Re Parkway One Pty Limited (No 2) - [2020] NSWSC 191

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Parkway One Pty Limited (No 2) [2020] NSWSC 191
Hearing dates: 2 March 2020
Date of orders: 02 March 2020
Decision date: 02 March 2020
Jurisdiction: Equity - Corporations List
Before: Rees J
Decision:
Liquidator of trustee company appointed as the receiver and manager to all property, assets and undertakings owned by the trust.

Catchwords: CORPORATIONS — Receivers and managers —liquidator of corporate trustee seeking appointment as receiver and manager – no ipso facto clause – no requirement in trust deed to notify trustee of its removal – attempt by sole shareholder of corporate trustee to replace trust deed – attempt by sole shareholder to replace trustee – attempt by sole shareholder to circumvent court’s earlier refusal to terminate liquidation including by reason of concerns as to commercial morality – appointment of liquidator as receiver and manager of trust property
Legislation Cited: Supreme Court Act 1970 (NSW), s 67
Cases Cited: Amirbeaggi, In the matter of Simpkiss Pty Ltd (in liq) [2018] FCA 2121
Hosking, In the matter of Business Aptitude Pty Ltd (in liquidation) [2016] FCA 1438
In the matter of Parkway One Pty Ltd (in liquidation) [2019] NSWSC 1495
Jones (Liquidator) v Matrix Partners Pty Ltd, in the matter of Killarnee Civil & Concrete Contractors Pty Ltd (in liq) (2018) 124 ACSR 568; [2018] FCAFC 40
Staatz v Berry, in the matter of Wollumbin Horizons Pty Ltd (in liq) (No 3) (2019) 138 ACSR 231; [2019] FCA 924
Taylor (Liquidator) v CJ & KL Bond Super Pty Ltd, Re CJ & KL Bond Pty Ltd (in liq) [2018] FCA 1430
Category: Principal judgment
Parties: Parkway One Pty Limited (Applicant)
Zapato Pty Ltd (Interested Party)
Representation:
Counsel:
Mr H Somerville (Applicant)
Solicitors:
Bridges Lawyers (Applicant)
Interested Party (No appearance)

File Number(s): 2019/223342

ex tempore Judgment

HER HONOUR: The liquidator of Parkway One Pty Ltd (in liquidation), Andrew Scott of PricewaterhouseCoopers, seeks orders that he be appointed as receiver and manager to all property, assets and undertakings owned by the Parkway One Unit Trust, in particular, three properties located in Ashfield, Newcastle and Cooks Hill.
These properties are described in In the matter ofParkway One Pty Ltd (in liquidation) [2019] NSWSC 1495, where I refused an application by Fiona Page, sole shareholder of Parkway One, to terminate the winding up including by reason of concerns as to ‘commercial morality’: at [96]-[103]. Since that judgment was handed down on 1 November 2019, the tenants in the Ashfield and Newcastle properties have stopped paying rent. Although termination notices have been served on these tenants, neither has made any further rental payments nor vacated the properties. The secured creditor, National Australia Bank Limited – which is owed some $3.4 million – has issued various enforcement notices. It is therefore likely in the near future that the liquidator will need to issue writs of possession for the Ashfield and Newcastle properties and sell some or all of 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: [2020] NSWSC 191
Decision Date: 02 March 2020

CaseChat Overview and Summary

In the matter of Parkway One Pty Limited (No 2), the dispute involved the liquidator of a corporate trustee, Parkway One, who sought to be appointed as the receiver and manager of the trust property. The corporate trustee was the sole shareholder of a related company, and there was no ipso facto clause in the trust deed, and no requirement for the trustee to notify the trustee of its removal. The sole shareholder had attempted to replace the trust deed, the trustee, and to circumvent the court’s earlier refusal to terminate the liquidation, on the basis of concerns as to commercial morality. The court had to determine whether the liquidator could be appointed as the receiver and manager of the trust property.

The court had to decide whether the liquidator of the corporate trustee could be appointed as the receiver and manager of the trust property. The court examined the trust deed and found that there was no requirement for the trustee to notify the trustee of its removal. The court also found that the sole shareholder's attempts to replace the trust deed, the trustee, and to circumvent the court’s earlier refusal to terminate the liquidation were improper. The court held that the liquidator could be appointed as the receiver and manager of the trust property, and that the sole shareholder's actions were an attempt to circumvent the court’s earlier decision.

The court’s reasoning was that the liquidator of the corporate trustee could be appointed as the receiver and manager of the trust property, as there was no requirement for the trustee to notify the trustee of its removal. The court found that the sole shareholder's attempts to replace the trust deed, the trustee, and to circumvent the court’s earlier refusal to terminate the liquidation were improper. The court held that the liquidator's appointment was necessary to protect the interests of the creditors and beneficiaries of the trust property. The court also found that the sole shareholder's actions were an attempt to circumvent the court’s earlier decision, and that such actions were not in the best interests of the creditors and beneficiaries.

The court appointed the liquidator as the receiver and manager of the trust property. The court found that the sole shareholder's attempts to replace the trust deed, the trustee, and to circumvent the court’s earlier refusal to terminate the liquidation were improper. The court held that the liquidator's appointment was necessary to protect the interests of the creditors and beneficiaries of the trust property. The court also found that the sole shareholder's actions were an attempt to circumvent the court’s earlier decision, and that such actions were not in the best interests of the creditors and beneficiaries.

Orders