In the matter of Antpet Pty Ltd (in liq)

[2024] NSWSC 155

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Antpet Pty Ltd (in liq) [2024] NSWSC 155

Hearing dates:

19 February 2024

Date of orders:

19 February 2024

Decision date:

19 February 2024

Jurisdiction:

Equity - Corporations List

Before:

McGrath J

Decision:

See [20]-[26]

Catchwords:

CORPORATIONS — Receivers and managers — Appointment by court — Appointment of receiver for the purpose of selling property and distributing proceeds amongst creditors

CORPORATIONS — Winding up — Conduct of liquidation — Application of assets — Order entitling liquidator as receiver to retain funds to account for remuneration expenses and discharge future liabilities

CORPORATIONS — Winding up — Conduct of liquidation — Application of assets — Order that any remaining funds from the sale of the property be paid into Court

Legislation Cited:

Corporations Act2001 (Cth)

Cases Cited:

In the matter of Brimson Pty Ltd; Ex parteCremin (2019) 136 ACSR 649; [2019] FCA 1023

In the matter of Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FLR 17; [2014] NSWSC 1484

Sprowles, in the matter of Triumph N Triumph Pty Limited (in liq) [2019] FCA 1461

Category:

Principal judgment

Parties:

Antpet Pty Ltd (In Liquidation) (First Plaintiff)
Nicarson Natkunarajah in his capacity as Liquidator of Antpet Pty Ltd (In Liquidation) (Second Plaintiff)
Anthony Zamattia (First Defendant)
David Zamattia (Second Defendant)
Salvatore Zamattia (Third Defendant)

Representation:

Counsel:
Cleary T (Plaintiff)

Solicitors:
CCSG Legal Pty Ltd (First and Second Plaintiffs)
Kardos Scanlan (First Defendant)
Oliveri Attorneys (Second and Third Defendants)

File Number(s):

2023/00464864

JUDGMENT – ex tempore (revised 23 february 2024)

INTRODUCTION

1. This application is brought by an originating process which was filed on 20 December 2023 by the first plaintiff, Antpet Pty Limited (in liquidation) (Antpet), and the second plaintiff, Nicarson Natkunarajah, in his capacity as liquidator of Antpet.

2. The defendants to the application are Anthony Zamattia, David Zamattia and Salvatore Zamattia respectively.

3. I have been informed by Mr T Cleary, who appears as counsel for the plaintiffs, that the first defendant does not wish to be heard in respect of the application, and the second and third defendants have made submitting appearances in relation to the application.

4. I have also been informed that the National Australia Bank (NAB), being a secured creditor, also does not wish to be heard in relation to the application.

5. Accordingly, the application has proceeded in effect ex parte, with the plaintiffs alone making submissions.

FACTUAL BACKGROUND

6. Antpet was ordered to be wound up in insolvency on 29 September 2021 and Mr Natkunarajah was appointed as the liquidator of Antpet on that occasion.

7. Antpet held a property in Moorebank, New South Wales (Property) as bare trustee for the trustees of the Zamattia Superannuation Fund (Super Fund), which is a self-managed superannuation fund.

8. In addition to holding the Property on bare trust, Antpet received income from leasing the Property solely for the benefit of the Super Fund.

9. The Security Trust Deed dated 18 November 2010 (Trust Deed) sets out the terms by which Antpet held the Property as bare trustee. Amongst the terms contained in the Trust Deed is a term that, to the maximum extent permitted by law, Antpet had no right to indemnification with respect to the Property. It also does not contain a term conferring on Antpet any power of sale with respect to the Property, nor does it contain any clause providing for the termination of Antpet's appointment as trustee upon the appointment of a liquidator.

EVIDENCE

10. On the application, the following affidavits were read:

1. affidavit of Nicarson Natkunarajah sworn 20 December 2023;

2. affidavit of Toni Murtanovski sworn 15 February 2024; and

3. affidavit of Nicarson Natkunarajah sworn 16 February 2024.

11. The evidence reveals that whilst performing its function as trustee of the Property, Antpet has been incurring liabilities, including strata levies, taxation liabilities relating to rental income from the Property which are owed to the Australian Taxation Office (ATO), and council rates relating to the Property.

12. The evidence also reveals that there are, at present, two outstanding income tax returns that need to be lodged, which may cause an increase in those liabilities.

13. As I mentioned earlier, NAB is the secured creditor that holds a registered mortgage over the Property and the secured liability in respect of the registered mortgage.

14. Mr Natkunarajah has identified in the evidence that a rollover request has been lodged by the first defendant, who is a beneficiary of the Super Fund. He has also given evidence that he is unsure whether that request represents a competing claim to the proceeds of the sale of the Property.

