In the Matter of Rooforce SW Pty Ltd (in Liquidation); Ex Parte
[2024] WASC 139
•23 APRIL 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: IN THE MATTER OF ROOFORCE SW PTY LTD (IN LIQUIDATION); EX PARTE MATHIEU TRIBUT AS LIQUIDATOR OF ROOFORCE SW PTY LTD (IN LIQUIDATION) [2024] WASC 139
CORAM: HILL J
HEARD: ON THE PAPERS
DELIVERED : 14 MARCH 2024
PUBLISHED : 23 APRIL 2024
FILE NO/S: COR 32 of 2024
MATTER: IN THE MATTER OF ROOFORCE SW PTY LTD (IN LIQUIDATION)
EX PARTE
MATHIEU TRIBUT AS LIQUIDATOR OF ROOFORCE SW PTY LTD (IN LIQUIDATION)
First Plaintiff
ROOFORCE SW PTY LTD (IN LIQUIDATION)
Second Plaintiff
Catchwords:
Corporations - External administration - Winding up - Where company in liquidation is bare trustee - Application for appointment of liquidator as receiver and manager of trust property - Turns on own facts
Legislation:
Corporations Act 2001 (Cth) s 420, sch 2 s 90-15
Rules of the Supreme Court 1971 (WA) O 51 r 1
Supreme Court (Corporations) Rules 2004 (WA) r 2.8
Supreme Court Act 1935 (WA) s 25(9)
Result:
Application granted
Category: B
Representation:
Counsel:
| First Plaintiff | : | No appearance |
| Second Plaintiff | : | No appearance |
Solicitors:
| First Plaintiff | : | Rowe Bristol Lawyers |
| Second Plaintiff | : | Rowe Bristol Lawyers |
Cases referred to in decision:
Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth [2019] HCA 20; (2019) 268 CLR 524
Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd [2011] FCA 677
In the matter of Hercules Car Parking Systems (Victoria) Pty Ltd [2018] NSWSC 409
In the matter of Mecfab Holdings Pty Ltd [2015] NSWSC 46
Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (in liq) [2018] FCAFC 40; (2018) 260 FCR 310
HILL J:
On 1 November 2023, the first plaintiff, Mathieu Tribut, was appointed as administrator of the second plaintiff, Rooforce SW Pty Ltd (Company). Following the second meeting of creditors, on or about 6 December 2023, the first plaintiff was appointed as a liquidator of the Company (Liquidator). Prior to the appointment of the first plaintiff as Liquidator, the Company was the trustee of the Rooforce Unit Trust.
On 7 March 2024, the plaintiffs filed an originating process in this Court seeking, among other things, orders that the Liquidator:
(a)be appointed as receiver and manager of the assets of the Trust;
(b)in acting as receiver, have the powers under s 420 of the Corporations Act 2001 (Cth) (Act), as if the reference to 'corporation' in that section was a reference to the Trust; and
(c)is entitled to be paid remuneration, costs, disbursements, and expenses out of the property of the Trust assets.
The originating process was initially listed for hearing on 15 March 2024. On 13 March 2024, the plaintiffs requested that the matter be dealt with on the papers.[1] On 14 March 2024, I made orders in terms of the minute of proposed orders dated 14 March 2024 subject to one amendment, and vacated the hearing. These are my reasons for making these orders.
[1] Email from Rowe Bristol Lawyers to Associate to Hill J dated 13 March 2024.
Factual background
The plaintiffs filed two affidavits in support of their application: an affidavit of the first plaintiff filed 7 March 2024 and an affidavit of service filed 8 March 2024. This summary is taken from these affidavits.
The Company was incorporated on 18 October 2022. A current and historical company extract from the records of the Australian Securities and Investments Commission (ASIC) discloses that the sole director and shareholder of the Company is Gerard Martinet.[2]
[2] Affidavit of Mathieu Tribut filed 7 March 2024, 'MT1'.
On 6 December 2023, Mr Martinet, as sole shareholder of the Company, passed a resolution to appoint Mathieu Tribut as liquidator of the Company in accordance with s 491 of the Act.[3]
[3] Affidavit of Mathieu Tribut filed 7 March 2024, 'MT5'.
Based on the enquiries that have been undertaken to date, the first plaintiff believes that:[4]
(a)the Company was the trustee of the Trust;
(b)the Company did not trade in its own right;
(c)the Company only acted in its capacity as trustee of the Trust and did not conduct any other business or hold any assets in any other capacity; and
(d)the only assets of the Company are cash held in accounts with Westpac Banking Corporation and accounts receivable.
[4] Affidavit of Mathieu Tribut filed 7 March 2024 [12] - [13].
Among the books and records of the Company is a copy of the Trust deed. The Trust deed discloses that the Trust was established on 18 October 2022.[5] Pursuant to cl 35.9(g) of the Trust deed, on the appointment of an administrator or liquidator, the Company was removed as trustee of the Trust.
[5] Affidavit of Mathieu Tribut filed 7 March 2024, 'MT8'.
Service of application
I am satisfied that ASIC has been served with copies of the originating process and the affidavit of Mr Tribut,[6] as required by r 2.8 of the Supreme Court (Corporations) (WA) Rules 2004 (WA).
[6] Affidavit of Martin C M Muk filed 8 March 2024.
No one gave notice to the plaintiffs' solicitors or to the court that they wish to be heard on the application.
