WILLMOTT FORESTS LIMITED (receivers and managers appointed) (in liquidation) (ACN 063 263 650) AND OTHERS (according to the schedule attached)	Plaintiffs and Defendants by Counterclaim
v
PRIMARY SECURITIES LTD (ACN 089 812 635) in its capacity as responsible entity of Willmott Forests Project 1995-1999 (ARSN 089 598 612)	Defendant and Plaintiff by Counterclaim

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JUDGE:	Efthim AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	13 June 2014
DATE OF JUDGMENT:	17 April 2015
CASE MAY BE CITED AS:	IMO Willmott Forests Limited
MEDIUM NEUTRAL CITATION:	[2015] VSC 138

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr R. Craig	Arnold Bloch Leibler
For the Defendant	Mr T. Woodward SC	Mills Oakley Lawyers

HIS HONOUR:

The first plaintiff, Willmott Forests Limited (‘WFL’) was the Responsible Entity of the 1995‑1999 Willmott Forests Project (’95-99 scheme’) from its inception until it was replaced as Responsible Entity of the 95-99 scheme by the first defendant, Primary Securities Limited (‘Primary’) on 22 December 2011.

WFL was placed into administration on 6 September 2010, with the second and third plaintiffs, Craig David Crosbie and Ian Menzies Carson (‘the liquidators’) being appointed as joint and several administrators on 26 October 2010. They were subsequently appointed liquidators of WFL on 22 March 2011.

As at 6 September 2010, WFL was the Responsible Entity of 30 investment management schemes but only the 1995 scheme is directly relevant for the purposes of this application. The 95‑99 scheme was comprised of six projects commenced by prospectuses issued between 1995 and 1999.

The liquidators seek orders that:

(a) They are entitled to indemnify themselves for the expenses incurred (including reasonable remuneration) in administering the 95‑99 scheme and/or caring for, protecting, preserving and/or realising the assets and/or property including the trees of the 95‑99 scheme (‘the Assets’) during the period from 26 October 2010 to 22 December 2011 out of:

-     the assets;
-     the proceeds of sale; and
-     the proceeds of any insurance claims in respect of the 95‑99 scheme (together, ‘the Lienable property’).

(b) They be indemnified in respect of their costs of the application out of the Lienable property.

The liquidators seek the sum of $387,243.11 plus interest.

The liquidators initially sought a direction from the Court under s 511 of the Corporations Act 2001 (Cth) that they are justified in claiming the expenses incurred in caring for, preserving and realising assets of the 95‑99 scheme. Primary submitted that the liquidators should not be seeking directions from the Court but, rather, a declaration, because a direction would not be binding against the defendant and would not resolve any issue between the liquidators and Primary.

I ordered by consent that the plaintiffs’ application proceed by determination on the following questions:

1.What categories of costs are being claimed by the plaintiffs?
2.What categories of costs are…

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.

Continue reading IMO Willmott Forests Limited

Details

AGLC: IMO Willmott Forests Limited [2015] VSC 138
Case: [2015] VSC 138
Decision Date: 17 April 2015

CaseChat Overview and Summary

The case involves Willmott Forests Limited (WFL) and Primary Securities Limited (Primary). WFL was the Responsible Entity of the 1995-1999 Willmott Forests Project until it was replaced by Primary on 22 December 2011. WFL was placed into administration on 6 September 2010, and Craig David Crosbie and Ian Menzies Carson were appointed as joint and several administrators on 26 October 2010, subsequently appointed liquidators on 22 March 2011. The liquidators seek orders to indemnify themselves for expenses incurred in administering the 95-99 scheme from 26 October 2010 to 22 December 2011 out of the assets, proceeds of sale, and insurance claims of the 95-99 scheme. The primary legal issue was whether the liquidators are entitled to an equitable lien on the assets of the 95-99 scheme for their costs and expenses. The Court determined that the liquidators are entitled to an equitable lien under the salvage principles in Re Universal Distributing Co Ltd. The Court assessed the liquidators' claims for specific, general, and mixed costs and expenses, making adjustments based on objections from Primary. The final amount allowed for the lien was $322,418.80. The lien attaches to the property held on trust by Primary which was created or benefitted from the work performed by the liquidators.

Orders