Bosi Security Services Limited v Australia and New Zealand Banking Group Limited

The Bosi Security Services Limited v Australia and New Zealand Banking Group Limited case involved a dispute concerning the rights of investors in a managed investment scheme that had been placed into liquidation. The case was heard in the Federal Court of Australia. The investors, who had invested in the scheme for the cultivation of almonds, claimed rights to use orchards and land owned by Timbercorp Group. However, the companies in Timbercorp were placed in liquidation, and the liquidators sought to sell the orchards and land unencumbered by any interest. The investors argued that they had a proprietary interest in the assets and sought to claim a share of the net proceeds from the sale.

The legal issues the court had to decide included the principles to be applied to determine the extent of the respective interests in the fund, the nature of the growers' rights, and the valuation of the opportunity for the projects to be restructured if the rights were not extinguished. The court had to determine whether the investors' rights to use and occupy the assets under licence were of a proprietary nature and whether the leasehold interest in the land extended to the orchards, capital works, and water licenses. The court also had to consider the experts' duty to the court and the admissibility of evidence.

The court found that the investors' rights to the assets sold were not founded in property rights and that the measure of apportionment was to be determined by the value of the property rights pre-extinguishment. The court held that the investors' rights to use and occupy the assets were contractual in nature and that the leasehold interest in the orchards and capital works was proprietary in nature. The court also found that the experts' duty to the court was to provide independent, objective, and impartial assistance and that evidence of an expert as an advocate was inadmissible. The court held that the opportunity for the projects to be restructured if the rights were not extinguished was mere hope and had no value established in relation to the proprietary rights of the investors.

The court ordered that the fund created out of the sale proceeds be apportioned between the investors and the secured creditors based on their respective proprietary interests in the fund. The court also ordered that the investors' rights to assert entitlement to a share of the net proceeds be preserved and reserved to the rights proceeding.