Macdonald v Quancorp Pty Ltd - [2020] WASC 65

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   MACDONALD -v- QUANCORP PTY LTD [2020] WASC 65
CORAM:   MASTER SANDERSON
HEARD:   31 OCTOBER 2019
DELIVERED          :   5 MARCH 2020
FILE NO/S:   COR 276 of 2001
BETWEEN:   KENNETH DUNCAN MACDONALD
GRAEME ORIEL MORRIS
EDWARD JOHN HALL
BRYAN ALFRED ELLIS
JAMES GORDON MITCHELL
FRANCIS MARK BETHWAITE
KEITH EDWARD FAULKENER
PETER JOHN HOUSDEN
CUDGEN RZ LTD
Plaintiffs
AND
QUANCORP PTY LTD
Defendant
LAWDOC PTY LTD
P & A CAIN INVESTMENT TRUST
PETER MICHAEL CAIN
Interested parties

Catchwords:

Corporations law - Application by liquidator for directions and for approval of remuneration - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)
Insolvency Practice Rules (Corporations) 2016
Rules of the Supreme Court 1971 (WA)
Supreme Court (Corporations) (WA) Rules 2004
Trustees Act 1962 (WA)

Result:

Order made - remuneration approved - directions given

Category: B

Representation:

Counsel:

Plaintiffs	:	I M O Matthews
Defendant	:	No appearance
Interested parties	:	R Scanangas

Solicitors:

Plaintiffs	:	Chew & Matthews
Defendant	:	No appearance
Interested parties	:	Irongroup Lawyers

Case(s) referred to in decision(s):

Apostolou v VA Corporation of Australia Pty Ltd (2010) 77 ACSR 84
Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth of Australia [2019] HCA 20
Conlan (as liquidator of Rowena Nominees Pty Ltd) v Adams (2008) ACSR 521
Jennings v Mather [1902] 1 KB 2
Lemery Holdings Pty Ltd v Reliance Financial Services Pty Ltd [2008] NSWSC 1344
Nationwide News Pty Ltd v Samalot Enterprises Pty Ltd [No 2] (1986) 5 NSWLR 227
Re Killarnee Civil and Concrete Contractors Pty Ltd (In liq) (2018) 354 ALR 436
Re Suco Gold Pty Ltd (In liq) (1983) 33 SASR 99
Thackray v Gunns Plantation Ltd (2011) 85 ACSR 144
Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96
Yeo (in their capacity as former liquidators of Nissand Pty Ltd (in liq)) v Nissand Pty Ltd [in liq] [2019] VSC 280

MASTER SANDERSON:

By amended interlocutory process filed 30 July 2019, the liquidator and former liquidator of Quancorp Pty Ltd seek certain orders (I will refer to the liquidator and former liquidator as the applicants). Before detailing the orders sought, it is necessary to provide some background to what has been a lengthy liquidation process. The background facts which follow are taken largely from submissions filed by the applicants on 1 October 2019. They are uncontroversial.
From its incorporation in 1984, Quancorp Pty Ltd (the Company) has been owned by Peter Michael Cain (Peter Cain) and his then spouse, Anne Christine Cain (Anne Cain). Peter Cain has been a director of the Company at all material times. Anne Cain ceased to be an officer of the Company in 1996 and has been separated from Peter Cain since about 2007. The Company was the initial trustee of the P & A Cain Family Trust (family trust) which was established in 1984. It was also the initial trustee of the P & A Cain Investment Trust (investment trust) which was established in 1995.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Macdonald v Quancorp Pty Ltd

Details

AGLC: Macdonald v Quancorp Pty Ltd [2020] WASC 65
Case: [2020] WASC 65
Decision Date: 5 MARCH 2020

CaseChat Overview and Summary

In the matter of Macdonald v Quancorp Pty Ltd, the applicants sought orders to regulate the remuneration of liquidators and to approve their entitlement to certain assets. The Company was wound up in 2001, with Alden Jon Halse serving as liquidator until 2018, when he was replaced by Wayne Anthony Rushton. The applicants, including the liquidators, sought various orders to govern their remuneration, the sale of certain assets, and the entitlement to indemnities and costs. The central legal issues revolved around the applicability of certain rules and statutes to the applicants' claims for remuneration and the validity of the proposal to creditors regarding their remuneration. The court had to decide whether the applicants' application for remuneration was valid despite procedural irregularities and whether they were entitled to certain assets and indemnities.

The court considered the procedural aspects of the application, specifically the applicability of the Supreme Court (Corporations) (WA) Rules 2004 versus Order 81G of the Rules of the Supreme Court 1971 (WA). It also examined the applicants' entitlement to remuneration under s.473(3)(b)(ii) of the old act and the validity of the proposal to creditors regarding their remuneration under section 75-40 of Schedule 2 of the Insolvency Practice Schedule. Additionally, the court had to determine whether the applicants were justified in dealing with specific assets of the Investment Trust and whether they were entitled to indemnities and costs from the assets of the Investment Trust.

The court concluded that the Corporations Rules applied to the application instead of Order 81G of the Rules of the Supreme Court 1971 (WA). It found that the applicants' application for remuneration was valid despite procedural irregularities. The court also approved the applicants' remuneration for the specified periods and allowed them to deal with certain assets of the Investment Trust. Furthermore, the court declared that the applicants were entitled to indemnities and costs from the assets of the Investment Trust, subject to certain conditions.

