FAMILY COURT OF AUSTRALIA
| CUTHBERT & CUTHBERT AND ORS | [2015] FamCA 567 |
| FAMILY LAW – Application by liquidator — seeking directions under s 511 of the Corporations Act 2001 (Cth) — seeking approval to compromise debts under s 477(2A) of the Corporations Act — seeking approval to enter into agreements that extend beyond three months in duration under s 477(2B) of the Corporations Act — seeking advice of the Court under s 63 of the Trustee Act 1925 (NSW) |
| Corporations Act 2001 (Cth) ss 511, 477(2A), 477(2B) Trustee Act 1925 (NSW) s 63 |
| B Pty Ltd v D Pty Ltd … | ||
| APPLICANT: | Ms Cuthbert | |
| RESPONDENT: | Mr Cuthbert |
| SECOND NAMED RESPONDENT: THIRD NAMED RESPONDENT: | Mr Curtin B Pty Ltd (in liquidation) |
| FOURTH NAMED RESPONDENT: | Deputy Commissioner of Taxation |
| FILE NUMBER: | CAC | 200 | of | 2010 |
| DATE DELIVERED: | 21 July 2015 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Bennett J |
| HEARING DATE: | 22 May 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Robinson |
| SOLICITOR FOR THE APPLICANT: | Robinson Gill |
| COUNSEL FOR THE RESPONDENT: | Mr Finch |
| SOLICITOR FOR THE RESPONDENT: | Creaghe Lisle Solicitors |
| COUNSEL FOR THE SECOND AND THIRD NAMED RESPONDENTS: | Mr Dawson |
| SOLICITOR FOR… |
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- AGLC
- Cuthbert and Cuthbert and Ors [2015] FamCA 567
- Case
- [2015] FamCA 567
- Decision Date
CaseChat Overview and Summary
The court was required to determine whether the Second Respondent, in his capacity as liquidator and trustee, was justified in entering into and performing deeds of settlement with Ms Cuthbert, Mr Cuthbert, and Mr Cotter, and whether he had the court's approval to compromise debts under these settlements. Furthermore, the court needed to decide on the justification for treating certain real property as trust property, liabilities incurred by a company purporting to act as trustee as true trust liabilities, and the overall winding up of the trust. The court also had to direct the order of priority for payments during the winding up process, including the costs of the liquidator, unsecured creditors, settlement obligations, and the Australian Taxation Office.
In reaching its decision, the court applied sections 511, 477(2A), and 477(2B) of the Corporations Act 2001 (Cth) and section 63 of the Trustee Act 1925 (NSW). Section 511 of the Corporations Act allowed the court to direct that a liquidator is justified in entering into and performing agreements. Sections 477(2A) and 477(2B) provided the court's approval for compromising debts and entering into agreements where performance might extend beyond three months. Section 63 of the Trustee Act permitted the court to direct a trustee regarding the administration and winding up of a trust. The court granted directions for the settlements with Ms Cuthbert, Mr Cuthbert, and Mr Cotter, approved the compromise of debts, and authorised the entry into the deeds of settlement. It also directed that specific real property be treated as trust property, certain liabilities be considered true trust liabilities, and authorised the winding up of the trust.
The court ordered that the Second Respondent, as liquidator and trustee, was justified in entering into and performing the deeds of settlement with Ms Cuthbert, Mr Cuthbert, and Mr Cotter, and was approved to compromise the debts under those deeds. The court further directed that the Second Respondent was justified in treating the specified real property as trust property, the liabilities incurred by D Pty Ltd as true trust liabilities, and in winding up the trust. The administration of the winding up was directed to follow a specific order of priority: firstly, the costs of the liquidator/trustee; secondly, unsecured creditors (excluding the ATO); thirdly, obligations under the settlement deeds; and finally, payment to the ATO. Liberty was granted to the Second Respondent to apply to the court on short notice, and all extant applications were dismissed.
Orders
Orders of the court
IT IS ORDERED THAT:
Directions as to settlement with Ms Cuthbert and the ATO
1.
Pursuant to Corporations Act 2001 (Cth), s 511, the Court directs that the Second Respondent in his capacity as liquidator or the Third Respondent is justified in entering into and performing, and in procuring that the Third Respondent enter into and perform, a deed of settlement with Ms Cuthbert substantially in the same form as Confidential Exhibit A (‘the Ms Cuthbert Deed of Settlement’).
2.
Pursuant to Corporations Act 2001 (Cth), s 477(2A), the Second Respondent in his capacity as liquidator or the Third Respondent has the approval of the Court to compromise all debts owing to the Third Respondent that are referred to in the Ms Cuthbert Deed of Settlement, upon the terms contained in that Deed.
3.
Pursuant to Corporations Act 2001 (Cth), s 477(2B), the Second Respondent in his capacity as liquidator or the Third Respondent for and on behalf of the Third Respondent, has the approval of the Court to enter into the Ms Cuthbert Deed of Settlement, notwithstanding that obligations of a party to the agreement may according to the terms of the agreement be discharged by performance more than three months after the agreement is entered into.
4.
Pursuant to section 63 of the Trustee Act 1925 (NSW), a direction that the Second Respondent in his capacity as trustee of the Trust is justified in entering into the Ms Deed of Settlement.
