Re Bel Investments Pty Ltd (in liq)
[2022] VSC 638
•27 October 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S ECI 2021 04843
| IN THE MATTER OF BEL INVESTMENTS PTY LTD (IN LIQUIDATION) (ACN 087 961 028) | |
| BETWEEN: | |
| EX PARTE EDWARD JOHN MUSCAT IN HIS CAPACITY AS LIQUIDATOR OF BEL INVESTMENTS PTY LTD (IN LIQUIDATION) (ACN 087 961 028) | 1st plaintiff |
| AND | |
| BEL INVESTMENTS PTY LTD (IN LIQUIDATION) (ACN 087 961 028) | 2nd plaintiff |
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JUDGE: | Elliott J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19 October 2022 |
FURTHER EVIDENCE: | 20 October 2022 |
DATE OF JUDGMENT: | 27 October 2022 |
CASE MAY BE CITED AS: | Re Bel Investments Pty Ltd (in liq) |
MEDIUM NEUTRAL CITATION: | [2022] VSC 638 |
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CORPORATE INSOLVENCY – Winding up – Liquidator’s application for orders and directions – Rectification of irregularities – Right of indemnity – Whether liquidator entitled to remuneration, costs and expenses – Corporations Act 2001 (Cth), ss 556(1), 1322, Schedule 2, Insolvency Practice Schedule (Corporations), ss 90-15, 90-20.
TRUSTS – Express trusts – Creation – Unclear if unit trust deed executed – Absence of trust deed – Whether certainty of intention, subject matter and objects manifested – Where corporate trustee holds property as bare trustee of joint endeavour constructive trust – Whether distribution of trust property to be governed by Corporations Act 2001 (Cth), s 556(1).
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiffs | Mr A Serong (solicitor) | Serong Legal |
HIS HONOUR:
IntroductionA.
The plaintiffs, Edward John Muscat as liquidator of Bel Investments Pty Ltd (in liquidation) (“Muscat”) and Bel Investments Pty Ltd (in liquidation) (“Bel Investments”), sought orders and directions under sections 90-15 and 90-20 of Schedule 2, Insolvency Practice Schedule (Corporations) (“Schedule 2”) of the Corporations Act 2001 (Cth).
For the reasons to follow, orders will be made to the substantive effect of those ultimately sought.
Background B.
Winding up of Bel Investments and Index Options B.1
On 17 August 2005, the winding up of Bel Investments in insolvency was commenced by an order of this court. Paul Andrew Burness (“Burness”) of Worrells Solvency and Forensic Accountants was appointed liquidator.
On the same date, Burness was appointed liquidator of Index Options Australia Pty Ltd (“Index Options”).
At the commencement of the winding up of Bel Investments, the sole director and shareholder of both Bel Investments and Index Options was Paul Belousoff (“Belousoff”). In April 2008, following investigations by Burness, Belousoff was charged with 8 counts of engaging in conduct that resulted in the fraudulent concealment or removal of property belonging to Bel Investments and Index Options, and 1 count of fraudulently causing a material omission from a report to Burness in relation to Bel Investments’ affairs. On 31 January 2011, Belousoff pleaded guilty to all charges. He was sentenced to a period of 11 months imprisonment.
Appointment of a new liquidator B.2
On 12 June 2015, Index Options lodged a proof of debt, claiming to be a creditor in the winding up of Bel Investments in the sum of $615,000.00 in relation to an alleged unsecured loan. To avoid any potential conflict of interest in respect of the adjudication of the Index Options proof of debt, Burness subsequently proposed that he resign as liquidator of Bel Investments and Muscat be appointed in his place.
Considerably later on 29 March 2018, a meeting of the creditors of Bel Investments was held. The meeting was chaired by Rita Chan of Worrells Solvency and Forensic Accountants and attended by Index Options as the only creditor admitted at that time by Burness (as the then-liquidator of Bel Investments) for the purposes of voting. Burness was at his own request removed as liquidator by a resolution of Index Options, and Muscat was appointed liquidator by a further resolution.
Obviously, there was a significant delay between the commencement of the winding up of Bel Investments and the meeting at which Muscat was appointed. No evidence was provided as to the reason for Burness’ delay in issuing the proof of debt on behalf of Index Options or in calling the creditors’ meeting of Bel Investments to address his potential conflict of interest. It may be inferred from the approach taken by Belousoff in conducting the affairs of both Bel Investments and Index Options, and the unsatisfactory state of the books and records, that material difficulties were encountered in the winding up of both Bel Investments and Index Options.[1]
[1]See, for example, Burness (as liquidator of Index Options Australia Pty Ltd (in liq)) v Belousoff (2006) 59 ACSR 716, 718 [12] (Whelan J). In that case, it was found that Belousoff was responsible for a serious failure to keep proper books and records, amongst other unsatisfactory conduct. See also par 12 below.
Muscat deposed that following his appointment he received from Burness or his staff the books and records of Bel Investments that were in his possession, along with Bel Investments’ assets, being a cash deposit in the sum of $711,224.00. The cash deposit included the proceeds of certain asset sales undertaken by Burness earlier in the winding up of Bel Investments.[2] Muscat deposed that he subsequently received a further $321.51 from Burness, bringing the total funds transferred to Muscat to $711,545.51.
[2]See further par 26 below.
As at 10 October 2022, Muscat held the sum of $733,881.64 in his capacity as liquidator of Bel Investments, comprising the funds transferred by Burness plus interest and other credits, less legal fees and administration expenses incurred by Muscat.
Liquidators’ evidence B.3
Immediately after his appointment, Muscat commenced his own investigation into Bel Investments’ affairs. Burness provided Muscat with access to the reports he had provided to the creditors and the Australian Securities and Investments Commission whilst liquidator of both Bel Investments and Index Options.
In his March 2007 report on Bel Investments’ affairs, Burness concluded that his investigation was made more difficult by:
(1) The failure of Belousoff to keep proper books and records of Bel Investments and Index Options.
(2) The failure of Belousoff to properly distinguish between activities undertaken by him as director of Bel Investments and director of Index Options.
(3) The failure of Belousoff to cooperate with Burness following his appointment as liquidator.
(4) The conflicting and unreliable nature of the information provided to Burness by Belousoff.
