Re Dungowan Manly Pty Ltd (in liq)

In the matter of Re Dungowan Manly Pty Ltd (in liq), the Federal Court was tasked with resolving disputes concerning the winding up of a company and the validity of levies imposed on shareholders. The primary dispute centred on whether the liquidator was restricted to relying on a 2015 levy due to an election made, whether the earlier levies by the administrators were authorised under the company's articles, and the validity of levies issued under a share surrender agreement. Additionally, the court needed to determine the nature of the trust, if any, over a unit held by class D shareholders and whether the liquidator could claim a lien over the unit. Finally, the court examined whether certain debts and costs were secured by a mortgage over class D shares.

The court found that the liquidator was not confined to the 2015 levy due to the election and held that the earlier levies were not authorised by the company's articles. It was determined that the levies under the share surrender agreement were valid. Regarding the unit held by class D shareholders, the court concluded that it was not held on a constructive or resulting trust for those shareholders. The court also found that the liquidator's lien over the unit could not be upheld as it was not established that the costs incurred were specifically for the preservation of the unit or that the company's non-trust assets would be insufficient to cover the liquidator's costs. Lastly, the court ruled that the judgment debts, orders for costs, and distributions in the winding up were not 'secured property' for the purposes of the mortgage over the class D shares.

The court's decision provided clarity on the validity of the levies, the nature of the trust over the unit, and the enforceability of the mortgage. The final orders included that the 2015 levy was binding, the earlier levies were invalid, the levies under the share surrender agreement were valid, the unit was not held on trust for class D shareholders, the liquidator's lien was not enforceable, and the debts and costs were not secured by the mortgage.