Seafarms Group Limited v McKinnon - [2025] QSC 45

SUPREME COURT OF QUEENSLAND

CITATION:

Seafarms Group Limited v McKinnon [2025] QSC 45

PARTIES:

SEAFARMS GROUP LIMITED ACN 009 317 846

(Applicant)

v

SHAUN MCKINNON

(First respondent)

ANDREW FIELDING

(Second respondent)

PROJECT SEA DRAGON PTY LTD (IN LIQUIDATION) ACN 604 936 192

(Third respondent)

ROBERT WILLIAM HUTSON AND DAVID MARTIN JOHNSTONE AS LIQUIDATORS OF PROJECT SEA DRAGON PTY LTD (IN LIQUIDATION) ACN 604 936 192

(Fourth respondent)

CANSTRUCT PTY LTD ACN 008 869 467

(Fifth respondent)

FILE NO:

BS 13604 of 2024

DIVISION:

Trial Division

PROCEEDING:

Originating application, interlocutory applications

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

21 March 2025

DELIVERED AT:

Supreme Court at Brisbane

HEARING DATES:

4 & 5 March 2025

JUDGE:

Hindman J

ORDER:

Parties are to bring in a form of order reflecting the Court’s reasons. The Court will hear from the parties in respect of costs.

CATCHWORDS:

CORPORATIONS – VOLUNTARY ADMINISTRATION – DEEDS OF COMPANY ARRANGEMENT – GENERALLY – where the company was placed into voluntary administration – where the deed of company arrangement (DOCA) was terminated by court order – where the applicant, the parent company, seeks to recover from the administrators monies pursuant to the DOCA – where the applicant submits in the alternative that the right to recovery was an accrued right which remained enforceable post-termination of the DOCA – where the applicant submits in the further alternative that, upon proper construction of the DOCA, the company or administrators held funds in trust for the applicant – whether the clause of the DOCA relied upon by the applicants survived termination of the DOCA – whether the DOCA created a trust in favour of the applicant

CORPORATIONS – VOLUNTARY ADMINISTRATION – ADMINISTRATOR – FUNCTIONS, POWERS, RIGHTS AND LIABILITIES GENERALLY – where the administrators seek a declaration that, insofar as they are liable to make any payment to the applicant, they are entitled to be indemnified from the fund held by them – where the administrators alternatively seek a declaration that they are not liable to repay any amounts to the applicant – whether the administrators are liable to pay any amounts to the applicant – whether any amounts owed could be indemnified

CORPORATIONS – VOLUNTARY ADMINISTRATION – ADMINISTRATOR – REMUNERATION – where the administrators seek remuneration and a declaration that, in respect of certain expenses and disbursements, they are entitled to be indemnified from the fund held by them – where the amount of remuneration and expenses to be paid out of the fund is generally agreed by all interested parties – whether remuneration and expenses may be paid out of the fund held by the administrators

CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – STAY OF PROCEEDINGS UNDER ORDER – GENERALLY – where the liquidators seek leave to be appointed as voluntary administrators and for the winding up to be stayed in order to permit a second proposed DOCA to be considered and put to creditors – whether the liquidators should be appointed as voluntary administrators –…

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] QSC 45
Decision Date: 21 March 2025

CaseChat Overview and Summary

The matter of Seafarms Group Limited v McKinnon was before the Court, where Seafarms, the parent company, sought to recover funds from the administrators following the termination of a deed of company arrangement (DOCA). Seafarms argued that the right to recover the funds was an accrued right that remained enforceable after the termination of the DOCA. Alternatively, Seafarms submitted that the DOCA created a trust in its favour. The administrators, on the other hand, sought a declaration that any liability to make payments to Seafarms could be indemnified from the funds held by them. They also sought remuneration and indemnification for certain expenses and disbursements. Additionally, the liquidators sought leave to be appointed as voluntary administrators and for the winding up to be stayed, to allow for consideration of a second proposed DOCA.

