Re Gunns Plantations Limited (No 4) - [2013] VSC 595

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE

Not Restricted

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT
CORPORATIONS LIST

S CI 2012 5485

IN THE MATTER OF GUNNS PLANTATIONS LIMITED (IN LIQUIDATION) (RECEIVERS & MANAGERS APPOINTED) (ACN 091 232 209)

DANIEL MATHEW BRYANT, IAN MENZIES CARSON and CRAIG DAVID CROSBIE (in their capacities as joint and several Liquidators of GUNNS PLANTATIONS LIMITED (IN LIQUIDATION) (RECEIVERS & MANAGERS APPOINTED) (ACN 091 232 209)) and others and	First Plaintiffs
GUNNS PLANTATIONS LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (ACN 091 232 209)	Second Plaintiffs
v
THE TRUST COMPANY (AUSTRALIA) LIMITED (ACN 000 000 993) as Trustee of the Forestry Investment Trust and others	Defendants

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JUDGE:	FERGUSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	9 September 2013
DATE OF ORDERS:	9 September 2013
DATE OF REASONS:	31 October 2013
CASE MAY BE CITED AS:	Re Gunns Plantations Limited (No 4)
MEDIUM NEUTRAL CITATION:	[2013] VSC 595

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CORPORATIONS — Forestry managed investment scheme — Application by liquidators for directions in relation to costs, expenses and remuneration — Directions also sought in relation to proceeds of settlement with receivers in relation to funds derived from bank guarantees — Corporations Act 2001 (Cth) s 511 — Supreme Court (General Civil Procedure Rules) 2005 (Vic), r 54.02.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Dr O Bigos	Arnold Bloch Liebler
For Great Southern Plantation Holdings Pty Ltd (in liquidation)	K & L Gates

HER HONOUR:

Introduction

The First Plaintiffs (‘Plaintiffs’) are the liquidators of the Gunns group of companies. They became liquidators on 5 March 2013 following the transition of the companies from voluntary administration to liquidation. The Plaintiffs control Gunns Plantations Limited (‘GPL’) in its capacity as responsible entity of a number of Gunns’ managed investment schemes. GPL is otherwise controlled by receivers and managers. The Plaintiffs applied for directions in relation to costs, expenses and remuneration, which they incurred in relation to the schemes during the time that they were voluntary administrators of GPL. They also sought directions in relation to funds which they received as a result of a settlement entered into with the receivers. Those funds emanated from bank guarantees which were called upon following the collapse of the Gunns Group. At the conclusion of the hearing, I gave the directions sought by the Plaintiffs and said that I would publish my reasons at a later date. These are those reasons.

The Plaintiffs relied on two sources of power for the making of the directions which they sought. First, they relied on s 511 of the Corporations Act 2001 (Cth). Secondly, they relied on r 54.02 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) which confers on the Court power to give directions to trustees.

The reasons why insolvency practitioners seek directions and the circumstances in which such directions will be made were summarised by Goldberg J in Re Ansett Australia Limited (No 3)[1] as follows:

When liquidators and administrators seek directions from the Court in relation to any…

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: [2013] VSC 595
Decision Date: 9 September 2013

CaseChat Overview and Summary

The matter before the court involved the liquidators of Gunns Plantations Limited, who applied for directions regarding costs, expenses, and remuneration. Additionally, the liquidators sought directions concerning the proceeds of a settlement with receivers in relation to funds derived from bank guarantees. The case was heard in the Supreme Court of Victoria.

The central legal issues the court needed to resolve were the appropriate allocation of costs and expenses incurred by the liquidators and the distribution of proceeds from the settlement with the receivers. The court was required to determine the entitlements of various parties, including the liquidators, the company's creditors, and the receivers, in accordance with the Corporations Act 2001 (Cth) and the Supreme Court (General Civil Procedure Rules) 2005 (Vic).

The court's reasoning focused on the statutory framework provided by the Corporations Act and the procedural rules. It examined the specific provisions relating to the powers and duties of liquidators, the distribution of assets, and the treatment of costs and expenses. The court also considered the equitable principles that guide the distribution of funds in liquidation proceedings, including the need to prioritise creditors' interests and ensure a fair and transparent process. After evaluating the submissions and evidence presented, the court made its determination on the directions sought by the liquidators. The final orders addressed the allocation of costs and expenses, as well as the distribution of the settlement proceeds, ensuring that the liquidators' actions were in the best interests of the creditors and aligned with the statutory requirements.

Orders