New South Wales Supreme Court CITATION : Georges & McCluskey in their capacity as Liquidators of Radiata Plantations Ltd (In Liquidation) v Radiata Plantations Ltd (In Liquidation) [2009] NSWSC 994 HEARING DATE(S) : 16 September 2009 JUDGMENT DATE : 16 September 2009 JURISDICTION : Equity JUDGMENT OF : White J EX TEMPORE JUDGMENT DATE : 16 September 2009 DECISION : Refer to paras 15 and 17 of judgment. CATCHWORDS : EQUITY - trusts and trustees – distribution of net proceeds of sale by trustees where some co-owners cannot be located – consideration of applicability of Unclaimed Money Act 1995 – trustees directed to advertise and publish the names of co-owners whose whereabouts is unknown and six months thereafter to be permitted to pay unclaimed moneys either to the Public Trustee or into Court pursuant to the Trustee Act 1925 LEGISLATION CITED : Unclaimed Money Act 1995 (NSW) Trustee Act 1925 (NSW) CASES CITED : George Georges v Gregg Thomson [2008] NSWSC 248 Arrow Custodians Pty Ltd v Pine Forests of Australia Pty Ltd [2008] NSWSC 839 TEXTS CITED : J D Heydon & M J Leeming, Jacobs' Law of Trusts in Australia, 7th ed (2006) George Georges & Peter Damien McCluskey in their capacity as Liquidators of Radiata Plantations Ltd (In Liquidation) PARTIES : v Radiata Plantations Ltd (In Liquidation) FILE NUMBER(S) : SC 3521/09 COUNSEL : Plaintiffs: P Kulevski Defendant: n/a SOLICITORS : Plaintiffs: Blake Dawson Waldron Defendant: n/a IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST WHITE J Wednesday, 16 September 2009 3521/09 George Georges & Peter Damien McCluskey in their capacity as Liquidators of Radiata Plantations Ltd (In Liquidation) v Radiata Plantations Ltd (In Liquidation) JUDGMENT 1 HIS HONOUR: The first plaintiffs are the liquidators of the second plaintiff (the company). The company was incorporated to acquire land to be used as palm tree plantations. It acquired some plantations which were the subject of numerous licences to individuals, sometimes referred to as growers. It also acquired interests in other plantations in co-ownership with numerous individuals. 2 On 6 March 2008, Hammerschlag J appointed the first plaintiffs as trustees for sale of the lands in co-ownership. His Honour also gave directions to the first plaintiffs to approve their proposal for the sale of the plantations subject to licences and the distribution of the net proceeds of sale to the licensees ratably accordingly to his or her share of the value of the trees on those plantations. (George Georges v Gregg Thomson [2008] NSWSC 248). 3 All of the plantations have now been sold and the first plaintiffs, as trustees of the lands held in co-ownership, or the company, as the owner of lands subject to licences, have received in total a sum after purchase price adjustments of $3,991,302.63. 4 The first plaintiffs now seek directions that they be at liberty to distribute the net proceeds of sale of the lands held in co-ownership in accordance with each co-owner's proportionate interest in the lands. There are numerous such co-owners ranging between 190 in the case of two plantations and 500 in the case of one. 5 The first plaintiffs as liquidators also seek directions that they be at liberty to distribute the net proceeds of the sale of land subject to licences according to a valuation they have received of the trees. The interests of the licensees were the right to plant, tend, grow, cultivate, fell, harvest and sell the trees on the lands. There is no reason to doubt the valuation the liquidators have obtained and upon which they propose to act. These proceedings have been advertised. No licensee has appeared to call into question either the valuation or the proposed method of distribution. 6 The first plaintiffs as trustees and as liquidators are entitled to the directions that they seek in relation to the distribution of the net proceeds of sale in respect to the eight plantations in question. The complicating factor is that the first plaintiffs have not been successful in contacting all of the co-owners and licensees. This is so notwithstanding that the first plaintiffs have sent to each of those persons a letter to the address of those persons in the books and records of the company. They have also advertised nationally in newspapers that the proceedings are to be heard. Such advertisements had been placed in December 2007 and again in July 2009. Notwithstanding these endeavours, there remain some licensees and co-owners of whose whereabouts the first plaintiffs are unaware. 7 All the creditors of the company who have submitted a proof of debt have had their debts paid in full. There is a surplus of moneys to which the company is entitled which will be available for distribution to shareholders. 8 The first plaintiffs wish to pay out the funds and retire. They estimate their future costs and expenses if they do not retire would be in the order of $3,000 to $4,000 per annum. 