AFFIDAVIT OF SAID JAHANI. On 15 November 2017, I, Said Jahani of Level 17, 383 Kent Street, Sydney NSW 2000, liquidator, affirm:

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1 IN THE SUPREME COURT OF NEW SOUTH WALES No. 217/ DIVISION: Equity REGISTRY: Sydney Corporations List IN THE MATTER OF COURTENAY HOUSE CAPITAL TRADING GROUP PTY LIMITED (IN LIQUIDATION) (ACN ) & COURTENAY HOUSE PTY LIMITED (IN LIQUIDATION) (ACN ) SAID JAHANI AND JOHN MCINERNEY IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF COURTENAY HOUSE PTY LIMITED (IN LIQUIDATION) AND COURTENAY HOUSE CAPITAL TRADING GROUP PTY LIMITED (IN LIQUIDATION) Plaintiffs AFFIDAVIT OF SAID JAHANI On 15 November 217, I, Said Jahani of Level 17, 383 Kent Street, Sydney NSW 2, liquidator, affirm: Introduction lam one of the plaintiffs. I previously affirmed an affidavit in these proceedings on 4 September 217 (my previous affidavit), which was filed on 5 September 217. Shown to me at the time of swearing this affidavit are a tabbed and paginated bundle of documents entitled "Exhibit SJ-2" (Exhibit). When I refer to documents in this affidavit, I do so by reference either to their tab or page number in the Exhibit. The Liquidations of the Companies On 16 May 217, John McInerney and I were appointed as joint and several liquidators of Courtenay House Capital Trading Group Pty Limited (In Liquidation) (Courtenay House Trading) and Courtenay House Pty Limited (In Liquidation) (Courtenay House) (collectively, the Companies) by order of the Supreme Court of New South Wales. At Tab I Page 1-16 of the E hibit is a copy of the orders made by Justice Black on 16 May / v Deponent Witness 1-ilea on oenait 1: I he Plaintiffs Prepared by: Scott Geoffrey Hedge Cohn Biggers & Paisley Pty Ltd DX: 28 SYDNEY Lawyers Tel: (2) Level 42, 2 Park Street Fax: (2) SYDNEY NSW 2 Ref: SGH: scott.hedge cbp.com.au - stuart.mckenzie@cbp.com.au Attention: Stuart McKenzie JVOBBI7QGE

2 5. In this affidavit, when I refer to "the Liquidators" I am referring to myself and Mr McInerney. Since the appointment of the Liquidators, I have had the primary conduct of the Liquidations of the Companies and have directly supervised staff of Grant Thornton Australia Limited (Grant Thornton) working on the Liquidations. 7. I make this affidavit in support of my application for approval to pay the first plaintiffs' remuneration, costs and expenses, and legal costs and disbursements, from the Westpac 1 Account and the NAB 1 Account (as defined below), respectively. Specifically, this application seeks approval of: (a) (b) the plaintiffs' remuneration in connection with these proceedings and administering the NAB 1 Account for the period 16 May 217 to 31 August 217, in the amount of $55,269.5 (excluding GST); the plaintiffs' costs and expenses (other than legal costs and disbursements) in connection with these proceedings and administering the NAB 1 Account for the period 16 May 217 to 31 August 217, in the amount of $3, (excluding GST); the plaintiffs' remuneration in connection with these proceedings and administering the Westpac 1 Account for the period 16 May 217 to 31 August 217, in the amount of $522,89. (excluding GST); the plaintiffs' costs and expenses (other than legal costs and disbursements) in connection with these proceedings and administering the Westpac 1 Account for the period 16 May 217 to 31 August 217, in the amount of $3, (excluding GST); and the plaintiffs' legal costs and disbursements of and incidental to these proceedings as 49 follows: (i) in the amount of $142,54.38 (including GST), to be paid from the NAB 1 Account; and (U) in the amount of $16,86.44 (including GST), to be paid from the Westpac 1 Account. 8. Except where otherwise indicated, I make this affidavit from: my own knowledge; Deoonent V, Witness review of my files; and

3 (c) my and my staffs inquiries of relevant persons. The qualifications and experience of me and my staff I am a registered liquidator and a Partner at Grant Thornton. Mr McInerney is also a registered liquidator and a Director of Grant Thornton. I am the head of Grant Thornton's Financial Advisory team in Sydney and I have over 2 years' experience in corporate recovery and turnaround. During that time, I have specialised in, among other areas, the financial services market. I hold an Executive Masters of Business Administration and am a fellow of INSOL International. I am also a member of the Turnaround Management Association, Australian Restructuring Insolvency and Turnaround Association and I am a fellow of the Institute of Chartered Accountants of Australia and New Zealand. 11. During the course of my career, I have acted in a substantial number of contentious and difficult liquidations, including a number of liquidations in which investment companies were wound up. I also have previous experience acting as the liquidator of large companies which operated "Ponzi" style schemes. 12. I have had significant experience supervising and instructing solicitors and counsel in relation to litigation that often results from contentious liquidations. I am aware of the range of costs that are charged by various solicitors and counsel in Sydney and other jurisdictions in relation to this kind of work. 13. At Tab 2 Page 17 of the Exhibit is a copy of my curriculum vitae. At Tab 3 Page 18 of the Exhibit is a copy of Mr Mclnerney's curriculum vitae. 14. The vast majority of professional time in the liquidation of Courtenay Rouse so far has been undertaken by me as the Liquidator, along with the following employees of Grant Thornton: Lisa Gibb, a Senior Manager; David Mintz, a Senior Associate; and William Park, an Associate. 15. The vast majority of professional time in the liquidation of Courtenay House Trading so far has been undertaken by me as the Liquidator, along with: (a) Alexander Bell, a Partner; Gibb 14S VV Deponent 3 J't k/l Witness

4 Mr Mintz; Christopher Hillier, a Senior Associate; Suraj Adhikari, a Senior Associate; Shiv Ashokkumar, an Associate; Fraser Wilkinson, an Associate; and Jessica Costanzo, an Associate. 16. Mr Bell joined Grant Thornton as a Partner in November 215. I am informed by Mr Bell and verily believe that Mr Bell: has practised as a chartered accountant since 23; and has substantial forensic accounting experience having been involved in the forensic accounting profession for more than 17 years. 17. Ms Gibb joined Grant Thornton in November 21. I am informed by Ms Gibb and verily believe that Ms Gibb: has practised as a chartered accountant since 28; and has substantial experience in winding up mid-sized and large companies having been involved in the insolvency profession for more than 1 years. 16. Mr Mintz joined Grant Thornton in March 217. lam informed by Mr Mintz and verily believe that Mr Mintz: has experience in conducting forensic investigations into the affairs of companies having been involved in the forensic accounting profession for more than 4 years; and will be admitted as a chartered accountant in December 217 and has successfully passed all his Chartered Accounting exams with the Chartered Accountants of Australia and New Zealand. 19. Mr Park joined Grant Thornton in October 216. lam informed by Mr Park and verily believe that Mr Park: has practised as a chartered accountant since 216; and Deponent Witness ru

5 (b) has experience in general accounting mailers, having joined the accounting profession in March Mr Hillier joined Grant Thornton in 216. I am informed by Mr Hillier and verily believe that Mr Mr Hillier: is a part-qualified Certified Practising Accountant; and has experience in winding up small and large companies having been involved in the insolvency profession for more than 7 years. 21. Mr Adhikari joined Grant Thornton in 217 and has experience in general accounting matters, having joined the accounting profession in Mr Ashokkumar joined Grant Thornton in 217 and has experience in conducting forensic investigations into the affairs of companies. 23. Mr Wilkinson joined Grant Thornton in 217 and has experience in winding up small and large companies. 24. Ms Costanzo joined Grant Thornton in 216 and has experience in general accounting mailers, having joined the accounting profession in January From time to time, other employees undertook work in relation to the liquidations of both Courtenay House and Courtney House Trading, for example if the employees referred to above were unavailable or on leave. However, the employees referred to above were the ones who have had primary involvement in the day-to-day carriage of the liquidations of Courtenay House and Courtenay House Trading. 26. I regarded these teams as appropriate for liquidations of this nature because: they had a mix of experience for the complicated issues and economies for simpler tasks by less experienced staff; and the team included staff members brought in from departments other than the restructuring department to assist with more specialised investigations, such as employees from Grant Thornton's forensics team. ADelponent Witness 5

6 I refer to Part 14 (Necessary and Proper Remuneration) of the ARITA Code and Part 15 (Meaningful Disclosure in Remuneration Claims) of the ARITA Code and confirm that, in respect of the remuneration I now claim, I have had to regard the principles and standards of conduct prescribed in those Parts of the ARITA Code. At Tab 4 Pages of the Exhibit is a an excerpt of Parts 14 and 15 of the ARITA Code. Background to Companies' activities The Companies Courtenay House was incorporated on 14 April 28. At TabS Pages of the Exhibit is an historical company search of Courtenay House extracted from the records maintained by the Australian Securities and Investments Commission (ASIC). Courtenay House Trading was incorporated on 21 July 211. At Tab 6 Pages 5-52 of the Exhibit is an historical company search of Courtenay House Trading extracted from the records maintained by ASIC. Based on my investigations so far, it is my understanding that the Companies held out to prospective investors that they operated a foreign exchange and commodities investment business. Winding up of the Companies The winding up orders were made on the application of the ASIC. This followed what I understand to be an extensive investigation by ASIC into the affairs of the Companies. S The exact nature of the investments offered by the Companies to investors and the terms upon which investors advanced funds to the Companies are not entirely clear. However, based on the books and records currently available to the Liquidators, it appears that the Companies provided investors with the option of investing in three different types of trading strategies, being Swing Trading, Extreme Trading and Forex Live/Elite Trading. In addition, the Companies offered three 'special" investment opportunities, one of which is described as the Brexit Investment. The Liquidators' investigations The Liquidators have identified and secured control over approximately $51 million in cash which was held in bank accounts and foreign exchange trading accounts formerly controlled by the Companies at the time of their appointment. These funds a~ were held in the following accounts: Witness

7 Bank Account Name of Account Opening Date Balance at Name appointment NAB CHL 29 November $28,999,968 NAB I 216 NAB CHL 2 September $1. NAB NAB CHL 2 September $14,6.33 NAB Westpac CHCT ATF Courtenay 29 July 211 $21,16,572 Westpac I House Capital Trading and Investment Group Trust Westpac CHL 13 May 28 $1,611. Westpac 2 Westpac CHCT ATF Courtenay 3 January 217 USD $ Westpac 3 House Capital Trading and Investment Group Trust In addition to the accounts referred to in the table immediately above, there was also a sum of $1,367, contained in various foreign exchange accounts held by Courtenay House Trading. (FX Account). Following the Liquidators' appointment, the accounts referred to in the table above and the FX Account were secured by the Liquidators and, with the exception of Westpac 3, transferred into the following accounts: - Account Accounts - Type of Name of Account Name number! included Account Reference No. ANZ 2- NAB 1, NAB Term Deposit Courtenay House, ANZ I 2 2, NAB 3 Account Capital Trading Group (in liquidation) ANZ 2- Westpac 1 Term Deposit Courtenay House ANZ 2 1 and part of Account Capital Trading the FX Group (in Account liquidation) CBA Westpac 2 Cheque Courtenay House CBA 2 and part of Account Capital Trading the FX Group (in Account liquidation) When the Liquidators secured the amounts held in the NAB 1 Account, NAB 2 Account and NAB A count: ponent wl Witness 7

8 the forensic investigations of the Companies' accounts were in their preliminary stages; the director of the Companies advised me during a meeting that all funds from investors were placed with Courtenay House Trading and that all agreements were between the investors and Courtenay House Trading; the initial calls from creditors related to monies invested in the Brexit Investment and those creditors informed us that those monies had been invested with Courtenay House Trading; and the Liquidators were in the initial stages of receiving legal advice from their solicitors regarding the effect of potential trust issues and other matters. 37. For these reasons when the Liquidators secured the NAB 1 Account, NAB 2 Account and NAB 3 Account and transferred those monies into the ANZ 1 Account, the ANZ 1 Account was opened in the name of Courtenay House Trading instead of Courtenay House. I am informed by Ms Gibb, and verily believe, that she has requested that the ANZ 1 Account be changed from Courtenay House Trading to Courtenay House. Ms Gibb has informed me that the name change request has been forwarded to the ANZ Bank's legal team for consideration and that whilst we do not expect there to be an issue with the name change, the name change may take a few weeks to be resolved. 1 In addition to the accounts referred to in the table at paragraph 35, the Liquidators have opened a Cheque Account in the name of Courtenay House with the Commonwealth Bank of Australia, being account number (CBA I Account). This account has no funds in it and the Liquidators are paying the monthly account keeping fee to keep the bank account open. As can be seen from the table above, the funds in the NAB 1 Account, NAB 2 Account and NAB 3 Account were deposited into one account, the ANZ 1 Account. The Liquidators have maintained a record of the amounts transferred into the ANZ 1 Account and the date of those transfers, so that the Liquidators can distribute the interest earned on the ANZ I Account proportionally to the creditors and/or beneficiaries in accordance with their respective entitlements to the NAB 1 Account, NAB 2 Account and NAB 3 Account as determined by this Honourable Court. No money has been withdrawn from ANZ 1 Account and subject to paragraph 44 below, the Liquidators do not intend to withdraw any money from the ANZ 1 Account in the future other than in accordance with any order of this Honourable Court. Deponent Witness WA n

9 41. Although the funds in the NAB 1 Account and the Westpac 1 Account have in fact been transferred to into new accounts, for convenience, in this affidavit: when I refer to the NAB 1 Account, I am referring to the funds previously held in the National Australia Bank account number in the name of Courtenay House. Those funds are now contained in ANZ 1 Account, being Term Deposit Account reference number 2-2 in the name of Courtney House Trading; and when I refer to the Westpac 1 Account, I am referring to the funds previously held in the Westpac account number in the name of Courtenay House Trading. Those funds are now contained in ANZ 2 Account, being Term Deposit Account reference number 2-1 in the name of Courtney House Trading. 42. In circumstances where the references to bank accounts in the Initial Orders do not take into account the fact that funds have been transferred into the new ANZ accounts, I also intend to seek amendments to the Initial Orders, to clarify the accounts from which the funds are to be paid. 43. For completeness, I note that the ANZ 1 Account and the ANZ 2 Account are term deposit accounts which are not due for renewal until in or about January 218. The Liquidators will not break those term deposits early for the purpose of withdrawing funds to satisfy any remuneration which is approved priorto January. Withdrawals from those accounts will not occur until, at the earliest, in January when the term deposits for the ANZ 1 Account or the ANZ 2 Account are due to be renewed. S 44. Prior to renewing the term deposits in January 218, it is also the Liquidators' intention to transfer $1.1 million from the ANZ 1 Account to the CBA 1 Account and to transfer $1.5 million from the ANZ 2 Account to the CBA 2 Account. The purpose of this is so that CBA 1 Account and CBA 2 Account can operate as a "holding account" for amounts that may be withdrawn when orders are made by the Court for payment of the legal expenses of the defendants' representatives, or for payment of the remuneration or other expenses of the Liquidators. This will ensure that the balance of the funds can remain in the ANZ 1 Account and ANZ 2 Account, which are term deposits and earn higher interest rates. These proceedings and this application 45. The Liquidators filed the Originating Process in these proceedings on 5 September 217 seeking, among other things, orders and directions about the manner in which the first plaintiffs should distribute the funds held in certain bank accounts to former investors in one the Companies (these Proceedings). Deponent Witness

10 In particular, the Liquidators have sought an order as to whether the following question should be determined separately and before others arising in the proceedings: "Whether the funds held in the NAB I Account... should be available for distribution to the Brexit Investors.., only and not to other creditors of the Companies." The Brexit Investors are investors who deposited funds into the account described above as the NAB I Account, to participate in a special investment opportunity identified by the Companies as the "Brexit Investment", and who seek to have the funds in the NAB 1 Account made available for distribution exclusively to investors in the Brexit Investment. On 29 September 217, Justice Brereton made orders joining representatives of various classes of creditors to the proceedings, and made orders in relation to remuneration, costs and expenses, and legal costs and disbursements. Those orders, as amended on 19 October 217 by Justice Black (Initial Orders), relevantly provided: "Costs of the Proceedings 2. Pursuant to part 9-15(1) of the IPS, the Court directs that the first plaintiffs are justified in paying the legal costs and disbursements of each of.- f (a) the Pre 21 April 217 Brexit Representative; (b) the Post 21 April 217 Brexit Representative; (c) the Non Brexit Representative; and (d) the plaintiffs, is incurred in relation to and incidental to these proceedings, calculated at the usual rates of the solicitors and counsel engaged by each of them respectively, in an amount as approved by the Court 3. For the purpose of the Court approval provided for in Order 2 above, the legal costs and disbursements claimed by the parties be referred to a Registrar for examination and approval on an indemnity trustee basis and the Registrar's decision in that respect be subject to review in the same manner as a Registrar's decision approving the remuneration of a liquidator. 5. THE COURT FURTHER ORDERS THAT any amounts approved in accordance with Order 3 above are to be paid from the following accounts V t - Deponent Witness 1

11 the legal costs and disbursements of the Pre 21Apr Brexit Representative and the Post 21 April217 Brexit Representative are to be paid out of the NAB I Account; the legal costs and disbursements of the Non Brexit Representative are to be paid out of the Westpac I Account; and the legal costs and disbursements of the plaintiffs are to be paid from the NAB I Account and the Westpac I Account in amounts proportionate to the amount of time recorded in relation to those respective classes of investor (such proportions to be the subject of evidence before the Registrar for the purposes of Order 3 above). 6. Pursuant to part 9-15(1) of the IPS, THE COURT DIRECTS that the first plaintiffs - are justified in paying from the accounts specified in Order 5 above the amounts approved pursuant to Order 3 above. 7. Until further order, and subject to approval in accordance with Order 8 below: the first plaintiffs remuneration, costs and expenses (other than legal costs and disbursements) in connection with these proceedings and administering the NAB I Account be paid out of the NAB I Account; the first plaintiffs'remuneration, costs and expenses (other than legal costs and disbursements) in connection with these proceedings and administering the Westpac I AcOount be paid out of the Westpac I Account. 8. For the purpose of the Court approval provided for in Order 7 above, the first plaintiffs' application for remuneration, costs and expenses be referred to a Regis trar for examination and approval and the Registrar's decision in that respect be subject to review in the same manner as a Registrar's decision approving the remuneration of a liquidator. 49. This application seeks approval of the amounts set out in paragraph 7 above, in accordance with the Initial Orders. Proceedings commenced by Lord Kyle Lester, Sheridan V U, Witness 11

12 5. On 19 May 217, Lord Kyle Lester, Sheridan commenced proceedings in the Supreme Court of New South Wales (being proceedings number 217/151478) (Lord Sheridan Proceedings) seeking, inter alia, the following relief: Holding of trust property and/or assets being cash amount Ten Million Six Hundred Thousand Australian Dollars ($1,6,); Entitled to all equitable estate or right and/or to relief (Supreme Court Act 197 section 58); and Commissions Lost for the month of March and April, 217 as trust property to the cash amount of One Million, Four Hundred and Thirteen Australian Dollars ($1,413,). 51. On 3 June 217, Lord Kyle Lester, Sheridan filed an interlocutory application in the Lord Sheridan Proceedings seeking, inter alia, the following orders: The total funds to be considered is $1,6, Ten Million Six Hundred thousand dollars. The funds in total should be returned forthwith; In the alternative, the amount of $7,8, Seven Million Eight Hundred thousand dollars being an amount Illegally gotten after order be returned forthwith, and $2,8, Two Million Eight Hundred thousand dollars be returned or frozen till decision on the funds are made with regards to rescission; An order or motion for prompt and immediate return of property from frozen and/or held funds to Lord Kyle Lester, Sheridan as Managing Director and/or The Oceanic Sun Group (TOSg) to the amount of Seven Million Eight Hundred Thousand Australian Dollars ($7,8,), pursuant to Uniform Civil Procedure Rules 25 regulation 25.5; and An order or motion for the prompt and immediate disbursement/return of funds of frozen and/or held funds to Lord Kyle Lester, Sheridan as Managing Director and/or The Oceanic Sun Group (TOSg) to the amount of Two Million Eight Hundred Thousand Australian Dollars ($2,8,). 52. On 12 July 217, Lord Kyle Lester, Sheridan filed an interlocutory process in the Lord Sheridan Proceedings seeking leave to commence proceedings against the Companies. Leave has not yet been granted. Witnes 12

13 53. On or around 26 July 217, Lord Kyle Lester, Sheridan filed a Notice of Motion in the Lord Sheridan Proceedings, which again sought, amongst other orders, freezing orders and the immediate release of funds held in the NAB 1 Account. This Notice of Motion was not served on me or Cohn Biggers & Paisley and the Notice of Motion was dismissed on 26 July 217. In my view, it is likely that the mailers the Liquidators have asked the Court to determine in these Proceedings will, to a substantial degree, determine whether the relief sought in the Lord Sheridan Proceedings can be granted. For this reason, the Lord Sheridan Proceedings are travelling together with these Proceedings. As a mailer of case management, the Lord Sheridan Proceedings have, on the past two occasions they.have been before the Court, simply been adjourned to the same date as these Proceedings. The Lord Sheridan Proceedings are currently listed for further directions on 4 December 217. Establishment of the Committees of Inspection On 2 June 217, Grant Thornton sent a letter to all known creditors of the Companies which contained, amongst other things, a schedule of "Frequently Asked Questions" and responses to those questions. At Tab 7 Pages of the Exhibit is the letter sent by Grant Thornton to all known creditors of the Companies dated 2 June 217. The Liquidators' investigations into the affairs of the Companies are ongoing. At Tab 8 Pages 6-77 of the Exhibit is a report dated 24 July 217 prepared by the Liquidators pursuant to an order of this Court. A meeting of the creditors of the Companies was convened and took place on 31 July 217. The meeting was attended by approximately 3 creditors. Committees of Inspection were appointed to each of the Companies. At Tab 9 Pages of the Exhibit is a copy of the Notice of Meeting that was sent to the creditors prior to the meeting of creditors. I was the chairperson of the meeting of creditors. At that meeting, I advised the creditors that they had the opportunity to appoint a Committee of Inspection in relation to each of the Companies if they wished to do so. I also explained the purpose and function of a Committee of Inspection to the creditors. There was significant interest among the creditors for Committees of Inspection to be appointed in respect of each of the Companies and I invited any creditor who wished to do nate themselves as a member of the Committee of Inspection. Witness 13

14 M. In total, 11 creditors nominated themselves to be appointed as members of the Committee of Inspection of Courtenay House. The Courtenay House committee members are set out below: Committee Name of creditor Representative Creditor Class thember Creditor Michael Beiruty Himself J.P. Melocco Pty Ltd Pre 21 April 217 Brexit Representative David Milutin Milutin Discretionary J.P. Melocco Pty Ltd Pre 21 April 217 Trust Brexit Representative Vesna Mastoris Alexander Mastoris J.P. Melocco Pty Ltd Pre 21 April 217 Brexit Representative Patricia Del Herself Alamaidan Investments Post 21 April 217 Vecchio Pty Ltd Brexit Representative Cam,elo Trimfresh Investments J.P. Melocco Pty Ltd Pre 21 April 217 Stillisano Pty Ltd Brexit Representative Heidi Postle M and H International J.P. Melocco Pty Ltd Pre 21 April 217 Pty Ltd Brexit Representative Peter Melocco J.P. Melocco Pty Ltd J.P. Melocco Pty Ltd Pre 21 April 217 Brexit Representative Ryan Fisher Bentley Co Pty Ltd Alamaidan Investments Post 21 April 217 Pty Ltd Brexit Representative Michael Gehit Pty Ltd J.P. Melocco Pty Ltd Pre 21 April 217 Frydman Brexit Representative Vince Amore Oceanic Sun Group Alamaidan Investments Post 21 April 217 Pty Ltd Brexit Representative Janet Timberd Herself J.P. Melocco Pty Ltd Pre 21 April 217 Brexit Representative S 63. I put a resolution to the creditors that the 11 persons I refer to in paragraph 62 be appointed to the Committee of Inspection of Courtenay House. That resolution was carried on the voices. In total, 18 creditors nominated themselves to be appointed as members of the Committee of Inspection of Courtenay House Trading. The Courtenay House Trading committee members are set out below: Committee Name of creditor Representative creditor Creditor Class member Katie Peen Suxia Lin LifeSmart Trading Pty Non Brexit Ltd Representative Carmelo Katic Investments Pty LifeSmart Trading Pty Non Brexit Stillisano Ltd Ltd Representative David e1ilutin Milutin Discretionary J.P. Melocco Pty Ltd Pre 21 April 217 Deponent U Witness 14

15 Trust Brexit Representative Michael Beiruty Himself J.P. Melocco Pty Ltd Pie 21 April 217 Brexit Representative [] V 4 / - Witness 15

16 Geneve Grasso LifeSmart Trading Pty LifeSmart Trading Pty Non Brexit Ltd Ltd Representative John Todaro Himself J.P. Melocco Pty Ltd Pre 21 April 217 Brexit Representative Michael Owen Himself J.P. Melocco Pty Ltd Pre 21 April 217 Brexit Representative Ryan Fisher Bentley Co Pty Ltd Alamaidan Investments Post 21 April 217 Pty Ltd Brexit Representative Michael Gehlt Pty Ltd J.P. Melocco Pty Ltd Pre 21 April 217 Frydman Brexit Representative Douglas Cotton Himself LifeSmart Trading Pty Non Brexit Ltd Representative Heidi Postle M and H International J.P. Melocco Pty Ltd Pre 21 April 217 Pty Ltd Brexit Representative Luke Buxton Himself LifeSmart Trading Pty Non Brexit Ltd Representative Anthony Kassis N & N Pty Ltd LifeSmart Trading Pty Non Brexit Ltd Representative David Hall DA Hall Investments LifeSmart Trading Pty Non Brexit Pty Ltd Ltd Representative Fleur Bishop Herself J.P. Melocco Pty Ltd Pre 21 April 217 Brexit Representative Vince Amore Oceanic Sun Group Alamaidan Investments Post 21 April 217 Pty Ltd Brexit Representative Joe Barber Northgate Australia Pty LifeSmart Trading Pty Non Brexit Ltd Ltd Representative Janet Timberg Herself J.P. Melocco Pty Ltd Pre 21 April 217 Brexit Representative 65. I put a resolution to the creditors that the 18 persons I refer to in paragraph 64 be appointed to the Committee of Inspection of Courtenay House Trading. The resolution was carried on the voices. Request for approval of the Liquidators' remuneration for the period 16 May 217 to 31 August 217 at the Meeting of Committees of Inspection 66. On 21 September 217, the meetings of the Committees of Inspection for each of the Companies were held concurrently. I attended and chaired that meeting. At Tab 1 Pages of the Exhibit is a copy of the minutes of the meetings of the Committees of Inspection. V~// - Witness 16

