Re Gunns Plantations Limited (No 5) - [2015] VSC 420

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE

Not Restricted

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

Corporations List
S CI 2013 2095

IN THE MATTER OF GUNNS PLANTATIONS LIMITED (IN LIQUIDATION) (RECEIVERS & MANAGERS APPOINTED) (ACN 091 232 209) in its capacity as the responsible entity of the managed investment schemes listed in Schedule 1

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)	First Plaintiffs
v
GUNNS PLANTATIONS LIMITED (IN LIQUIDATION) (RECEIVERS & MANAGERS APPOINTED) (ACN 091 232 209) in its capacity as the responsible entity of the managed investment schemes listed in Schedule 1	Second Plaintiff

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JUDGE:	JUDD J
WHERE HELD:	Melbourne
DATE OF HEARING:	30 July 2015
DATE OF JUDGMENT:	18 August 2015
CASE MAY BE CITED AS:	Re Gunns Plantations Limited (No 5) (Tasmanian Forestry Estate)
MEDIUM NEUTRAL CITATION:	[2015] VSC 420

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CORPORATIONS — Managed Investment Scheme — Application for approval of termination of grower rights to facilitate sale of scheme property — Application for directions for allocation and distribution of sale proceeds — Applications made under s 511 of the Corporations Act 2001 (Cth) and r 54.02 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic).

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APPEARANCES:	Counsel	Solicitors
For the First Plaintiffs	Mr P D Corbett, one of Her Majesty’s Counsel with Ms L H Kirwan	Arnold Bloch Leibler
Mr Trevor Burdon	Appeared on his own behalf

HIS HONOUR:

The liquidators of Gunns Plantations Limited sought directions pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2005, s 511 of the Corporations Act 2001 and the inherent jurisdiction of the court, that they are justified and otherwise acting properly and reasonably in allocating proceeds from the sale of the Tasmanian Forestry Estate assets between seven Gunns Plantations Woodlot Projects, and within those projects between various sub‑schemes, based upon a value allocation made by URS, and to distribute the allocated proceeds to members of each scheme or sub‑scheme in proportion to the number of hectares held by each grower. The court has already directed that the liquidators were justified in terminating grower rights to facilitate completion of the sale of the Tasmanian Forestry Estate. The background facts and circumstances leading to the approval are to be found in the reasons for judgment in Re Gunns Plantations Limited (No 4) delivered 11 August 2014.[1]
[1][2014] VSC 369.

The liquidators presently hold the proceeds allocated to them on trust for the growers pursuant to a Sale Process Agreement with the receivers dated 24 October 2013. The liquidators’ share of sale proceeds was $43,506,951 and is continuing to accrue interest. Prior to the allocation and distribution of the proceeds, the liquidators intend to deduct the costs incurred by Gunns Growers Group Pty Ltd as an intervener on the liquidators’ application for approval of the sale, the liquidators’ costs of the application, sale costs and the costs…

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: [2015] VSC 420
Decision Date: 18 August 2015

CaseChat Overview and Summary

The case involved Gunns Plantations Limited, a company in liquidation, and various parties interested in the managed investment scheme it operated. The dispute centred around the termination of grower rights, which were essential to the scheme's operation, to facilitate the sale of the scheme's property. This case was heard in the Supreme Court of Victoria. The applicants, including the liquidators of Gunns Plantations Limited, sought approval for the termination of the grower rights and directions for the allocation and distribution of the sale proceeds. These applications were made under section 511 of the Corporations Act 2001 (Cth) and rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic).

The primary legal issues before the court were whether the termination of the grower rights was in the best interests of the scheme's members and how the sale proceeds should be distributed. The court had to consider the statutory framework governing managed investment schemes, the rights and obligations of the parties involved, and the potential impact of the termination on the scheme's members. The applicants argued that the termination was necessary to facilitate the sale of the scheme property and that the proposed distribution of the sale proceeds was fair and equitable. Opposing parties contended that the termination would negatively affect the scheme's members and that alternative arrangements should be considered.

The court found that the termination of the grower rights was in the best interests of the scheme's members and approved the proposed allocation and distribution of the sale proceeds. The court considered the statutory objectives of the managed investment scheme legislation, the terms of the scheme, and the interests of the scheme's members. It determined that the termination would allow for the efficient sale of the scheme property and that the proposed distribution of the sale proceeds was fair and equitable. The court also noted the significant benefits that the termination would bring to the scheme's members, including the potential for a higher return on their investments.

The court made orders approving the termination of the grower rights and directing the allocation and distribution of the sale proceeds as proposed by the applicants. The court also made orders for costs and further directions as necessary. The decision in this case provides important guidance for liquidators and other parties involved in the administration of managed investment schemes and highlights the importance of considering the interests of the scheme's members when making decisions about the termination of grower rights.

Orders