In the matter of PrimeSpace Property Investment Limited (in liquidation)

[2018] NSWSC 919

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of PrimeSpace Property Investment Limited (in liquidation) [2018] NSWSC 919
Hearing dates:	7 June 2018
Decision date:	20 June 2018
Jurisdiction:	Equity - Corporations List
Before:	Black J
Decision:	Direct that the liquidators of PrimeSpace Property Investment Limited (in liquidation) (“PPIL”) are justified in setting off the liabilities of each of Prime Access Property Fund ("PAPF") and PrimeSpace Northbourne Trust ("PSNT") against the other, resulting in a net liability of PPIL in its capacity as trustee of PAPF to PPIL in its capacity as trustee of PSNT.
Catchwords:	TRUSTS – Application for judicial advice as to availability of set-off of debts under Corporations Act 2001 (Cth) ss 479(3) and 511.
Legislation Cited:	- Civil Procedure Act 2005 (NSW) ss 21, 90 - Corporations Act 2001 (Cth) ss 479, 511, 553C, 1551, 1617 - Insolvency Law Reform Act 2016 (Cth) - Trustee Act 1925 (NSW) s 63
Cases Cited:	- Cherry v Boultbee (1839) 41 ER 171 - Day & Dent Constructions Pty Ltd (in liq) v North Australian Properties Pty Ltd (prov liq apptd) (1982) 150 CLR 85 - Dean-Willcocks v Soluble Solution Hydroponics Pty Ltd (1997) 42 NSWLR 209 - Gye v McIntyre (1991) 171 CLR 609 - Hall v Poolman [2007] NSWSC 1330; (2007) 215 FLR 243; 65 ACSR 123 - Handberg v MIG Property Services Pty Ltd [2010] VSC 336; (2010) 79 ACSR 373 - Mine & Quarry Equipment International Ltd v McIntosh [2005] QCA 186; (2005) 54 ACSR 1 - Re Anglican Development Fund Diocese of Bathurst (recs and mgrs apptd) [2015] NSWSC 440 - Re Ansett Australia Ltd (No 3) [2002] FCA 90; (2002) 115 FCR 409 - Re Australian Institute of Professional Education Pty Ltd (in liq) [2018] FCA 780 - Re Cannuli Holdings Pty Ltd (in liq) [2018] NSWSC 638 - Re eChoice Ltd (admin apptd) [2017] FCA 1582 - Re Hawden Property Group Pty Ltd (in liq) [2018] NSWSC 481; (2018) 125 ACSR 355 - Re MF Global Australia Ltd (in liq) [2012] NSWSC 994; (2012) 267 FLR 27 - Re Mackie Group Pty Ltd (in liq) [2017] VSC 477 - Re Octaviar Administration Pty Ltd (in liq) [2017] NSWSC 1556 - Re Peruvian Railway Construction Company Ltd [1915] 2 Ch 144 - Re PrimeSpace Property Investment Ltd (in liq) [2016] NSWSC 1113 - Re PrimeSpace Property Investment Ltd (in liq) [2016] NSWSC 1450 - Re PrimeSpace Property Investment Ltd (in liq) [2016] NSWSC 1821 - Re PrimeSpace Property Investment Ltd (in liq) [2016] NSWSC 1891 - Re PrimeSpace Property Investment Limited (in liq) [2017] NSWSC 386 - Smith v Bone [2015] FCA 319; (2015) 104 ACSR 528
Category:	Procedural and other rulings
Parties:	Shaun Robert Fraser (First Plaintiff) Anthony Gregory McGrath (Second Plaintiff) PrimeSpace Property Investment Limited (in liquidation) (Third Plaintiff) IQIT Nominees Pty Ltd as trustee of the IQ Investment Trust (Defendant)
Representation:	Counsel: V Whittaker/J Anderson (Plaintiffs) D Stack (Defendant)   Solicitors: Johnson Winter & Slattery (Plaintiffs) Bridges Lawyers (Defendant)
File Number(s):	2016/107316

Judgment

1. By Interlocutory Process filed on 4 May 2018, the Plaintiffs, Messrs Fraser and McGrath as liquidators of PrimeSpace Property Investment Limited (in liq) ("PPIL") and PPIL apply for directions under former ss 479(3) and 511 of the Corporations Act and s 63 of the Trustee Act 1925 (NSW) and in the Court’s inherent jurisdiction. The liquidators seek directions that that they are justified in distributing funds held by PPIL as trustee of the PrimeSpace Northbourne Trust ("PSNT") on the basis that a claim made by PPIL (as trustee of the Prime Access Property Fund ("PAPF")) of $1,765,752.43 against PPIL (as trustee for PSNT) can be wholly set off against the amount claimed pursuant to a Deed of Guarantee dated 18 December 2012 and a Supplemental deed dated 27 May 2014 by PPIL (as trustee for PSNT) against PPIL (as trustee for PAPF).

