Australian Securities and Investments Commission v Mount Warren Park (Nominees) Pty Ltd
[2005] QSC 326
•9 November 2005
SUPREME COURT OF QUEENSLAND
CITATION:
Australian Securities & Investments Commission v Mount Warren Park (Nominees) Pty Ltd & Ors [2005] QSC 326
PARTIES:
AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
(applicant)
v
MOUNT WARREN PARK (NOMINEES) PTY LTD
ACN 102 398 818 AS TRUSTEE FOR THE MOUNT WARREN HOSTEL UNIT INVESTMENT TRUST AND OTHERS
(first respondent)
CARRARA NOMINEES (QLD) PTY LTD
ACN 103 217 242 AS TRUSTEE FOR THE CARRARA UNIT INVESTMENT TRUST
(second respondent)
HILLCREST NOMINEES (QLD) PTY LTD
ACN 103 217 214 AS TRUSTEE FOR THE HILLCREST DEVELOPMENT UNIT INVESTMENT TRUST
(third respondent)
MORAYFIELD (THE AVENEUS) PTY LTD
ACN 100 748 794 AS TRUSTEE FOR THE AVENUES UNIT INVESTMENT TRUST
(fourth respondent)
PARTNERING DYNAMICS PTY LTD
ACN 068 541 346
(fifth respondent)
LIFECARE SERVICES AUSTRALIA PTY LTD
ACN 102 326 081
(sixth respondent)
QUALITY CARE MANAGEMENT PTY LTD
ACN 088 962 707
(seventh respondent)
ROBERT THOMAS ADCOCK
(eighth respondent)
COLIN GRAHAM FRANCIS
(ninth respondent)
DAVID JOSEPH STOYAKOVICH
(tenth respondent)
BRIAN MAHER
(eleventh respondent)
MARIE MAHER
(twelfth respondent)
PAUL RODDA
(thirteenth respondent)FILE NO:
BS No 5969 of 2005
DIVISION:
Trial
PROCEEDING:
Originating Application
ORIGINATING COURT:
Supreme Court at Brisbane
DELIVERED ON:
9 November 2005
DELIVERED AT:
Brisbane
HEARING DATE:
21 October 2005
JUDGE:
White J
ORDERS:
As per attached schedules
CATCHWORDS:
CORPORATIONS – WINDING UP – GENERALLY – OTHER CASES – managed investment schemes –scheme required to be registered not registered –acknowledgment by operator that scheme should be wound up – proposal by operator that operator be appointed to wind up the schemes –all the investors support the proposal – no opposition from ASIC – where operators undertake extensive reporting to investors and ASIC
Corporations Act 2001 (Cth), s 601EE
ASIC v Tasman Investment Management Ltd [2004] NSWSC 651, 23 July 2004, cited
COUNSEL:
S Keim SC and C Caulson for the applicant
R Perry SC for first, second, third, fourth, sixth, eighth, ninth and tenth respondents
J Johnson (solicitor) for seventh, eleventh, twelfth and thirteenth respondents
P Rosengren (solicitor) for the investorsSOLICITORS:
Shaun Ansell, Special Counsel, Australian Securities & Investment Commission for the applicant
Lynch & Co for the first, second, third, fourth, sixth, eighth, ninth and tenth respondents
Johnsons for the seventh, eleventh, twelfth and thirteenth respondents
Deacons for the investors
The parties appeared in the Applications Court on 21 October 2005. The operators of four unregistered managed investment schemes – the first to fourth respondents – sought orders that they be appointed to wind up the schemes in accordance with s 601EE(1)(b) of the Corporations Act 2001. All of the investors in the several schemes supported the proposed orders. The Australian Securities and Investment Commission did not oppose the orders. After reading the extensive written submissions and hearing oral argument I made the orders which are attached to these reasons with reasons to be provided in due course. Those reasons are now provided.
The applicant (‘ASIC’) alleged that the first to fourth respondents were the operators of four unregistered managed investment schemes which were required to be registered under the provisions of the Corporations Act 2001. ASIC alleged that as a consequence of the non-registration of the four schemes their continued operation was unlawful and that the schemes should be wound up. ASIC sought the appointment of insolvency practitioners as Receivers and Managers of the property of the schemes and the winding-up of those schemes.
The projects undertaken by the first, second and third respondents, Mount Warren Park (Nominees) Pty Ltd, Carrara Nominees (Qld) Pty Ltd and Hillcrest Nominees (Qld) Pty Ltd, respectively, involved the acquisition, construction and operation of aged care centres in Queensland. Initially the project undertaken by the fourth respondent, Morayfield (The Avenues) Pty Ltd, was an aged care project but became a residential subdivision development when it was determined that an aged care project in the Morayfield area was unlikely to be successful.
Each of the first to fourth respondents is the trustee of a unit trust. Investors subscribed for B and C class units in each of the unit trusts and paid subscription monies to each of the first to fourth respondents in consideration of the issue of these units to them. Investors who have C class units are entitled to repayment of interest and redemption of capital on certain redemption dates. B class units permit investors to share in any profit derived by each trustee from the lease of the aged care centres to be constructed on the land owned by each of the first to fourth respondents after the construction of those complexes and their leasing to operators.
The initial promoters of the four schemes were companies associated with the twelfth respondent, Mrs Marie Therese Maher, and the thirteenth respondent, Mr Paul James Rodda, and had A class units in each trust to the number of B class units in each trust.
From the commencement of the operation of each of the managed investment schemes operated by the first to fourth respondents until 29 March 2004 Mrs Maher and Mr Rodda were directors of each of those companies and controlled the conduct of each managed investment scheme. On 29 March 2004 the ninth respondent, Mr Colin Graham Francis, and the tenth respondent, Mr David Joseph Stoyakovich, were appointed directors of each of the first to fourth respondents and the eighth respondent, Mr Robert Thomas Adcock, the secretary to each of those companies.
The fifth and seventh respondents, Partnering Dynamics Pty Ltd and Quality Care Management Pty Ltd, are companies associated with Mrs Maher and Mr Rodda. The eleventh respondent is Mr Brian James Maher, the husband of Mrs Maher.
According to Mr Francis:
“38. As at 29 March 2004 the projects being undertaken by the First to Fourth Respondents were in a shambles. The builder contracted to construct the Hillcrest, Carrara and Mount Warren complexes had ceased work and placed caveats over the land owned by each of the First, Second and Third Respondents.
39. Only some basic site clearing had been undertaken on the Morayfield project and no construction finance had been obtained.
40. Some foundation work had been completed on the Mount Warren site and there was an existing loan in place relating to the acquisition of the site. No construction finance had yet been obtained for the project.
41. The external mortgagee for the Carrara project had ceased providing construction finance and the loan was in default.