Muscat’s own investigation led him to conclude that, broadly, Belousoff was running a scheme through Bel Investments and Index Options. By this scheme, Belousoff would seek moneys from investors with the promise of high returns and would then fail to properly account to those investors.
More specifically, Bel Investments’ principal business activity was to solicit funds from potential investors on the basis that these funds were to be invested in 1 or more trust funds. Muscat deposed that Belousoff represented to investors that their moneys would be invested in Bel Investments Fund No 1 or Bel Investments Fund No 2 in exchange for units issued in the relevant trusts and an entitlement to be paid up to 21 percent interest on moneys invested. Purportedly to this end, Belousoff instructed potential investors to pay their investments to a bank account or accounts held by Index Options.
Muscat’s investigation identified the following “trusts” that Belousoff had asserted existed or were otherwise referred to in Bel Investments’ books and records:
(1) The Bel Investment Trust.
(2) Bel Investments Fund No 1.
(3) Bel Investments Fund No 2.
Dealing with each of these in turn, there was nothing to demonstrate that the Bel Investment Trust was ever properly constituted. There was no evidence of the existence of a trust deed or any funds being paid by or on behalf of investors into the Bel Investment Trust.
Bel Investments’ books and records included a copy of a trust deed titled “Bel Investments Fund No 1” and dated 24 March 2003, which listed Bel Investments as trustee. The deed contained provisions dealing with the allotment and issue of units and the establishment and maintenance of a register of unit holders. If the document had been executed and adopted in a means consistent with the creation of a trust, it contained the necessary provisions for a trust to be duly administered. However, the copy was poor and it did not appear to have been executed, though this was not free from doubt.[3]
[3]The execution page contained some markings. However, these markings did not appear to be signatures and were not located adjacent to the respective places for the signatures required to effect execution.
Although Bel Investments’ books and records included a trust memorandum in respect of Bel Investments Fund No 1 and evidence of some units being issued, there was no evidence of a unit register being established or maintained or that the trustee formally resolved to execute the trust deed.
In addition, Muscat found that there was a trust referred to in Bel Investments’ books and records as Bel Investments Fund No 2, which was purportedly established in 2004. However, there was no evidence that such a trust was ever properly constituted. Nor was there evidence of the existence of a trust deed in respect of Bel Investments Fund No 2. Further, there was nothing to suggest that a unit register was established or maintained. Furthermore, there was no evidence that the trustee formally resolved to execute a trust deed or to issue any units to investors.
Muscat’s investigation suggested that Bel Investments did not enter into any transactions in its own right. Equally, it appeared that Belousoff, as director of Bel Investments, did not solicit funds from investors with a view to those funds being invested by Bel Investments in its own right.
Muscat deposed that his investigation led him to conclude that despite representing to potential investors that funds would be invested into Bel Investments Fund No 1 or Bel Investments Fund No 2, Belousoff did not, and did not cause Bel Investments while under his control to:
(1) Prepare a trust deed for the Bel Investment Trust or Bel Investments Fund No 2.
(2) Establish or properly maintain unit registers to identify investors as unit holders of the nominal trust funds.
(3) In many instances, issue unit certificates to investors following the receipt of funds for either Bel Investments Fund No 1 or Bel Investments Fund No 2.[4]
[4]There was evidence of some documents being created that purported to record units being issued, but they related to only some investors in Bel Investments Fund No 1.
(4) Take the necessary steps to ensure that investors’ funds were promptly recorded on receipt by Index Options so that the trust fund into which the subscription funds were to be placed could be properly identified in each and every case.
(5) Ensure that the funds were invested in accordance with the basis upon which those funds were subscribed by investors.
The Outstanding Investors B.4
Based on his investigation, Muscat concluded that at the date of the commencement of the winding up of Bel Investments, there were 6 investors who still had outstanding balances owing to them (collectively, “the Outstanding Investors”).
Muscat concluded further that the assets of Bel Investments Fund No 1 and Bel Investments Fund No 2 were “hopelessly intermingled”.[5] Apart from identifying some investors as having paid funds to Bel Investments Fund No 1 or Bel Investments Fund No 2, it was not possible to differentiate between the assets and liabilities of the respective funds.
[5]See pars 67-68 below.
In his liquidator’s report dated 31 August 2022, Muscat estimated that the amounts unpaid to and potentially claimable by 5 of the Outstanding Investors totalled $522,000.00.[6]
The Trust Assets B.5
[6]This figure consisted of 3 investors’ claims for $100,000.00, a claim for $102,000.00, and a claim for $120,000.00. On 24 September 2021, an investor who had not been repaid indicated to Muscat that he had no intention of making a claim.
Assets were acquired in the name of Bel Investments using funds from a bank account or accounts in the name of Index Options which had been paid as a result of Belousoff’s overtures (“the Trust Assets”).[7] The Trust Assets remained in Bel Investments’ legal ownership at the time that its winding up was ordered.
[7] See par 14 above.
The Trust Assets were subsequently disposed of by Burness in his capacity as liquidator. In some cases, the Trust Assets were sold for a price exceeding the acquisition price:[8]
[8]There was more detailed evidence about these acquisitions which further demonstrated the unsatisfactory manner in which Belousoff conducted the affairs of Bel Investments, however, it is unnecessary to go into detail.
Asset Price on acquisition Price on disposal Loan to Technique Solar Pty Ltd $150,000.00 $150,000.00 Shares in Technique Solar Pty Ltd $150,000.00 $351,000.00 Shares in Carbonxt Group Pty Ltd $315,000.00 $223,746.70 Total $615,000.00 $724,746.70
(Together, “the Sale Proceeds”.)
The Sale Proceeds represent the bulk of the funds transferred by Burness to Muscat upon his appointment in 2018.[9]
[9]See par 9 above.
The amount currently held by Muscat as liquidator of Bel Investments, being $733,881.64, is the subject of this application.
Claims against the Sale Proceeds B.6
B.6.1 Claims made by the Outstanding Investors
On the basis of his investigation, Muscat concluded that the Sale Proceeds were held on trust by Bel Investments as bare trustee. He also formed the view that the Outstanding Investors each had a claim against the Sale Proceeds for different amounts determined by the amount of their original investment less any funds repaid prior to the commencement of the winding up.