The court made orders pursuant to the Corporations Act 2001 (Cth) and the Trustee Act 1958 (Vic), approving the applicants' remuneration, allowing them to deal with certain assets of the Investment Trust, and granting them entitlement to indemnities and costs from the assets of the Investment Trust. The court also ordered the payment of the Escrow Amount to the First Plaintiff and directed that the costs of the application be costs in the winding up.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The Company was placed into liquidation in September of 2001. Alden Jon Halse was appointed as its liquidator and remained so until 2018. He was then replaced by Wayne Anthony Rushton. Against that background, the applicants sought the following order (the marking up of the amended application has been omitted):On the facts stated in the supporting affidavits, the Plaintiffs apply for the following orders:1.An order pursuant to rule 1.3(3) of the Supreme Court (Corporations) (WA) Rules 2004 (Corporations Rules) that the Corporations Rules apply to this application instead of Order 81G of the Rules of the Supreme Court 1971 (WA) (as at the date of winding up of the Second Plaintiff).2.An order that the obligation to comply with rules 9.4(3), (4), (5) and (6) of the Corporations Rules be dispensed with on the condition that a copy of this application and supporting affidavits be served on the persons specified in rule 9.3(3) and any objections to the First and Third Plaintiffs' claims for remuneration received within 21 days thereof be noted in a further affidavit to be sworn by the First Plaintiff; alternatively an order that the time for service of the notice required by rule 9.4(3) of the Corporations Rules be abridged so that the notice may be served at any time prior to the interlocutory process in respect of this application being filed.3.An order pursuant to s.473(3)(b)(ii) of the old act fixing the remuneration of the Third Plaintiff for the period from 13 November 2003 to 18 October 2018 in the amount of $105,005 (plus GST).4.An order pursuant to s.473(3)(b)(ii) of the old act fixing the remuneration of the First Plaintiff for the period from 19 October 2018 to 30 April 2019 in the amount of $11,115.50 (plus GST).5.An order pursuant to s.473(3)(b)(ii) of the old act approving future remuneration of $20,000 (inclusive of GST).6.A declaration pursuant to s.1322(4)(a) of the Act that the application to fix the remuneration of the liquidators pursuant to s.473(3)(b)(ii) of the old act is not valid notwithstanding that the proposal to creditors to approve such remuneration was made pursuant to section 75-40 of Schedule 2 of the Insolvency Practice Schedule and not Part 5.6 of the Corporations Regulations 2001.7.A direction pursuant to s 90-15 of the Insolvency Practices Schedule that the liquidators of the Second Plaintiff are and will be justified and acting properly in dealing with:a)the Escrow Amount (as that term is defined in the orders made by Family Court of Australia in proceedings MLC11881/2018 dated 16 January 2019), representing part proceeds from the sale of the property formerly registered in the name of the Second Plaintiff situated at 21 Pine Avenue, Elwood, Victoria; andb)the Second Plaintiff's interest as tenant in common as to 1 of a total of 2 equal undivided shares in the property situated at 31 Volantis Crescent Roxburgh Park, Victoria, being the whole of the land described in Lot 2207 on Plan of Subdivision 406268T comprised in Certificate of Title Volume 10381 Folio 676 (Roxburgh Property),on the basis that they are assets of the P&A Cain Investment Trust (Investment Trust).8.An order that, pursuant to s 90-15 of the Insolvency Practice Schedule and s 63 of the Trustee Act 1958 (Vic), alternatively s 8(1) of the Trustees Act 1962 (WA), the Second Plaintiff, acting by its liquidator, be permitted to sell its interest in the Roxburgh Property, in the course of the winding up.9.A declaration pursuant to s 90-15 of the Insolvency Practice Schedule that the First and Second Plaintiffs are entitled to an indemnity secured by an equitable lien over the assets of the Investment Trust (including the proceeds of any sale pursuant to order 8 of its interest in the Roxburgh Property) for any debts or liabilities incurred by the Second Plaintiff in its capacity as trustee or bare trustee of the Investment Trust.10.A declaration pursuant to s 90-15 of the Insolvency Practice Schedule that the First and Third Plaintiffs are entitled to an indemnity secured by an equitable lien over the assets of the Investment Trust (including the proceeds of any sale pursuant to order 8 of its interest in the Roxburgh Property) for any costs and expenses of the winding up (including remuneration) to the extent that those costs and expenses are properly referable to the Second Plaintiff's capacity as trustee or bare trustee of the assets of the Investment Trust while they were respectively liquidators of the Second Plaintiff.11.An order pursuant to s 90-15 of the Insolvency Practice Schedule that any costs and expenses incurred by the Plaintiffs in realising any assets of the Investment Trust and otherwise protecting and maintaining those assets be costs in the winding up.12.An order pursuant to s 90-15 of the Insolvency Practice Schedule that the First and Third Plaintiffs' entitlement pursuant to order 10 be satisfied in part by payment to the First Plaintiff of the Escrow Amount (as that term is defined in the orders made by Family Court of Australia in proceedings MLC11881/2018 dated 16 January 2019) (or such proportion of the Escrow Amount as this Honourable Court thinks fit) within 7 days of the date of this order.13.An order pursuant to s 90-15 of the Insolvency Practice Schedule that the costs of the application be costs in the winding up and that the Plaintiffs be indemnified in respect of fifty percent of those costs from the assets of the Investment Trust.14.Such further or other orders as this Honourable Court thinks fit.