KIMBERLEY STUART WALLMAN AND GREGORY PAUL QUIN IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF GOLDEAGLE NOMINEES PTY LTD (In Liquidation) (ACN 081 643 254)
[2023] WASC 7
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: KIMBERLEY STUART WALLMAN AND GREGORY PAUL QUIN IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF GOLDEAGLE NOMINEES PTY LTD (In Liquidation) (ACN 081 643 254) [2023] WASC 7
CORAM: HILL J
HEARD: 18 JANUARY 2023
DELIVERED : 18 JANUARY 2023
PUBLISHED : 18 JANUARY 2023
FILE NO/S: CIV 1027 of 2023
MATTEREX PARTE
KIMBERLEY STUART WALLMAN AND GREGORY PAUL QUIN IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF GOLDEAGLE NOMINEES PTY LTD (In Liquidation) (ACN 081 643 254)
Plaintiffs
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
Insolvency Practice Schedule 2016 (Corporations) (Cth) s 90-15
Rules of the Supreme Court 1971 (WA) O 51 r 1
Supreme Court Act 1935 (WA) s 25(9)
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiffs | : | J M Sheppard |
Solicitors:
| Plaintiffs | : | Jackson McDonald |
Case(s) referred to in decision(s):
Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth [2019] HCA 20; (2019) 268 CLR 524
Caterpillar Financial Australia Limited 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:
The plaintiffs, Kimberley Stuart Wallman and Gregory Paul Quin (collectively, the Liquidators) are the liquidators of Goldeagle Nominees Pty Ltd (Goldeagle). Prior to the appointment of the Liquidators, Goldeagle was the trustee for the Wilmot Family Trust (Trust).
On 12 January 2023, the Liquidators filed an originating motion in this court seeking:
(a)orders that the Liquidators be appointed as receivers and managers of the property held by Goldeagle in its capacity as trustee of the Trust, pursuant to O 51 r 1 of the Rules of the Supreme Court 1971 (WA) and s 90‑15 of the Insolvency Practice Schedule (Corporations);
(b)orders that the Liquidators in acting as receivers and managers have the powers under s 420 of the CorporationsAct 2001 (Cth) (Act), as if the reference to 'corporation' in that section was a reference to the Trust.
Factual background
The plaintiffs filed three affidavits in support of its application: two affidavits of Mr Quin, filed 12 January 2023 and 17 January 2023, and an affidavit of service of Anastasia Elise Rosemary Causton filed 16 January 2023. This summary is taken from these affidavits.
Goldeagle was incorporated on 13 February 1998. A current and historical company extract obtained from the records of the Australian Securities and Investments Commission (ASIC) discloses that the sole director, company secretary and shareholder of Goldeagle is Graeme Frederick Wilmot.[1]
[1] Affidavit of Gregory Paul Quin filed 12 January 2023 [7] ‑ [8], 'GPQ‑2'.
On 19 October 2022, the Liquidators were appointed joint and several liquidators of Goldeagle pursuant to a resolution of the company in accordance with s 491 of the Act.[2]
[2] Affidavit of Gregory Paul Quin filed 12 January 2023 [2].
Based on the enquiries undertaken to date, the Liquidators believe:[3]
(a)Goldeagle was the trustee of the Trust;
(b)in that capacity, it carried on business as Wilmot Engineering;
(c)it 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.
[3] Affidavit of Gregory Paul Quin filed 12 January 2023 [16] ‑ [17], 'GPQ‑5'.
Among the books and records of Goldeagle is a copy of the Trust deed. The Trust deed discloses that the Trust was established on 17 February 1998.[4] Pursuant to cl 16.3 of the Trust deed, on the appointment of a liquidator, Goldeagle was automatically removed as trustee of the Trust.
[4] Affidavit of Gregory Paul Quin filed 12 January 2023 [10], 'GPQ‑3'.
On the basis of the Liquidators' investigations to date, Mr Quin believes there are 195 known creditors, totalling $5,217,568.67.[5]
[5] Affidavit of Gregory Paul Quin filed 12 January 2023 [19], 'GPQ‑6'.
Service of Application
I am satisfied that ASIC have been served with copies of the originating motion and the first affidavit of Mr Quin a reasonable time before the hearing of the application,[6] as required by r 2.8 of the Supreme Court (Corporations) Rules 2004 (WA).
[6] Affidavit of Anastasia Elise Rosemary Causton filed 16 January 2023 [5], 'AEC‑1'.
I am also satisfied that the sole director and company secretary of Goldeagle, Mr Wilmot, has been provided with notice of the application.
No one has given notice to the plaintiffs' solicitors that they wish to be heard on the application.[7]
[7] Affidavit of Anastasia Elise Rosemary Causton filed 16 January 2023 [5]; Supplementary affidavit of Gregory Paul Quin filed 17 January 2023 [11] ‑ [12].
Legal principles for appointment of receiver
Where a corporate trustee enters into 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, but the liquidator of the company does not have the power to sell those assets to satisfy that indemnity absent intervention by the court.[8]
[8] 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 Limited v Ovens Nominees Pty Ltd [2011] FCA 677 [22] ‑ [28] (Gordon J).
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.
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] See 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] See In the matter of Mecfab Holdings Pty Ltd [2015] NSWSC 46 [9].
Once the sale of the trust's assets has 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] See 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 16.3 of the Trust deed, on the appointment of the Liquidators, Goldeagle was automatically removed as Trustee of the Trust. As a consequence, Goldeagle 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.
I accept that the proposal to appoint the Liquidators as receivers of the Trust without security is in accordance with the legal principles outlined above and will protect the trustee company's right of indemnity as well as the position of creditors.
In these circumstances, I accept there are advantages with the proposal that the plaintiffs as liquidators be appointed as receivers and managers of the Trust. These include that they are subject to the regulatory regime applicable to insolvency practitioners, they have professional indemnity insurance and are subject to the continued supervision of the court.
I also accept Mr Quin's evidence that Goldeagle has acquired assets and incurred liabilities only as Trustee of the Trust. For this reason, it is appropriate to make orders appointing the Liquidators as receivers and managers of the Trust's assets with the powers of a receiver and manager in respect of the business and property of a company under s 420 of the Act, as if the reference in that section to 'property of the corporation' is a reference to the 'property of the Trust'. This includes, without limitation, the power to do all things necessary and convenient to secure the assets of the Trust.
In relation to the costs of the application, the plaintiffs sought orders for the costs of the application be paid from the Trust property. I consider this to be the appropriate costs order and make that order.
For these reasons, at the conclusion of the hearing, I made orders in terms of Annexure 'A'.
ANNEXURE 'A'
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
FD
Associate to the Honourable Justice Hill
18 JANUARY 2023
3
6
0