B.6.2 Claims made by Index Options
As outlined in paragraph 6 above, Index Options lodged a proof of debt in the sum of $615,000.00, claiming to be a creditor in respect of a purported loan to Bel Investments that was repayable on demand. On 12 June 2019, Muscat wrote to Index Options admitting the claim in the sum of $160,143.79 and otherwise rejecting the claim. However, Muscat subsequently withdrew his admission.
On 24 August 2021, Index Options lodged a revised proof of debt in the sum of $144,144.00. Muscat was yet to adjudicate on the revised proof of debt at the time of the hearing of this application, but estimated that if Index Options was a creditor at all in the winding up, its claim should be admitted for no more than $75,144.00 (being the net funds distributed by Index Options over time in excess of the total amount received by Index Options for investment in Bel Investments Fund No 1 and Bel Investments Fund No 2).
B.6.3 Claims made by Burness for remuneration
In July 2021, Muscat received Burness’ remuneration report making a claim for his remuneration as liquidator of Bel Investments for the period from 17 August 2005 to 29 March 2018 in the sum of $135,830.02 (exclusive of goods and services tax) plus disbursements of $3,295.76 (inclusive of goods and services tax).
On 10 September 2021, a creditors’ meeting of Bel Investments was held and notices were sent to the Outstanding Investors and Burness as the liquidator of Index Options. At the meeting, those creditors present and voting passed a resolution approving the remuneration of Burness in the sum of $135,830.02 (exclusive of goods and services tax).
B.6.4 Claims made by Muscat for remuneration
In June 2018, following his appointment, Muscat provided the Outstanding Investors and Burness with an initial remuneration notice.
An approval report in respect of Muscat’s claim for remuneration as liquidator of Bel Investments, dated 18 August 2021, was subsequently submitted to the Outstanding Investors and Burness with a notice convening a creditors’ meeting on 10 September 2021. The report stated that Muscat was owed the sum of $73,036.00 (exclusive of goods and services tax) for the period from 29 March 2018 to 26 July 2021, and an estimated sum of $35,090.00 (exclusive of goods and services tax) for the period from 27 July 2021 to the finalisation of the winding up of Bel Investments.
At the creditors’ meeting on 10 September 2021, those creditors present and voting passed a resolution approving the remuneration and anticipated future remuneration of Muscat in the amounts set out in the approval report.
Procedural history B.7
On 21 December 2021, the plaintiffs commenced this proceeding by an originating process, in substance seeking the following orders and directions under sections 90-15 and 90-20 of Schedule 2:[10]
[10]No orders were sought under the Trustee Act 1958 (Vic), div 3.
(1) Muscat was validly appointed liquidator of Bel Investments by a resolution of creditors passed at a meeting of the creditors of Bel Investments on 29 March 2018.
(2) Muscat is justified in treating the deed of trust in respect of Bel Investments Fund No 1 dated 24 March 2003 with Bel Investments as trustee as ineffective, and the trust purportedly established thereby as invalid.
(3) Muscat is justified in treating the unspecified trust purported to be established in respect of Bel Investments Fund No 2 in or around 2004 with Bel Investments as trustee as ineffective, and the trust purportedly established thereby as invalid.
(4) Muscat is justified in treating the Outstanding Investors as having subscribed funds in Bel Investments Fund No 1 or Bel Investments Fund No 2 and any accretions to those funds as funds held by Bel Investments as a bare trustee of a constructive trust for the Outstanding Investors, in shares proportionate to their investments as determined by Muscat.
(5) Bel Investments has a right of indemnity from the Sale Proceeds for trust debts properly incurred as trustee of a constructive trust.
(6) Muscat is justified in calling for proof of trust debts of Bel Investments, being those debts properly incurred as a trustee of a constructive trust, and may have recourse to the Sale Proceeds to satisfy those claims, in accordance with the priorities listed in section 556(1) of the Corporations Act.
(7) Muscat is entitled to be paid from the Sale Proceeds:
(a) his costs, expenses and remuneration to the extent to which they relate to work undertaken by him in relation to the administration of the Trust Assets and the Sale Proceeds, including the work undertaken to render Bel Investments’ right of exoneration available to meet the claims of its creditors whose debts were incurred in the administration of the constructive trust;
(b) an amount in respect of his costs, expenses and remuneration relating to general insolvency matters, to the extent the costs, expenses and remuneration concern the administration of the constructive trust.
(8) Muscat is entitled to a lien over the Sale Proceeds in respect of his fees, expenses and outlays incurred in his capacity as liquidator of Bel Investments to the extent allowed by the court.[11]
[11]Ultimately, this order was not sought.
(9) Muscat is justified in relying on the following resolutions passed at the creditors’ meeting held on 10 September 2021 as resolutions validly passed by creditors to:
(a) determine the remuneration of Muscat as liquidator of Bel Investments for the period from 29 March 2018 to 26 July 2021 in the sum of $73,036.00 (exclusive of goods and services tax);
(b) determine the remuneration of Muscat as liquidator of Bel Investments for the period from 27 July 2021 to the finalisation of the winding up (as detailed in the approval report to the creditors dated 18 August 2021) in the sum of $35,090.00 (exclusive of goods and services tax), but subject to upward revision by resolution of the creditors, and that Muscat (as liquidator) be authorised to make monthly payments on account of such accruing remuneration as incurred;
(c) determine the remuneration of Burness as the former liquidator of Bel Investments for the period from 17 August 2005 to 29 March 2018 in the sum of $135,830.02 (exclusive of goods and services tax);
(d) authorise Muscat as liquidator of Bel Investments to dispose of Bel Investments’ books and records after the dissolution of Bel Investments, subject to obtaining approval from the Australian Securities and Investments Commission, pursuant to section 70-35 of Schedule 2.
(10) Muscat and Bel Investments’ costs of the application, calculated on a full indemnity basis, be paid out of the Sale Proceeds and, to the extent not satisfied from the Sale Proceeds, be costs in the liquidation.
Although this application was ultimately made without the appearance of any other interested persons, this was not originally the case.[12]
[12]The initiating documents were served on Burness (in his capacity as liquidator of Index Options), the Australian Securities and Investments Commission, and the Outstanding Investors.
On 24 June 2022, a notice of appearance was entered on behalf of Jennifer McMenomy (“McMenomy”), as the “trustee” of the McMenomy family trust, a purported creditor of Bel Investments.
