] notes that [NAME] has sworn (or affirmed) no affidavits in these proceedings especially such as include financial records "which, no doubt, are sourced from him" and that he ([NAME]) has asked for such source documents as he has and, in the main, they have not been provided, yet [NAME] has referred to financial data such as that which is attached to the affidavit of [NAME] sworn on 25 October 2013; and the Schedules to the amended statement of claim. [NAME] complains that "[NAME] appears to believe he need not produce the source document". 2. [NAME] complains (again) as to "rubbery figures" in the affidavit of [NAME] sworn 2 July 2019 and to the said Schedules. As to Schedule 1 to the statement of claim (claimed to be a list of matters in which the sums referred to have not been paid to [NAME] and for which [NAME] is said to be liable) [NAME] says that often there is a reference to incorrect amounts. As to Schedule 2 to the statement of claim, he says that his defence has replied thereto and that, again, most, if not all, have been paid to accounts of [NAME]. He says that there is reference to incorrect sums and that the same five sums are repeated in a cycle about 11 times and are "clearly wrong". It is submitted that the total of the sums far exceeds that typed as $581,698. [NAME] says there appears to have been little if any reference to the accounts of [NAME] whenever figures have been referred to and the source documents are not produced.

3. Furthermore, he complains that there have been, without his knowledge and approval, considerable write-offs and discounts such that such moneys were not to be recovered and no documents produced. He says that [NAME] knew the office [NAME] of [NAME] that all write-offs and/or discounts were to continue to be recovered except if the partners agreed otherwise. He says that he has not agreed but to a small fraction of the quantum of what appears to have been permanently written-off and/or discounted which on its face is over $1 million since about 2012.

4. Attached to his supplementary submissions are: Schedule of Discounts which [NAME] says were discovered by accident by his secretary (and that he asked for explanation several times and never received any), noting that at the bottom of page 8 of the Schedule of Discounts there is a sum which is $295,322.47 discounted by [NAME] between about July 2012 and May 2013. He says that he has, since early 2013, questioned these discounts and has had no reply. He compares this with the discounted $48,035.18 figures on page 22 for him for about the same period. Reference is made to the Profit and Loss Statement of [NAME] year ended 30 June 2013 at page 4 which records "Adjustment of Fees (re Debtors) $493,496.65". Reference is also made to a letter of [NAME] to [NAME] dated 19 January 2019 (where [NAME] complains that she speaks of "write-off she instructed to [NAME] however no details are provided"). 5. [NAME] says that the principal proceedings were initiated by [NAME] in late October 2013, with the knowledge of [NAME] of: [NAME]'s claim as to the moneys paid to [NAME] and without regard for the indemnity rule upon which the order for costs relies; that he received cash and there were irregularities in the accounts in the matter of [NAME] including instructions not to issue a costs agreement; [NAME]'s email to him of 20 October 2013 (part of annexure "B" to [NAME]'s affidavit of 3 June 2019) in which [NAME] informed him that he was retaining various sums he had collected as to fees paid by some clients as a set off against moneys he owed [NAME]. [NAME] maintains that he has throughout tried to be transparent "to the optimum". 6. [NAME] says that [NAME]'s relationship with [NAME] appears to have been in existence since late 2006; that its existence was brought to his attention by her husband in about May 2012; and that the "already toxic" relation between he and [NAME] since mid-2011 led to [NAME] refusing to attend meetings of partners and soon thereafter none was held. [NAME] points to an email from [NAME] to [NAME] dated 1 February 2011 a copy of which he found on his desk in about mid 2013; and a memorandum prepared by him as to him being informed by the husband of [NAME] about the relationship between she and [NAME], copies of which he said he gave of each to [NAME] on 24 July 2019.

7. As to the matters to which [NAME] has deposed in his affidavit sworn 22 July 2019, [NAME] says as follows.

8. First, that there were no material discussions after about late December 2012. He says that his partners operated in secrecy and used [NAME] staff and resources to prepare their set; he points to emails where he asked his staff to inform him what they were doing; and says that the wall in the reception towards which clients walk towards on entry was repainted and [NAME] signage replaced with that of [NAME] without notice to him; that on departure property his partners wanted which included paintings and books; and that [NAME] asked him to pay for 50% of the furniture and equipment "forgetting [NAME] took about 80%. The atmosphere was toxic".

9. As to the authorities provided by [NAME] complains that he was only able at the hearing to say one sentence (in effect that nothing in them militates against the appointment of a [NAME] being made in this case) but then says that "[i]ndeed there is not much to be said, I believe". As adverted to above, he submits that the principle in [NAME] v [NAME] "that a [NAME] will be appointed as of course" should stand as the remaining authorities relied upon are distinguishable on their facts such that this matter would not fall into the situation where the exceptions and/or other alternatives arise.

10. As to the "rubbery figures", [NAME] says that he had recovered at least $250,000 in the following matters: [NAME] (about $30,000 from damages he claimed from Counsel for negligent advice otherwise the matter was one of his few contingency matters); [NAME] (about $120,000 as a result of assessment and negotiations); [NAME] (about $50,000 as a result of assessment and demands to the solicitor who was to have kept the funds in his trust but had given them to his client (and he says it was necessary to threaten bankruptcy)); [NAME] (about $54,000 (submitting that there were "particularly difficult recoveries" and [NAME] was unsupportive of his efforts and in most cases he had to meet the disbursements)).

11. As to the position with [NAME] (who was appointed as a debt collection agent), [NAME] has attached, he says, all emails with him and has marked parts that he says show: he was a colleague in a networking organisation BNI who offered debt recovery; [NAME] sought to collect for all outstanding sums due to [NAME]; [NAME] declined to proceed ultimately as he ceased debt recovery services; and [NAME] (who is an accountant who was to supervise recovery in his email to [NAME] and [NAME] of 27 May 2015) explains some past events and why he did not wish to continue. [NAME] says that [NAME] has not provided any material from [NAME] and [NAME] "cannot comprehend how he records what he has" (as to the circumstances in which [NAME] is said to have said he ceased the retainer).

12. As to [NAME]'s report, to which reference is made in [NAME]'s affidavit (as adverted to above at [37]), [NAME] says that he never criticised her report; that he said indeed it was "very good" and that it prompted many issues for him about which he drafted an email of questions (dated 3 December 2016). [NAME]'s criticism, rather, was her ten months' delay in issue of demands and lack of follow up. He says that [NAME] has trivialised the delay.

