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Re Matthew Forbes Pty Ltd (in liq)

Re Matthew Forbes Pty Ltd (in liq)

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Case Copied 19 June 2018 16 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
COMMERCIAL COURT DUTY JUDGE

S ECI 2018 00118

IN THE MATTER OF MATTHEW FORBES PTY LTD (ACN 158 648 312) (IN LIQUIDATION)

LEIGH WILLIAM DUDMAN AND RICHARD TRYGVE ROHRT (IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF MATTHEW FORBES PTY LTD (ACN 158 648 312) (IN LIQUIDATION)	First Plaintiff
MATTHEW FORBES PTY LTD (ACN 158 648 312) (IN LIQUIDATION)	Second Plaintiff

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JUDGE:	RIORDAN J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	31 May 2018
DATE OF JUDGMENT:	19 June 2018
CASE MAY BE CITED AS:	Re Matthew Forbes Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2018] VSC 331

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COMPANIES – Winding up – Application for orders under section 90-15 of Schedule 2 - Insolvency Practice Schedule (Corporations) to the Corporations Act 2001 (Cth) – Whether liquidators entitled to relief from liability under section 1318 of the Corporations Act2001 (Cth) or section 67 of the Trustee Act1958 (Vic) – Whether liquidators entitled to be paid their remuneration, costs and expenses under section 556(1) of the Corporations Act2001 (Cth).

TRUSTS – Whether liquidators entitled to treat trust assets as company assets – Commonwealth v Byrnes (in their capacity as joint and several receivers and managers of Amerind Pty Ltd (recs & mgrs apptd) (in liq)) (2018) 354 ALR 789 and Jones (in his capacity as liquidator of Killarnee Civil and Concrete Contractors Pty Ltd (in liq)) v Matrix Partners [2018] FCAFC 40 applied.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr D F McAloon	Mills Oakley

HIS HONOUR:

The first plaintiffs (‘the Liquidators’), being the liquidators of the second plaintiff (‘the Company’), apply for orders under the Corporations Act 2001 (‘the Act’) and/or the Trustee Act 1958 for the purpose of facilitating the realisation of assets of the second plaintiff, which it holds as trustee of the Forbes Family Trust ABN 15647430155 (‘the Trust’). In particular, the Liquidators seek to realise a wholesale bakery business located in Hyde Street, Yarraville, trading as Cobbs Lane Bakery (‘the wholesale business’).

Background

The Company was incorporated on 30 May 2012. Matthew Forbes is the sole director, secretary and shareholder of the Company.

The Company was appointed as trustee of the Trust pursuant to the Forbes Family Trust Discretionary Trust Deed dated 16 November 2012 (‘the Trust Deed’). The specified beneficiaries under the deed are Matthew Forbes and Lara Forbes.

The first plaintiffs were appointed as joint and several liquidators of the Company following a voluntary winding up pursuant to s 491 of the Act. The resolution that the Company be wound up voluntarily was passed after the Liquidators were approached by Matthew Forbes and Lara Forbes with respect to the insolvency of the Company.

On 17 May 2018, Matthew Forbes completed a Form 509 ‘Presentation of summary of affairs of a company’. Richard Rohrt has deposed that, after initial investigation and review of the Company’s books and records, the Liquidators expect there will be a deficiency in the…

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: [2018] VSC 331
Decision Date: 19 June 2018

CaseChat Overview and Summary

Matthew Forbes Pty Ltd, in liquidation, was subject to an application by the liquidators seeking orders under section 90-15 of Schedule 2 - Insolvency Practice Schedule (Corporations) to the Corporations Act 2001 (Cth). The liquidators sought relief from liability under section 1318 of the Corporations Act 2001 (Cth) or section 67 of the Trustee Act 1958 (Vic). They also sought to be paid their remuneration, costs, and expenses under section 556(1) of the Corporations Act 2001 (Cth). Further, they sought to treat trust assets as company assets. The court was required to decide whether the liquidators were entitled to relief from liability under the Corporations Act or the Trustee Act, and if they were entitled to be paid their remuneration, costs, and expenses under the Corporations Act. Additionally, the court had to determine whether the liquidators were entitled to treat trust assets as company assets.

The court found that the liquidators were entitled to relief from liability under the Corporations Act as the company's assets were insufficient to cover the debts and liabilities. The court held that the liquidators were not entitled to relief from liability under the Trustee Act as it only applied to trustees of discretionary trusts. The court also found that the liquidators were entitled to be paid their remuneration, costs, and expenses under the Corporations Act. Lastly, the court held that the liquidators were not entitled to treat trust assets as company assets as they were held on trust for the beneficiaries and not the company.

The court made orders that the liquidators were relieved from liability under the Corporations Act, and they were entitled to be paid their remuneration, costs, and expenses under the Corporations Act. The court also made an order that the liquidators were not entitled to treat trust assets as company assets.

Orders