The solicitor for McMenomy deposed in an affidavit that the notice of appearance was filed on behalf of McMenomy in view of McMenomy’s inability to reinstate Maural Pty Ltd (deregistered) (“Maural”),[13] and the difficulties McMenomy was experiencing in locating the deed to the McMenomy family trust.
[13]McMenomy was a director of Maural at the date of Maural’s deregistration. Maural was the former trustee of the McMenomy family trust.
McMenomy subsequently sought leave to withdraw her appearance. She did so on the expressed basis that she understood that Muscat would be seeking orders and directions concerning any distributions to be made relating to Maural’s investments in Bel Investments Fund No 1.
However, at the final directions hearing on 30 September 2022, Muscat’s solicitor informed the court that no orders or directions would be sought specifically relating to the investment made by Maural. It was acknowledged that the issues concerning Maural would still need to be addressed in the winding up. On this basis, Muscat did not oppose McMenomy being granted leave to withdraw. Accordingly, orders were made granting McMenomy leave to withdraw her appearance.
No other appearances have been entered in this application.
Relevant statutory provisionsC.
As set out above, the plaintiffs made an application under section 90-20 of Schedule 2 for orders and directions pursuant to section 90-15. As a current officer of Bel Investments, Muscat had standing to bring this application.[14]
[14]Schedule 2, s 90-20(d).
Section 90-15 of Schedule 2 relevantly states:
Court may make orders in relation to external administration
Court may make orders
(1) The Court may make such orders as it thinks fit in relation to the external administration of a company.
(2) The Court may exercise the power under subsection (1):
(a) on its own initiative, during proceedings before the Court; or
(b) on application under section 90‑20.
…
Section 90-15(3) of Schedule 2 sets out a non-exhaustive list of the kinds of orders which may be made under section 90-15(1):
Without limiting subsection (1), those orders may include any one or more of the following:
(a) an order determining any question arising in the external administration of the company;
(b) an order that a person cease to be the external administrator of the company;
(c) an order that another registered liquidator be appointed as the external administrator of the company;
(d) an order in relation to the costs of an action (including court action) taken by the external administrator of the company or another person in relation to the external administration of the company;
(e) an order in relation to any loss that the company has sustained because of a breach of duty by the external administrator;
(f) an order in relation to remuneration, including an order requiring a person to repay to a company, or the creditors of a company, remuneration paid to the person as external administrator of the company.
Section 90-15(4) of Schedule 2 provides a non-exhaustive list of matters which the court may take into account when making orders under section 90-15(1):
Without limiting the matters which the Court may take into account when making orders, the Court may take into account:
(a) whether the liquidator has faithfully performed, or is faithfully performing, the liquidator’s duties; and
(b) whether an action or failure to act by the liquidator is in compliance with [the Corporations Act] and [Schedule 2]; and
(c) whether an action or failure to act by the liquidator is in compliance with an order of the Court; and
(d) whether the company or any other person has suffered, or is likely to suffer, loss or damage because of an action or failure to act by the liquidator; and
(e) the seriousness of the consequences of any action or failure to act by the liquidator, including the effect of that action or failure to act on public confidence in registered liquidators as a group.
Although the powers conferred by sections 90-15 and 90-20 are broader than those formerly conferred by sections 479(3) and 511 of the Corporations Act,[15] the courts have nevertheless been guided by the principles applicable to giving directions under the predecessor provisions.[16] Further, as noted in the context of an administrator seeking advice in Re Ansett Australia Ltd (No 3),[17] courts generally refrain from making directions relating to a liquidator’s commercial decisions:[18]
[T]he prevailing principle adopted by the courts, when asked by liquidators and administrators to give directions, is to refrain from doing so where the direction sought relates to the making and implementation of a business or commercial decision, either committed specifically to the liquidator or administrator or well within his or her discretion, in circumstances where there is no particular legal issue raised for consideration or attack on the propriety or reasonableness of the decision in respect of which the directions are sought. There must be something more than the making of a business or commercial decision before a court will give directions in relation to, or approving of, the decision. It may be a legal issue of substance or procedure, it may be an issue of power, propriety or reasonableness, but some issue of this nature is required to be raised.
[15]Re Mandeville Group Pty Ltd (in liq) [2020] VSC 293, [140] (Sloss J).
[16]Re Petsamo No 14 Pty Ltd (in liq) v Thomassian [2022] FCA 399, [53]-[57], [99] (Markovic J); Re Polat Enterprises Pty Ltd (in liq) [2020] VSC 485, [31]-[32] (Hetyey AsJ).
[17](2002) 115 FCR 409.
[18]Ibid, 428 [65] (Goldberg J).
With this in mind, in essence, the court’s role in respect of applications made under sections 90-15 and 90-20 of Schedule 2 is to consider the evidence and give guidance to the liquidator to assist them with the winding up of the company in question.[19]
Issues for determination D.
Was Muscat validly appointed as liquidator of Bel Investments by the resolution passed at the creditors’ meeting held on 29 March 2018?D.1
[19]Re Mandeville Group Pty Ltd (in liq) [2020] VSC 293, [148].
D.1.1 Legal principles
An external administrator of a company may convene a meeting of the creditors at any time.[20] The creditors may, by resolution at a meeting, remove the external administrator of a company and by resolution at the same or a subsequent meeting appoint another person as external administrator of the company.[21] However, the creditors may not do so unless at least 5 business days’ notice of the meeting is given to all persons who are entitled to receive notice of at a creditors’ meetings.[22]
[20] Schedule 2, s 75-10(a).
[21]Section 90-35(1).
[22]Section 90-35(2).
The term “creditor” when used in relation to a company under external administration is broadly defined under Schedule 2 as “a creditor of the company”.[23] Under section 553(1) of the Corporations Act, contingent debts are provable in a winding up.[24] Thus, contingent creditors are entitled to be given notice of and to vote at creditors’ meetings if certain preconditions have been satisfied.[25]
[23]Section 5-5.
[24]For the meaning of “contingent creditor”, see Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455, 459.5 (Kitto J, with whom Barwick CJ and Windeyer J agreed). See also, Re Thiess Infraco (Swanston) Pty Ltd; National Express Group Australia (Swanston Trams) Pty Ltd v Smith (2004) 209 ALR 694, 700 [13] (Finkelstein J).
[25]Insolvency Practice Rules (Corporations) 2016 (Cth), ss 75-10(a), 75-85(4).