13. As to the Schedules, [NAME] says that his partners paid the benefits to staff who continued with them and did not pay benefits to the staff who stayed with [NAME]; that, despite his opposition, they paid [NAME] $15,153.32 for long service leave that she did not take (but chose instead to continue to work and be paid "even though [[NAME]] had ample staff"). In any event, he complains that none of the figures has been checked on his behalf. 14. [NAME] says: that he had recovered almost all his debtors except a small amount in which he did not have the funds to meet disbursements; that he did not focus only upon chasing debtors of [NAME]; and that the emails in relation to [NAME] corroborate that. He says that [NAME] was vigorous about his matters and that he did not object to [NAME] dealing with them if he wished. [NAME] also says that "statute barring" was a frequent topic on his emails "but it did not appear to interest [NAME] and the [NAME]"; and that there are many debts of $3,000 they have ignored despite [NAME]'s reminders.

15. As to the respondents' submissions on the present application, [NAME] reiterates that he does not agree with them. He says that he has dealt with comparison of expense to ventilate these issues through court process compared to independent [NAME]. He maintains that the latter would be far less costly and says it is likely one or each party would call expert evidence. He says the following as to particular submissions: as to [28(a)], it was a set off; [28(b)] and [28(c)] no particulars are provided and he would welcome the [NAME] investigating them; as to [29(b)], that there are fiduciary duties by each partner to each other; as to [30] and [33] there are no particulars provided. As to the submission that his is "chasing rabbits", [NAME] denies this and denies that he was "ever other than willing to set a bench mark of $3,000".

16. As to the list at [50], he says that much was made of [NAME] chasing the [NAME]; that most, if not, are statute-barred, "and, surprisingly, few appear to have done anything for 5 years". As to [NAME], he says that since 2013 he has asked for all invoices and on three occasions was given statements only which do not give proper details. He notes that he issued a subpoena to [NAME] earlier this year and says that there are charges which need explanation. He says that initially [NAME], and since then the [NAME], claimed he had used $4,000 for his benefit; that the sum was about $600 in November 2012, in error, and repaid immediately after he checked and that he never otherwise used that card but used his own with [NAME].

17. As to [70] of the submissions (which lists reasons why the court should not exercise its discretion in appointing a [NAME] in favour of [NAME]) he said that the respondents should not be allowed to rely upon this and distract the court from considering the facts and issues as to collection and disbursement of the moneys of [NAME].

18. As to [97] (relating to material that had been requested by [NAME] which the [NAME] indicated they did not possess), he submits that the [NAME] can address this and has more authority to address lack of cooperation.

19. As to [103] (where the [NAME] submit that it is open to the court to conclude that in making this application, [NAME] is: using another avenue to try again to "wrestle control" of the collection of debts; using what money the parties have collected to fund his desire to gain control; and using what money the parties have collected to fund the [NAME] to pursue certain of [NAME]'s desires such as investigate the [NAME]' collection of [NAME]'s debtors and monies written off and or discounted by [NAME]) he says that the [NAME] acknowledge not having "direct evidence", and that [NAME] admits to engaging in speculation. [NAME] refers to his letter to the assessor dated 9 July 2019 where there is reference to speculation that [NAME] has created false documents. [NAME] says he would accept either party being given the opportunity to provide the contemporaneous records upon which each relies. 20. [NAME] says the position at [106] of the submissions (in relation to the [NAME] debts now being statute-barred) has been exclusively caused to occur both by lack of action by [NAME] and dilatory conduct of the [NAME] and that the respondents should be accountable for that conduct.

21. As to [111]-[113] of the respondents' submissions (relating to the lien for the costs of [NAME]), [NAME] maintains that this is an extraordinary proposition and should be refused. He says: … Indeed, [NAME] has remarked from time to time that he was not being paid. I responded each time with disbelief and cautioned him against it. He on no occasion intimated his desire now expressed. I believe, and I regret, there is ample revealed about the manner in which [NAME] has conducted himself in this matter as between us and I regret to say on considerable occasions towards the Court. I believe I have demonstrated some as occurred in respect of the conduct of this motion both orally and in writing. He has demonstrated disrespect for the Court and his duties to the Court. He has not produced his costs agreement. He seems to be ignoring the indemnity rule. He has been liberal in making assertions and/or submissions which misrepresent true facts and events. This request is but one more illustration of his propensity to be disingenuous. It is as well revealing of the cynicism of the [NAME] and [NAME] when considering the assertion I wish to use the funds available for my ends and they openly concede that is their goal.

1. At [114] of the respondents' submissions (where it is stated that the [NAME] assert a constructive trust and/or lien over the assets of [NAME] to satisfy the claim they have brought against the defendant for misappropriation of assets of the [NAME]), he submits there is no foundation for this assertion.

2. As to [115]-[116] (where it is said by the [NAME] that a person who is owed fiduciary obligations can trace assets in which he or she had a beneficial interest where there had been a breach of fiduciary obligations), he agrees "subject to the same right in [his] favour".

3. As to [120] (where the [NAME] submit that there is an alternative to the appointment or a [NAME], being that the parties should be ordered to exchange details of the files, the amounts of debtors and [NAME] billed and recovered costs written off and [NAME] paid and the whereabouts of any funds collected that exceed [NAME] paid and outlines a proposed timetable for this to occur), it is submitted that if this or a "similar timetable driven course of events" is to be ordered the parties should provide some contemporaneously with each other. It is submitted that, given the history of the matter since mid-2012 especially that of the delays in the main proceedings and debt recovery, his affidavit of 3 June 2019 provides in effect a chronology. He says that: … Whereas any remarks against me by [NAME], which I submit are exaggerated, as to delay and my contribution to same [sic] were made from the bar table. The conduct of the [NAME] and [NAME] would cause prospects of a just, quick and cheap outcome concluded being doubtful. The frequency of [NAME] making unsupported assertions and/or submissions causes one to believe it is futile to cause me provide information without there being a contemporaneous exchange with that to be provided by the [NAME]. I note that to date little has been provided by the [NAME] and they are likely to claim they are unable to by reason of actions of [NAME] against whom they have made only superficial effort or to say I have not complied. 1. [NAME] believes there is ample proof of over almost six years "uncooperative conduct by the late [NAME] and the [NAME] with the motive of exhausting [him] financially" and believes that further opportunity to do so "ought to be considered with highest caution". [NAME] submits that the most just, quick and cheap course to follow is the appointment of a [NAME] and he says that he does not have any faith or confidence in any other alternative which allows either party without penalty to obfuscate or delay. 2. [NAME] disagrees to a condition precedent, especially when it is directed only at him. He argues that the [NAME] will treat both parties in equal fashion and obtain what he considers is required in the interest of [NAME].