17 67. One of the items for consideration at the meetings of the Committees of Inspection for each of the Companies was approval of the Liquidators' remuneration in the period 16 May 217 to 31 August 217. I provided a report to the Committees of Inspection in advance of the meeting, which included a Remuneration Report. A copy of that Remuneration Report is at Tab 11 Pages of the Exhibit. By this stage, these Proceedings had been commenced and so I foreshadowed, in the Remuneration Report, that the Liquidators would be seeking Court approval of their remuneration, but wanted to also seek the approval of the Committees of Inspection for my remuneration. That Remuneration Report included tables which summarised the work performed in relation to the Liquidations in the period up to 31 August 217, specifically the tables which appear at Tab 11 Pages of the Exhibit. As revealed in the Remuneration Report, the majority of the work in the liquidation of Courtenay House was performed by me, Mr Mintz, Ms Gibb and Mr Park. I ensured that the work was being performed by an employee with the appropriate amount of experience for the task assigned. In general terms, the Liquidators' Remuneration Request Approval Report for Courtenay House indicate that as between me, Mr Mintz, Ms Gibb and Mr Park: Mr Park, being an Associate, charged the highest number of hours to the Liquidation. In my experience, this is consistent with a staff member being the most junior employee assigned to this Liquidation. To the extent tasks were of a less complex nature, they were typically performed by Mr Park. Mr Park's duties involved preparing a detailed schedule of all Brexit investors including forms signed, returns received, commissions received, value of other investments with the Companies and reconciling payments made in relation to the Brexit investment; Mr Mintz and Ms Gibb, being a Senior Associate and Senior Manager respectively, charged the next highest number of hours to the Liquidation. As they are more senior, their work included reviewing source documents in order to analyse the source and use of funds for the Companies, supervising and checking the work of the lower level staff, securing the funds in the NAB accounts, reviewing all Brexit documentation, attending meetings in relation to Lord Sheridan's application and attending meetings with the Liquidators' solicitors and counsel; and I charged fewer hours than my staff. In my experience, this is consistent with the role of a principal such as myself. My role involved supervising the staff, checking their analyses, liaising with solicitors and counsel and providing strategic direction to k/l Witness 17

18 7. As revealed in the Remuneration Report, the majority of the work in the liquidation of Courtenay House Trading was performed by me, Mr Mintz, Mr Askokkumar, Ms Gibb, Mr Hillier, Mr Adhlkari, Mr Wilkinson and Ms Costanzo. I ensured that the work was being performed by an employee with the appropriate amount of experience for the task assigned. In general terms, the Liquidators' Remuneration Report for Courtenay House Trading indicate that as between me, Mr Mintz, Mr Askokkumar, Ms Gibb, Mr Hillier, Mr Adhlkari, Mr Wilkinson and Ms Costanzo: (a) Mr Askokkumar, Mr Wilkinson and Ms Costanzo, being Associates, charged the highest number of hours to the Liquidation. In my experience, this is consistent with those staff members being the most junior employee assigned to this Liquidation. To the extent tasks were of a less complex nature, they were typically performed by those staff. Their duties included reviewing documents, preparing schedules of available information, telephone attendances with creditors (typically where they involved addressing uncomplicated queries), reviewing and reconciling bank statements and inputting and reconciling Proofs of Debt; Mr Mintz and Ms Gibb, being a Senior Associate and Senior Manager respectively, charged the next highest number of hours to the Liquidation. As they are more senior, their work included reviewing source documents in order to analyse the source and use of funds for the Companies, supervising and checking the work of the lower level staff, preparing documents (including all external communications issued), meetings and discussions with persons of interest, solicitors and counsel, overseeing creditors meeting and attendances with creditors (where the questions received were more complex); and I charged fewer hours than my staff. In my experience, this is consistent with the role of a principal such as myself. My role involved supervising the staff, checking their analyses, liaising with my solicitors and counsel and providing strategic direction to, senior staff. 71. At the beginning of the Liquidations, I used to meet daily with Ms Gibb, Mr Hillier and Mr McInerney to discuss the work that needed to be undertaken that day in respect of the Liquidations and Ms Gibb and Mr Hillier would prepare tasks lists and those task lists and the status of the tasks would be discussed at the next meeting. As the Liquidations progressed, rather than having daily meetings, the meetings would happen once or twice a week with Ms Gibb and Mr Hillier. Now, I meet with Ms Gibb at least once a week to discuss the status of the Liquidations, what tasks need to be undertaken, the appropriate level of staff who should those tasks and to ensure that the Liquidations are progressing. -, Deponent Wftnesst

19 At the meeting of the Committee of Inspection for Courtenay House, the following fee resolution was proposed: The remuneration of the Liquidators and any of the Liquidators' partners or employees/n performance of the services performed from 16 May 217 to 31 August 217, to be fixed at $57,145. (excluding GST) plus any out of pocket expenses incurred for Courtenay House Pty Ltd. These costs to be paid out of the NAB (Brexit) funds secured by the Liquidators. The reference to "NAB (Brexit) funds" in the resolution refers to the NAB 1 Account. The Committee of Inspection for Courtenay House passed the resolutions approving the remuneration. At the meeting of the Committee of Inspection for Courtenay House Trading, the following fee resolution was proposed:. the The remuneration of the Liquidators and any of the Liquidators' partners or employees in performance of the services performed from 16 May 217 to 31 August 217, to be fixed at $597,592.5 (excluding GST) plus any out of pocket expenses incurred for Courtenay House Capital Trading Group Pty Ltd. These costs to be paid out of the Westpac (Non-Brexit) funds secured by the Liquidators. The reference to 'Westpac (Non-Brexit) funds" in the resolution refers to the Westpac 1 Account. The Committee of Inspection for Courtenay House Trading passed the resolutions approving remuneration. Systems of Grant Thornton General process for recording of work performed and time taken It has been my experience that Grant Thornton has a strong commitment to excellent standards, processes, manuals and automation of To-Do functions. At Tab 12 Pages of the Exhibit is a copy of Grant Thornton's time recording policy and billing policy. Grant Thornton uses the Accounting Practice Management Software (APS) to run specific practice management systems which include general accounting office functions such as timesheet entry, time capture and billings. Based on my experience in the industry, I believe that APS is an industry accepted software that is used by many accounting firms and practitioners. Deponent Wifness 19

20 To record time and report costs, Grant Thornton uses APS. The process requires staff to enter their time daily into the system, using 6 minute intervals. Staff enter tasks using drop down menus on two or three categories (the categories used in these Liquidations are discussed further below). The work is categorised at the time the employee enters their time entries electronically on the specific job and then the employee includes a description to identify the work undertaken. Grant Thornton requires that only reasonable and necessary time, relevant to the liquidation, be charged. It is Grant Thornton's practice that whenever a new staff member joins Grant Thornton, they undertake an induction program where they are informed of Grant Thornton's policies in this regard. In addition, when a new staff member starts, someone in my team has a conversation with them about having a discretion to reduce the time charged if they think an inappropriate amount of time was spent on a particular task. The system of time recording adopted by Grant Thornton requires me and each staff member to record time on a daily basis. Under my supervision, the Senior Manager working on a particular liquidation will, from time to time, review the time sheets of the various staff members working on that liquidation. Where he or she considers the amounts charged may not have been reasonable or necessary having regard to the work that was being performed (for instance, because there was learning curve, or because the work would have been more appropriate for a more junior employee), he or she has the authority to reduce the amounts recorded on those timesheets. In addition to the review undertaken by the Senior Manager working on a particular liquidation, I receive weekly reports which includes the time charged to a particular liquidation. Having overseen the particular liquidation, including having allocated tasks to staff, I am able to determine from the weekly report whether the time charged to the particular liquidation is reasonable or excessive. If I think that the time charged to the particular liquidation is excessive, I will have a discussion with the Senior Manager on the particular liquidation about the time charged to date and will request that that time be reviewed, and if necessary, reduced. Witn'èss 2

21 86. Ms Gibb is the Senior Manager working with me on these Liquidations and I am informed by Ms Gibb and believe that she has, from time to time, reviewed the time sheets of various staff members working on these Liquidations for the purpose referred to in the preceding paragraph. This includes review by Ms Gibb of time entries by staff on a weekly basis to assess the reasonableness of time charged to the mailer by my staff. In addition, in these Liquidations, the time entries were also reviewed in the context of preparing the Remuneration Report which was included in the Report to the Committee of Creditors dated 14 September 217 (this report is discussed in paragraph 67 above). Ms Gibb has informed me that her process for reviewing those time entries was as follows: (a) Ms Gibb raised the first draft of the Remuneration report and at the time the draft report was prepared, she reviewed the narrations and time entries recorded by staff members and considered whether the amounts recorded were necessary and reasonable; and S (b) once Ms Gibb had satisfied herself that work that had been performed and the time charged was necessary and reasonable, she prepared the draft Remuneration Report and submitted it to me for review and final sign off. As part of my review of the draft Remuneration Report, I specifically considered the number of hours attributed to each category of work and the way that the work had been distributed amongst the various staff members, and I also formed the view that the amounts recorded and work performed, as referred to in the Remuneration Report were necessary and reasonable. Specific Process for the Recording of Time and Costs in these Liquidations 87. Because of the complexities and the nature of these Liquidations, a tailored process for the recording of time and costs was created and, with the exception of the Forensics team, has been implemented by me and my staff since the commencement of the Liquidations. In general terms, when recording time on APS, me and my staff ensured that each time entry was: First, assigned to one of 4 specific codes that were developed for the purposes of these Liquidations (Specific Codes) (these are discussed further in paragraphs 88 to 89 below); and Second, assigned to one of the milestones in APS (Milestones) (these are discussed further in paragraph 9 below). Witness 21

22 Specific Codes As noted above, at the commencement of these Liquidations I caused four Specific Codes to be created and used for the purpose of recording time, as the first step of the time recording. process. The four Specific Codes established at the commencement of the Liquidations were: Brexit Funds (NAB) - work which relates specifically to the Brexit Investment and the NAB. 1 Account is assigned to this code. This includes, for example: (i) (U) conducting bank reconciliations and dealing with NAB. This included investigating and analysing the source of all deposits into the NAB 1 Account; briefing legal representatives and considering the potential trust issues relating to the NAB 1 Account that became the subject of these Proceedings; (Ui) work in relation to the Lord Sheridan Proceedings; and (iv) taking calls from the creditors who were ultimately appointed by the Court as representative defendants for Brexit investors and their legal representatives. The work recorded to this Specific Code was only assigned for the purpose of our calculations (discussed further below) to Courtenay House (and not Courtenay House Trading) because the NAB 1 Account was opened in the name of Courtenay House. General funds (Westpac) - the work charged to this code was all other work undertaken in relation to the Liquidations of the Companies that was not specific to the Brexit Investment, for example: (i) all creditor queries ( s or calls) because all creditors of Brexit were also investors in the general pool of investors; (U) all proof of debts because all creditors of Brexit were also investors in the general pool of investors; (Ui) preparation for and attendance at meeting of creditors; bank reconciliations and dealings with Westpac in respect of the Westpac 1 Account; wi ess 22

23 communications with ASIC regarding the matter; and review of Foreign Exchange accounts. Of the two Companies, the work recorded to this Specific Code was only assigned for the purpose of our calculations (discussed further below) to Courtenay House Trading (and not. Courtenay House) because the Westpac 1 Account was opened in the name of Courtenay House Trading. Courtenay House Pty Ltd (statutory) - statutory tasks in relation to the Liquidations were assigned to this Specific Code, for example: (i) preparation and lodgement of ASIC forms; and (h) liaising with ASIC regarding notifications. For the purpose of our calculations below, the work recorded to this Specific Code was divided equally between the two Companies, because each task in this Specific Code had to be completed for both Companies. Forensic Investigations - the work charged to this Specific Code was work undertaken by Grant Thornton's forensic accounting team including reconciliation of bank accounts, preparation of investors' spreadsheets, and determining the source and application of funds. Milestones 9. As the second step of the time recording process, the staff and me assigned each time entry to one of the following Milestones which were used in these Liquidations, based on the nature of the work that was being undertaken: S (a) Books and Other Debts; Other assets; Creditors committee; Section 422, 439D, 476 and 533 reports; Statutory Meetings; Unsecured Creditors; Pre-appointment Taxation Matters; Deoonent itness 23

24 Shareholders; Priority Creditors - include workers compensation claims; ) Books and Reports; (k) Investigations; (I) Legal - Litigation only (excluding legal mailers on assets and workers comp claims); File control; Company searches; Directors and management; S Practitioner's bank accounts; Insurances (excluding workers compensation claims); Miscellaneous; Documents of appointment; Report as to Affairs; ASIC filings and correspondence; and Post-appointment taxation matters. 91. The Forensics team, who were assisting the Liquidators with their investigations, did not use the Milestones when recording their time due to the specific nature of the work they undertook. The Forensics team have utilised their own codes, and their time was subsequently assigned to the Forensic Investigations Specific Code by Ms Gibb. Reconciliation undertaken for the purpose of calculating remuneration and preparing the Remuneration Report 92. The Specific Codes and Milestones are then used to calculate the amount of the Liquidators' remuneration and to group the work that has been performed into categories, so that this information can be presented to creditors in an easy to understand format in the Remuneration Report. For the Remuneration Report provided to the Committees of Insp9ction on 14 September 217, this was done by: Deponent Witness 24

25 (a) allocating the work that has been perfomied to one of the Companies. This is done with reference to the Specific Codes as follows: work assigned to the Brexit Funds (NAB) Specific Code is allocated to Courtenay House; work assigned to the General (Westpac) Specific Code is allocated to Courtenay House Trading; the value of the time entries allocated to the Courtenay House Pty Ltd (statutory) Specific Code is divided equally between the two Companies for the reasons set out above; and work assigned to the Forensic Investigations Specific Code was also allocated to either Courtenay House or Courtenay House Trading by Ms Gibb reviewing the time entries and allocating them to one or the other of the Companies depending on the nature of the work being performed. Following commencement of these proceedings, in around mid-september the Forensics Investigation Specific Code was divided into two codes: one relating to Courtenay House and one relating to Courtenay House Trading and so now, staff assign work to one of two Forensic Investigations Specific Codes when they complete their time sheets, depending on the company to which the work relates; and (b) then, grouping the Milestones (and the corresponding work allocated to that Milestone) into one of the "ARITA Categories". These are the categories of tasks suggested by the ARITA Code, and adopted by the industry as a whole. At Tab 13 Pages of the Exhibit is an excerpt of Part 23 of the ARITA Code which refers to the ARITA Categories. The Milestones and ARITA Categories are not, however, used for forensics work. That work is charged to the Forensics Specific Code and remains assigned to that code for reporting and calculation purposes. 93. To assist the Court in analysing the Milestones and the ARITA Categories, below is a table which identifies which Milestone is assigned to each applicable ARITA Category in these Liquidations: ARITA Category GT File Index Milestone Assets B Book & other debts E Other assets V h/, Wit ss 25

26 Creditors 1 Creditors committee 6 Section 422, 439, 476 & 533 reports 9 Statutory meetings K Unsecured creditors N Pre-appointment taxation matters P Shareholders Employees J Priority creditors - include workers comp claims Investigation 13 Books and Reports R Investigations Legal - Litigation only (excluding legal mailers on S assets and workers comp claims) Administration 1 File control 3 Company searches Q Directors & management I Practitioner's bank accounts U Insurances - excluding workers comp claims V Miscellaneous Statutory 2 Documents of appointment 5 Reports as to affairs 7 ASIC filings and correspondence V Post - appointment taxation mailers Grant Thornton Hourly Charge Out Rates S 94. The hourly charge out rates of myself, Mr McInerney and the staff who have worked on these Liquidations are set out in the table below. Where those rates have changed over time (for example, because a person was promoted or because a rate change occurred), this has been indicated in the table. Employee Charge out rate pre-1 July 217 (excl GST) Charge out rate post-i July 217 (excl GST) Said Jahani $65 $65 Alexander Bell $65 $65 John McInerney $575 $575 Nari Baxter $55 $55 Danielle Franjic $55 $55 Jarred Erceg $55 $55 Lisa Gibb $55 $55 9avid Trehy $52 " eponent V d. Witnss / $52 26

27 Naziful Islam $52 $52 David Mintz $4 $4 Christopher Hillier $4 $44 Brendan Campbell $4 $4 Suraj Adhlkarl $355 $355 William Park $3 $3 Jennifer Skelcher $295 $295 Fraser Wilkinson $27 $27 Jessica Costanzo $255 $255 Wenqlan Ni $255 $255 Shiv Ashokkumar $245 $245 Mitchell Williams $22 $22 Emily Cramp $22 $22 Eva Petalio Conte $22 $27 Rachael Hughes $185 $185 Sarah Campbell $135 $ Based on my experience in the industry and my work on other liquidations, I believe that the rates charged by Grant Thornton during the course of these Liquidations are reasonable having regard to: the experience of each Grant Thornton staff member; the nature and complexity of the work; the costs incurred by Grant Thornton in performing the work in relation to the appointments; and comparable rates in the insolvency market. 96. I believe that the Grant Thornton's hourly rates, in conjunction with the efficient use of systems and the review of time charged procedures mean that the work performed in the liquidations were reasonable and necessary, and the remuneration claimed and disbursements incurred in the conduct of the liquidations were reasonable. mt, Witness 27

28 Liquidators' remuneration, costs and expenses (other than legal costs and disbursements) in connection with these Proceedings and administering the NAB I Account Liquidators'remuneration The members of the Committee of Inspection approved my remuneration for services performed from 16 May 217 to 31 August 217, to be fixed at $57,145. (excluding GST) plus any out of pocket expenses incurred for Courtenay House. The Initial Orders provide that the first plaintiffs' remuneration, costs and expenses (other than legal costs and disbursements) in connection with these Proceedings and administering the NAB 1 Account may be paid out of the NAB 1 Account, subject to being approved in accordance with the process set out in those orders. The first plaintiffs' remuneration in connection with these Proceedings and administering the NAB 1 Account is $55,269.5, being a portion of the total remuneration of $57,145. approved by the Committee of Inspection. That is because the remuneration which was the subject of the approval by the Committee of Inspection related to all work that had been performed in relation to the liquidation of Courtenay House up to that date. However, the relevant Initial Orders only apply to remuneration in connection with these Proceedings and administering the Westpac 1 Account. In due course, I intend to seek separate orders from the Court in relation to the balance of the remuneration. 99. The first plaintiffs' remuneration in connection with these Proceedings and administering the NAB 1 Account has been calculated by Ms Gibb reviewing the time entries for each category and the Forensics Specific Code and determining that in respect of each of them that: (a) (b) the entire amount claimed in the Creditors category was in connection with these Proceedings or related to the administration of the NAB 1 Account because all of the creditors of Courtney House are the investors of the funds held in the NAB 1 Account and Grant Thornton's dealings with creditors, whether telephone calls, s, creditor reports or creditor meetings related to questions which will be ultimately determined by these Proceedings regarding the monies previously held in the NAB 1 Account; the entire amount claimed in the Assets category was in connection with these Proceedings or related to the administration of the NAB 1 Account because these tasks related to securing the monies held in the NAB 1 Account: wa k, Witness FE

29 the entire amount claimed in the Forensics category was in connection with these Proceedings or related to the administration of the NAB 1 Account because these tasks related directly to the NAB 1 Account and the gathering of evidence in these Proceedings; of the 83.4 hours claimed for the Investigations/Legal category, 82.4 hours is in connection to these Proceedings or are related to the administration of the NAB 1 Account, being tasks including, amongst others, liaising with Cohn Biggers & Paisley Lawyers in respect of these Proceedings and the Lord Sheridan Proceedings and obtaining advice in respect of the NAB 1 Account. I am informed by Ms Gibb that the balance of the Investigations/Legal category related to meetings with the director and therefore, ought to be excluded from this application; the entire amount claimed in the Administration category was in connection with these Proceedings or related to the administration of the NAB 1 Account because these tasks included, amongst others, internal meetings to discuss these Proceedings and the NAB 1 Account; and the entire amount claimed in the Statutory category did not relate to these Proceedings or the administration of the NAB 1 Account and therefore, this category ought to be excluded from this application. Following Ms Gibb's review of the time entries for each category and the Forensics Specific Code, I met with Ms Gibb to discuss her review of the time entries and her reasons for including or excluding the relevant time entries or categories that are the subject of this application. Following my meeting with Ms Gibb, it is my view that the amounts claimed relate to the Proceedings or the administration of the NAB 1 Account. S The categories of work, and the amount claimed in respect of each category, are summarised in the following table: Task Area General Description - Includes Creditors Creditor reports/notifications Notifying all creditors of the Liquidators appointment (13.8 hours) Meeting of Creditors Issuing a FAQ to all creditors ($6,95.5) Preparation meeting notices, proxies and advertisements. (9)L7 V a~ Deponent Forward notice of meeting to all known creditors. Preparation of meeting file, including agenda, certificate of postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting. Holding the first meeting of creditors. witness 29

30 S Preparation and lodgement minutes of creditors meetings with ASIC. Responding to stakeholder queries and questions immediately following meeting. Assets Bank Accounts Liaising with NAB regarding the transfer of the funds (2.6 hours) held at appointment, including but not limited to ($1 32) numerous chase s and calls. Circular to all major banks in Australia asking them to freeze any accounts held in Courtenay House's name. Placing funds on term deposit and liaising with various banks to ensure the best interest rate is received. Forensics Bank Accounts Reviewing the Brexit investor list located on the (35.5 hours) Company's hard drive listing investors taking part in the Courtenay House Brexit product (Brexit Investor '$ / List). Brexit Investors were each given a unique identifier and matched to the bank statement. Where a match was identified the matching procedure was followed. Investor names were then detailed on the Consolidated Bank Accounts to facilitate later matching to POD. Legal/ These Proceedings Meetings with the Liquidators solicitors and legal Investigations,ounse1egarding the Brexit issues and these The Lord Sheridan Proceedings roceedins. g (82.4 hours) Reviewing affidavits and court applications in relation ($3 I 698 5O / to these Proceedings and the Lord Sheridan Proceedings. Drafting notice to all creditors regarding an update on these Proceedings. Liaising with the proposed Brexit representatives. Meeting with a creditor's legal representative and various calls and s with said creditors advisors regarding the Lord Sheridan Proceedings. Reviewing notice of discontinuance in the Lord Sheridan Proceedings and signing. Liaising with our solicitors regarding the on-going action against the Liquidators and the Companies in the Lord Sheridan Proceedings and providing legal instructions to our solicitors regarding the Lord Sheridan Proceedings. Reviewing documentation in regards to these Proceedings. Reviewing all company documents signed by Brexit investors and providing to our solicitors Creating a spreadsheet of Brexit investors and calculating returns Brexit investors have received in other promotions. t\il W ess 3

31 Administration These Proceedings Internal meetings to discuss the Lord Sheridan (3.4 hours) Proceedings IBrexit issues and agree on go forward The Lord Sheridan Proceedings strategy. ($1,7.5) Open Liquidators bank account to deposit NAB funds into. TOTAL ( hours) ($55,269.5) Liquidators' remuneration, costs and expenses (other than legal costs and disbursements) in connection with these Proceedings and administering the Westpac I Account The members of the Committee of Inspection approved remuneration for services performed from 16 May 217 to 31 August 217, to be fixed at $597,592.5 (excluding GST) plus any out of pocket expenses incurred for Courtenay House Trading. That amount represents the total remuneration for that period in respect of Courtenay House Trading. The Initial Orders provide that the first plaintiffs' remuneration, costs and expenses (other than legal costs and disbursements) in connection with these Proceedings and administering the Westpac 1 Account may be paid out of the Westpac 1 Account, subject to being approved in accordance With the process set out in those orders. The plaintiffs' remuneration in connection with these Proceedings and administering the Westpac 1 Account are $522,89.. This amount is a portion, but not the entirety of, the total remuneration of $597,592.5 approved by the Committee of Inspection. That is because the remuneration which was the subject of the approval by the Committee of Inspection related to all work that had been performed in relation to the liquidation of Courtenay House Trading up to that date. However, the relevant Initial Orders only apply to remuneration in connection with these Proceedings and administering the Westpac 1 Account. In due course, I intend to seek separate orders from the Court in relation to the balance of the remuneration. The plaintiffs' remuneration in connection with these Proceedings and administering the Westpac 1 Account has been calculated by Ms Gibb reviewing the time entries for each category and in the Forensic Specific Code and determining that in respect of each of them: (a) the entire amount claimed in the Creditors category was in connection with these Proceedings or related to the administration of the Westpac 1 Account because all of the creditors are the investors of the funds held in the Westpac 1 Account and Grant Thornton's dealings with creditors, whether telephone calls, s, creditor reports or creditor meetings, related to questions which will be ultimately determined by these Proceedings regarding the monies previously held in the Westpac 1 Account; 1411' Deponent Witness 31

32 of the 13.6 hours claimed for the Assets category, 9.5 hours related to the administration of the Westpac 1 Account being tasks related to securing the monies held in the Westpac I Account. I am informed by Ms Gibb that the balance of the Assets category related to dealing with Foreign Exchange Providers and attempting to realise assets of Courtenay House Trading and therefore, these tasks ought to be excluded from this application; the entire amount claimed in the Employee/Contractors category did not relate to these Proceedings or the administration of the Westpac 1 Account and therefore, this category ought to be excluded from this application; the entire amount claimed in the Forensics category was in connection with these Proceedings or related to the administration of the Westpac 1 Account because those tasks related directly to the Westpac 1 Account and the gathering of evidence in these Proceedings. I am informed by Ms Gibb and verily believe that the amount 4 sought in this category has increased by $1,78.5 compared to the amount contained in the Remuneration Report because a member of the Forensics' team incorrectly charged their time to the Investigations/Legal category and this time entry has now been moved to the Forensics category; of the hours claimed for the Investigations/Legal category, 126 hours is in connection to these Proceedings or are related to the administration of the Westpac 1 Account, being tasks including, amongst others, liaising with Cohn Biggers & Paisley Lawyers in respect of these Proceedings and obtaining advice in respect of the Westpac 1 Account. I am informed by Ms Gibb that the balance of the Investigations/Legal category related to dealings with related or third parties and therefore, these tasks ought to be excluded from this application; of the hours claimed for the Administration category, hours was in connection to these Proceedings or related to the administration of the Westpac 1 Account, being tasks which included, amongst others, internal meetings to discuss these Proceedings and the Westpac 1 Account. I am informed by Ms Gibb that the balance of the Administration category related to dealing with administrative matters such as insurance brokers, filing of documents and dealing with the storage of company records and therefore, these tasks ought to be excluded from this application; and the entire amount claimed in the Statutory category did not relate to these or the administration of the Westpac 1 Account and therefore, this category ought to be excluded from this application. Deoonent OtA n W\JA/ I Witn L s 32