Legal principles for appointment of receiver
The legal principles that govern this application are well-known and can be summarised as follows.
Where a corporate trustee enters external administration, the company's right of indemnity and accompanying equitable lien over the assets of the trust survives the appointment. Where a company has been removed as trustee of the trust by reason of the terms of the trust deed, the company retains the right to hold trust assets as bare trustee. However, the liquidator of the company does not have the power to sell those assets to satisfy that indemnity absent intervention by the court.[7]
[7] See Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (in liq)[2018] FCAFC 40; (2018) 260 FCR 310 [44], [85] ‑ [91] (Allsop CJ), [139], [142] (Siopis J) and [198] (Farrell J); Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd [2011] FCA 677 [22] - [28] (Gordon J).
The liquidator, in essence, has two options. First, to apply for an order that confers power on the liquidator to deal with the assets of the trust or, second, to apply to be appointed as receiver and manager of the trust.
In this case, the first plaintiff seeks to be appointed as receiver and manager of the Trust and also seeks orders under s 90‑15 of the Insolvency Practice Schedule (Corporations) (sch 2 to the Corporations Act 2001 (Cth)) (Insolvency Practice Schedule) to facilitate their dealing with the assets of the Company to enable the winding up of the Company and the Trust to proceed.
Section 90-15(1) of the Insolvency Practice Schedule provides that the court may make 'such orders as it thinks fit in relation to the external administration of a company'. The power is broad and is at least as extensive as the powers formerly available under s 479(3) and s 511 of the Act.
Courts are generally willing, upon an appropriate application, to make orders permitting the liquidator of a (former) corporate trustee to sell trust assets.
Order 51 r 1 of the Rules of the Supreme Court 1971 (WA) deals with the court's power to appoint a receiver. The court also has power, pursuant to s 25(9) of the Supreme Court Act 1935 (WA), to appoint a receiver where it appears to be just and convenient. Orders may be made nunc pro tunc to authorise any sale of assets that have already occurred.[8]
[8] Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (in liq) [91], [152], [198].
In the absence of any relevant conflict, it is commonly the case that the court will appoint the liquidator of the corporate trustee as receiver without security.[9]
[9] In the matter of Hercules Car Parking Systems (Victoria) Pty Ltd [2018] NSWSC 409 (Brereton J).
Appointing a liquidator or administrator of a corporate trustee as a receiver of a trust's assets facilitates and simplifies the external administration of the corporate trustee by providing for the trust's business and assets to be under the same control as the corporate trustee while it is in external administration. This aids in the vindication of the trustee company's right of indemnity out of the trust's assets.[10]
[10] In the matter of Mecfab Holdings Pty Ltd [2015] NSWSC 46 [9].
Once the sale of the trust's assets have occurred, the proceeds may be appropriated by way of exoneration as part of the conduct of the liquidation in accordance with the statutory priorities set out in pt 5.6, div 6 of the Act.[11] This includes the costs of the liquidation.
[11] Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth [2019] HCA 20; (2019) 268 CLR 524 [55] - [58] (Kiefel CJ, Keane & Edelman JJ), [95] - [97] (Bell, Gageler & Nettle JJ), [171] (Gordon J).
Disposition
On the evidence before me, I accept that by reason of cl 35.9(g) of the Trust deed, on the appointment of Mr Tribut as administrator, the Company was removed as trustee of the Trust. As a consequence, the Company is now a bare trustee of the Trust's assets and does not have the power to sell or otherwise deal with the assets of the Trust. No new trustee has been appointed.
I am satisfied that the Company only acted as trustee of the Trust and in no other capacity, and that all Trust assets held by the Company were held in its capacity as trustee of the Trust.
The orders sought by the plaintiffs are consistent with the legal principles that I have outlined above.
Given the evidence before the court, I accept that it is expedient for Mr Tribut to have the power to sell the property of the Trust and that orders be made nunc pro tunc from the time of his appointment as Liquidator.
I also accept it is appropriate to appoint Mr Tribut as receiver and manager of the Trust without security. This is in accordance with the legal principles outlined above and will protect the Company's right of indemnity, as well as the position of creditors. Other advantages with the proposal include that the first plaintiff is subject to the regulatory regime applicable to insolvency practitioners, he has professional indemnity insurance, and is subject to the continued supervision of the court.
The form of orders sought in terms of service and the allowance for any aggrieved party to apply to this Court to vacate or vary these orders protects the creditors of the Company from any possible prejudice that might otherwise arise from this application. To ensure the creditors of the second plaintiff were aware of these orders, I ordered that Mr Tribut give notice of these orders to them within seven days of the date of the orders.
In relation to the orders sought under s 90-15 of the Insolvency Practice Schedule, I accept Mr Tribut's evidence that the Company has acquired assets and incurred liabilities only as trustee of the Trust. For this reason, it is appropriate to make orders that the first plaintiff will be acting properly and is justified in proceeding to conduct the affairs of the Trust on the basis that the business and assets of the Company comprised the assets of the Trust.
Finally, the plaintiffs sought orders for the costs of the application be costs in the winding up of the second plaintiff and otherwise be paid from the Trust property. In my view, this is the appropriate costs order.
Conclusion
For these reasons, I was satisfied it was appropriate to make the orders which are annexed to these reasons marked 'Annexure A'.
'Annexure A'
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KC
Associate to the Honourable Justice Hill
24 APRIL 2024
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