RE QUINTIS (AUSTRALIA) PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) & ORS [No 2] [2024] WASC 278 (18 July 2024)

(a) treating the sandalwood trees located on the Voyager Land as being trees previously the subject of the Quintis Managed Investment Schemes to which neither 'Non‑Electing Growers' nor 'Electing Growers' (as defined in the lease and management agreements) have any interest, right or title under the Quintis Managed Investment Schemes in light of cl 5.14, cl 15 and cl 16 of the lease and management agreements; and

(b) entering into a sale agreement and paying the net proceeds of sale of the Scheme Trees on the Voyager Land (after deduction of marketing and selling costs) into an interest bearing escrow account on an interim basis pending determination by this court, or agreement, as to the distribution of the proceeds of sale.

1. The application was made in a proceeding already commenced in the court (known as COR 62 of 2024) by the filing of an interlocutory process.[5] It was listed with urgency for a first return and programming in the court's recess. The programming orders made on 11 July 2024 concerned, among other things, the giving of notice of the application to Scheme Investors. On 18 July 2024 the application was substantively heard with expedition in circumstances where the court was informed that:

(a) the harvesting of the Scheme Trees must occur before the expiry of the lease of the Voyager Land (which in the case of that part of the Voyager Land which is Lot 257, could expire as early as 31 October 2024);

(b) harvesting requires specialised equipment and an experienced harvester, which were in very limited supply;

(c) harvesting operations are weather dependent and must be completed before the onset of the wet season;

(d) the marketing of the Scheme Trees for sale had occurred and a preferred bidder had been identified; and

(e) the preferred bidder's preferred harvesting contractor had limited availability and had indicated that prompt confirmation of the harvesting job was required, and if not received, other harvesting jobs would be accepted and personnel and equipment otherwise earmarked for the harvesting of the Scheme Trees would be redeployed, risking the Scheme Trees not being harvested at all before the expiry of the lease that applies to Lot 257.[6]

1. Satisfied of the urgency, on 18 July 2024 the application was heard. At the conclusion of the hearing, the directions sought under s 424 of the Corporations Act were given and ancillary orders made in the form reproduced at sch B, with reasons to follow. For the reasons set out below, I determined it appropriate to make directions substantially in the terms sought.

1. At the hearing of the application, counsel read four affidavits.
2. The first was the affidavit of Mr Woodhouse affirmed on 5 July 2024 to which he attached documents marked DHW-21 to DHW-48 (which was the fourth affidavit affirmed by Mr Woodhouse and filed in the proceeding). In his fourth affidavit, Mr Woodhouse described the circumstances giving rise to the application.
3. In his fourth affidavit, Mr Woodhouse referred to another affidavit that he had made which had been filed in the proceeding, being his affidavit affirmed on 15 April 2024 to which he attached documents marked DHW-1 to DHW-20 (which was the first affidavit affirmed by Mr Woodhouse and filed in the proceeding).
4. The second affidavit read at the hearing of this application was Mr Woodhouse's affidavit affirmed on 15 April 2024 (that is, the first affidavit affirmed by Mr Woodhouse and filed in the proceeding), but only to the extent necessary to provide background to the appointment of the Receivers and the receivership of the Quintis Group entities.[7]
5. The third was the affidavit of Mr Woodhouse affirmed on 17 July 2024 to which he attached documents marked DHW‑49 to DHW‑52(c) (which was the fifth affidavit affirmed by Mr Woodhouse and filed in the proceeding). Mr Woodhouse's fifth affidavit was principally concerned with the Receivers' compliance with the procedural orders made by the court on 11 July 2024, particularly the giving of notice of the application to Scheme Investors.
6. The fourth was the affidavit of Stephen Commadeur affirmed on 11 July 2024. Mr Commadeur is a Managing Director of FTI Consulting with over 16 years' experience in corporate agribusiness. Mr Commadeur has assisted the Receivers in relation to their appointment to the Quintis Group entities and in his affidavit, he described the circumstances which gave rise to the application's urgency.
7. Counsel also relied upon a written outline of submissions filed on 18 July 2024.

Circumstances in which the Receivers sought directions

1. I describe below the circumstances in which the Receivers came before the court for directions, drawn from the affidavits filed on behalf of the Receivers in support of the application and the submissions made. I expect that some aspects are uncontroversial. That said, the description of the background and events deposed to, and what I understood to be the contentions and claims of the Receivers and the Scheme Investors, should not be taken to be factual findings for any purpose beyond this application.

1. The Quintis Group entities have been involved in growing and harvesting heartwood from sandalwood trees for the purposes of producing logs, oil, chips, and powder. The business has operations in Australia and in China. It also has business development teams in America, France, India and Japan.[8]
2. Historically, the Quintis Group entities and its operations sought investment via retail investors (through managed investment schemes registered and operated in accordance with pt 5C of the Corporations Act), institutional investors and high net worth investors.[9] It had three tiers of plantation investors with over 3,000 managed investment scheme investors, approximately 79 sophisticated investors (some with bespoke arrangements), and three institutional investors with bespoke arrangements.[10] In 2018, various Quintis Group entities went through a voluntary administration, receivership, deed of company arrangement and scheme of arrangement process.[11]

The Voyager Land and the structure of the Quintis Managed Investment Schemes

1. As to the lots which comprise the Voyager Land, the books of the Quintis Group entities record that:

(a) Lot 257 was the subject of the 2007 Quintis Managed Investment Scheme;[12] and

(b) Lot 240 was the subject of the 2006, 2007, 2008 and 2009 Quintis Managed Investment Schemes.[13]