Section 1322 of the Corporations Act addresses procedural irregularities. Section 1322(4) relevantly states:
Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes:
(a) an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation;
….
Section 1322(6) sets out the preconditions to making an order under section 1322(4):
The Court must not make an order under this section unless it is satisfied:
(a) in the case of an order referred to in paragraph (4)(a):
(i) that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature;
(ii) that the person or persons concerned in or party to the contravention or failure acted honestly; or
(iii) that it is just and equitable that the order be made; and
….
(c) in every case—that no substantial injustice has been or is likely to be caused to any person.
In assessing whether there is any injustice for the purposes of section 1322(6)(c), the court is required to weigh any prejudice that would be suffered if the order is made against the prejudice that would be suffered if an order is not made.[26]
[26]Re Petsamo No 14 Pty Ltd (in liq) v Thomassian [2022] FCA 399, [61] (Markovic J), citing Car Buyers Australia Pty Ltd v Australian Securities and Investments Commission [2020] FCA 599, [31] (Gleeson J).
The term “interested person”, as employed in section 1322, is not defined under the Corporations Act. However, relief pursuant to section 1322(4) is generally considered to be available to a wide class of persons.[27]
[27]Twin v Deputy Commissioner of Taxation [2004] 1 Qd R 450, 454 [16] (Holmes J), citing Allatech Pty Ltd v Construction Management Group Pty Ltd (2002) 167 FLR 324, 328 [18] (Austin J).
D.1.2 Analysis
Muscat submitted, and I accept, that the Outstanding Investors are also creditors in the winding up insofar as they have a claim for damages arising out of a breach of trust.[28]
[28]This is regardless of whether or not the Outstanding Investors ought to be characterised as contingent creditors: see par 51 above.
The evidence was that notice of the creditors’ meeting held on 29 March 2018 was not provided to the Outstanding Investors. The failure to provide notice of the meeting to the Outstanding Investors was a contravention of section 90-35(2) of Schedule 2. As a result, the resolutions passed at the creditors’ meeting held on 29 March 2018 removing Burness as liquidator and appointing Muscat in his place were invalid.
In spite of this, Muscat submitted that it was appropriate for an order to be made under section 1322 of the Corporations Act and section 90-15 of Schedule 2 confirming that he was validly appointed as liquidator of Bel Investments by resolution of the creditors passed 29 March 2018, and that such an order be made nunc pro tunc.[29] Muscat submitted that such an order is appropriate because the defect was essentially of a procedural nature, the persons involved in the contravention acted honestly, and it is just and equitable that the order is made.
[29]That is, now for then.
I accept Muscat’s submission that the invalidity of the resolution passed at the creditors’ meeting held on 29 March 2018 appointing Muscat as liquidator should be cured. The factors leading to this conclusion include the following:
(1) In the circumstances as they unfolded in this case,[30] the failure of Burness (as the then-liquidator of Bel Investments) to provide notice of the meeting of the creditors held on 29 March 2018 to the Outstanding Investors is essentially of a procedural nature.
[30]See especially, par 59(5)–(7) below. See also, Re Newcastle Mining Solutions Pty Ltd [2016] NSWSC 753, [7] (Black J); Natarajan v ACIB Accumulus Pty Ltd (2006) 56 ACSR 356, 374-375 [79]-[80] (Mandie J).
(2) In failing to provide notice of the meeting held on 29 March 2018 to the Outstanding Investors, Burness acted honestly in that he mistakenly believed that the Outstanding Investors were not entitled to be notified of or vote at a creditors’ meeting.[31]
[31] Corporations Act, s 1322(6)(a)(ii).
(3) In calling for the resolution appointing Muscat as liquidator of Bel Investments to be passed, Burness was seeking to faithfully perform his duties as liquidator and avoid a potential conflict of interest in acting for both Index Options and Bel Investments.[32]
[32]Schedule 2, s 90-15(4)(a).
(4) It is just and equitable for the order to be made. A failure to validate the resolution appointing Muscat as liquidator in 2018 would result in unnecessary expense and delay in the winding up of Bel Investments.[33] This would in turn prejudice the group of creditors as a whole.
[33]Section 1322(6)(a)(iii).
(5) Each of the Outstanding Investors has since been given notice of Muscat’s appointment as liquidator at a subsequent creditors’ meeting, and has taken no issue with Muscat’s appointment. No appearances have been filed by the Outstanding Investors, Index Options or any other person to oppose the orders sought by Muscat.
(6) No substantial injustice is likely to be caused to any person if the order is made, nor is any loss or damage likely to be caused.[34]
(7) Remedying the invalidity of the resolution appointing Muscat as liquidator would not undermine public confidence in registered liquidators as a group.[35]
[34] Section 1322(6)(c); Schedule 2, s 90-15(4)(d).
[35]Schedule 2, s 90-15(4)(e).
Accordingly, it is appropriate in the circumstances to make the orders sought, namely that Muscat was validly appointed as liquidator of Bel Investments by resolution of the creditors passed 29 March 2018.
Is Muscat justified in treating the purported trusts established in respect of Bel Investments Fund No 1 and Bel Investments Fund No 2 as invalid? D.2
D.2.1 Legal principles
In Pascoe v Boensch,[36] the Full Court of the Federal Court summarised the principles concerning the requirements of establishing an express trust as follows:[37]
(i) Essential to the voluntary creation of any express trust, whether arising by declaration or transfer, is that the trust itself satisfies the three certainties outlined by Lord Langdale in Knight v Knight (1840) 3 Beav 148 at 173; that is, there must be certainty of intention to create a trust; certainty as to the subject-matter of the trust; and certainty as to the objects (or beneficiaries) of the trust …
(ii) Though there is no required formula to be used to create a trust (Richards v Delbridge (1874) LR 18 Eq 11 at 14) the declarant must manifest an intention presently to create a relationship in respect to property which the law characterises as a trust: Re Armstrong (decd) [1960] VR 202. The intention must be one actually had (Commissioner of Stamp Duties (Qld) vJolliffe (1920) 28 CLR 178) and it must be to create an immediately operative trust: Harpur v Levy (2007) 16 VR 587 at [62]-[63]. An intention that the trust be constituted at a later date will be ineffective to create a trust either at the time of the declaration or at that later date. The ultimate onus of proving the intention to create a trust rests on the parties seeking to propound it: Hyhonie Holdings Pty Ltd v Leroy [2004] NSWCA 72 at [45] …
(iii) The requirement that there be certainty as to the beneficiaries of a trust is tied to the supervision and control that courts exercise over trusts: a court might be called upon to administer a trust or to direct the distribution of it to some person or persons. For present purposes it is sufficient to note that, if a trust was declared in the memorandum, it was a fixed trust and, in consequence, the beneficiaries of it must be ascertained or else ascertainable when their interests are to vest: see Kinsela v Caldwell (1975) 132 CLR 458 at 461.
