New South Wales Supreme Court CITATION : Newmetal Mines Limited; ex parte Laurence Brian Hunter and Peter Bernard Allen [1999] NSWSC 882 CURRENT JURISDICTION : Equity FILE NUMBER(S) : 2983/83 HEARING DATE(S) : 30/08/99 JUDGMENT DATE : 30 August 1999 PARTIES : In the matter of Newmetal Mines Limited and the Companies (NSW) Code Laurence Brian Hunter and Peter Bernard Allen (Applicants) JUDGMENT OF : Santow J COUNSEL : J Priestley (Applicants) ex parte SOLICITORS : Kemp Strang (Applicants) CATCHWORDS : CORPORATIONS LAW - Scheme of Arrangement - Judicial advice ACTS CITED : Trustee Act 1925 (NSW), s63 DECISION : Judicial advice given. REVISED — 31 August, 1999 IN THE SUPREME COURT OF NEW SOUTH WALES IN EQUITY SANTOW J No. 2983/83 In the matter of Newmetal Mines Limited and the Companies (NSW) Code Laurence Brian Hunter and Peter Bernard Allen Applicants JUDGMENT — ex tempore 30 August 1999 1 What follows are my reasons for making the orders by way of judicial advice under s63 of the Trustee Act 1925 (NSW). 2 Attached to this judgment is a chronology of the relevant events. Essentially what has happened is that back in October 1984, a scheme of arrangement contemplated that certain monies be paid to the relevant overseas shareholder beneficiaries of the scheme and indeed that is what so far as possible occurred. However, a number of such beneficiaries have failed to present their cheques and some cannot be located. The amounts individually are small. But in overall terms, out of approximately $300,000 realised for overseas shareholders from sale of their shares, $106,000 only was able to be distributed of their entitlement for the reasons mentioned, leaving approximately $190,000 still in the relevant trust fund held by the two applicants as trustee. 3 The trustees of these funds are accountants who wish to be indemnified for their costs and are entitled to be. This is in circumstances where the company is now insolvent. Under the terms of clause 2.7 of the scheme, the company bears the cost of meeting the trustee's costs. The Applicant's submissions note that there is however no provision under clause 2.7 precluding the trustee's right of indemnity at general law from the relevant trust fund. In all the circumstances, including that the trustees forego any profit on their costs, calculated at a 10 per cent margin, and the long passage of time (nearly 15 years) in which the residue of the fund has been left unclaimed, and the fact that about $140,000 will still remain, I am satisfied that the monies standing in the relevant account may be applied as to $48,150.90 to pay all outstanding costs and a further amount be paid for the costs of the present application. 4 The detailed submissions are in the file and are initialled by me for identification and I consider they correctly state the position to the extent necessary to underpin the basis of the orders I have made. Applicant's Chronology Date Event 29.10.84 Scheme of Arrangement approved 19.12.84 Newmetal changes name to Eastcourt 29.03.85 Notice of distribution and report to minority shareholders showing realisations of $168,609.18 placed in IBD Apr 1985 Notice of distribution and cheque sent to each minority member Nov 1985 Public Trustee does not accept balance of the fund 10.06.86 Directions given that fund be paid into an IBD and at the end of 6 years, into Court if PT will not accept it 01.10.90 Up till this time all professional fees paid by the company; no further such payments made by company 15.06.94 Memo of fees for period 01.10.90-15.06.94 for $12,048.20 29.01.99 Public Trustee advises it will accept the fund 17.02.99 Company advises that it is insolvent ********** Last Modified: 09/01/1999 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.