1. The Voyager Land was owned by Sandalwood Properties Ltd (formerly known as T.F.S. Properties Ltd) until June 2023. In June 2023, the Voyager Land was acquired by Prime Grain Pty Ltd, and was leased to Quintis Forestry Pty Ltd (formerly known as Tropical Forestry Services Ltd).[14] Quintis Forestry Pty Ltd then sub-leased the Voyager Land to Quintis Leasing Pty Ltd (formerly known as T.F.S. Leasing Pty Ltd) as bare trustee for Sandalwood Properties Ltd, the responsible entity of each of the Quintis Managed Investment Schemes.[15]
2. When each Quintis Managed Investment Scheme was established, Quintis Leasing Pty Ltd, Sandalwood Properties Ltd as the responsible entity, and Scheme Investors entered into a lease and management agreement. In each of the lease and management agreements, the Scheme Investors were described as 'Growers', the relevant Quintis Managed Investment Scheme was described as the 'Project', and that part of the Voyager Land intended to be used for the purposes of the scheme was described as the 'Plantation'.
3. The two lots which comprised the Voyager Land were divided into 'Sandalwood Lots' for the purposes of each scheme. By the lease and management agreements, Quintis Leasing Pty Ltd granted (or 'Allotted') to every Grower a sub-lease of one or more 'Sandalwood Lots':[16]

together with all improvements on it and the Fixtures for the Term upon and subject to the Encumbrances and the covenants and provisions set out in this Agreement.

1. However, the sub-leases of Sandalwood Lots granted to Growers under the lease and management agreements were not in registrable form.[17]
2. Under the constitution for each Quintis Managed Investment Scheme, Sandalwood Properties Ltd as the responsible entity had the power to enter into a sub-lease in its name, as bare trustee for the Growers, for the purpose of registering at Landgate only the interest of Growers in the sub-leases of Sandalwood Lots granted to them, and without prejudice to the right of occupation and possession of the Growers under their sub-lease, or to the Growers' right to remove and harvest sandalwood from their Sandalwood Lots, or to any other contractual rights or obligations of the Growers under the sub-leases of Sandalwood Lots.[18]
3. As was observed in each registered sub-lease of the Voyager Land, the sub-lease was entered into principally to enable the lessee to register and protect the interest of Growers in their sub-leases of Sandalwood Lots, and each sub-lease operated as a collateral lease confirming the Sandalwood Lot sub-leases, but in registrable form.
4. The Voyager Land is subject to caveats in favour of Sandalwood Properties Ltd, which Mr Woodhouse believes relate to Sandalwood Properties Ltd's claimed interests on behalf of Scheme Investors (that is, the Growers) in parcels of land that are the subject of the relevant managed investment schemes.[19]
5. Mr Woodhouse attached to his fourth affidavit a copy of the applicable lease and management agreement, constitution, and product disclosure statement for each of the 2007, 2008 and 2009 Quintis Managed Investment Schemes.[20]
6. As to the 'head-leases' entered into by Prime Grain Pty Ltd and Quintis Forestry Pty Ltd, I noted that:

(a) Prime Grain Pty Ltd as lessor has a right to terminate the lease it entered into with respect to Lot 257 on and from 31 October 2024, with one month's notice in writing to Quintis Forestry Pty Ltd pursuant to cl 18.1 of that lease.[21] Once the lease for Lot 257 terminates, it appeared to be the case that the right and ability of Quintis Forestry Pty Ltd to harvest the Scheme Trees on Lot 257 would be lost, which would affect approximately 207.4 hectares of Scheme Trees;[22] and

(b) Prime Grain Pty Ltd as lessor also has a right to terminate the lease it entered into with respect to Lot 240 on and from 31 August 2025, with one month's notice in writing to Quintis Forestry Pty Ltd as lessee.[23] Once the lease for Lot 240 terminates, it appeared to be the case that the right and ability of Quintis Forestry Pty Ltd to harvest the Scheme Trees on Lot 240 would be lost, and a termination of that lease would affect approximately 97 hectares of Scheme Trees.[24]

1. The Receivers identified the lease and management agreements as being relevant to their desire to sell as soon as possible the unharvested Scheme Trees located on the Voyager Land, particularly cl 5.14, cl 15 and cl 16. The clauses are reproduced at sch C to these reasons, together with a number of terms as defined in cl 1.1 of the lease and management agreements, and cl 18. While there were some differences (which are identified in sch C), for present purposes, there was no material difference between lease and management agreements for the Quintis Managed Investment Schemes. The rights and obligations of the parties to the lease and management agreements are discussed further below.

Categories of Growers under the lease and management agreements

1. From the documents attached to Mr Woodhouse's fourth affidavit, I understood that, in summary, in order to invest in a Quintis Managed Investment Scheme, a potential investor would be required to complete an application by which the potential investor would offer to subscribe and take an interest in the scheme by entering into a lease and management agreement in respect of one or more Sandalwood Lots. When completing the application, the potential investor was presented with the opportunity to become an 'Electing Grower' for the purposes of the lease and management agreement by marking the relevant section of the application.[25] Investors who did not so elect were 'Non-Electing Growers' under the lease and management agreements.
2. The lease and management agreements afforded to Electing Growers and to Non-Electing Growers certain rights and obligations. The main difference between the two classes concerned their respective rights and obligations in relation to 'Forest Produce'.[26]
3. In summary, under the lease and management agreements, an Electing Grower was obliged to collect the 'Collectable Produce',[27] and pay certain costs. Provision was also made for what would occur if the Electing Grower failed to collect and pay as required. In summary, upon such failure, the Electing Grower would be deemed for all purposes of the lease and management agreements to be a Non-Electing Grower.[28]
4. Clause 16.1 of the lease and management agreements defined the rights of Growers to Forest Produce. In the case of a Non-Electing Grower, the Grower had full right, title and interest in the Forest Produce and the right to have the Forest Produce sold for the benefit of the Grower; whereas a Grower that was an Electing Grower had full right, title and interest in the Collectable Produce (which was to be collected by the Grower rather than sold for the benefit of the Grower).[29]
5. A Non-Electing Grower was obliged to accept the payment referred to in cl l8.3(c) of the lease and management agreements in full satisfaction and discharge of their rights in relation to the Forest Produce; whereas an Electing Grower was obliged to take the Collectable Produce in full satisfaction and discharge of the rights of the Electing Grower in relation to the Collectable Produce. Further, Non-Electing Growers were deemed to have irrevocably appointed the responsible entity as their exclusive agent to negotiate and make 'at the maximum practicable price available', sales of the Forest Produce.[30]
6. Based on the records of the Quintis Managed Investment Schemes, Mr Woodhouse deposed to his belief that:[31]

(a) all of the Growers in respect of Lot 257 of the Voyager Land were Non-Electing Growers for the purposes of cl 16.l(a) of the lease and management agreement entered into for the purposes of the 2007 Quintis Managed Investment Scheme;

(b) all but eight of the Growers in respect of Lot 240 of the Voyager Land were Non-Electing Growers for the purposes of cl 16.l(a) of the lease and management agreements entered into for the purposes of the 2007, 2008 and 2009 Quintis Managed Investment Schemes; and

(c) the eight Electing Growers had been identified and were named in Mr Woodhouse's fourth affidavit.