Factual background, assumed facts and affidavit evidence

2. I have dealt with the background to this liquidation in several previous judgments ([2016] NSWSC 1113, [2016] NSWSC 1450, [2016] NSWSC 1821, [2017] NSWSC 386). PPIL was the responsible entity and trustee of funds and trusts within the Prime Access Group. PPIL is presently the trustee and responsible entity of PAPF and is also the trustee of PSNT which has a substantial interest in the IQ joint venture, which funded and managed the development of the IQ Smart Apartments in Canberra. Messrs McGrath and Fraser were appointed joint and several voluntary administrators of PPIL in April 2015, and were appointed joint and several liquidators of PPIL in May 2015. Since this is an application for directions, the Plaintiffs prepared a Statement of Assumed Facts at the Court’s invitation, and I have assumed the correctness of those facts for the purposes of this judgment. Beyond the matters that I have noted above as to PPIL’s role, I set out those assumed facts below.

3. PPIL’s only asset in its personal capacity is the proceeds from the settlement of the "MV Claim", being a claim that the liquidators caused PPIL to bring against its former solicitors in respect of the preparation of convertible note subscription agreements which PPIL used to raise funds in its capacity as responsible entity of PAPF. PAPF is an unlisted managed investment scheme, which was established in 2006 to finance property investment and development. PPIL as trustee for PAPF holds all of the units in the Prime Retail Property Fund (“PRPF”). The liquidators do not anticipate any distribution to PAPF in respect of its unitholding in PRPF.

4. PPIL as trustee for PAPF holds all of the units in the Prime Office Property Fund (“POPF”). The liquidators do not anticipate any distribution to PAPF via POPF in respect of PAPF’s unitholding in POPF. The only asset of PPIL as trustee for PAPF is the $1,765,752.43 it is entitled to claim from PPIL as trustee for PSNT, referred to in paragraph 11 below. By reason of the facts set out in this paragraph, PPIL as trustee for PAPF will not have sufficient funds to pay the amount of $2.1 million claimed by PPIL as trustee for PSNT, referred to in paragraph 12 below.

5. PSNT was established in 2007 to fund the development of the IQ Smart Apartments in Braddon, ACT. PSNT is being wound up in accordance with the terms of its Constitution. The Defendant, IQIT Nominees Pty Ltd (“IQIT Nominees”) as trustee for the IQ Investment Trust (“IQIT”), is the Loan Note Holder in PSNT. The Loan Notes in PSNT were converted from Preference Units in 2015. PS Office Pty Ltd (“PS Office”) as trustee for the POPF is the Ordinary Unit Holder in PSNT.

6. The admitted creditors of PSNT are:

(1)   Australian Executor Trustees Limited (“AET”) in the amount of $18,348; and

(2)   IQIT in the amount of $6,548,240.

7. There is an additional amount potentially claimable against PSNT by Hayes Advisory in relation to work carried out for the Prime Space Group in the sum of $136,092.76. The Liquidators expect this amount will be admitted upon receipt of a revised proof of debt from Hayes Advisory. Each of AET and Hayes Advisory, if admitted, are ordinary unsecured creditors of PPIL as trustee for PSNT.

8. IQIT, as the Loan Note Holder in PSNT, is:

(1)   subordinated to ordinary unsecured creditors of PSNT; and

(2)   entitled to a distribution in priority to PS Office (as the Ordinary Unit Holder in PSNT).

9. PPIL as trustee for PSNT has sufficient funds to pay:

(1)   the costs and expenses of the winding up of PSNT in full; and

(2)   AET's admitted claim, and any claim by Hayes Advisory which is to be admitted, as ordinary unsecured creditors of PPIL as trustee for PSNT in full.

After payment of these amounts, PPIL as trustee for PSNT will hold sufficient funds to make a distribution to IQIT (but insufficient funds to discharge IQIT's claim in full). There will not be any distribution to PS Office.

10. Any amount paid by PPIL as trustee for PSNT to PPIL as trustee for PAPF in respect of the PAPF Claim (defined in paragraph 11 below) will reduce the quantum of the distribution to IQIT.