Direction as to the settlement with Mr Cuthbert and the ATO
5.
Pursuant to Corporations Act 2001 (Cth), s 511, the Court directs that the Second Respondent in his capacity as liquidator or the Third Respondent is justified in entering into and performing, and in procuring that the Third Respondent enter into and perform a deed of settlement with Mr Cuthbert substantially in the same form as Confidential Exhibit B (‘the Mr Cuthbert Deed of Settlement’);
6.
Pursuant to Corporations Act 2001(Cth), s 477(2A), the Second Respondent in his capacity as liquidator or the Third Respondent has the approval of the Court to compromise all debts owing to the Third Respondent that are referred to in the Mr Cuthbert Deed of Settlement, upon the terms contained in that Deed.
7.
Pursuant to Corporations Act 2001(Cth), s 477(2B), the Second Respondent in his capacity as liquidator or the Third Respondent for and on behalf of the Third Respondent, has the approval of the Court to enter into the Mr Cuthbert Deed of Settlement, notwithstanding that obligations of a party to the agreement may according to the terms of the agreement be discharged by performance more than three months after the agreement is entered into.
8.
Pursuant to section 63 of the Trustee Act 1925 (NSW), a direction that the Second Respondent in his capacity as trustee of the Trust is justified in entering into the Mr Cuthbert Deed of Settlement.
Directions as to the settlement with Mr Cotter
9.
Pursuant to Corporations Act 2001 (Cth), s511, the Court directs that the Second Respondent in his capacity as liquidator or the Third Respondent is justified in entering into and performing, and in procuring that the Third Respondent enter into and perform a deed of settlement with Mr Cotter substantially in the same form as Confidential Exhibit C (‘the Mr Cotter Deed of Settlement’).
10.
Pursuant to Corporations Act 2001 (Cth), s 477(2A), the Second Respondent in his capacity as liquidator or the Third Respondent has the approval of the Court to compromise all debts owing to the Third Respondent that are referred to in the Mr Cotter Deed of Settlement, upon the terms contained in that Deed.
11.
Pursuant to Corporations Act 2001 (Cth), s 477(2B), the Second Respondent in his capacity as liquidator or the Third Respondent for and on behalf of the Third Respondent, has the approval of the Court to enter into the Mr Cotter Deed of Settlement, notwithstanding that obligations of a party to the agreement may according to the terms of the agreement be discharged by performance more than three months after the agreement is entered into.
12.
Pursuant to section 63 of the Trustee Act 1925 (NSW), a direction that the Second Respondent in his capacity as trustee of the Trust is justified in entering into the Mr Cotter Deed of Settlement.
Administration and winding up of the Trust
13.
Pursuant to section 63 of the Trustee Act 1925 (NSW), a direction that the Second Respondent in his capacity as trustee of the Trust is justified in treating real property situated at E Street is property as Trust property.
14.
Pursuant to section 63 of the Trustee Act 1925 (NSW), a direction that the Second Respondent in his capacity as trustee of the Trust is justified in treating liabilities incurred by D Pty Ltd in the period 14 October 2011 to 13 April 2012, while it purported to serve as trustee of the Trust as true liabilities of the Trust.
15.
Pursuant to section 63 of the Trustee Act 1925 (NSW), a direction that the Second Respondent in his capacity as trustee of the Trust is justified in winding up the Trust.
16.
Pursuant to section 63 of the Trustee Act 1925 (NSW), a direction that the Second Respondent in his capacity as trustee of the Trust is justified in administering the winding up of the Trust as follows:
(a) Firstly, in payment of the costs and expenses of the Second Respondent in his capacity as liquidator of the Third Respondent and trustee of the Trust;
(b) Secondly, in payment of unsecured creditors excluding the Australian Taxation Office (ATO);
(c) Thirdly, in performing the obligations under the Ms Cuthbert Deed of Settlement, the Mr Cuthbert Deed of Settlement and the Mr Cotter Deed of Settlement; and
(d) Fourthly, in payment to the ATO.
General
17.
Liberty to the Second Respondent to apply to the Court on 2 days’ notice.
18.
An order that these orders be made in proceeding NSD 680/2014 (formerly in the Federal Court of Australia).
19.
An order that Exhibits A, B & C be and remain confidential, and that they be placed on the Court file in an envelope marked ‘confidential’: not to be opened except by order of the Judicial Officer.
20.
All extant applications be dismissed and this matter be removed from the docket of The Honourable Justice Bennett.
IT IS DIRECTED:
21.
That the minute of orders be marked Exhibit “A” and remain on the Court file.
22.
A copy of this Order be annexed to the Order made on 25 May 2015 in file No. (P)MLC4357/2015 in the name of B Pty Ltd (In Liquidation) and Curtin, Cuthbert, Cuthbert and Cotter and this file travel with that file.
AND IT IS NOTED that the file referred to as proceeding NSD 680/2014 (formerly in the Federal Court of Australia) was transferred to the Family Court of Australia on 13 April 2015 and is known as the file No. (P)MLC4357/2015 in the name of B Pty Ltd (In Liquidation) and Curtin, Cuthbert, Cuthbert and Cotter.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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