1. On 19 December 2023, Sandalwood Properties Ltd as responsible entity made an application to this court for orders that all of its managed investment schemes then on foot be wound up.[32]
2. On 20 December 2023, Richard Scott Tucker and Scott Bradley Kershaw of KordaMentha were appointed as joint and several administrators of Quintis Leasing Pty Ltd,[33] which subsequently entered liquidation at the second meeting of its creditors.[34]
3. On 21 December 2023, Hill J ordered that any Grower who wished to be heard with respect to the winding up application file an appearance by 29 January 2024.[35] No Grower sought to be heard.[36] After hearing Sandalwood Properties Ltd's application, Cobby J on 12 and 14 March 2024 ordered that Sandalwood Properties Ltd wind up on just and equitable grounds ten managed investment schemes dating from 2007 to 2016, being all of the managed investment schemes of the Quintis Group entities that were on foot at that time, pursuant to s 601ND(l)(a) of the Corporations Act.[37]

1. On 2 April 2024, Messrs Woodhouse, White and Park were appointed as joint and several receivers and managers of the Quintis Group entities.[38] The Receivers were appointed to the entire assets and undertakings (subject to some exceptions) of the Quintis Group entities by an appointment deed pursuant to a fixed and floating charge dated 21 June 2011, as amended from time to time. The appointment was made following the occurrence of an event of default under the indentures governing the Quintis Group entities' secured first and second lien notes. On the instructions of the requisite majority of holders of those notes, the Collateral Trustee enforced the security held by the holders of those notes by appointing the Receivers.[39] On 3 April 2024, the Receivers were also appointed over the various real property interests owned by the Quintis Group entities under various mortgages, pursuant to three supplemental appointment deeds.[40]
2. The companies over which the Receivers were appointed are also subject to voluntary administration, save for Quintis Leasing Pty Ltd, which is in liquidation following a voluntary administration process which commenced on 20 December 2023. Messrs Tucker and Kershaw were appointed voluntary administrators to the remainder of the Quintis Group entities on 3 April 2024 (together with two additional subsidiary companies) by resolution of the directors pursuant to s 436A of the Corporations Act.[41]

1. As to the Quintis Managed Investment Schemes, I noted as follows.
2. Section 601GA(1) of the Corporations Act provides that the constitution of a registered scheme must make adequate provision for the consideration that is to be paid to acquire an interest in the scheme; the powers of the responsible entity in relation to the making of investments of, or otherwise dealing with, scheme property; the method by which complaints made by members in relation to the scheme are to be dealt with; and winding up the scheme.
3. As required by s 601GA(1) of the Corporations Act, at cl 6 of the constitution for each of the Quintis Managed Investment Schemes, provision was made for the winding up of each scheme, and cl 6.1 provided as follows:[42]
   1. WINDING UP A SCHEME OR THE PROJECT

The provisions in this Constitution and in the Corporations Act relating to the winding up of a managed investment scheme apply to the winding up of the Project and are deemed to apply to the winding up of a Scheme.

1. To this end, cl 6.2 of the constitution for each of the Quintis Managed Investment Schemes prescribed events which would cause a winding up of the Quintis Managed Investment Scheme, and relevantly, cl 6.2(c) of each constitution provided that the responsible entity must wind up the scheme if a court orders that the scheme be wound up pursuant to s 601ND of the Corporations Act.
2. Section 601ND of the Corporations Act provides that on the application of a responsible entity, among others, the court has the power, by order, to direct the responsible entity of a registered scheme to wind up the scheme if, among other things, the court thinks it is just and equitable to make the order.[43]

1. The 2006 Quintis Managed Investment Scheme is complete, that is, the sandalwood trees subject to that scheme were sold in 2023 and the proceeds distributed in accordance with the terms of the 2006 Quintis Managed Investment Scheme. All investors in the 2006 Quintis Managed Investment Scheme were issued with a final distribution statement.[44]
2. As noted above, on the application of Sandalwood Properties Ltd as responsible entity, the court on 12 and 14 March 2024 ordered that all remaining managed investment schemes of the Quintis Group entities be wound up pursuant to s 601ND(1)(a) of the Corporations Act on the ground that it was just and equitable to do so, the court having found each of the schemes unprofitable and that the continuation of each could well expose the investors to additional costs, which would not be met by the proceeds of sale of sandalwood.[45] The 2007, 2008 and 2009 Quintis Managed Investment Schemes were the subject of the winding up orders made by Cobby J.[46]

1. The constitution of each Quintis Managed Investment Scheme sets out the process Sandalwood Properties Ltd, as responsible entity, must follow to wind up the scheme.
2. As to the process of winding up, cl 6.3 of the constitution of each Quintis Managed Investment Scheme provides that:[47]

(a) Unless otherwise required by the Corporations Act, the Responsible Entity is responsible for the winding up of the Scheme or the Project.

(b) The Responsible Entity must convert to money all Project Property, deduct all fees, expenses, costs and any other money in accordance with the Constitution and the Corporations Act and then divide the balance amongst the Growers according to each Grower's Proportional Interest. The Responsible Entity may make interim distributions during the winding up process as it sees fit.

(c) The Responsible Entity must proceed with the winding up efficiently, diligently and without undue delay. However, if it is in the interests of Growers to do so, then the Responsible Entity may postpone any part of the winding up for such time as it thinks desirable.

