Hinrichsen v Hinrichsen Pastoral Pty Ltd - [2024] QSC 314

SUPREME COURT OF QUEENSLAND

CITATION:

Hinrichsen v Hinrichsen Pastoral Pty Ltd [2024] QSC 314

PARTIES:

NEVILLE WILLIAM HINRICHSEN

(applicant)

v
HINRICHSEN PASTORAL PTY LTD AS TRUSTEE FOR THE HINRICHSEN PASTORAL TRUST
ACN 079 049 773

(first respondent)
DAVID BAILEY HINRICHSEN

(second respondent)

FILE NO:

BS 15286 of 2024

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

13 December 2024

DELIVERED AT:

Brisbane

HEARING DATE:

3 December 2024

JUDGE:

Copley J

ORDER:

Application dismissed.

CATCHWORDS:

CORPORATIONS – RECEIVERS, CONTROLLERS AND MANAGERS – APPOINTMENT – where the first respondent is the corporate trustee for a Pastoral Trust – where the applicant and second respondent are the directors and equal shareholders of the company and the sole beneficiaries of the trust – where there are proceedings on foot in the Supreme Court at Rockhampton – where the applicant contends that the reason for appointment is the inability for the directors to carry on the business in accordance with the constitution and trust deed of the first respondent – where the second respondent resists the appointment of receivers and managers – whether this proceeding is an abuse of power – whether the Court should appoint receivers and managers to the first respondent

Corporations Act 2001 (Cth), s 232, s 233

Uniform Civil Procedure Rules 1999 (Qld), r 78, r 272, r 658

GLJ v Trustees for the Roman Catholic Church for the Diocese of Lismore (2023) 414 ALR 635; [2023] HCA 32
Lamers v Arvind Pty Ltd [No 2] [2019] WASC 491
Singh & Ors v Brisbane Sikh Temple (Gurdwara) Inc [2022] QSC 151
UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45
Walton v Gardiner (1993) 177 CLR 378; [1993] HCA 77

COUNSEL:

D R Cooper KC, with W A Seewald, for the applicant
No appearance for the first respondent

D T Forbes for the second respondent

SOLICITORS:

Edgar & Wood Solicitors for the applicant
No appearance for the first respondent

Connie Narvarro Legal for the second respondent

On 8 November 2024 the applicant filed an originating application in the Supreme Court at Brisbane. Pursuant to this application he seeks an order that receivers and managers be appointed to the first respondent in its capacity as trustee of the Hinrichsen Pastoral Trust and the property, assets and undertaking of the trust, with power to carry on the business of the trust for the purpose of discharging the indebtedness of the trust to Rabobank Australia Limited and to procure the termination of the trust. A number of ancillary orders are also sought in the event that receivers and managers are ordered to be appointed. The application for the appointment of receivers and managers is brought pursuant to r 272 of the Uniform Civil Procedure Rules 1999 and the Court’s inherent jurisdiction.
The first respondent was not represented at the hearing. The applicant and the second respondent relied on affidavit evidence. Aspects of the applicant’s affidavits were in conflict with aspects of the second respondent’s…

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: [2024] QSC 314
Decision Date: 13 December 2024

CaseChat Overview and Summary

The case of Hinrichsen v Hinrichsen Pastoral Pty Ltd was heard in the Supreme Court of Queensland. The applicant, who is a director and shareholder of the respondent company, sought the appointment of receivers and managers for the company, which is the trustee for a Pastoral Trust. The applicant argued that the company was unable to carry on its business in accordance with its constitution and trust deed due to the actions of the second respondent, the other director and shareholder, who is also the applicant's younger brother. The second respondent opposed the appointment of receivers and managers, arguing that the application was an abuse of process.

The court had to decide whether the application for the appointment of receivers and managers was appropriate, given that there were already ongoing proceedings in the Supreme Court at Rockhampton. The court also needed to determine whether the second respondent's conduct justified the appointment of receivers and managers to investigate the affairs of the trust, recover any unlawfully taken assets, and manage the trust's debts.

The court found that the application for the appointment of receivers and managers was not appropriate given the existing proceedings in Rockhampton. The court noted that the applicant's primary motivation appeared to be to gain an advantage in the ongoing litigation, rather than to address the alleged mismanagement of the trust. The court concluded that the application was an abuse of process and dismissed the application. Consequently, the court refused to appoint receivers and managers to the company.

The final orders of the court were that the application for the appointment of receivers and managers was dismissed, and the application was refused.

Orders

Orders of the court

Application dismissed.