3. As to [125]-[126] of the respondents' submissions (where it is submitted that:, if [NAME] wishes the discretion to be exercised in his favour then he ought first "fulfil his own legal and equitable obligations to his [NAME] partner's executor and trustees, arising out of the subject matter of the dispute"; and that [NAME] has not come to equity with clean hands) , [NAME] says that: There appears a distinct inclination on the part of [NAME] and the [NAME] to caste judgement [sic] and obligations upon me when same should, on any view, apply equally to all parties. I believe such conduct is grossly mischievous and mischief is revealed too often in the conduct of [NAME] and the [NAME], including assertions and/or submissions of the [NAME]. 1. [NAME] says that any criticism he has directed at [NAME] he has done so "reluctantly and unhappily".

Submissions of the respondents (the [NAME])

1. The respondents acknowledge that they previously sought the appointment of a [NAME] to the dissolved legal [NAME]. However, they submit that it would now be futile to appoint a [NAME]. They argue that the previous need for the appointment of a [NAME] has been overtaken by events, namely the agreements between the parties to act in recovering debts owing to the [NAME] (which has had some success) and they say that the present circumstances of the case (namely, the fact some money has been recovered and [NAME] paid but that other debtors may now be statute-barred) do not necessitate or justify the appointment of a [NAME] and that a [NAME] would effectively go over the same ground that the parties have already covered.

2. It is submitted that the amount of costs that would be paid to the [NAME] would outweigh any costs that could be recovered and would deplete the moneys available to pay the [NAME] of the [NAME] and expose the parties to actions by third parties; and that [NAME] is attempting to use the [NAME] to investigate matters that are relevant to his prior cross-claim against the [NAME] (which he has discontinued) as well as his counter claims in his defence, and in so doing is using the [NAME] to gather evidence to bring and or prove his case at the cost of the [NAME].

3. In support of their opposition to the motion, the respondents rely upon the affidavits of [NAME] affirmed 25 October 2013, and [NAME] sworn 22 July 2019. 4. [NAME], notes that [NAME], in his affidavit affirmed 25 October 2013, deposed that: the assets of [NAME] as at the time of dissolution comprised unbilled [NAME] ([NAME]) of $1,360,125.33 and debtors of $1,450,226.37 (a total $2,810,351.70); other assets such as equipment were transferred in specie to the individual partners by agreement between themselves; and that the amount of liabilities at the time of dissolution was $1,221,665.71. [NAME] has calculated the balance, as at the date of dissolution of [NAME], to be $1,588,685.99. 5. [NAME] in his affidavit affirmed 25 October 2013 said that he collected approximately $163,000, which he says was paid into the [NAME] bank account for payment of invoices. Annexed to [NAME]'s 22 July 2019 affidavit is a schedule prepared by [NAME] of amounts recovered from [NAME] clients (totalling $141,040.88). [NAME] notes that [NAME], in his affidavit affirmed 25 October 2013, deposed that [NAME] had collected about $42,000 and paid that into the [NAME] bank account up to 27 August 2013. (As noted above, [NAME], in Schedules 1 and 2 of his defence, sets out the amounts he claims to have recovered.) 6. [NAME] deposes that on 29 September 2014, [NAME] and [NAME] participated in a mediation, following which they entered into a Binding Heads of Agreement (see Annexure "A" to [NAME]'s affidavit sworn 22 July 2019), in which the parties estimated their debtors and [NAME] at $8 million. It is noted that in that estimate [NAME] indicated a preparedness to discount the original estimates by 20% "to cover risk of reduction, cost of assessment process and bad debts" (which the respondents submit is a relevant consideration when considering what costs, if any, a [NAME] could recover). 7. [NAME] submits that, since the mediation, the parties have worked together to identify debtors and [NAME] worth chasing for payment; and that they have consulted and identified the files with the highest amount outstanding to pursue. It is noted that the parties have recovered moneys from clients of [NAME], the amounts of which have, by agreement, been deposited into [NAME] trust account; and that the parties have, by agreement, engaged the services of two [NAME], [COMPANY] ([NAME]) and [NAME]. It is said that [NAME] has had some success in recovering moneys; but that [NAME] did not have any success; and that the present balance of moneys collected and deposited into [NAME] trust account is $84,089.67.

8. The respondents argue that (given the responses of debtors, or the lack thereof, and given the time that has elapsed since the dissolution of the [NAME]) the [NAME] have now indicated that in their opinion the debts are uneconomical to pursue, or statute-barred; and that they intend to close their files. They submit that even though a [NAME] may be appointed, that may not guarantee success in recovery of the full amount or of any amounts of all debts and that a [NAME] may well likewise form the view that it is uneconomical to recover the debts, in which case what money the [NAME] has (which could otherwise be used to pay its [NAME]) will have been wasted.

9. As noted earlier, following dissolution of the [NAME], the [COMPANY] appointed [NAME] as Manager of the [NAME]'s trust account and a controlled money account in respect of the remaining funds of a client of [NAME]. [NAME] has deposed that he is informed by Mr [NAME] that: the balance of the [COMPANY] account is $44,232.24; and that the balance of the moneys held in a controlled monies account with [COMPANY] in relation to a particular matter (the [NAME] matter) is $16,344.54, thus totalling $60,576.78.

10. The respondents believe there is also an amount of $13,498.73 in credit in a bank account for the balance of moneys paid regarding the [NAME]'s purchase of a photocopier (a payment referable it seems to a company known as [NAME]).

11. The respondents say that they are aware of outstanding [NAME] of the [NAME] totalling $206,835.74 (see [NAME]'s submissions at [50]), including an [NAME] tax debt in the sum of $73,800.61.