1. The process of winding up the ten managed investment schemes of the Quintis Group entities (which include the 2007, 2008 and 2009 Quintis Managed Investment Schemes) is being managed by Messrs Tucker and Kershaw in their capacity as the joint and several voluntary administrators of Sandalwood Properties Ltd.[48]
2. Further, cl 6.5 of the constitution for each Quintis Managed Investment Scheme empowers the responsible entity during the winding up of the scheme to terminate any other agreements or arrangements it has entered into with the Growers which relate to the scheme, and cl 6.5 provides that the responsible entity must give notice to the Growers of the termination of those agreements or arrangements.
3. After the court ordered that the remaining managed investment schemes of the Quintis entities be wound up, on 26 and 28 March 2024, notices were issued by the Chair of Sandalwood Properties Ltd, as the responsible entity, to investors in each of the Quintis Managed Investment Schemes (that is, to the Scheme Investors or Growers), in similar terms. The Scheme Investors of each scheme were put on notice that:[49]

(a) the court had directed Sandalwood Properties Ltd, as the responsible entity, to wind up the scheme;

(b) Sandalwood Properties Ltd had commenced the winding up and had lodged the required notices with the Australian Securities and Investments Commission (ASIC);

(c) the constitution sets out the process which Sandalwood Properties Ltd as the responsible entity must follow during the winding up process. In particular, the constitution records that:

(i) Sandalwood Properties Ltd must convert to money all 'Project Property', deduct all fees, expenses, costs and any other money in accordance with the constitution and the Corporations Act, and then divide the balance amongst the Growers according to each Grower's 'Proportional Interest'; and

(ii) Sandalwood Properties Ltd must proceed with the winding up efficiently, diligently and without undue delay;

(d) the 'Project Property' of the 2007 Quintis Managed Investment Scheme included forest produce that was harvested before the winding up orders were made by the court, and Sandalwood Properties Ltd would shortly conduct a public tender process for the sale of that forest produce;

(e) each respective scheme uses land owned by a third party, leased to Quintis Leasing Pty Ltd;

(f) Quintis Leasing Pty Ltd went into liquidation on 6 March 2024 and the liquidators will shortly issue notices under s 568 of the Corporations Act disclaiming those head-leases (to the extent that they have not already done so);

(g) in effect, the disclaimer of a lease will mean that the lease is taken to be terminated, and when the head-leases are terminated, in effect, the sub-leases (including any sub-lease under the respective lease and management agreements) will also terminate and all of the right, title and interest in the trees on the land will pass to the land owner; and

(h) the constitution provides that during the winding up of the scheme, Sandalwood Properties Ltd may terminate any other agreements or arrangements it has entered into with the Growers which relate to the scheme, and Sandalwood Properties Ltd must give notice to the Growers of the termination of those agreements or arrangements.

1. On 26 and 28 March 2024, Sandalwood Properties Ltd as the responsible entity of each of the Quintis Managed Investment Schemes also issued to the Growers termination notices, giving them notice that:[50]

Pursuant to Clause 6.5 of the Constitution, the Responsible Entity hereby provides notice to the Grower that the LMA is terminated effective immediately.

1. I understood the reference to 'LMA' in each termination notice to be a reference to the lease and management agreements entered into by Quintis Leasing Pty Ltd, Sandalwood Properties Ltd (as responsible entity), and the Growers for each of the Quintis Managed Investment Schemes. By 28 March 2024, Sandalwood Properties Ltd as the responsible entity had purported to terminate all of the lease and management agreements for the Quintis Managed Investment Schemes.

1. On 20 March 2024, Messrs Tucker and Kershaw in their capacity as the joint and several liquidators of Quintis Leasing Pty Ltd disclaimed the sub-leases of the Voyager Land granted to Quintis Leasing Pty Ltd by Quintis Forestry Pty Ltd.[51]
2. Mr Woodhouse deposed that Prime Grain Pty Ltd holds in escrow and it is anticipated that Prime Grain Pty Ltd will lodge in due course withdrawal of caveat forms in respect of the registration of the Growers' sub-leases.[52]
3. On 20 March 2024, Messrs Tucker and Kershaw in their capacity as the joint and several liquidators of Quintis Leasing Pty Ltd also purported to disclaim the lease granted by Prime Grain Pty Ltd to Quintis Forestry Pty Ltd with respect to Lot 240 of the Voyager Land.[53]
4. As to the purported disclaimer by Messrs Tucker and Kershaw of either 'head-lease' of the Voyager Land, I noted as follows.
5. First, the leases were granted by Prime Grain Pty Ltd (as lessor) to Quintis Forestry Pty Ltd (as lessee), and not to Quintis Leasing Pty Ltd (as lessee). Secondly, Messrs Tucker and Kershaw are the joint and several administrators, not liquidators, of Quintis Forestry Pty Ltd.
6. In the circumstances, despite their assertions otherwise, it would appear that Messrs Tucker and Kershaw did not have the power to disclaim the head-lease for Lot 240 of the Voyager Land granted by Prime Grain Pty Ltd (as lessor) to Quintis Forestry Pty Ltd (as lessee), pursuant to s 568 of the Corporations Act, as was recorded in the notice of disclaimer issued to Prime Grain Pty Ltd on 20 March 2024, and represented to the Growers in the notices issued to them from 26 to 28 March 2024.[54]

1. The application for directions was made in circumstances where:

(a) the Receivers had retained Smith Agri International Pty Ltd to market and sell the unharvested Scheme Trees on the Voyager Land;

(b) Smith Agri International had marketed the Scheme Trees on Lot 257 of the Voyager Land for sale, and on 4 July 2024 had received six expressions of interest from buyers;

(c) as at the date of Mr Woodhouse's fourth affidavit, the expressions of interest were then under review by the Receivers before, potentially, entering into a binding sale agreement;

(d) Mr Woodhouse also deposed to his belief that it was in the best interests of the Receivers, their appointees and the Scheme Investors that the Scheme Trees be harvested and removed from the Voyager Land as soon as possible (or at the very least in the immediate short term, from Lot 257) due to the right of termination held by Prime Grain Pty Ltd; and

(e) Mr Woodhouse's belief was grounded in part on the Receivers' understanding that ownership of any Scheme Trees that remained unharvested at the time of termination or expiry of the Voyager Leases would vest in Prime Grain Pty Ltd as the landowner on termination or expiry.