11. PSNT (through its trustee, PPIL) is indebted to PAPF (through its trustee, PPIL) in the liquidated amount of $1,765,752.43 (“PAPF Claim”). This claim arises from a loan advanced from PAPF (through PPIL) to PSNT (through PPIL).

12. PAPF (through its trustee, PPIL) is indebted to PSNT (through its trustee, PPIL) in the liquidated amount of $2.1 million. This claim arises from monies paid by PSNT (through PPIL) in the settlement of proceedings brought by Canberra Finance Group Pty Ltd; and from PSNT’s rights of contribution (through PPIL) with respect to that payment arising under certain agreements.

13. Turning now to the affidavit evidence, the Plaintiffs relied on an affidavit of Mr Shaun Fraser, one of the liquidators, sworn on 4 May 2018. That affidavit provides support for a number of the factual matters recorded in the Statement of Assumed Facts, although it is not appropriate that I reach findings as to those matters where declaratory relief was not sought in this application, and could not have been, in the absence of a contradictor to the application. Mr Fraser sets out the evidence which has led him to conclude that, although a payment from PAPF to PSNT (or, more precisely, from PPIL in its capacity as trustee of PAPF to PPIL in its capacity as trustee of PSNT) was undocumented, that payment was an interest free loan. Mr Fraser refers to a number of entries in PSNT’s balance sheet and loan accounts which are consistent with that characterisation.

14. Mr Fraser also identifies the nature of a claim by PSNT against PAPF, which arises from the settlement of proceedings brought by a third party against PPIL in its personal capacity and as trustee for PSNT. Mr Fraser notes that PPIL in its capacity as trustee of PSNT and PPIL in its capacity as trustee of PAPF were co-guarantors of the loans to that third party, under several transaction documents, and that Mr Fraser has concluded that PPIL as trustee for PSNT has a right of contribution against PPIL as trustee for PAPF in the amount of $2.1 million. Although Mr Fraser’s evidence refers to a number of documents relevant to that conclusion, that matter is again to be treated as an assumed fact for the purposes of this application, and I am not asked to reach a finding about it.

15. Mr Fraser points to the fact that the treatment of the claims by PPIL as trustee for PAPF against PPIL as trustee for PSNT, and by PPIL as trustee for PSNT against PPIL as trustee for PAPF, will have an impact on the distributions to creditors of PPIL and PSNT. Mr Fraser also recognises that the liquidators of PPIL, and PPIL as trustee of PAPF and PSNT, are in a position of conflict in determining whether to set-off the PAPF claim against the PSNT claim and the liquidators seek the Court’s direction as to whether the liquidators would be justified in doing so.

16. The Plaintiffs also read the affidavit affirmed on 7 June 2018 of Mr Wicks, a solicitor acting for them, which indicates that notice of this application has been given to all creditors of PPIL, in its personal capacity and as trustee for the various trusts, for which the liquidators have contact details; to all unitholders of relevant trusts and funds; to IQIT Nominees as trustee for IQIT; and to the Australian Securities and Investments Commission (“ASIC”). Mr Stack appeared for IQIT Nominees, and supported the approach proposed by the liquidators. By letter dated 15 May 2018, ASIC advised the liquidators that it considers this matter is properly left for the Court’s determination and that it does not propose to intervene in the proceedings or to appear in them. There was no appearance for other creditors, unitholders or ASIC when the matter was called.

The Court’s jurisdiction to give directions to the liquidators

17. As I noted above, the liquidators brought this application for directions under s 479(3) and 511 of the Corporations Act 2016 (Cth), which were repealed by the Insolvency Law Reform Act. The Plaintiffs submit that those sections nonetheless apply in the application, by reason of the transitional provision in s 1617 of the Corporations Act. That section applies where proceedings are brought under the Corporations Act (as it stood prior to the commencement of the Insolvency Law Reform Act) in a Court in relation to an external administration of a company before the commencement day of the Insolvency Law Reform Act. The term “proceedings” is there defined to include civil proceedings “and any other processes” and the “commencement day” is 1 September 2017, being the day on which Part 1 of Schedule 2 to the Insolvency Law Reform Act commenced, by reason of s 1551 of the Corporations Act. Where that section applies, nothing in Schedule 2 to the Insolvency Law Reform Act affects the proceedings or the Court’s power to make orders in relation to the proceedings, and the former Corporations Act continues to apply on and after the commencement day in relation to the proceedings, despite the amendments made by that Schedule to the Insolvency Law Reform Act.

