IN THE MATTER of an application pursuant to ss 48 and 51 of the Trustee Act 1958
ROBERT SCOTT WOODS (as trustee of the bankrupt estate of Ergun Omer)
Plaintiff
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JUDGE:
McMillan J
WHERE HELD:
Melbourne
DATE OF HEARING:
21 October 2016
DATE OF RULING:
9 December 2016
CASE MAY BE CITED AS:
Re Cooper Street Property Trust
MEDIUM NEUTRAL CITATION:
[2016] VSC 756
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TRUSTS — Terms of trust deed — Where trustee company deregistered and appointor bankrupt — Application by appointor’s trustee in bankruptcy for appointment of new trustee by the Court — Welfare of the beneficiaries — Effect of deregistration of trustee company — Where Commonwealth acts as trustee — Trustee Act 1958, s 48 — Corporations Act 2001 (Cth), ss 601AD and 601AE
The plaintiff was appointed trustee in bankruptcy of the estate of Mr Ergun Omer (‘Mr Omer’) pursuant to a sequestration order of the Federal Court of Australia on 14 October 2014.
In this proceeding, the plaintiff seeks an order appointing Mr Michael Carrafa as a trustee of the Cooper Street Property Trust (‘the Cooper Street trust’), pursuant to s 48(1) of the Trustee Act 1958 (‘the Act’), and a vesting order under s 51 of the Act.
The plaintiff relies on three affidavits in support of his application: two by the plaintiff sworn 14 July 2016 and 20 October 2016 respectively and one by Mr Carrafa sworn 5 July 2016. Mr Carrafa deposes that he is a registered liquidator, official liquidator of the Supreme Court and Federal Court, and a registered trustee in bankruptcy, with over 20 years’ experience in corporate insolvency and bankruptcy. He provided the Court with his consent to act as trustee, a schedule of his hourly rates and a declaration of independence.
Background
The plaintiff has investigated the assets or interests of Mr Omer and has identified an undated trust deed (‘the trust deed’) settling the Cooper Street trust. The trustee of the Cooper Street trust named in the schedule to the trust deed is Omer Property Group Pty Ltd (‘OPG’) and the appointor is stated as:
Ergun Omer and such other person as may be nominated in writing or by will but failing such appointment then on his death or her death the personal representative of such person.
OPG was incorporated on 18 October 2006. At that time Mr Omer was the…
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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Re Cooper Street Property Trust [2016] VSC 756
Case
[2016] VSC 756
Decision Date
CaseChat Overview and Summary
In the matter of the Cooper Street Property Trust, the court was faced with a dispute regarding the appointment of a new trustee after the original trustee company had been deregistered. The appointor, who was subsequently declared bankrupt, applied to the Court for the appointment of a new trustee, citing the welfare of the beneficiaries as a key consideration. The court was required to determine whether the applicant had the necessary standing to make the application, and if so, whether the court should appoint a new trustee in light of the trustee company's deregistration.
The primary legal issue was whether the applicant, as the trustee in bankruptcy of the appointor, was a 'person beneficially interested in the property' of the trust, thus granting them standing to apply for a new trustee's appointment. The court considered relevant precedents, including Gartside v Inland Revenue Commissioners, Australian Securities and Investments Commissioner v Carey, and Public Trustee v Smith, to ascertain the requisite interest in the trust property. Additionally, the court examined the provisions of the Trustee Act 1958 and the Corporations Act 2001 to understand the implications of the trustee company's deregistration on the trust and the potential appointment of the Commonwealth as trustee.
The court found that the applicant did indeed possess the necessary standing to apply for the appointment of a new trustee. In reaching this decision, the court emphasised the importance of the welfare of the beneficiaries and the need for continuity in the administration of the trust. The court also noted that, under the Trustee Act 1958, it had the authority to appoint a new trustee, including the Commonwealth if appropriate. Consequently, the court granted the application and appointed a new trustee to manage the trust in the best interests of the beneficiaries.
The final orders of the court included the appointment of a new trustee for the Cooper Street Property Trust and the direction that the new trustee take all necessary steps to ensure the ongoing management and welfare of the trust property. The court also noted that the Commonwealth could be appointed as trustee if it was in the best interests of the beneficiaries, reflecting the broad discretion available under the Trustee Act 1958.