1. The court understood that while the Receivers wished to proceed to sell the Scheme Trees on the Voyager Land as soon as possible, the Receivers were on notice of claims made by investors with respect to the trees grown on the leased Sandalwood Lots. In light of the claims raised (described below), the Receivers sought directions to obtain comfort before entering into any binding sale agreement with any potential buyer of the Scheme Trees on the Voyager Land.

1. The Receivers were aware of the existence of the claims by their interrogation of the PPSR, and through various correspondence.[55] Mr Woodhouse described in his fourth affidavit the enquiries and searches made of the PPSR on behalf of the Receivers; the number of registrations lodged against the Quintis Group entities on the PPSR and the nature of the interest claimed; the correspondence that had been issued on behalf of the Receivers to the 'secured parties' who had made PPSR registrations against Quintis Group entities; and the correspondence issued on behalf of Messrs Tucker and Kershaw in their capacity as joint and several voluntary administrators of Quintis Leasing Pty Ltd (as they then were), to the 'secured parties' who had made PPSR registrations against Quintis Leasing Pty Ltd.[56]
2. Among other things, Mr Woodhouse deposed to his understanding that:

(a) by about 27 March 2024 approximately 215 registrations had been lodged against the Quintis Group entities on the PPSR, some of which Mr Woodhouse believed were made by Scheme Investors claiming an interest in trees, in 'tree investments' or in the proceeds of sale from trees. At that time there appeared to be about 66 registrations against 'crops'; and 60 registrations against 'general intangible' with collateral descriptions asserting interests held in 'trees' or 'the rights and remedies of the Secured Party as a 'Grower'' arising under the lease and management agreements;[57]

(b) further searches had been undertaken of the PPSR in respect of each of the Quintis Group entities on 3 June 2024, and as against the Australian Registered Scheme Numbers for the 2007, 2008 and 2009 Quintis Managed Investment Schemes on 22 June 2024;[58]

(c) on behalf of the Receivers, correspondence was issued to all of the 'secured parties' who had made PPSR registrations against Quintis Group entities, including but not limited to those claiming an interest or registration in 'crops', 'general intangible' property or (based on the collateral descriptions given) anything in the nature of an interest in Scheme Trees (except for any that had made registrations against Quintis Leasing and by unintended omission, Ms Carolyn Jenkins);[59]

(d) as at 5 July 2024, only one substantive response to the correspondence sent had been received, and a copy of Mr Steven Hendry's communication dated 19 April 2024 was attached to Mr Woodhouse's fourth affidavit.[60] In summary, Mr Hendry described his security interest as being one arising or in connection with the lease and management agreement with Sandalwood Properties Ltd (and others), and the constitutions of the Quintis Managed Investment Schemes; and

(e) between 20 December 2023 to 4 March 2024 the (then) joint and several administrators of Quintis Leasing Pty Ltd had sent letters to various persons who had registered a security interest on the PPSR. By that correspondence, the administrators had requested a copy of the underlying documentation said to give rise to the PPSR registration so that they might make an assessment of the validity of the claim, and had sought confirmation of the property said to be the subject of the claimed security interest.[61]

1. Mr Woodhouse deposed to his understanding that through correspondence, Desmond Caling had asserted an interest in Scheme Trees, on his own behalf and as 'security agent' on behalf of other unidentified investors in the Quintis Managed Investment Schemes.
2. Mr Woodhouse also deposed that from his review of the 'grower register', he believed that:[62]

at most Mr Caling appears to have had an interest in the 2012 Quintis MIS project (comprising around 70 woodlots / 5.83 hectares), and in the 2010 Quintis MIS project (comprising around 267 woodlots/ 44.509 hectares), which was the subject of the MIS Winding Up Order. However, Mr Caling also purports to represent as agent for, an as yet unidentified, group of investors. Mr Caling's registrations on the PPSR purportedly as agent of these unidentified investors may affect the trees on the Voyager Land.

1. Despite having requested particulars of the basis for the claimed interest from Mr Caling's solicitors in April 2024, the Receivers received no response.[63]

Correspondence with the Sandalwood Growers' Co-op

1. On 10 May 2024, the Receivers received an email from Messrs Barry Thompson and Graeme Scott, as directors of the Sandalwood Growers' Co-op, which purported to represent hundreds of unidentified Scheme Investors who 'maintain a legal interest in the sandalwood plantations currently located on Quintis owned or leased land'.
2. In the correspondence received on 10 May 2024, the Sandalwood Growers' Co-op demanded that the Receivers not:[64]

... deal or dispose of the land or the trees on the land without first giving notice to the buyer of our growers' interest and directing the buyer to us for further information.

1. In later correspondence, the Sandalwood Growers' Co-op responded to correspondence received from the Receivers' solicitors in the following terms:[65]

You can do your own research re this issue and any sale that has a detrimental consequence for growers will be at your own risk.

All growers holding a current PPSR for their trees will seek resort for their full compensation to which they are entitled at any loss or damage to their property cover under prevailing PPSRs.

This precaution was taken out to ensure that growers were able to see their tree investments progress to maturity and harvest contending with eventualities like the one which has arisen.

