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Re Mandeville Group Pty Ltd (In Liq)

Re Mandeville Group Pty Ltd (In Liq)

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Case Copied 27 May 2020 71 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2019 05082

IN THE MATTER OF MANDEVILLE GROUP PTY LTD (IN LIQUIDATION)
(ACN 614 322 299)

B E T W E E N
BARRY WIGHT in his capacity as liquidator of Mandeville Group Pty Ltd (IN LIQUIDATION) (ACN 614 322 299)
First Plaintiff
AND
MANDEVILLE GROUP PTY LTD (IN LIQUIDATION) (ACN 614 322 299)
Second Plaintiff

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JUDGE:	SLOSS J
WHERE HELD:	Melbourne
DATE OF HEARING:	6 April 2020 (Plaintiffs provided supplementary submissions dated 8 April 2020)
DATE OF JUDGMENT:	27 May 2020
CASE MAY BE CITED AS:	In Re Mandeville Group Pty Ltd (In Liq)
MEDIUM NEUTRAL CITATION:	[2020] VSC 293

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CORPORATE INSOLVENCY — Directions — Liquidator’s application for orders and directions under Sch 2, ss 90-15, 90-20, and s 1318 of the Corporations Act 2001 (Cth) — Property purchased in corporate name for the purpose of development project — Where unit trust structure adopted — Where property is company’s only substantial asset — Whether property is held by company in own right or as trustee of unit trust — Corporate trustee disqualified from acting as trustee upon entering into liquidation — Liquidator seeking directions empowering sale of property — Whether liquidator entitled to be paid remuneration, costs and expenses under s 556(1) of the Corporations Act 2001 (Cth) — Application granted and directions given.

TRUSTS — Express trusts — Creation — Declaration of unit trust by deed — Numerous versions of unit trust deeds executed — Whether certainty of intention, subject matter and object manifested — Whether failure of express unit trust due to different or conflicting trust deeds — Where trustee seeks judicial advice as to whether it is justified in conducting winding up of the corporate trustee on basis that it holds property in its capacity as trustee of the express unit trust — Rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).

TRUSTS — Express trusts — Ipso facto clause — Where corporate trustee in liquidation holds property as bare trustee of unit trust — Where bare trustee sought orders under s 63 of the Trustee Act 1958 Vic for conferral of the necessary powers to carry on the business of the unit trust and preserve, realise and distribute the assets — Where liquidator sought orders permitting him to rely on statutory powers as liquidator of corporate trustee pursuant to s 477 of the Corporations Act 2001 (Cth) to take all necessary steps to sell property — Alternatively, liquidator sought orders appointing the liquidator as receiver over the property — Orders made for conferral on bare trustee of powers sought under s 63 of the Trustee Act 1958 (Vic) and conferral on liquidator of powers under s 477 of the Corporations Act 2001 (Cth).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr C R Brown of counsel (by audio visual link)	Holding Redlich Lawyers
As Contradictor appointed by the Court	Ms V Bell of counsel

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: [2020] VSC 293
Decision Date: 27 May 2020

CaseChat Overview and Summary

The case involves the liquidator of Mandeville Group Pty Ltd seeking directions to facilitate the sale of the company's property, which was its sole substantial asset, following its entry into liquidation. The property was held in the name of the company for a development project, and there were competing claims regarding whether the company held the property as the outright owner or as a trustee of a unit trust. The liquidator sought orders to clarify the company's ownership of the property and to enable its sale, including the appointment of the liquidator as receiver over the property if necessary. Additionally, the liquidator requested reimbursement of his costs and expenses under the Corporations Act.

The court was required to determine whether the property was held by the company in its own right or as trustee of a unit trust, and if the latter, whether the trust was validly created. The court also had to consider whether the corporate trustee, being in liquidation, was disqualified from acting as trustee of the unit trust, and whether the liquidator was entitled to remuneration, costs, and expenses under the Corporations Act.

The court found that the property was held by the company as trustee of a unit trust, and that the trust was validly created despite variations in the unit trust deeds. The court held that the corporate trustee was disqualified from acting as trustee upon entering into liquidation, and granted the liquidator's application for directions. The court also found that the liquidator was entitled to remuneration, costs, and expenses under the Corporations Act.

The court made orders conferring on the bare trustee the powers sought under the Trustee Act and on the liquidator the powers under the Corporations Act to sell the property. The liquidator was also appointed as receiver over the property.

Orders