Moreton Resources Ltd (in liq) v First Samuel Ltd - [2020] QSC 339

SUPREME COURT OF QUEENSLAND

CITATION:

Moreton Resources Ltd (in liq) & Ors v First Samuel Ltd & Ors [2020] QSC 339

PARTIES:

MORETON RESOURCES LIMITED (IN LIQUIDATION) ACN 060 111 784

(first applicant)
and
MRV METALS PTY LTD (IN LIQUIDATION)
(RECEIVERS APPOINTED)
ACN 610 100 402
(second applicant)
and
GRANT DENE SPARKS AND DAVID MICHAEL ORR IN THEIR CAPACITY AS JOINT AND SEVERAL
LIQUIDATORS OF MORETON RESOURCES LIMITED (IN LIQUIDATION) ACN 060 111 784 AND MRV METALS PTY LTD (IN LIQUIDATION) (RECEIVERS APPOINTED) ACN 610 100 402
(third applicants)

v
FIRST SAMUEL LIMITED ACN 086 243 567 IN ITS
OWN RIGHT AND IN ITS CAPACITY AS SECURITY
TRUSTEE OF THE MORETON SECURITY TRUST
(first respondent)
and
PHILIP ANTHONY FEITELSON
(second respondent)
and
A & J CONSULTANCY PTY LTD ACN 002 962 503
(third respondent)
and
ZINC OXIDE (AUST) PTY LTD ACN 009 744 692
(fourth respondent)
and
DARRYL EDWARD KIRK AND MATTHEW LESLIE JOINER IN THEIR CAPACITY AS RECEIVERS OF MRV METALS PTY LTD (IN LIQUIDATION) (RECEIVERS APPOINTED) ACN 610 100 402
(fifth respondents)

FILE NO/S:

10147/20

DIVISION:

Trial

PROCEEDING:

Originating Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

13 November 2020

DELIVERED AT:

Brisbane

HEARING DATES:

9, 21 and 22 October 2020; Further written submissions received from the applicants and second, third and fifth respondents, 23 October 2020.

JUDGE:

Flanagan J

ORDER:

1. The amended originating application filed 21 October 2020 is dismissed.

2. The Court will hear the parties as to costs.

CATCHWORDS:

MORTGAGES – JUDICIAL SALE – where the first and second applicants held certain property and resource tenements associated with a silver mine in Southern Queensland – where a secured debenture deed granted the first respondent, as trustee for the debenture holders including the second respondent, a security interest over that property – where the third applicants were appointed as administrators of the first and second applicants and commenced a marketing and sale campaign for the property – where the second respondent made various offers to purchase the property which were not accepted – where the second respondent repeatedly asserted his security interest, including by causing the lodgement of caveats and appointment of receivers – where the liquidators entered into a sale agreement with a third party – whether the Court should direct, under s 99(2) of the Property Law Act 1974 (Qld), that the property be sold pursuant to the sale agreement

MORTGAGES – RECEIVERS – APPOINTMENT – GENERALLY – where the first respondent, as security trustee, did not appoint receivers pursuant to instructions given by beneficiaries including the second respondent – where the security trust deed provided that if the security trustee failed to exercise a power as instructed within a reasonable time, a beneficiary could exercise the power – where the second respondent purported to appoint the fifth respondents as receivers – whether the appointment of the fifth respondents as receivers was valid

Property Law Act 1974 (Qld), s 99

Asset Core Pty Ltd v Jarrett 1 Enterprises Pty Ltd [2016] 1…

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.

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Details

Case: [2020] QSC 339
Decision Date: 13 November 2020

CaseChat Overview and Summary

In the matter of Moreton Resources Ltd (in liquidation), represented by its liquidators, and First Samuel Ltd, a secured debenture holder, the Queensland Supreme Court was tasked with resolving disputes regarding a silver mine property in Southern Queensland. The property and associated resource tenements were subject to a secured debenture deed, granting First Samuel Ltd, as trustee for the debenture holders, a security interest over the property. When the applicants became administrators of the first and second applicants, they initiated a marketing and sale campaign. Despite various offers from First Samuel Ltd, the applicants proceeded with a sale agreement with a third party. The court was required to determine whether it should direct a judicial sale of the property under s 99(2) of the Property Law Act 1974 (Qld), and if the appointment of receivers by the second respondent was valid.