18. Former ss 479 and 511 of the Corporations Act have been applied, after 1 September 2017, in several proceedings that were commenced prior to the commencement of the Insolvency Law Reform Act: see Re Octaviar Administration Pty Ltd (in liq) [2017] NSWSC 1556; Re Mackie Group Pty Ltd (in liq) [2017] VSC 477; Re Cannuli Holdings Pty Ltd (in liq) [2018] NSWSC 638. In other cases, for example Re Australian Institute of Professional Education Pty Ltd (in liq) [2018] FCA 780, the transitional provision did not apply because the substantive proceedings were commenced after 1 September 2017. None of these cases involve an interlocutory process filed after 1 September 2017 in proceedings that were commenced prior to that date. Nonetheless, it seems to me that, as Ms Whittaker and Mr Anderson (who appear for the liquidators) submit, the reference to “proceedings” in s 1617(3) of the Corporations Act is to the underlying proceedings, rather than to each interlocutory application brought in them, and this transitional provision applies where the underlying proceedings were commenced prior to 1 September 2017, even if the relevant interlocutory process was filed after that date. For these reasons, it seems to me that the liquidators’ application was correctly brought under former ss 479 and 511 of the Corporations Act. If I were incorrect in that view, and former ss 479(3) and 511 of the Corporations Act do not have continued application in these proceedings, the Court would have the power to give the directions sought under s 90-15 of the Insolvency Practice Schedule (Corporations): Re eChoice Ltd (admin apptd) [2017] FCA 1582 at [27]; Re Australian Institute of Professional Education Pty Ltd (in liq) above at [29]ff. The Court would also have power to give that direction, so far as PPIL is acting as trustee, under s 63 of the Trustee Act or in its inherent jurisdiction.

19. I summarised the scope of the Court's jurisdiction to make a direction of this kind in earlier judgments delivered in these proceedings on 22 December 2016 ([2016] NSWSC 1891) and 10 April 2017 ([2017] NSWSC 386) and I need only briefly note the applicable principles here. Applications for a direction under s 511 of the Corporations Act in a voluntary winding up are determined in a similar manner to applications in a Court ordered winding up under s 479(3) of the Corporations Act; the Court may give such a direction where it will be of advantage in the liquidation; the effect of a direction under the sections is to sanction a course of conduct on the part of the liquidator so that he or she may adopt that course free from the risk of personal liability for breach of duty; and the Court may exercise the power to give such a direction to assist a liquidator in the proper performance and discharge of his or her duties and functions, including giving advice as to the proper course of action when a matter involves a legal issue of substance: Dean-Willcocks v Soluble Solution Hydroponics Pty Ltd (1997) 42 NSWLR 209 at 212; Re Ansett Australia Ltd (No 3) [2002] FCA 90; (2002) 115 FCR 409 at [65]; Handberg v MIG Property Services Pty Ltd [2010] VSC 336; (2010) 79 ACSR 373 at [7]; Re MF Global Australia Ltd (in liq) [2012] NSWSC 994; (2012) 267 FLR 27 at [7]–[8]. I am satisfied that the giving of a direction in this case will clarify the course which the liquidators should adopt and will be of advantage to the liquidation of PPIL.

The parties’ submissions and determination as to set-off

20. Ms Whittaker and Mr Anderson did not submit that equitable set-off was available in this case, in the sense that PPIL in its capacity as trustee of PAPF or trustee of PSNT had any equitable ground for protection against the other’s demand. They instead relied on the decision of Brereton J in Re Anglican Development Fund Diocese of Bathurst (recs and mgrs apptd) [2015] NSWSC 440, where Brereton J considered the scope of set-off under ss 21(1) and 90(2)(a) of the Civil Procedure Act 2005 (NSW), set-off under s 553C of the Corporations Act and the application of the “rule” in Cherry v Boultbee (1839) 41 ER 171.

