JAMES GERARD THACKRAY, COLIN MCINTOSH NICOL AND ANTHONY GREGORY MCGRATH IN THEIR PERSONAL CAPACITY AND AS RECEIVERS AND MANAGERS OF GREAT SOUTHERN MANAGERS AUSTRALIA LIMITED (ACN 083 825 405) (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION)

Plaintiffs

GUNNS PLANTATIONS LIMITED

(ACN 091 232 209) & ORS

(according to the attached Schedule)

Defendants

---

JUDGE:	DAVIES J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 and 26 July 2011
DATE OF JUDGMENT:	11 August 2011
CASE MAY BE CITED AS:	Thackray & Ors v Gunns Plantations Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2011] VSC 380

---

CORPORATIONS – Receiver claims entitlement to indemnity secured by equitable lien for costs and expenses of receivership of the Responsible Entity of Managed Investment Schemes – “Salvage” principle in Re Universal Distributing applied – Equitable allowance principle in Re Berkeley Applegate applied – Process for determining the reasonableness of the amount claimed – Venetian Nominees applied – Standard of proof required to a prima facie level – Provision for objection process – Prima facie claim for an indemnity with respect to the remuneration, costs and expenses referrable to each scheme established

EVIDENCE – Whether evidence can be adduced by way of summaries – s 50 of the Evidence Act 2008 (Vic)

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J. G. Santamaria QC with Dr O. Bigos and Mr M. A. J. McKillop	Minter Ellison
For the First Defendant	Mr P. Fox	Freehills
For the Second and Third Defendants	No appearance by or on behalf of the Second and Third Defendants
For Mr Burns	Mr N. P. De Young	Clarendon Lawyers

TABLE OF CONTENTS

A. INTRODUCTION......................................................................................................................... 1

B. BACKGROUND FACTS............................................................................................................. 3

Appointment....................................................................................................................................... 3

Size and nature of the receivership................................................................................................ 4

Steps required to care for, preserve and realise assets............................................................... 6

Funding of receivers.......................................................................................................................... 9

Forfeiture of external leases........................................................................................................... 10

Relevant orders from related proceedings.................................................................................. 10

This proceeding................................................................................................................................ 13

C. LEGAL PRINCIPLES................................................................................................................. 13

Salvage Principles - Re Universal Distributing.......................................................................... 14

Inherent Jurisdiction of the Court Requiring an Allowance................................................... 21

D. STANDARD OF PROOF.......................................................................................................... 25

The Court must be satisfied there is a Prima Facie entitlement............................................. 25

Assessment principles..................................................................................................................... 27

E. SECTION 50 OF THE EVIDENCE ACT................................................................................. 29

F. THE EVIDENCE.......................................................................................................................... 32

Preliminary issue - Capturing Operational Costs..................................................................... 35

Operational Costs............................................................................................................................. 36

Category 4: External Head Leases - Head Lease Expenses............................................................ 36

Categories 5 and 6: Insurance Costs.............................................................................................. 37

Category 7: GSL forestry staff expenses........................................................................................ 40

Category 8: Other Administrative Staff Expenses........................................................................ 42

Category 9: Maintenance Expenses – Contractors........................................................................ 43

Category 10: Regional Office Leasing Costs.................................................................................. 44

Category 11: Motor vehicles, plant and machinery...................................................................... 45

Category 12: PriceWaterhouseCoopers (PWC) Modelling........................................................... 46

Category 13: URS Report.............................................................................................................. 47

Category 14: Growers Meetings.................................................................................................... 48

Category 15: Other Costs...............................................................................................................…

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.

Continue reading Thackray v Gunns Plantations Ltd

Details

AGLC: Thackray v Gunns Plantations Ltd [2011] VSC 380
Case: [2011] VSC 380
Decision Date: 11 August 2011

CaseChat Overview and Summary

The matter before the court was a claim brought by Thackray against Gunns Plantations Ltd, seeking entitlement to an indemnity secured by an equitable lien for costs and expenses incurred during the receivership of the Responsible Entity of Managed Investment Schemes. The case was heard in the Supreme Court of Victoria. The primary issue for determination was whether the claimant could establish a prima facie case for an indemnity in respect of the remuneration, costs, and expenses attributable to each scheme, applying the principle of the equitable allowance in Re Berkeley Applegate and the salvage principle in Re Universal Distributing. The court also had to consider the process for determining the reasonableness of the amount claimed and the standard of proof required, as well as the provision for an objection process and the admissibility of evidence presented by way of summaries.

The court found that the claimant must first establish a prima facie case by demonstrating that the costs and expenses claimed were reasonably incurred and directly attributable to the management of the investment schemes. Applying the principle of the equitable allowance, the court held that the claimant was entitled to an indemnity for costs and expenses that were necessary and reasonable in the circumstances. The court also held that the principle of salvage applied, allowing the receiver to claim an indemnity for expenses incurred in preserving the assets of the investment schemes. Regarding the process for determining the reasonableness of the amount claimed, the court adopted the approach outlined in Venetian Nominees, which involved a two-step process of establishing a prima facie case and then determining the reasonableness of the amount claimed. The court further held that the standard of proof required for establishing a prima facie case was the civil standard of balance of probabilities. Finally, the court found that evidence could be adduced by way of summaries, in accordance with section 50 of the Evidence Act 2008 (Vic), and that an objection process was available to interested parties.

In conclusion, the court found in favour of the claimant and established a prima facie case for an indemnity with respect to the remuneration, costs, and expenses referrable to each scheme. The court outlined the process for determining the reasonableness of the amount claimed and held that the standard of proof required was the civil standard of balance of probabilities. The court also found that evidence could be adduced by way of summaries and that an objection process was available. The final orders of the court are not included in the text provided.

Orders