1. Finally, I note that the court was informed that no investor in any of the Quintis Managed Investment Schemes had disputed the termination of any of the lease and management agreements.[66]

1. I did not understand the Receivers to suggest that it was not the case that each Grower of a Quintis Managed Investment Scheme had been granted and had held an interest in the Scheme Trees on their allotted Sandalwood Lot or Lots leased to the Growers pursuant to the lease and management agreement for that scheme.[67]
2. Further, I did not understand the Receivers to suggest that it had not been the case that the rights and interests granted to the Growers under the lease and management agreements had been independent and severable grants of property interests in the relevant Sandalwood Lots by Quintis Leasing Pty Ltd as the lessor in favour of the Growers. Indeed, I understood the Growers' interests in the Sandalwood Lots on the Voyager Land had been protected by caveats in favour of Sandalwood Properties Ltd, which caveats Mr Woodhouse understood related to Sandalwood Properties Ltd's claimed interests on behalf of Scheme Investors (that is, the Growers) in parcels of land the subject of the relevant managed investment schemes.[68]
3. In circumstances where the Receivers wished to sell as soon as possible the unharvested Scheme Trees on the Voyager Land, the Receivers were particularly concerned with the interest, if any, that the Growers continued to hold in the Scheme Trees grown on the Sandalwood Lots located on the Voyager Land after termination of the lease and management agreements.
4. In short, the Receivers noted that by operation of cl 5.14 of the lease and management agreements, the Growers had acknowledged and agreed that the Scheme Trees were and would remain the property of the relevant Grower until the end of the Term (as defined in the lease and management agreements), or otherwise for so long as their Lease has not been terminated in accordance with its terms. That is, on a proper construction of the lease and management agreements, in circumstances where the court had ordered the Quintis Managed Investment Schemes to be wound up by the responsible entity, and the responsible entity had terminated the lease and management agreement for each of the Quintis Managed Investment Schemes, the Receivers maintained that the Growers had no continuing rights or interests in the Scheme Trees. The Receivers maintained that post‑termination, the Growers' rights were limited to the proper administration of the winding up of the scheme in which they had invested.
5. I set out in further detail below the Receivers' position with respect to the proper construction of the lease and management agreements, and the appropriateness of the directions sought.

1. The Receivers noted that the court had ordered the Quintis Managed Investment Schemes to be wound up, the lease and management agreements had been terminated, and the sub-leases of the Voyager Land had been disclaimed. It was in this context that the Receivers had formed their view as to the rights of Scheme Investors in the Scheme Trees.
2. The Receivers maintained that the lease and management agreements (including cl 5.14) had to be construed by reference to the lease and management agreements as a whole and by reference to the other scheme documents, particularly the constitutions. They also maintained that any rights and interests that Scheme Investors may have, after the termination of the lease and management agreements, could not exceed the rights and interests they had while the lease and management agreements were on foot.
3. As to the rights of the Non-Electing Growers, it was the Receivers' position that:[69]

(a) on the proper construction of the lease and management agreements, while the agreements were on foot, the Non-Electing Growers' rights and interests in respect of the Scheme Trees were at best limited to their right to receive a share of the net proceeds of sale of the Scheme Trees, which were to be distributed pursuant to cl 18.3(c) of the lease and management agreements;

(b) cl 16.1 of the lease and management agreements, properly construed, applies only for so long as a Grower's sub-lease has not been terminated, or with respect to Scheme Trees that had been harvested prior to termination;

(c) the construction described above must necessarily be the case because cl 6.3(b) of the constitution of each of the Quintis Managed Investment Schemes provides what is to occur upon winding up, and that clause makes plain that the Growers do not retain any proprietary interest in 'Scheme Property' (including Scheme Trees) upon termination. Rather, their sole right is to a pari passu distribution of the net proceeds of the liquidation of the 'Scheme Property' after the deduction of 'all fees, expenses, costs and any other money in accordance with the Constitution and the Corporations Act 2001 (Cth) ...';[70]

(d) the lease and management agreements had been drafted in a manner consistent with the constitutions, and cl 5.14, cl 15 and cl 16, when read together and properly construed, were intended to maintain a Grower's right, title and interest in the Scheme Trees during the currency of the lease and management agreements, despite the Scheme Trees being converted to produce and proceeds;

(e) cl 5.14 is plain in its terms and provides that a Grower's right, title and interest in the Scheme Trees ceases to exist when, among other things, the scheme is terminated; and

(f) having lost title to the Scheme Trees upon the winding up of the Quintis Managed Investment Schemes, in circumstances where the lease and management agreements and sub-leases had been terminated, it could not sensibly be said that a Grower retains any interest in the Scheme Trees once converted to produce or that a Grower is entitled to a share in any proceeds of sale, other than via the distribution mechanism contemplated by cl 6.3(b) of the constitutions.

1. The Receivers submitted that accordingly, the directions sought by the Receivers were consistent with the best case putative contractual rights of the Non-Electing Growers.
2. As to the rights of the Electing Growers, it was the Receivers' position that:[71]

(a) on the proper construction of the lease and management agreements, while the agreements were on foot, the Electing Growers' rights and interests in respect of the Scheme Trees were limited to taking the Collectable Produce, which meant, in relation to a Grower who was an Electing Grower, that Grower's Proportional Share of the Forest Yield;[72]

(b) based on the contractual definitions of Proportional Share and Forest Yield, in effect, Electing Growers were entitled to share in a proportion of the produce after harvesting and processing, based on the proportion which the number of Sandalwood Lots sub-leased to the Electing Grower bore to the total number of Sandalwood Lots sub-leased by all Growers;

(c) by operation of cl 16.3 of the lease and management agreements:

An Electing Grower must take the Collectable Produce in full satisfaction and discharge of the Electing Grower's rights in relation to the Collectable Produce. (emphasis added)

(d) under the lease and management agreements, an Electing Grower was obliged to collect the Collectable Produce on the day specified by the responsible entity, and pay all amounts outstanding including but not limited to the proportional share of the costs of harvesting and processing, unpaid rent and any unpaid fees that were then owed to the responsible entity;

(e) any Electing Grower who failed to collect the Collectable Produce was deemed to have always been a Non-Electing Grower, lost their entitlement to the Collectable Produce, and was obliged to pay to the responsible entity an additional 3% of the gross proceeds of sale;

(f) on the proper construction of the lease and management agreements, the Electing Growers' rights and interests in respect of the Scheme Trees were at best limited to collecting their share of the harvested and processed trees, which harvest and processing had to be undertaken during the currency of the scheme and the lease and management agreements by the responsible entity;

(g) the Growers (be that Non-Electing or Electing Growers) could not sensibly be said to retain any interest in the Scheme Trees post-termination of the scheme and the lease and management agreements for if that was the case, it would undermine the manifest objective intention of cl 6.3(b) of the constitutions;

(h) in any event, even in the case of the Electing Growers, under the lease and management agreements the Scheme Trees had to be harvested, processed and sold for the Electing Growers to be able to monetise their investment;

(i) what the Receivers proposed to do was to market the Scheme Trees for sale in circumstances where none of the Electing Growers had asserted any desire to undertake the marketing and sale of the Scheme Trees themselves; and

(j) if the directions sought by the Receivers were made, the Scheme Trees were sold and the Electing Growers were found to have an interest in the Scheme Trees, all that would have occurred would be that the trees would have been monetised via a sale controlled by the Receivers, as opposed to a sale controlled by the Electing Growers.

