SUPREME COURT OF QUEENSLAND
CITATION:
Park & Muller (liquidators of LM Investment Management Ltd) v Whyte No 3 [2017] QSC 230
PARTIES:
JOHN RICHARD PARK AND GINETTE DAWN MULLER AS LIQUIDATORS OF LM INVESTMENT MANAGEMENT LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 077 208 461 THE RESPONSIBLE ENTITY OF THE LM FIRST MORTGAGE INCOME FUND ARSN 089 343 288
(first applicants)
AND
LM INVESTMENT MANAGEMENT LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 077 208 461 THE RESPONSIBLE ENTITY OF THE LM FIRST MORTGAGE INCOME FUND ARSN 089 343 288
(second applicant)AND
DAVID WHYTE AS THE PERSON APPOINTED TO SUPERVISE THE WINDING UP OF THE LM FIRST MORTGAGE INCOME FUND ARSN 089 343 288
(respondent)
FILE NO/S:
BS3508/15
DIVISION:
Trial Division
PROCEEDING:
Application
DELIVERED ON:
17 October 2017
DELIVERED AT:
Brisbane
HEARING DATE:
19 & 20 June 2017
JUDGE:
Jackson J
ORDER:
The order of the court is that:
1. The first applicants are entitled to be paid the following sums from the property of the LM First Mortgage Income Fund by way of indemnity for expenses:
(a) the appropriate proportion of the sum of $80,125 for insurance premiums;
(b) the appropriate proportion of the sum of $25,480.43 for legal costs related to the production of books and records;
(c) the sum of $11,477.43 for legal costs of the assessment of legal costs;
(d) the sum of $6,279.86 for assessor’s costs of the assessment of legal costs.
2. The first applicants and the respondent may submit a draft order in agreed amounts in accordance with these reasons as to the first applicants’ entitlement to be paid from the LM First Mortgage Income Fund (“FMIF”) for the expenses referred to in paragraph 1.
3. If the parties are unable to reach agreement under paragraph 2 two business days before 22 November 2017, the matter is relisted on that date for further hearing or directions.
4. The parties should exchange submissions on costs two business days before 22 November 2017.
5. The question of costs and any outstanding questions under these orders be heard on 22 November 2017 at 10 am.
CATCHWORDS:
CORPORATIONS – MANAGED INVESTMENTS – WINDING UP – where the second applicant was the responsible entity of a number of registered investment schemes – where the first applicants were appointed administrators and later liquidators of the second applicant – where the respondent was appointed by order to take responsibility for ensuring that the largest registered investment scheme was wound up in accordance with its constitution and the order – where the first applicants made claims for expenses for legal costs, assessors costs and insurance premiums incurred in the liquidation of the second applicant – whether the first applicants’ expenses were reasonably incurred and should be paid from the trust property of the registered investment scheme
CORPORATIONS – MANAGED INVESTMENTS – WINDING UP – where the second applicant was the responsible entity of a number of registered investment schemes – where the first applicants were appointed administrators and…
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- AGLC
- Park v Whyte (No 3) [2017] QSC 230
- Case
- [2017] QSC 230
- Decision Date
CaseChat Overview and Summary
The court considered whether the expenses claimed by the applicants were reasonably incurred and should be paid from the trust property of the registered investment scheme. The court also had to determine if any successful indemnity claims by the applicants should be reduced by any claims against the second respondent for breaches of trust or duty. In resolving these issues, the court examined the statutory framework governing managed investment schemes, the nature of the indemnity claims, and the implications of direct payment from the trust property.
The court found that the first applicants were entitled to be indemnified for certain expenses, including insurance premiums and legal costs. However, the court determined that the claims should be proportionately reduced to account for potential claims against the second respondent. The court ordered that the first applicants and the respondent draft an order detailing the agreed amounts for payment from the LM First Mortgage Income Fund. If the parties could not agree within a specified period, the matter would be relisted for further hearing.
The final orders of the court were that the first applicants were entitled to specified sums from the LM First Mortgage Income Fund for certain expenses, with the amounts to be determined by the parties or by further order of the court. The court also set a deadline for the parties to exchange submissions on costs and scheduled a hearing to address any remaining issues regarding costs and outstanding questions under the orders.
Orders
Orders of the court
The order of the court is that:
1. The first applicants are entitled to be paid the following sums from the property of the LM First Mortgage Income Fund by way of indemnity for expenses:
(a) the appropriate proportion of the sum of $80,125 for insurance premiums;
(b) the appropriate proportion of the sum of $25,480.43 for legal costs related to the production of books and records;
(c) the sum of $11,477.43 for legal costs of the assessment of legal costs;
(d) the sum of $6,279.86 for assessor’s costs of the assessment of legal costs.
2. The first applicants and the respondent may submit a draft order in agreed amounts in accordance with these reasons as to the first applicants’ entitlement to be paid from the LM First Mortgage Income Fund (“FMIF”) for the expenses referred to in paragraph 1.
3. If the parties are unable to reach agreement under paragraph 2 two business days before 22 November 2017, the matter is relisted on that date for further hearing or directions.
4. The parties should exchange submissions on costs two business days before 22 November 2017.
5. The question of costs and any outstanding questions under these orders be heard on 22 November 2017 at 10 am.
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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