33 As with the time entries and categories that are the subject of this application, following my meeting with Ms Gibb as discussed at paragraph 1, it is my view that the amounts claimed in paragraph 15 relate to the Proceedings or the administration of the Westpac 1 Account. The categories of work, and the amount claimed in respect of each category, are summarised in the following table: S Task Area General Description Includes Creditors Creditor Enquiries Answering creditor/investor calls. At the (5645 commencement of our appointment our office Creditor reports/notifications hours) received c.4 plus calls a day and continue to receive ($177,682.5) Dealing with proofs of debt approximately 5 calls per day. Replying to creditor s sent to the Courtenay Meetinn of Creditors House inbox. At the commencement of our appointment our office received c.2 plus s a day and continue to receive approximately 3-5 s per day. Maintaining creditor enquiry databases. Review and prepare correspondence to creditors representatives via facsimile, and post. Note: We note that the above is an extremely time consuming exercise as despite our office best efforts to advise creditors who call/ that we cannot provide any further information than that provided on our website, creditors continue to ask similar questions(push for answers. On average a creditor call will take approximately 2 minutes. Notifying all creditors of the Liquidators appointment Drafting and issuing a FAQ to all creditors Receipting and filing Proofs of Debts Assisting creditors with completion of proof of debt forms Preparation meeting notices, proxies and advertisements. Forward notice of meeting to all known creditors. Preparation of meeting file, including agenda, certificate of postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting. Holding the first meeting of creditors. Preparation and lodgement minutes of creditors meetings with ASIC. Responding to stakeholder queries and questions immediately following meeting. A W Witness 33

34 11 Assets (9.5 hours) ($5 42 ) Bank Accounts Liaising with Westpac regarding the transfer of the funds held at appointment, including but not limited to numerous chase s and calls. Circular to all major banks in Australia asking them to freeze any accounts held in Courtenay House Trading's name. Placing funds on term deposit and liaising with various banks to ensure the best interest rate is received. Placing funds on term deposit and liaising with various banks to ensure the best interest rate is received. Forensics Bank Accounts Scanning the physical Westpac bank statements (83.4 received from the bank and ASIC and sending these Schedule of Investor Accounts hours) to a third party, Data Motive, to type into excel. ($265,998.5) Batch Payments Checking the bank statements typed by Data Motive for errors, this involved sample checking transactions MYOB and checking the typed balance against a running Administration balance formula utilising the typed debit and credit amounts. Consolidating all bank accounts into one document titled "Consolidated Bank Accounts". The document includes 13,8 rows of data. Providing each transaction in the Consolidated Bank Accounts with a unique identifier. Matching payments between Courtenay House Trading accounts using the Matching Procedure. Payments and deposits were matched considering the amount, date and description of the transaction. Categorising all 13,8 transactions based on description provided on the bank statements, categories used were: Investor deposit, Deposit unknown, Cash/ Cheque, Term deposit, Overseas payment, Bank interest, Payment - Investor interest, Payment - Investor capital, Payment Expenses, Key individuals, Forex and Payment - Referral Commission. Extracted individuals names from the transaction description; these names were checked against the list of investors to determine if they were an investor. Created a further column of investor names that was consistent with the names used in MYOB to allow for matching of various data sources. For each investor the relevant information from their SOCMI was copied into the Schedule of Investor Accounts under the following headings: Investor Name, Company Name, Product, Group, Date, Deposit, Return of Capital, Returns, Payment to CHCTG and Notes. This exercise was completed for each investor, checking for statements relevant to each year, 214 to 217, prior to moving on to the next investor. Creating a list of investors/other parties who received commissions. 34

35 Capital deposits and return of capital detailed in the Schedule of Investor Accounts were matched against the bank statements. This involved both a manual and automated process. Checking each capital deposit and capital return detailed on the Schedule of Investor Accounts against Consolidated Bank Accounts. Reviewing batch payments made by the Companies and reconciling these payments to Investor returns. Creating a master spreadsheet of all batch payments made by the Companies Entering Proofs of Debt (POD) into MYOB. This involved reviewing s from investors and opening all the attachments to the s to identify POD's and document supporting the POD's. [1 Whilst checking each POD, if the investor provided a payment receipt, we would attempt to identify the payment on the Consolidated Bank Accounts. If a payment was identified and not currently matched to the investor, the investor name was input into the Consolidated Bank Accounts. This process is still currently underway. Attending weekly meetings with the Insolvency team to discuss progress, priorities, resourcing and requirements. Correspondence and phone calls with the banks sourcing banking transaction details. Assisting with the handling of investor correspondence. Legal! Legal Regular meetings with our solicitors. Investigations Investigations Reviewing and signing affidavits, reviewing court (126. Company Books and application, minutes for court and other legal hours) Records/General documents. ($63,613.) Discussions with Forensics team to provide overview of tasks to be undertaken in regards to the Westpac account. Securing Company records and forensically imaging. Preparing detailed listing of Companies books and records. Reviewing Companies books and records and documentation issued to investors Undertaking detailed investigations into potential assets of the Companies from a review of the Companies books and records. Preparing memos regarding findings from a review of the Companies records and preparing a schedule of all available books and records. Conducting searches on Nuix regarding treatment of investors' funds, pooling of funds etc. VLL Witness 35

36 Administration Internal Meetings (26.85 hours) Engagement Planning Internal meetings to discuss progress of the liquidation ($1176) Opening Liquidators bank account to hold assetsmestpac funds TOTAL (1, hours) ($522,89) Liquidators' Internal Expenses The Companies have also incurred the following internal costs and expenses which have been charged by Grant Thornton in respect of the Liquidations. In my view, these costs and expenses are related to the proceedings and/or the administration of the NAB 1 Account and the Westpac 1 Account: [1 Disbursements paid 16 May Description Basis Total (excl 217 to 31 August 217 GST) Bank Fees Fees to courier bank At cost $48.5 cheques from the respective bank branches IT charges Hard drive/usb to At cost $161.5 provide information/documents to ASIC Postage/Printing Courierfees At cost $134. Search Fees Various company At cost $ searches and other applicable searches S Mail Redirection Mail redirection from the At cost $8.27 Companies' office in Bondi Junction to Grant Thornton Meeting Facilities Facility hire fees for At cost $2, holding the first meeting of creditors TOTAL $4, For the purpose of this application, I believe that these internal expenses should be split equally between the Companies and therefore paid equally from the NAB 1 Account and the Westpac 1 Account, because each expense related to both Companies. 36

37 Liquidators' External Expenses 11. The Companies have also been issued with the following invoice from a third party provider who has performed services in respect of these Liquidations related to the administration of the NAB 1 Account and the Westpac 1 Account: Disbursements unpaid 16 May 217 General Description Total (excl GST) to3l August217 Klein & Co invoice number K123-1 Costs associated with $1,86.2 dated 25 August 217 obtaining forensic images of the Companies' computers TOTAL. $1,86.2 At Tab 14 Page 174 of the Exhibit is a copy of the invoice referred to in the table above. For the purpose of this application, I believe that this external expense should be split equally between the Companies and paid equally from the NAB 1 Account and the Westpac 1 Account, because the expense relates to both Companies. Legal costs S r - Matter Name Courtenay House PtyLtd(inLiq) - Court Application re "Brexit" Funds - Counsel's fees for Vanessa Whittaker Courtenay House Pty Ltd (in Liq) - Court Application re "Brexit" Funds - Counsel's fees for Louise Hulmes Since these Proceedings were commenced, my solicitors, Cohn Biggers & Paisley Pty Ltd have incurred legal costs and disbursements in these Proceedings in the amount of $213,312.87, calculated as follows: - Invoice Invoice Solicitors' Counsel's Disbursements Date Fees fees and GST Total /9/217 $12,112.5 $1, $13, /9/217 $3,42. $342. $3,762. Courtenay House Pty Ltd (in Liq) - CourtApphication /9/217 $54,342. $9, $64, re "Brexit" Funds - CBP invoice A Al Witness 37

38 Courtenay House Pty Ltd (in Liq) - Court Application /11/217 $16,258. $15, $121, re "Brexit" Funds - CBP invoice Courtenay House Pty Ltd (in Liq) - Court Application re Brexit Funds - Counsel's fees for Louise Hulmes 98 3/11/217 $9,36 $936. $1,296. TOTAL $213, At Tab 15 Page of the Exhibit are extracts of the invoices referred to the above table I have reviewed the invoices referred to in the above table and the work recorded in those invoices was performed in accordance with my instructions. The work I instructed Cohn Biggers & Paisley to perform was in the nature of providing legal advice and preparing for anticipated Court proceedings and was not work that I am qualified to undertake. Based on my experience in the industry, it is my view that the charge out rates of Cohn Biggers & Paisley Lawyers are competitive when compared against other law firms that I have instructed in other liquidations. S For the purpose of this application, I believe that the legal costs referred to in paragraph 112 ought to be paid equally from the NAB 1 Account and the Westpac 1 Account because these Proceedings are for the benefit of both classes of investors and relate equally to the NAB 1 Account and the Westpac 1 Account. Notwithstanding the matter name used by my lawyers and counsel which was only to label the mailer and describe the underlying nature of the case. In addition to these legal costs and disbursements, Cohn Biggers & Paisley Pty Ltd have incurred legal costs and disbursements in relation to the Lord Sheridan Proceedings in the amount of $35,247.94, calculated as follows: W

39 Matter Name Invoice Invoice Solicitors' Counsel's Disbursements Date Fees fees and GST Total I Courtenay House Capital Trading Group Pty Ltd (in Liq) and Courtenay House Pty Ltd (in Liq) claim brought by Lord Kyle /8/217 $25,142. $2,556.2 $27,698.2 Lester, Sheridan - CBP invoice (excluding Counsel's fees as itemised below) Courtenay House Capital Trading Group Pty Ltd (in Liq) and Courtenay House Pty Ltd (in Liq) claim by Kyle =1teI;i7:n Counsel's fees for Vanessa Whittaker as 'included in CBP invoice number $5,7. $57. $6,27. Courtenay House Capital Trading Group Pty Ltd (in Liq) and Courtenay House Pty Ltd (in Liq) claim /9/217 $1,161. $ $1, brought by Lord Kyle Lester, Sheridan CBP invoice TOTAL $35, At Tab 16 Pages of the Exhibit are extracts of the invoices referred to the above table. I 116. As with the other invoices referred to in this affidavit, I have reviewed the invoices referred to in the above table, and the work recorded in those invoices was performed in accordance with my instructions. The work I instructed Cohn Biggers & Paisley to perform was in the nature of providing legal advice and appearing on behalf of the Liquidators in Court proceedings, and was not work that I am qualified to undertake. As noted above, it is my view that the charge out rates of Cohn Biggers & Paisley Lawyers are competitive when compared against other law firms that I have instructed in other liquidations I believe that these costs are incidental to these Proceedings because: (a) the Lord Sheridan Proceedings relate specifically to the NAB 1 Account; y ) 1 Witness 39

40 the Lord Sheridan Proceedings seek orders for the immediate release of certain funds from the NAB 1 Account in priority to other creditors; and the Lord Sheridan Proceedings are proceedings which are running in tandem with these Proceedings 118. For the purpose of this application, I believe that the legal costs referred to in paragraph 17 ought to be paid from the NAB 1 Account because the Lord Sheridan Proceedings only relate to the NAB 1 Account. Other Information 119. To assist the Court in analysing the fees incurred the subject of this application: at Tab 17 Page 188 of the Exhibit is a detailed one page summary entitled Fees Overview which discloses the total amounts claimed against the NAB 1 Account pursuant to the orders of Justice Brereton; and at Tab 18 Page 189 of the Exhibit is a detailed one page summary entitled Fees Overview which discloses the total amounts claimed against the Westpac 1 Account pursuant to the orders of Justice Brereton. 12. At Tab 19 Page 19 of the Exhibit is a copy of the Receipts and Payments in the NAB 1 Account and the Westpac I Account. Conclusion 121. In summary, I am seeking approval of the following amounts (including GST) to be paid or reimbursed out of or from the NAB 1 Account and the Westpac 1 Account: NAB I Account Westpac I Account Liquidators' remuneration for $6, $575,179 the period 16 May 217 to 31 August217 Liquidators' costs and $3, $3, expenses (other than legal - costs and disbursements) for the period 16 May 217 to 31 August 217 Liquidators legal costs and $142,54.38 $16,86.44 disbursements of and incidental to these proceedings TOTAL $26,3.79 $685,165.4 Vk r Witness 4

41 AFFIRMED at Signature of deponent Name of witness Address of witness Capacity of witness Sy : VWilliam Mckenzie Level 42, 2 Park Street, Sydney NSW 2 Solicitor And as a witness, I certify the following matters concerning the person who made this affidavit (the deponent): I saw the face of the deponent. 2 I have confirmed the deponent's identity using the following identification document: NSW Driver's Licence U I I c Signature of witness \¼ A I., Identification dçument reiipd on (may be original or certified copy)t Note: The deponent and witness must sign each page of the affidavit. JVO8BI7OGE 41

42 IN THE SUPREME COURT OF NEW SOUTH WALES No. 21 7/ DIVISION: Equity REGISTRY: Sydney Corporations List IN THE MATTER OF COURTENAY HOUSE CAPITAL TRADING GROUP PTY LIMITED (IN LIQUIDATION) (ACN ) & COURTENAY HOUSE PTY LIMITED (IN LIQUIDATION) (ACN ) SAID JAHANI AND JOHN MCINERNEY IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF COURTENAY HOUSE PTY LIMITED (IN LIQUIDATION) AND COURTENAY HOUSE CAPITAL TRADING GROUP PTY LIMITED (IN LIQUIDATION) Plaintiffs CERTIFICATE IDENTIFYING EXHIBIT This is the exhibit marked "SJ-2" referred to in the affidavit of Said Jahani sworn on 15 November 217. Before me: Signature of person taking affidavit Exhibit "SJ2" Filed on behalf of: The Plaintiffs Prepared by: Scott Geoffrey Hedge Cohn Biggers & Paisley Pty Ltd DX: 28 SYDNEY Lawyers Tel: (2) Level 42, 2 Park Street Fax: (2) SYDNEY NSW 2 Ref: SGH: scoft.hedge@cbp.com.au - stuart.mckenziecbp.com.au Attention: Stuart McKenzie J VU B6 U S U DJ

43 fo 1

44 Form 43 IJCPR 3611 OHIO! TUMTI Issued: 16 May 217 5:2 PM JUDGMENT/ORDER Division Equity List Corporations List Registry Supreme Court Sydney Case number 217/ io First Defendant Courtenay House Capital Trading Group Pty Ltd ACN Second Defendant Courtenay House Pty Ltd Number of Defendants 8 Corporation subject of the Courtenay House Capital Trading Group Pty Ltd proceeding Refer to Party Details at rear for full list of parties L)ate maae or given lb May 211 Date entered 16 May 217 TERMS OF JUDGMENT/ORDER - Filed in Court for Plaintiff: Amended Originating Process filed by ASIC dated 11 May 217; Affidavit of Jenna Helen Molesworth sworn 11 May 217. VERDICT, ORDER OR DIRECTION: - Black J grants leave to Ms Emilia lervasi to be heard under r2.13 of the Supreme Court (Corporations) Rules. - Black J grants leave to Mr Giles of Counsel for Fourth and Seventh Defendants to be excused. - Black J grants leave to file in Court Amended Originating Process filed by ASIC dated 11 May 217; Affidavit of Jenna Helen Molesworth swom 11 May 217. Plaintiff moves on paragraphs 2 25 of Amended Originating Process dated 11 May 217. Ex tempore judgment delivered on non-publication order. Black J makes order in the form of Order 2 of the Consent Order initialled by him and placed in the file. Ex tempore judgment delivered on application for winding up of First and Second Defendants. Black J makes orders in accordance with the Short Minutes of Order initialled by him and placed in the file. PENAL NOTICE TO: COIJRTENAY HOUSE CAPITAL TRADING GROUP PlY LTD ACN COURTENAY HOUSE PlY LTD ACN TONY IERVASI DAVID SIPINA ATHAN PAPOULIAS PROACTIVE PROPERTY SERVICES PTY LTD ACN SIPINA ENTERPRISES PlY LTD ACN tkenne2 Page 1 of 3

45 THENOWGROUP.COM.AU PlY LTD ACN IF YOU: REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU TO ABSTAIN FROM DOING; YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT. ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED. THE COURT ORDERS BY CONSENT THAT: A. Leave to file Amended Originating Process The Plaintiff is granted leave file an Amended Originating Process in the form annexed hereto and marked "A". B. Confidential Exhibit On the grounds set out in: section 8(1)(a) Court Suppression and Non - Publication Orders Act 21 (NSW) (the Suppression Act), that the order is necessary to prevent prejudice to the proper administration of justice; and section 8(1 )(e) of the Suppression Act, that it is otherwise necesary in the public interest for the order to be made and that public interest significantly outweighs the public interest in open justice, pursuant to section 7 of the Suppression Act and the inherent jurisdiction of the Court, that: disclosure, by publication or otherwise, of the contents of the documents comprising Exhibit JHM-1 to the affidavit of Jenna Helen Molesworth sworn 11 May 217 is prohibited; and no access is to be given to Exhibit JHM-1 to the affidavit of Jenna Helen Molesworth sworn 11 May 217 to any person, without a further order of the Court, provided that this order will not prevent the Third Defendant dealing with that document in any manner that would be permitted if this order had not been made. C. Winding Up Orders Pursuant to section 461(1 )(k) of the Corporations Act, each of the First and Second Defendants be wound up. Pursuant to section 472(1) of the Corporations Act, Said Jahani and John McInerney of Grant Thornton, level 17, 383 Kent Street Sydney, registered liquidators, be appointed as liquidators of each of the First and Second Defendants. Pursuant to section 467(3)(b) of the Corporations Act, compliance by the Plaintiff with Rule 5.6 of the Supreme Court (Corporations) Rules 1999 (NSW) is dispensed with. Pursuant to section 467(3)(b) of the Corporations Act, compliance by the Plaintiff with the Corporations Regulation 5.4.1A(2)(b)(vUi) and (ix) is dispensed with. D. Dissolution of the asset preservation orders as against the First and Second Defendants 7. The orders set out in paragraphs 2, 3, 4 and 1 of the Orders made by the Court on 1 May 217 are dissolved so far, and only so far, as they apply to each of the First and Second Defendants. E. Amendment to asset preservation orders generally The orders set out in paragraphs 2 and 3 of the Orders made by the Court on 1 May 217, do not prevent each of the Defendants from transferring money to a legal practitioner's trust account on account of legal costs and legal disbursements to be reasonably incurred. These orders made today be entered forthwith. Liberty to apply, including in respect of orders binding Mr lervasi made by the Family Court of Australia, on 2 business days' notice specifying the relief sought. SCHEDULE A Courtenay House Capital Trading Group Pty Ltd ACN First Defendant Courtenay House Pty Ltd ACN Second Defendant Tony lervasi aka Anthony lervasi, Antonio lervasi and Tony leruasi Third Defendant David Sipina Fourth Defendant Athan Papoulias tkenne2 Page 2 of 3 PA

46 Fifth Defendant Proactive Property Services Pty Ltd ACN Sixth Defendant Sipina Enterprises Pty Ltd ACN Seventh Defendant TheNowGroup.com.au Pty Ltd ACN Eighth Defendant [SEALANDSIGNATURE Signature T.Kennedy (L.S) Capacity Chief Clerk Date 16May217 If this document was issued by means of the Electronic Case Management System (ECM), pursuant to Part 3 of the Uniform Civil Procedure Rules (UCPR), this document is taken to have been signed if the person's name is printed where his or her signature would otherwise appear. First Application under Corporation Law Plaintiff(s) First Plaintiff Australian Securities and Investments Commission Defendant(s) First Defendant Second Defendant Third Defendant Fourth Defendant Fifth Defendant Sixth Defendant Seventh Defendant Eighth Defendant Courtenay House Capital Trading Group Pty Ltd ACN Courtenay House Pty Ltd ACN Tony lervasi David Sipina Athan Papoulias Proactive Property Services Pty Ltd ACN Sipina Enterprises. Pty Ltd ACN Thenowgroup.com.au Pty Ltd ACN [AflAcIIMENT5 TO ORDERS (Annexure Ato SMOs pdf) [attach.] tkenne2. Page 3 of 3

47 Outcome Dé/\ff May 217 IN THE SUPREME COURT OF NEW SOUTH WALES No. 217/ DIVISION: EQUITY REGISTRY: SYDNEY CORPORATIONS LIST IN THE MATTER OF COURTENAY HOUSE CAPITAL TRADING GROUP PTY LTD ACN AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Plaintiff COIJRTENAY HOUSE CAPITAL TRADING GROUP fly LTD S ACN: First Defendant AND THE OTHER DEFENDANTS LISTED IN ANNEXURE.A AMENDED ORIGINATING PROCESS (rule 2.2) A. DETAILS OF APPLICATION This application is made under sections 461 (1) (k). 462 (2) (,464(1). 472 (1). 1 1OIB (1), (4) and (5), 1323 (1) and (3) and 1324 (1) and (4) of the Corporations Act 21 (Cth) 5 (Corporations Act), sections 23, 66 and 67 of the Supreme Court Act 197, and the impliedlinherent jurisdiction of the Court. The relief sought includes orders for the appointment of a Receiver to the property (as defined in the Corporations Act) of the First to Eighth Defendants or alternatively, for asset prservation orders, against each of the First to Eighth Defendants. It also includes orders for Filed by: Kim Turner Solicitor for the Australian Securities and Investments Commission Level 5; 1 Market Street SYDNEY NSW 2 kim.turnerasic.gov.au DX: 653 Sydney Tel: (2) Fax: (2) Ref: Attention: Susan Donnelly

48 the prevention of the First to Fifth Defendants from carrying on a financial services business. It also includes orders restraining the Third Defendant from leaving Australia. It further includes orders for the winding up of the First and Second Defendants. On the facts stated in the supporting affidavits of Candice Elisabeth Patricia Harris affirmed on 2 April 217, Maylin Anne Taylor sworn on 19 April 217, Jenna Helen Molesworth sworn on Ii May 217 and such further and other affidavits as may be filed and read, the Plaintiff claims the following relief: I. The ex parte/short service orders: An order that upon the Plaintiffs undertaking to pay the usual filing fees, the Plaintiff has leave to file in Court this Originating Process and the affidavits of Candice Elisabeth Patricia Harris affirmed 2 April 217 and Maylin Anne Taylor sworn on 19 April 217. An order that, in the first instance, service of this Originating Process be dispensed wit. An order that, in the first instance, this Originating Process be returnable instanter. An order that time for service of this Originating Process be abridged to 5. pm on Monday, 24 April 217. An order that this Originating Process be returnable before the Corporation Judge at 9.45 am on Monday, 1 May 217. U. The Receiver orders: An order pursuant to sections 1323(1) (h) and (3) of the Corporations Act for the appointment, until further order, of a suitable person as Receiver and/or Receiver Manager (Receiver), without security, of the property (as defined in the Corporations Act), whether within or without the State of New South Wales, of each of the First, Second, Third, Fourth, Fifth, Sixth, Seventh and Eighth Defendants.

