Introduction
1 Application has been made by Mr Damian Templeton for orders that:
(a) he be discharged and released as a receiver and manager of the property of the fourth, fifth, eighth, ninth, fourteenth, fifteenth, sixteenth, nineteenth, twenty-second to twenty-eighth and thirtieth to fifty-fourth defendants (relevant entities) and the managed investment schemes operated by the relevant entities as set out in Annexure A of the orders of the Court made on 25 February 2010, Annexure A of the orders of the Court made on 4 March 2010 and Annexure A of the orders of the Court made on 30 July 2010 (relevant schemes); and
(b) he be released as liquidator of each of the relevant entities and that each of the relevant entities be deregistered by the Australian Securities and Investment Commission (ASIC).
The application is supported by Mr Templeton's 60th affidavit in these proceedings, sworn on 29 May 2020. This is the 28th judgment delivered in these proceedings.
2 The relevant entities comprise 40 of the 52 corporate entities which were the managers and trustees of the relevant schemes in which Mark Letten, the first defendant, was involved. In 2010 and 2011, Mr Templeton and Philip Hennessy were appointed as receivers and managers of the property of the relevant schemes and as liquidators of the relevant entities. In 2015, the Court ordered that Mr Hennessy be discharged as receiver and manager and that Mr Templeton continue as sole receiver and manager. Mr Hennessy also subsequently resigned as liquidator of the relevant entities.
3 In Australian Securities and Investments Commission v Letten (No 7) [2010] FCA 1231; 190 FCR 59 (Letten (No 7)), Gordon J held that the receivers and managers were justified in distributing the surplus property of schemes on a pooled basis: Letten (No 7) at [336]. The pooling orders provide the priority order in which payments are to be made out of the assets of each of the schemes as follows:
(a) priority receivership costs (as fixed by the Court) to the receivers;
(b) any liabilities secured by the scheme asset to the relevant secured lender;
(c) trust creditor claims in respect of the relevant entities; and
(d) the balance into the common fund.
4 The method by which the distributions out of the common fund were to be calculated and made was determined by Gordon J in Australian Securities and Investments Commission v Letten (No 20) [2012] FCA 1283.
5 The pooling orders did not combine the claims of creditors other than the investors. These claims were to be dealt with in the winding up of the corporate entities and schemes out of any available scheme property before payment of the balance to the common fund, and were to be paid out of such property if the trustee of the scheme was entitled to indemnity. Mr Templeton deposed that there were, in fact, no realisations of scheme property, as by the time receivers were appointed in 2010, the property had been disposed of and no identifiable assets were held by any of the relevant entities nor was there any identifiable scheme property. As Mr Templeton has also sworn, none of the relevant entities had any liabilities secured by a scheme asset or any trust creditor claims. The persons interested in and potentially affected by the application which is now made are the investors. Procedural orders in respect of the application, which are designed to inform the investors in an efficient and cost-effective way about the application and to give them an opportunity to be heard in objection to the orders sought, are sought in the first instance. The procedure is modelled on the procedure used in previous applications concerning the conduct of the receivership and liquidations.
6 The proposed orders also seek dispensation with the requirements of rr 7.5(5) and (6) of the Federal Court (Corporations) Rules 2000 (Cth) with respect to the application for an order that Mr Templeton be released as the liquidator of the relevant entities and that ASIC deregister the companies. Those sub-rules provide as follows:
(5) The liquidator must file with, or annex to, the supporting affidavit:
(a) a statement of the financial position of the company at the date when the interlocutory process seeking release was filed; and
(b) a summary of the liquidator's receipts and payments in winding up the company.
(6) Unless the Court otherwise orders, the liquidator must serve by prepaid post, on each creditor who has proved a debt in the course of the winding up, and on each contributory, a copy of the interlocutory process accompanied by:
(a) a copy of the summary of the liquidator's receipts and payments in winding up the company; and
(b) a copy of the statement of the financial position of the company at the date when the interlocutory process seeking release was filed.
7 Mr Templeton deposed to the following matters in relation to each of the relevant entities and relevant schemes:
(a) in so far as I have been able to ascertain, the [relevant entities] and the [relevant schemes] did not have any property at the time of my appointment and no monies have been received or paid in the course of the winding up;
(b) no calls have been made on contributories in the course of the winding up;
(c) no dividends have been paid in the course of the winding up;
(d) no committee of inspection has been appointed;
(e) ASIC has not caused books in relation to the [relevant entities] to be audited under section 70-15 of the Insolvency Practice Schedule (Corporations);
(f) the Court has not ordered a report on accounts of the liquidator or receiver to be prepared;
(g) no objection to my release has been received by me from any creditor, contributory or other interested person;
(h) I have not submitted a report to ASIC under section 533 of the Corporations Act 2001 (Cth) (Act);
(i) I do not consider it necessary to report on the affairs of the [relevant entities] or the [relevant schemes] or any of [their] officers;
(j) no property was disclaimed in the course of the winding up;
(k) no remuneration was paid or payable to me directly relating to the work performed by me, my Partners and staff relating to each of the individual Relevant Entities and the Relevant Schemes. Rather, such remuneration was claimed from the Common Fund by the Receiver in relation to the "Miscellaneous Work" work performed for each of the Relevant Entities, as first described in paragraph 22(c) of the Twentieth Affidavit of Damian John Templeton dated 30 November 2010;
(l) there are no costs, charges or expenses payable by me if the Court grants my release other than a claim for my costs and expenses in relation to this application;
(m) to the best of my belief, there has been no act done or default made by me in the administration of the affairs of the [relevant entities] or the [relevant schemes] or otherwise in relation to my conduct as liquidator or receiver which is likely to give rise to any liability to the Company or any creditor or contributory; and
(n) I am not aware of any claim made by any person that there has been any such act or default.
8 Mr Templeton further deposed that as a consequence of those matters:
(a) there is no current statement of the financial position for any of the Relevant Entities or Relevant Schemes; and
(b) I have not prepared a summary of my receipts and payments in the winding up of each of the Relevant Entities or Relevant Schemes for the purposes of this application because I have not had any such receipts or payments directly to the Relevant Entities or Relevant Schemes. Such a summary would show 'nil' receipts and 'nil' payments.
9 I am satisfied the procedural orders should be made. Persons interested in and potentially affected by this application are the investors and the procedural orders sought are designed to inform them in an efficient and cost effective way about the application and to give any of them who wished to do so an opportunity to be heard in objection to the orders sought. The affidavit material in support of the application otherwise complies with the relevant requirements of r 7.5 of the Federal Court (Corporations) Rules 2000 (Cth) in relation to both the application under s 480 of the Corporations Act 2001 (Cth) (Corporations Act) for release as liquidator and, by analogy, the application for release as receiver under ss 601EE and 1323 of the Corporations Act: see Re Idylic Solutions Pty Ltd [2018] NSWSC 700 at [3]. Given the matters deposed to by Mr Templeton, there would be no purpose in compliance with r 7.5(5) or r 7.5(6) and to do so would cause unnecessary additional expense.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies.