Mansfield (Trustee) v Cruz - [2018] FCA 1525

FEDERAL COURT OF AUSTRALIA
Mansfield (Trustee) v Cruz [2018] FCA 1525

File number(s): NSD 1128 of 2018

Judge(s): FARRELL J

Date of judgment: 9 October 2018

Catchwords: CORPORATIONS – application by trustee seeking declarations to void transactions against trustee pursuant to s 120 and/or s 121 of the Bankruptcy Act 1966 (Cth) and s 37A of the Conveyancing Act 1919 (NSW) – parties resolved proceeding by agreement – whether appropriate to order the transfer of the bankrupt’s shares in a company to the trustee under s 175 of the Corporations Act 2001 (Cth) where the company had no directors and there was no proposal to appoint a director – trustee provided satisfactory undertaking – application granted

Legislation:
Bankruptcy Act 1966 (Cth) ss 121, 122

Corporations Act 2001 (Cth) ss 175, 201A

Evidence Act 1995 (Cth) s 191

Taxation Administration Act 1953 (Cth) ss 269-15, 20, 25

Conveyancing Act 1919 (NSW) s 37A

Cases cited:
In the matter of DH International Pty Limited (Administrators Appointed) ACN 143 461 849 [2013] NSWSC 1120

Price v Powers [2005] WASC 154

Date of hearing: 4, 9 October 2018

Registry: New South Wales

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: General and Personal Insolvency

Category: Catchwords

Number of paragraphs: 22

Counsel for the Applicants: Mr S Golledge

Solicitor for the Applicants: Corrs Chambers Westgarth

Solicitor for the Respondents: Mr E Herman of Herman Legal

ORDERS

NSD 1128 of 2018

BETWEEN:
DAVID IAN MANSFIELD AS THE TRUSTEE OF THE BANKRUPT ESTATE OF JIN HEUNG YANG

First Applicant

JIM YANG NOMINEES PTY LTD (IN LIQUIDATION) ACN 137 666 614

Second Applicant

JIM YANG CONSULTANCY PTY LTD (IN LIQUIDATION) ACN 607 537 824

Third Applicant

AND:
RICHARD QUESADA CRUZ

First Respondent

STEAMBOAT PTY LTD ACN 609 789 488 IN ITS PERSONAL CAPACITY AND ITS CAPACITY AS THE TRUSTEE OF THE STEAMBOAT TRUST

Second Respondent

NAGANO PTY LTD ACN 609 789 442 IN ITS PERSONAL CAPACITY AND ITS CAPACITY AS THE TRUSTEE OF THE NAGANO TRUST

Third Respondent

THOUSAND ANGELES ISLAND PTY LTD ACN 612 556 260 IN ITS PERSONAL CAPACITY AND AS TRUSTEE FOR THE THOUSAND ANGELES ISLAND TRUST
Fourth Respondent

JUDGE:

FARRELL J

DATE OF ORDER:

5 OCTOBER 2018

BY CONSENT, THE COURT ORDERS THAT:
1.Orders that Jim Yang Nominees Pty Ltd (In Liquidation) ACN 137 666 614 (JYN) be joined as the second applicant, Jim Yang Consultancy Pty Ltd (In Liquidation) ACN 607 537 824 (JYC) be joined as the third applicant and that Thousand Angeles Island Pty Ltd ACN 612 556 260 in its personal capacity and as trustee of the Thousand Angeles Island Trust be joined as the fourth respondent.
2.Orders that the Amended Application marked as “A” and the Amended Concise Statement marked as “B” annexed to the Short Minutes of Orders provided to Farrell J’s chambers on Wednesday, 3 October 2018 be taken as filed. The Short Minutes of Orders (including the annexures) be marked as Exhibit B in these proceedings.
3.Declares that, pursuant to…

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 Mansfield (Trustee) v Cruz

Details

AGLC: Mansfield (Trustee) v Cruz [2018] FCA 1525
Case: [2018] FCA 1525
Decision Date: 9 October 2018

CaseChat Overview and Summary

The court considered an application by the trustee, David Ian Mansfield, seeking declarations to void certain transactions against the trustee under the Bankruptcy Act 1966 (Cth) and the Conveyancing Act 1919 (NSW). The parties resolved the proceeding by agreement, leaving the court to determine whether it was appropriate to order the transfer of the bankrupt’s shares in a company to the trustee under the Corporations Act 2001 (Cth) where the company had no directors and there was no proposal to appoint a director. The applicant provided a satisfactory undertaking, which was a factor considered by the court.

The court focused on the provisions of the Corporations Act 2001 (Cth) and the circumstances surrounding the company in question. It noted that the company had no directors, and there was no proposal to appoint a director, which presented a unique situation. Despite these circumstances, the court found that the trustee had provided a satisfactory undertaking, and the resolution of the proceeding by agreement indicated a mutual consent to the relief sought. The court concluded that ordering the transfer of shares to the trustee was appropriate under the circumstances.

The court granted the application, ordering the transfer of the bankrupt’s shares in Thousand Angeles Island Pty Ltd to the trustee, David Ian Mansfield, effective as of the date of the original registration. This order was intended to correct the register of members to reflect the trustee as the shareholder. The court dismissed the proceeding otherwise, indicating that no further orders were required beyond the transfer of shares.

The final orders included a direction to correct the register of members of the company to reflect the trustee as the shareholder and to dismiss the proceeding otherwise. This decision provided clarity and finality to the matter, ensuring that the trustee could manage the assets of the bankrupt’s estate effectively.

Orders

Orders of the court

1. Pursuant to s 175 of the Corporations Act 2001 (Cth), the register of members of Thousand Angeles Island Pty Ltd ACN 612 556 260 be corrected to record that the shares presently registered in the name of Richard Quesada Cruz be registered in the name of David Ian Mansfield as the trustee of the bankrupt estate of Jin Heung Yang, such order to take effect nunc pro tunc.

2. The proceeding is otherwise dismissed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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File number(s):	NSD 1128 of 2018
Judge(s):	FARRELL J
Date of judgment:	9 October 2018
Catchwords:	CORPORATIONS – application by trustee seeking declarations to void transactions against trustee pursuant to s 120 and/or s 121 of the Bankruptcy Act 1966 (Cth) and s 37A of the Conveyancing Act 1919 (NSW) – parties resolved proceeding by agreement – whether appropriate to order the transfer of the bankrupt’s shares in a company to the trustee under s 175 of the Corporations Act 2001 (Cth) where the company had no directors and there was no proposal to appoint a director – trustee provided satisfactory undertaking – application granted
Legislation:	Bankruptcy Act 1966 (Cth) ss 121, 122 Corporations Act 2001 (Cth) ss 175, 201A Evidence Act 1995 (Cth) s 191 Taxation Administration Act 1953 (Cth) ss 269-15, 20, 25 Conveyancing Act 1919 (NSW) s 37A
Cases cited:	In the matter of DH International Pty Limited (Administrators Appointed) ACN 143 461 849 [2013] NSWSC 1120 Price v Powers [2005] WASC 154
Date of hearing:	4, 9 October 2018
Registry:	New South Wales
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	General and Personal Insolvency
Category:	Catchwords
Number of paragraphs:	22
Counsel for the Applicants:	Mr S Golledge
Solicitor for the Applicants:	Corrs Chambers Westgarth
Solicitor for the Respondents:	Mr E Herman of Herman Legal