Hastings and Hopkins & Ors
[2020] FamCA 688
•20 August 2020
FAMILY COURT OF AUSTRALIA
| HASTINGS & HOPKINS AND ORS | [2020] FamCA 688 |
| FAMILY LAW – COURT APPOINTED RECEIVERS – powers – need for orders to specify powers and remuneration of receivers under s 420 of the Corporations Act – orders made. FAMILY LAW – COURT APPOINTED LIQUIDATORS – powers – need for orders to specify powers under s 477 of the Corporations Act – orders made. |
| Corporations Act 2001 (Cth), ss 420, 461(1)(f), 477(2) Family Law Act 1975 (Cth), s 79 |
| Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth (2019) 93 ALJR 807 Combis, in the matter of Reehal Holdings Pty Ltd (in liq) (Trustee) v Reehal Holdings Pty Ltd (in liq) (Trustee) [2017] FCA 793 Jawhite Pty Ltd v Trabme Pty Ltd [2019] QCA 119 Michell (Liquidator) v Delltta Holdings Pty Ltd (in liq) atf The Brookhill Trust [2019] FCA 2133 Re Gondon Five Pty Ltd and Cui Family Asset Management Pty Ltd [2019] NSWSC 468 |
| Sir Raymond Walton, Kerr on Receivers & Administrators (Sweet & Maxwell, 17th ed, 1989). |
| APPLICANT: | Ms Hastings |
| FIRST RESPONDENT: | Mr Hopkins |
| SECOND RESPONDENT: | B Pty Ltd |
| THIRD RESPONDENT: | Hopkins Holdings Pty Ltd |
| FOURTH RESPONDENT: | C Pty Ltd |
| INTERVENOR: | Commissioner of Taxation for the Commonwealth Of Australia |
| RECEIVER: | Mr P and Mr Q in their capacity as Receivers of the Hopkins Family Trust & Mr P and Mr Q in their capacity as Receivers of the Hopkins Trust |
| FILE NUMBER: | MLC | 10970 | of | 2015 |
| DATE DELIVERED: | 20 August 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Wilson J |
| HEARING DATE: | 20 August 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Not applicable |
| SOLICITOR FOR THE APPLICANT: | Not applicable |
| COUNSEL FOR THE FIRST RESPONDENT: | Not applicable |
SOLICITOR FOR THE FIRST RESPONDENT: | Not applicable |
COUNSEL FOR THE SECOND RESPONDENT: | Not applicable |
| SOLICITOR FOR THE SECOND RESPONDENT: | Not applicable |
COUNSEL FOR THE THIRD RESPONDENT: | Not applicable |
SOLICITOR FOR THE THIRD RESPONDENT: | Not applicable |
COUNSEL FOR THE FOURTH RESPONDENT: | Not applicable |
| SOLICITOR FOR THE FOURTH RESPONDENT: | Not applicable |
| COUNSEL FOR THE INTERVENOR: | Not applicable |
| SOLICITOR FOR THE INTERVENOR: | Not applicable |
| COUNSEL FOR THE RECEIVER: | Not applicable |
| SOLICITOR FOR THE RECEIVER: | Mills Oakley |
Orders
With effect from 11 March 2020, Mr P and Mr Q of L Partners, the joint and several receivers (Receivers) of all of the assets of the Hopkins Trust and Hopkins Family Trust (Trusts) appointed pursuant to paragraph 4 of the orders of the Honourable Justice Wilson made 11 March 2020 (11 March Orders), be appointed with the powers provided by s 420 of the Corporations Act 2001 (Cth) (Act) as if the reference therein to “the corporation” were to the Trusts, together with the powers that a liquidator has in respect of property of a company (in its role as legal owner and trustee) pursuant to s 477(2) of the Act.
With effect from 11 March 2020, the Receivers are entitled to be paid from the rights of exoneration of each of the second respondent and the third respondent (the Companies) as trustee of each of the respective Trusts their costs, expenses and remuneration in respect of work undertaken to render each of the Companies’ rights of exoneration available to meet the claims of creditors whose debts were incurred in the administration of the Trusts (the Remuneration Entitlement).