42. Each of the First to Fourth Respondents maintained bank accounts at the National Australia Bank into which the subscription moneys received from investors was paid. When Mr Stoyakovich and myself took over as directors of the First to Fourth Respondents we were given no access to the National Australia Bank accounts and these accounts were closed by Mrs Maher and Mr Rodda.
43. Notwithstanding the subscription of funds from investors no funds remained for the use of the First to Fourth respondents in the completion of the scheme projects as at 29 March 2004.
44. In order to rectify the position of the scheme projects Mr Stoyakovich and myself pledged our own credit by signing personal guarantees in support of new loans for the projects. Moreover we cause the Sixth Respondent [Lifecare Services Australia Pty Ltd] to provide securities for various financiers so that the scheme projects could be re-started. Further Mr Stoyakovich, Mr Adcock and myself established new trust accounts for the First to Fourth Respondents and contributed moneys to these accounts in order to capitalise the First to Fourth Respondents so that the operations of the First to Fourth Respondents could continue.
45. By the time of the commencement of these proceedings:-
(a) construction finance had been obtained for the Morayfield projects, construction was well under way and a number of pre-sales had been obtained of the residential lots within the project with an expected completion date of 12 months;
(b) construction finance had been obtained for the Carrara project and construction was over half complete with a completion date of December 2005;
(c) construction finance had been obtained for the Hillcrest Project with an expected completion date of March 2006;
(d) the existing Mount Warren mortgage was refinanced and construction finance was being sought to complete the project.”Affidavit of Colin Graham Francis filed 18 October 2005.
In early 2005 ASIC commenced an investigation of the schemes including the examination of Mr Stoyakovich, Mr Adcock and Mr Francis.
Acting on legal advice the first to fourth respondents convened meetings of investors in the four schemes and informed them of the ASIC investigation and of a number of possible outcomes to that investigation including the appointment of an insolvency practitioner to wind-up the schemes. The investors requested the first to fourth respondents to formulate a plan of action in order to safeguard their interests.
As a consequence, at meetings held in Brisbane and Sydney at the end of June 2005, investors in each of the four schemes (with the exception of two), voted to enter into extinguishment arrangements whereby the interests of participating investors in the four managed investment schemes would be extinguished in exchange for the transfer to each investor of a proportionate amount of the land owned by each of the first to fourth respondents. The proposal included the provision of an option from each participating investor to the sixth respondent, Lifecare Services Australia Pty Ltd, for an option price calculated by the sum of the amount of each investor’s capital invested, the amount of interest owing to each investor up to 30 June 2005 and the refund of any stamp duty paid by the investor on the extinguishment documents. A feature of the extinguishment proposal was that participating investors gave up their entitlement as B class unit holders to participate in any future profits of each of the first to fourth respondents from the leasing of the agent care complexes.
The first to fourth respondents had arranged for Deacons Lawyers to provide independent advice to the investors about the proposed deeds of extinguishment and transfer. This advice, provided by Mr Peter Rosengren, a partner at Deacons, was paid for by the first to fourth respondents.
All (except three) investors executed deeds of extinguishment and transfer.
The present proceedings were commenced by an originating application to wind-up the schemes and an interlocutory application for the appointment of receivers and managers to the schemes filed on 22 July 2005 by ASIC and returnable on 28 July 2005.
After negotiation between ASIC and the first to fourth respondents directions were made by consent on 28 July 2005 by Mullins J which permitted those respondents to continue the construction of the four projects on undertakings not to dissipate the assets of the schemes other than in the ordinary course of business.
The interlocutory application was adjourned to the civil list for hearing on 16 September 2005 with directions for its further progress.
After the 28 July order negotiations ensued between ASIC, the first to fourth respondents and the investors in relation to the settlement of the proceedings. Meetings were held between investors in Brisbane and Sydney and officers of ASIC and detailed independent legal advice was given by Mr Rosengren to the investors.
The proposal before the court on 21 October on the application of the first to fourth respondents was that each of the four schemes should be wound-up and that each of the first to fourth respondents be appointed to wind-up each respective scheme. The winding-up was to be undertaken by completing the scheme projects by those corporations. The proposed orders gave the investors the same benefits that were to have been provided to them under the deeds of extinguishment being
• the repayment of capital;
• the repayment of interest to 30 June 2005;
• the repayment of any stamp duty paid by the investors on the extinguishment document.
By the 21 October all investors supported the proposed orders.
The orders provide that the first to fourth respondents will be deemed to have completed the winding-up of each scheme when the investors are paid out but must, in any event, complete the winding up of
• the Morayfield scheme within 12 months;
• the Hillcrest scheme within 18 months;
• the Carrara scheme within 18 months;
• the Mount Warren scheme within 24 months.
If the investors are not paid out within those periods all of the assets of the scheme must be sold and the proceeds distributed to the investors.
The orders provide that in the course of the winding-up of the schemes the first to fourth respondents must each undertake extensive reporting to investors, ASIC and the supervisor appointed to each scheme. The supervisor, Mr Michael McDonald, is a member of the Institute of Chartered Accountants in Australia and a registered company auditor. He is a partner in the firm Moore Stephens (Brisbane) & Partners. He was appointed pursuant to s 601EE(2) of the Corporations Act to receive the various progress reports referred to in the orders and to supervise the payment of project management fees to the sixth respondent, Lifecare Services Australia Pty Ltd, to ensure that it is paid project management fees in accordance with the procedures specified. Mr McDonald will respond to any queries made by ASIC in connection with the winding up of the schemes. His costs are to be paid by the sixth respondent.
The orders require monthly reporting during the course of the winding-up of the schemes to ASIC, the investors and the supervisor by the scheme operators. The first, second and third respondents must report about:
• the extent to which the aged care complex has been completed in each case;
• the number of residents for which residency agreements have been completed in each case;
• the marketing of the aged care complex in each case;
• the extent to which the fit out of each aged care complex has been completed;
• the progress made in obtaining staff for each aged care complex;
• the progress made in the lodgement of all necessary applications with the Commonwealth Department of Ageing so as to facilitate the certification and accreditation of the aged care complex under the Aged Care Act 1997 (Cth);
• the progress made in obtaining residents for the aged care complex in each case and whether the residents are funded or unfunded and to the extent that they are unfunded whether the bed allocations are obtained by purchase or lease;
• the amount of accommodation bonds obtained;
• the amount of fees paid by the first second and third respondents to the sixth respondent for the preceding monthly period and a statement of the balance of project management fees still undrawn; and
• a list of all receipts and payments made by the first, second and third respondents in the preceding monthly period.
The fourth respondent must report on
• the construction of the 50 residences;
• the marketing of the 50 residences;
• the execution of sale contracts for each of the 50 residences;
• the completion of the sale of each of the 50 residences
• the distribution of the proceeds of sale of the 50 residences in the following manner
• first in discharge of any monies due by the fourth respondent to any registered mortgagee;
• second in payment to the investors of the sums provided for in the order;
• third in repayment to the sixth respondent of any monies owing by the fourth respondent to the sixth respondent;
• finally the balance of the proceeds of sale (if any) to the fourth respondent.
