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[2003] FCA 1055
plaintiff. The Court ordered that the applicant is entitled to bring proceeding No 404 of 2003 in the Hobart Registry of the Supreme Court of Tasmania in the name 'Barry Kenneth Hamilton as Liquidator of the...
1 cited instrument linked from this judgment.
The Federal Court held that a liquidator appointed to wind up an unregistered managed investment scheme may commence legal proceedings in his own name styled 'X as Liquidator of [the scheme] (in liquidation)' to recover losses for investors. A managed investment scheme is not a legal person and nominated mortgagees who are partners in the defendant firm could not be plaintiffs; accordingly the liquidator is the appropriate party to sue so that recoveries can be pooled for distribution to investors (paras 8, 10, 12).
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1,797 words · generated 19/07/2026
The Federal Court considered an application by the liquidator of an unregistered managed investment scheme (the Piggott Wood & Baker Run-out Mortgage Business) for directions about the proper title in which to bring proceedings against a firm of solicitors that operated the scheme. Sundberg J had earlier ordered the Scheme wound up under s 601EE of the Corporations Act 2001 (Cth) and appointed Mr Barry Kenneth Hamilton (the Liquidator) jointly and severally with Mr Woods (para 1). The liquidator subsequently filed writ No 404 of 2003 in the Supreme Court of Tasmania claiming, against the firm Piggott Wood & Baker, damages and other relief in a range of causes of action arising from the firm’s conduct of the contributory mortgage scheme (para 6).
Because the Scheme was not a legal entity, and because the registered mortgagees named on the mortgages (Messrs Kench and Foster) were partners in the defendant firm and thus could not properly be plaintiffs in proceedings alleging the partners’ liability, the liquidator sought directions under s 479(3) as to whether he could bring the action in his own name styled "Barry Kenneth Hamilton as Liquidator of the Piggott Wood & Baker Run-out Mortgage Business (in liquidation)" (paras 2, 4–6, 10–11). The application was heard ex parte and the Court ordered that the liquidator is entitled to bring the Supreme Court proceeding in that style (formal order and para 12).
Heerey J identified three interlocking legal facts that determined the outcome.
A managed investment scheme is not a legal entity. Unlike a company, a scheme cannot be a plaintiff in its own name (para 8). That basic characterisation is central: the usual corporate route where a company in liquidation remains the plaintiff and the liquidator sues in the company’s name does not translate directly to schemes.
The statutory and order-made powers. The winding up order was made under s 601EE and conferred upon the liquidators all the powers a liquidator would have pursuant to s 477 as if the scheme were a company (para 1 and para 5). The order expressly conferred the power, among others, "to…bring or defend any proceeding…relating to the operation of (the Scheme) in the name of or on behalf of the respondents [ie the Firm]" (para 5). Heerey J treated those powers as enabling steps, but emphasised that the differences in legal personality between schemes and companies determine the form of any proceeding (para 8).
The identity of the registered mortgagees. The mortgages named two partners in the firm, Kench and Foster, as the mortgagees and nominees (para 4). In some circumstances it might be possible to bring claims in the names of registered mortgagees (for example, a trespass action relating to mortgaged property) because those persons might be properly analogous to the company in liquidation (para 9). However here Messrs Kench and Foster were partners in the defendant firm and the alleged wrongdoers included the partners themselves. As Heerey J observed, they could not be plaintiffs because they would be on the other side of the record (para 10 and para 12). He cited Perpetual Trustee Co Limited v Attorney General to support the proposition that parties who will be defendants cannot be plaintiffs (para 12).
Taken together, these facts meant the liquidator was the only appropriate party to institute proceedings to recover choses in action for the benefit of the investors, and the Court so directed (para 12).
Before this decision, practitioners could look to the company winding up paradigm: in a company liquidation the company remains the plaintiff and the liquidator exercises the company's rights, including under s 477(2)(a), to bring or defend proceedings in the name of the company (para 8). However Heerey J explains the limits of that analogy: an unregistered managed investment scheme has no separate legal personality and therefore cannot be the plaintiff (para 8). The Court recognised that in particular fact patterns it might still be appropriate to bring actions in the names of registered nominees or trustees (para 9), but where those nominees are themselves members of a defendant firm alleged to have caused the loss, that route is not available (paras 10–12).
The decision clarifies that, for an unregistered scheme, the liquidator may bring proceedings in his own name in a style that makes clear his role as liquidator of the scheme. The practical effect is to provide certainty for practitioners engaged in wind-ups of unregistered schemes: where the ordinary corporate form is unavailable, the liquidator can be the plaintiff in his capacity as liquidator and recover assets and choses in action for pooling and distribution to investors (para 12).
The judgment also draws a useful distinction from the receiver context considered in ASIC v Takaran (No 2). There, Barrett J granted receivers leave to sue in the name of the registered holding entity, but the claims were not against that trustee; Heerey J notes that Takaran therefore differed from the present case because the claims were not against the trustee (para 11). That distinction delineates when a name-on-the-register might still be used.