49 An order that the Receiver have the powers set out in section.42(2) (a), (b), (e), (f), (g), (k), (n), (p), (q), (r), (t) and (u) of the Corporations Act and can exercise these powers in respect of the property (as defined in the Corporations Act) of the First, Second, Third, Fourth, Fifth, Sixth, Seventh and Eighth Defendants as if, in the case of each of the Third, Fourth and Fifth Defendants, those Defendants were corporations. S. An order that the Receiver's reasonable costs and expenses be payable from the property (as defined in the Corporations Act) of the First, Second, Third, Fourth, Fifth, Sixth, Seventh and Eighth Defendants. LII. The asset preservation orders: 9. Further or in the alternative to the orders sought in paragraphs 6, 7 and 8 above, subject to paragraph 11 below, an order that until ftirther order, each of the First, Second, Third, Fourth, Fifth, Sixth, Seventh and Eighth Defendants, by themselves and their servants, agents and employees, be restrained from: removing, or causing or permitting to be removed from the State of New South Wales and from Australia all or any of their, property (as defined in the Corporations Act); selling, charging, mortgaging or otherwise dealing with, disposing of and/or diminishihg the value of all or any of their property (as defined in the Corporations Act); causing or permitting to be sold, charged, mortgaged or otherwise dealt with, disposed of, or diminished in value, all or any of their property (as defined in the Corporations Act); without limiting the tenns of sub-paragraphs (a) to (c) above, incurring new liabilities including, without limitation, liabilities incurred either directly or

50 indirectly, through the use of a credit card, a credit facility, a drawdown facility or a re-thaw facility; and (e) without limiting.the terms of sub-paragraphs (a) to (d) above, withdrawing, transferring or otherwise disposing of or dealing with, any monies available in any account with any bank, building society or other financial institution, in which any of the Defendants has any legal or equitable interest. 1. Further or in the alternative to the orders sought in paragraphs 6,7 and 8 above, subject to paragraph 11 below, an order that without limiting the terms of the orders sought in paragraph 9 above, in respect of the following accounts (collectively the Company Accounts): S (a) Westpac Business One, Courteñay House Capital Trading Group Pty Ltd ATF Courtenay House Capital Trading and Investment Group Trust, BSB: 32-51, Account number: 49253; Westpac Business One, Courtenay House Pty Ltd as Trustee of the Iervasi Capital Trust, BSB: , Account number: ; National Australia Bank, Business Everyday Account, Courtenay House Pty Ltd, BSB: , Account number: ; and National Australia Bank, Business Everyday Account, Courtenay House Pty 5 Ltd, BSB: , Account number: , until further order, each of the First, Second, Third, Fourth, Fifth, Sixth, Seventh and Eighth Defendants, by themselves and theft servants, agents and ethployees, be restrained from: withdrawing, or causingi or permitting to be withdrawn all or any funds from any of the Company Accounts; 7

51 ( transferring and/or otherwise parting with possession of all or any fluids held in any of the Company Accounts; and (g) causing, permitting and/or allowing all or any fluids held in any of the Company Accounts to be used, charged or otherwise dealt with through the use of any credit card, credit facility, a drawdown facility and/or a redraw facility. 11. An order that the orders sought in paragraphs 9 and 1 above, shall not prevent: each of the Defendants from paying or otherwise incurring a liability for ordinary living and operating expenses up to an amount of two thousand, dollars ($2,) per week; each of the Defendants from paying or otherwise incurring a liability for costs reasonably incurred in these proceedings and any criminal proceedings arising from the Plaintiff's investigation into the affairs of each of the Defendants; C the First and Second Defendants from dealing with or disposing of any of their assets in the ordinary and proper course of their business, including paying business expenses bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so the First and Second Defendants give the Plaintiff, if possible, at least two working days written notice of the particulars of this obligation; and any bank, building society of financial institution from exercising any right of set-off which it may have in respect of a facility afforded by it to each or any of those Defendants prior to the date of the order as made. LV. The disclosure orders: 12. Except to the extent that a claim of privilege against self incrimination or civil penalty privilege is made, an order that each of the First, Second, Third, Fourth, Fifth, Sixth, Seventh and Eighth Defendants deliver or cause to be delivered to the Plaintiff by the

52 time nominated by the Court, a full and detailed affidavit sworn by each of them setting out: the name and address of any bank, building society or other financial institution at which there is an account in the name of or under the control of the relevant Defendant, together with the number of such account, the name of such account and the balance of that account; the name and address of any person or persons indebted to the relevant Defendant and the amount of the indebtedness; an itemised inventory of the relevant Defendant's assets and liabilities; an itemised inventory of any and all property (as defined in the Corporations Act) whether real or personal owned or controlled by the relevant Defendant or in which that Defendant has any legal or beneficial interest; and in respect of any of the property (as defined in the Corporations Act) of the relevant Defendant which has been given as security for any debt, the details of that property and the nature of the security and the debt so incurred. 13. An order that in the event that any of the Third, Fourth and/or Fifth Defendants wish to object that compliance with the order sought in paragraph 12 above, may tend to incriminate that Defendant or make that Defendant liable to a civil penalty, that Defendant must, in accordance with section 128A of the Evidence Act, 1995 (NSW): prepare, file and serve on the Plaintiff an affidavit disclosing so much of the information required to be disclosed by paragraph 12 to which no objection is taken; prepare an affidavit containing so much of the information required to be disclosed by paragraph 12 to which objection is taken and deliver it to the Court in a sealed envelope; and

53 (c) prepare, file and serve on the Plaintiff a separate affidavit setting out the basis of the objection. V. Service of orders on Third Parties: 14. To the extent necessary, the Plaintiff has leave to give to: the relevant authorities that record, control and regulate the ownership of real property; the relevant authorities that record, control and regulate the ownership of motor vehicles; the relevant authorities that record, control and regulate the ownership of maritime vessels and craft; any bank, building society or other financial institution through which, to the best of the Plaintiffs belief, any of the Defendants operates any account; and any other person or entity, holding or controlling property, which, to the best of the Plaintiffs belief; belongs to any of the Defendants, notice of these Orders, by delivering a copy of a minute of the orders to a person apparently in the employ of that entity or person. VI Travel restraint orders; An order pursuant to section 1323 (1) (k) of the Corporations Act, that until fhrther order the Third Defendant be restrained from leaving or attempting to leave Australia. An order pursuant to section 1323 (1) ) of the Corporations Act, that the Third Defendant deliver up forthwith, to the Registry of this Court, all passports held by him, or otherwise in his possession, custody or control and any airline tickets concerning any travel arrangements made for the six (6) month period commencing from the date of that order and that those documents be held by the Registry until further order. 1

54 17. An order pursuant to section 1323 (1) (j) of the Corporations Act, that until fttrther order the Third Defendant be restrained from applying for the issue of a passport. 18. An order pursuant to section 1323 (1) U) of the Corporations Act, that in the event that the Third Defendant cannot locate any passport, he: give notification (the Notification) to the Department of Immigration and Citizenship or the Australian Passport Information Service, confinning that he has lost his passport; and file an affidavit stating that fact and exhibiting a copy of the Notification sent. VII Financial services business order: 19. An order pursuant to sections (1), (4) and (5) and 1324 (1) and (4) of the Corporations Act, that until flirther order, each of the First, Second, Third, Fourth and Fifth Defendants be restrained from carxying on a financial services business (as defined in the Corporations Act) including by: canying on any unregistered managed investment scheme; providing financial services advice; dealing in financial products, issuing or making available to customers financial products including trading in foreign exchange on behalf of investors; advertising, promoting or marketing financial products or any business or services that involves financial products; seeking or soliciting customers to acquire financial products; and (1) operating the website at

55 VIII Winding Up Orders An order under section 461 (1) (k) of the Corporations Act that each of the First and Second Defendants be wound up. An order under section 472(1) of the Corporations Act that Said Jahani and John McInerney of Grant Thornton, level 17, 383 Kent Street Sydney, registered liquidators, be appointed as liquidators of each of the First and Second Defendants. Further or alternatively, an order under section 472 (2) of the Corporations Act that witil further order, Said Jahani and John Mclnerney of Grant Thornton. level 17, 383 Kent Street Sydney, registered liquidators, be appointed as liquidators provisionally of each of the First, and Second Defendants. An order under section 467(3)(b) of the Corporations Act dispensing with compliance with Rule 5.6 of the Suprdme Court (Corporations) Rules 1999 (NSW) relating to the requirement to publish a notice of the Plaintiff's application that each of the First and Second Defendants be wound up. An order under section 467(3)(b) of the Corporations Act dispensing with compliance with the Corporation Regulation 5.4.IA (2) (b) (viii) and (ix) relating to the entering of particulars on ASIC!s database of the name and address of the court to hear the application to wind up the First and Second Defendants and the particulars of the time and date of the court hearing to wind up the First and Second Defendants. IX General orders: S 25. Such further and other orders as the Court thinks fit. An order that the First, Second, Third, Fourth, Fifth, Sixth, Seventh and Eighth Defendants pay the Plaintiffs costs of, and incidental to, this Originating Process. An order that there be liberty to any party to apply to the Corporations List Judge on reasonable notice

56 Date: 11 May217 Kim Turner Solicitor for the Australian Securities and Investments Commission This application will be heard by...at the Supreme Court of New South Wales, Law Courts Building, Queens Square, Sydney, New South Wales at... am/pm on... May217 B. NOTICE TO DEFENDANTS To the: FIRST DEFENDANT: COIJRTENAY HOUSE CAPITAL TRADING GROUP PTY LTD ACN OF: Level 23, Tower 1, 52 Oxford Street, Bondi Junction NSW 222 SECOND DEFENDANT: COURTENAY HOUSE PTY LTD ACN OF: 33 Page Street, Pagewood NSW 235 THIRD DEFENDANT: TONY IERVASI OF: 33 Page Street, Pagewood NSW 235 FOURTH DEFNDANT: DAVID SIPINA OF: 26 Garment Street, Prairiewood NSW 2176 FIFTH DEFENDANT: ATLIAN PAPOULIAS OF: Unit 2, 2-4 Crawford Road, Brighton-Le-Sands NSW 2216 SIXTH DEFENDANT: PROACTIVE PROPERTY SERVICES PTY LTD ACN OF: Level 23, 52 Oxford Street, Bondi Junction NSW

57 SEVENTH DEFENDNAT: SIPINA ENTERPRISES PTY LTD ACN OF: 26 Garment Street, Prairiewood NSW 2176 EIGHTH DEFENDANT: THENOWGROUP.COM.AU PTY LTD ACN OF: Ajaka and Co, Level 1, 212 Maroubra Road, Maroubra Road NSW 235 If you or your legal practitioner do not appear before the Court at the time shown above, the application may be dealt with, and an order made, in your absence. As soon after that time as the business of.the Court will allow, any of the following may happen: the application may be heard and final relief given, directions may be given for the future conduct of the proceeding, any interlocutory application may be heard. Before appearing before the Court, you must file a notice of appearance, in the prescribed form, in the Registry and serve a copy of it on the plaintiff. Note. Unless the Court otherwise orders, a defendant that is a corporation must be represented at a hearing by a legal practitioner. It may be represented at a hearing by a director of the corporation only if the Court grants leave. FILING Date of filing: May217 This originating process is filed by Kim Turner, Solicitor for the Australian Securities and Investments Commission. SERVICE The plaintiffs address for service is Level 5, 1 Market Street, Sydney, NSW

58 It is intended to serve a copy of this originating process on each defendant and on any person listed in Schedule A. S S 12 15

59 SCHEDULE A THE DEFENDANTS TO THIS AMENDED ORIGINATING PROCESS ARE AS FOLLOWS: First Defendant: Second Defendant: Courtenay House Capital Trading Group Pty Ltd ACN Courtenay House Pty Ltd ACN Third Defendant: Tony lervasi aka Anthony lervisi, Antonio lérvasi and Tony Ieruasi S Fourth Defendant: David Sipina Fifth Defendant: Athan Papoulias Sixth Defendant: Proactive Property Services Pty Ltd ACN Seventh Defendant: Sipina Enterprises Pty Ltd ACN Eighth Defendant: TheNowGroup.Com.Au Pty Ltd 13 16

60 I. 2

61 Grantlho rnton An instinct for growth Said Jahani MBA (Executive) Fellow INSOL Title Head of Financial Advisory - Sydney Ll Experience Said has over twenty years experience in corporate recovery and turnaround. Before joining Grant Thornton he worked for PricewatertiouseCoopers and Ferrier Hodgson where he developed his specialisation in turnaround and corporate restructuring. Said currently leads the firms Alternate Credit Solution advisory services assisting the firm's clients to access alternate capital. Sector experience Following completion of his MBA at the AGSM, Said is well equipped to assist clients in tackling not only operational and imminent liquidity problems they may be facing but more importantly the underlying strategic issues around their business. With an industry focus on financial services as well as mining and resources, Said has provided the full range of services to clients from investigative accountant, pre-lending due diligence and solvency Level 17 reports through to receiverships, voluntary 383 Kent Street Sydney NSW 2 administrations and liquidations. Key expertise Strategic problem solving Stakeholder management Negotiation and commercial skills Mining and resources specialisation Financial Services specialisation Professional qualifications and memberships Fellow of INSOL International MBA (Executive) (AGSM) Fellow of Institute of Chartered Accountants of Australia Turnaround Management Association Australian Restructuring Insolvency and Turnaround Association Registered Liquidator Contact details T F E Said.Jahaniau.gt.com Grant Thornton Australia Limited ABN ACN Great refers to the brand undmr,d*tr the Grant Thcorrton rrrnrrrber lions proide assurance, tan and artarem, reices to thdrcfenrtssnd!sr relerstoare an more membee finns or the corteol requires. Grartihannleqr Aussalis Ltd iso merberfbrrr of GranlThcrntmr Internatomnul Ltd (GTtLI GTIL and Ire member tome are not a wonidreide parbnorsfnip. Gilt and sedm memberlinmr a, e aaratulegnl ei services are deleered by Isa member Inns. GIlL does ret pmodde serdces Is dients. GIlL and its merabee tansane not agents ci, and do not obligate me another and are not liable Ice snot anothee', edo on ondodona. In ereassnelier coolest so&, the use of inc 1mm 'Grant Tfneetoer' nay ride to Qart litanies Asotela Limited ABN and itsaosbaias a.thddisnbm and reload Sibos. GIlL st err Asaba!lssn notated entty to Gent Thornton Auatstie Lbdtad. Liability lirniled by a scheme approved under Plotessional Standalds Legislation. Liability is limited in those Stales where a current scheme applies. 17

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63 O-GrantThornton An instinct for growth'tm John McInerney Liquidator Restructuring Advisory Specialist S Title Director - Financial Advisory Experience John is a liquidator, chartered accountant and member of the Australian Restructuring Insolvency & Turnaround Association (ARITA). John has more than 16 years' experience offering corporate insolvency, restructuring and advisory services to his clients and more than three years' financial accounting experience. John has been involved in all forms of corporate and personal insolvencies including voluntary administrations, liquidations, receiverships, bankruptcies and investigative accounting reviews. Some of John's recent assignments include: as Voluntary administrator and liquidator of Airport Doors Group (7 companies), a roller door business operating from Melbourne, Adelaide and Western Australia with turnover of $2M p.a., assets of $6M and 75 employees. Voluntary administrator and subsequently liquidator of Townsend Group, a construction company with lame building contracts at Barangaroo, Wynyard Walk, Epping to Chatswood Railway line, Westfield's and various Apple stores, turnover of $12M p.a., assets of $6M and 5 employees. is Voluntary administrator and subsequently liquidator of Bakers Dozen, a retail bakery chain in Tasmania, which involved a trade-on and sale of assets with turnover of $3M p.a., assets of $1 M and 25 employees. Director in the receivership of several residential apartments in Sydney's Eastern Suburbs. Director in the investigative accounting review of a chain of fast food outlets in NSW and Canberra. Professional qualifications and memberships as as is Liquidator Member of the Institute of Chartered Accountants Member of the Australian Restructuring and Insolvency Turnaround Association Bachelor of Business (Accounting) Holder of NSW hotelier's licence Contact details Level Kent Street Sydney NSW 2 T F E John.Mclnerneyau.gt.com Grant Thornton Australia Limited ABN ACN antthomtmr refers Is the brand estee wtrichthe GrasiThsa,tcn m,erber Inns, preside a sserarce. Ian and madame sardces Is 15W, d,erls.ndiar refers Is errors morearembertrrnrs. arthe corteal requrses Granlmeente, Aussdie LW is a merbee thra SCrant Thorrter, trtmnater,s Ltd EGIILI. GTIL and theeaembacflrmn,,enslaa,snldwide p.rorerahip. GTIL and each nsenrber firs a a separatelegal ee,lily. Seralces are delverad by the camber dims. GIlL does rot preside nerdces so chests. GTIL and its member ferns are not agents of. and do not obl,gate we assurer and are not liable for one snsther's acts or arrasetans. in treaussatar casleatessly, the ese at the term GeanlThoeston' may rater to GrartThrnnten Assbd'a Limited ASN 'ad ifs Auseahar subsidiadea and 'elated entities GTIt. is rot or Aesbelian related eatly Is Grant Thomtco, Ansfrdi, Limited. Liability limiled by a scheme approved under Professional Standards LegisLation. Liability is Limited in those Slates where a curtent scheme applies. 18

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65 A ARITA 14 Necessary and Proper Remuneration Principte 1: A Practitioner is entitled to claim Remuneration and Disbursements, in respect of necessary work, properly performed in an Administration. A Practitioner's right to be paid is recognised under the legislation and at general law and is given a high priority of payment from the Insolvent's funds. The entitlement to Remuneration exists only in respect of work done that was necessary and was properly performed Necessary Work A Practitioner is entitled to Remuneration only in respect of work done that was necessary for the Administration. The term 'necessarj means work that was: connected with the Administration: and done in furtherance of the exercise of the powers and performance of the duties of a Practitioner as required by the Legislation, Code and applicable professional standards. is report to creditors; investigations of conduct of directors; protection and recovery of assets; preparing and filing.a S533 report to ASIC; if the company has trading operationsihroughout Australia, it.will generally be necessary for the Practitioner to make relevant searches of property titles in all States and Territories; if the company is a small local operation only, it would not be necessary to make international enquiries; and The examination of claims for Remuneration will necessarily be made with the benefit of hindsight. However a Practitioner may claim for work that may not have produced a positive outcome provided there was a proper exercise of professional judgment in the Practitioner deciding to do the work at the time the work was undertaken. Refer to section 18.2 for guidance on work papers and maintenance of Administration files. Once that is established, the work will remain 'necessary for the purposes of a Remuneration claim, even if subsequent events show that the work was not necessary. searches revealing no assets; examination of directors resulting in no new information; or unsuccessful claims for preference recovery or insolvent trading. Before a decision is made to claim for Remuneration, the Practitioner must ensure that work that was done, by him or herself, or by staff members, was necessary. AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE M 19

66 ARITA n a provisional liquidation, there are Limits on the work required to be done. If work is done hose limits it may no be regarded as necessary Properly performed In order to claim Remuneration for necessary work, the Practitioner will need to establish that the work was property performed. Work done poorly, or, at worst, improperly and needing to be reworked should not be charged. Example It may have been necessary to inquire of all property titles countrywide, but if the staff member doing that work pursued inquiries through the wrong agency because of ignorance or inattention, then that work was not done property. It may have been necessary for the Practitioner to have convened a meeting of creditors, but if work done in convening that meeting took an inordinate amount of time, through the inexperience of the staff member, it was not done property. While an allowance is made for junior staff through the Lower hourly rate, where activity is redone, care should be taken to ensure that the amount charged reflects the true value of the work. Work performed to convene an invalid meeting would not eprqpyp_e_rfe. Creditors are entitled to expect that Administration funds are not expended on work that was not property performed. All time spent for necessary work property performed should be recorded against the Appointment using an appropriate system. Before claiming Remuneration, the Practitioner must identify any work and time that should not be claimed. The Remuneration requirements of the Code for work that is necessary and property performed are consistent with, or impose a higher standard than, the Legislation. Prior approval of fees does not remove the obligation to establish that the work was necessary and property performed. The mere approval does not give the right to draw Remuneration if the work was not necessary or was not property done Deciding what work to undertake The Practitioner should exercise professional and commercial judgment in considering whether work is to be performed. Clearly, work that improves the return for creditors should be undertaken. Exampie A judgment wilt need to be made in relation to the pursuit of unfair preference claims or other voidable transactions in terms of the likely cost and likely return. This may involve consultation with creditors, and, if appropriate, Legal advice, or reference to the court. AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 65 2

67 A ARITA Not all work is associated with directly seeking a return for creditors. Many of the general statutory tasks of a Practitioner - for example in reporting to creditors, lodging documents with ASIC, and maintaining accounts - are properly performed and charged even though the Remuneration charged will not produce a financial return and will reduce the funds available for distribution. In a liquidation, a Practitioner is not obliged to do work unless there are funds available for their Remuneration, except for certain statutory tasks that must be undertaken regardless of available funds. Practitioners should have regard to any assistance that may be available from the Reg ulators Outsourcing A Practitioner may outsource work subject to the restrictions on delegation (e.g. decision making and exercise of judgment remain the Practitioner's responsibility and cannot be delegated or outsourced). The decision to outsource is a matter of commercial judgment for the Practitioner, based on such considerations as: geography and location (the business may have its operations spread throughout the country and it may be commercially necessary to appoint local agents to deal with particular tasks); time constraints; or costs considerations (the external source may be able to attend to an urgent task quickly, or more cheaply). If work is outsourced, the Practitioner's obligations under this Code remain the same as if the Practitioner or members of staff had performed the work. For guidance on whether outsourced work is Remuneration or a Disbursement refer to Practitioners should have regard to APES GN 3 - Outsourced Services. A copy of GN 3 can be accessed from the Accounting and Ethical Standards Board website ( Work that cannot be remunerated If a Practitioner, other than a bankruptcy trustee, seeks to be remunerated for work that is outside the scope of the powers of the Practitioner or undertaken prior to the Appointment, approval can only be sought from the court. A Practitioner may claim that pre-appointment work was necessary for the Administration and would have had to be undertaken, but it is undertaken prior to the Appointment and thus the Practitioner must seek court approval if remuneration is to be claimed. However, case law indicates such approval is unlikely to be obtained. An exception is if it relates to a transitioning Appointment and the Legistation allows Remuneration relating to the prior Administration. It is not sufficient in itself to obtain approval from a committee or from the creditors. These restrictions are a threshold test before applying the 'necessary and properly performed test. AUSTRALIAN RESTRUCTURING INSOLVENCY & TIJRNAROIJND ASSOCIATION PAGE 66 21

68 A Practitioner appointed as a bankruptcy trustee may draw Remuneration for pre-appointment work where that work is approved in accordance with the Bankruptcy Act. Remuneration must not be claimed for work that results in, or is the result of, a breach of the Practitioner's duties Staff levels and numbers In time-based charging, the Practitioner must ensure that the number and qualifications of staff allocated to an Administration is appropriate for the nature of the work being performed so that the Administration is completed in the most efficient and effective manner. Example S An experienced Liquidator generally would not attend to more routin&tasks - such as preparing. notices for a meeting '-given that such.tasks could be done as well and ala lower charge-out rate by a more junior member of staff. This will require commercial and prof!ssional judgment. WhiLe a particular task may be appropriate to a particular level of employee, the Practitioner may consider that, even though charging at a higher hourly rate than the employee, he or she may be able to do the work in one quarter of the time. 'Ele It may be more cost effective for the Practitioner to prepare and finalise a report for creditors, if 1P!i!p!rt is required urgentlyand requires the Practitioner's input. Care should be taken in allocating the appropriate number and level of staff to an Administration or task, particularly when travel is required. This is a balance between having sufficient staff available to undertake the required tasks and over servicing the Administration Setting hourly rates S In time based charging, the Practitioner should ensure that appropriate hourly rates are set for the Administration. Generally, market forces will ensure that a Practitioner sets appropriate standard hourly rates which are generally applied to Administrations. However, a Practitioner should ensure the appropriateness of these standard hourly rates is specifically considered for each Administration. Factors that may result in a variation of the standard hourly rates include: complexity of the Administration; location of the business operations of the Insolvent and the scale of the rates that would normally be applied in that location; risk associated with the Administration; and/or the specialised nature of the Administration (if any! Costs of claiming Remuneration Practitioners may claim the necessary and proper costs of record keeping and seeking approval or determination of their claim for Remuneration. AUSTRALIAN RESTRuCTuRING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 67 22

69 If additional costs are incurred because of inadequacies of the Practitioner or Firm's time recording systems, or due to staff not properly recording their time, these costs would not be necessary and proper. It is not appropriate to charge this additional cost to the Administration and it should not form part of the claim for Remuneration. Necessary and proper remuneration costs may include the cost of prqducing a report for creditors to allow creditors to make an informed decision whether to approve the remuneration or the costs of applying to the court (subject to any order of the court). Reworking information produced from an inadeqvate time recording system in order to prepare a remuneration report for creditors is not necessary and proper Costs of communicating with Regutators or professionat bodies A Practitioner must not claim Remuneration for time spent: communicating with Regulators or professional bodies regarding complaints about the Practitioner or the conduct of a particular Administration; on Regulator surveillance, professionat audits or inspection of files, or on peer reviews; or unsuccessfully defending a breach of the law or this Code, subject to any order of the court Disbursements Disbursements may only be claimed if they were necessary and properly incurred. In incurring Disbursements, a Practitioner must use their commercial judgment, adopting the perspective of, and acting with the same care as, a reasonable person exercising care and skill would act in incurring expenses on their own behalf. While Practitioners must account to creditors for Disbursements, the reimbursement for the 18 payment of Disbursements does not require creditor approval before being drawn. Thus, the categorisation of activity as Remuneration or Disbursement is significant What is a Disbursement? The Practitioner needs to determine whether the claim for payment is in the nature of a Disbursement, or whether it represents Remuneration. Disbursements are: costs paid from the Administration's bank account directly to third parties; or costs paid to third parties by the Practitioner and later claimed back from the Administration; or costs claimed by the Practitioner for non-professional services provided by the Firm and/or outlays incurred by their staff in the proper conduct of the Administration. A Practitioner should separate Disbursements from the expenses of running their practice which may only be recovered through Remuneration (for example, in the case of time based remuneration by factoring overheads into the hourty charge-out rate and in fixed fees, by factoring overheads into the fixed fee calculationi. AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 68 23

70 IA ARITA Table 2: Disbursement types Disbursement Criteria Examples Rationale type Professional S External These are fees that satisfy both the independent lawyers, This is a advice, non- following criteria. They are: auctioneers, valuers, Disbursement insolvency (al for professional services (nonreal estate agents, because it involves the Practitioner insolvency services) relating to specific independent tax tasks required to be done during the retaining an external advisors or Administration; and advisor for work to be accountants, done in the (h) are properly incurred by independent outside consultants engaged by, and Administration, at an not associated with, the Practitioner. ' agreed fee or rate. and their Firm. These expenses are claimed from the Administration at cost. Non-professional External These are costs that satisfy all the following administration These are typical criteria. They are: advertising, Disbursements (al not for professional services; and travel and because they involve accommodation for an outlay in relation to (hi incurred with a third party in relation to staff, the Administration. work required to be done during the These expenses are Administration. room hire, claimed from the document storage, Administration at photocopying and cost. printing, C external word processing and secretarial services. Internal These are costs that satisfy at[ the following Reasonable costs of: These are also typical criteria: Disbursements, telephone calls, except they are (a) they are not for professional services; postage, incurred internally by (h) they are for goods or services property stationery, the Firm. These provided by the Practitioner or their expenses, if charged staff in the Administration; and photocopying and to the Administration, printing, (c) they are not overheads covered in the would generally be Remuneration claim. data room hosting. charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 69

71 A ARITA What are not Disbursements? Given the significance of a claim for payment by a Practitioner being classified as a Disbursement, it is useful to list what are not Disbursements: A. Overheads An overhead is not a Disbursement. It is a cost that can only be charged for and recovered across all the administrations handled by the Practitioner's Firm. In contrast, an out of pocket expense is an expense actually incurred in respect of that Administration. It can be claimed as a Disbursement. The Practitioner must be able to show how the expense: S is uniquely and directly attributable to the Administration; and was calculated and allocated to the Administration. Example Rent, insurance,.professional indemnity insurance, professional memberships, staff costs, traininq,.depreciation are examples of overheaxis. Internal non-insolvency professional costs A Practitioner may engage internal non-insolvency related professional services only after proper commercial consideration to that decision has been given that such an engagement is in the interests of creditors and the efficient conduct of the Administration. This includes non-insolvency professional services provided by another practice within a federated practice structure or associated practice. The point to consider is whether the benefit of the engagement fee will be received by the Practitioner, the Practitioner's Firm or an entity related to the Practitioner or perceived to be related to the Practitioner. These items are Remuneration and must be disclosed and approved in the same manner as 5 insolvency services (refer to Remuneration Report template for further guidance). Eiile Legal advice, tax advice, real estate valuations, auctioneering provided by a Practitioner's Firm are examples.of internal professional costs. External insolvency professional costs If a Practitioner outsources insolvency tasks, the fees charged to the Practitioner may only be claimed as Remuneration, notwithstanding that the fees may be payable before the claim for Remuneration can be made. The necessary and properly performed test applies. It is not always clear whether the out-sourced work is better categorised as insolvency work (which is claimed as Remuneration],-or general non-insolvency work (which is classified as a Disbursement). AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIAIION PAGE 7 25

