Lo Pilato in his capacity as Liquidator of RSD (Qld) Pty Ltd (in liq) v McLeod
[2024] FCA 751
•31 May 2024
FEDERAL COURT OF AUSTRALIA
Lo Pilato in his capacity as Liquidator of RSD (Qld) Pty Ltd (in liq) v McLeod [2024] FCA 751
File number: ACD 35 of 2024 Judgment of: DERRINGTON J Date of judgment: 31 May 2024 Date of publication of reasons: 10 July 2024 Catchwords: PRACTICE AND PROCEDURE – application for orders pursuant to r 18.01 of the Federal Court Rules 2011 (Cth) allowing liquidator to pay a dividend from the liquidation into Court – where dispute exists as to the entitlement to the receipt of the dividend – application granted Legislation: Corporations Regulations 2001 (Cth)
Federal Court Rules 2011 (Cth)
Division: General Division Registry: Australian Capital Territory National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 10 Date of hearing: 31 May 2024 Counsel for the Applicants: Mr M Falcetta Solicitor for the Applicants: Trinity Law Solicitor for the First and Second Respondents: Mr P Hegarty of Hegarty Lawyers Solicitor for the Third Respondent: Mr Z Bentley of Irish Bentley Lawyers Counsel for the Fourth Respondent: The Fourth Respondent did not appear ORDERS
ACD 35 of 2024 BETWEEN: FRANK LO PILATO
First Applicant
JONATHON KINGSLEY COLBRAN
Second Applicant
AND: BRENDAN MCLEOD
First Respondent
MCLEOD KELLY DEVELOPERS PTY LTD
Second Respondent
ZEKE DAVID BENTLEY (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
DERRINGTON J
DATE OF ORDER:
31 MAY 2024
THE COURT ORDERS THAT:
1.In accordance with r 18.01 of the Federal Court Rules 2011 (Cth) the applicants pay the McLeod Dividend (as defined in the Affidavit of Mr Frank Lo Pilato sworn 29 May 2024) into Court.
2.Except as to the issue of costs, the applicants submit to the orders of the Court.
3.Any party who claims an interest in the McLeod Dividend file and serve any application for payment out of Court of the monies held and any affidavit upon which they propose to rely by 4.00pm on 27 June 2024.
4.These proceedings be listed for further case management hearing on a date to be advised.
5.Costs be reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
DERRINGTON J:
This is an application for relief by way of interpleader made by Mr Frank Lo Pilato and Mr Jonathon Kingsley Colbran in their capacity as joint and several liquidators of RSD (QLD) Pty Ltd (in liquidation) (the Company). They seek orders, pursuant to r 18.01 of the Federal Court Rules 2011 (Cth), that they be allowed to pay a certain dividend from the liquidation into Court pending the resolution of conflicting claims over the dividend.
Mr Lo Pilato is a well-regarded and well-recognised liquidator and insolvency professional. He, along with Mr Colbran, were appointed as joint and several administrators of the Company on 30 April 2020 and, on 4 August 2020, they were subsequently appointed joint and several liquidators.
On 3 April 2024, Mr Lo Pilato caused a notice to be issued pursuant to reg 5.6.65 of the Corporations Regulations 2001 (Cth) (Corporations Regulations) of the liquidators’ intention to declare dividends. On his calculations, the dividends are due to be paid by 3 June 2024. If he is unable to pay them by that time, he will need to revoke the notice and cause a new notice to be issued pursuant to reg 5.6.65 of the Corporations Regulations. Further, several other creditors who are not party to the present application will be impacted, in that they will be delayed in receiving their respective dividends which total around $500,000.00.
One of the dividends, which will be referred to as the “McCleod Dividend”, is to be paid to the first respondent, Mr Brendan McLeod, and the second respondent, McLeod Kelly Developers Pty Ltd. On Mr Lo Pilato’s calculations, that dividend is in the sum of $245,807.03.
Mr Lo Pilato has been given notice of lien claims in respect of monies paid to the McCleod entities. Those claims are by legal practitioners. It appears, therefore, that a relevant dispute exists as to the entitlement to the receipt of the McCleod Dividend.
Necessarily, the liquidators do not wish to be involved in that disputation, they having no interest in its outcome. To the extent they have any interest, it is in furthering the winding up of the Company. They, therefore, ask that an order be made allowing them to pay the money into Court and, thereby, interplead between the disputing parties. That is precisely the purpose of r 18.01, and the liquidators have satisfied the requirements for an order that the money to be paid in.
Happily, in this case, the relevant parties were represented by capable and respected lawyers. They have also acknowledged the appropriateness of the liquidators’ views and this application, and assisted the Court by identifying relevant issues which have, effectively, resulted in the Court being able to make orders in relation to the matter largely by consent.
In those circumstances, it is appropriate to make orders in the form of the draft proposed to me by Mr Hegarty, who appeared on behalf of the first and second respondents, though slightly amended in order 3 to provide that any party who claims an interest in the McLeod Dividend file and serve any application for payment out of Court of the monies held and any affidavit on which they propose to rely by 27 June 2024.
The matter must go back to the National Operations Registry for allocation. As such, the fourth order will be that the proceedings be listed for a further case management hearing on a date to be advised to the parties.
It is also appropriate to make an order that costs be reserved.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington. Associate:
Dated: 10 July 2024
SCHEDULE OF PARTIES
ACD 35 of 2024 Respondents
Fourth Respondent:
MICHAEL HENRY
0
0
2