In addition to the reporting requirements on a monthly basis, the first to fourth respondents are required by the orders to provide quarterly reports to ASIC, the investors and the supervisor about
• a balance sheet for each of the schemes;
• a statement of any payments made to or by a unit holder of any of the schemes;
• a list of aged creditors for each scheme;
• a certificate by the operator of each scheme stating whether in its opinion the scheme is solvent or insolvent;
• a list of any legal proceedings brought by or against any of the first to fourth respondents.
Under the orders relating to the Carrara scheme two investors, AKR Investments Pty Ltd and GJ & CA Piggott Superannuation Fund, are to receive the repayment of capital and interest earlier than the other investors in that scheme who have consented to the proposed orders. Those non-participating investors will receive interest payments for the period 30 June 2005 until 30 June 2006 whereas participating investors’ interest entitlement is capped at 30 June 2005. The other investors were aware of this differential treatment and have nonetheless consented to the orders.
At the time of hearing the application the Carrara and Hillcrest constructions were proceedings according to schedule; the Morayfield construction was delayed due to the external mortgagee terminating the construction loan because of the current proceedings but had reached agreement with the financier to reinstate the construction loan subject, inter alia, to these orders being made. The Mount Warren mortgage as at 21 October was in default but an indicative letter of finance approval had been received for the sum of $7.425 million for construction finance.
The orders provide for the dismissal of both the originating application and the interlocutory application against all respondents other than the Fifth, Seventh, Eleventh, Twelfth and Thirteenth Respondents. Mr Johnson, who appeared for those respondents, indicated that they abided the orders of the court.
Section 601EE of the Corporations Act provides
“(1) If a person operates a managed investment scheme in contravention of subsection 601ED(5), the following may apply to the court to have the scheme wound up:
(a) ASIC;
(b) the person operating the scheme;
(c) a member of the scheme.(2) The Court may make any orders it considers appropriate for the winding up of the scheme.”
As Barrett J said in ASIC v Tasman Investment Management Ltd [2004] NSWSC 651 (decision of 23 July 2004), s 601EE(2) says nothing about the way a winding-up ordered by the court is to be carried out or who should have the carriage of it. Those matters are left entirely to the court’s orders.
In its letter to the investors in each of the schemes dated 7 October 2005 ASIC explained that in applying to the court for orders about the schemes, it sought to have the schemes completed in a manner which would ensure that investors received full, accurate and independent information and disclosure as well as all of the protection that would be available to investors in a registered managed investment scheme. ASIC continued
“Notwithstanding ASIC’s preferred position that the completion of the schemes be conducted by an independent person ... both the operators and investors legal representatives have insisted that completion of the schemes should be undertaken by the current operators with minimal supervision by an independent person.
It is important to note that under Mr Rosengren’s proposal ASIC will have no supervisory role in relation to the completion of the schemes, so that investors will need to ensure that they adequately monitor the conduct of the operators in completing the schemes.”
ASIC indicated to the investors that in view of the proposal which had been worked out by Mr Rosengren on behalf of the investors and the solicitor for the operators, ASIC had decided not to oppose the proposed orders which would allow for the current operators to complete the schemes if all the investors endorsed the proposed orders. The ASIC letter highlighted a number of aspects of the orders including that ASIC had no role in the supervision of the completion of the schemes and that the investors would bear the risk that the current operators would not complete the schemes in a manner beneficial to their interests. ASIC noted that the role of the supervisor, Mr McDonald, was solely to supervise the payment of the project management fees. In effect, ASIC was endeavouring to ensure that the investors fully understood that they were responsible for overseeing the due completion of the projects by the operators.
In Tasman Investments Barrett J reviewed a great many of the authorities relating to s 601EE including a number of cases in this jurisdiction. He concluded
“Several threads run through theses cases. I would respectfully adopt the observation of Mullins J in the Atlantic 3 case [ASIC v Atlantic 3 Financial (Aust) Pty Ltd (2003) 47 ACSR 52] that there can be a tension between what is required, as a matter of public interest, for the protection of the body of investors and what is perceived as a matter of private interest, to be in the interests of investors individually; and that is ultimately a matter of balancing all factors relevant to the particular case in determining who should be entrusted with the task of winding up the scheme and on what terms. At the same time, I remain of the general view (expressed in ASIC v Takaran (No 2)) that the public interest dimension would cause winding up by the existing and contravening operator not to be favoured except in exceptional circumstances.” para 31.
There are a number of factors which make the winding-up of the schemes by the operators of these schemes not inappropriate. All of the investors in each of the schemes consent to the proposed orders. Their agreement has been obtained with each investor having the benefit of analysis and advice by an independent experienced solicitor acting on their behalf together with a cautionary letter from ASIC. The schemes are progressing satisfactorily after Mr Francis and Mr Stoyakovich became directors of the first to the fourth respondents and Mr Adcock the secretary. The proposals include very stringent reporting conditions and, in light of the initiative of the first to the fourth respondents through the offices of Messrs Francis, Stoyakovich and Adcock in meeting with the investors and putting in place the deeds of extinguishment, the likelihood of them complying with the strict reporting and supervisory regimes included in the orders is high. The investors clearly see these orders as benefiting them more than would be the case were an independent supervisor to be appointed as was ASIC’s preferred position bearing in mind the costs of such an appointment. The public interest is not affronted by these orders. This regime does not include the eleventh, twelfth or thirteenth respondents or their companies.
The orders entrusting the winding-up in each case to the scheme’s operator are annexed to these reasons.
SUPREME COURT OF QUEENSLAND REGISTRY: Brisbane
NUMBER: BS5969/05
Applicant: AUSTRALIAN SECURITIES AND INVESTMENTS
COMMISSION
AND
First Respondent MOUNT WARREN PARK (NOMINEES) PTY
LTD (A.C.N. 102 398 818)
AND
Second Respondent: CARRARA NOMINEES (QLD) PTY LTD
(A.C.N. 103 217 241)
AND
Third Respondent: HILLCREST NOMINEES (QLD) PTY LTD
(A.C.N. 103 217 214)
AND
Fourth Respondent: MORAYFIELD (THE AVENUES) PTY LTD
(A.C.N. 100 748 794)
AND
Fifth Respondent: PARTNERING DYNAMICS PTY LTD
(A.C.N. 068 541 346)
AND
Sixth Respondent: LIFECARE SERVICES AUSTRALIA PTY
LTD (A.C.N. 102 326 081)
AND
Seventh Respondent: QUALITY CARE MANAGEMENT PTY LTD
(A.C.N. 088 962 707)
AND
Eighth Respondent: ROBERT THOMAS ADCOCK
AND
Ninth Respondent: COLIN GRAHAM FRANCIS
AND
Tenth Respondent: DAVID JOSEPH STOYAKOVICH
AND
Eleventh Respondent: BRIAN JAMES MAHER
AND
Twelfth Respondent MARIE THERESE MAHER
AND
Thirteenth Respondent: PAUL JAMES RODDA
ORDER
Before:
Date:
Initiating Document: Interlocutory Application filed 22 July 2005
Originating Application filed 22 July 2005
1. The First Respondent be appointed to wind up the managed investment scheme conducted by the First Respondent (‘the Mount Warren scheme’) pursuant to sec.601EE of the Corporations Act 2001 in accordance with the terms of this order.