72 A ARITA Factors to be taken into account when making this assessment include: was the contractor an insolvency firm? was there a regular resource sharing/provision arrangement? would the Practitioner have done the work if there had been sufficient resources? Where the task involves standard expertise and skills of an insolvency practitioner, the outsourced costs will be a Remuneration claim of the Practitioner. Where the task involves more general or particular skills that are not insolvency specific, then the outsourcing costs will be a Disbursement. Example A stocktake is required in an Administration. It is a matter for the Practitioner's judgment either to use his or her own Firm's staff, or contract out the work to a suitably qualified specialist; or There is a branch of the company's business that is in an outlying country area. The Practitioner may choose to have the stocktake done by a local firm because it would be cheaper than sending the Practitioner's staff to do the stocktake.; In that country area, the Practitioner considered using a professional stocktaking firm to undertake the stocktake, but selected a local accounting firm. In this instance there are arguments both ways for the costs of the local accountant to be remuneration or a disbursement. Similarly, the Practitioner's Firm may have valuation expertise (chargeable as remuneration) but the Practitioner may choose to engage an external valuer (disbursement). This will be a regard to the interests of creditors. When a Practitioner makes a decision that an expense of this nature is a Disbursement rather than Remuneration, the invoices received for the services should detail the work performed and it should be clear from the description that the services were not insolvency services. Late lodgement fees Any Late fee or penalty imposed by a court, Regulator or agency for Late lodgement or other default should be borne by the Practitioner. Late lodgement fees imposed by ASIC orafsa must not be charged to the Administration. E. Unreasonable Travel Costs TraveL should be bought on the best commercial terms and the style of travel and accommodation should be appropriate for the trip being undertaken. Care should be taken in claiming the costs of travel by the Practitioner between offices of his or her firm for the purposes of a particular Administration. Where there are geographically spread locations for a particular Administration, consideration should be given to the retention of local staff or agents to carry out tasks which are appropriate and capable of delegation, in order to minimise the costs to the Administration. However, it may well be appropriate for the Practitioner and/or his or her staff to attend at these locations and incur the relevant travel costs. AUSTRALIAN RESTRUCTURING INSOLvENCY & TURNAROUND ASSOCIATION PAGE 71 26

73 A ARITA Every Firm should have a policy on travel (including time charged and Disbursements), which should be made available to creditors on request. This policy can be Administration specific or a general policy. Travel costs to and from an Administration's ptace of business is normal and chargeable; If the Administration's business is conducted around Australia, or internationally, it may be appropriate for the Practitioner to personally attend at each location, depending on the size and nature of the business, even if the practitioner has offices around Australia or Pre-appointment expenses S Any expenses incurred prior to the Appointment must not be claimed from the Administration as a Disbursement. Practitioners are only entitled to claim Disbursements incurred after their Appointment Necessarily and properly incurred A. Professional Disbursements A Practitioner may engage external professional services (refer to the table at section as Disbursements without creditor approval, but only after exercising proper commercial consideration. The Practitioner should consider issues of: expertise: quality: timeliness; and reasonable and appropriate cost. S Practitioners must assess each engagement of a professional service provider in terms of the interests of creditors and their fiduciary responsibilities. Unless the Disbursement is insignificant, the Practitioner should document the decision making process identifying why the work was necessary and why the particular firm or professional was engaged. While the approval of creditors is not required, creditors are entitled to be informed of and to understand the decision process if the issue is raised. Before authorising payment of Disbursements, the Practitioner must ensure that: the task has been properly performed; and the quantum of the professional service fee is as agreed or is reasonable. Legal advice, the service provided being assessed on quoted price or time charges, quality and focus of advice, and timeliness of delivery; and. Agent's sale of property, the service provided being assessed on commission rate, sale price [and_any quoted expenses. AUSTRALIAN RESTRUCTURING INSOLvENCY & TURNAROUND ASSOCIATION PAGE 72 27

74 A ARITA Non-professional Disbursements A Practitioner may incur non-professional Disbursements, both internal and external, [refer to the table at section without creditor approval, but only after exercising proper commercial consideration. While the approval of creditors is not required, creditors are entitled to be informed of and to understand the decision process if the issue is raised. For internal Disbursements: the recovery basis must be set on commercial terms; creditors must be advised as part of the initial advice to creditors on Remuneration [refer and ), details of the basis of charging for these types of Disbursements; and details of actual internal Disbursements paid leg. quantity and total cost] must be reported to creditors in each Remuneration report (refer and The Practitioner should consider the reasonableness and appropriateness of the cost of the nonprofessional Disbursement before authorising the Disbursement. This is equally applicable to internally provided and externally provided non-professional Disbursements. Practitioners must assess each Disbursement for an Administration in terms of the interests of creditors and their fiduciary responsibilities. Before authorising payment of Disbursements, the Practitioner must ensure that: the benefit has been provided to the Administration; and the quantum of the fee is as agreed or is reasonable. fl AUSTRALIAN RESTRUCTURING INSOLVENCY & TLIRNAROUND ASSOCIATION PAGE 73 28

75 A ARITA 15 Meaningful disclosure in Remuneration claims Principle 11: A claim by a Practitioner for Remuneration must provide sufficient, meaningful, open and clear disclosure to the Approving body so as to allow that body to make an informed decision as to whether the proposed Remuneration is reasonable. A Remuneration claim requires information to be conveyed to the Approving body (creditors, committee of creditors, committee of inspection, or the court). That information encompasses a number of elements: a system of recording that information (refer section 15.1); a basis for calculating Remuneration (refer section 15.21; sufficient detail to justify the amount of Remuneration (refer section 15.3); and relevant timing of the information being provided (refer section Recording of Work Done Regardless of the Remuneration method to be applied, the Practitioner must maintain a proper record of work that was done on an Administration in order to: claim Remuneration; and report to creditors on the progress of the Administration. The Practitioner should maintain a system that requires staff to record: the period of time spent; the categories of the work performed (see Remuneration Report Template); details of the work being performed; and contemporaneously at the time the work is done in order to maximise accuracy. Time recordingprovides good practice management information, even though time data will not be required for reporting to creditors in claims for fixed fee or percentage based Remuneration. ARITA's Remuneration Report Template provides a description of some common work categories that should be used (refer section Bases of calculation There are several bases by which Remuneration can be calculated (refer sections , , and ARITA has no preference as to the method of calculating fees. Practitioners must be transparent and fully explain to creditors the main bases by which Remuneration can be calculated, the method proposed to be used in the Administration and the reasons for selecting that particular basis (refer to section ). The terms of that Remuneration are a matter for the Approving Body, upon full disclosure of the arrangement being explained to them by the Practitioner. AUSTRALIAN RESTRL'CTLJRING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 74 29

76 A ARITA Time based charging Time based is a common form of charging. Practitioners calculate Remuneration by reference to the hourly or time unit rate which is applied to the time spent on necessary work properly performed. A Practitioner should ensure that regular reviews of the WIP on an Administration are performed to ensure that only time spent on necessary work, properly performed is retained on the WIP. Such a review must be performed prior to issuing any Remuneration requests for approval Prospective Fee Approval A Practitioner may seek approval from creditors for time based Remuneration to be determined in advance of the work to be performed. The approved amount must have a Cap to a nominated limit. The claim for Remuneration will subsequently be calculated on a time basis for necessary work properly performed and can be drawn without further approval of creditors up to the Cap. The hourly rates to be applied may be increased by an agreed formula where the escalation factors are objectively and independently determinable. If a Practitioner wants to be able to increase hourly rates that are charged on an Administration in the future without having to obtain creditor approval, a specific formula must be included in the resolution for the approval of the prospective Remuneration (for example, rates are increased annually by the CPI amount). A reference to changes in rates from time to time (or similar) must not be included in resolutions to approve prospective fees. Any increase approved does not apply to the capped total, only to the hourly charge rate. If a Practitioner wishes to change the capped amount, or the hourly rate scale other than as agreed, a Practitioner will need to seek Approving body approval (refer section for reporting obligations) Fixed fee A Practitioner may claim Remuneration based on a quoted fixed amount with creditor approval. A fixed fee arrangement provides certainty to creditors about how much the Remuneration claim will be. The risk of excessive time spent is transferred to the Practitioner. Once a fee is fixed for an agreed task, set of tasks or the conduct of the Administration, it remains fixed and a Practitioner must not seek further approval if the original estimate is wrong.. In a small Administration, where the issues can reasonably be anticipated, the Practitioner may wish to have remuneration approved for a fixed amount. r Towards the end of an Administration where remuneration has been based on a time basis, a Practitioner may choose to charge a fixed fee for work to be done in finalising the Administration, rather than obtaining prospective approval on an hourly basis to a capped amount. AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 75 3

77 A ARITA Percentage A Practitioner may claim Remuneration based on a percentage of a particular factor, usually assets disclosed, or assets realised Success or Contingency Fees A Practitioner must not seek Remuneration on the basis that they wilt receive a specified bonus, success fee, super-profit or additional percentage as Remuneration, in the event that a specified contingent future event occurs or particular circumstances arise, if that arrangement would place the Practitioner in a position of conflict, or generate a perception of a Lack of independence. This is based on the principles that: no additional incentive should be required or offered in order to have the Practitioner perform duties that are required; the independence and objectivity of the Practitioner, even if only as perceived, may be compromised by such an arrangement: and the arrangement must not be inconsistent with the fiduciary obligations of a Practitioner. 'Example An example of a duty that may not be a required duty is the pursuit of litigation. The decision to 'pursue litigation is a matter of professional judgment for the Practitioner, particularly in instances where there are no funds on hand in the Administration and no ready source of funding. When considering whether a proposed fee arrangement is acceptable, the Practitioner must consider whether the arrangement could be perceived as the Practitioner acting in his or her own interests rather than the interests of the creditors. If a Practitioner is intending to use this type of fee arrangement, full disclosure of the terms of the proposed arrangement must be made to creditors and the consent of the creditors obtained prior to work commencing under a proposed contingent fee arrangement. If an arrangement is in breach of this Code, the arrangement will still constitute a breach even if 4 creditors have approved the arrangement. When considering whether a contingent fee arrangement might be a suitable fee arrangement in a particular Administration, the Practitioner should consider: any restrictions that may apply under the relevant legislation; funds available in the Administration; funding from alternate sources such as creditors or a litigation funder; costs of the alternate source of funds compared to a contingent fee arrangement; risk associated with the tasks to be undertaken for the contingent fee; and the appropriateness of the possible contingent fee amount considering the nature of the Administration and the risk associated with the task to be undertaken. ri example of an acceptable contingent fee arrangement is discounting standard hourly rates until certain objective is achieved. If that objective is achieved, standard hourly rates wilt then be 2rnnrI AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 76 31

78 A ARITA 15.3 Information to be disctosed and when Information on the particular basis of Remuneration claimed should be provided to creditors at two main points of time in an Administration. First, soon after the appointment, in order to advise creditors of the available bases by which Remuneration can be calculated and the proposed basis upon which Remuneration will be claimed for the Administration. This will generally be with the notice of first meeting of creditors in a voluntary administration or a creditors' voluntary liquidation, or a Part X agreement; or by including it in the first circular sent to creditors in other Administrations. This is the equivalent of an Initial Remuneration Notice URN] in relation to a personal Administration. Second, before any meeting is held at which approval for the Remuneration is to be sought. The information should be sent to creditors in the normal course with any reports and other documents required for the conduct of that meeting in the time frames required by the leg isiation. This is the equivalent of an Remuneration Approval Notice (RAN) in relation to a personal Administration. The table below summarises the timing of the provision of information for each Remuneration basis. Basis - First coivmuhlcatiomn affei DUring the - appointment Administration - Time based Advice on the basis chosen. Estimate of Report on work undertaken and request fees and comparison to pre- appointment estimate, if one provided, approval of quantum. comparison to initial estimate of tees provided to creditors. Prospective Fee Advice on the basis chosen. Request for Report on work undertaken and request (time based) approval for time based charging to a further approvals. capped amount. Fixed fee Advice on the basis chosen. Report on achievement of milestones for Request for approval of the quantum. the drawing of Remuneration. Percentage Advice on the basis chosen Report on the factors underlying the Request for approval of the percentage entitlement to claim the Remuneration. Contingency Advice on the basis chosen Report on the achievement of the Note; Request for approval of the arrangement. contingency event or otherwise. Mixed Fee Arrangements; There will be circumstances where a Practitioner will seek approval for a different basis of Remuneration for a particular aspect of an appointment or finalisation of the appointment; the appropriate information (refer section will need to be provided at the time of seeking the creditors approval of that arrangement. The Remuneration reporting requirements do not apply to Controllers. A Controller should report to their appointor in the manner requested by their appointor. The guidance in this section of the Code may still be of assistance to Controllers when preparing their Remuneration reports. AUSTRALIAN RESTRUCTURING INSOLVENCY & TLIRNAROUNL ASSOCIATION PAGE 77 32

79 II' ARITA Court requirements In addition, where an application is made to a court for an order that a company be wound up or for an official liquidator to be appointed as a provisional liquidator of a company, regard must be had to any additional requirements of the courts. For example, with the Consent to Act, Practitioners may be required to disclose their hourly rates. The same applies in relation to Part X agreements under the Bankruptcy Act. S S AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNARO'JND ASSOCIATION PAGE 78 33

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89 15.4 Sources of Funding Department of Employment payments Corporate Administrations Funding received from the Department of Employment (DE) to facilitate a FEG or GEERS distribution by Appointees may be a limited or partial funding agreement. As such, where higher fees are incurred than the amount agreed with DE there is no restriction in the administration being charged for the shortfall on the basis that all Remuneration claimed is necessary and property incurred in accordance with ARITA's Code. While the money received from DE is not subject to creditor approval and can be paid directly to the practitioner, any shortfall must be appropriately approved in accordance with the relevant legislation prior to drawing. In seeking creditor approval for any shortfall, Practitioners must provide separate disclosure of the total time charged, DE receipt(s) and any shortfall amount in the Remuneration report. Practitioners must ensure that they do not "double dip" in relation to FEC or GEERS Remuneration and that the amount received from DE is allocated to the Administration. To facilitate this, Practitioners must ensure that any work undertaken in relation FEC or GEERS distributions is appropriately identified in their time recording system, including an adjustment for any direct payments from DE. Personal insolvency Administrations Practitioners must have regard to guidance issued by AFSA in respect of the requirements for approval of funding received from DE or any shortfall Assettess Administration funding Funding received from ASIC under the AssetLess Administration Fund may be a limited or partial funding agreement. As such, if higher fees are incurred than the amount agreed with ASIC there is no restriction in the administration being charged for the shortfall on the basis that all Remuneration claimed is necessary and properly incurred in accordance with ARITA's Code. Some funding received from ASIC from the assetless administration fund requires creditor approval prior to drawing and some types of funding can be paid directly to the practitioner without creditor approval. Practitioners should refer to RG 19 for ASIC guidance on when approval is required for assetless administration funding. If approval is not required, any shortfall must be appropriately approved in accordance with the Corporations Act prior to drawing. In seeking creditor approval for any shortfall, Practitioners must provide separate disclosure of the total time charged, ASIC receipt(s) and any shortfall amount in the Remuneration report. Practitioners must ensure that they do not 'double dip" in relation to this Remuneration and that the amount received from ASIC is allocated to the Administration. To facilitate this Practitioners must ensure that any work undertaken for ASIC in relation the Assetless Administration Fund is appropriately identified in their time recording system, including an adjustment for any direct payments from ASIC. AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 88 43

90 A ARITA Litigation funding Remuneration from litigation funding from any source, must be: paid into and drawn from the Administration bank account; and disclosed and approved in accordance with the requirements detailed at chapters 14 and Creditor funding Remuneration from funding by creditors provided for any purpose, must be: paid into and drawn from the Administration bank account; and disclosed and approved in accordance with the requirements detailed at chapters 14 and Secured creditor funding Where secured assets are realised in the course of an Administration, except for Appointments as a Controller, any Remuneration in relation to the realisations, including funds withheld from realisations or payments made directly by the Secured creditor, must be: paid into and drawn from the Administration bank account; and disclosed and approved in accordance with the requirements detailed at chapters 14 and Indemnities and up-front payments Remuneration drawn from an indemnity or an up-front payment provided for any purpose, must be disclosed and approved in accordance with the requirements detailed at chapters 14 and Genera' guidance on reporting The provision to creditors of voluminous detailed information is not a substitute for a clear and concise report. It is the reie'ance, qualityand focus of the information rather than the quantity and detail that is important. Creditors and even committees are not necessarily conversant with insolvency issues and processes, nor do they have the capacity or time to understand WIP records. Creditors have the right to ask questions and have them answered and to inspect supporting documentation if requested. The information provided to creditors must be: Sufficient - be in enough detail for the purposes for which it is prepared and in the context of the work done in the Administration; Meaningful - be presented in a way that allows creditors to understand what was done and why it was done; Clear - use non-technical terms so that what is being claimed is readily understandable; Relevant - limited to what is needed; and Concise. A Practitioner should: provide information that is specific to the Administration, rather than generic; AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 89

91 1% ARITA try and ensure that the level of information is proportionate to the size and complexity of the Administration; try to assist committee members or creditors by highlighting the key components of the Remuneration claim and any areas that committee members or creditors are likely to view as contentious: and provide a summary of relevant information. Questions from creditors should be anticipated and not discouraged. Additional information should be provided if requested At the meeting S At a meeting at which a request for approval of Remuneration is being considered, a Practitioner must:. table the information provided to creditors/the committee in support of the Remuneration request; and ask creditors whether there are any questions before putting the resolutions for approval of Remuneration to the meeting. It is not acceptable to wait until the meeting to provide the required information to creditors. AdditionaL information provided at the meeting should be limited to: responding to creditors' questions; or clarifying information that has already been provided. Introducing new information at the meeting disadvantages creditors who did not attend the meeting, or who provided proxies for the meeting based on the information provided prior to the meeting. Refer to Chapter 24 for further information about meeting requirements. S 15.7 Changing basis of Remuneration The basis for claiming Remuneration may be changed with creditor consent, however changing the basis to time based is only possible if proper records have been kept of time and activity. Note the restriction on fixed fees in section percentage of rea(isations basis.does not require recording of time spent. To change to a time is would only be possible if propjrecordsof timespent had been kept. AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 9

92 A ARITA try and ensure that the level of information is proportionate to the size and complexity of the Administration; try to assist committee members or creditors by highlighting the key components of the Remuneration claim and any areas that committee members or creditors are likely to view as contentious; and provide a summary of relevant information. Questions from creditors should be anticipated and not discouraged. Additional information should be provided if requested At the meeting At a meeting at which a request for approval of Remuneration is being considered, a Practitioner must: table the information provided to creditors/the committee in support of the Remuneration request; and ask creditors whether there are any questions before putting the resolutions for approval of Remuneration to the meeting. It is not acceptable to wait until the meeting to provide the required information to creditors. Additional information provided at the meeting should be limited to: responding to creditors' questions; or clarifying information that has already been provided. Introducing new information at the meeting disadvantages creditors who did not attend the meeting, or who provided proxies for the meeting based on the information provided prior to the meeting. Refer to Chapter 24 for further information about meeting requirements Changing basis of Remuneration The basis for claiming Remuneration may be changed with creditor consent, however changing the basis to time based is only possible if proper records have been kept of time and activity. Note the restriction on fixed fees in section A percentage of reatisations basis does not require recording of time spent. To change to a time basis would only be possible if proper records of time spent had been kept. AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 91

93 5

94 ASIC Australian Securities & Investments Commission Current Company Extract Narñe: COURTENAY HOUSE PTY LTD.AÔN: DatelTime: 11 May 217 AESt 5:26:38 PM This extract contains information derived from the Australian Securities and Investments Commission's (ASIC) datàbàse under section 1274A of the Corporétions Act 21. Please advise ASIC of any error or omission which you may identify. 47

95 Current Company Extract COURTENAY HOUSE PT? LTD ACPI r organisavondetad v. -s... Current Organisatlon Details - Dnen1NIiI!bè'j Name: COURTENAY HOUSE PlY LTD 1E ACN: ABN: Registered in: South Australia Registration date: 14/4/28 Next review date; 14/4/218 Name start date: 14/4/28 Status: Registered Company type: Australian Proprietary Company Class: Umited By Shares Subclass: Proprietary Company Current Registered addresst 33 Page Street, PAGEWOOD NSW E Start date; 14/4/28 -. Principal PlaceOf 33 Page Street, PAGEW NSW 235 1E Business address: Start date: 14/4/28 Contact Address section 146A of the Corporations Act 21 states 'A contact address is the address to which cmmunications and nottoesare sentfm.asic tothe cornpanl... Address: P BOX 735, BOTANY NSW 1455 Start date: 22/5129. Name Address dress Born Appointment date r. Name Share Inlormahon Address Born Appointment date TONY IERVASI 33 Page Street, PAGEWOOD NSW 235 6/11/1965, CALABRIA, ITALY 14/41 28 TONY IERVASI 33 Page Street, PAGEW NSW 235 6/11/1965, CALABRIA, ITALY 1 4/4/2b8. :-:: LLL '--..:.-...4=: Share Structure t I E May 217 AEST 5:26:38 PM 1 48

96 Current Company Extract COURTENAY HOUSE PTY LTD ACN Class Description I Number i Tøtal amount Total amount Document ORD ORDINARY SHARES I 1.. 1E Members Note: For each class of shares issued by a proprietary company, ASIC records the details of the top twenty members of the class (based on shareholdings). The details of any other members holding the same number of shares as the twentieth ranked member will also be recorded by ASIC on the database. Where available, historical records show that a member has ceased to be ranked amongst the top twenty members. This may, but does not necessarily mean, that they have ceased to be a member of the company. Name: TONY IERVASI Address: 33 Page Street, PAGEWOOD NSW class [Number held Jeflci hmd jnt number LORD I yes 1 FULLY 1E JTIIIITITIIIIITIIIIIIISIITIli 'End of Extract of 2 Pages E 11 May 217 AEST 5:26:38 PM 2 EN

97 C [1

98 t ASIC AustiaiiBnSecutities Sr Investments commission Current Con pany Extract Naiie: COURTENAY HOUSE CAPITAL TRADING GROUP PTY :Lto ACN: Date/Time: 11 May2OI7AESTO&27..:23PM Thsedract contains information derived frpm the Australian Securities and Inyestments Commission's (ASIC) database under secbon 1274A of the Cóbrations Act 21. I I LI Please advise ASIC of any error or omission whièiy9u may identify.. ED S 5

99 Current Company Extract CpURTENAY HOUSE CAPITAL TRADING GROUP PTY LTD ACN :: Current Organisatlon Details Name: COURTENAY HOUSE CAPITAL TRADING GROUP 1E PTY LTD ACN: ABNc Registered in: New South Wales Registration date: 21/7(211 Next review date: 21/71217 Name start date: 21/7/211 Status: Registered Company type: Australian Proprietary Company Class: Subclass:. Limited By Shares Proprietary Company!S 1 i Cun'ent st± littitiititiiit Registered address: Level 23, 52 Oxford Street, BONDI JUNCTION NSW 222 Start date: 21/7/211 Principal Place Of Level 23, 52 Oxford Street, BONDI JUNCTION NSW Business address: 222 Start date: 21/7/211 1E E ñefiantherr do ies umentnurnber.... Name: TONY ERVASI 1E Address: 33 Page Street, PAGEW NSW 235 Born: 6/11(1965, CALABRIA, ITALY Appointment date: 21/7/211 Name: DAVID SIPINA 7E Address: 26 Garment Street, PRAIRIEWOOD NSW 2176 Born: 22/3/1968, AUBURN, NSW Secretar Appointment date: 24/11/215 Name: TONY JERVASI Address: 33 Page Street, PAGEWOOD NSW 235 Born: 6/11/1965, CALABRIA, ITALY Appointment date: 21/7/211 1E Share Information Share Structure 11 May 217 AEST 5:27:23 PM 51

100 I Current Company Extract COURTENAY HOUSE CAPITAL TRADING GROUP PTYIT ACN class Description Number Total amount Total amount I Document.4 issued. paid Junpaid 4rber ORD ORDINARY SHARES 1 : E Members Note: For each class of shares issued by a proprietary company. ASIC records the details of the top twenty members of the class (based on shareholdings). The details of any other members holding the same number of shares as the twentieth ranked member will also be recorded by ASIC on the database. Where available, historical records show that a member has ceased to be ranked amongst the top twenty members. This may, but does not necessarily mean, that they have ceased to be a member of the company. Name: TONY IERVASI Address: 33 Page Street, PAGEW NSW 235 [class Number ld lif Beneffidauly held Paid Document number ORD 11 jyes I1E759o81sJ Note: Where no.oate Processed is shown, the document in question has not been processed. In these instances care should be taken in using information that may be updated by the document when it is processed. Where the Date processed is shown but there is a zero under No Pages, the document has been processed but a copy is not yet available. [Date received Form type - Date Number of Effective Document processed L pages date number - 24/11/ E Change To Company 24/11/ /11/215 7E Details Appointment Or Cessation Of A Company Officeholder SEnd of Extract of 2 Pages 11 May 217 AEST 5:27:23 PM PA 52

101 7

102 GrantThornton An instinct for growth Level Kent Sbeet ALL CREDITORS/INVESTORS Sydney NSW 2 Correspondence to: Locked Bag 8 QVB Post OrOce 2 June 217 Sydney NSW 123 PRIVATE AND CONFIDENTIAL Dear Sir/Madam F info.nsw@augt.com W vmw.granithornton.conl.au Courtenay House Capital Trading Group Pty Ltd (in Liquidation) ACN Courtenay House Pty Ltd (in Liquidation) ACN (Collectively "the Companies") I refer to the appointment of John McInerney and I as Joint and Several Liquidators of the Companies on 16 May 217 and to our initial update to creditors/investors of 18 May 217. Please find attached a further update to creditors/ investors in a question and answer format. While every attempt has been made to provide as much information as possible, given the relatively short period of time that we have been appointed, there are certain aspects of the Liquidations that we are unable to comment on at this time as we are Still continuing our investigations into the Companies affairs. It is also our intention to hold a meeting of creditors/investors prior to 31 July 217 which will provide creditors/investors the opportunity of asking questions directly to the Liquidators. All correspondence issued to creditor/investors will be made available on the Grant Thornton website at: https: / / Should you have any queries in relation to the above or issues raised in the attached questions and answers attachment, please contact Fraser Wilkinson of our office on (2) or at CourtenavHouse(au.gt.com Yours faithfully -" Said Jahani Joint and Several Liquidator Grant Thornton Australia Limited ABN ACN Gourd Thaerdor( rotors 'a Ore inuad wrote, ames the Geaaymurreae master F. prudda assonance. inn and odsiswy sersices in thet crania aid/ac Ioeafsna area, acre martha, firma, as the canaan re/nen. Grueu macman Anornula Ltd lou nrenrber Cnn a(grunnma,nnan hrneen,adasal Ltd (6Th.). GrIL and One me,nhenfrrrs are Mona amine/do pornilaratnip. GriL and each meeter can is a salamis iegalemnby. Sesdues are dehoeeed by the member brrra. GIlL dues and odedde ser*es te cetera,. Gill. and Os moarthnmerma are ron oysnns at. and do and ebigarnane another and me non table a, acre anetherr acts no ondsainars, in the Aussnirn canseni andy, Ore use at era lean, 'Grain macsane may aloe' Grora momma Aasnaiia Leaded ABN and to Auaaaalor subiedioniss and rasat,d cities. GT1L is ace an Aanmaiar rotated eeoby in Genii marrow, Aasaolia limited. Liability limited by a scheme appioved under ProFessional Standards Legislation. OL! Rat: L - FAO.Dacn 53

103 GrantThornton An instinct for growtlf FREQUENTLY ASKED QUESTIONS COURTENAY HOUSE CAPITAL TRADING GROUP PTY LTD (IN LIQUIDATION) ACN COURTENAY HOUSE PTY LTD (IN LIQUIDATION) ACN (Collectively referred to as "the Companies") 1. Have I invested in a Ponzi scheme? Our preliminary investigations have revealed that the operations of the Companies appear to have the hallmarks of a Ponzi scheme. Our preliminary investigations have revealed that the Companies did little foreign exchange trading. The business model of the Companies was essentially to pay interest and redemptions with new and existing capital subscriptions deposited by investors. We understand that the small amount of foreign exchange trading the Companies carried out was not profitable over the 6 years that the Companies operated. We are currently undertaking further investigations in this regard. I was told it was just a financial services licence issue? Why were the Liquidators appointed? The Companies are insolvent and the Companies operations appear to have the hallmarks of a Ponzi scheme. Whilst the Companies were not properly licensed, there were other issues that require investigation. What is the Companies asset position? As at the date of our appointment the Companies held c.$som in various bank accounts. In addition the Companies held c. $1.3m in various FX trading accounts. As Liquidators we have secured the above funds for the benefit of creditors/investors. No other material assets have been located at this point in time; however, our investigations remain on going. How many creditors/investors are there and how much is owed in total? We are still investigatmg the records of the Companies and continue to receive Formal Proof of Debts from creditors/investors daily. However, our initial investigations suggest that there are approximately 4-5 creditors/investors owed a total of between c.$16m to $19m. This is subject to further investigations. Accordingly these amounts may change.

