Re All Purpose Labour Pty Ltd (in liq) - [2024] VSC 547

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2024 03532

IN THE MATTER of ALL PURPOSE LABOUR PTY LTD (IN LIQUIDATION)
(ACN 641 262 204) as Trustee for the ATC UNIT TRUST

BETWEEN:

ADRIAN JOHN WARRY and SHANE LESLIE DEANE in their capacity as joint and several liquidators of ALL PURPOSE LABOUR PTY LTD (IN LIQUIDATION) (ACN 641 262 204)	First Plaintiff
and
ALL PURPOSE LABOUR PTY LTD (IN LIQUIDATION) (ACN 641 262 204) as Trustee for the ATC UNIT TRUST	Second Plaintiff

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JUDGE:	Sloss J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 September 2024
DATE OF JUDGMENT:	2 September 2024 (ex tempore)
CASE MAY BE CITED AS:	Re All Purpose Labour Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2024] VSC 547

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CORPORATIONS – Liquidation of trustee company – Trust deed contained an ‘ipso facto’ clause which operated to render trustee company a ‘bare’ trustee upon liquidation – Application by liquidators for appointment as receivers and managers pursuant to s 37 of the Supreme Court Act 1986 (Vic), alternatively for power to deal with trust assets pursuant to s 63 of the Trustee Act 1958 (Vic) – Trustee’s right of indemnity – Principles in Re Brimson (2019) 136 ACSR 699 considered – Liquidators appointed receivers and managers over trust property – Re Waratah Group Pty Ltd (in liq) [2020] VSC 523 considered – Requirement for security pursuant to r 39.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) dispensed with as the liquidators were already subject to obligations under the Corporations Act 2001 (Cth) – Re Pires Consulting Holding Pty Ltd (In Liquidation) [2019] VSC 384 applied – Liquidators relieved from liability for dealing with trust property before appointment as receivers and managers pursuant to s 1318 of the Corporations Act 2001 (Cth).

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APPEARANCES:	Counsel	Solicitors
For the First and Second Plaintiffs	Ms A V M Carruthers	Milton Lawyers

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Background......................................................................................................................................... 3

The Company................................................................................................................................ 3
The Trust........................................................................................................................................ 4
Assets.............................................................................................................................................. 5
Creditor position........................................................................................................................... 7
The Trust Deed.............................................................................................................................. 8
The trading of the business.......................................................................................................... 9
Tasks undertaken since the Liquidators’ appointment........................................................... 9
Service on unitholder of the Trust............................................................................................ 12
Reasons for orders sought......................................................................................................... 12

Applicable principles...................................................................................................................... 12

The trustee’s right of indemnification...................................................................................... 12
Whether to appoint Liquidators as receiver pursuant to the Supreme Court Act (or the Rules), or to confer relevant powers pursuant to the Trustee Act............................................... 15
Whether receiver is to provide security................................................................................... 18
Whether to make an order under s 1318 of the Corporations Act or s 67 of the Trustee Act 18

Consideration.................................................................................................................................... 18

Conclusion......................................................................................................................................... 21

Orders................................................................................................................................................. 21

HER HONOUR:

Introduction

This proceeding is brought by the first named plaintiff, Adrian John Warry and Shane Leslie Deane (the Liquidators) in their capacity as joint and several liquidators of All Purpose Labour Pty Ltd (In Liquidation) (ACN 641 262 204) (the Company).[1] The Liquidators were appointed liquidators of the Company on 28 September 2023, pursuant to s 491…

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: [2024] VSC 547
Decision Date: 2 September 2024

CaseChat Overview and Summary

Re All Purpose Labour Pty Ltd (in liq) is a case before the Supreme Court of Victoria, involving the liquidation of a trustee company, All Purpose Labour Pty Ltd. The liquidators sought the appointment as receivers and managers over the trust property or, alternatively, the power to deal with the trust assets to ensure the trust funds are properly administered and secured. The trust deed contained an 'ipso facto' clause which led to the trustee company becoming a 'bare' trustee upon liquidation. This raised questions regarding the liquidators' authority to manage the trust assets and whether they could be appointed as receivers and managers.

The central legal issues in this case were whether the liquidators could be appointed as receivers and managers of the trust property and, if so, whether they would be relieved from any pre-appointment liabilities for dealing with the trust assets. The court considered the principles in Re Brimson (2019) 136 ACSR 699 and the requirements of the Supreme Court Act 1986 (Vic) and the Trustee Act 1958 (Vic). It also took into account the need for security pursuant to r 39.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), the Corporations Act 2001 (Cth), and relevant case law.

The court found that the liquidators should be appointed as receivers and managers over the trust property, taking into account the circumstances of the case and the need to protect the trust assets. The court relied on Re Waratah Group Pty Ltd (in liq) [2020] VSC 523 and Re Pires Consulting Holding Pty Ltd (In Liquidation) [2019] VSC 384 in making its decision. The requirement for security was dispensed with as the liquidators were already subject to obligations under the Corporations Act 2001 (Cth). The court also found that the liquidators would be relieved from liability for any dealings with the trust property prior to their appointment as receivers and managers, in accordance with s 1318 of the Corporations Act 2001 (Cth).

In conclusion, the Supreme Court of Victoria appointed the liquidators as receivers and managers over the trust property, relieved them from any pre-appointment liabilities, and dispensed with the requirement for security. This decision ensures the proper administration and protection of the trust assets during the liquidation process.

Orders