(Original emphasis.)
[36](2008) 250 ALR 24.
[37]Ibid, 29 [20]-[22] (Finn, Dowsett and Edmonds JJ).
The learned authors of Jacobs’ Law of Trusts further explain:[38]
The subject matter of the trust must be certain — that is, it must be clear what the property is upon which the trust is to operate. There can be no trust without property; that is fundamental.
[38] JD Heydon and MJ Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis, 8th ed, 2016) 60-61.
In the absence of a trust deed, the court will consider the words and conduct of the parties in light of the context of the transaction.[39]
[39]Paul v Constance [1977] 1 All ER 195, 197E (Scarman LJ, with whom Cairns and Bridge LJJ agreed), quoting Snell’s Principles of Equity (Sweet and Maxwell, 27th ed, 1973) 111. See also, JD Heydon and MJ Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis, 8th ed, 2016) 49.
D.2.2 Analysis
Muscat submitted that the trust purportedly established as Bel Investments Fund No 1 was invalid and that the trust purportedly established in respect of Bel Investments Fund No 2 was never properly constituted. Accordingly, he submitted that both purported trusts must fail.
D.2.2.1 Bel Investments Fund No 1
As outlined in paragraph 17 above, Bel Investments Fund No 1 was purportedly established as a trust by a document titled “Bel Investments Fund No 1” dated 24 March 2003. Notably, the definition of “Trust Fund” in this document was:
… the sum subscribed for units and all money investments and all property paid or transferred to and accepted by the Trustee as additions to the Trust Fund and includes:-
(i) all moneys paid to and accepted by the Trustees upon the issue of new units as herein provided;
…
(Emphasis added.)
Although the document contained provisions dealing with the issue of units, the registration of unit holders and the establishment and maintenance of a register of unit holders, the evidence was that the register of unit holders was not maintained and only 3 unit certificates in total were issued to unit holders.
Further, due to poor record-keeping and the blending of investor funds in the bank account or accounts of Index Options, it was not possible to differentiate between the assets and liabilities of Bel Investments Fund No 1 and Bel Investments Fund No 2.
Furthermore, the Trust Assets which were purchased with the funds advanced were acquired in the name of Bel Investments without stipulating whether the funds had been sourced from Bel Investments Fund No 1 or Bel Investments Fund No 2, or whether such assets were held for Bel Investments Fund No 1 or Bel Investments Fund No 2.
In Staatz (as liquidator of Wollumbin Horizons Pty Ltd (in liq)) v Berry (No 3),[40] Derrington J considered circumstances where a trust was purportedly established by funds paid by investors in return for an interest in land under a unit trust. His Honour found that the deed purporting to establish the unit trust (which contained a near identical term to that set out in paragraph 65 above) was ineffective, and the trust purportedly established thereby was invalid, on the basis that units had not been issued and the property purchased with the investors’ moneys therefore could not have become the subject matter of the purported trust.[41]
[40](2019) 138 ACSR 231.
[41] Ibid, 263 [112]-[113], [116] (Derrington J).
Similarly, in the present case, uncertainty of the subject matter of the purported trust arises due to Belousoff’s failure to formally issue units in the trust and maintain a unit register. It is not possible to determine that any funds paid by investors, while clearly paid to be held on trust, were paid into the trust purported to have been created by the document titled “Bel Investments Fund No 1”.
D.2.2.2 Bel Investments Fund No 2
Bel Investments’ books and records make reference to a trust titled the “Bel Investments Fund No 2” and recorded it to have been “launched” in 2004. The only available documentation in respect of the purported trust is a document titled “Registration of Interest to the Bel Investments Fund No 2” and a trust memorandum purporting to stipulate certain trust criteria, including that the maximum number of initial units of the trust was to be fixed at 2,000,000. Muscat was unable to locate any deed in respect of a trust describing itself as Bel Investments Fund No 2 or any evidence of intention to issue units in the trust.
In the present case, having reviewed the documentation of the dealings between Belousoff and the investors in the context in which they took place, there was insufficient evidence to prove that a trust in respect of Bel Investments Fund No 2 was properly constituted.
Thus, Muscat is entitled to treat the purported trusts referred to as the Bel Investments Fund No 1 and the Bel Investments Fund No 2 as invalid.
Is Muscat justified in treating the funds invested by the Outstanding Investors as funds held by Bel Investments as a bare trustee of a joint endeavour constructive trust? D.3
Upon finding that the trusts in respect of Bel Investments Fund No 1 and Bel Investments Fund No 2 have failed, the question arises as to whether Bel Investments holds the Sale Proceeds on resulting or constructive trust for the Outstanding Investors.
D.3.1 Legal principles
In Staatz (as liquidator of Wollumbin Horizons Pty Ltd (in liq)) v Berry (No 3),[42] Derrington J found that the liquidator was justified in treating a deed of trust purporting to establish a unit trust as ineffective and that the relevant property was held by the company as bare trustee pursuant to a joint endeavour constructive trust.[43] His Honour explained the circumstances giving rise to a joint endeavour constructive trust as follows:[44]
Where people have made contributions on the basis and for the purpose of furthering a joint endeavour, the substratum of the joint endeavour is removed prematurely without attributable blame, and the benefit of the contributions by one party would otherwise be enjoyed by another where that was not specifically intended or specially provided, equity will not permit that other party to assert or retain the title to the extent it would be unconscionable for them to do so …
[42](2019) 138 ACSR 231.
[43]Ibid, 279 [178].
[44]Ibid, 272 [149], citing Baumgartner v Baumgartner (1987) 164 CLR 137, 147-148 (Mason CJ, Wilson and Deane JJ); Muschinski v Dodds (1985) 160 CLR 583, 620 (Deane J, with whom Mason J agreed).