2. The First Respondent wind-up the Mount Warren scheme by completing the Mount Warren project and the winding up of the Mount Warren scheme shall be deemed to be completed,(subject to the operation of paragraph 9) when each investor in the Mount Warren scheme is paid a sum comprising:-
(a) the principal sum contributed by each investor to the scheme; and
(b)interest on the principal calculated at the rate of 10% per annum on the principal sum from the date of the contribution of the said sum by the investor until 30 June 2005; and
(c)any stamp duty paid by the investor on account of stamp duty on the Deed of Extinguishment and Transfers signed by the investor(other than duty that has already been refunded to the investor).
provided however that the winding up must be completed within 24 months of the date of this order. For the avoidance of doubt, if the winding up is not completed within 24 months of the date of this order, the First Respondent shall forthwith sell the land and improvements thereon then comprising the Mount Warren project and distribute the proceeds in accordance with paragraph
5(m).
3. For the purpose of this order the Mount Warren project means the acquisition, construction , development and operation of a 72 bed aged care residential complex at 33 Mount Warren Boulevard, Mt Warren.
4. The following provisions of the Corporations Act 2001 shall apply to the winding up of the Mount Warren scheme:-
(a) sec.477(1)(a);
(b) sec.477(2)(a), (b),(c),(d), (e) and (k);
(c) sec. 477 (2A);
(d) sec.477 (2)(m);
as if the reference to a “liquidator” was a reference to the First Respondent and as if the reference to a “company” in sec.477(1) and sec.477(2) was a reference to the Scheme and as if the reference to a “creditor” in sec. 477(2A) was a reference to an investor.
5. The First Respondent in completing the Mount Warren project shall undertake each of the following steps in the winding up or steps to like effect as the First Respondent determines may be necessary in order for it to comply with these orders(except for the payments required by paragraph 5 (l) which the First Respondent must make):-
(a)the construction of the 72 bed aged care residential complex and the payment to Lifecare Services Australia Pty Ltd of project management fees in accordance with the provisions of this order;
(b)the marketing of the 72 bed aged care places to potential residents;
(c)the installation of appropriate fit-out for the complex and for this purpose the First Respondent shall be entitled to further encumber the land owned by the First Respondent;
(d)the obtaining of appropriate staff for the conduct of the complex;
(e)the lodgement of a policies and procedures manual with the Commonwealth Department of Health and Ageing;
(f)the lodgement of the necessary applications with the Commonwealth Department of Health and Ageing so as to obtain accreditation and certification under the Aged Care Act 1997;
(g)the filling of the complex with residents whether or not those residents are unfunded by the Commonwealth government or funded by the Commonwealth government and in the case of unfunded residents whether or not the residential places to be offered to potential residents are obtained by the purchase or lease of bed allocations;
(h)the lodgement of all necessary applications with the Commonwealth Department of Health and Ageing so as to enable the obtaining of funded bed allocations;
the collection and investment of accommodation bonds from residents in accordance with the provisions of the Aged Care Act (C’wlth) 1997;
(j)the registration of the lease of the aged care residential complex to Lifestyle Care Providers Pty Ltd in accordance with the agreement to lease entered into between the First Respondent and Lifestyle Care Providers Pty Ltd;
(k)the refinance of the existing indebtedness on the land owned by the First Respondent for the purpose of the payment to the investors specified in paragraph 2 (a)-(c);
(l)the distribution of the proceeds of the refinance of the land owned by the First Respondent in the following manner:-
firstly, in discharge of any monies due by the First Respondent to any registered mortgagee;
secondly, in payment to the investors of the sums specified in paragraph 2 (a)-(c) and in payment to the First Respondent for the sums due to it;
thirdly, in repayment to the Sixth Respondent of any monies owing by the First Respondent to the Sixth Respondent;
lastly, the balance of any proceeds of the refinance (if any), to the First Respondent.
6. In the course of the winding-up of the Mount Warren scheme the First Respondent shall provide a monthly report to each investor in the scheme and to the Supervisor on the second Tuesday of each month reporting on the following matters for the preceding monthly period:-
(a) the extent to which the aged care complex has been completed;
(b) the number of residents for which residency agreements have been completed;
(c) the marketing of the aged care complex undertaken to that date;
(d) the extent to which the fit-out of the aged care complex has been completed;
(e) the progress made in obtaining staff for the conduct of the aged care complex;
(f) the progress made in the lodgement of all necessary applications with the Commonwealth Department of Ageing so as to facilitate the certification and accreditation of the aged care complex under the Aged Care Act 1997;
(g) the progress made in obtaining residents for the aged care complex and whether the residents obtained are funded or unfunded and to the extent that they are unfunded whether the bed allocations are obtained by purchase or lease;
(h) the amount of accommodation bonds obtained;
(i) the amount of fees paid by the First Respondent to the Sixth Respondent for the preceding monthly period together with a statement of the balance of project management fees still undrawn;
(j) a list of all receipts and payments made by the First Respondent in the preceding monthly period.
7. The Sixth Respondent shall only be entitled to be paid project management fees from the First Respondent on a monthly basis for the balance of project management fees remaining undrawn as at the date of this order in the same proportion as the projects being undertaken by the First Respondent is constructed in any monthly period.
8. The First Respondent shall on a four monthly basis from the date of this order, prepare and provide a report to the investors, ASIC and the Supervisor which shall comprise:-
(a) a Balance Sheet for the scheme;
(b) a statement of any payments made to or by a unitholder in the scheme;
(c) a list of aged creditors for the scheme;
(d) a certificate by the operator of the scheme stating whether in its opinion the scheme is solvent or insolvent;
(e) a list of any legal proceedings brought by or against the First Respondent.
9. Pursuant to sec. 601EE (2) of the Corporations Act 2001 Mike McDonald shall forthwith be appointed as Supervisor to receive the reports referred to herein and to supervise the payment of project management fees to the Sixth Respondent so as to ensure that the Sixth Respondent is paid project management fees in accordance with the procedure specified in the Annexure to this order. The Supervisor shall forthwith respond to ASIC in relation to any enquiry made by ASIC to the Supervisor in connection with the winding-up of the schemes.
10. The Sixth Respondent shall pay the supervisor’s costs of supervision of the payment of the project management fees undertaken pursuant to paragraph 9 of this order.
11. The interlocutory application brought by the Applicant, to the extent of any relief sought against the First Respondent, be dismissed with no order as to costs.