12. The respondents note that s 67 of the Supreme Court Act 1970 (NSW) (Supreme Court Act) confers a wide discretion to appoint a [NAME], on terms, where it appears to the court to be just and convenient to do so. It is submitted that although, historically, it was considered that when an action was brought seeking the winding up of a [NAME] already dissolved, the plaintiff was entitled, as a general rule, and practically as a matter of course, to the appointment of an interim [NAME] (see [NAME] v [NAME]), that is no longer the case. It is submitted that, notwithstanding that general rule, it is now equally well established that it is not inevitable that in any such case an interim [NAME] and manager will be appointed as a matter of course but, rather, that there is a residual discretion as to whether any appointment should be made (referring to [NAME] v [NAME] (Supreme Court (NSW), Powell J, 1 March 1985, unrep) ([NAME] v [NAME]), and that the surrounding circumstances must be taken into account (Rowlands v MacDonald [2002] NSWSC 282 ([NAME] v [NAME]) at [28]). It is noted that in [NAME] v [NAME] (Supreme Court (NSW), McLelland J, 16 May 1991, unrep) ([NAME] v [NAME]), McLelland J said: Nevertheless the court has an over-riding discretion in the matter, and for substantial cause shown will refuse, or limit the terms of, the appointment of a [NAME].

1. The respondents submit that in [NAME] v [NAME], in deciding to appoint a [NAME], his Honour considered that the evidence revealed aspects of the conduct of the defendants that gave added weight to the plaintiff's case for appointment of an interim [NAME], and that the events demonstrated lack of good faith by the defendants, which his Honour said reinforced the legitimacy of the plaintiff's desire that the winding up should be taken out of the defendant's hands.

2. In the present case, the respondents submit that there is no evidence regarding aspects of their conduct concerning the collection of debts, nor any lack of good faith by them, such that would justify the appointment of a [NAME].

3. Reference is made to [NAME] ([NAME] (ed), [NAME] (19th ed, 2017, [NAME]) (Lindley)) at 23-160, where it is said that "there is nothing approaching a presumption that a [NAME] will be appointed in such a case, and sufficient grounds will always have to be shown, as the Court of Appeal made clear in [NAME] v [NAME]."

4. The respondents submit that [NAME] v [NAME] (Court of Appeal (NSW), 2 November 1995, unrep), is authority for the proposition that an application for appointment will not be granted as a matter of routine and that in every case it will be necessary to show sufficient grounds for the appointment and that the expense associated therewith will not be disproportionate to the nature and value of the [NAME] business (see Lindley at 23-157).

5. As to the exercise of the discretion to appoint a [NAME], it is noted that the power is not unfettered (P [NAME], Principles of Australian Equity and Trusts (3rd ed, 2016, LexisNexis Butterworths) at 992 (Principles of Australian Equity and Trusts)) and that the power of appointment: … is an extraordinary and drastic remedy to be exercised with utmost care and caution and only where the court is satisfied there is imminent danger of loss if it is not exercised [Bond Brewing Holdings Ltd v National Australia Bank Ltd (1990) 1 ACSR 445 at 458].

1. It is noted that, when exercising its discretion as to whether an appointment should be refused, the court may take into account whether the consequences of such an appointment will be "ruinous" (see [NAME]­[NAME] v [NAME] at 12 and the cases there cited).

2. The respondents submit that it would be ruinous to appoint a [NAME] in the circumstances of this case where: the [NAME] has been dissolved; following the dissolution of the [NAME] and [NAME] collected debts and paid [NAME]; [NAME] admits in his defence (at [42]) that he has collected debts owing to the [NAME], which he has kept for himself (such that the respondents say that there is no utility in a [NAME] being appointed to collect debts from [NAME] where he has already collected such debts); the parties themselves have appointed a debt collection agency which has recovered as much as it can; debts may now be statute-barred; there are limited funds available; the [NAME] would charge fees and may not be able to do better than what the parties have already done; the depletion of funds would not leave any moneys to pay existing [NAME]; and the depletion of funds would leave the parties exposed to claims by [NAME].

3. It is noted that in Liquor National Wholesale Pty Ltd v The Redrock Co Pty Ltd [2007] NSWSC 392 ([NAME]), Brereton J, as his Honour then was, declined to order the appointment of a [NAME] (having considered whether the appointment would be "ruinous" and having been of the view that irremediable prejudice would be occasioned to the defendants by appointing a [NAME], putting them into default of their obligations to third parties).

4. The respondents submit that this conclusion should be drawn in the present case, further submitting that the appointment of a [NAME] could be even more ruinous to them because, if [NAME] files a debtor's petition (as it is said he has indicated he will do), then the respondents (i.e., the [NAME] in the main proceedings), as the remaining partners, will be saddled with and could be liable for the whole amounts of the [NAME]'s debts.

5. The respondents note that one of the factors that Young CJ in Eq took into account in Cuming v Hennessy [2005] NSWSC 1219 ([NAME] v [NAME]), when deciding not to appoint a [NAME] was that there was no threat that the capital assets of the [NAME] were being diminished (see at [15]). The respondents submit that in the present case, the assets of the [NAME] have been largely dealt with such that there is no threat to capital assets being diminished that would justify ordering the appointment of a [NAME].

6. The respondents acknowledge that in [NAME] v [NAME] J, as his Honour then was, identified (at [30]) two factors that pointed strongly towards the appointment of a [NAME]: first, the parties being in serious dispute (making co-operation sufficiently problematic as to warrant the introduction of a third party); and, second, irregularities in the [NAME]'s financial affairs.

7. The respondents submit that this decision ought be distinguished: first, on the basis that that dispute concerned an ongoing [NAME] that included a residential property that was being occupied by one of the parties, whereas in the present case the [NAME] was terminated some years ago; second, that the parties here have collected debtors and paid [NAME]; third, that the parties have engaged a bookkeeper ([NAME]) to write to debtors; fourth, that the parties have engaged two [NAME] ([NAME] and [NAME]) with some limited success; fifth, that what debts are existing are now probably statue-barred; and finally, that any irregularity in the [NAME]'s financial affairs was caused by [NAME]'s own conduct (referring to [NAME] v Council of the [COMPANY] of New South Wales [2019] NSWCA 119 ([COMPANY])).