104 S. Will I get all my money back? Given the value of the Companies assets located to date and the amount owing to investors/creditors, creditors/investors will not receive their capital back in full. Further details on the likely return to creditors/investors will be provided in due course once the Liquidators investigations into the Companies affairs are further advanced. Will I continue to receive my monthly return? No, all further distributions and payments have been ceased. I invested in the 'Brexit' special capital raise. Is this returned as a priority? We are currently seeking legal advice in regards to a number of aspects including 1. Whether investment funds (including the Brett funds) were held on trust for the investor; and 2. Vhether previous interest payments made to creditors/investors will reduce the claimable amount. E.g. if a creditor/investor invested $1, and over the course of 2 years received $25,, we will need to consider whether they rank for $1, or $75,. Until legal advice has been finalised and a detailed forensic investigation is undertaken into the source and application of investor funds, we are unable to answer the above questions. At this stage, &ven the complexity of the legal issues raised to date, it is the Liquidators intention to seek the Court's directions on a proposed distribution model. S. I was told that the Companies had insurance that would return my money in times like this? We have been provided with a small amount of paperwork that suggests the Companies had some form of insurance. We are currently assessing the credibility of these insurance policies and whether they would respond to the current circumstances. 9. How long will it take to distribute funds? As advised in previotlis correspondence, it may take in excess of six (6) months for a dividend to be distributed as we are required to carry out the following prior to any distribution: Detailed reconciliation of all transactions including bank tracing; Obtain legal advice in regards to creditor claims; and Seek directions from the court in regards to any proposed distributions to creditors 1. Why does it take so long to distribute funds? In addition to seeking the legal advice referred to above, we are also required to undertake detailed tracing and reconciliations of the various bank accounts that the Companies held. This process is unfortunately time consuming and necessary as Courtenay House Capital Trading Pty Ltd never prepared any formal financial accounts in the six years it had been operating. We will keep creditors/investors updated regarding our investigations throughout the course of the liquidation. 55

105 This was my only source of income. Can I access the money you have under hardship provisions? The Liquidators are required by law to act in the interests of creditors/investors collectively and cannot provide preferential treatment to select creditors/investors, regardless of their circumstance. Creditors/Investors can phone Lifeline on should they require any form of non-financial support. Are you going to pursue the Director for the shortfall in money? We will pursue all commercially viable options to provide creditors with the greatest return. Will the Liquidators take action against those involved with the Companies? is Liquidators cannot prosecute individuals for criminal conduct. Only the Director of Public Prosecution (the Crown) has the power to do this. However, the Liquidators can bring civil proceedings against individuals, if appropriate, and beneficial to the estate to do so. 14. Should I engage my own lawyer? We are unable to provide a recommendation to creditors regarding engaging their own legal representation. 15. How do I register my claim in the liquidation? Creditors/Investors can submit details of the amount outstanding to them by the Companies using the attached Formal Proof of Debt or Claim Form (Form 535). Creditors/Investors are asked to include documentation to support their claim. An example of documentation that may be provided includes: Account Statements/summaries provided by the Companies to creditors/investors Agreements/Contracts between the Companies and creditors/investors Bank statements evidencing payments to the Companies 16. Is there a deadline for submitting Proof of Debts? Am I treated as a priority if I get my Proof of Debt in first? There is no deadline for submitting Proofs of Debt at this stage. However, we encourage all creditors/investors to submit their Proof of Debt as soon as practicable. No priority is given to creditors/investors based upon the timing of them submitting their Proof of Debt invested in the Companies through my superannuation fund. Is this treated as an employee priority claim? No. Investing through a superannuation fund does not entitle an investor to a priority claim. 56

106 18. What have you been doing? During the first two weeks of this appointment we have carried out the following: Met with representatives of the Australian Securities and Investments Commission to discuss the background of the Companies and its activities; Travelled to the Companies' premises, met with contractors and secured the Companies' books and records including physical records and computers; Arranged for the Companies' computers to be forensically imaged; Liaised with banks and financial service providers to investigate and recover potential assets of the Companies; Undertaken review of records including preliminary reconciliation of outstanding investor funds; Established a creditor database for ongoing communications; Met with the Director to discuss the affairs of the Companies; Attended to a large volume of creditor/investor enquiries including phone calls, s and physical attendance at our offices; and Commenced our preliminary investigations. 19. How are the Liquidators being paid? Liquidators are paid from the proceeds of assets recovered in accordance with Section 556 of the Corporations Act 21. The Liquidators and their staff charge on a time cost basis (i.e. charge in 6 minute increments for work carried out). The Liquidators require consent from either creditors or the court to thaw and pay their fees. The Liquidators are required to produce a detailed report on how they have calculated their fees and must provide complete transparency. Further details regarding our remuneration will be provided in our report to creditors that will be circulated injuly What is the purpose of having a creditors meeting? The purpose of the meeting is to provide a formal forum to address a tiumber of matters from the collective creditor/investor group. It also enables the following under a formal agenda: Update from the Liquidators including our recent investigations; Appointment of a Committee of Inspection (a small number of creditors who represent the wider creditor group); and Consider and approve the remuneration of the Liquidators. 21. When do you intend to provide your next update? It is also our intention to hold a meeting of creditors/investors prior to 31 July 217 which will provide creditors/investors the opportunity of asking questions directly to the Liquidators. A full report, including details of the Liquidators costs and expenses incurred to this date, will be provided to creditors/investors prior to the meeting. 57

107 ACN FORM 535 Corporations Act (21) FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM) Subregulation (2) To the Official Liquidators of Courtenay House Capital Trading Group Limited (In Liquidation) This is to state that the company was on 16 May 217 (date of court order in winding up by the Court, or date of resolution to wind up, if a voluntary winding up), and still is, justly and truly indebted to: (full name and address of the creditor and, if applicable, the creditor's partners. Ifprepared by an employee or agent of the creditor, also insert a description of the occupation of the creditor) for $ and cents. C Date Consideration (state how the Debt arose) Amount $ c Remarks (include details of voucher substantiating payment 2. To my knowledge or belief the creditor has not, nor has any person by the creditors order, had or received any satisfaction or security for the sum or any part of it except for the following: (insert particulars of all securities held. If the securities are on the property of the company, assess the value of those securities. If any bills or other negotiable securities are held, show them in a schedule in the following form) Date Drawer Acceptor Amount $c Due Date S *3 I am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. *3 I am the creditors agent authorised in writing to make this statement in writing. 1 know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. Signature Occupation: Address Dated *Do not complete if this proof is made by the creditor personally. M.

108 ACN FORM 535 Corporations Act (21) FORMAL PROOF OF DEBT OR CLAJM (GENERAL FORM) Subregulation (2) To the Official tiquidators of Courtenay House Pty Ltd (In Liquidation) This is to state that the company was on 16 May 217 (date of court order in winding up by the Court, or date of resolution to wind up, if a voluntary winding up), and still is, justly and truly indebted to: (full name and address of the creditor and, if applicable, the creditor's partners. Ifprepared by an employee or agent of the creditor, also insert a description of the occupation of the creditor) for $ and cents. S Date Consideration (state how the Debt arose) [ Amount L $ c Remarks (include details of voucher substantiating payment 2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any satisfaction or security for the sum or any part of it except for the following: (insert particulars of all securities held. If the securities are on the property of the company, assess the value of those securities. If any bills or other negotiable securities are held, show them in a schedule in the following form). Date Drawer Acceptor Amount $c Due Date fl *3 I am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. *3 I am the creditor's agent authorised in writing to make this statement in writing. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. Signature Occupation: Address Dated *Do not complete if this proof is made by the creditor personally. 59

109 El

110 Grantlhornton An instinct for growthoe Levell7, 383 KenIsnet Supreme Court of New South Wales Sydney WSW 2 Law Courts Building Correspondenceto: 184 Philip St kedbago83o Sydney NSW 2 QVB Post Office Sydney NSW July 217 T F E into.nsw@au.gt.com Wwew.graetUiomlon.com au To this Honourable Court Courtenay House Capital Trading Group Pty Ltd (In Liquidation) ACN ("CHCTG") Courtenay House Pty Ltd (In Liquidation) ACN ("CH") (Collectively "the Companies") Plaintiff: Lord Kyle Lester Sheridan ("the Plaintiff") Proceedings: 217/ ("the Proceedings") As you are aware, John McInerney and I were appointed Joint and Several Liquidators of the Companies on 16 May 217. The following orders were made by His Honour Justice Brereton on 3 July 217: 'The liquidators prepare apre/imina!y report for 24 July, setting out, so far as thej can, what has become of the plaint?ft's investment and how it is held." We have prepared this correspondence in order to comply with the above orders and have also included our comments for the court's consideration. Summary We confirm we currently hold $7,8, of funds that were deposited by the Oceanic Sun Group into the Companies' bank account pnor to our appointment. Grant Thornton Australia Limited ABN ACN Grant Thorntvt' refers to the brand under which five Grant Thorrton member firms provide esserance, lax and edaieony services to their clients ardkr dam to ore an more ineorber tent, to the rtsnt requires Grant Thcenuorr Ausirama Ltd is a member Into of Grant Tbomtmr lntmratoral Lid (GTIL). GIlL and the nvambertrms are note woddaide panmeerthip GIlL and each member errs is a eepanete legal end ty. serudces are delivered by the member firms. GIlL does eat provide services Is clients. Gil Laedi to mererbenlinme are eat agents of, and do not obligate one another and are not keble for erie another's acts or eanisnisno. In he Auesdien coerces erely, the one at the term 'Grant Thornton' may refer to Grant Tharntoou Aetsbalia Limiled ABN 41 t and to Atesaalarr eshetdiaries arid related eniftais. GIlL 'a eat aeaesteaian related entity to GrasiTharterse Aeskala UnIted. Liability limited by a stheme approved under Professional Standards Legislaton.

111 Grantlhornton An instinct for growth" Background As previously mentioned, we were appointed Joint and Several Liquidators of the Companies on 16 May 217 pursuant to an Order of the Supreme Court of New South Wales. The winding up application was filed by the Australian Secunties and Investments Commission. Preliminary investigations Our preliminary investigations into the affairs of the Companies indicate that the Companies, although presented as a foreign exchange trading business, effectively operated as a ponzi scheme. We are of this preliminary view as profits (if any at all) from the foreign exchange trading being conducted were insufficient to meet the returns being paid to investors. At this point in time, we understand that the Companies raised between $16,, and $1 9,, in capital from between approximatley 4 to 5 parties. These numbers are subject to change as we undertake further investigations and receipt claims from creditors. The Companies maintained limited books and records. Given this deficiency, we are currently undertaking the following tasks in order to forensically recreate the financial position of the Companies: Task Reconstructing financial records from bank statements. Reconstructing foreign exchange trading performance. Consolidating investors' trading statements. Details This will confirm what actually happened with the monies raised from investors. Essentially this task requires identifying the source of funds (e.g. investor funds/capital) and the subsequent application/use of funds (e.g. distribution to investors, capital redemption, commission payments or other use of funds). This task must be undertaken from 28 for CH and from 211 for CHCTG. Using this information, a set of financial records including profit and loss statement and balance sheet can be produced to provide an accurate financial position and performance of the Companies. This will confirm what foreign exchange trading occurred and whether it was ever enough to generate the returns being offered to investors. We are still in the process of obtaining the trading statements of the vanous accounts held. This has been delayed as a result of a number of accounts being held in personal capacities and not in the name of the Companies which has restricted our access. This will help us understand what is owed to each investor. The Companies recordeçl investors' capital across a sigmficant number of separate documents. We have commenced the process of consolidating these documents into a single file so that the information can be interrogated and reconciled back to bank statements. 61

112 Grant Thornton An instinct for growth. 3 The above tasks, although simple in their requirements, are time consuming given the period of time required to be covered (over 6 years) and the number of transactions (thousands of line entries which appear on the bank statements) that need to be interrogated. We are still in the process of undertaking the above. Claims made by the Plaintiff We understand that the Plaintiff is claiming $14,671,28 but the elements of this claim that relate to funds in the Companies' bank account are $1,6,. Deposits by the Plaintiff As ordered by the Court, we have undertaken a review of the Companies' bank statements. The limited records of the Companies indicate that Oceanic Sun Group may have deposited the below referred funds. 1. On 2 October 216, $1,, was remitted into bank account number BSB Account held by Courtenay House Pty Ltd (In Liquidation). A copy of the bank statement confirming thi? deposit is enclosed as Annexure ' ' These funds were subsequently -w-:ithdrawn from this bank account. We have not yet been able to identify where these funds were transferred to. 2. On 2 December 216, $4, was remitted into bank account number BSB Account held by Courtenay House Pty Ltd (In Liquidation). A copy of the bank statement confirming this deposit is enclosed as Annexure "B' These funds were subsequently withdrawn from this bank account. We have not yet been able to iqentify where these funds Were transferred to. 3. On 3 December 216, $45, was remitted into bank account number BSB Account held by Courtenay House Pty Ltd (In Liquidation). A copy of the bank statement confirming this deposit is enclosed as Annexure "C' These funds were subsequently withdrawn from this bank account. \Xle have not yet been able to identify where these funds were transferied to. 4. On 31 January 217, $65, was remitted into bank account number BSB Account held by Courtenay House Capital trading Group Pty Ltd (In Liquidation). A copy of the bank statement confirming this deposit is enclosed as Annexure "D' These funds were subsequently witl1drawn from this bank account. \Xle have not yet been able to identify where these funds were transferred to. 5. On 21 February 217, $25, was remitted into bank account number BSB Account held by Courtenay House Capital trading Group Pty Ltd (In Liquidation. A copy of tl1e bank statement confirming this deposit is enclosed as Annexure "E' These funds were subsequently withdrawn from this bank account. We have not yet been able to identify where these funds were transferred to. 6. On 24 April 217, $7,8, was remitted into bank account number BSB Account held by Courtenay House Pty Ltd (In Liquidation). A copy of the bank statement confirming this deposit is enclosed as Annexure "F' Our analysis excludes the Plaintiffs claims for interest or damages as we have not yet been in a position to adjudicate on this portion of the Plaintiffs claim. 62

113 Grant Thornton An instinct for growth" 4 Funds currently held On 25 May 217, $28,999,978. was remitted from the National Australia Bank Limited. Included in this amount is the $7,8,. that was deposited on 24 April 217. These funds are currently under our control and held in a term deposit bank account. On 22 June 217, $21,16,51 I.SI was remitted from Westpac Banking Corporation Limited in regards to the funds held in bank account BSB: Account Number: These funds are currently under our control and held in a term deposit bank account. We currently have $51,35, in bank accounts under our control in relation to the liquidation of the Companies which include other recoveries in addition to the above amounts. 7 Other matters for the Court's consideration We are of the view that this matter should be addressed once we have a complete and informed view of the Companies' entire financial position so as to avoid prejudice to other creditors. We anticipate being in such a position once we have completed the aforementioned tasks of recreating financial records. \Ve have communicated to creditors of the Companies that, once we are in a complete and informed position, we will seek the Court's directions in regards to any form of distribution to creditors. We have convened a meeting of creditors pursuant to Section 479(2) of the Corporations Act 21, to be held on 31 July 217. Should you have any queries in relation to the above, please contact the writer directly on (2) or said.jahani@au.gt.com. y?i' Said Jahani Joint and Several Liquidator Enc. 63

114 Grantlhornton An instinct for growthre. Annexure "A" Grant Thornton Australia Limited ABN lrgd army, elsth the Grant Thornton member firers pmsnideassurnmoe, as andaddsocy semoes 1 thdr diermts and/or refers inrate or anne memberltrms, as the Ltd is a member firm of Grant Thornlsxm Inlernatsert Lid IGTG.l. GTIL and be membemfimmo arenel a worldwide oamthersh'o. GIlL and nato memberl' Liability limited by a scheme approved under Professional Standards Legislaton. Liabilfty is limited in those States where a current stherne applies.

115 CHC NAB Business Everyday Account Account Details COURTENAY MOUSE PTY LID BUSINESS EVERYDAY AC BSB Number Account Number Transaction Details (continued) Date Debits Redacted for confidentiality 65

116 CHC Transaction Det:iils (continued} Date Particulars Debits Credits &lance Redacted for confidentiality S1:i1cmcn1 number I l';ig 6 of7 66

117 GrantThornton An instinct for growth. Annexure "B" S Grant Thornton Australia Limited ABN Grant Thornton refers In the brand tinder which the Grant Thoerntos membun F,rma provide ansarance. tea and advisory services to their atents andler relent to ense or tens mrmsbee finns, as the contest reqahes Creel Thornton Australia Ltd is a member Firm of Grant Thcerrtcn Inteenaiceral Ltd (tl). GTIL and the rrerrbee firms are rote wreldeide partnership. GTIL and each member finn is a separate legal entry. Services use delivered by the member firms. GTtL dnes not provide services to clients. GIlL and itt member firms nre not agents of, and do not thligate ente rnsthen and are not table by ova aentheets acts eq orrtstoenre. In the Asnydian contest rely, the use at the terre 'Grant Iltontat may neter In Grant Thntntenr Aetbaita Umitat ABN and is Aestalan nebsatieries arid related entries. GTILts It em Assnelam related enbty to Grard Thenetse Arnyala Listtad. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies. 67

118 CHC NAB Business Everyday Account Account Details COURTENAY HOUSE PTY LID BUSINESS EVERYDAY AC BSB Numbcr Acrount Number Trnnsnctio11 Details (continued) Redacted for confidentiality 6

119 GrantThornton An instinct for growthra S Annexure "C" S Grant Thornton Australia Limited ABN Grantihunntmr riders to the hound underutrich the Grant Ttrocntornreànbri trmspronide assurance, tax and sdninoq aendcen to tsr dientu andloc refers loose or mere mentor firms, no the maleut reqnteeo. GrwttltrartlritAustaia Ltoia a rmmbe thins Grant ihernnrrir lnrenard LIdIGIlLI. GTII. and ftre meerther ferns an rot awsxtdadde pnetneenhip. Gill and each member tern ioaneprawiegalentty 5erdonaruddtneeedbythemeertbeoflnns.Gilldoeonoirsoesetntocbenn5n Glll and ilsrrerrbenfwmrseroroeaguntsei and donoeohhguteerreanothetaed are not liable toe one another's acts aroorinalanu. In the Aunudion onerlerteraty, the use of the W. 'Gramtitrerntner'may rider to Grunt Thornton Annbdia Urrdted ABN4I and ito Australian nubsdiarieo and related nettidsu. Gill is not an Anobuliun rotated entity to Grant Starrier Australia limited, Liability limited by a scheme approved under Professional Standards Legislalion. Liability is limited in those States where a cun'ent scheme applies. We

120 CHC NAB Business Evcrydny Account Account Dela.ils COURTENAY HOUSE rrv LTD BUSINESS EVERYDAY AC Tl':tnsnction Det:iils (continued) Date -:: e BSB Number Debits Account NLJmb::r Redacted for confidentiality 7

121 GrantThornton An instinct for growthra. Annexure "D" S Grant Thornton Australia Limited ABN Grant Thornton,! clara to to brand under whath the Grant Thornton membee Irons provide assurance. Ian and advisory neraicns to their dimsts srrdtor raters lauren more member firms, as he canrirot reql es. &ersthonsrsser Assbnoa Lids a srembe, Inn at Grantihantas Intesnabonral Lid IGTILI. GTIL and the mes*erfrrrsn are was a esrklneide parsiership. GTIL and each rrember Orm laeaselagment. Seratesa'edsheeedbythennenbe&vrs GTH-doesnot arerollnablelmeelenretherancssaneenierisess In lreasnfrattancoesssesr&, theuneoldrelernngeanlmonaloererryrntersogrnr,rltiansonanssdiaumtedafiw4l aM to Aunbaliar stink janus ard related estates. GIlL is non an Aasntat'an netased ertily to Grani Thornton, Aurnalin tjmttrd, Liability limited by a scheme approved under Professional Standards LegislaU. Liability is limited in those States where a current scheme applies. 71

122 CHC Service Online Page I of I Westpac Banking corpor,,tlon ASN t. Account: BUSINESS ONE LOW Brancl1 name: BONDI JUNCTION Current balance: Available fun els: $22,89, CR $22,89, CR Redacted for confidentiality westpac.com.au/fromsolmpilot/wps/myportal/service... 9/3/2 l 7 72

123 GrantThornton An instinct for growth a Annexure "E" Grant Thornton Australia Limited ABN Grant Thorntoaf refers to the brand under whish the Grant Thntor member tnrns provide assuraace. tan and advisory novices 1 their clients andlar refers to One or more member fists, as the emateot requbes. Grant ThomlQmArnbata lid isa raemberinm of G,eotihcnntav Isteenalional Ltd GIlL). GilL and the meerbnr tons are not a worldwide pontreeship. GTIL and eaclt merebertrnn isa oeparale legates Ser*esane dsiveeed by the anreeobesemss. GilL doesnelprn'dde eea*es tsdiemntu. Gill and its member rests enenolagmnsset, and do nolebligate One another and aneneifable kwanme anotins?n acts or emissions. In theaesbdiams content old1, house tithe term 'GrasiTluanabea may refer InGrant Ilmorehyl Atanyolin ljmtsd AEN and In Assyajas snbsh iaeies and dated mutolia GTILb em an Anstaloem rdnled misty to Grass Ihemnilens Ansyala jotted. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a Gurrent scheme applies. 73

124 CHC Service Online Page 1 of J Westpac nanklng Corporation ABN '11, Account: BUSINESS ONE LOW Brancll name: BONDI JUNCTION Current balance: Available funds: $22,89, CR $22,89, CR Redacted for confidentiality hups://gsso.intranet. westpac.com.au/f r omsolmpilot/wps/myporlal/service... 9/3/217 74

125 !a]j2p!nt911 An instinct for growtht S Annexure "F" S Grant Thornton Australia Limited ABN wntts regains, Gnarl Thantan Auohta LW is a anarbe is. sep eate WO nasty. Sanoeo iare delvetedbylra mr are ran liable Is are arother eels an anniadara. In ire A Australannabsithanjea and related easter. GIlL is nolan and edniom oar/ceo ls math claris and/a niece than a rare inerstrar flnrns, Aoofrala untied and Is Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies. 75

126 - rnm111mi CHC Trnnsnction Details {continued) Dare Debits Credits Bolon co ' Redacted for confidentiality Stn\crncnt riumb!r 2 Page 6ofS 76

127 NAD nusinessev ryduy Account Account Det!lUs !111 CHC.13,.8 BSB },i;mber Act::ount N1,1n1W Redacted for confidentiality 77

128 a 4

129 Grantlhornton An instinct for growthtm To the Recipient as Addressed Levelll 383 Kent Steet Sydney NSW 2 Con'espdndence to: Locked Bag 8 OVO Post Office Sydney NSW July DO F L irdo.nsw@au.gt.com W xnm.grantlhornton.corn.au Dear Sir/Madam Courtenay House Capital Trading Group Pty Ltd (in Liquidation) ACN ("CHCTG") Courtenay House Pty Ltd (in Liquidation) ACN ("CH") (Collectively referred to as "the Companies") CIRCULAR TO CREDITORS As you are aware, John McInerney and I were appointed Joint and Several Liquidators of the Companies on 16 May 217. A meeting of creditors is to be held pursuant to Section 479(2) of the Corporations Act 21 ("the Act"). The details are as follows: Date: Monday, 31 July 217 Time: 2pm (registration open from 1pm) Location: Wesley Mission, 22 Pitt Street, Sydney NSW Please arrive at the meeting location early (1 hour) to ensure there is sufficient time for all creditors to sign the attendance rgister. Should any investor/creditor have a specific question they wish us to address at the meeting, we request you submit such in writing to our office on or before close of busmess on 25 July 217 to enable us, where possible, to adequately prepare a response to your query. Please direct these queries to courtenayhouseau.gt.com. We refer investors/creditors to our previously issued frequently asked questions ("FAQs") which may assist with any immediate questions. For convenience, these FAQs can be found using the following website link: hrtps: / / Grarrr Ttroentoer Aunoala Iirrrxted A6N ACN 'Gram Thornrn,r retento tire brand order aatrich ton Grant Thninnapr morrow trmn peaotoe arrrce. tax and ndvboiy neretcen In mob cttenta on/ne rabors in ore or more merrirer tint, as be torrent reqobea. Gent Ibrermon Aoaia Undaod ha mordant tam ndgento Thnentcnt hmnerandoerix lad GTE. GTIL and Ore nrentha limo are ncoa nnwote pnm1near. GUI and each menow tom ha separate 1911 enbty. Sorices are detoered by abe reenter Irms. Gill dates non prnohdr sonnices an dienis. GIlL a,d Os menrirer Orms are not agenno ot, and do nol nba/gale one on,thne and Ire rot ia Irentearrrdl&n acts m nrnhsbis. bore Anotahn caeenn, Ore ow otoreleem eono Thmraoi rrayrse a, Geam ThaiOniAn,Ooia laded ARt and Os Aoshabaai sohstr9arhes and relaxed enlittes. Gill is not on Ansvnl,rr dared entity an Grana llmrnlnea Aostnrlia Untied. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies W.

