Delayed payment of a receiver’s bill – by 400 days?

Delayed payment of bills is said to be a significant problem facing small to medium enterprises in particular, with ‘cash flow’ remaining as an essential factor in the underlying stability and success of the business. When courts are the reason for delays in respect of the approval and payment of bills of receivers and other like professionals, the delays can be considerable.

A receiver was appointed by the NSW Supreme Court in 2016. The receiver applied for approval of his remuneration, in the amount of $126,000. The application was heard in February 2018. Judgment was given on 28 June 2019. The receiver’s remuneration was reduced to $90,000, for reasons given: In the matter of Australasian Barristers Chambers Pty Ltd [2019] NSWSC 799.

Such a delay is not very good, nor fair.

Dissatisfaction with the Australian judicial system

A former High Court Judge, Mr Kenneth Hayne has written about dissatisfaction with the Australian judicial system.[1]

“Lengthy reservation of judgment in the trial and intermediate appellate courts should be treated as never necessary and always wrong. Trial courts, the intermediate courts of appeal, and the judges of those courts must order the business of the court and their own affairs in whatever ways are necessary to avoid lengthy delay in delivery of any judgment. First, delay must come to be measured in days (perhaps in weeks) but never in months. Second, acceptable delay must be measured recognising that trial courts and intermediate appellate courts rarely deal with cases that require more than the application of known and accepted legal principle to the particular facts of the case”.

He went on to write that

“The judicial system can no longer survive trial courts, or intermediate appellate courts, reserving cases for month after month. It is, therefore, time to state clearly that there can never be any excuse for reservation of any case in those courts for the periods of six, twelve or even more months that too often have been seen in recent times both at trial and in intermediate courts of appeal. To be blunt about it, the judge who will not complete a judgment promptly is in breach of duty”.

In relation to many issues he raises in his article, which require attention, he concludes that

“(t)o stand still would condemn the Australian judicial system to irrelevance”.

The [limited] options

Perhaps tellingly, the NSW Supreme Court’s protocol on delayed judgments says an inquiry about a delay might be triggered (only?) once “a reserved judgment has been outstanding for an unreasonably long time …”. What inquiries were made in this case, if any, we do not know; but it is not up to the parties to ensure the courts attend to prompt delivery of judgments.

Meanwhile, beyond the limited option for receivers and other corporate insolvency officers of choosing their court – the Federal Court or any of the State Supreme Courts; or for bankruptcy trustees, the Federal Court or the Federal Circuit Court – the existing system in Australia, in all courts, often involves undue delay and cost, sometimes negating the original purpose of going to the court at all.

More to come.

[1] The Australian Judicial System: Causes for Dissatisfaction (2018) 92 ALJ 32, K M Hayne.

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