Background

Background to the litigation

For the reasons set out below the application is refused. Background The first respondent was registered on 24 June 1997. The applicant and the second respondent, who is the applicant’s younger brother, are the directors of and the only and equal shareholders in the first respondent. This has been the position since some time in 2005. The first respondent is the trustee of a discretionary trading trust known as the Hinrichsen Pastoral Trust. The trust is constituted pursuant to a Deed of Trust dated 27 June 1997 as varied by a Deed of Variation dated 29 September 2005. The applicant and the second respondent are the primary beneficiaries of the trust. The first respondent carries on the business of raising cattle at a station known as Durrandella near Alpha. Since December 2004 the applicant has been the registered lessee of the land known as Durrandella. In 2000 the first respondent began grazing cattle at two stations known as Yappar River and Ella Vale near Croydon. The second respondent has conducted the company’s activities at those places from 2000 onwards. He is the registered lessee of those stations. In June 2020 the applicant commenced a proceeding against the first respondent in the Supreme Court at Rockhampton seeking a declaration that he was the owner of Durrandella. In July 2020 the second respondent obtained orders in the Supreme Court at Townsville. By those orders he obtained leave to commence a proceeding, including any counterclaim in the Rockhampton proceeding against the applicant in the name of the first respondent, and in the Rockhampton proceeding the second respondent was joined as a defendant and the first respondent was removed as a defendant but joined as a plaintiff by counterclaim. In September 2020 the first and second respondents in the present application filed their defence and counterclaim in the Rockhampton proceeding. Although an amended counterclaim was filed in December 2023,[1] it seems that the counterclaim remains substantially as it was, it being that: the applicant held his interest in Durrandella on trust for himself and the second respondent; the applicant was liable to the first respondent for a debt of $395,177; and, the applicant was liable to the first respondent for damages of $4,239,532 arising from breaches of his duties as a director of the first respondent. [1]Affidavit of DB Hinrichsen, Exhibit DBH15. By June 2024 the Rockhampton proceeding had been set down for trial and the trial was to be a reserve trial to possibly commence on 11 November 2024. The applicant was to file any amended reply and answer to the counterclaim by 21 June 2024. On 16 August 2024 the applicant filed an application seeking leave to amend his statement of claim and to have the respondents’ amended counterclaim struck out entirely. On 22 August 2024 the applicant was given leave to amend his statement of claim, but otherwise his application of 16 August 2024 was dismissed. On 14 October 2024 the applicant filed and served an amended reply and further amended answer to counterclaim. Pursuant to paragraph 43(c) of the further amended answer to counterclaim the applicant asserted that having regard to the second respondent’s conduct of the affairs of the trust it was appropriate for the Court to appoint a receiver and manager to take control of the affairs of the trust with all the powers necessary to investigate the affairs of the trust, recover money and assets unlawfully taken from it, determine and pay its debts, and to seek the assistance of the Court as required to terminate the trust.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Hinrichsen v Hinrichsen Pastoral Pty Ltd [2024] QSC 314
PARTIES:	NEVILLE WILLIAM HINRICHSEN (applicant) v HINRICHSEN PASTORAL PTY LTD AS TRUSTEE FOR THE HINRICHSEN PASTORAL TRUST ACN 079 049 773 (first respondent) DAVID BAILEY HINRICHSEN (second respondent)
FILE NO:	BS 15286 of 2024
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	13 December 2024
DELIVERED AT:	Brisbane
HEARING DATE:	3 December 2024
JUDGE:	Copley J
ORDER:	Application dismissed.
CATCHWORDS:	CORPORATIONS – RECEIVERS, CONTROLLERS AND MANAGERS – APPOINTMENT – where the first respondent is the corporate trustee for a Pastoral Trust – where the applicant and second respondent are the directors and equal shareholders of the company and the sole beneficiaries of the trust – where there are proceedings on foot in the Supreme Court at Rockhampton – where the applicant contends that the reason for appointment is the inability for the directors to carry on the business in accordance with the constitution and trust deed of the first respondent – where the second respondent resists the appointment of receivers and managers – whether this proceeding is an abuse of power – whether the Court should appoint receivers and managers to the first respondent Corporations Act 2001 (Cth), s 232, s 233 Uniform Civil Procedure Rules 1999 (Qld), r 78, r 272, r 658 GLJ v Trustees for the Roman Catholic Church for the Diocese of Lismore (2023) 414 ALR 635; [2023] HCA 32 Lamers v Arvind Pty Ltd [No 2] [2019] WASC 491 Singh & Ors v Brisbane Sikh Temple (Gurdwara) Inc [2022] QSC 151 UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45 Walton v Gardiner (1993) 177 CLR 378; [1993] HCA 77
COUNSEL:	D R Cooper KC, with W A Seewald, for the applicant No appearance for the first respondent D T Forbes for the second respondent
SOLICITORS:	Edgar & Wood Solicitors for the applicant No appearance for the first respondent Connie Narvarro Legal for the second respondent