8. The respondents note that the [NAME] was dissolved on 21 June 2013 and submit that, given the parties have been active in pursuing debts and paying [NAME], there is no imminent danger of loss that would justify the court exercising its discretion and appointing a [NAME].

9. Further, the respondents submit that the discretion to appoint a [NAME] should not be exercised in favour of [NAME] in circumstances where: [NAME] has misappropriated assets of [NAME] in the circumstances set out in [COMPANY] and has engaged in professional misconduct (by the conduct there identified) (see [272], [274], [299], [302], [303], [306], [315]-[318], [348]-[355] and [372]); [NAME] has admitted in his defence that he collected the debts of the [NAME] and failed to bank them to the [NAME] account; [NAME] has stated to the court that he intends to file a debtor's petition but so far has not taken any steps to do so, thus leaving the respondents in the position of having to litigate their claim in the knowledge that if they are successful they will not be able to recover any judgment against him; and [NAME] is seeking to use the court process to recover money for his own purposes before he becomes bankrupt, and thereby avoid any liability to the respondents, and has discontinued his cross-claim against the respondents such that he does not have a claim against the respondents that warrants the court entertaining his application and/or granting his application.

10. In relation to s 67of the Supreme Court Act, the respondents submit that this requires the court, when exercising its discretion, to take into account settled legal principles so as to protect the parties' rights and prevent damage, and to achieve justice between the parties. They submit that the appointment of a [NAME] would be "ruinous" for the parties (particularly the respondents) if [NAME] files a debtor's petition, such that it would not do justice between the parties.

11. It is noted that, in considering whether to appoint a [NAME], the court should be concerned to ensure that there is no other way of resolving the dispute between the parties (see Lindley at 23-157). The respondents submit that there are other alternatives to the appointment of a [NAME], which the court should order (as to which see further below), and the listing for hearing and determination of their claim and [NAME]'s defence.

12. As to the question of the [NAME]'s remuneration, it is noted that r 26.4 of the Uniform Civil Procedure Rules 2005 (NSW) provides that a [NAME] is to be allowed such remuneration (if any) as may be fixed by the court. The respondents note that the proposed receivers' charges are some $588.50 per hour including GST. It is submitted that this is at the higher end of fees charged by receivers (pointing to [NAME]'s evidence of enquiries made to other receivers) and therefore the potential [NAME] moneys available to the parties will be depleted faster if is a [NAME] is (or receivers are) appointed.

13. It is noted that a [NAME] appointed by the court is entitled to be properly remunerated (Price v Price (1904) 29 VLR 719); and that normally the [NAME]: looks to the assets to which the appointment relates (Eady v Eady (1895) 16 LR (NSW) Eq 70; Boehm v Goodall [1911] 1 Ch 155; Rosanove v O'Rourke [1988] 1 Qd R 171); is entitled to assert a lien over them (Bernard v Davies (1862) 32 LJ Ch 41 at 43; Shirlaw v Taylor (1991) 31 FCR 222); and is entitled to be paid remuneration in priority to the claim of [NAME] (Hill v Venning (1979) 4 ACLR 555), unless the appointment relates to property encumbered in favour of those [NAME] (Choudhri v Palta [1994] 1 BCLC 184; [1992] BCC 787).

14. The respondents submit that, given the proposed receivers' rates and the work they would need to do, what little money that exists in the [COMPANY] account, [NAME] controlled moneys account and in the [NAME] trust account would be depleted quickly leaving nothing to pay existing [NAME] of [NAME].

15. The respondents argue that the expense of appointing a [NAME] would be potentially disproportionate. They note that in Lindley at 23-153, the authors say: Even before the advent of the Civil Procedure Rules, the courts had regard to the potentially disproportionate expense of appointing a [NAME] and it would now seem likely that an application for such relief will be subject to particularly careful scrutiny in terms of overriding objective. In addition, it would seem that the court will not, in general, favour a [NAME] which will have an extended duration. For this reason, the current editor is fortified in his view that the appointment of a [NAME] (or a [NAME] and manager) should normally be regarded as a remedy of last resort. and that Young CJ in Eq, as his Honour then was, said in [NAME] v [NAME] at [6] that "one must be very careful when there is a [NAME] with only modest assets, and where the income is likely to be very small, to put in a [NAME] because the current scale of fees of receivers is $480 to $520 an hour for a principal, with pro rata for lesser mortals in the [NAME]'s organisation. Taking time for familarisation and looking at the figures, it does not take very long for one hundred hours work to be done and that can mean a bill of up to $50,000".

1. The respondents also note the further comments of Young CJ in Eq in [NAME] v [NAME] regarding a partner post a bond for the [NAME]'s fees (at [6]): … It is unfair to ask a [NAME] to take such a task on-board unless he or she has some security for the fees. That is why in small [NAME] matters I usually require that where there is a dispute between partners as to whether a receive is necessary, and one partner insists on it, that that partner post a bond so that in the first instance the first one hundred hours' work of the [NAME] is secured.

1. It is noted that an applicant for the appointment of a [NAME] is usually required to give an undertaking as to damages as "the price to be paid" for the order (Duffy v Super Centre Development Corporation Ltd (1967) 1 NSWLR 382 at 383-4).

2. The respondents submit that, in the circumstances, and having regard to the comments of Young CJ in Eq, if the court is inclined to order the appointment of a [NAME], then it should order that [NAME] post a bond of $50,000 to cover the [NAME]'s fees; and that [NAME] should be ordered to provide details of [NAME] paid, and the amounts of any moneys collected and not paid to [NAME] before appointing a [NAME].

3. The respondents submit that [NAME] has an ulterior motive for the appointment of a [NAME], noting that during the course of the matter [NAME] has expressed: his frustration regarding [NAME]'s (as well as [NAME]'s) collection of the [NAME]' debts; his suspicion that since the termination of the [NAME] (as well as [NAME]) has received moneys from debtors for which an account has not been made to the [NAME]; and his frustration with the lack of success of the [NAME] in collecting debts. The respondents maintain that the position of [NAME] is that he is trying to appoint a [NAME] in effect to continue his own litigation at [NAME] expense (T 17; 24/7/19). [NAME] describes [NAME] as a "control freak" and points to difficulty working together (T 25; 24/7/19).