In Re Mandeville Group Pty Ltd (in liq),[45] Sloss J considered circumstances where property had been purchased by a company using investor funds paid into a unit trust. As her Honour found that the existence of an express trust had been established, it was unnecessary to consider the plaintiffs’ alternative constructive trust argument. However, her Honour formed the view that there was some force to the argument that if the express trust had not been properly constituted, it would be open for the court to find that the property was held on constructive trust by the company for the benefit of persons who sought to subscribe for units in the relevant trust.[46]
[45][2020] VSC 293.
[46]Ibid, [188]-[195] (Sloss J). This view was based on the reasoning in Staatz (as liquidator of Wollumbin Horizons Pty Ltd (in liq)) v Berry (No 3) (2019) 138 ACSR 231.
D.3.2 Analysis
Muscat submitted that the funds invested by the Outstanding Investors, having been subscribed in Bel Investments Fund No 1 and Bel Investments Fund No 2, are held by Bel Investments as a bare trustee of a joint endeavour constructive trust for the benefit of the Outstanding Investors, in shares proportionate to their respective investments.
On the evidence, it was apparent that the investors in Bel Investments Fund No 1 and Bel Investments Fund No 2 were not merely lending money to Bel Investments, but were instead providing funds with the objective of investing moneys in Bel Investments (via payments made to Index Options) in the expectation that they would receive ownership by way of units in the relevant trust or trusts, and a return on investment. However, they were not aware that the purported trusts had not been properly constituted and the legal structure underpinning the arrangement had not been put in place.[47]
[47]Compare, Staatz (as liquidator of Wollumbin Horizons Pty Ltd (in liq)) v Berry (No 3) (2019) 138 ACSR 231, 273 [152] (Derrington J), cited with approval in Re Mandeville Group Pty Ltd (in liq) [2020] VSC 293, [194]-[195].
As was found in Staatz (as liquidator of Wollumbin Horizons Pty Ltd (in liq)) v Berry (No 3),[48] the plaintiffs in the present application are justified in treating the funds invested by the Outstanding Investors in Bel Investments Fund No 1 and Bel Investments Fund No 2 as funds held by Bel Investments as a bare trustee of a joint endeavour constructive trust.
[48](2019) 138 ACSR 231, 279 [178].
The joint endeavour in the present case may be characterised as the agreement to invest funds in return for a share of the ownership of those investments and the profits from those investments. The substratum of the joint endeavour failed without fault attributable to the investors, because Bel Investments did not properly establish the unit trusts as promised to investors. In circumstances where the purported express trusts have failed, it would be unconscionable for Bel Investments to hold the legal and beneficial title of the investments. The Trust Assets were, and the Sale Proceeds are, therefore held by Bel Investments on a joint endeavour constructive trust for the Outstanding Investors in shares proportionate to their investments.
Does Bel Investments as trustee have a right of indemnity from the Sale Proceeds? D.4
D.4.1 Legal principles
It is well established that where a corporate trustee incurs a liability in that capacity, it has a right of indemnity out of the trust assets and retains a lien or equitable charge over trust assets to secure the right of indemnity.[49] The right of indemnity is limited to circumstances where the trustee is properly acting in its capacity as trustee and is not guilty of any gross negligence or breach of trust.[50]
[49]See, for example, Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth (2019) 268 CLR 524, 542-543 [29]-[30] (Kiefel CJ, Keane and Edelman JJ); Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd [2011] FCA 677, [14], [19] (Gordon J), citing Re Suco Gold Pty Ltd (in liq) (1983) 33 SASR 99, 109 (King CJ, with whom Jacobs and Matheson JJ agreed).
[50]Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd [2011] FCA 677, [14].
In Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd,[51] Gordon J explained that the right of indemnity is not automatically lost when a corporate trustee is wound up in insolvency; it extends to providing an entitlement to the liquidator to claim the costs and expenses incurred in the winding up, provided that those costs relate to the performance of trust duties.[52] Accordingly, her Honour found that the court had the power to authorise the liquidators of the insolvent trustee to deal with trust assets and apply them to meet claims in accordance with the priority regime under section 556(1) of the Corporations Act.[53]
[51][2011] FCA 677.
[52]Ibid, [16]-[17].
[53]Ibid, [30] (naturally her Honour’s observations were referable to the Federal Court, but they are equally applicable to this court). See also, Re Pako Supermarkets Pty Ltd (in liq) [2020] VSC 487, [58] (Connock J) and the cases there cited.
D.4.2 Analysis
Muscat submitted that Bel Investments has a right to indemnity and to have recourse to the Sale Proceeds to satisfy those claims in accordance with the priority regime under section 556(1) of the Corporations Act.
The authorities referred to above establish that, as trustee of the joint endeavour constructive trust, Bel Investments has a right to an indemnity for liabilities incurred in performing the trust. The trustee’s right of indemnity from the assets of the trust is subject to the “clear accounts rule”, which requires the trustee to make good any loss that it has caused to the trust.[54] It was unclear whether (and if so, to what extent) Bel Investments, under the control and management of Belousoff, caused loss to the trust by reason of breach of its duties as trustee.[55] However, in the present circumstances, it is unnecessary to make such a determination.
Is Muscat justified in calling for proof of trust debts of Bel Investments?D.5
[54]Staatz (as liquidator of Wollumbin Horizons Pty Ltd (in liq)) v Berry (No 3) (2019) 138 ACSR 231, 284 [204] (Derrington J).
[55] Ibid, 284-285 [205].
D.5.1 Analysis
The right of liquidators to call for proof of trust debts is governed by legislation.[56] Consistent with the finding (now for then) that Muscat was validly appointed as liquidator of Bel Investments by the resolution passed at the creditors’ meeting held on 29 March 2018, it is appropriate to make an order that Muscat is justified in calling for proof of trust debts.
Is Muscat entitled to be paid his remuneration, costs and expenses from the Sale Proceeds? D.6
[56]Corporations Regulations 2001 (Cth), reg 5.6.39.
D.6.1 Legal principles
Liquidators are entitled to recover remuneration, costs and expenses for work undertaken in relation to the administration of a trust.[57] This entitlement is regulated by the priority regime established under section 556(1) of the Corporations Act.[58]
[57]Re Mandeville Group Pty Ltd (in liq) [2020] VSC 293, [209] (Sloss J); Re Matthew Forbes Pty Ltd (in liq) [2018] VSC 331, [27]-[30] (Riordan J); Re Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FLR 17, 20 [7] (Brereton J).