21. By analogy with the approach taken in that case, Ms Whittaker and Mr Anderson submit that, in any action between PAPF and PSNT (or, more precisely, brought by PPIL or another entity as trustee of PAPF and PSNT respectively against the other), each party would be entitled to assert its competing liability (whether by way of defence or cross-claim) and judgment would be given for the balance only. They submit that, on that approach, the claims of PAPF and PSNT (or, more precisely, the respective claims of PPIL as trustee of each trust against the other) may be set-off by virtue of ss 21(1) and 90(2)(a) of the Civil Procedure Act. That process was described by Brereton J in Re Anglican Development Fund Diocese of Bathurst (recs and mgrs apptd) above (at [42]–[45]) as follows:

“To recover moneys due to ADF, the receivers must resort to an ordinary action. Were it not for the orders empowering the receivers to receive and adjudicate proofs of debt, persons having claims against ADF would have to enforce them by ordinary action. In connection with any such action, (NSW) Civil Procedure Act 2005, s 21(1), provides that if there are mutual debts between a plaintiff and a defendant in any proceedings, the defendant may, by way of defence, set off against the plaintiff’s claim any debt that is owed by the plaintiff to the defendant and that was due and payable at the time the defence of set-off was filed, whether or not the mutual debts are different in nature.

The effect of s 21 is that if either APT or ADF were to sue the other to recover their respective debt, the other party, as a defendant, would be entitled to set-off against that claim the sum of the debt owed to it by the plaintiff. Thus, in an action commenced by the Receivers against APT to recover the $639,561.99, APT could raise as a set-off the amount owed to it by ADF. Moreover, if it wished to recover the balance — because the amount ADF owes APT exceeds the $639,561.99 — APT could cross-claim. … Were APT to cross-claim, then pursuant to Civil Procedure Act, s 90(2)(a), the court could give judgment for the balance only and there is every reason why it would do so, and no reason why not: both debts pre-existed the receivership; both are loans by one party to the other of a reciprocal nature which ought to be treated as countervailing transactions on balance of account; and (ADF being insolvent) the same policy that underlies s 553C applies — that it is unjust to require a debtor/claimant of an insolvent to pay the debt in full but recover only a dividend on the claim. The result would be a judgment in favour of APT for $680,908.47.

In an action commenced by APT against ADF to recover the APT Loan, ADF could raise as a set-off the $639,561.99 owed to it by APT, and the result would be a judgment in favour of APT for the difference, namely $680,908.47. Thus in either case, application of Civil Procedure Act, s 21 and s 90(2)(a), would result in the debts being set-off and a judgment in favour of APT for $680,908.47.

It follows that to require the receivers to set-off APT’s indebtedness to ADF against ADF’s to APT and admit only the balance due to APT would accord with the legal rights of the parties. As it happens, this is the same outcome as would be produced by application of Corporations Act, s 553C.”

22. Ms Whittaker and Mr Anderson also submit, by reference to the observations of Brereton J in Re Anglican Development Fund Dioceses of Bathurst (rec and mgrs apptd) above at [47], that:

“This outcome reflects the underlying policy of the statutory set-off provisions that where there are mutual debts, credits or other dealings, but one of the parties is insolvent, it is unjust to require the solvent party to pay 100 cents in the dollar in respect of its debt, but only allow it some lesser percentage dividend of the monies owed to it.”

23. Mr Stack supported Ms Whittaker’s and Mr Anderson’s submissions in respect of set-off under the Civil Procedure Act.

24. In considering this submission, I have not neglected the possibility that procedural obstacles might well arise if PPIL sought to bring proceedings in one capacity against itself in another capacity. The parties did not address the feasibility, or otherwise, of that course. However, the proceedings to which Brereton J referred in Anglican Development Fund Diocese of Bathurst (recs and mgrs apptd) above were hypothetical proceedings, rather than existing proceedings, and that hypothesis is adopted in order to determine how the law would treat respective claims if such proceedings were brought. It seems to me to be appropriate to extend such a hypothesis in this case also to recognise that, if it were necessary to bring such proceedings and any procedural difficulty would arise because PPIL would be both the plaintiff and the defendant in them, albeit in different capacities, then it would be necessary for PPIL to resign as trustee or responsible entity of one or both of the trusts or funds, and to be replaced by a trustee or responsible entity that could bring such proceedings against the other in order to vindicate the respective rights of PAPF and PSNT. Once the hypothesis is extended in that way, then any procedural difficulty arising from the fact that PPIL would be both plaintiff and defendant, albeit in different capacities, is addressed.