The Remuneration Entitlement –
(a) is conferred upon the Receivers in their capacity both as liquidators of the Companies and in their capacity as Receivers of the assets of the Trusts; and
(b) is to be calculated at the rates set out in the Schedule of Hourly Rates and Guide to Staff Experience appearing as Annexure “B” to this order.
With effect from 11 March 2020, the Receivers, in their capacity as receivers of the Trusts, are to be remunerated from the assets of the Trusts at the same rates and in the same manner as they are remunerated as liquidators as a consequence of paragraph 3 of the 11 March Orders.
The work referred to in paragraph 1 hereof as being work to render each Company’s right of exoneration available to meet the claims of creditors whose debts were incurred in the administration of the Trusts includes work relating to –
(a) the identification of trust assets and liabilities;
(b) the identification of trust creditors and distinguishing them from non-trust creditors;
(c) the ascertaining of the state of the accounts between the beneficiaries and the trustee;
(d) the recovering or attempting to recover trust assets for the purposes of meeting the right of exoneration;
(e) the realisation or the attempted realisation of trust assets for the purposes of meeting the right of exoneration;
(f) the securing of trust assets (or their value) to meet the right of exoneration and their application to the trust creditors;
(g) the distribution of funds which are the subject of the right of exoneration to those who are entitled to them, and/or distribution of funds in accordance with orders 6 and 7 of the 11 March Orders.
The Court dispenses with any requirement for the Receivers to file any security in accordance with rule 20.48 of the Family Law Rules 2004 (Cth).
The Receivers’ costs of and incidental to the making of these orders be costs in the winding up of the Companies.
The Receivers have liberty to apply.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hastings & Hopkins has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 10970 of 2015
| Ms Hastings |
Applicant
And
| Mr Hopkins |
First Respondent
And
| B Pty Ltd |
Second Respondent
And
| Hopkins Holdings Pty Ltd |
Third Respondent
And
| C Pty Ltd |
Fourth Respondent
And
| Commissioner of Taxation for the Commonwealth of Australia |
Intervenor
And
| Mr P and Mr Q in their capacity as Receivers of the Hopkins Family Trust & Mr P and Mr Q in their capacity as Receivers of the Hopkins Trust |
Receiver
EX TEMPORE REASONS FOR JUDGMENT
Introduction
Ms Hastings commenced proceeding MLC10970 of 2015 seeking orders under s 79 of the Family Law Act. The respondent to that proceeding was Mr Hopkins. Over the life of that proceeding various companies were added as respondents, those being B Pty Ltd, Hopkins Holdings Pty Ltd and C Pty Ltd. By leave, the Commissioner of Taxation for the Commonwealth of Australia (“the Commissioner”) intervened.
After several directions hearings before me that proceeding was settled. The first respondent had presented his own petition in bankruptcy on 18 September 2019 and the Commissioner agreed to the terms of settlement. After hearing submissions from the parties on the justice and equity of the proposals embodied in the terms of settlement I made orders by consent of the applicant and the Commissioner pursuant to which the proceeding was resolved and all parties’ claims were compromised.
Pursuant to the consent orders by which the proceeding was compromised, the applicant was required to do certain things and orders were made for the appointment of liquidators to the second, third and fourth respondents. Orders were also made for the appointment of receivers of the assets of two trusts, namely the Hopkins Family Trust and the Hopkins Trust. Ms Hastings in her capacity as a director of B Pty Ltd was required to do all things necessary to transfer a property from B Pty Ltd to herself known and described as M Street, Suburb N and for her to retain that property for her own use and benefit. Paragraph 3 of the orders made on 11 March 2020 provided that after the transfer of the Suburb N property to Ms Hastings, the applicants in this application in a case returnable today were appointed –
a)under s 461(1)(f) of the Corporations Act as joint and several liquidators of B, Hopkins Holdings and C Pty Ltd, those being the abbreviated names for the second, third and fourth respondents; as well as
b)joint and several receivers of the assets of the Hopkins Family Trust and the Hopkins Trust.
Mr P and Mr Q, the applicants in this application are very experienced accountants, liquidators, trustees-in-bankruptcy and members of the Australian Restructuring Insolvency & Turnaround Association. Each is well known to the court and enjoys a very favourable reputation in insolvency matters.
For ease of reference I shall call Mr P and Mr Q, “the liquidators and receivers”.
