Mier v FN Management Pty Ltd

In Mier v FN Management Pty Ltd, the Court of Appeal of the Supreme Court of Queensland heard an appeal concerning the winding up of a managed investment scheme operated by FN Management Pty Ltd (FNM). The scheme involved the rental of units at a resort in Cairns. The appeal was brought by the operators of the scheme and the owners of the land upon which the resort was situated. The appeal contested the authority of the liquidators to sell a lot owned by the second appellants. The primary judge had ordered the sale of the lot, but the appellants argued that the lot was not part of the scheme's property and therefore should not be sold. The central legal issues were whether the lot could be considered property of the scheme and whether its sale was appropriate for the winding up of the scheme.

The Court of Appeal considered the relevant provisions of the Corporations Act, specifically s 601EE, which empowers a court to make any orders it considers appropriate for the winding up of a scheme. The court noted that the scheme operated unlawfully as it was unregistered. The court examined whether the lot could be considered property of the scheme, focusing on whether it was part of the business of the scheme or merely incidental to it. The Court of Appeal distinguished the present case from previous decisions that considered similar issues, concluding that the lot was not part of the scheme's property and its sale was not appropriate for the winding up of the scheme. The Court of Appeal found that the primary judge had erred in authorising the sale of the lot and allowed the appeal.

The Court of Appeal set aside the orders made by the primary judge, ruling that the liquidators were not authorised to sell the lot owned by the second appellants. Instead, the Court of Appeal ordered that the respondents' application be refused, and it was declared that the liquidators' appointment did not permit them to deal with the leasehold interest of FNM or the freehold interest of the second appellants in the lot. The Court of Appeal also ordered the respondents to pay the appellants' costs of the application, including reserved costs if any, to be assessed on the standard basis. The appeal was allowed with costs to be assessed on the standard basis.