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Re Waratah Group Pty Ltd (in liq)

Re Waratah Group Pty Ltd (in liq)

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Case Copied 20 August 2020 28 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2020 02442

IN THE MATTER OF WARATAH GROUP PTY LTD (ACN 607 483 803) (IN LIQUIDATION)
BETWEEN
SHANE LESLIE DEANE AND NICHOLAS GIASOUMI IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF WARATAH GROUP PTY LTD (ACN 607 483 803) (IN LIQUIDATION)	First Plaintiffs
and
WARATAH GROUP PTY LTD (ACN 607 483 803) (IN LIQUIDATION) AS TRUSTEE FOR THE DOCKLANDS ABILITY GROUP UNIT TRUST	Second Plaintiff

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JUDGE:	DELANY J
WHERE HELD:	Melbourne
DATE OF HEARING:	7 August 2020
DATE OF JUDGMENT:	20 August 2020
CASE MAY BE CITED AS:	Re Waratah Group Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2020] VSC 523

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CORPORATIONS – Liquidation of trustee company – Trustee right of indemnity – Application by liquidators for power of sale over trust assets, alternatively appointment as receivers and managers – Where company bare trustee and power of appointment of new trustee – Whether former trustee right of possession of trust assets against new trustee – Just and convenient to appoint liquidators receivers and managers – Application allowed – Pitard Consortium Pty Ltd atf the Pitard Trust v Les Denny Pty Ltd [2019] VSC 614, Re Parkway One Pty Ltd (No 2) [2020] NSWSC 191 considered – Trustee Act 1958 (Vic) s 63 – Supreme Court Act 1986 (Vic) s 37.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Ms C Rome-Sievers	Gadens

HIS HONOUR:

Background

By originating process dated 4 June 2020, the first plaintiffs as liquidators (‘the Liquidators’) of the second plaintiff (‘the Company’) seek declarations, orders and directions to enable them to preserve, realise and distribute the assets of the Docklands Ability Group Unit Trust (‘the Trust’) and to ensure that payment of their remuneration and expenses is available from the Trust property.

The Company was incorporated on 5 August 2015. The Docklands Ability Unit Trust was established by an undated Trust Deed, but stamped 5 August 2015, the same day the Trust was registered for GST.

As discussed below, the evidence in support of the application establishes that the Company only ever acted as trustee of the Trust. On 6 November 2019, the Liquidators were appointed as administrators of the Company. On 11 December 2019, they were appointed joint and several liquidators of the Company.

Clause 6.4(a)(2) of the Trust Deed provides that ‘a Trustee will ipso facto cease to be a Trustee if, being a Corporation, such Trustee will go into liquidation …’.

Clause 6.4(d)(2) provides that the Unit Holders may decide at any time to appoint any person or corporation to be a substitute trustee, including in the case of a trustee ceasing. There is no evidence to suggest either that a new trustee has been or may be appointed. If such an appointment were to be made, the trust deed does not require that notice be given to the person who ceased to be the trustee.

In order to enable a company in liquidation that…

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 523
Decision Date: 20 August 2020

CaseChat Overview and Summary

The parties involved in this case were the liquidators of Waratah Group Pty Ltd, which was a bare trustee company, and the respondents who were the beneficiaries of the trust. The dispute centred around the liquidators' application for a power of sale over the trust assets, or alternatively, their appointment as receivers and managers. The case was heard in the Supreme Court of Victoria.

The primary legal issue that the court had to address was whether the former trustee, Waratah Group Pty Ltd, had a right of possession over the trust assets against the new trustee, who was to be appointed. The court also needed to determine if it was just and convenient to appoint the liquidators as receivers and managers. This issue was explored by referencing previous cases, such as Pitard Consortium Pty Ltd atf the Pitard Trust v Les Denny Pty Ltd [2019] VSC 614, and Re Parkway One Pty Ltd (No 2) [2020] NSWSC 191.

In reaching its decision, the court examined the relevant provisions of the Trustee Act 1958 (Vic) s 63 and the Supreme Court Act 1986 (Vic) s 37. The court found that it was just and convenient to appoint the liquidators as receivers and managers, and that the former trustee did not have a right of possession over the trust assets against the new trustee. Consequently, the application by the liquidators was allowed.

Orders