Para 8: "A managed investment scheme, unlike a company, is not a legal entity." Plain English: a scheme cannot sue or be sued in its own name because it is not a separate legal person the way a company is.
Para 5 (order power quoted): The winding up order gave the liquidator "all the powers that a liquidator would have pursuant to s 477…as if the Scheme were a company" and power "to…bring or defend any proceeding…in the name of or on behalf of the respondents." Plain English: the Court gave the liquidator broad powers similar to a company liquidator, including the ability to bring or defend court cases tied to the scheme's operation, and to do so in certain names if necessary.
Para 9: Heerey J pointed out that in some cases the nominees named on the register (the mortgagees) might be the right people to sue in their own names, for example if someone had trespassed on mortgaged property. Plain English: if a claim directly involves property rights that sit with the nominee, it may be right to sue in the nominee's name.
Para 10: "The complication…is that Messrs Kench and Foster are partners in the Firm…Those allegedly liable for the loss and damage are the partners in the Firm…including Messrs Kench and Foster themselves." Plain English: the people on the register who might otherwise sue are part of the group being sued, so they cannot be the plaintiffs.
Para 12: "Therefore the appropriate course is that which the liquidator has adopted. He can bring proceedings as plaintiff in the style 'Barry Kenneth Hamilton as Liquidator…'." Plain English: the liquidator may bring the case in his own name set out as the liquidator of the scheme.
This decision is directly engaged where:
An unregistered managed investment scheme is wound up under s 601EE, and a liquidator is appointed (para 1).
Choses in action or other claims arise from conduct of the scheme that are to be recovered for pooling for investors (paras 6, 10).
The persons on the register who might otherwise appear to hold enforceable rights (for example nominee mortgagees) are themselves alleged to be responsible for the loss, or are members/partners of a defendant entity that would be sued (paras 4, 10).
A transfer of registered rights to the liquidator is not available or has not been effected (para 9).
In those circumstances, Heerey J's reasoning supports the use of the liquidator's own name styled with his capacity as liquidator as the proper plaintiff in litigation to recover assets for the scheme’s beneficiaries (para 12).
The judgment itself records reliance on and conformity with contemporary authority. Heerey J followed the approach discussed in Woods v Dodge [2003] FCA 1066 concerning the necessary amendment of the title so that the liquidator is the applicant and the firm the respondent (para 7). Heerey J distinguished ASIC v Takaran (No 2) on the facts because in Takaran the claims were not against the trustee who held the registered interests (para 11). Beyond those contemporaneous references, the present text does not record subsequent appellate treatment of the principle. The decision therefore stands as a clear first-instance articulation that a liquidator may be the plaintiff in his styled capacity when winding up an unregistered scheme and when nominees cannot be plaintiffs because they are implicated as defendants (paras 8, 10–12).
Practitioners should treat this decision as authoritative on the facts set out. If later appellate authority addresses the question, that would refine the contours; however the judgment itself does not report such later treatment.
The judgment resolves the particular problem of title and plaintiff in cases where the registered nominees are on the record as defendants. It nonetheless leaves a number of practical and doctrinal questions that may arise in other fact patterns:
When exactly will a transfer of registered interests to a liquidator be necessary or sufficient to allow proceedings to be brought in the transferee’s name? Heerey J records a purported transfer to the liquidator was executed and lodged but later withdrawn because of requisitions by the Recorder of Titles (para 9). The decision does not set out the consequences if such a transfer were successfully registered.
The judgment acknowledges that claims may in some cases be properly brought in the names of registered mortgagees where those persons are not implicated as defendants (para 9). The precise boundary between when to sue in the registered nominee's name and when to sue in the liquidator's style may require further elaboration in future cases.
How should courts treat analogous situations involving registered trustees or corporate nominees where the nominal holder is not the alleged wrongdoer but practical or procedural considerations make suing in the nominee’s name inconvenient? Heerey J’s discussion points to flexibility, but more detailed guidance may be necessary for complex arrangements.
The decision is fact-specific to an unregistered scheme. Comparable issues in the context of registered schemes under Pt 5C.9 may raise different statutory implications. Heerey J draws distinctions from the company regime but does not fully map the consequences for registered schemes.
Practitioners and courts will need to consider these open issues in future litigations. For present purposes Hamilton v Piggott Wood & Baker provides clear direction on the proper plaintiff title where the scheme is not an entity and nominees are themselves defendants: the liquidator may sue in his own name styled as the liquidator (para 12).