130 GrantThornton Update on Liquidation Given that the Companies maintained limited books and records, the majority of our efforts to date have been investigating the affairs of the Companies. This includes: Recreating the Companies' financial records from source documents such as bank statements; and Interviewing relevant individuals involved with the Companies. Our immediate focus is on undertaking the following tasks: Task Reconstructing financial records from bank statements. Reconstructing foreign exchange trading performance. Consolidating investors' trading statements. Details This will confirm what actually happened with the monies raised from investors. Essentially this task requires identifying the source of funds (e.g. investor funds/capital) and the subsequent application/use of funds (e.g. distribution to investors, capital redemption, commission payments or other use of funds). This task must be undertaken from 28 for Cl-i and from 211 for CHCTG. Using this information, a set of financial records including profit and loss statement and balance sheet can be produced to provide an accurate financial position and performance of the Companies. This will confirm what foreign exchange trading occurred and whether it was ever enough to generate the returns being offered to investors. We are still in the process of obtaining the trading statements of the various accounts held. This has been delayed as a result of a number of accounts being held in personal capacities and not in the name of the Companies which has restricted our access. This will help us understand what is owed to each investor. The Companies recorded investors' capital across a significant number of separate documents. We have commenced the process of consolidating these documents into a single file so that the information can be interrogated and reconciled back to bank statements. The above tasks, although simple in their requirements, are time consuming given the period of time required to be covered (over 6 years) and the number of transactions (thousands of line entries which appear on the bank statements) that need to be interrogated. 79

131 GrantThornton Subsequent to completion of the above tasks, we will then be in a position to report on the following: Financial performance of the Companies including profits (or losses) and other financial reporting metrics; Total quantum of capital raised, redemptions paid and "trading profit" distributed; Quantify misappropriation of the Companies' funds; Commissions earned by relevant parties; and Possible avenues for further asset recoveries. Using the above analysis, we will then be able to formulate a proposed dividend distribution model for investors/creditors. This proposed distribution model will be submitted to the Court for directions prior to any funds being distributed to investors/creditors. When doing so, we will provide notice to investors/creditors of such an application to enable such parties to respond with any information that they deem relevant for the Court's consideration to provide directions on the proposed dividend distribution model. The above analysis will also allow us to determine what other avenues exist for us to commence legal action against potential parties to seek recovery of assets for the benefit of investors. We are making enquiries in respect of the various insurance policies the Companies held. We are complying with our legal obligations in relation to these policies. Our other lines of investigations remain confidential at this stage so as to not prejudice same, we reserve further comment Asset Recoveries We have not recovered any further assets beyond what was outlined in our previous correspondence. Meeting of Creditors The meeting of creditors of the Companies will be held concurrently. A formal notice of meeting is enclosed. Details of the concurrent meetings are as follows: Date: Mohday, 31 July 217 Time: 2pm (registration open from 1pm) Location: Wesley Mission, 22 Pitt Street, Sydney NSW Creditors who intend to vote at the meeting are required to lodge a formal proof of debt. A blank proof of debt form for the Companies is enclosed. Please note that investors/creditors need only submit one proof of debt. Therefore, if you have already submitted a proof of debt and your claim has not changed, there is no need to submit a new proof of debt for this meeting. Creditors who are unable to attend the meeting and wish to be represented should ensure that a proxy form is completed. A blank proxy form for the Companies is also enclosed. Documents for the meeting of creditors are to be lodged by no later than 4pm on Thursday, 27 July 217, in the following ways: w

132 C GrantThornton Postal Courtenay House Capital Trading Group Pty Ltd (In Liquidation) and/or Courtenay House Pty Ltd (In Liquidation) C/- Grant Thornton Australia Locked Bag Q8 QVB Post Office NSW 123 Facsimile courtenavhouse@au.gtcom Creditors should ensure that their proof of debt and proxy form completed correspond with one another. Committee of Inspection The main formal agenda item for the meeting is to seek an appointment of a Committee of Inspection ("Committee"). The following are the main points to note regarding being a member of a Committee: Cannot instruct or direct a Liquidator to undertake a certain course of action but act as a sounding board for all creditors. Are non-remunerated. It is a voluntary position and members will be bound by the terms of a confidentiality agreement. Any creditor in breach of the Confidentiality Agreement will be removed from the Committee. The ideal number of creditors for the Committee is between 4 and 6 to ensure that it is workable. ASIC has published the following notes in regards to a Committee: A Committee assists the Liquidator, approves fees and, in limited circumstances, approves the use of some of the Liquidator's powers, on behalf of all the creditors. Committee meetings can be arranged at short notice, which allows the Liquidator to quickly obtain the Committee's views on urgent matters. Shareholders may also be members of the committee. A Committee member must not, without permission from the Court, accept a gift or benefit from the Companies or any other person, including another creditor, or purchase any of the Companies' property. A Committee acts by a majority in number of its members present at a meeting, but it can only act if a majority of its members attend that meeting. A liquidator must consider any directions given by the committee of inspection, but is not bound to follow them. Declaration of Independence, Relevant Relationships and Indemnities In accordance the Australian Restructuring Insolvency Turnaround Association ("ARITA") Code of Professional Practice, a Declaration of Independence, Relevant Relationships and Indemnities ('DIRRI") is enclosed for your information.

133 GrantThornton This declaration discloses information regarding our independence, any prior personal or professtonal relationships with the Companies or related parties and any indemnities received in relation to our appointment as Liquidators of the Companies. Receipts and Payments The following table is a summary of the receipts and payments for the period 16 May 217 to 19 July 217 incurred in the liquidation of CHCTG: Receipts Amount ($) Cash at Bank 5,16,55.51 Funds Held in FOREX Accounts 1,36,155.9 Other Current Assets 69.6 Total Receipts 51,323,396.2 Payments Bank Charges (2,99.59) Legal Fees (1,988.23) Professional Fees (33.) Sundry Costs (4,361.24) Total Payments (17,779.6) Cash at Bank as at 19 July ,35, Please note that no receipts or payments have been incurred in the liquidation of CH. Liquidators' Fees and Disbursements We are not seeking fee approval from creditors at this point in time. Our remuneration as Liquidâtors can only be fixed by: Resolution of creditors; Resolution of a committee of inspection; or By the Court. Prior to seeking fee approval, we will issue a detailed remuneration report which outlines the specifics of the remuneration approval sought. This remuneration report will be prepared in accordance with ARITA guidelines. In accordance with the ARITA's Code of Professional Practice, a Schedule of Remuneration Methods and Hourly Rates is enclosed for your information. Other If any creditor has any relevant information that they believe would be of interest to our investigations, they should provide this to our office as soon as possible at the below mentioned address. m

134 GrantThornton Contact Details Should you have any queries in relation to the above, please contact Fraser Wilkinson of our office on (2) or courtenayhouse(augt.cotn. Yours faithfully 24 SØ'Jaham Joint and Several Liquidator Enc. S 83

135 Grantlhorntori FORM 529 Corporations Act 21 Sub-regulation (2) NOTICE OF MEETING Courtenay House Capital Trading Group Pty Ltd (In Liquidation) ACN Courtenay House Pty Ltd (In Liquidation) ACN (Collectively referred to as "the Companies") Notice is hereby given that a meeting of the creditors of the Companies will be held at the Wesley Mission, 22 Pitt Street, Sydney NSW at 2: PM on Monday, 31 July 217. AGENDA To consider holding the meeting of the Companies' creditors concurrently. To receive an update from the Liquidators. To consider the appointment of a Committee of Inspection. To consider any other business that may be brought forward. Dated this 19th day of July / S SMD JAHANI JOINT AND SEVERAL UQUIDATOR Grant Thornton Australia Limited Level 17, 383 Kent Street Sydney NSW 2 Tel: (2)

136 GrantThornton Declaration of Independence, Relevant Relationships and Indemnities COURTENAY HOUSE CAPITAL TRADING GROUP PTY LTD (IN LIQUIDATION) ACN COURTENAY HOUSE PTY LTD (IN LIQUIDATION) ACN (Collectively referred to as "the Companies") This document requires the Practitioner/s appointed to an insolvent entity to make declarations as to: A. Their independence generally; B. Relationships, including 1 The arcumstances of the appointment; 2 Any relationships with the Insolvent and others within the previous 24 months; 3 Any prior professional services for the Insolvent within the previous 24 months; 4 That there are no other relationships to declare; and C. Any indemnities given, or up-front payments made, to the Practitioner. This declaration is made in respect of ourselves, our partners, Grant Thornton Australia Limited ("GTAL") ("the Firm") and any of GTAL's associated entities. Independence We, Said Jahani and John McInerney of GTAL have undertaken a proper assessment of the risks to our independence prior to accepting the appointment as Liquidators of the Companies in accordance with the law and applicable professional standards. This assessment identified no real or potential risks to our independence. We are not aware of any reasons that would prevent us from accepting this appointment. Declaration of Relationships Circumstances of Appointment On 5 May 217, Ms Penny Beck of the Australian Securities and Investments Commission ("ASIC") spoke with MrJahani and provided a background on the Companies and ASIC's involvement in the matter, including the proposed application to the Court to have the Companies wound up. Duting the same telephone thscussion, Ms Beck also sought MrJahani's consent to act as Liquidator of the Companies. Later that day, subsequent to appropriate conflict of interest checks, we provided our consent to act as Liquidators to Ms Beck. LIE

137 Grantlhornton Relevant Relationships (excluding Professional Services to the Insolvent) Neither we, nor our firm, have, or have had within the preceding 24 months, any relationships with the Companies, an associate of the Companies, a former insolvency practitioner appointed to the Companies or any person or entity that has security over the whole or substantially whole of the Companies' property. Prior Professional Services to the Insolvent Neither we, nor our Firm, have provided any professional services to the Companies in the previous 24 months. [1 Concurrent ADDointments to Related Parties Nature of professional service We were concurrently appointment Joint & Several Liquidators of the following related party entities: Courtenay House Capital Trading Group Pty Ltd; and Courtenay House Pty Ltd. Reasons We believe that this relationship does not result in a conflict of interest or duty because: We are not aware of any conflicts of interest as between the Companies. Should a conflict anse, we will keep creditors informed and take appropnate action to resolve the conflict. The appointment of us as Joint & Several Liquidators of the Companies will not influence our ability to fully comply with the statutory and fiduciary obligations associated with the Liquidation of the Companies in an object and impartial manner. No other relevant relationships to disclose There are no other known relevant relationships, including personal, business and professional relationships, from the previous 24 months with the Companies an associate of the Companies, a former insolvency practitioner appointed to the Companies or any person or entity that has a security over the whole or substantially whole of the Companies' property that should be disclosed.

138 Grar,tlhornton 1 C: Indemnities and up-front payments We have not been indemnified in relation to this administration, other than any indemmues that we may be entitled to under statute and we have not received any up-front payments in respect of our remuneration or disbursements. Dated this 19th day of July 217 SAIfriAHANI JOINT AND SEVERAL LIQUIDATOR JOHN MCINERNEY JOINT AND SEVERAL LIQUIDATOR [1 NOTE: If circumstances change, or new information is identified, we are required under the Corporatiox'is Act 21 and ARITA Code of Professional Practice to update this Declaration and provide a copy to creditors with our next communication as well as table a copy of any replacement declaration at the next meeting of the insolvent's creditors. 2 Any relationship, indemnities or up-front payments disclosed in the DIRRI must not be such that the Practitioner is no longer independent. The purpose of components B and C of the DIRRI is to disclose relationships that, while do not result in the Practitioner having a conflict of mterest or duty, ensure that creditors are aware of those relationships and understand why the Practitioner nevertheless remains independent. S 87

139 GrantThornton II INITIAL ADVICE TO CREDITORS - REMUNERATION Remuneration Methods There are four basic methods that can be used to calculate the remuneration charged by an Insolvency Practitioner. They are: Time based / Hourly rates This is the most common method. The total fee charged is based on the hourly rate charged for each person who carried out the work multiplied by the number of hours spent by each person on each of the tasks performed. Fixed Fee The total fee charged is normally quoted at the commencement of the administration and is the total cost for the administration. Sometimes a Practitioner will finalise an administration for a fixed fee. Percentage The total fee charged is based on a percentage of a particular variable, such as the gross proceeds of assets realisations. Contingency The practitioner's fee is structured to be contingent on a particular outcome being achieved. Method Chosen Given the nanire of this administration, we propose that our remuneration be calculated on the time based/hourly rates method. In our opinion, this is the fairest method for the following reasons: We will only be paid for work done, subject to sufficient realisations of the Company assets. It ensures creditors are only charged for work that is performed. Our time is recorded and charged in six minute increments and staff are allocated to duties according to their relevant experience and qualifications. We are required to perform a number of tasks which do not relate to the realisation of assets, e.g. responding to creditor enquiries, reporting to ASIC and distributing funds in accordance with the provisions of the Corporations Act 21. We are unable to estimate with certainty the total amount of fees necessary to complete all tasks required in this administration at this point in time. Explanation of Hourly Rates The rates for our remuneration calculation are set out in the following table together with a general guide showing the qualifications and experience of staff engaged in the administration and the role they take in the administration. The hourly rates charged encompass the total cost of providing professional services and should not be compared to an hourly wage. w

140 GrantThornton 12 ttitle Szw.i.i.inniiiynStlr S Partner Registered Liquidator / Trustee. Partner bringing specialist skills to $65 Administrations and Insolvency matters. Controlling all matters relating to the assignment. Associate Qualified accountant (CA/CPA) and may be a registered $575 Director liquidator/trustee. Minimum 7/8+ years' experience. Likely to be appointed as a director in due course. Highly advanced technical and commercial skills. Planning and control of all Administration and Insolvency tasks. Controlling substantial matters relating to the assignment and reporting to the appointee. Senior Qualified accountant (CA/CPA). 7/8+ years' experience. Well- $55 Manager developed technical and commercial skills. Planning and control of all Administration and Insolvency tasks. Controlling substantial matters relating to the assignment and reporting to the appointee. Manager Typically CA/CPA Qualified. 5-8 years' experience. Well-developed $52 technical and commercial skills. Planning and control of Administration and Insolvency tasks with the assistance of the appointee. Supervisor / Typically CA/CPA Qualified. 4+ years' experience. Co-ordinates $44 Assistant planning and control of small to medium Administrations and Manager Insolvency tasks. Conducts certain aspects of larger Administrations. Senior Typically CA/CPA Qualified. 3-5 years' experience. Required to $4 control the fieldwork on Administrations and Insolvency tasks. Intermediate Typically under-taking CA/CPA Qualifications. Up to 3 years' $33 experience. Required to conduct the fieldwork on smaller Administrations and Insolvency tasks and assist with fieldwork on medium to large Administrations and Insolvency tasks. Graduate Typically less than 1 years' experience. Required to assist with the day $27 to day fieldwork on Administrations and Insolvency tasks under the supervision of intermediate and senior staff. Undergraduate Typically less than 1 years' experience, usually working part time whilst $22 studying a university undergraduate qualification. Required to assist with the day to day fieldwork on Administrations and Insolvency tasks under the supervision of intermediate and senior staff. Secretary Carries out all secretarial functions relating to an Administration. $185 Administrator Conducts all aspects relating to administering the accounts function. $185 Disbursements Disbursements are divided into three types: Externally provided professional services - these are recovered at cost. An example of an externally provided professional service disbursement is legal fees. Externally provided non-professional costs such as travel, accommodation and search fees - these are recovered at cost. m

141 Grantlhornton 13 Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate winch recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis. We are not required to seek creditor approval for disbursements, but must account to creditors. Full details of any actual costs incurred will be provided with future reporting C

142 FORM 532 Corporations Act 21 Regulation Courtenay House Capital Trading Group Pty Ltd (In Liquidation) ACN (the Company) APPOINTMENT OF PROXY J/We (1) of a creditor/member of Courtenay House Capital Trading Group Ply Ltd (In Liquidation) appoint or in his/her absence as my/our general/special proxy to vote at the meeting of creditors to be held on Monday, 31 July 217 at 2: PM or at any adjournment of that meeting. DATED this day of 217 Signature CERTIFICATE OF WITNESS - only complete if the person given the proxy is blind or incapable of writing. of cethfy that the above instrument appointing a proxy was completed by me in the presence of and at the request of the person appointing the proxy and read to him before he attached his signature or mark to the instrument. DATED this day of 217 Signature of witness Description Place of residence Notes: Ifa firm strij<e out 'I' and set out the full name of the firm. Insert the name of the person appointed. If a special proxy, 'add the words 'to vote for, or the words 'to vote against' and specify the particular resolution'. If the creditor isa sole trader, sign in accordance with the following example: 'A.B., proprietor'. If the creditor isa partnership, sign in accordance with the following example: 'A.B., a partner of the said firm.' If the creditor is a company, then the form of proxy must be under its Common Seal or under the hand of some officer duly aothorised in that capacity, and the fact that the officer is so authorised must be stated in accordance with the following example: 'for the company, A.B.' (duly authorised under the Seal of the Company). Proxy forms should have been completed and returned by no later than 4: PM on Thursday, 27 July 217 to be eligible to vote at the meeting. RETURN TO: Courtenay House Capital Trading Group Ply Ltd (In Liquidation) of care of Grant Thornton Australia Limited Address: Locked Bag Q8, QVB Post Office, Sydney NSW 123 Phone: Fax:

143 FORM 532 Corporations Act 21 Regulation Courtenay House Pty Ltd (In Liquidation) ACN (the Company) APPOINTMENT OF PROXY I/We (1) of a creditor/member of Courtenay House Ply Ltd (In Liquidation) appoint or in his/her absence as my/our general/special proxy to vote at the meeting of creditors to be held on Monday, 31 July 217 at 2: PM or at any adjournment of that meeting. DATED this day of 217 Signature CERTIFICATE OF WITNESS - only complete if the person given the proxy is blind or incapable of writing. certify that the above instrument appointing a proxy was completed by me in the presence of and at the request of the person appointing the proxy and read to him before he attached his signature or mark to the instrument. DATED this day of 217 Signature of witness Description Place of residence Notes: (I) Ifa firm strike out q' and set out the fuu name of the firm. Insert the name of the person appointed. If a special proxy, 'add the words 'to vote for' or the words 'to vote against' and specify the particular resolution'. If the creditor is a sole trader, sign in accordance with the following example: 'AD., proprietor'. If the creditor is a partnership, sign in accordance with the following example: 'A.B., a partner of the said firm.' If the creditor is a company, then the form of proxy must be under its Common Seal or under the hand of some officer duly authorised in that capacity, and the fact that the officer is so authorised must be stated in accordance with the following example: 'for the company, AD,' (duly authorised under the Seal of the Company). Proxy forms should have been completed and returned by no later than 4: PM on Thursday, 27 July 217 to be eligible to vote at the meeting. RETURN TO: Courtenay House Ply Ltd (In Liquidation) of care of Grant Thornton Australia Limited Address: Locked Bag Q8, QVB Post Office, Sydney NSW 123 Phone: Fax:

144 ACN WITLTUTSU Corporations Act (21) FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM) Subregulation (2) To the Official Liquidators of Courtenay House Capital Trading Group Limited (In Liquidation) This is to state that the company was on 16 May 217 (date of court order in winding up by the Court, or date of resolution to wind up, if a voluntary winding up), and still is, justly and truly indebted to: (full name and address of the creditor and, if applicable, the creditor's partners. Ifprepared by an employee or agent of the creditor, also insert a description of the occupation of the creditor) for $ and cents. Date Consideration (state how the Debt arose) Amount $ c Remarks (include details of voucher substantiating payment 2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any satisfaction or security for the sum or any part of it except for the following: (insert particulars of all securities held. If the securities are on the property of the company, assess the value of those securities. If any bills or other negotiable securities are held, show them in a schedule in the following form). Date Drawer Acceptor Amount $c Due Date r L *3 1 am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. *3 1 am the creditor's agent authorised in writing to make this statement in writing. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. Signature Occupation: Address Dated *Do not complete if this proof is made by the creditor personally. 93

145 ACN FORM 535 Corporations Act (21) FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM) Subregulation (2) To the Official Liquidators of Courtenay House Pty Ltd (In Liquidation) This is to state that the company was on 16 May 217 (date of court order in winding up by the Court, or date of resolution to wind up, if a voluntary winding up), and still is, justly and truly indebted to: (full name and address of the creditor and, if applicable, the creditor's partners. If prepared by an employee or agent of the creditor, also insert a description of the occupation of the creditor) for $ and cents. Date Consideration (state how the Debt arose) Amount $ c I Remarks (include details of voucher substantiating payment 2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any satisfaction or security for the sum or any part of it except for the following: (insert particulars of all securities held. If the securities are on the property of the company, assess the value of/hose securities. If any bills or other negotiable securities are held, show them in a schedule in the following form). Date Drawer Acceptor Amount Sc [ Due Date fl *3 1 am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. *3 1 am the creditor's agent authorised in writing to make this statement in writing. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. Signature Occupation: Address Dated *Do not complete if this proof is made by the creditor personally.

146 IVE IC

147 MINUTES OF MEETINGS OF COMMITTEE OF INsPECTIoN OF: COURTENAY HOUSE CAPITAL TRADING GROUP PTY LTD(INLIQUIDATION) ACN COURTENAY HOUSE PTY LTD (IN LIQUIDATION) ACN ("THE COMPANIES") HELD AT LEVEL 17,383 KENT STREET, SYDNEY NSW ON 21 SEPTEMBER 217 AT 2PM PRESENT: Said Jahani Usa Gibb Scott Hedge Fraser Wilkinson Joint and Several Liquidator Assistant to the Liquidator? Liquidator? legal advisor Liquidators' assistant (vlinute Secretary) INTRODUCTION: Said Jahani opened the meeting at 2:5PM is The Chairperson tabled the attendance register for each Committee and advised that there were Committee members present via teleconference. The Chairperson noted the meeting was being recorded for ease of minute taking. The attendance register is arrached as Annexure 1. CHAIRPERSON: PROXIES: Said Jahani advised that the meeting was called pursuant to section 8-5 of the Insolvency Practice Rules 216, and as Official Liquidator he would act as Chairperson of the meeting in accordance with section 75-5 of the Insolvency Practice Rules 216. The Chairperson noted that he held no proxies in his favour. NOTICE OF MEETING: The Chairperson tabled the notice of the meetings for the Committee of Inspection of the Companies forwarded to both Committees of Inspection on Thursday, 14 September 217 and advised that it be taken as read. QUORUM: In accordance with section 7545 of the Insolvency Practice Rules, the Chairperson advised that there was a quomm present for each of the two Committees of Inspection. The Chairperson advised that the meetings of the two Committees would be held concurrently as they are sufficiently inter-related and it would be cost effective to do so. PURPOSE OF MEETING: The Chairperson advised that the purpose of the meeting was to: - Consider the report to the Committee of Inspection dated 14 September 217; - Consider the remuneration of the Liquidators; and - Receive an account of the Liquidator? acts and dealings and of the conduct of the winding up to date.