15. In addition, the first defendant has recently lodged a proof of debt, which appears to have been incurred on behalf of the Super Fund. As a result, there is a potential dispute over what is to be done with whatever funds might exist upon the sale of the Property, and it is proposed by the plaintiffs that those funds, after the payment of the liabilities to which I will come to in due course, should be paid into court.

LEGAL PRINCIPLES

16. The legal principles for the reimbursement of a trustee, including a bare trustee, for expenses that have been properly incurred, where the trustee also has the benefit of an equitable lien to enforce that right of indemnity, are well-settled.

17. The question of the power of a liquidator of a trustee company to realise trust assets to pay creditors of the liquidated trustee company are also now relatively well-settled.

18. The principles that are applicable to this application are those that are set out in In the matter of Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FLR 17; [2014] NSWSC 1484, which is a decision of Brereton J, who said at [33]:

Accordingly, if the company has ceased to be trustee of the super fund, it can no longer exercise the trustee's power of sale under the trust instrument or at general law (because it is not the trustee), and Corporations Act, s 477(2)(c), does not empower the liquidator to sell assets held by the company on trust. In such circumstances, the appropriate remedy for a liquidator is to seek appointment as a receiver of the trust assets, by way of enforcement of the (former) trustee's right of indemnity.

19. That decision has been applied in subsequent cases including in Cremin, in the matter of Brimson Pty Ltd (in liq) (2019) 136 ACSR 649; [2019] FCA 1023 by Moshinsky J at [49] and also in Sprowles, in the matter of Triumph N Triumph Pty Limited (in liq) [2019] FCA 1461 by Yates J at [50].

CONSIDERATION

20. I am satisfied that, upon the application of those legal principles, this is an appropriate case in which the orders sought should be made.

21. It is appropriate in the present case that there be an order appointing a receiver for the purpose of selling the Property and distributing the sale proceeds amongst the creditors.

22. At the present time, it has been made clear that the liquidator does not yet seek orders for the payment of his remuneration, given that there is going to be further work to be done on his appointment as the receiver of the Property.

23. In light of that, it is appropriate that there be an order entitling the liquidator as receiver to retain the sum of $250,000 on account of current and future remuneration expenses and also for the discharge of any liability to the ATO that is likely to arise upon the lodgement of tax returns which have not yet been lodged.

24. In light of the fact that there are issues concerning the way in which the amount of funds remaining after sale of the Property should be paid to those who may be making a claim to them, it is also appropriate that an order be made that any such funds be paid into court.

25. I am also satisfied that it is appropriate to make an order that the second plaintiff's costs of the application be paid out of the trust assets.

CONCLUSION

26. In those circumstances, I propose to make the orders in accordance with the short minutes of order, in keeping with the reasons that I have just given.

ORDERS

27. The court makes the following orders:

1. The second plaintiff, Nicarson Natkunarajah, be appointed without security as receiver of the property held at 3/15 Cunningham Place, Moorebank, NSW 2170 (the Trust Property) held by the first plaintiff as bare trustee in favour of the RSF Trustee (the Trust).

2. The second plaintiff has in respect of the Trust Property the powers that a liquidator has in respect of the property of a company under the Corporations Act2001 (Cth) s 477(2).

3. A declaration that the first plaintiff is entitled to be indemnified for those liabilities properly incurred as trustee of the Trust.

4. The second plaintiff to retain $250,000 from any net proceeds of the sale of the Trust Property (following the payment of secured liabilities payable to the NAB, including enforcement expenses, as identified at order 6.a. below) to discharge any liability to the ATO that may arise from the lodgement of outstanding income tax returns, as well as for the remuneration of the second plaintiff as liquidator of the first plaintiff and receiver appointed over the Trust Property and associated disbursements as may be approved.

5. The second plaintiff may pay from the assets of the trust the debts described at Schedule A, together with any interest accrued thereon.

6. The remainder of the funds from the sale of the Trust Property following:

1. payment of amounts owing to the NAB (including enforcement expenses) as secured creditor over the Trust Property under its mortgage,

2. those payments at orders 4 and 5 above, and

be paid into court.

7. An order that subject to any further order of the court, the second plaintiff be paid or retain out of the Trust Assets, the second plaintiff’s costs and disbursements of this application.

Schedule A

Creditor	Sum
Australian Taxation Office	$6,375.30
Independent Unit Management Pty Ltd	$61,175.63
Liverpool City Council	$7,663.60

Decision last updated: 23 February 2024