MATHIEU TRIBUT as liquidator of MVP FINANCIAL PTY LTD (IN LIQUIDATION)

[2023] WASC 108

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   MATHIEU TRIBUT as liquidator of MVP FINANCIAL PTY LTD (IN LIQUIDATION) [2023] WASC 108

CORAM:   HILL J

HEARD:   24 MARCH 2023

DELIVERED          :   24 MARCH 2023

PUBLISHED           :   31 MARCH 2023

FILE NO/S:   COR 44 of 2023

MATTER:   IN THE MATTER OF MVP FINANCIAL PTY LTD (IN LIQUIDATION)

EX PARTE

MATHIEU TRIBUT as liquidator of MVP FINANCIAL PTY LTD (IN LIQUIDATION)

Plaintiff

Catchwords:

Corporations - External administration - Winding up - Where company in liquidation is bare trustee - Application for appointment of liquidator as receiver of trust property - Turns on own facts

Legislation:

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:

Plaintiff : N Draper

Solicitors:

Plaintiff : Mendelawitz Morton Commercial 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 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:

1. On 28 February 2023, the court ordered that the plaintiff, Mathieu Tribut, be appointed as liquidator of MVP Financial Pty Ltd (Liquidator).  Prior to the appointment of the Liquidator, MVP Financial Pty Ltd (Company) was the trustee of the MVP Unit Trust (Trust).

Disposition

1. On 20 March 2023, the Liquidator filed an originating process in this court seeking orders that:

   (a)the Liquidator be appointed as receiver of the assets of the Trust, pursuant to O 51 r 1 of the Rules of the Supreme Court 1971 (WA), further and alternatively s 90-15 of the Insolvency Practice Schedule (Corporations);

   (b)the Liquidator is justified in proceeding to conduct the affairs of the Trust on the basis that the business and assets of the Company are comprised of the assets of the Trust (to the extent that the Company owns such assets in its capacity as trustee of the Trust); and

   (c)the Liquidator is entitled to be paid remuneration, costs, disbursements, and expenses out of the property of the Trust assets for the period from 28 February 2023.

Factual background

1. The plaintiff filed an affidavit of the Liquidator in support of its application.  This summary is taken from this affidavit.

2. The Company was incorporated on 9 February 2015.[1]  A current and historical company extract obtained from the records of the Australian Securities and Investments Commission (ASIC) discloses that the Company has two directors, Roberto Roderio Marusco and Douglas Pierce Reginald Verley.  Mr Marusco is the company secretary and owns one of the two issued shares in the Company.[2]

   [1] Affidavit of Mathieu Tribut filed 20 March 2023 'MT 1'.

   [2] Affidavit of Mathieu Tribut filed 20 March 2023 'MT 1'.

3. On 28 February 2023, the plaintiff was appointed liquidator of the Company by this court, pursuant to s 472 of the Corporations Act 2001 (Cth) (Act).[3]

   [3] Affidavit of Mathieu Tribut filed 20 March 2023 [5], 'MT 1', 'MT 2'.

4. Based on the enquires undertaken to date, the Liquidator believes:[4]

   (a)the Company was the trustee of the Trust;

   (b)the Company did not trade in its own right; and

   (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.

   [4] Affidavit of Mathieu Tribut filed 20 March 2023 [10] - [11].

5. 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 10 February 2015.[5]  Pursuant to cl 16.4 of the Trust deed, on the appointment of a liquidator, the Company was required to retire as trustee of the Trust and was disqualified from acting as trustee. 

   [5] Affidavit of Mathieu Tribut filed 20 March 2023 'MT 3'.

Service of Application

1. I am satisfied that the Australian Securities and Investments Commission has been served with copies of the originating process and the affidavit of Mr Tribut 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] Attachment to email to Associate to Justice Hill dated 23 March 2023. 

2. No-one has given notice to the plaintiff’s solicitors that they wish to be heard on the application. 

Legal principles for appointment of receiver

1. 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.[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 Limited v Ovens Nominees Pty Ltd [2011] FCA 677 [22] - [28] (Gordon J).

2. 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.

3. 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.[8]

   [8] See In the matter of Hercules Car Parking Systems (Victoria) Pty Ltd [2018] NSWSC 409 (Brereton J).

4. 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.[9]

   [9] See In the matter of Mecfab Holdings Pty Ltd [2015] NSWSC 46 [9].

5. 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.[10]  This includes the costs of the liquidation. 

   [10] 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

1. On the evidence before me, I accept that by reason of cl 16.4 of the Trust Deed, on the appointment of the Liquidator, the Company was required to retire as Trustee of the Trust and was immediately disqualified from acting as trustee.  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. 

2. I accept that the proposal to appoint the Liquidator as receiver of the Trust without security 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. 

3. In these circumstances, I accept there are advantages with the proposal that the plaintiff as liquidator be appointed as receiver of the Trust.  These include that he 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. 

4. I accept that the form of orders sought in terms of service of the Court's orders 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 of this application. 

5. I also 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 under s 90-15 of the Insolvency Practice Schedule 2016 that the 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. 

6. The plaintiff sought orders for his remuneration as liquidator to be paid out of the assets of the Trust from 28 February 2023.  Given Mr Tribut’s evidence that the Company only acted in its capacity as trustee of the Trust, I also accept that it is appropriate to make these orders.

7. Finally, in relation to the costs of the application, the plaintiff 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.

8. 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

31 MARCH 2023