4. It is noted that on 6 August 2018 [NAME] served upon the respondents a notice to produce; and that on 7 August 2018, [NAME] issued and served a subpoena upon [NAME]; the material there being sought being, for all intents and purposes, identical and quite extensive (going to the essence of [NAME]'s frustration and suspicion regarding the accounts of the [NAME] as well as [NAME] and [NAME]'s actions and attempt to obtain the information). The respondents say that they do not possess the material requested (and, if they do, then they received them from [NAME]); that [NAME] sought to have it set aside; and that [NAME], at the directions hearing before the court on 4 June 2019, sought, and was granted, leave to discontinue his application for orders that [NAME] comply with his subpoena.

5. The respondents note that in his email to the court on 30 May 2019, [NAME] stated that due to his personal circumstances he is not in a position to continue his defence of the matter, would discontinue his cross-claim, intended to consent to the orders of the court in relation to his defence and intended to lodge a debtor's petition. Subsequently, [NAME] filed his defence to the amended statement of claim, in which, in answer to the respondents' claim for relief he says: ... and whether any dealing and transaction occurred at any time and to provide that the [NAME] do all things reasonable to recover monies owed to the [NAME] and if [sic] which ought not to have been charged.

1. The respondents submit that it is open to infer that in making this application, [NAME] is: "using another avenue" and "using what money the parties have collected" to fund "his desire to wrestle control of the collection of debts"; and using what money the parties have collected to fund the [NAME] to pursue his desire to: investigate the respondents' collection of [NAME]'s debtors and moneys written-offs and/or discounted, and investigate [NAME]'s collection of [NAME]'s debtors and moneys written off and/or discounted by [NAME]. The respondents submit that in those circumstances it would be an improper use of the court's powers to appoint a [NAME].

2. Reference is made to Principles of Australian Equity and Trusts, where it is noted that the appointment of a [NAME] by the court does not vest any property in the [NAME] (Bolton v Darling Downs Building Society [1935] St R Qd 237). Thus, it is said that the [NAME] has no right of action in his name for recovering property that is subject to the [NAME]; and must apply for leave to sue in the name of the entity entitled to sue.

3. The respondents further submit that, given the [NAME] dissolved on 21 June 2013, the debts of the [NAME] may be now statute-barred, meaning that whilst the parties could write to debtors and request payment, they would not be able to commence and maintain proceedings for recovery. Indeed, the respondents note that the [NAME] engaged by the parties have indicated as much.

Accordingly, it is submitted that it would be a waste of effort and money to appoint a [NAME] to "chase" debts that are statute-barred.

4. The respondents also argue that the [NAME] has a potential conflict of interest. They note that [NAME] has informed the court that he intends to lodge a debtor's petition, and that he has asked [NAME] and [NAME] to consent to being his trustee in bankruptcy (referring to the correspondence dated 31 May 2019 annexed to [NAME]'s affidavit sworn 3 June 2019). The respondents submit that if [NAME] and [NAME] become both receivers to [NAME] and [NAME]'s trustee in bankruptcy they will place themselves in a position in which it could be perceived that they could prefer [NAME]'s personal position to that of their position as receivers of [NAME].

Accordingly, they submit that they should not be allowed to be in a position where they could be perceived to be in conflict.

5. A lien for the costs of [NAME] is also raised as a factor to take into account. The respondents note that since the time of agreement between the parties to deposit moneys collected into [NAME] trust account, [NAME] has: been involved in the recovery and receipt into his trust account of moneys owing from one client of [NAME]; instructed and communicated with [NAME] regarding collection of debtors of [NAME]; and has receipted into his trust account moneys collected and paid their fees from the trust. [NAME] says that since receiving instructions in this matter, he has not received payment of his costs or disbursements; and that there is an equitable lien over the relevant moneys in the [NAME] trust account.

6. The respondents submit that if the appointment of a [NAME] is ordered, then the court should first order the payment of [NAME]'s fees associated with: recovering and receipting into trust the moneys paid by [NAME]; instructing and communicating with [NAME] regarding collection of debtors of [NAME]; as well as receipting into his trust moneys collected and paying their fees from the trust.

7. Further, it is noted that the respondents assert a constructive trust and/or lien over the assets of [NAME] to satisfy the claim they have brought against [NAME] for misappropriation of assets of the [NAME]. It is noted that in In re Hallett's Estate; Knatchbull v Hallett (1880) 13 Ch D 696 Jessel MR held that a person who was owed fiduciary obligations was able to trace assets in which he or she had a beneficial interest where there had been a breach of fiduciary obligations.

Accordingly, the respondents submit that their claim would have priority ahead of any claim by a [NAME] and so the appointment of a [NAME] would be futile as against the [NAME]' claim.

8. As to the costs of the motion, the respondents say that if [NAME] succeeds in his motion, as a litigant in person, he is not entitled to costs; and that if [NAME] is not successful in his motion, [NAME] should be ordered to pay the respondents' costs of and associated with the motion.

9. The respondents submit that the appointment of a [NAME] will be a costly exercise that will deplete what little money has been recovered and deprive the payment of existing [NAME].

10. They submit that there is an alternative to the appointment of a [NAME] and that is that the parties should be ordered to exchange details of their files, the amounts of debtors, [NAME] billed, recovered costs written off, [NAME] paid and the whereabouts of any funds collected that exceed [NAME] paid. In that regard, they proposed a timetable which would require [NAME] within four weeks to prepare and serve upon the respondents a list of all [NAME] and personal matters [NAME] took after the dissolution of the [NAME] on 21 June 2013 and, in respect of each such matter: detail the costs he and/or [NAME] recovered, detail the costs he and/or [NAME] wrote off and or discounted, provide details of [NAME] paid and the amounts, and the amounts of any moneys collected and not paid to [NAME]. It is submitted that within a further four weeks after the defendant has provided his list, the respondents would: prepare and serve upon the defendant a list of all [NAME] and personal matters [NAME] took after the dissolution of the [NAME] on 21 June 2013 and, in respect of each such matter: detail the costs recovered, detail the costs written off, provide details of [NAME] paid, and the amounts of any moneys collected and not paid to [NAME]; and that the matter then be listed for directions eight weeks hence.

11. The respondents note that in [NAME] v [NAME] CJ in Eq, speculated that the parties could work out a "system whereby [NAME] and allied matters could be finalised in a far more inexpensive way than by putting in a [NAME]" and commended the parties for considering an alternative to the appointment of a [NAME] (namely, mediation).