REASONS FOR JUDGMENT 1 On 13 December 2001 Sundberg J ordered under s 601EE of the Corporations Act 2001 (Cth) (the Act) that an unregistered managed investment scheme known as the Piggott Wood & Baker Run-out Mortgage Business (the Scheme) be wound up and that Mr Barry Kenneth Hamilton (the Liquidator) be appointed liquidator jointly and severally with Mr John William Woods. 2 The Liquidator has applied under s 479(3) of the Act for the following directions: "Whether or not the applicant is entitled to institute proceedings in the name of Barry Kenneth Hamilton as Liquidator of the Piggott Wood & Baker Run-out Mortgage Business (in liquidation), and if not in what name the applicant is entitled to should he institute proceedings." 3 Section 479(3) provides that a liquidator may apply to the Court "for directions in relation to any particular matter arising under the winding up". 4 Piggott Wood & Baker (the Firm) is a firm of solicitors. It conducted a business in which clients deposited moneys with it and the Firm arranged for those moneys to be advanced as loans secured by mortgages over real estate in Tasmania. The mortgagees named in the mortgages were two partners in the Firm, Grant Edward Kench and Michael Graham Foster, who were nominees of the Firm and trustees for investors. 5 The terms of Sundberg J's order included an order under par 2(b) that the liquidators have all the powers that a liquidator would have pursuant to s 477 of the Act as if the Scheme were a company. The order also contained certain specified powers including, under par 2(b)(ix), the power "to…bring or defend any proceeding…relating to the operation of (the Scheme) in the name of or on behalf of the respondents [ie the Firm]." 6 On 5 August 2003 the Liquidator filed in the Hobart Registry of the Supreme Court of Tasmania a generally endorsed writ No 404 of 2003 naming the Firm as defendant. The named plaintiff is "Barry Kenneth Hamilton as Liquidator of the Piggott Wood & Baker Run-out Mortgage Business (in Liquidation)". The plaintiff's claim against the Firm is stated to be: "…for damages or other relief for: (a) breach of contract; (b) negligence; (c) negligent misstatement; (d) breach of trust; (e) misleading or deceptive conduct; (f) breach of fiduciary duty; (g) fiduciary default under the Legal Profession Act 1993; (h) unconscionable conduct; (i) unjust enrichment; (j) money had and received in relation to moneys paid to the Defendant by investors in a contributory mortgage scheme conducted by the defendant between on or about 26 July 1991 to on or about 13 December 2001 and costs to be taxed." 7 For the reasons discussed in Woods v Dodge [2003] FCA 1066 at [5] to [8] the title to this proceeding will be amended so that the Liquidator is the applicant and the Firm is the respondent. The Firm has not been served and, appropriately in my view, the present application proceeded ex parte. 8 As this application shows, the provision for the winding up of an investment scheme cannot always be neatly fitted into the analogy of the winding up of a company. Where a company is wound up the property of the company does not vest in the liquidator. In proceedings brought by a company in liquidation the company itself is the plaintiff. The Act confers power on a liquidator to bring or defend any legal proceeding in the name and on behalf of the company: s 477(2)(a). 9 However a managed investment scheme, unlike a company, is not a legal entity. A scheme may be wound up, whether it is unregistered (under s 601EE) or registered (under Pt 5C.9). In respect of some kinds of claim it might be possible to say that Messrs Kench and Foster would be in a position truly analogous to that of a company in liquidation, for example where a trespasser has wrongfully taken possession of the mortgaged property. In such a case the Liquidator could bring an action in the name of Messrs Kench and Foster because they are on the register as mortgagees. (I was informed that a transfer of the mortgages from Messrs Kench and Foster to the Liquidator was executed on or about 4 January 2002 and lodged at the Office of the Recorder of Titles but was withdrawn from registration after the Recorder raised certain requisitions and objections.) 10 The complication in the present case is that Messrs Kench and Foster are partners in the Firm, or at any rate were when the allegedly wrongful conduct occurred. Those allegedly liable for the loss and damage are the partners in the Firm at the relevant time including Messrs Kench and Foster themselves. That loss and damage has been suffered by the investors in the scheme. Claims against the Firm are choses in action which need to be enforced so that the proceeds, along with other recoveries such as the proceeds of sale of mortgaged properties and debts of mortgagors, can be pooled and distributed rateably amongst investors. 11 In Australian Securities and Investment Commission v Takaran (No 2) (2003) 21 ACLC 12 receivers had been appointed to an unregistered managed investment scheme. Under the scheme Takaran Pty Ltd held mortgages as trustee. It was desired to bring claims allegedly negligent valuers and a guarantor. Barrett J granted the receivers leave to sue in the name of Takaran. Thus the case differed from the present one in that the claims were not against the trustee, or defendants who included the trustee. 12 It is clear enough that neither the Firm or Messrs Kench and Foster, the nominee mortgagees, could be plaintiffs since they will be on the other side of the record: see Perpetual Trustee Co Limited v Attorney General (1937) 54 W N (NSW) 95. As already mentioned, the Scheme itself is not a legal entity and cannot be a plaintiff. Therefore the appropriate course is that which the liquidator has adopted. He can bring proceedings as plaintiff in the style Barry Kenneth Hamilton as Liquidator of the Piggott Wood & Baker Run-Out Mortgage Business (in liquidation). I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.
Hamilton
Piggott Wood & Baker
The Court ordered that the applicant is entitled to bring proceeding No 404 of 2003 in the Hobart Registry of the Supreme Court of Tasmania in the name 'Barry Kenneth Hamilton as Liquidator of the Piggott Wood & Baker Run-out Mortgage Business (in liquidation)'.