148 MINUTES OF MEETINGS OF COMMInEE OF INSPECTION OF: COURTENAY HOUSE CAPITAL TRADING GROUP 1"FY LTD(INLIQUIDATION) ACN COURTENAY ROUSE fly LTD (IN LIQUIDATION) ACN ("THE COMPANIES") HELD AT LEVEL 17,383 KENT STREET, SYDNEY NSW ON 21 SEPTEMBER 217 AT 2.PM LIQUIDATORS' UPDATE: The Chairperson provided the Committees of Inspection with a brief summary of the report sent to Committee Members on 14 September 217. The Chairperson also discussed the progress of the Liquidations since the First Meeting of Creditors on 31 July 217. The update included: - The on-going Court application - Liquidators' liwestigations - Forensic Investigations - ASIC Action - Receipts and Payments - Remuneration A summary of the key discussions held during the meeting is noted below. Court application The Chairperson advised that as discussed at the first meeting of creditors, the issue of whether the Brexit funds were held on trust was a matter for the Courts to consider. The Chairperson advised that on 5" September 217 an application was made to the Federal Court ('the Court") in which the Liquidators sought directions from the Court regarding various issues relating to the distribution of creditor funds. The primary issue to be considered by the Court was if the Brexit funds were held on trust for the benefit of the Brexit investors. The Court has been asked if this issue can be dealt with separately to the other issues being considered in order to expedite an outcome on this matter. The Chairperson advised that due to the complex nature of the issues raised and the amount of overlap in the Company's operations and fundraising, the Court may find that no issue can be separately addressed. The Chairperson explained that to ensure the Court is presented with both sides of the Brexit argument, a representative creditor from the Brett and General fund or non - Brexit pool has been proposed. The Chairperson was asked to explain the purpose of the representative creditors further and provided the Committees with an overview of their function and role. A question was raised by Vince Anmore regarding how the funds transferred after the ASIC petitioned court freezing

149 MINUTES OF MEETINGS OF COMMIflEE OF INSPECTION OF: COURTENAY HOUSE CAPITAL TRADING GROUP PTY LTD(INLIQUIDATION) ACN COURTENAY HOUSE PTY LTD (IN LIQUIDATION) ACN ("THE COMPANIES") HELD AT LEVEL 17,393 KENT STREET, SYDNEY NSW ON 21 SEPTEMBER 217 AT 2.PM order came into effect, was to be dealt with. The Chairperson advised that only a small percentage of funds were transferred by investors after that date. The Chairperson explained the nature of the freezing order, stating that funds are unable to leave an account however funds can still be credited/received into an account- The Chairperson noted that it is the Liquidators intention to raise this issue with the Court and seek directions on if these funds should be treated differently. The issue of transparency of the representative creditors selection process was raised. The Chairperson explained that the Liquidators selected the representatives from the pooi of creditors by considering the individual's investment and also any previous dealings/correspondence they have had with the individuals. The Chairperson noted that the proposed representatives had been outlined in the report issued to Committee members. The Chairperson noted that ultimately it is the Court's decision on who represents each group. Once selected and if the Court agrees, the legal costs of the representatives will be paid out of the assets of the Companies. There was discussion on whether all funds were held on trust if they weren't traded and therefore there is no difference between the general investment funds and the Brexit investment funds. There was also discussion on if the Liquidators should be deducting any returns received by investors from initial capital when admitting them for a dividend. The Chairperson advised the Committee members on the different outcomes or scenarios that the Court may consider including: The Brexit money is held on trust and should be paid back to the Brexit investors. The general funds held in the Westpac accounts will paid back pad passu to investors. Both investment accounts are held on trust And funds are returned to investors that are able to identify their funds invested. There is no trust structure in both funds and all investors are paid back pan passu. There was discussion between the Committee members on the issue of deducting returns paid from creditors' provable debt. The issue was raised regarding the expertise and knowledge of the representative's legal counsel. The Chairperson discussed 97

150 MINUTES OF MEETINGS OF COMMITTEE OF INSPEaION OF: COURTENAY HOUSE CAPITAL TRADING GROUP PTY LTD(INLIQUIDATION) ACN COURTENAY HOUSE PTY LTD (IN LIQUIDATION) ACN ("THE COMPANIES") HELD AT LEVEL 17,383 KENT STREET, SYDNEY NSW ON 21 SEPTEMBER 217 AT 2.PM the background of each representative's legal counsel to the best of his knowledge. The experience of the representatives was then asked, as the representatives may have to discuss strategy with their legal counsel and provide guidance on the direction during the Court proceedings The Chairperson explained that the focus was more with the methodology and views expressed by the group of investors being represented and ensuring these are properly put forward. The Chairperson advised that an address would be created for each representative allowing investors of that group to express their views regarding the issues and questions put before the Court. There was general discussion around the skills and expertise needed to represent a group of investors. The Chairperson asked the Liquidators legal advisor Scott Hedge to comment on the how the legal process will work. Mr Hedge advised that the Court proceedings would focus on submissions made by the legal counsel based on facts and not opinions. The Chairperson asked each representative to discuss their background and experience. The representatives then addressed the Committee and provided an overview of their background and experience. For. - Brexit Peter Melocco of JP Meloco Pry Ltd - Non - Brexit - Geneve Grasso of Life Smart Trading The issue of the proposed representatives and the third party who ippeared before the Court on Monday, 18 September 217 was discussed. The Chairperson advised that a third party was present at the Court hearing and that Patricia DelVecchio wished to be appointed the representative of the Brexit investment group. The Court hearing was adjourned by the Judge to allow any creditor to file a notice of appearance in order to be heard regarding the Brexit representatives. Ms DelVecchio was then asked by a member of the Committee why she had nominated herself as a representative creditor. Ms DelVecchio then explained that she wanted transparency around the legal representation process and trusts that the judge will appoint the right legal representative for the investment group. A Committee member then asked Ms DelVecchio about her background. Ms DelVecchio provided the Committee with an overviesv of her background and reasons for nominating, sighting lack of transparency in how the two proposed representatives had been selected. The Committee then m

151 MINUTES OF MEETINGS OF COMMITTEE OF INSPECTION OF: COURTENAY HOUSE CAPITAL TRADING GROUP PiTY LTD(INLIQUIDATION) ACN COURTENAY HOUSE PTY LTD (IN LIQUIDATION) ACN ("TIlE COMPANIES") HELD AT LEVEL 17,383 KENT STREET, SYDNEY NSW ON 21 SEPTEMBER 217 AT 2. PM discussed the amount of transparency around the selection process. The Chairperson advised that there was no official selection process and the decision was based on efficiency, the creditor's investments and the Liquidators dealings with these parties. The Chairperson noted that if other investors feel that they would like to be heard they can retain a lawyer and be heard in Court. The Chairperson noted however that if multiple parties are involved, the proceedings may be delayed and become expensive to manage. The Committee Members then discussed that an account could be used by each representative to keep investors of the respective group informed of developments. The Chairperson advised that the Liquidators had received over a thousand calls and s allowing the Liquidators to be aware of 9/a of the issues and concerns of the investors. The report lodged by the Liquidators will be made available to investors. The Liquidators legal advisor Scott Hedge advised that the Court will ensure that creditors of the Liquidations will be made a'vare of all the information lodged with the Court. Both representatives discussed the best method to convey information to investors of each group. The Chairperson advised that once a formal process had been agreed on, the process will be presented to the Court as a way to resolve any transparency issues. The question was raised what action can be taken against investors that withdrew their invested funds prior to the Liquidation if it is deemed that the funds are in fact returns of capital. The Chairperson explained that it is highly unlikely that the Liquidators will be able to claw back funds paid to individuals prior to the Liquidations of the Companies. In order to do this the Liquidators would have to prove that these investors had knowledge of the Ponzi scheme or the insolvency of the Companies and even then a time limit of 6 months prior to the date of Liquidation would apply for preferential payments. The question was raised what actions were being taken regarding payments to brokers and agents. The Chairperson advised a documented list is being created regarding these transaction. The issue of promoters that also invested in the Companies and who received commissions is also being considered. For individuals that received commissions without having a material investment, these individuals will be asked

152 MINUTES OF MEETINGS OF COMMITTEE OF INSPECTION OF: COURTENAY HOUSE CAPITAL TRADING GROUP PTY LTh(INLIQUIDATION) ACN COURTENAY HOUSE PTY LTD (IN LIQUIDATION) ACN ("THE COMPANIES") HELD AT LEVEL 17,383 KENT STREET, SYDNEY NSW ON 21 SEPTEMBER 217 AT 2. I'M how much information they knew regarding the Companies operatons. The question was raised if there is a potential claim against the financial planners. The Chairperson advised that awareness and knowledge that the Companies operated a Ponzi scheme would need to be proved in order to take action. The question was asked how commissions were paid to individuals. The Chairperson explained that the funds were normally paid via a separate payment based on the evidence found in the books and records. However there may be several other ways that the commissions were paid as the books and records of the Companies are poor. A question was asked via a creditor on the phone regarding the reliabth.of the Companies books and records and what information/documentation is available. The Chairperson noted that the Liquidators were able to secure material including passwords of accounts on day one of the Liquidation. However, with the accounts only 2% of the information was secured, the remaining information was held on personal accounts. This information is difficult to secure, however through the public examinations this information can be requested. The Chairperson explained that the Liquidators have faced difficulty gaining access to the Google accounts due to privacy laws and the storage of the information being held in America. It was queried by the Committee when the earliest a dividend could be distributed following the Courts' decision. The Chairperson noted that the Judge may take time to deliver his judgment on the case. However, once Court approval has been given a dividend can be paid within 8-12 weeks. It was queried by the Committee if a partial dividend could be made. The Chairperson advised that the Liquidators require a Court order before they are able to distribute the funds due to the trust issue. The question was asked what had been the liquidators experience in the past with Ponzi schemes and the Chairman provided the Committee with details of his experience. However, commented that each Ponzi scheme was different in nature and had different outcomes. The Chairperson advised the Committee Members that a report is to be submitted to the Court by 27 October 217. The report will be based on the Liquidators' preliminary findings. This report will be used by both representative creditors to frame their submissions to the Court The Chairperson noted that the report will not be final as the 1

153 MINUTES OF MEETINGS OF COMMITTEE OF INSPECFION OF: COURTENAY HOUSE CAPITAL TRADING GROUP PTY LTD (INLIQUIDATION) ACN COURTENAY HOUSE PTY LTD (IN LIQUIDATION) ACN ("THE COMPANIES") HELD AT LEVEL 17,383 KENT STREET, SYDNEY NSW ON 21 SEPTEMBER 217 AT 2PM Liquidators are still waiting on information from various parties,. in particular the banks in respect of supporting documentation. Liquidators Investigations Tony lervasi The Chairperson updated the Committee Members on the Liquidators' dealings with Mr Iervasi. The Chairperson advised that Mr Tervasi had through his lawyers submitted a settlement offer to the Uquidators. This offer had been rejected due to the Liquidators considering it to be inadquate. The Chairperson noted that a settlement with 1fr Iervasi is the most efficient way to recover hinds if Mr Iervasi is minded to cooperate. The Chairperson noted that Mr rervasi had also signed a letter which allows the Liquidators to undertake their own investigation into and confirm Mr lervasi's asset position. Lisa Gibb from the Liquidator's office advised that this independent investigation process has begun. There was significant discussions and speculation between the Committee members of other possible assets held by Mr Iervass, including hinds in overseas bank accounts. The Committee asked the Chairperson to take steps to confirm some of these potential assets. The Chairperson took the opporninity to advise the Committee of the costs in following up a number of unsubstantiated leads. The Chairperson noted that once the full reconciliation of the bank accounts had been completed the Liquidators would be able to establish with more certainty how much hinds had been misapproptiated. The Chairperson also noted that there is significant cost involved in obtaining information from overseas jurisdictions and without the Liquidators applying to Courts in other jurisdiction and/or seeking a recogninon order any information they are able to obtain would be minimal. David Sipina The Chairperson updated the Committee Members on the Liquidators dealings with David Sipina. Topics discussed included his status as an alleged director, assets, knowledge of the Companies operations and public examination. 11

154 MINUTES OF MEETINGS OF COMMITTEE OF INSPECTION OF: COURTENAY HOUSE CAPITAL TRADING GROUP PTY LTD(INLIQUIDATION) ACN COURTENAY HOUSE PTY LTD (IN LIQUIDATION) ACN ("THE COMPANIES") HELD AT LEVEL 17,383 KENT STREET, SYDNEY NSW ON 21 SEPTEMBER 217 AT 2PM Athan Papoulias The Chairperson updated the Committee Members on the Liquidators dealings with Athan Papoulias. The Chairperson advised that Athan had to date been cooperative- Bank Accounts The question was riised regarding where the funds obtained upon appointment were invested. The Chairperson advised that the funds are held on two separate term deposits and that before placing the funds on term deposit the Liquidators sought rates from all the major banks. Remuneration The Chairperson tabled the Remuneration report contained in his report dated 14 September 217. There was discussion regarding the fees charged by the Liquidators. There was discussion on how fees are calculated and the hourly rates charged. The Chairperson explained that the hourly rates are within line with industry norms and the hourly rates for each staff member are a reflection of an individual's experience. The Chairperson also advised that the rate structure provides an indication of what staff undertakes what work based on their experience. The Chairperson explained the role of each key member of his team. A creditor requested the Chairperson to consider an arbitrary discount of 1/o to his rates. The Chairperson declined this request. Several Committee members then addressed the meeting citing their own experience in business and working with major professional services firms and advised they believed the rates and fees being charged by the Liquidator to be reasonable and in accordance with industry norms with the comment that Big 4 accounting finns would be significantly more expensive. 12

155 MINUTES OF MEETINGS OF COMMITFEE OF INSPECTION OF: COURTENAY HOUSE CAPITAL TRADING GROUP PTY LTD(INLIQUIDATION) ACN COURTENAY HOUSE PTY LTD (IN LIQUIDATION) ACN ("THE COMPANIES") HELD AT LEVEL 17,383 KENT STREET, SYDNEY NSW ON 21 SEPTEMBER 217 AT 2PM RESOLUTIONS The Meeting was asked to consider the following motions. RESOLUTION I- COURTENAY HOUSE CAPITAL TRADING GROUP The Chairperson put the following resolution forward: 'The remuneration of/be Liquida/ors and coy ofthe Liq widators' partners or employer inpe.fom;ana of services pe4onued from 16 A1' August 217, to he fixed at 5597,5925 &xcluding GST) plus coy out of pocket expenses incurred/or Couetenqy I-louse Capital Dwding Giveq, Py Ltd. These 'vs/s are to be paid out of the IVestpac 'Non.B rexit,)funds secured bj the Liquidator:." Moved: Seconded: Geneve Grasso Douglas Cotton The resolution was carried on the voices. For: 11 Against: RESOLUTION 2 COURTENAY HOUSE LIMITED 'The remuneration of the Liquidators and any of the Liquidator? partners or employes in performance of sen'ices performedfroru 16 Maj 217 to 31 August 217, to befi.s.-ed at $57,145. (exchtdin GST) plus an) out of pocket expenses incurredfor Caurtenaj' House Py Lid. These costs are to be paid out of the NAB (Brexit) funds secured by the Liquidators." Moved: Seconded: Vesna Mastons Patricia DelVecchio The resolution was carried on the voices. Against RESOLUTION 3 COURTENAY HOUSE CAPITAL TRADING GROUP 'Pursuant to section 4772B) of the Coiporations Act 21 the Liqeeidaton an au/bathed to enter into an agreements to retain solicitors, specifically Cohn Btgger & Pais49' and counsel, notwithstanding that the qgreements n/a)' co ntinue for more than 3 months" Moved: Seconded: Michael Beiruty Geneve Grasso 13

156 MINUTES OF MEETINGS OF COMMITTEE OF INSPECTION OF: COURTENAY HOUSE CAPITAL TRADING GROUP PTY LTD(INLJQUIDATION) ACN COURTENAY HOUSE PTY LTD (IN LIQUIDATION) ACN ("THE COMPANIES") HELD AT LEVEL 17,383 KENT STREET, SYDNEY NSW ON 21 SEPTEMBER 217 AT 2PM The resolution was carried on the voices. For. 11 Against: 1 [S 1ff5111$flS tifl MI 'Pursuant to section 477(2B) of/be opc rations Act 21 the liquidators air anthoused to enter into an agree/itenhs to retain solicitors,.becijica/?y Co/lit B;gger & Paisley and counsel, ieotwithstandin,g that the agreements ms continue for more than 3 months" Moved: Seconded: Michael Beiruty Vesna Mastoris The resolution was carried on the voices. For. Against: CLOSURE: The Chairperson advised that the minutes of meeting will be lodged with ASIC and copy will be published on the Grant Thornton website within 4 weeks'. The Chairperson asked if there was any further business. There being no further business the meeting was declared dosed at 4:2PM. Recorded as a true and accurate record of proceedings. Dated this 16' October 217 S on SAID JAJ-LANI JOINT AND SEVERAL LIQUIDATOR 14

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184 GrantThornton 11 INITIAL ADVICE TO CREDITORS - REMUNERATION Remuneration Methods There are four basic methods that can be used to calculate the remuneration charged by an Insolvency Practitioner. They are: Time based I Hourly rates This is the most common method. The total fee charged is based on the hourly rate charged for each person who carried out the work multiplied by the number of hours spent by each person on each of the tasks performed. Fixed Fee The total fee charged is normally quoted at the commencement of the administration and is the total cost for the administration. Sometimes a Practitioner will finalise an administration for a fixed fee. Percentage The total fee charged is based on a percentage of a particular variable, such as the gross proceeds of assets rea]isations. Contingency The practitioner's fee is structured to be contingent on a particular outcome being achieved. Method Chosen Given the nature of this administration, we propose that our remuneration be calculated on the time based/hourly rates method. In our opinion, this is the fairest method for the following reasons: We will only be paid for work done, subject to sufficient realisations of the Company assets. It ensures creditors are only charged for work that is performed. Our time is recorded and charged in six minute increments and staff are allocated to duties according to their relevant experience and qualifications. We are required to perform a number of tasks which do not relate to the realisation of assets, e.g. responding to creditor enquiries, reporting to ASIC and distributing funds in accordance with the provisions of the Corporations Act 21. We are unable to estimate with certainty the total amount.of fees necessary to complete all tasks required in this administration at this point in time. Explanation of Hourly Rates The rates for our remuneration calculation are set out in the following table together with a general guide showing the qualifications and experience of staff engaged in the administration and the role they take in the administration. The hourly rates charged encompass the total cost of providing professional services and should not be compared to an hourly wage. 131

185 GrantThornton 12 'riiie W1i bit on ouritie S Partner Registered Liquidator / Trustee. Partner bringing spectalist skills to I $65 Administrations and Insolvency matters. Controlling all matters relating to the assignment. Associate Qualified accountant (CA/CPA) and may be a registered $575 Director Liquidator/Trustee. Minimum 7/8+ years' experience. Likely to be appointed as a director in due course. Highly advanced technical and commercial skills. Planning and control of all Administration and Insolvency tasks. Controlling substantial matters relating to the assignment and reporting to the appointee. Senior Qualified accountant (CA/CPA). 7/8+ years' experience. \Vell- $55 Manager developed technical and commercial skills. Planning and control of all Administration and Insolvency tasks. Controlling substantial matters relating to the assignment and reporting to the appointee. Manager Typically CA/CPA Qualified. 5-8 years' experience. \Vell-developed $52 technical and commercial skills. Planning and control of Administration and Insolvency tasks with the assistance of the appointee. Supervisor / Typically CA/CPA Qualified. 4+ years' experience. Co-ordinates $44 Assistant planning and control of small to medium Administrations and Manager Insolvency tasks. Conducts certain aspects of larger Administrations. Senior' Typically CA/CPA Qualified. 3-5 years' experience. Required to $4 control the fieldwork on Administrations and Insolvency tasks. Intermediate Typically undertaking CA/CPA Qualifications. Up to 3 years' $33 experience. Required to conduct the fieldwork on smaller Administrations and Insolvency tasks and assist with fieldwork on medium to large Administrations and Insolvency tasks. Graduate Typically less than 1 years' experience. Required to assist with the day $27 to day fieldwork on Administrations and Insolvency tasks under the supervision of intermediate and ienior staff. Undergraduate Typically less than I years' experience, usually working part time whilst $22 studying a university undergraduate qualification. Required to assist with the day to day fieldwork on Administrations and Insolvency tasks under the supervision of intermediate and senior staff. Secretary Carries out all secretarial functions relating to an Administration. $185 Administrator Conducts all aspects relating to administering the accounts function. $185 Disbursements Disbursements are divided into three types: Externally provided professional services - these are recovered at cost. An example of an externally provided professional service disbursement is legal fees. Externally provided non-professional costs such as travel, accommodation and search fees - these are recovered at cost. 132

186 C Grantlhornton Ia o Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the Adininistranon, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis. We are not required to seek creditor approval for disbursements, but must account to creditors. Full details of any actual costs incurred will be provided with future reporting S 133

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192 GrantThornton Time Recording Policy and Guidelines POL - F1N55 S S Document name Time Recording Policy and Guidelines Document code POL - FIN55 Document owner Finance and Operations Subject Matter Experts Christian Miles and Karen Wilkinson Application GTAL - National Effective Date 2/21212 Last reviewed by Laura Lillas, Chief Operations and Financial Officer Last review date 1/2/212 POL-FIN55 Time Recording Policy vii.docx Page 1 of 8 138

193 Policy Intent The purpose of this policy is to ensure that all GTAL partners and staff have a clear understanding of the requirements and procedures surrounding Time Recording. Policy statement All tirnesheets must be prepared and submitted in accordance with the requirements of this Policy and Gmdelines. All tirnesheets must be prepared and submitted in Advance Professional Services (APS). All partners and staff are required to submit timesheets on a weekly basis. Daily time entries are strongly encouraged. Time entries should be allocated to relevant client matter codes (chargeable hours) and administrative codes (non-chargeable/admin time, including recording of leave taken). Definitions GTAL Grant Thornton Australia Limited, its subsidianes and related entities Employee A person who has signed a contract of employment with GTAL, its subsidiaries or related entities COFO The Chief Operations and Fmancial Officer of GTAL Finance The Head of Finance and the finance team of GTAL Sub BU Leader Local Service Line Leaders, Head of Specialist Tax Advisory, Head of CF, Head of R&R, Head of Forensics/litigation support, Head of BT, Head of Business Risk Chargeable Hours Time directly attributable to a client matter Gren,tThennten, Ansyalia ftnth,d isa nnecnhenfinm sirens Gnantlhcentpe L,tennthenal Ltd. Geast marcia, hntenneiasaal Ltd and tare reenthar fnnss ace,ol a eoaide panthiership. Greet Ttnonelon Aushdia LimitS. tsgea,er with Its ssbstdianies and asiatsi ensues, delivers its seistes independently in Aussalia. Liability limited by a scheme approved under Professionar Standards Legislation 139

194 Scope This policy applies to all partners and staff including contractors, and others who perform work on Grant Thornton's behalf. The policy is applicable to the whole organisation including any wholly owned subsidiaries. Time Recording Principles Daily time entries are strongly encouraged. This will ensure accuracy and transparency of our time records. In addition, time can be reviewed throughout the week as time records are entered. All partners and staff are required to submit timesheets on a weekly basis. This will ensure that time entries/revenue is reflected in our financial records in the relevant accounting period and utilisation of client servicing staff and partners is not misstated. All partners and staff are responsible for the following with regards to time recording: Record 'all time, all the time'; Accurately record chargeable time to the correct client and matter code and milestone; Accurately record non-chargeable time to the most appropriate code ('adniin' or 'other' codes should only be used when no other code is relevant); Accurately record leave taken in accordance with the requirements of our Leave Pohcv and Guidelines; Provide accurate, relevant and detailed narrations for all time entries. Weekly Timesheets GTAL's timesheet period is from Monday to Sunday, except where month end splits a week. Timesheets must be submitted in APS by 11am (local time) each Monday morning (or the first working day after calendar month end). Requests to re-open APS for prior \veeks are not permitted. GTAL uses the 'auto-post' functionality in APS, this means: Time entries on submitted timesheets are immediately visible on the matter in APS; Time can be reviewed throughout the week as timesheets are entered; Time can be corrected throughout the week up until 'tirriesheet cut-of? which occurs at 1 lain (local time) each Monday morning (or the first working day after calendar month end); Late time which misses the cut-off can be entered into the following week's timesheet with reference in the narrative to the date the work was performed. Chargeable Time All time worked on a client matter (chargeable hours) must be recorded against the correct client matter code and milestone. Chargeable time includes, but is not limited to the following activities: Preparation of engagement documents; Specific client work in accordance with engagement documents; Any t'pe of research for a client matter, including review of prior year files and background information; Matter planning; Team briefings and time spent on delegating/assigning tasks; POL.F1N55 Time Recording Policy vl.1.doc, Page 3 of 8 14

195 Risk assessments and other quality assurance tasks (internal checklists, etc); Internal meetings about the client matter; Technical research and consultations; Telephone calls about the client matter and preparation of file notes; Travel time to/from clients during business hours, except travel to/from home at start and end of day; Other tasks in relation to the client matter. Reasons for Recording our Time We provide high-quality professional services to our clients, therefore we should charge appropriately for those services. Preparing an adequate budget for a client matter sends a clear message to our employees and clients that we are committed to provide high-quality services, and we know what it takes to deliver these services. Pressuring our employees to charge less time on a client matter could increase the risk of an issue not being properly addressed. By charging our time appropriately, we are acting with professional integrity and recognising the value and quality of our services. We value and recogmse the work of our people. Having a clear view of time spent helps us to understand and manage workload of our people. If we are ever called upon to explain our performance, appropnate records of time spent on a matter is normally an indicator of the level of resources allocated to this matter. As a professional services organisation, amongst all other important KPIs, we monitor and analyse profitability of individual client matters and productivity of our client servicing people. Chargeable hours are an important component of these KPIs. For all recurring matters, our actual time records provide a good guidance for setting up budgets for the following year. Having accurate thne records helps us to make appropriate pricing decisions and successfully negotiate overruns. Recording of Leave Taken All leave entitlements and benefits should be recorded in accordance with the requirements of our.leave Policy and Guidelines. All leave requests should be submitted and approved via ESS prior to commencement of leave. All leave taken should be recorded to the relevant leave milestones set out in APS under Client: 'Internal' and Matter: 'Leave' (ID ). All partners and staff must complete and submit their timesheets before commencement of leave to ensure leave taken is recorded in our payroll system and financial results in the relevant accounting penod. All timesheets in APS are opened one month in advance; hence can be completed in advance of any leave which has been applied for. Recording of Business Development Time All time spent on business development activities should be recorded as non-chargeable time and in accordance with the guidelines set out below. It is important to distinguish between business development attributable to our existing clients, potential clients/prospects and general business development activities. POL-F1N55 Time Recording Pofcy vl.i.docx Page 4 of B 141

196 Business Development attributable to Existing Clients and Prospects set up in APS All business development activities with regards to an Existing Client should be recorded under the relevant client in APS. The INT-Client Business Development matter should be set up under the relevant existing client. A 'zero' rate matrix should be applied to ensure that these time entries are recorded as non-chargeable time (i.e. not part of our production/revenue). This rule also applies to all business development activities in relation to a Prospect, which is available in APS. Accepting that it is not practical to set up all prospects in APS, business development time should be recorded against only those prospects for which we have previously prepared, or are preparing, a Bid or Proposal. Therefore, if a prospect is not already set up in the APS, the preparation of a bid or proposal must trigger the creation of a new prospect record in APS. Time should be recorded against the INT-Client Business Development matter under the relevant prospect. This rule also applies to all business development activities with regards to a Prospect, which is available in APS. Any Prospect for which we are preparing a Bid or Proposal should be set up in APS. Therefore, time should be recorded against the INT-Client Business Development matter under the relevant prospect AU activities should be recorded in accordance with the following mandatory milestones: health checks and For example, lunches and coffee catch ups, BD phone calls, entertainment S Including meeting internally, drafting, preparing and delivering presentations For example, client team meetings General Business Development and Prospects not set up in APS All business development time, which is not attributable to a specific Existing Client, or relates to a Prospect, which is not set up in APS, should be recorded under the newly created General Business Development/Marketing matter (ID 72686) under Client 'Internal'. POL.F1N55 Time Recording Policy vi.1.docx Poge IEP

197 All activities should be recorded in accordance with the following mandatory milestones: 3 rtm rnr,-waxii rm,1(,j,rm. t.o,o,,tmui.. and W&t, islol EM: conferences Attendance for either networking purposes or presenting, includes preparation and follow up time ki,ioi1.1rmbthhi pre riaproleting/business mt planning, discussing how to pursue opporturittles Targeting FTTUrsr ITarge ting including reviewing distribution lists and communications to multiple clients ncluding all administration as well as CSM pre-calls and follow-up I i MRWlLW,1!!!1.2 BD meetings that are not specific to a single client or prospect - e.g. industry team meetings. BID forums Thought promotion n1w1fl!i,inoh,t BID entertainment that is not specific to a single client or prospect - e.g. taking a group of clients and/or prospects to the AFL Policy Approval This document is approved by the COFO and no part of the document may be amended without the COFO's approval. The approved document includes the body of the document, the guidelines and any explanatory documents. The policy is to be reviewed and approved on an annual basis. Breach of Policy All employees, contractors and others should be aware that conduct, which violates this policy, is considered to be outside the scope of their employment or engagement. Violating the policy could significantly damage the firm and expose it to unintended legal and commercial liabilities. Individuals who breach this policy are subject to appropriate disciplinary action by the firm induding, but not limited to one or more of the following: counselling further training and development reduction in level and/or scope of delegated authority withdrawal of delegated authority suspension warning POL.P1N55 Time Recording Policy vl.1.docx Page 6 of 143