1. The Receivers submitted that accordingly, if the directions sought by the Receivers were made, there would be no prejudice to the Electing Growers (even if they were ultimately found to have had a continuing interest in the Scheme Trees) because it was intended that the proceeds of sale be held in escrow until such time as the question as to the rights (if any) that Scheme Investors have in those proceeds is resolved.

1. As noted above, on 11 July 2024, the Receivers moved for programming orders which concerned, among other things, the giving of notice of the application to Scheme Investors. It was ordered that the Receivers were to give notice of the application by:

(a) causing a notice in a form approved by the court to be posted on the website maintained by Sandalwood Properties Ltd by Friday, 12 July 2024, which notice to be maintained on the website at least until the hearing of the application;

(b) causing a notice in a form approved by the court to be advertised by Friday, 12 July 2024 in the following newspapers:

(i) the Australian;

(ii) the Weekend Australian; and

(iii) the West Australian;

(c) sending, by email (or absent an email address, by post), a copy of a communication in a form approved by the court to the 'ex-scheme investors of the managed investment schemes the subject of winding-up orders made by the Court on 12 and 14 March 2024 (to the extent the identity of such ex-scheme investors and their email or postage address is known) which are investors in ex-Scheme Trees on the Voyager Land (ex-Scheme Investors) by Friday, 12 July 2024'.

1. It was further ordered that any 'ex-Scheme Investor' who wished to be heard on this application file an appearance by 4:00pm (AWST) on Wednesday, 17 July 2024.
2. In his fifth affidavit, Mr Woodhouse deposed to the steps that he caused to be taken so as to comply with the orders made on 11 July 2024.
3. Among other things, Mr Woodhouse deposed that he caused employees of FTI Consulting to post on the website maintained by Sandalwood Properties Ltd a notice substantially in the form approved by the court and annexed to the orders made on 11 July 2024. He further deposed that as at the date of his fifth affidavit, the website notice was maintained and he had instructed that it should continue to be maintained until after the hearing of the application.[73]
4. As to causing a notice to be advertised by Friday, 12 July 2024 in various newspapers, Mr Woodhouse deposed that a notice substantially in the form approved by the court was published in the public notices section of the West Australian on 12 July 2024;[74] in the business section of the Weekend Australian on 13 July 2024;[75] and in the notices section of the Australian on 15 July 2024.[76] He further deposed that while an attempt was made on 11 July 2024 to publish a notice in The Australian newspaper on 12 July 2024, it had not been possible to do so in circumstances where The Australian newspaper required notices to be submitted at least two days in advance of the relevant publication.[77]
5. As to causing notice to be sent, by email (or absent an email address, by post) to Scheme Investors, Mr Woodhouse deposed to the steps taken to cause such notice substantially in the form approved by the court to be issued. There was evidence that:

(a) notices were sent on 11 July 2024 to 202 Scheme Investors by email;

(b) five notices were sent on 12 July 2024 by email to Mr Caling and to each of the four Sandalwood Growers' Co-op email addresses from which FTI Consulting had received correspondence; and

(c) 28 notices were sent on 12 July 2024 by post to Scheme Investors for whom an email address was not available.[78]

1. In his fifth affidavit, Mr Woodhouse described the one enquiry that was received from a Scheme Investor after notice of the application was given. That investor indicated that he did not intend to appear at the hearing of the application.[79]
2. There was no appearance at the hearing of the application by any person or entity (identifying as a Scheme Investor or otherwise), seeking to be heard with respect to the directions sought.

Applicable principles on the application for directions under s 424

1. Section 424 of the Corporations Act provides:

(1) A controller of property of a corporation may apply to the Court for directions in relation to any matter arising in connection with the performance or exercise of any of the controller's functions and powers as controller.

(2) In the case of a receiver of property of a corporation, subsection (1) applies only if the receiver was appointed under a power contained in an instrument.

1. As noted above, the purpose of s 424 is to provide a procedure for a controller to obtain guidance from the court in the conduct of his or her controllership, and thereby obtain protection against a claim for breach of duty or an allegation that he or she has acted improperly or unreasonably.[80] Subject to the controller making full and fair disclosure of the material facts, the order sanctions a proposed course of conduct.[81]
2. The power to give directions under s 424 is broad - reflected in the words 'in relation to any matter arising in connection with the performance or exercise of any of the controller's functions and powers as controller.' (Emphasis added.) It is well established that the power is intended to facilitate the work of controllers and should be interpreted liberally so as to give effect to that intention.[82]
3. As was observed by Colvin J in Preston, in the matter of Sandalwood Properties Ltd:[83]

... it is difficult to conceive of any action by a controller that would not have a connection with the performance or exercise of his or functions or powers. It follows that the relevant matter is described in quite general terms. Directions can be sought 'in relation to' any such matter. Such terms are of the widest import, and in the absence of compelling reasons should not be read down. (emphasis added, citations omitted)

1. It is accepted that the nature and scope of available directions under s 424 is as follows:[84]

(1) The directions that may be provided are a form of personal guidance or advice; they articulate the approach the controller is justified in taking having regard to the known circumstances and relevant legal principles.

(2) The power is to give 'directions' in relation to the matters identified in s 424(1). The relevant matters are described in broad and general terms, especially given the words 'in connection with'. So too the words 'in relation to' are of 'the widest import'. Thus the permissible subject matter of a direction will include the actions of the controller but is not confined to such actions. It will include where:

... the controller has to consider the appropriate action to take in undertaking functions or exercising powers and a third party is claiming that a right, interest or entitlement of the third party must be acknowledged or respected in exercising those functions or powers ...

