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Re Mamounia Pty Ltd (in liq)

Re Mamounia Pty Ltd (in liq)

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Case Copied 11 May 2017 63 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2016 1126

IN THE MATTER of RE MAMOUNIA PTY LTD (IN LIQ)

MAMOUNIA PTY LTD (IN LIQUIDATION) ACN 007 091 349

SHANE DEANE AND NICHOLAS GIASOUMI IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF MAMOUNIA PTY LTD (IN LIQUIDATION) ACN 007 091 349

First Plaintiff

Second Plaintiff

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	3 April 2017
DATE OF JUDGMENT:	11 May 2017
CASE MAY BE CITED AS:	Re Mamounia Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2017] VSC 230

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CORPORATIONS – Application by liquidators for directions – Liquidators winding up a company that acted as a trustee carrying on a family restaurant – Company now a bare trustee – Liquidators seek a direction that they are justified in being reimbursed out of the trust assets for the reasonable cost and expenses in conducting investigations and examinations into claims by creditors and possible claims by the company – Held liquidators justified in proceeding on the basis that they are entitled as of right to be reimbursed their reasonable costs and expenses incurred in such investigations and examinations as those activities fall within the salvage principles in Universal Distributing – Section 511 Corporations Act 2001 (Cth).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	M J Galvin QC with R Zambelli	Piper Alderman

TABLE OF CONTENTS

Introduction.......................................................................................................................... 1
Background to the application.......................................................................................... 2
The liquidators’ dilemma................................................................................................... 8
The matters requiring inquiry and examination............................................................ 9
Cash at bank....................................................................................................................... 10
Ordinary unsecured creditors (unrelated).................................................................... 10
Lien claims by former lawyers........................................................................................ 10
Related party claims......................................................................................................... 11
Matters requiring further investigation......................................................................... 13
Mediation............................................................................................................................ 14
The Claims of the Kurban family.................................................................................... 16
Nabil Kurban...................................................................................................................... 16
Raif Kurban........................................................................................................................ 16
Walid Kurban..................................................................................................................... 17
Six Point Star as trustee for the Six Point Star trust...................................................... 19
The Original Pizza Family Company as trustee for the Original Pizza Family...... 20
Fadi and Andriana Kurban.............................................................................................. 20
Simon and Marlene Kurban............................................................................................. 21
Smarjs as trustee for the Simon and Marlene Kurban Family Trust.......................... 22
Consideration of the relevant authorities...................................................................... 22
The scope of the proposed examinations...................................................................... 41
Determination.................................................................................................................... 42

HIS HONOUR:

Introduction

Mamounia Pty Ltd (in liq) was the trustee of a trading trust that owned and carried on a family restaurant and pizza business called “Colombo’s” and land where the restaurant business was conducted on Whitehorse Road, Box Hill. As a result of a falling out between the five brothers involved in the business and the beneficiaries of the trust, Mamounia has been put into liquidation, initially as a members voluntary liquidation.

The business and freehold have been sold and the liquidators have realised some $1.3 million trust assets in the liquidation. Mamounia owes non-family creditors some $800,000. The liquidators have satisfied themselves that these sums should be paid. The family members and their related entities have made claims against Mamounia that on one basis amount to nearly $9 million. The liquidators have not been able to satisfy themselves that these…

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: [2017] VSC 230
Decision Date: 11 May 2017

CaseChat Overview and Summary

The case involved the liquidators of Mamounia Pty Ltd, a company that was wound up while acting as a trustee for a family restaurant. The liquidators sought a direction from the court to be reimbursed for their reasonable costs and expenses related to investigations and examinations into creditor claims and potential claims by the company. The case was heard by the Federal Court of Australia, which was tasked with determining whether the liquidators were entitled to reimbursement under the Corporations Act 2001.

The legal issues before the court were whether the liquidators could be reimbursed for their costs and expenses, and if so, under what legal principles. The court was required to consider the statutory framework and relevant case law to determine the scope of the liquidators' powers and duties in relation to investigating claims and potential liabilities of the company.

The court found that the liquidators were justified in seeking reimbursement for their reasonable costs and expenses related to investigations and examinations into creditor claims and potential claims by the company. The court held that the liquidators' actions fell within the salvage principles established in Universal Distributing, and that section 511 of the Corporations Act 2001 provided a statutory basis for the reimbursement. The court concluded that the liquidators were entitled to be reimbursed their reasonable costs and expenses as a matter of right.

The court did not make any further orders beyond confirming that the liquidators were entitled to reimbursement of their costs and expenses. The decision provides guidance to liquidators on the scope of their powers and duties in relation to investigating claims and potential liabilities of the company, and the importance of the salvage principles in determining the appropriate course of action.

Orders