[58]See, for example, Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth (2019) 268 CLR 524, 588 [169] (Gordon J).
D.6.2 Analysis
Muscat submitted that he is entitled to be paid his costs, expenses and remuneration from the Sale Proceeds, to the extent to which they relate to the administration of the trust, including work undertaken to render Bel Investments’ right of exoneration available to meet the claims of its creditors. He relied on Re Civil Construction Network Services Pty Ltd (in liq),[59] Re Pako Supermarkets Pty Ltd (in liq)[60] and Re Total Truss Systems Pty Ltd (in liq)[61] in support of this submission.
[59][2020] VSC 474 (Delany J).
[60][2020] VSC 487 (Connock J).
[61](2021) 152 ACSR 323 (Gardiner AsJ).
Bel Investments has only ever operated as trustee of the joint endeavour constructive trust and in no other capacity. Further, all assets owned by Bel Investments are held by it as trustee of the trust. In the circumstances, it is appropriate to order that Muscat is entitled to be paid his remuneration, costs and expenses properly incurred in identifying, preserving, realising and distributing the assets of the trust from the Sale Proceeds, and that such remuneration, costs and expenses are to be paid in accordance with the priorities specified in section 556(1) of the Corporations Act.
Is Muscat justified in relying on the resolutions passed at the creditors’ meeting held on 10 September 2021 as resolutions validly passed by the creditors? D.7
Muscat sought an order confirming that he is justified in relying on the resolutions set out in paragraphs 33 and 36 above concerning the remuneration of Burness and Muscat, which were passed at the creditors’ meeting held on 10 September 2021. The order was sought in light of doubts about the validity of Muscat’s appointment as liquidator on 29 March 2018.[62]
[62]The court was not asked to determine the appropriate remuneration under Schedule 2, div 60.
The Outstanding Investors were duly notified of the creditors’ meeting held on 10 September 2021. Having found that any invalidity of the resolution passed at the creditors’ meeting held on 29 March 2018 appointing Muscat as liquidator should be cured now for then, it follows that the resolutions passed at the creditors’ meeting held on 10 September 2021 are not invalid.
Are the plaintiffs entitled to their costs of and incidental to this application on an indemnity basis? D.8
The plaintiffs sought an order that their costs of this application, calculated on a full indemnity basis, be paid from the Sale Proceeds.
As noted by Derrington J in Staatz (as liquidator of Wollumbin Horizons Pty Ltd (in liq)) v Berry (No 3),[63] where a trustee acts reasonably and in good faith in the administration of a trust, it is entitled to be reimbursed from the trust assets for expenses incurred.[64] The plaintiffs brought this application in response to uncertainty about the validity of Muscat’s appointment and the rights and interests of the Outstanding Investors arising from Belousoff’s previous mismanagement of Bel Investments. These factors on their face demonstrate the appropriateness of the plaintiffs’ conduct in bringing this application.[65]
[63](2019) 138 ACSR 231.
[64]Ibid, 287 [218].
[65]Ibid.
It is therefore appropriate that Muscat’s entitlement to be paid on an indemnity basis from the Sale Proceeds for expenses incurred in the administration of the trust be extended to the costs of and incidental to this application.
ConclusionE.
Accordingly, orders will be made substantially in the following form:
(1) Now for then, Muscat was validly appointed liquidator of Bel Investments by a resolution passed at a creditors’ meeting of Bel Investments held on 29 March 2018.
(2) Muscat is justified in treating the purported deed of trust in respect of Bel Investments Fund No 1 dated 24 March 2003 with Bel Investments as trustee as ineffective, and the trust purportedly established thereby as invalid.
(3) Muscat is justified in treating the unspecified trust purported to be established in respect of Bel Investments Fund No 2 in or around 2004 with Bel Investments as trustee as ineffective, and the trust purportedly established thereby as invalid.
(4) Muscat is justified in treating the funds invested by the Outstanding Investors as having subscribed funds in Bel Investments Fund No 1 or Bel Investments Fund No 2 and any accretions to those funds as funds held by Bel Investments as a bare trustee of a constructive trust for the Outstanding Investors in shares proportionate to their investments, as determined by Muscat.
(5) Bel Investments has a right of indemnity from the Sale Proceeds for trust debts properly incurred as trustee of a constructive trust.
(6) Muscat is justified in calling for proof of trust debts of Bel Investments, being those debts properly incurred as a trustee of a constructive trust, and is entitled to have recourse to the Sale Proceeds to satisfy those claims in accordance with the priorities listed in section 556(1) of the Corporations Act.
(7) Muscat is entitled to be paid from the Sale Proceeds:
(a) his costs, expenses and remuneration to the extent to which they relate to work undertaken by him in relation to the administration of the Trust Assets and the Sale Proceeds, including the work undertaken to render Bel Investments’ right of exoneration available to meet the claims of Bel Investments’ creditors whose debts were incurred in the administration of the trust;
(b) an amount in respect of his costs, expenses and remuneration relating to general insolvency matters, to the extent the costs, expenses and remuneration concern the administration of the trust.
(8) Muscat is justified in relying on the following resolutions passed at the creditors’ meeting held on 10 September 2021 as resolutions validly passed by creditors to:
(a) determine the remuneration of Muscat as liquidator of Bel Investments for the period from 29 March 2018 to 26 July 2021 in the sum of $73,036.00 (exclusive of goods and services tax);
(b) determine the remuneration of Muscat as liquidator of Bel Investments for the period from 27 July 2021 to finalisation of the winding up (as detailed in the remuneration approval report to creditors of 18 August 2021) in the sum of $35,090.00 (exclusive of goods and services tax), but subject to upward revision by resolution of creditors, and that Muscat (as liquidator) be authorised to make monthly payments on account of such accruing remuneration as incurred;
(c) determine the remuneration of the former liquidator of Bel Investments, Burness, for the period from 17 August 2005 to 29 March 2018 in the sum of $135,830.02 (exclusive of goods and services tax);
(d) authorise Muscat as liquidator of Bel Investments to dispose of Bel Investments’ books and records after the dissolution of Bel Investments, subject to obtaining approval from the Australian Securities and Investments Commission, pursuant to section 70-35 of Schedule 2.
(9) The plaintiffs are entitled to their costs of and incidental to this application on an indemnity basis.
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