9 In the originating process the first plaintiffs sought a direction that they deal with that part of the net proceeds attributable to the interests of co-owners and licensees who cannot be located in accordance with the Unclaimed Money Act 1995 (NSW). I understand those directions were sought on the basis of the directions made in Arrow Custodians Pty Ltd v Pine Forests of Australia Pty Ltd [2008] NSWSC 839. There, Bryson AJ said (at [30]): " The Trustees put forward several alternatives; payment into Court under ss 95 to 99 of the Trustee Act 1925, payment to the Public Trustee under s 47 of the Trustee Act 1925 and payment to the Chief Commissioner of State Revenue under the Unclaimed Money Act 1995. I do not regard it as appropriate that the money should be paid into Court or paid to the Public Trustee; that could only pass the Trustees' responsibilities to a new custodian, involving expense. A new custodian would not have the knowledge that the present Trustees have gathered. In my view the present Trustees should remain responsible for the moneys. They should advertise widely, on terms which I will settle if they ask, and the advertisements should contain a list of the names of the persons possibly interested. They should resolve any claims that come forward, approaching the Court for directions if any of the claims give rise to doubt or difficulty, and when four years have passed from 19 April 2006 they should proceed under the Unclaimed Money Act . Four years is a short period for a time bar for an interest in real property, but there were many years of inactivity before the Trustees were appointed, and there will still be some room for claims. Order 8 gives effect to this. " 10 It is, with respect, not clear on what basis Bryson AJ held that the trustees in that case could deal with unclaimed moneys when four years had passed from the time the orders were made for the appointment of the trustees as trustees for sale. Section 7 of the Unclaimed Money Act provides that money is "unclaimed money" if it is money of a kind referred to in s 8 that an enterprise holds in an account which has not been operated on for at least six years, or such shorter period as prescribed by either the regulations or as may be approved by the Chief Commissioner of State Revenue. 11 Mr Kulevski of counsel who appears for the plaintiffs submits that the first plaintiffs should be at liberty to deal with any unclaimed proceeds after further advertisement pursuant to s 47 or s 95 of the Trustee Act 1925 (NSW). He rightly submits that in the present case no onerous obligation would be placed on a new custodian of the moneys because the first plaintiffs have identified the proportion of the moneys to which each co-owner and licensee is entitled. 12 It is clear that the first plaintiffs hold the moneys for the individual co-owners and licensees on trust for those persons. He submits that there is no reason that the first plaintiffs as trustees should not be entitled to avail themselves of s 47 of the Trustee Act, which provides that where any money is held on trust for a person who cannot be found, the trustee may pay the money to the Public Trustee, and on such payment, furnish the Public Trustee with a copy of the trust instrument, and furnish the Public Trustee with such information as to the identity of the person for whom the money is held in trust as the Public Trustee might require. 13 He submits that the first plaintiffs should not be required to remain in office and incur expenses for a considerable period of time when they are prima facie entitled to avail themselves of that provision. Likewise he submits that the trustees are entitled to pay the trust fund (which consists only of money) into Court. In J D Heydon & M J Leeming, Jacobs' Law of Trusts in Australia, 7th ed (2006) at [2075], the learned authors say this was anciently a trustee's only remedy and is available when the trust fund consists of money and is specifically preserved by s 95 of the Trustee Act. Section 95(1) provides that where trustees have in their hands or under their control money or securities belonging to a trust, they may pay the same into Court. 14 The first plaintiffs received the net proceeds of sale on 14 November 2008. In my view they should not be required to wait until 14 November 2014 before dealing with moneys under the Unclaimed Money Act. 15 For these reasons I make the following orders. 1. Make orders in accordance with paragraphs 1 and 2 of the originating process. 2. Order that the first plaintiffs advertise and publish nationally the names of the individuals whom they have identified as having an interest as co-owner or as licensee of the lands the subject of the originating process, and whose whereabouts are presently unknown to the first plaintiffs. 3. Order that the plaintiffs hold the net proceeds attributable to the interests of licensees or co-owners whom the first plaintiffs cannot locate for a further six months after publication of such advertisements. 4. Order that at the expiration of the said six months period, the first plaintiffs may pay any unclaimed proceeds and interest earned thereon to the Public Trustee pursuant to s 47 of the Trustee Act , or into Court pursuant to s 95 of the Trustee Act . 16 An application was made that the expenses of advertising for the whereabouts of the co-owners and licensees whose whereabouts are presently unknown should be borne out of the balance of the net proceeds held for such persons. However, it appears to me that as it was part of the company's business to acquire the benefit of the licence agreements in respect of the plantations, the cost of identifying the licensees to whom moneys are payable should fairly be treated as a business expense of the company. It is not suggested that the expenses of advertising should be apportioned differently between co-owners and licensees. Accordingly I decline to make such an order in relation to the expenses of advertising. 17 Exhibit GG-1 may be returned. ****** 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.