In the matter of PrimeSpace Property Investment Limited (in liq) [2016] NSWSC 1450

Supreme Court New South Wales

Medium Neutral Citation: In the matter of PrimeSpace Property Investment Limited (in liq) [2016] NSWSC 1450 Hearing dates: 30 September 2016 Decision date: 13 October 2016 Jurisdiction: Equity - Corporations List Before: Black J Decision: Pursuant to s 511 of the Corporations Act 2001 (Cth), the Court directs that the liquidators of the Third Plaintiff would be justified in distributing funds held by the Third Plaintiff in its capacity as trustee of the PrimeSpace Northbourne Trust ("PSNT") to pay the Third Plaintiff's reasonable costs and expenses in: the liquidators investigating claims made by Canberra Finance Group Pty Ltd ("CFG") against the Third Plaintiff in its capacity as trustee of PSNT in proceedings 2016/120251 ("CFG Proceeding"); the liquidators and the Third Plaintiff taking any steps in the CFG Proceeding as are necessary pending carrying out of the investigations; and the liquidators and the Third Plaintiff taking such other steps or action incidental to the foregoing. Parties to be heard as to costs following determination of remaining issues in the application. Catchwords: CORPORATIONS — Winding up — Application for directions under s 511 of the Corporations Act 2001 (Cth) — where proceedings were brought against trustee in its capacity as trustee of a particular trust on the basis of certain transactions purported to be binding on it – where liquidators of trustee sought directions that they be justified in distributing funds of the relevant trust to pay the trustee's reasonable costs and expenses in the liquidators investigating claims made against the trustee – where proposed investigations would allow liquidators to better assess likelihood of a successful defence of the proceedings and included conducting public examinations and obtaining legal advice on whether proceedings be defended or cross-claim brought – where trust creditor that was joined as defendant to the application opposed application on various grounds – whether the subject of the directions sought involves issue of propriety and reasonableness – whether directions sought ought be made. Legislation Cited: - Corporations Act 2001 (Cth), ss 511, Pt 5.9 - Evidence Act 1995 (NSW), s 136 - Supreme Court (Corporations) Rules 1999 (NSW), r 2.13 Cases Cited: - Re Crest Realty Pty Ltd (in liq) (No 2) [1977] 1 NSWLR 664 at 672; (1977) 2 ACLR 502 - Re Independent Contractor Services (Aust) Pty Ltd (in liq) (No 2) [2016] NSWSC 106; (2016) 305 FLR 222 - Re MF Global Australia Ltd (in liq) [2012] NSWSC 994; (2012) 267 FLR 27 - Re PrimeSpace Property Investment Limited (in liq) [2016] NSWSC 1113 - Re RiverCity Motorway Pty Ltd [2014] FCA 1008; (2014) 102 ACSR 185 - Re Ansett Australia Ltd (No 3) [2002] FCA 90; (2002) 115 FCR 409 - Wells v Wily [2004] NSWSC 607; (2004) 50 ACSR 103 Category: Procedural and other rulings Parties: Shaun Robert Fraser (First Plaintiff) Anthony Gregory McGrath (Second Plaintiff) Primespace Property Investment Limited (in liquidation) (Third Plaintiff) IQIT Nominees Pty Ltd as trustee for the IQ Investment Trust (Defendant) Representation: Counsel: V Whittaker (Plaintiffs) D Stack (Defendant) S Golledge (Canberra Finance Group Pty Ltd – Creditor)