12. The application to wind-up the First Respondent brought by the Applicant, be dismissed with no order as to costs.
13. Otherwise the Originating application brought by the Applicant, to the extent of any relief sought against the First Respondent, be dismissed with no order as to costs.
14. The First Respondent will not make any payments of project management fees to the Seventh, Eleventh, Twelfth and Thirteenth Respondents in relation to the Mt Warren scheme.
15. On reasonable notice, the First Respondent will provide to ASIC access to and facilities for inspecting any documents of a scheme.
16. The First Respondent shall, as soon as is practicable, answer any written enquiry by ASIC or an investor in relation to the winding up of the scheme.
Signed:
SUPREME COURT OF QUEENSLAND REGISTRY: Brisbane
NUMBER: BS5969/05
Applicant: AUSTRALIAN SECURITIES AND INVESTMENTS
COMMISSION
AND
First Respondent MOUNT WARREN PARK (NOMINEES) PTY
LTD (A.C.N. 102 398 818)
AND
Second Respondent: CARRARA NOMINEES (QLD) PTY LTD
(A.C.N. 103 217 241)
AND
Third Respondent: HILLCREST NOMINEES (QLD) PTY LTD
(A.C.N. 103 217 214)
AND
Fourth Respondent: MORAYFIELD (THE AVENUES) PTY LTD
(A.C.N. 100 748 794)
AND
Fifth Respondent: PARTNERING DYNAMICS PTY LTD
(A.C.N. 068 541 346)
AND
Sixth Respondent: LIFECARE SERVICES AUSTRALIA PTY
LTD (A.C.N. 102 326 081)
AND
Seventh Respondent: QUALITY CARE MANAGEMENT PTY LTD
(A.C.N. 088 962 707)
AND
Eighth Respondent: ROBERT THOMAS ADCOCK
AND
Ninth Respondent: COLIN GRAHAM FRANCIS
AND
Tenth Respondent: DAVID JOSEPH STOYAKOVICH
AND
Eleventh Respondent: BRIAN JAMES MAHER
AND
Twelfth Respondent MARIE THERESE MAHER
AND
Thirteenth Respondent: PAUL JAMES RODDA
ORDER
Before:
Date:
Initiating Document: Interlocutory Application filed 22 July 2005
Originating Application filed 22 July 2005
1. The Second Respondent be appointed to wind up the managed investment scheme conducted by the Second Respondent (‘the Cararra scheme’) pursuant to sec.601EE of the Corporations Act 2001 in accordance with the terms of this order.
2. The Second Respondent wind-up the Cararra scheme by completing the Cararra project and the winding up of the Cararra scheme shall be deemed to be completed,(subject to the operation of paragraph 9) when each investor in the Carrara scheme is paid a sum comprising:-
(a) the principal sum contributed by each investor to the scheme; and
(d)interest on the principal calculated at the rate of 10% per annum on the principal sum from the date of the contribution of the said sum by the investor until 30 June 2005; and
(e)any stamp duty paid by the investor on account of stamp duty on the Deed of Extinguishment and Transfers signed by the investor(other than duty that has already been refunded to the investor).
provided however that the winding up must be completed within 18 months of the date of this order. For the avoidance of doubt, if the winding up is not completed within 18 months of the date of this order, the Second Respondent shall forthwith sell the land and improvements thereon then comprising the Cararra project and distribute the proceeds in accordance with paragraph 5 (l).
3. For the purpose of this order the Cararra project means the acquisition, construction , development and operation of a 66 bed aged care residential complex at 45 Chisholm Road, Carrara.
4. The following provisions of the Corporations Act 2001 shall apply to the winding up of the Cararra scheme:-
(a) sec.477(1)(a);
(b) sec.477(2)(a), (b),(c),(d), (e) and (k);
(c) sec. 477 (2A);
(d) sec.477 (2)(m);
as if the reference to a “liquidator” was a reference to the Second Respondent and as if the reference to a “company” in sec.477(1) and sec.477(2) was a reference to the Scheme and as if the reference to a “creditor” in sec. 477(2A) was a reference to an investor.
5. The Second Respondent in completing the Cararra project shall undertake each of the following steps in the winding up or steps to like effect as the Second Respondent determines may be necessary in order for it to comply with these orders(except for the payments required by paragraph 5 (l) which the Second Respondent must make):-
(m)the construction of the 66 bed aged care residential complex and the payment to Lifecare Services Australia Pty Ltd of project management fees in accordance with the provisions of this order;
(n)the marketing of the 66 bed aged care places to potential residents;
(o)the installation of appropriate fit-out for the complex and for this purpose the Second Respondent shall be entitled to further encumber the land owned by the Second Respondent;
(p)the obtaining of appropriate staff for the conduct of the complex;
(q)the lodgement of a policies and procedures manual with the Commonwealth Department of Health and Ageing;
(r)the lodgement of the necessary applications with the Commonwealth Department of Health and Ageing so as to obtain accreditation and certification under the Aged Care Act 1997;
(s)the filling of the complex with residents whether or not those residents are unfunded by the Commonwealth government or funded by the Commonwealth government and in the case of unfunded residents whether or not the residential places to be offered to potential residents are obtained by the purchase or lease of bed allocations;
(t)the lodgement of all necessary applications with the Commonwealth Department of Health and Ageing so as to enable the obtaining of funded bed allocations;
(u)the collection and investment of accommodation bonds from residents in accordance with the provisions of the Aged Care Act (C’wlth) 1997;
(v)the registration of the lease of the aged care residential complex to Lifestyle Care Providers Pty Ltd in accordance with the agreement to lease entered into between the Second Respondent and Lifestyle Care Providers Pty Ltd;
(w)the refinance of the existing indebtedness on the land owned by the Second Respondent for the purpose of the payment to the investors specified in paragraph 2 (a)-(c);
(x)the distribution of the proceeds of the refinance of the land owned by the Second Respondent in the following manner:-
firstly, in discharge of any monies due by the Second Respondent to any registered mortgagee;
secondly, in payment to the investors of the sums specified in paragraph 2 (a)-(c)
thirdly, in repayment to the Sixth Respondent of any monies owing by the Second Respondent to the Sixth Respondent;
lastly, the balance of any proceeds of the refinance (if any), to the Second Respondent.
6. In the course of the winding-up of the Cararra scheme the Second Respondent shall provide a monthly report to each investor in the scheme and to the Supervisor on the second Tuesday of each month reporting on the following matters for the preceding monthly period:-
(a) the extent to which the aged care complex has been completed;
(b) the number of residents for which residency agreements have been completed;
(c) the marketing of the aged care complex undertaken to that date;
(d) the extent to which the fit-out of the aged care complex has been completed;
(e) the progress made in obtaining staff for the conduct of the aged care complex;
(f) the progress made in the lodgement of all necessary applications with the Commonwealth Department of Ageing so as to facilitate the certification and accreditation of the aged care complex under the Aged Care Act 1997;
(g) the progress made in obtaining residents for the aged care complex and whether the residents obtained are funded or unfunded and to the extent that they are unfunded whether the bed allocations are obtained by purchase or lease;
(h) the amount of accommodation bonds obtained;
(i) the amount of fees paid by the Second Respondent to the Sixth Respondent for the preceding monthly period together with a statement of the balance of project management fees still undrawn;
(j) a list of all receipts and payments made by the Second Respondent in the preceding monthly period.
