ASIC v Primelife Corporation Ltd - [2007] FCA 1874

FEDERAL COURT OF AUSTRALIA
Australian Securities & Investments Commission v
Primelife Corporation Ltd (ACN 010 622 901) [2007] FCA 1874
WINDING UP – liquidator’s fees – where company being wound up is former trustee and liquidator has preserved trust assets – whether liquidator entitled to fees despite having knowledge that company not true trustee – liquidator entitled to fees incurred in securing and preserving trust assets where it has acted in absence of ability of true trustee to do so.
Corporations Act 2001 (Cth): ss 473(3), 601EE
13 Coromandel Place Pty Ltd v CL Custodians Pty Ltd (In Liq) (1999) 30 ACSR 337, applied
Australian Securities and Investments Commission v Rowena Nominees Pty Ltd (2003) 45 ACSR 424, cited
Re Interchase Corporation Ltd (In Liq) (1993) 44 FCR 501, cited
Re WA Pines Pty Ltd (In Liq) (1994) 12 ACLC 328, cited
IN THE MATTER OF THE WINDSOR VILLAGE PARTNERSHIP SCHEME
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v PRIMELIFE CORPORATION LTD (ACN 010 622 901), PRIMELIFE MANAGEMENT SERVICES PTY LTD (ACN 082 926 029), WINDSOR VILLAGE MANAGEMENT PTY LTD (ACN 088 339 913), GDK FINANCIAL SOLUTIONS PTY LIMITED (ACN 085 488 311), GLENDALE RETIREMENT NOMINEES PTY LTD (ACN 088 015 801), MELRA PTY LTD (ACN 088 202 091), AMBRIDGE PRODUCTIONS No 2 PTY LTD (ACN 088 161 979), GDK RETIREMENT NOMINEES (WINDSOR) PTY LTD (ACN 088 256 713), GLENRET PTY LTD (ACN 088 256 713), VILLAGE PARTNERSHIP (WINDSOR) NOMINEES PTY LTD (ACN 088 315 986), ERGO MANAGEMENT PTY LTD (ACN 088 394 705), BODERO AND ASSOCIATES PTY LTD (ACN 003 207 887), JONES FINANCIAL MANAGEMENT PTY LTD (ACN 077 909 883) and FORTIA FUNDS MANAGEMENT LTD (ACN 104 111 631)
VID 1201 of 2004
IN THE MATTER OF GDK FINANCIAL SOLUTIONS PTY LIMITED
PKF CHARTERED ACCOUNTANTS ADVISORS (A FIRM) v GDK FINANCIAL SOLUTIONS PTY LIMITED (ACN 085 488 311)
VID 44 of 2006
GOLDBERG J
30 NOVEMBER 2007
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 1201 of 2004

IN THE MATTER OF THE WINDSOR VILLAGE PARTNERSHIP SCHEME

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Plaintiff

AND:

PRIMELIFE CORPORATION LTD
(ACN 010 622 901)

First Defendant

PRIMELIFE MANAGEMENT SERVICES PTY LTD
(ACN 082 926 029)

Second Defendant

WINDSOR VILLAGE MANAGEMENT PTY LTD
(ACN 088 339 913)

Third Defendant

GDK FINANCIAL SOLUTIONS PTY LIMITED
(ACN 085 488 311)

Fourth Defendant

GLENDALE RETIREMENT NOMINEES PTY LTD
(ACN 088 015 801)

Fifth Defendant

MELRA PTY LTD
(ACN 088 202 091)

Sixth Defendant

AMBRIDGE PRODUCTIONS NO 2 PTY LTD
(ACN 088 161 979)

Seventh Defendant

GDK RETIREMENT NOMINEES (WINDSOR) PTY LTD
(ACN 088 256 713)

Eighth Defendant

GLENRET PTY LTD
(ACN 088 256 713)

Ninth Defendant

VILLAGE PARTNERSHIP (WINDSOR) NOMINEES PTY LTD
(ACN 088 315 986)

Tenth Defendant

ERGO MANAGEMENT PTY LTD
(ACN 088 394 705)

Eleventh Defendant

BODERO AND ASSOCIATES PTY LTD
(ACN 003 207 887)

Twelfth Defendant

JONES FINANCIAL MANAGEMENT PTY LTD
(ACN 077 909 883)

Thirteenth Defendant

FORTIA FUNDS MANAGEMENT LTD
(ACN 104 111 631)

Fourteenth Defendant

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] FCA 1874
Decision Date: 30 November 2007

CaseChat Overview and Summary

The Australian Securities and Investments Commission (ASIC) brought proceedings against Primelife Corporation Ltd, seeking recovery of liquidator’s remuneration and costs. The liquidator, Andrew Reginald Yeo, sought payment of his remuneration and costs from the assets of GDK Financial Solutions Pty Limited (In Liquidation), a former subsidiary of Primelife Corporation Ltd. The dispute centered around whether the liquidator was entitled to remuneration and costs from the assets of the former subsidiary, which had been wound up, and whether those assets were available for such payments.

The court was required to determine the scope of the liquidator's authority to claim remuneration and costs from the assets of a subsidiary that had been wound up. Specifically, the court needed to decide whether the liquidator was entitled to draw from the assets of the former subsidiary, and if so, to what extent. The court also had to consider whether the liquidator’s claims were reasonable and appropriate, and if there were any assets available from which these claims could be satisfied.

The court held that the liquidator, Andrew Reginald Yeo, was entitled to his remuneration and costs from the assets of GDK Financial Solutions Pty Limited (In Liquidation). The court found that the liquidator's claims were reasonable and appropriate, and that there were sufficient assets available from the former subsidiary, including those held in trust and in a Macquarie Bank account, to satisfy these claims. The court ordered that the liquidator be paid $190,224.50 in remuneration and $98,043.30 in costs, charges and expenses, with further entitlement to future remuneration and costs from the available assets.

In conclusion, the court granted the liquidator's application in full, ordering Primelife Corporation Ltd to pay the specified amounts to Andrew Reginald Yeo from the assets of GDK Financial Solutions Pty Limited (In Liquidation).

Orders

Orders of the court

1. Andrew Reginald Yeo, in his capacity as liquidator of GDK Financial Solutions Pty Limited (In Liquidation) (“the Company”), is entitled to $190,224.50 by way of remuneration, to be paid out of the assets of the Company including assets held in trust and moneys held in Macquarie Bank Limited Corporate Cheque Account No 3016‑56492.

2. Andrew Reginald Yeo, in his capacity as liquidator of the Company, is entitled to reimbursement of costs, charges and expenses incurred in the winding up of the Company in the sum of $98,043.30 to be paid out of the assets of the Company, including assets held in trust and moneys held in Macquarie Bank Limited Corporate Cheque Account No 3016‑56492.

3. Andrew Reginald Yeo, in his capacity as liquidator of the Company, is entitled to be paid his future remuneration and costs, charges and expenses out of the assets of the Company, including assets held in trust and moneys held in Macquarie Bank Limited Corporate Cheque Account No 3016‑56492.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

GOLDBERG J

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Ratio Decidendi

Legal Principle Established

Established by: GOLDBERG J

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IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 1201 of 2004