12. The respondents point to the observations of Brereton J in [NAME] v [NAME]; Parkinson v Morkaya [2008] NSWSC 1050 at [20]: … But despite the potentially ruinous consequences, if the parties are in intractable dispute appointment of a [NAME] may be inevitable. If the court is to decline to appoint a [NAME] in such circumstances, it will usually require that there be some mechanism in place to provide comfort to the court and to the party not in control as to the interim management of the [NAME] business … .

1. Finally, as an example of the maxim that he who seeks equity must do equity, the respondents submit that if the court is inclined to exercise its discretion and grant the request for the appointment of a [NAME], then it is incumbent upon [NAME] first clearly and precisely to articulate, in respect of each of his [NAME] and personal matters, the details of: costs he and/or [NAME] recovered; costs he and/or [NAME] have written off; [NAME] paid and the amounts; and the amounts of any moneys collected and not paid to [NAME].

2. The respondents submit that if [NAME] wishes equity to exercise its discretion in his favour then he should first fulfil his own legal and equitable obligations to his [NAME] partner's executor and trustees, arising out of the subject matter of the dispute (i.e., the [NAME]) and account for the above.

3. Finally, the respondents submit that in the context of [NAME] appropriating to himself and his subsequent [NAME], monies collected from [NAME] debtors, rather than paying the moneys into the [NAME] account and refusing [NAME]'s requests that he do so, and now seeking to use what money has been collected to embark on his quest to appoint a [NAME] to try to recover moneys before he intends to go bankrupt, [NAME] is not coming to equity with clean hands.

Determination 1. Long Innes J said in [NAME] v [NAME] (at 383) that: It must now, I think, be regarded as settled that in a suit instituted in Equity for the winding up of a [NAME] already dissolved, or for the dissolution of an admitted [NAME] in which it is clear that dissolution will be granted at the hearing, the plaintiff is entitled as a general rule, and practically as a matter of course, to the appointment of an interim [NAME] … .

1. However, more recently that has not been the position adopted in this Court in cases such as [NAME] v Hennessy and Gumbleton v Hewitt [2012] NSWSC 886 ([NAME] v [NAME]), where it has been recognised that the question whether a [NAME] will be appointed in such circumstances remains a question of discretion and requires a consideration of all the relevant circumstances.

2. In [NAME] v [NAME], having said (at [1]) that, for the purpose of appointment of an interim [NAME] "one merely looks to see whether the plaintiff has set up a prima facie case that there is a [NAME]", Young CJ in Eq (as his Honour then was) outlined some of the principles relating to the appointment of a [NAME] in relation to the dissolution of a [NAME] (from [7]ff), as follows: The traditional law is as M McLelland J said in [NAME] (16 May 1991, unreported): "Where there are proceedings for the winding up of a [NAME], the existence and dissolution of which are not in contest, the [NAME] are, generally speaking, entitled to have an interim [NAME] appointed almost as a matter of course. ... The rationale of this rule is that no partner has any greater right than the others to wind up the [NAME] affairs to the exclusion of those others. Nevertheless, the Court has an over-riding discretion in the matter, and for substantial cause shown will refuse, or limit the terms of, the appointment of a [NAME]." That statement was based on the case of [NAME] (1928) 28 SR (NSW) 380 at 383, and on the then current edition of [NAME]. However, as [NAME] for the defendant has reminded me, the current edition of Lindley, the 19th, has modified that statement and in the 18th edition, at paragraph 23.160, the learned editor says: "Lord Lindley's use of the expression "almost as a matter of course" in relation to appointments following a general dissolution should not be taken too literally: there is nothing approaching a presumption that a [NAME] will be appointed in such a case and sufficient ground will always have to be shown, as the Court of Appeal made clear in [NAME] (2 November 1995, unreported)." That attitude was adopted by Barrett J in this Court in Rowlands v Macdonald [2002] NSWSC 282 and by Le Miere J in Western Australia in [NAME] (2004) 51 ACSR 564 at 573.

1. In [NAME] v [NAME] noted that in [NAME] v [NAME] CJ in Eq "accepted that the appointment of a [NAME], although usual, is not something which will occur in every case without consideration of its appropriateness". In Daniels v Smith [2006] NSWSC 1424 (cited in Byrne v Byrne [2011] NSWSC 1437 by Barrett J, as his Honour then was), Brereton J (as his Honour then was) said (at [8]-[9]): In Cuming v Hennessy [2005] NSWSC 1219 (28 November 2005) Young CJ in Eq described to [sic] the substantial cost of installing a [NAME] in a [NAME] with only modest assets and to the development of the law since 1928. His Honour referred to [NAME] v [NAME] (NSWSC, unreported, 16 May 1991 - [ID]), in which McLelland J, as he then was, having acknowledged the rule that where there were proceedings for the winding up of a [NAME], the existence and dissolution of which were not in contest, the plaintiff was entitled to have an interim [NAME] appointed almost as a matter of course - the rationale being that no partner had any greater right than the others to wind up the [NAME] affairs to the exclusion of the others - added that the court had an over-riding discretion in the matter, and for substantial cause shown would refuse, or limit the terms of, the appointment of a [NAME]. Young CJ in Eq, in [NAME] v [NAME] , also referred to Rowlands v MacDonald [2002] NSWSC 282, in which, after referring to [NAME] v [NAME], Barrett J observed that though the case was one in which the conditions for the application of the general principles were satisfied, the remedy remained discretionary, and that, in the words of Powell J in [NAME] v [NAME] (NSWSC, unreported, 1 March 1985), the court must pay attention to the surrounding circumstances: "This general rule notwithstanding, it is equally well established that it is not inevitable that, in any such case, an interim [NAME] and manager will be appointed, and that the Court retains a residual discretion as to whether any appointment should be made; one of the bases upon which, in an appropriate case, an appointment will be refused, is that the consequences of such an appointment will be 'ruinous' (see, for example, [NAME] (1807)15 Ves 16; 33 ER 658; [NAME] (1928) 28 SR (NSW) 380; Sobel v Boston [1975] 2 All ER 282)."

1. In [NAME], Brereton J (as his Honour then was) noted some other "balance of convenience considerations" as including: the costs of the [NAME]; the ultimate saleability of the business and the price that might be realised; and the fact that the asset which it recovers "might well be a diminished one" (see at [53]).