The Court had to determine whether the clause in the DOCA relied upon by Seafarms survived the termination of the DOCA, and whether the DOCA created a trust in favour of Seafarms. Furthermore, the Court had to decide whether the administrators were liable to make any payments to Seafarms, and if any amounts owed could be indemnified. The Court also needed to consider whether the liquidators should be appointed as voluntary administrators and whether the company should go back into voluntary administration. Finally, the Court had to decide whether remuneration and expenses could be paid out of the fund held by the administrators.

The Court found that the clause in the DOCA relied upon by Seafarms did not survive the termination of the DOCA, and that the DOCA did not create a trust in favour of Seafarms. The Court held that the administrators were not liable to make any payments to Seafarms, and that any amounts owed could not be indemnified. The Court refused to appoint the liquidators as voluntary administrators and denied the application to stay the winding up. The Court also found that remuneration and expenses could be paid out of the fund held by the administrators, subject to agreement by the parties.

The Court ordered that the parties bring in a form of order reflecting the Court’s reasons and that the Court would hear from the parties in respect of costs.

Orders

Orders of the court

Parties are to bring in a form of order reflecting the Court’s reasons. The Court will hear from the parties in respect of costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Seafarms Group Limited v McKinnon [2025] QSC 45
PARTIES:	SEAFARMS GROUP LIMITED ACN 009 317 846 (Applicant) v SHAUN MCKINNON (First respondent) ANDREW FIELDING (Second respondent) PROJECT SEA DRAGON PTY LTD (IN LIQUIDATION) ACN 604 936 192 (Third respondent) ROBERT WILLIAM HUTSON AND DAVID MARTIN JOHNSTONE AS LIQUIDATORS OF PROJECT SEA DRAGON PTY LTD (IN LIQUIDATION) ACN 604 936 192 (Fourth respondent) CANSTRUCT PTY LTD ACN 008 869 467 (Fifth respondent)
FILE NO:	BS 13604 of 2024
DIVISION:	Trial Division
PROCEEDING:	Originating application, interlocutory applications
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	21 March 2025
DELIVERED AT:	Supreme Court at Brisbane
HEARING DATES:	4 & 5 March 2025
JUDGE:	Hindman J
ORDER:	Parties are to bring in a form of order reflecting the Court’s reasons. The Court will hear from the parties in respect of costs.
CATCHWORDS:	CORPORATIONS – VOLUNTARY ADMINISTRATION – DEEDS OF COMPANY ARRANGEMENT – GENERALLY – where the company was placed into voluntary administration – where the deed of company arrangement (DOCA) was terminated by court order – where the applicant, the parent company, seeks to recover from the administrators monies pursuant to the DOCA – where the applicant submits in the alternative that the right to recovery was an accrued right which remained enforceable post-termination of the DOCA – where the applicant submits in the further alternative that, upon proper construction of the DOCA, the company or administrators held funds in trust for the applicant – whether the clause of the DOCA relied upon by the applicants survived termination of the DOCA – whether the DOCA created a trust in favour of the applicant CORPORATIONS – VOLUNTARY ADMINISTRATION – ADMINISTRATOR – FUNCTIONS, POWERS, RIGHTS AND LIABILITIES GENERALLY – where the administrators seek a declaration that, insofar as they are liable to make any payment to the applicant, they are entitled to be indemnified from the fund held by them – where the administrators alternatively seek a declaration that they are not liable to repay any amounts to the applicant – whether the administrators are liable to pay any amounts to the applicant – whether any amounts owed could be indemnified CORPORATIONS – VOLUNTARY ADMINISTRATION – ADMINISTRATOR – REMUNERATION – where the administrators seek remuneration and a declaration that, in respect of certain expenses and disbursements, they are entitled to be indemnified from the fund held by them – where the amount of remuneration and expenses to be paid out of the fund is generally agreed by all interested parties – whether remuneration and expenses may be paid out of the fund held by the administrators CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – STAY OF PROCEEDINGS UNDER ORDER – GENERALLY – where the liquidators seek leave to be appointed as voluntary administrators and for the winding up to be stayed in order to permit a second proposed DOCA to be considered and put to creditors – whether the liquidators should be appointed as voluntary administrators –…