In the Matter of Hercules Car Parking Systems (Victoria) Pty Ltd
[2018] NSWSC 409
•05 March 2018
Supreme Court
New South Wales
Medium Neutral Citation: In the matter of Hercules Car Parking Systems (Victoria) Pty Ltd [2018] NSWSC 409 Hearing dates: Monday, 5 March 2018 Date of orders: 05 March 2018 Decision date: 05 March 2018 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Liquidator appointed as receiver and manager of the trust assets of the company to enforce the trustee company’s right of indemnity
Catchwords: CORPORATIONS - winding up - liquidators - where company’s sole function was to act as trustee of a unit trust – where trust deed provided for automatic removal of company as trustee upon liquidation – where no replacement trustee appointed - liquidator appointed as receiver of trust assets to enforce company’s right of indemnity Legislation Cited: (CTH) Corporations Act 2001 ss 477(2) and 506(1) Cases Cited: In the matter of Blujack Pty Limited (in liquidation) [2016] NSWSC 685;
In the matter of Gramarker Pty Ltd; Clifford Sanderson (as liquidator of Gramarker Pty Limited) v Simon Kerr [2014] NSWSC 243
In the matter of Stansfield DIY Wealth Pty Limited (in liquidation) [2014] NSWSC 1484, 103 ACSR 401
Re Indopal Pty Ltd (1987) 12 ACLR 54Category: Principal judgment Parties: Christopher John Palmer (First Plaintiff)
Hercules Car Parking Systems (Victoria) Pty Ltd (in liquidation) ACN 601 944 674 (Second Plaintiff)
129 Albert Street Pty Ltd CAN 109 979 946 (First Defendant)
Hercules Car Parking Systems 2004 Pty Ltd ACN 077 434 452 (Second Defendant)
Map Architecture & Design Pty Ltd ACN 137 783 923 (Third Defendant)Representation: Counsel: J Knackstredt (Plaintiff)
Solicitors:Macpherson Kelley (Plaintiff)
File Number(s): 2018/ 69393
Judgment (EX TEMPORE)
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The second plaintiff company Hercules Car Parking Systems (Victoria) Pty Limited was the trustee of a unit trust called the Hercules Car Parking Systems Unit Trust, in which the first, second and third defendants were the unit holders, which carried on business as the Victorian distributor for Hercules Car Parking Systems. So far as the evidence discloses, the company had no other function than to serve as trustee of the trust.
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On 13 February 2018, the members of the company resolved that it be wound up and that the first plaintiff Christopher John Palmer be appointed its liquidator. The trust deed that constitutes the trust contains a so-called "ipso facto" clause by which upon going into liquidation the company is removed as trustee. It does not appear that any replacement trustee has been appointed.
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By a procedure which is now well-established[1] the liquidator of the trustee company applies to be appointed receiver of the trust assets of which the company was formerly trustee, by way of enforcement of the former trustee's right of indemnity against trust assets, which survives the removal of the trustee and operates in favour of a former trustee.
1. See for example, In the matter of Stansfield DIY Wealth Pty Limited (in liquidation) [2014] NSWSC 1484, 103 ACSR 401; In the matter of Blujack Pty Limited (in liquidation) [2016] NSWSC 685; Re Indopal Pty Ltd (1987) 12 ACLR 54; and In the matter of Gramarker Pty Ltd; Clifford Sanderson (as liquidator of Gramarker Pty Limited) v Simon Kerr [2014] NSWSC 243.
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Notice of the application has been given in accordance with directions made by the duty judge last week to the three defendants, together with an invitation to indicate whether the return of the originating process at 2pm this afternoon was inconvenient for them. Nothing has been heard, and on that basis I am prepared to proceed with the application; however given the very short timeframe in which it has all transpired, I will reserve leave to the defendants to apply to vary or set aside the orders, once they have been served with them.
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Although the relief claimed has been framed on the basis of that which was granted in Re Stansfield, [2] in more recent cases I have preferred to grant less extensive relief at the outset and, in particular, to require that the receiver return to the Court to obtain leave to distribute the proceeds to creditors and beneficiaries.
2. [2014] NSWSC 1484; 103 ACSR 401.
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In this case the receiver wishes, as I understand the evidence, to procure the release of some of the company's assets to a third party creditor which itself is incurring liability for liquidated damages due to the delay in provision to it of the equipment in question. That appears to involve the compromise of some claim with that creditor. The Court is not being asked to approve the compromise, and the order which I make permitting the liquidator to complete that transaction is made on the basis that it is, if necessary, an exception to the requirement not to distribute to creditors without the further leave of the Court, but does not amount to an approval of the compromise should that be required.
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The Court orders that:
Christopher John Palmer of Suite 1 Level 9/66 Clarence Street, Sydney, New South Wales, be appointed without security as receiver and manager (the receiver) of the assets and undertaking of the Hercules Car Parking Systems Unit Trust ABN 279 667 419 45.
The receiver has in respect of the trust property the powers that a liquidator has in respect of property of a company under (CTH) Corporations Act 2001 ss 477(2) and 506(1).
The receiver not distribute the proceeds of realisation of trust assets to creditors or beneficiaries without the further direction of the Court, provided that the receiver may release to Element Five Pty Limited the car park systems components referred to in paragraph 12 of the receiver's affidavit of 2 March 2018, upon such terms as the receiver may negotiate.
Leave be reserved to the defendants to apply to vary or set aside these orders on forty-eight hours’ notice, within three days of service on them of these orders.
The plaintiff have liberty to apply for further directions on forty-eight hours’ notice by arrangement with my Associate.
The plaintiff's costs of the application be costs in the liquidation.
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Endnotes
Decision last updated: 04 April 2018
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