The liquidators and receivers have brought to my attention that the orders made on 11 March 2020 are silent in relation to matters for which provision is ordinarily made under the Corporations Act. Specifically they say provision is usually made in the order –
a)under s 420 of the Corporation Act in relation to the receivers’ powers;
b)under s 477(2) of the Corporations Act in relation to the liquidators’ powers;
c)for the receivers’ remuneration and their right of exoneration; and
d)giving guidance as to the work to be undertaken.
It must be borne in mind that as a matter of law, differences exist in relation to the scope and powers conferred upon receivers appointed by instrument as opposed to receivers appointed by order of the court. The extent of those differences has been the subject of learned examination by Sir Raymond Walton in Kerr on Receivers and Administrators.[1]
[1] Sir Raymond Walton, Kerr on Receivers & Administrators (Sweet & Maxwell, 17th ed, 1989).
In the circumstances of this case, Ms Hastings had been removed as a director of and shareholder in B Pty Ltd in July 2019 and by the date of my order in March 2020, she had not been reappointed. In view of her removal from her status as a director of and shareholder in B Pty Ltd as at July 2019, she was unable to successfully undertaken the steps that were necessary in transferring the Suburb N property. Consequently, complications arose in the appointment of the liquidators to the companies referred to above.
Let me return to the events of April 2020. It became apparent that the ASIC records of directorship of B Pty Ltd was a state of confusion. Counsel then appearing for Ms Hastings informed me on 8 April 2020 that the form 484 lodged with ASIC on 22 October 2019 revealed that Ms Hastings had been removed as a director of and shareholder in B Pty Ltd and that her son Mr O had been installed as the director of and shareholder in B Pty Ltd. Ms Hastings sought an ex parte order setting aside her alleged removal as a shareholder in and director of B Pty Ltd. Having the benefit of submissions on the day from Mr Rohan Hoult of counsel, now the Senior Registrar of the Family Court of Australia, I was persuaded to direct a registrar to execute any document necessary to facilitate the reinstatement of Ms Hastings as a director of and as the sole shareholder in B Pty Ltd.
Liquidators have since been appointed to the three companies described earlier in these reasons.
The Commissioner has not opposed the orders proposed today, nor has Ms Hastings.
On behalf of the receivers and liquidators this application was brought in conformity with the observations of Brereton J in Re Gondon Five Pty Ltd and Cui Family Asset Management Pty Ltd.[2] There Brereton J addressed the need for clarification to be speedily given by the court where doubt exists about the scope and purpose of the appointment of receivers in particular. I have kept those observations in mind in formulating the orders to be made today.
[2] [2019] NSWSC 468.
Further, the receivers and liquidators have contended that the initial orders for their appointment contemplate the winding up of the three companies. They rely on the decision of the High Court in Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth.[3] They have contended that in this case all or the majority of the assets held by the trustees of the trusts were held in a representative capacity as trustee. They argue that by reason of that trusteeship of the trust assets the receivers’ appointment is an ancillary measure to aid in the liquidation of the trustees and that the receivers’ appointment was intended to be in aid of the trustees’ exoneration out of the trust assets for the benefit of the trustees’ creditors.
[3] (2019) 93 ALJR 807.
To my mind, there is considerable force in those contentions.
The receivers and liquidators submit that without the orders currently prayed in aid being made, the receivers and liquidators are bereft of guidance as to the scope of their appointment, they are without power to take all necessary steps in respect of trust assets and they are without any ability to seek remuneration for their work. Again, there is considerable force in those contentions. For that matter, orders in those terms are usually made as the cases demonstrate such as Jawhite Pty Ltd v Trabme Pty Ltd,[4] Michell (Liquidator) v Delltta Holdings Pty Ltd (in liq) atf The Brookhill Trust[5] and Combis, in the matter of Reehal Holdings Pty Ltd (in liq) (Trustee) v Reehal Holdings Pty Ltd (in liq) (Trustee).[6]
[4] [2019] QCA 119.
[5] [2019] FCA 2133.
[6] [2017] FCA 793.
Paragraphs 2 to 9 of the application in a case returnable today sets out the precise form of orders sought. I am persuaded to make them and I now do.
I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 20 August 2020.
Associate:
Date: 20 August 2020
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