New South Wales Supreme Court CITATION : Crocombe v Pine Forests of Australia Pty Ltd (No 2) [2005] NSWSC 245 HEARING DATE(S) : 22/03/05 JUDGMENT DATE : 22 March 2005 Equity Division JURISDICTION : Corporations List JUDGMENT OF : Young CJ in Eq DECISION : Orders for appointment of Trustees for sale made under s 66G of Conveyancing Act, 1919. CATCHWORDS : CORPORATIONS [88]- Other interests- What orders to be made where scheme involves co-owners or co-mortgagees of undivided shares in land. CASES CITED : Burton v Arcus (2004) 51 ACSR 683 John Gordon Crocombe (P1) Andrea Judith Crocombe (P2) Pine Forests of Australia Pty Limited (D1) PARTIES : Pacific Farm Management Pty Limited (D2) Transgrowth Association (Aust) Ltd (In Liquidation) (D3) Ausforest Limited (Receivers and Managers Appointed) (In Liquidation) (D4) FILE NUMBER(S) : SC 2200/04 J T Johnson (P) COUNSEL : L G Foster SC (D1) R G McHugh (Receivers of D4) Maurice Blackburn Cashman (P) SOLICITORS : Gilbert + Tobin (D1) Blake Dawson Waldron (Receivers of D4) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST YOUNG CJ in EQ Tuesday 22 March 2005 2200/04 CROCOMBE v PINE FORESTS OF AUSTRALIA PTY LTD (N0 2) JUDGMENT 1 HIS HONOUR: I gave reasons for my decision in this matter on 8 March 2005. The matter is in the list today to consider what orders should be made following those reasons. 2 I have been presented with three different versions of suggested orders. 3 The first version, submitted by Mr J T Johnson of counsel for the plaintiffs, includes an order that the Receiver have certain powers under the Corporations Act and that the fourth defendant, Ausforest Limited, file and serve accounts. 4 This goes far beyond what I dealt with in my reasons for judgment. Indeed, I specifically rejected the idea that accounts should be taken before the land was sold the principal reason being that on the evidence before me there is no money to pay for accounts or enquiries until monies become available from the sale of the land. Mr Johnson says that the sale may take over a year and as every day goes by it will be more and more difficult to ensure that all the relevant information is still available. That may be so, and it also may be that if someone is prepared to fund the liquidator of Ausforest Limited, or alternatively, fund the trustees for sale, that enquiries can be made. 5 However, I am not prepared to order accounts at this stage, as to my mind, it would be throwing good money after bad. As Mr Johnson points out, he may take out a motion for accounts, though probably because of my reasons in the present case, he would start behind scratch. That, however, is a matter for the plaintiffs. 6 The principal reason why I have framed the orders as appointing trustees for sale as a way of carrying out the winding up of the scheme is illustrated by the result of the case of Burton v Arcus (2004) 51 ACSR 683, a decision of Johnson J of the Supreme Court of Western Australia. There are great problems, as his Honour pointed out, in winding up a scheme where there are co-mortgagees of undivided shares of property which is involved in the scheme. The solution is to appoint trustees for sale so that the encumbrances affecting undivided shares can be superseded, the land sold, money produced, which can then be distributed to investors after all proper administration expenses have been paid. 7 I have made orders in accordance with paragraph 1 of Mr McHugh's draft, for the Receiver and paragraphs 2 to 6 of the draft submitted by Mr Lindsay Foster SC on behalf of the first defendant. I have made a representative order. However, there has already been, to my mind, some misleading publicity about this case and I want to make one hundred percent clear that I am not treating the present proceedings as a class action in making a representative order for the purpose of the s 66G application which appears as order 1 in the short minutes. That merely allows the sale of the property without having to serve each investor. If this were a class action I would need to consider a procedure whereby people could opt out (or opt in) of the action. That question has not arisen in these proceedings to date. ********************* 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.