Re Moda Projects (Fit Out Construction) Pty Ltd (in liq) - [2025] VSC 300

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2025 02198

IN THE MATTER OF AN APPLICATION BY GIDEON ISAAC RATHNER IN HIS CAPACITY AS LIQUIDATOR OF MODA PROJECTS (FIT OUT CONSTRUCTION) PTY LTD (IN LIQUIDATION) (ACN 618 271 015)

BETWEEN:

GIDEON ISAAC RATHNER IN HIS CAPACITY AS LIQUIDATOR OF MODA PROJECTS (FIT OUT CONSTRUCTION) PTY LTD (in liquidation) (ACN 618 271 015)

Plaintiff

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JUDGE:	DELANY J
WHERE HELD:	Melbourne
DATE OF HEARING:	23 May 2025
DATE OF RULING:	23 May 2025 (ex tempore, revised 29 May 2025)
CASE MAY BE CITED AS:	Re Moda Projects (Fit Out Construction) Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2025] VSC 300

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CORPORATIONS – Liquidation of trustee company – Company operated exclusively in capacity as trustee – Creditors on notice of remuneration to be sought by the liquidator – No objection or opposition to remuneration – Remuneration approved – Liquidator appointed receiver to enable recovery of debt alleged to be owed to the trust notwithstanding the very modest potential dividend to creditors from any such recovery after the payment of remuneration – Re Cremin (in his capacity as liquidator of Brimson Pty Ltd) (in liq) [2019] FCA 1023; Re Amerind Pty Ltd (receivers and managers apptd) (in liq) [2017] VSC 127; (2017) 320 FLR 118, applied.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	R N Malone	KKI Lawyers

HIS HONOUR:

The application

On 23 July 2024 Gideon Isaac Rathner (‘Liquidator’) was appointed liquidator of Moda Projects (Fit Out Construction) Pty Ltd ACN 618 271 015 (in liquidation) (‘the Company’) pursuant to a resolution of the Company’s members at a general meeting under s 491 of the Corporations Act 2001 (Cth) (‘Act’).

From 29 March 2017 to 23 July 2024, the Company was the corporate trustee for a trust called the Shabley Trust (‘Trust’) established by a Trust Deed (‘Deed’) executed on that date.

The Liquidator brings this application under s 63(1) of the Trustee Act 1958 (Vic) (‘Trustee Act’) and r 39.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) seeking orders appointing him as receiver over the Trust (‘application’).

In support of the application the Liquidator relies on:

(a) the Originating Process dated 24 April 2025;

(b) the first affidavit of the Liquidator affirmed 28 April 2025;

(c) the second affidavit of the Liquidator affirmed 21 May 2025;

(d) affidavits of Madelane Panna affirmed 20 May 2025 and 27 May 2025, deposing to service on the beneficiaries;

(e) the third affidavit of the Liquidator affirmed 27 May 2025; and

(f) submissions dated 21 May 2025.

The solicitors acting for the specified beneficiaries have been notified of the application and of the hearing.

The principles to be applied on such an application and also the evidence required to substantiate the relief sought by the liquidator are well-established.

The criteria for appointment of the liquidator as receiver

In Re Cremin (in his capacity as liquidator of Brimson…

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: [2025] VSC 300
Decision Date: 23 May 2025 (ex tempore, revised 29 May 2025)

CaseChat Overview and Summary

The case of Re Moda Projects (Fit Out Construction) Pty Ltd (in liq) involved the liquidation of a company that operated solely as a trustee. The dispute centered on the remuneration sought by the liquidator, who was also appointed as a receiver to recover a debt allegedly owed to the trust. Creditors were notified of the remuneration sought and did not object or oppose the liquidator's application. The legal issues before the court were whether the remuneration was reasonable and whether the liquidator's appointment as a receiver was justified, given the modest potential dividend to creditors from any recovery after the payment of remuneration.

The court considered the principles established in Re Cremin (in his capacity as liquidator of Brimson Pty Ltd) (in liq) [2019] FCA 1023 and Re Amerind Pty Ltd (receivers and managers apptd) (in liq) [2017] VSC 127; (2017) 320 FLR 118, which provide guidance on the remuneration of liquidators and the circumstances under which a liquidator may be appointed as a receiver. The court found that the remuneration sought was reasonable and that the appointment of the liquidator as a receiver was justified, as it would enable the recovery of a debt that was significant to the trust, despite the modest potential dividend to creditors.

The court approved the liquidator's remuneration and his appointment as a receiver, recognising the importance of the trust's interests and the need to preserve the value of the trust assets. The liquidator's actions were deemed to be in the best interests of the creditors, given the potential recovery of a significant debt to the trust. The court's decision underscores the importance of balancing the interests of the trust and its creditors when determining the remuneration of a liquidator and the appropriateness of appointing a receiver.

The final orders of the court included the approval of the liquidator's remuneration and the appointment of the liquidator as a receiver to recover the alleged debt to the trust.

Orders