7. The Sixth Respondent shall only be entitled to be paid project management fees from the Second Respondent on a monthly basis for the balance of project management fees remaining undrawn as at the date of this order in the same proportion as the projects being undertaken by the Second Respondent is constructed in any monthly period.
8. The Second Respondent shall on a four monthly basis from the date of this order, prepare and provide a report to the investors, ASIC and the Supervisor which shall comprise:-
(a) a Balance Sheet for the scheme;
(b) a statement of any payments made to or by a unitholder in the scheme;
(c) a list of aged creditors for the scheme;
(d) a certificate by the operator of the scheme stating whether in its opinion the scheme is solvent or insolvent;
(e) a list of any legal proceedings brought by or against the Second Respondent.
9. The Second Respondent shall pay to both AKR Investments Pty Ltd and Gregory James Piggott and Catherine Ann Piggott as Trustees of the G.J.& C.A. Piggott Superannuation Fund:-
(a) not later than 1 July 2006, the principal sum of $100,100.00 contributed to the scheme by each of AKR Investments Pty Ltd and Gregory James Piggott and Catherine Ann Piggott as Trustees of the G.J.& C.A. Piggott Superannuation Fund; and
(b) within 14 days of the making of this order, interest calculated at the rate of 10% per annum on the principal sum of $100,100.00 from the date of the contribution of the said sum by AKR Investments Pty Ltd (19 June 2003) and Gregory James Piggott and Catherine Ann Piggott as Trustees of the G.J.& C.A. Piggott Superannuation Fund until 30 June 2005; and
(c) on 1 July 2006, all interest accrued during the period 30 June 2005 to 30 June 2006 calculated at the rate of 10% per annum on the principal sum of $100,100.00 contributed to the scheme by each of AKR Investments Pty Ltd and Gregory James Piggott and Catherine Ann Piggott as Trustees of the G.J.& C.A. Piggott Superannuation Fund
and upon receipt of those payments by them, the interests of AKR Investments Pty Ltd and Gregory James Piggott and Catherine Ann Piggott as Trustees of the G.J.& C.A. Piggott Superannuation Fund in the Cararra scheme shall be deemed to have been extinguished.
Pursuant to sec. 601EE (2) of the Corporations Act 2001 Mike McDonald shall forthwith be appointed as Supervisor to receive the reports referred to herein and to supervise the payment of project management fees to the Sixth Respondent so as to ensure that the Sixth Respondent is paid project management fees in accordance with the procedure specified in the Annexure to this order. The Supervisor shall forthwith respond to ASIC in relation to any enquiry made by ASIC to the Supervisor in connection with the winding-up of the schemes.
11. The Sixth Respondent shall pay the supervisor’s costs of supervision of the payment of the project management fees undertaken pursuant to paragraph 10 of this order.
12. The interlocutory application brought by the Applicant, to the extent of any relief sought against the Second Respondent, be dismissed with no order as to costs.
13. The application to wind-up the Second Respondent brought by the Applicant, be dismissed with no order as to costs.
14. Otherwise the Originating application brought by the Applicant, to the extent of any relief sought against the Second Respondent, be dismissed with no order as to costs.
15. The Second Respondent will not make any payments of project management fees to the Seventh, Eleventh, Twelfth and Thirteenth Respondents in relation to the schemes.
16. On reasonable notice, the Second Respondent will provide to ASIC access to and facilities for inspecting any documents of a scheme.
17. The Second Respondent shall, as soon as is practicable, answer any written enquiry by ASIC or an investor in relation to the winding up of the scheme.
Signed:
SUPREME COURT OF QUEENSLAND REGISTRY: Brisbane
NUMBER: BS5969/05
Applicant: AUSTRALIAN SECURITIES AND INVESTMENTS
COMMISSION
AND
First Respondent MOUNT WARREN PARK (NOMINEES) PTY
LTD (A.C.N. 102 398 818)
AND
Second Respondent: CARRARA NOMINEES (QLD) PTY LTD
(A.C.N. 103 217 241)
AND
Third Respondent: HILLCREST NOMINEES (QLD) PTY LTD
(A.C.N. 103 217 214)
AND
Fourth Respondent: MORAYFIELD (THE AVENUES) PTY LTD
(A.C.N. 100 748 794)
AND
Fifth Respondent: PARTNERING DYNAMICS PTY LTD
(A.C.N. 068 541 346)
AND
Sixth Respondent: LIFECARE SERVICES AUSTRALIA PTY
LTD (A.C.N. 102 326 081)
AND
Seventh Respondent: QUALITY CARE MANAGEMENT PTY LTD
(A.C.N. 088 962 707)
AND
Eighth Respondent: ROBERT THOMAS ADCOCK
AND
Ninth Respondent: COLIN GRAHAM FRANCIS
AND
Tenth Respondent: DAVID JOSEPH STOYAKOVICH
AND
Eleventh Respondent: BRIAN JAMES MAHER
AND
Twelfth Respondent MARIE THERESE MAHER
AND
Thirteenth Respondent: PAUL JAMES RODDA
ORDER
Before:
Date:
Initiating Document: Interlocutory Application filed 22 July 2005
Originating Application filed 22 July 2005
1. The Third Respondent be appointed to wind up the managed investment scheme conducted by the Third Respondent (‘the Hillcrest scheme’) pursuant to sec.601EE of the Corporations Act 2001 in accordance with the terms of this order.
2. The Third Respondent wind-up the Hillcrest scheme by completing the Hillcrest project and the winding up of the Hillcrest scheme shall be deemed to be completed when each investor in the Hillcrest scheme is paid a sum comprising:-
(a)the principal sum contributed by each investor to the scheme; and
(b)interest on the principal calculated at the rate of 10% per annum on the principal sum from the date of the contribution of the said sum by the investor until 30 June 2005; and
(c)any stamp duty paid by the investor on account of stamp duty on the Deed of Extinguishment and Transfers signed by the investor(other than duty that has already been refunded to the investor).
provided however that the winding up must be completed within 18 months of the date of this order. For the avoidance of doubt, if the winding up is not completed within 18 months of the date of this order, the Third Respondent shall forthwith sell the land and improvements thereon then comprising the Hillcrest project and distribute the proceeds in accordance with paragraph 5 (l).