The court examined the provisions of the secured debenture deed, particularly the clause allowing beneficiaries to exercise powers if the security trustee failed to act within a reasonable time. Given that the security trustee had not appointed receivers as instructed, the court found that the second respondent's purported appointment of receivers was valid. The court also considered the applicants' sale agreement with a third party, concluding that it was in the best interests of all parties to proceed with the sale as negotiated. The court found that the liquidators had acted appropriately in entering into the sale agreement, and dismissed the amended originating application. The court reserved the right to hear the parties on the issue of costs.

The court's orders were to dismiss the amended originating application and to hear the parties regarding costs. The decision emphasised the importance of following the instructions within secured debenture deeds and the court's discretion in appointing receivers and directing judicial sales in property disputes.

Orders

Orders of the court

1. The amended originating application filed 21 October 2020 is dismissed.

2. The Court will hear the parties as to costs.

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

Full text does not contain this section.

CITATION:	Moreton Resources Ltd (in liq) & Ors v First Samuel Ltd & Ors [2020] QSC 339
PARTIES:	MORETON RESOURCES LIMITED (IN LIQUIDATION) ACN 060 111 784 (first applicant) and MRV METALS PTY LTD (IN LIQUIDATION) (RECEIVERS APPOINTED) ACN 610 100 402 (second applicant) and GRANT DENE SPARKS AND DAVID MICHAEL ORR IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF MORETON RESOURCES LIMITED (IN LIQUIDATION) ACN 060 111 784 AND MRV METALS PTY LTD (IN LIQUIDATION) (RECEIVERS APPOINTED) ACN 610 100 402 (third applicants) v FIRST SAMUEL LIMITED ACN 086 243 567 IN ITS OWN RIGHT AND IN ITS CAPACITY AS SECURITY TRUSTEE OF THE MORETON SECURITY TRUST (first respondent) and PHILIP ANTHONY FEITELSON (second respondent) and A & J CONSULTANCY PTY LTD ACN 002 962 503 (third respondent) and ZINC OXIDE (AUST) PTY LTD ACN 009 744 692 (fourth respondent) and DARRYL EDWARD KIRK AND MATTHEW LESLIE JOINER IN THEIR CAPACITY AS RECEIVERS OF MRV METALS PTY LTD (IN LIQUIDATION) (RECEIVERS APPOINTED) ACN 610 100 402 (fifth respondents)
FILE NO/S:	10147/20
DIVISION:	Trial
PROCEEDING:	Originating Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	13 November 2020
DELIVERED AT:	Brisbane
HEARING DATES:	9, 21 and 22 October 2020; Further written submissions received from the applicants and second, third and fifth respondents, 23 October 2020.
JUDGE:	Flanagan J
ORDER:	1. The amended originating application filed 21 October 2020 is dismissed. 2. The Court will hear the parties as to costs.
CATCHWORDS:	MORTGAGES – JUDICIAL SALE – where the first and second applicants held certain property and resource tenements associated with a silver mine in Southern Queensland – where a secured debenture deed granted the first respondent, as trustee for the debenture holders including the second respondent, a security interest over that property – where the third applicants were appointed as administrators of the first and second applicants and commenced a marketing and sale campaign for the property – where the second respondent made various offers to purchase the property which were not accepted – where the second respondent repeatedly asserted his security interest, including by causing the lodgement of caveats and appointment of receivers – where the liquidators entered into a sale agreement with a third party – whether the Court should direct, under s 99(2) of the Property Law Act 1974 (Qld), that the property be sold pursuant to the sale agreement MORTGAGES – RECEIVERS – APPOINTMENT – GENERALLY – where the first respondent, as security trustee, did not appoint receivers pursuant to instructions given by beneficiaries including the second respondent – where the security trust deed provided that if the security trustee failed to exercise a power as instructed within a reasonable time, a beneficiary could exercise the power – where the second respondent purported to appoint the fifth respondents as receivers – whether the appointment of the fifth respondents as receivers was valid Property Law Act 1974 (Qld), s 99 Asset Core Pty Ltd v Jarrett 1 Enterprises Pty Ltd [2016] 1…