2. The authors of [NAME] (9th ed, 2009, [NAME]), ([NAME], C Croft, [NAME]) (at [16.680]) say that: … Traditionally, on the breakdown of a [NAME], the partners were considered to be entitled to have a [NAME] appointed to the [NAME] property. However, over time, the court's approach has changed – the matter is now one for the discretion of the court, and a [NAME] is no longer appointed "almost as a matter of course". [footnotes omitted] noting that "[o]ne of the matters considered in the exercise of this discretion is whether the appointment would be "ruinous" to the business or undertaking in question" (citing [NAME] v [NAME]; [NAME] v [NAME]; [NAME] at [50]; and [NAME] v [NAME] at [29]).

1. What is abundantly clear in the present case (and, ironically, was reinforced by the supplementary submissions made by [NAME] on 5 August 2019 when the hearing of his application was effectively reopened following his complaint as to procedural fairness) is that there is an ongoing dispute as to the dealings between the partners of the now dissolved legal [NAME]. 2. [NAME] harbours suspicions as to misconduct (professional or otherwise) on the part of his [NAME] partners and has obviously trawled through the records available to him (and wishes a [NAME] to be appointed to trawl further through the [NAME] records) in order to determine whether, for example, there was proper adherence to [NAME] policies (or perhaps inter-partner agreements) as to write-offs, discounts, collection of [NAME] and the like. 3. [NAME] has accused his [NAME] partners, in effect, of tax evasion (in the letters sent to the authorities) and of other unethical conduct. (It would appear from some of the correspondence to which [NAME] directed my attention that there were similar suspicions harboured by one or both of his [NAME] partners in relation to his conduct (the respondents would no doubt say that those suspicions were warranted in light of the [COMPANY] findings against [NAME] but here is not the place to comment on those findings).)

4. In the submissions before me, emphasis was placed by [NAME] on the manner in which the costs of proceedings involving [NAME] were dealt with (his suspicions no doubt being fuelled by the text of the communications between [NAME] and [NAME] to which my attention was drawn but which might well have been explicable in a more innocuous way) and in relation to the client file in which he says an amount of cash was paid to his [NAME] partner and for which he says his [NAME] partner did not account to the [NAME] (about which there is no basis for me to form any view).

5. Insofar as the complaints made by [NAME] relate to breaches or otherwise of duties owed between the partners or of agreements between the partners, those are matters that will arise for determination (if at all) in the context of the matters raised in the principal proceedings. It suffices to note here that there is obviously a depth of suspicion, mistrust and aggravation on [NAME]'s part and I can only assume any ill-feeling is reciprocated by [NAME] (having regard to some of the material to which [NAME] referred, including her apparent acknowledgment of the toxicity of their relationship and her refusal to attend meetings of the partners from mid-2011).

6. The significance of the above is that my perception is that [NAME] is indeed seeking to air his [NAME] disputes, and have an investigation of matters relating to those disputes, under the auspices of a [NAME] where the costs will be borne by the relatively small amounts presently to the credit of the [NAME] (and, to the extent that this exhausts the [NAME] funds, effectively at the expense of the [NAME]). The argument that if one or both of the two main disputed debts is or are recovered this will fund the [NAME] begs the question, in that it assumes the success of those efforts (which, if they were to prove unsuccessful, would conversely be likely to exhaust the [NAME] funds). 7. [NAME] complains of delay and obfuscation; and he expresses considerable frustration at the position in which he now finds himself. Wherever the rights and wrongs of his complaints may lie, it is not to my mind a proper use of [NAME] funds (particularly after the debt collection efforts that have already been undertaken) now to expend further funds on the appointment of a [NAME]. In particular, I do not accept that it is in the interests of the [NAME]'s [NAME] to expend the small sums presently available on further costs of an exercise that I am not persuaded is sufficiently likely to bear fruit in order for that expenditure to be proportionate to any recovery therefrom (and which appears to be designed in no small measure to settle outstanding scores between the partners in their personal disputes).

8. I emphasise the position of [NAME] in this regard because the position as between the partners themselves is one in respect of which I consider it likely that both sides have played a part – and that this can be ventilated in the principal proceedings in due course without the need for the [NAME] to investigate [NAME]'s allegations for him at the expense of the [NAME] (and thus potentially the [NAME]).

9. I understand that [NAME] challenges the figures that have been put forward by the respondents and by their solicitor as being "rubbery". Nevertheless, at this stage that is the material that is before me. Moreover, [NAME] himself is not prepared (or financially able) to put forward security for the [NAME]'s costs. 10. [NAME]'s position, as I understand it, is that if a [NAME] is not appointed then, through [NAME]'s and the respondents' actions (or inaction) or delay, his [NAME] partners will have brought about a position whereby he faces bankruptcy and may have lost the ability to recover from various of the debtors. From his perspective, I can understand his frustration. However, insofar as debts are (or are likely to be) presently statute-barred, there can be no useful purpose served in appointing a [NAME] to investigate their collection – particularly in light of the fact that efforts have already been made for the collection of many of the debts. Insofar as this means that [NAME]'s position has been prejudiced by the conduct of those other parties, if he has a cause of action against them then it is a matter for him to pursue it. However unpalatable as it is for [NAME] insofar as his personal position is concerned, I consider that the focus needs to be on what is a sensible way forward in the interests of [NAME]. And I have concluded that that is not by way of the appointment of a [NAME] in circumstances where I consider that would be futile and where the only real purpose that would thereby be served would be to give [NAME] a further opportunity to air his many complaints as to his [NAME] partners' conduct at someone else's expense.

11.

Accordingly, I will dismiss [NAME]'s notice of motion. I consider that a regime of the kind proposed by the respondents (with some amendment to take into account [NAME]'s criticisms) is a sensible means of progressing the matter in accordance with the statutory mandate for the just, quick and cheap resolution of the real issues in dispute; and that the dispute between [NAME] and his [NAME] partners, if it is to be pursued, should be dealt with in the ordinary course in the principal proceedings.

12. As to costs, I see no reason why costs should not follow the event.

Orders 1. For the above reasons, I make the following orders:

3. List the matter for further directions at 9am on 11 February 2020 before Ward CJ in Eq.

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