3. For the purpose of this order the Hillcrest project means the acquisition, construction , development and operation of Stage 1 of a 72 bed aged care residential complex at 46 Middle Road, Hillcrest.
4. The following provisions of the Corporations Act 2001 shall apply to the winding up of the Hillcrest scheme:-
(a) sec.477(1)(a);
(b) sec.477(2)(a), (b),(c),(d), (e) and (k);
(c) sec. 477 (2A);
(d) sec.477 (2)(m);
as if the reference to a “liquidator” was a reference to the Third Respondent and as if the reference to a “company” in sec.477(1) and sec.477(2) was a reference to the Scheme and as if the reference to a “creditor” in sec. 477(2A) was a reference to an investor.
5. The Third Respondent in completing the Hillcrest project shall undertake each of the following steps in the winding up or steps to like effect as the Third Respondent determines may be necessary in order for it to comply with these orders(except for the payments required by paragraph 5 (l) which the Third Respondent must make):-
(a)the construction of the 72 bed aged care residential complex and the payment to Lifecare Services Australia Pty Ltd of project management fees in accordance with the provisions of this order;
(b)the marketing of the 72 bed aged care places to potential residents;
(c)the installation of appropriate fit-out for the complex and for this purpose the Third Respondent shall be entitled to further encumber the land owned by the Third Respondent;
(d)the obtaining of appropriate staff for the conduct of the complex;
(e)the lodgement of a policies and procedures manual with the Commonwealth Department of Health and Ageing;
(f)the lodgement of the necessary applications with the Commonwealth Department of Health and Ageing so as to obtain accreditation and certification under the Aged Care Act 1997;
(g)the filling of the complex with residents whether or not those residents are unfunded by the Commonwealth government or funded by the Commonwealth government and in the case of unfunded residents whether or not the residential places to be offered to potential residents are obtained by the purchase or lease of bed allocations;
(h)the lodgement of all necessary applications with the Commonwealth Department of Health and Ageing so as to enable the obtaining of funded bed allocations;
the collection and investment of accommodation bonds from residents in accordance with the provisions of the Aged Care Act (C’wlth) 1997;
(j)the registration of the lease of the aged care residential complex to Lifestyle Care Providers Pty Ltd in accordance with the agreement to lease entered into between the Third Respondent and Lifestyle Care Providers Pty Ltd;
(k)the refinance of the existing indebtedness on the land owned by the Third Respondent for the purpose of the payment to the investors specified in paragraph 2(a)-(c);
(l)the distribution of the proceeds of the refinance of the land owned by the Third Respondent in the following manner:-
firstly, in discharge of any monies due by the Third Respondent to any registered mortgagee;
secondly, in payment to the investors of the sums specified in paragraph 2(a)-(c);
thirdly, in repayment to the Sixth Respondent of any monies owing by the Third Respondent to the Sixth Respondent;
lastly, the balance of any proceeds of the refinance (if any), to the Third Respondent.
6. In the course of the winding-up of the Hillcrest scheme the Third Respondent shall provide a monthly report to each investor in the scheme and to the Supervisor on the second Tuesday of each month reporting on the following matters for the preceding monthly period:-
(a) the extent to which the aged care complex has been completed;
(b) the number of residents for which residency agreements have been completed;
(c) the marketing of the aged care complex undertaken to that date;
(d) the extent to which the fit-out of the aged care complex has been completed;
(e) the progress made in obtaining staff for the conduct of the aged care complex;
(f) the progress made in the lodgement of all necessary applications with the Commonwealth Department of Ageing so as to facilitate the certification and accreditation of the aged care complex under the Aged Care Act 1997;
(g) the progress made in obtaining residents for the aged care complex and whether the residents obtained are funded or unfunded and to the extent that they are unfunded whether the bed allocations are obtained by purchase or lease;
(h) the amount of accommodation bonds obtained;
(i) the amount of fees paid by the Third Respondent to the Sixth Respondent for the preceding monthly period together with a statement of the balance of project management fees still undrawn;
(j) a list of all receipts and payments made by the Third Respondent in the preceding monthly period.
7. The Sixth Respondent shall only be entitled to be paid project management fees from the Third Respondent on a monthly basis for the balance of project management fees remaining undrawn as at the date of this order in the same proportion as the project being undertaken by the Third Respondent is constructed in any monthly period.
8. The Third Respondent shall on a four monthly basis from the date of this order, prepare and provide a report to the investors, ASIC and the Supervisor which shall comprise:-
(a) a Balance Sheet for the scheme;
(b) a statement of any payments made to or by a unitholder in the scheme;
(c) a list of aged creditors for the scheme;
(d) a certificate by the operator of the scheme stating whether in its opinion the scheme is solvent or insolvent;
(e) a list of any legal proceedings brought by or against the Third Respondent.
Pursuant to sec. 601EE (2) of the Corporations Act 2001 Mike McDonald shall forthwith be appointed as Supervisor to receive the reports referred to herein and to supervise the payment of project management fees to the Sixth Respondent so as to ensure that the Sixth Respondent is paid project management fees in accordance with the procedure specified in the Annexure to this order. The Supervisor shall forthwith respond to ASIC in relation to any enquiry made by ASIC to the Supervisor in connection with the winding-up of the schemes.
10. The Sixth Respondent shall pay the supervisor’s costs of supervision of the payment of the project management fees undertaken pursuant to paragraph 9 of this order.
11. The interlocutory application brought by the Applicant, to the extent of any relief sought against the Third, Sixth, Eighth, Ninth and Tenth Respondents, be dismissed with no order as to costs.
12. The application to wind-up the Third Respondent brought by the Applicant, be dismissed with no order as to costs.
13. Otherwise the Originating application brought by the Applicant, to the extent of any relief sought against the Third, Sixth, Eighth, Ninth and Tenth Respondents, be dismissed with no order as to costs.
14. The Third, Sixth, Eighth Ninth and Tenth Respondents will not make any payments of project management fees to the Seventh, Eleventh, Twelfth and Thirteenth Respondents in relation to the schemes.
15. On reasonable notice, the Third, Sixth, Eighth, Ninth and Tenth Respondents will provide to ASIC access to and facilities for inspecting any documents of a scheme.
16. The Third, Sixth, Eighth, Ninth and Tenth Respondents shall, as soon as is practicable, answer any written enquiry by ASIC or an investor in relation to the winding up of the scheme.
17. Order than any party have liberty to apply on 3 days notice, including, for the avoidance of doubt, the Applicant in the event of a material change in circumstances being discovered by the Applicant.
