Park v Whyte

Case [2020] QSC 18

SUPREME COURT OF QUEENSLAND

CITATION:

Park & anor v Whyte [2020] QSC 18

PARTIES:

JOHN RICHARD PARK AND GINETTE DAWN MULLER AS LIQUIDATORS OF LM INVESTMENT MANAGEMENT LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 077 208 461 THE RESPONSIBLE ENTITY OF THE LM FIRST MORTAGE INCOME FUND ARSN 089 343 288

(First Applicant)

AND

LM INVESTMENT MANAGEMENT LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 077 208 461 THE RESPONSIBLE ENTITY OF THE LM FIRST MORTAGE INCOME FUND ARSN 089 343 288

(Second Applicant)

v

DAVID WHYTE AS THE PERSON APPOINTED TO SUPERVISE THE WINDING UP OF THE LM FIRST MORTGAGE INCOME FUND ARSN 089 343 288 PURSUANT TO SECTION 601NF OF THE CORPORATIONS ACT 2001

(First Respondent)

AND

SAID JAHANI IN HIS CAPACITY AS RECEIVER AND MANAGER OF THE ASSETS, UNDERTAKINGS, RIGHTS AND INTERESTS OF LM INVESTMENT MANAGEMENT LIMITED (IN LIQUIEDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 077 208 461 AS THE RESPONSIBLE ENTITY OF THE LM CURRENCY PROTECTED AUSTRLAIAN INCOME FUND ARSN 110 247 875 AND THE LM INSTITUTIONAL CURRENCY PROTECTED AUSTRALIAN INCOME FUND ARSN 122 052 868
(Second Respondent)

FILE NO/S:

BS No 3508 of 2015

DIVISION:

Trial Division

PROCEEDING:

Application filed 20 January 2020

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

28 February 2020

DELIVERED AT:

Brisbane

HEARING DATE:

30 January 2020

JUDGE:

Jackson J

ORDER:

The order of the court is that:

1.   The respondent pay the first applicant the amount of $98, 647.27 from the property of the LM First Mortgage Income Fund.

2.   The applicants’ costs of the application as agreed or assessed on the indemnity basis be paid from the property of the FMIF.

3.   The respondent’s costs of the application be paid from the property of the FMIF.

CATCHWORDS:

CORPORATIONS– WINDING UP – LIQUIDATORS –EXPENSES– IN VOLUNTARY WINDING UP– where the first applicant liquidator incurred legal costs in the winding up of LMIM in insolvency– where the first applicants firm is personally liable for the legal costs payable as fees to LMIM’s and his solicitors– where the legal costs were properly incurred by the first applicant as liquidator– where the legal costs were properly incurred by the second applicant as responsible entity and trustee by reason of its conduct in that office– where the first and second applicants applied for an order that the first respondent pay two sums from the property of the FMIF to indemnify the applicants against legal expenses– where the court held that the respondent pay the first applicant from the property of the FMIF.

Corporations Act 2011 (Cth)

Trusts Act 1973 (Qld), s 72

Uniform Civil Procedure Rules 1999 (Qld), r 700(2)

Alsop Wilkinson (a firm) v Neary (1996) 1 WLR 1220, discussed

Armitage v Nurse [1998] Ch 242, discussed

Bruce v LM Investment Management Limited (2013) 94 ACSR 684, cited

Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth (2019) 368 ALR 390, cited

Cherry v Boultbee (1839) 4 My & Cr 442, discussed

Fearns v Young (1804) 10 Ves Jun…

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Details
AGLC
Park v Whyte [2020] QSC 18
Case
[2020] QSC 18
Decision Date

CaseChat Overview and Summary

In the case of Park v Whyte, the applicants, who were liquidators of LMIM in insolvency, sought to recover legal costs from the respondent, who was the first respondent. The applicants' firm was personally liable for the legal costs payable as fees to LMIM and their solicitors. The applicants applied for an order that the respondent pay two sums from the property of the LM First Mortgage Income Fund to indemnify them against their legal expenses. The applicants argued that the legal costs were properly incurred by them as liquidators and responsible entity and trustee. The court considered the matter and made an order.

The legal issues the court had to decide were whether the first applicant was entitled to reimbursement of legal costs incurred during the winding up of LMIM and whether the second applicant was entitled to reimbursement of legal costs incurred as responsible entity and trustee. The court had to determine if the legal costs were properly incurred and if the applicants were entitled to reimbursement from the property of the LM First Mortgage Income Fund.

The court held that the first applicant was entitled to reimbursement of legal costs from the property of the LM First Mortgage Income Fund. The court found that the legal costs were properly incurred by the first applicant as liquidator. The court also held that the second applicant was not entitled to reimbursement of legal costs from the property of the LM First Mortgage Income Fund. The court found that the legal costs were not properly incurred by the second applicant as responsible entity and trustee by reason of its conduct in that office. The court ordered that the respondent pay the first applicant the amount of $98,647.27 from the property of the LM First Mortgage Income Fund. The applicants’ costs of the application as agreed or assessed on the indemnity basis were to be paid from the property of the LM First Mortgage Income Fund. The respondent’s costs of the application were also to be paid from the property of the LM First Mortgage Income Fund.

Orders

Orders of the court

The order of the court is that:

1. The respondent pay the first applicant the amount of $98, 647.27 from the property of the LM First Mortgage Income Fund.

2. The applicants’ costs of the application as agreed or assessed on the indemnity basis be paid from the property of the FMIF.

3. The respondent’s costs of the application be paid from the property of the FMIF.

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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