25. Ms Whittaker and Mr Anderson pointed out that, if it were applicable, statutory set-off under s 553C of the Corporations Act would lead to a similar result. Broadly, that section allows set-off where there have been mutual credits, mutual debts or other mutual dealings between an insolvent company in winding up and a person seeking to have a debt or claim admitted against that company, avoiding the need for the creditor to pay a debt to the insolvent company in full and then prove as a creditor in the winding up: Gye v McIntyre (1991) 171 CLR 609; Mine & Quarry Equipment International Ltd v McIntosh [2005] QCA 186; (2005) 54 ACSR 1 at [6]. A set-off under that section requires that the creditor's claim is provable in the winding up; the claims exist at the date of the winding up; the claims are capable of being converted into monetary amounts; and the element of "mutuality" exists, namely credits, debts or claims arising from the dealings must be between the same parties and the benefit or burden of those credits, debts or claims must lie in the same interest, although it is not necessary that the claims are similar in nature: Day & Dent Constructions Pty Ltd (in liq) v North Australian Properties Pty Ltd (prov liq apptd) (1982) 150 CLR 85; Hall v Poolman [2007] NSWSC 1330; (2007) 215 FLR 243; 65 ACSR 123 at [422]; Smith v Bone [2015] FCA 319; (2015) 104 ACSR 528.

26. Ms Whittaker and Mr Anderson recognised a possible difficulty in the application of that section, where it applied between a company that is being wound up and a “person who wants to have a debt or claim admitted against the Company”, and noted that the section may not apply if PPIL was both the company in winding up and the potential claimant. However, it seems to me that s 553C would be applicable, on the hypothesis that PPIL would, if necessary, be replaced as trustee of PAPF or PSNT or both, so as to allow that section to have effect in accordance with its terms. Mr Stack also submitted that set-off under that section would be available in this case, distinguishing Re Anglican Development Fund Diocese of Bathurst (recs and mgrs apptd), where the relevant entities were incorporated under State legislation rather than under the Corporations Act.

27. In Re Anglican Development Fund Diocese of Bathurst (recs and mgrs apptd) above, Brereton J also considered the interaction between statutory set-off and the rule in Cherry v Boultbee above, as formulated by Sargant J in Re Peruvian Railway Construction Company Ltd [1915] 2 Ch 144, that a person who is entitled to participate in a fund, and also bound to make a contribution in aid of that fund, cannot be allowed to participate unless and until he or she has fulfilled his or her duty to contribute to that fund. His Honour observed (at [34]) that the application of that rule can produce a different result from statutory set-off in the context of insolvency but held (at [37]–[39]) that, whatever the ambit of that rule in the context of insolvent administrations, it only applies where set-off is not available. In Re Hawden Property Group Pty Ltd (in liq) [2018] NSWSC 481; (2018) 125 ACSR 355, Gleeson JA also observed (at [48]) that insolvency set-off and the equitable principle in Cherry v Boultbee above covered different fields and referred, with apparent approval, to the observations of Brereton J in Re Anglican Development Fund Diocese of Bathurst(recs and mgrs apptd) above at [38]–[39]. I am satisfied that rule has no application here, where the liquidators should proceed, at least by analogy, on the basis that statutory set-off is available.

28. I would follow the approach adopted by Brereton J in Re Anglican Development Fund Diocese of Bathurst (recs and mgrs apptd) above, both for consistency in decision-making in respect of matters arising under the Corporations Act, and because I consider that that approach is correct for the reasons that his Honour identifies in that decision. I am satisfied that the liquidators would be justified in proceeding on a basis that is consistent with the application of ss 21(1) and 90(2)(a) of the Civil Procedure Act, and s 553C of the Corporations Act, in the relevant circumstances, so that PPIL is treated as asserting and setting off the liabilities of each of PAPF and PSNT against the other, resulting in a net liability of PAPF to PSNT (or, more precisely, of PPIL in its capacity as trustee of PAPF to PPIL in its capacity as trustee of PSNT).

Costs

29. I am satisfied that this is a proper case for the liquidators’ costs of and incidental to this application to be treated as costs in the winding up of PPIL, and to be paid from funds held by it as trustee for PSNT. The liquidators submit, and I accept, that the application was only necessary because, in practical terms, PPIL held such funds as trustee for PSNT, resulting in the need to determine the entitlements to those funds. Mr Stack did not submit to the contrary. IQIT Nominees did not seek its costs of this application, where the costs of the application will ultimately reduce the amount distributed to it in any event. It seems to me that the application was plainly necessary, in the proper administration of the winding up, given the conflicting interests of persons with claims against the PAPF and PSNT in the relevant circumstances.

30. Accordingly, I make orders in accordance with the Short Minutes of Order initialled by me and placed in the file.

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Decision last updated: 21 June 2018