PLUTON RESOURCES LTD (RECEIVERS & MANAGERS APPOINTED (IN LIQ) - [2017] WASC 142

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: PLUTON RESOURCES LTD (RECEIVERS & MANAGERS APPOINTED (IN LIQ) [2017] WASC 142

CORAM: MASTER SANDERSON

HEARD: 16 & 23 MARCH 2017

DELIVERED : 19 MAY 2017

PUBLISHED : 26 MAY 2017

FILE NO/S: COR 239 of 2016

BETWEEN: PLUTON RESOURCES LTD (RECEIVERS & MANAGERS APPOINTED (IN LIQ)
First Plaintiff
SAM ANDREW MARSDEN in the Capacity as Joint and Several Liquidator of PLUTON RESOURCES LTD (RECEIVERS & MANAGERS APPOINTED) (IN LIQ)
Second Plaintiff
DERRICK CRAIG VICKERS in the Capacity as Joint and Several Liquidator of PLUTON RESOURCES LTD (RECEIVERS & MANAGERS APPOINTED) (IN LIQ)
Third Plaintiff

Catchwords:

Corporations law - Whether fund created by terminated DOCA subject of security held by secured creditor - Direction sought by liquidator

Legislation:

Corporations Act 2001 (Cth)
Personal Property Securities Act 2009 (Cth)

Result:

Fund not subject to security

Category: A

Representation:

Counsel:

First Plaintiff                  :     Mr W C J Zappia
Second Plaintiff             :     Mr J M Healy
Third Plaintiff                :     Mr J M Healy

Solicitors:

First Plaintiff                  :     HWL Ebsworth Lawyers
Second Plaintiff             :     Minter Ellison Lawyers
Third Plaintiff                :     Minter Ellison Lawyers

Case(s) referred to in judgment(s):

Australian Gypsum Industries Pty Ltd v Dalesun Holdings Pty Ltd [2015] WASCA 95
Dura (Australia) Constructions Pty Ltd (in liq) v Hue Boutique Living Pty Ltd [2014] VSCA 326
International Air Transport Association v Ansett Australia Holdings Ltd (Subject to a Deed of Company Arrangement) [2008] HCA 3; (2008) 234 CLR 151
Re Great Southern Ltd (in liq); Ex parte Great Southern Ltd (in liq) [2015] WASC 171
Ziziphus Pty Limited v Pluton Resources Ltd (Receivers and Managers Appointed) (Subject to a Deed of Company Arrangement) [2016] WASC 276

MASTER SANDERSON: By originating process dated 8 November 2016 the second and third plaintiffs as joint and several liquidators of Pluton Resources Ltd (Pluton) seek orders under s 511(1) of the Corporations Act 2001 (Cth) (the Act) concerning the entitlement to and distribution of funds paid to Pluton under a deed of company arrangement (DOCA) which was set aside by orders I made on 21 July 2016.
A dispute has arisen between the liquidators and the appointor of the receivers and managers General Nice Recursos Comercial Offshore De Macau Limitada (GNR) and its related entity World Systems Capital Investment Ltd (BVI) (World Systems). World Systems was the DOCA's proponent. The dispute concerns the use of funds remaining following termination of the DOCA.
(On 28 March 2017 the receivers and mangers filed an interlocutory process seeking a declaration and determination under s 424 of the Act. This was done at my suggestion. At the hearing of the liquidators' application counsel for the receiver and manager appeared and opposed the orders sought by the liquidators. There was a spirited contest which meant the liquidators' application was effectively a contested hearing. It seemed to me there was some doubt if I made orders as sought by the liquidators the receivers and managers would have a right of appeal…

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: [2017] WASC 142
Decision Date: 26 MAY 2017

CaseChat Overview and Summary

The matter before the court involved Pluton Resources Ltd, which was in liquidation and had receivers and managers appointed. The liquidator sought direction from the court regarding a fund created by a terminated Deed of Company Arrangement (DOCA). The fund was held by a secured creditor, and the liquidator sought to determine whether the fund was subject to the security held by the secured creditor. The court was asked to consider whether the fund was property of the company and thus subject to the security interest.

The primary legal issue before the court was whether the fund created by the terminated DOCA was property of the company and therefore subject to the security held by the secured creditor. The court had to consider whether the fund was part of the company's assets and if it could be subject to the security interest. This required an examination of the nature of the fund and the effect of the terminated DOCA on the fund.

The court examined the legal nature of the fund and concluded that it was not property of the company but rather a fund established for the benefit of creditors. The court held that the fund was not subject to the security held by the secured creditor. The court reasoned that the fund was created as a result of the terminated DOCA and was intended to be distributed to creditors in accordance with the terms of the DOCA. The court further found that the fund was not part of the company's assets and could not be subject to the security interest. The liquidator's application for direction was dismissed.

The court dismissed the liquidator's application for direction and held that the fund created by the terminated DOCA was not property of the company and was not subject to the security held by the secured creditor. The court ordered that the fund should be distributed to the creditors in accordance with the terms of the terminated DOCA.

Orders