18. Order that the Originating Application otherwise be adjourned to a date to be fixed with costs reserved.
Signed:
SUPREME COURT OF QUEENSLAND REGISTRY: Brisbane
NUMBER: BS5969/05
Applicant: AUSTRALIAN SECURITIES AND INVESTMENTS
COMMISSION
AND
First Respondent MOUNT WARREN PARK (NOMINEES) PTY
LTD (A.C.N. 102 398 818)
AND
Second Respondent: CARRARA NOMINEES (QLD) PTY LTD
(A.C.N. 103 217 241)
AND
Third Respondent: HILLCREST NOMINEES (QLD) PTY LTD
(A.C.N. 103 217 214)
AND
Fourth Respondent: MORAYFIELD (THE AVENUES) PTY LTD
(A.C.N. 100 748 794)
AND
Fifth Respondent: PARTNERING DYNAMICS PTY LTD
(A.C.N. 068 541 346)
AND
Sixth Respondent: LIFECARE SERVICES AUSTRALIA PTY
LTD (A.C.N. 102 326 081)
AND
Seventh Respondent: QUALITY CARE MANAGEMENT PTY LTD
(A.C.N. 088 962 707)
AND
Eighth Respondent: ROBERT THOMAS ADCOCK
AND
Ninth Respondent: COLIN GRAHAM FRANCIS
AND
Tenth Respondent: DAVID JOSEPH STOYAKOVICH
AND
Eleventh Respondent: BRIAN JAMES MAHER
AND
Twelfth Respondent MARIE THERESE MAHER
AND
Thirteenth Respondent: PAUL JAMES RODDA
ORDER
Before:
Date:
Initiating Document: Interlocutory Application filed 22 July 2005
Originating Application filed 22 July 2005
1. The Fourth Respondent be appointed to wind up the managed investment scheme conducted by the Fourth Respondent (‘the Morayfield scheme’) pursuant to sec.601EE of the Corporations Act 2001.
2. The Fourth Respondent wind-up the Morayfield scheme by completing the Morayfield project and the winding up of the Morayfield scheme shall be deemed to be completed when each investor in the Morayfield scheme is paid a sum comprising:-
(a)the principal sum contributed by each investor to the scheme; and
(b)interest on the principal calculated at the rate of 10% per annum on the principal sum from the date of the contribution of the said sum by the investor until 30 June 2005; and
(c)any stamp duty paid by the investor on account of stamp duty on the Deed of Extinguishment and Transfers signed by the investor(other than duty that has already been refunded to the investor).
For the avoidance of doubt, if the winding up is not completed within 12 months of the date of this order, the Fourth Respondent shall forthwith sell the land and improvements thereon then comprising the Morayfield project and distribute the proceeds in accordance with paragraph 5(e).
3. For the purpose of this order the Morayfield project means the acquisition, construction, development and sale of 50 residential lots owned by the Fourth Respondent situated at 73-87 Caboolture River Road, Morayfield.
4. The following provisions of the Corporations Act 2001 shall apply to the winding up of the Morayfield scheme:-
(a) sec.477(1)(a);
(b) sec.477(2)(a), (b),(c),(d), (e) and (k);
(c) sec. 477 (2A);
(d) sec.477 (2)(m);
as if the reference to a “liquidator” was a reference to the Fourth Respondent and as if the reference to a “company” in sec.477(1) and sec.477(2) was a reference to the Scheme and as if the reference to a “creditor” in sec. 477(2A) was a reference to an investor.
5.The Fourth Respondent in completing the Morayfield project shall undertake each of the following steps in the winding up or steps to like effect as the Fourth Respondent determines may be necessary in order for it to comply with these orders(except for the payments required by paragraph 5(e) which the Fourth Respondent must make):-
(a)the construction of the 50 residences and any action necessary to procure the reinstatement of construction finance for the project either by McLaughlins Financial Services or another lender;
(b)the marketing of the 50 residences;
(c)the execution of sale contracts for each of the 50 residences;
(d)the completion of the sale of each of the 50 residences;
(e)the distribution of the proceeds of sale of the 50 residences in the following manner:-
(i) firstly, in discharge of any monies due by the Fourth Respondent to any registered mortgagee;
(ii) secondly, in payment to the investors of the sums specified in paragraph 2(a)-(c);
(iii) thirdly, in repayment to the Sixth Respondent of any monies owing by the Fourth Respondent to the Sixth Respondent;
(iv) lastly, the balance of any proceeds of sale (if any), to the Fourth Respondent.
6. In the course of the winding-up of the Morayfield scheme the Fourth Respondent shall provide a monthly report to each investor in the scheme and to the Supervisor on the second Tuesday of each month reporting on the following matters for the preceding monthly period:-
(a) the number of residences for which a contract of sale has been signed;
(b) the number of residences for which a contract of sale has been completed;
(c) the extent to which the construction of the 50 residences has been completed;
(d) an expected date for the completion of the Morayfield project;
(e) the amount of fees paid by the Fourth Respondent to the Sixth Respondent for the preceding monthly period together with a statement of the balance of project management fees still undrawn;
(f) a list of all receipts and payments made by the Fourth Respondent in the preceding monthly period.
7. The Sixth Respondent shall only be entitled to be paid project management fees from the Fourth Respondent on a monthly basis for the balance of project management fees remaining undrawn as at the date of this order in the same proportion as the project being undertaken by the Fourth Respondent is constructed in any monthly period.
8. The Fourth Respondent shall on a four monthly basis from the date of this order, prepare and provide a report to the investors, ASIC and the Supervisor which shall comprise:-
(a) a Balance Sheet for the scheme;
(b) a statement of any payments made to or by a unitholder in the scheme;
(c) a list of aged creditors for the scheme;
(d) a certificate by the operator of the scheme stating whether in its opinion the scheme is solvent or insolvent;
(e) a list of any legal proceedings brought by or against the Fourth Respondent.
Pursuant to sec. 601EE (2) of the Corporations Act 2001 Mike McDonald shall forthwith be appointed as Supervisor to receive the reports referred to herein and to supervise the payment of project management fees to the Sixth Respondent so as to ensure that the Sixth Respondent is paid project management fees in accordance with the procedure specified in the Annexure to this order. The Supervisor shall forthwith respond to ASIC in relation to any enquiry made by ASIC to the Supervisor in connection with the winding-up of the schemes.
10. The Sixth Respondent shall pay the supervisor’s costs of supervision of the payment of the project management fees undertaken pursuant to paragraph 9 of this order.
11. The interlocutory application brought by the Applicant, to the extent of any relief sought against the Fourth Respondent, be dismissed with no order as to costs.
12. The application to wind-up the Fourth Respondent brought by the Applicant, be dismissed with no order as to costs.
13. Otherwise the Originating application brought by the Applicant, to the extent of any relief sought against the Fourth Respondent, be dismissed with no order as to costs.
14. The Fourth Respondent will not make any payments of project management fees to the Seventh, Eleventh, Twelfth and Thirteenth Respondents in relation to the Morayfield scheme.
15. On reasonable notice, the Fourth Respondent will provide to ASIC access to and facilities for inspecting any documents of a scheme.
16. The Fourth Respondent shall, as soon as is practicable, answer any written enquiry by ASIC or an investor in relation to the winding up of the Morayfield scheme.
Signed:
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