RYAN’S HORIZON PTY LTD (ACN 621 003 110) AS TRUSTEE FOR THE HORIZON TRUST	Plaintiff
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DIP HOLDCO PTY LTD (ACN 609 390 570) AS TRUSTEE FOR THE DIP HOLDING TRUST	First Defendant
DIP GR FUNDING PTY LTD (ACN 622 773 193) AS TRUSTEE FOR THE GR FUNDING TRUST	Second Defendant
DIP GAILEY ROAD PTY LTD (ACN 622 773 577)	Third Defendant

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JUDGE:	Connock J
WHERE HELD:	Melbourne
DATE OF HEARING:	15 June 2021
DATE OF JUDGMENT:	15 June 2021 Ex Tempore; published 16 June 2021
CASE MAY BE CITED AS:	Re DIP Gailey Road Pty Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 345

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CORPORATIONS LAW — Appointment of provisional liquidators — General principles — Failed development venture — Section 472 of the Corporations Act 2001 (Cth) — Winding up on the just and equitable ground — Section 461(1)(k) of the Corporations Act 2001 (Cth) — Appointment of receivers to property and assets of trust — Risk of dissipation of trust property — Preservation and protection of trust property — Section 37 of the Supreme Court Act 1986 (Vic) — Rule 39.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) — Appointments consented to by defendants.

TRUSTS AND TRUSTEES — Appointment of receivers to property and assets of trust — General principles — Failed development venture — Risk of dissipation of trust property — Preservation and protection of trust property — Section 37 of the Supreme Court Act 1986 (Vic) — Rule 39.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) — Appointments consented to by defendants — Usual undertaking as to damages given — Security under r 39.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) dispensed with — Proposed form of order.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Caillard	Madison Marcus
For the Defendants	Mr A Kuraica (solicitor)	Logie-Smith Lanyon Lawyers

HIS HONOUR:

Introduction

By its summons filed 10 June 2021 the plaintiff seeks orders that Glenn Franklin and Jason Stone of PKF Melbourne (Franklin and Stone) be appointed:

(a) as joint and several provisional liquidators of the third defendant, DIP Gailey Road Pty Ltd (Company), pursuant to s 472 of the Corporations Act 2001 (Cth) (Act); and

(b) as receivers and managers of the property and assets of the GR Funding Trust (the Trust) pursuant to s 37 of the Supreme Court Act 1986 (Vic) and r 39.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules).

The Company and the Trust are the vehicles through which a failed student accommodation development project (Project) was to be undertaken on land purchased by the Company at 152–156 Gailey Road, St Lucia, Queensland (Land). The plaintiff invested $5,900,000 in the Project…

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.

Continue reading Re Dip Gailey Road Pty Ltd

Details

AGLC: Re Dip Gailey Road Pty Ltd [2021] VSC 345
Case: [2021] VSC 345
Decision Date: 15 June 2021 Ex Tempore; published 16 June 2021

CaseChat Overview and Summary

The case of Re Dip Gailey Road Pty Ltd involved a dispute concerning the appointment of provisional liquidators and receivers to the property and assets of a trust. The defendants consented to the appointments, which were sought to address a failed development venture and the risk of dissipation of trust property. The case was heard in the Supreme Court of Victoria, where the court was asked to make determinations under the Corporations Act 2001 (Cth) and the Supreme Court Act 1986 (Vic). The applicants sought orders under sections 472 and 461(1)(k) of the Corporations Act 2001 (Cth) and section 37 of the Supreme Court Act 1986 (Vic), with the defendants consenting to the relief sought.

The court was required to consider whether the appointment of provisional liquidators and receivers was appropriate given the circumstances of the failed development venture and the risk of dissipation of trust property. The legal issues involved the general principles of appointing provisional liquidators under section 472 of the Corporations Act 2001 (Cth), the winding up of a company on the just and equitable ground under section 461(1)(k), and the protection of trust property under section 37 of the Supreme Court Act 1986 (Vic). The court also had to determine whether the defendants' consent to the appointments warranted the dispensing of security under rule 39.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).

The court found that the circumstances justified the appointment of provisional liquidators to manage the failed development venture and receivers to protect the trust property from dissipation. Given the consent of the defendants and the usual undertaking as to damages, the court dispensed with the requirement for security under rule 39.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic). The court granted the relief sought by the applicants, providing a proposed form of order to ensure the preservation and protection of the trust property.

The final orders included the appointment of provisional liquidators to manage the affairs of Dip Gailey Road Pty Ltd and receivers to safeguard the trust property. The court's decision was based on the need to protect the interests of creditors and beneficiaries in light of the failed development venture and the risk of dissipation of trust property. The defendants' consent to the appointments and the undertaking as to damages played a significant role in the court's decision to dispense with the requirement for security.

Orders