(3) The circumstance that the controller is a privately appointed receiver and manager is not relevant to the question whether to make directions. That said, receivers should not be unduly nervous and come to court where advice is not needed.

(4) There must be an issue calling for the exercise of legal judgment, ie a legal issue of substance or procedure or an issue of power, propriety or reasonableness. It must be more than a business or commercial decision. However, the fact that a legal question may have significant commercial consequences does not make the giving of directions inappropriate. The court does not give advice as to how the controller should act but rather whether there is legal justification to so act.

(5) Once the jurisdictional requirement is satisfied the court has a discretion whether to provide advice of the kind contemplated by the statutory provision.

(6) The making of directions is not an adjudication. It will not be determinative of parties' rights. The court is not determining the rights of persons and has no power to provide directions that would have that consequence.

(7) The fact that directions are sought in the context of an adversarial dispute does not mean that it is inappropriate to provide directions. There is a need to consider the nature of any underlying dispute. Nevertheless, the existence of such a dispute, and the circumstance that the subject matter for advice is an issue in adversarial proceedings, may be relevant to whether the court is willing to give directions and in what terms.

(8) A direction is given in the context of the circumstances presented to the court at the time it is made; it will not extend to materially different circumstances that arise in the future. The form in which a direction is expressed should be consistent with it being provided by way of judicial advice. (footnotes omitted)

1. There remains a question as to whether a receiver of a managed investment scheme appointed under s 601EE(2) of the Corporations Act may apply for directions under s 424(1).[85] That is because it may not be accurate to regard a person appointed as 'receiver to the scheme' as a 'controller of property of a corporation', calling into question whether sub-section (2) could be satisfied. However, as the Receivers were not appointed receivers of a managed investment scheme under s 601EE(2) of the Corporations Act, that question did not need to be answered in this case.
2. As suggested by s 424(2) of the Corporations Act, a privately appointed receiver or receiver and manager of property of a company is a 'controller'.[86] In this case, the Receivers were appointed privately on the instructions of the requisite majority of the Noteholder Group pursuant to security held. Accordingly, the Receivers are 'controllers' and had standing to apply to the court for directions as to the performance of their functions and powers under s 424(1).

1. I was satisfied that the Receivers were not by the application seeking guidance of the court in respect of a commercial decision, and this was not a case where there was no jurisdiction to give the directions sought because the guidance sought concerned a commercial issue.
2. The Receivers' proposed sale of sandalwood trees grown on land leased by Quintis Forestry Pty Ltd in light of the Scheme Investors' claims, called for the exercise of legal judgment with respect to a legal issue of substance. It was necessary for the Receivers to exercise a legal judgment with respect to the nature of the interest, if any, the Growers continued to hold in the Scheme Trees after termination of the lease and management agreements.
3. Further, I accepted that the directions sought by the Receivers clearly related to matters arising in connection with the performance or exercise of the Receivers' functions and powers as joint and several receivers and managers of the Quintis Group entities.
4. In Preston, in the matter of Sandalwood Properties Ltd at [43], it was acknowledged that where a controller has to consider the appropriate action to take in undertaking functions or exercising powers, and a third party is claiming that a right, interest or entitlement of the third party must be acknowledged or respected in exercising those functions or powers, then s 424 applies. Of course, a controller can only seek 'directions', being the nature and extent of the jurisdictional power conferred on the court. The court has no power to adjudicate, determine or to provide directions that would have that consequence, and I was satisfied that the directions sought on behalf of the Receivers would not have that consequence.
5. In all of the circumstances deposed to, I was satisfied that the court's power to make directions pursuant to s 424 of the Corporations Act had been enlivened in this case. Noting that the statutory power under s 424 of the Corporations Act is of wide scope, I found that the directions sought did not exceed that power.

1. As noted above, once the jurisdictional requirement is satisfied, the court has a discretion whether to provide advice of the kind contemplated by s 424 of the Corporations Act.[87] Satisfied that the jurisdictional requirement was met, I turned to consider whether to exercise discretion to provide advice of the kind contemplated by the statutory provision, cognisant of the circumstances in which the Receivers applied for directions (as summarised in these reasons), and the reported claims of certain Scheme Investors.
2. In deciding whether to give the directions sought, I turned first to consider the extent to which the directions concerned a matter the subject of an inter partes dispute.[88]
3. The Receivers were aware of the existence of claims made by some Scheme Investors by their interrogation of the PPSR, and through various correspondence, as described at [64] to [72] above. In light of the following, I did not consider the existence of the claims to be a reason for declining to provide the directions sought by the Receivers.
4. First, I accepted that prompt action on the part of the Receivers was required in the circumstances described to the court and summarised at [8] above. Possession of Lot 257 of the Voyager Land could be lost as early as 31 October 2024 if Prime Grain Pty Ltd as lessor were to exercise its right to terminate the lease. Once terminated, it appeared to be the case that the right and ability of Quintis Forestry Pty Ltd to harvest the Scheme Trees on Lot 257 would be significantly prejudiced if not lost, which would affect approximately 207.4 hectares of Scheme Trees.[89] Further, while the risk of termination of Lot 240 did not appear to be as imminent, there was also a risk that possession of that Lot could be prejudiced or lost, putting at risk approximately 97 hectares of Scheme Trees.[90]
5. In this regard, I noted cl 6.8 of each lease, which provides that the lessor and lessee agree that the 'Tree Crop' (as defined) is and remains the property of the lessee until the end of the 'Term' (as defined), or such earlier date on which the lease may be terminated be either party.[91]
6. Secondly, in light of the identified imminent risk, I considered there to be considerable weight in the opinion expressed by Mr Woodhouse that it would be in the best interests of not only the Receivers and their appointees, but also the Scheme Investors, that the Scheme Trees be harvested and removed from the Voyager Land as soon as possible. There was also considerable weight in the Receivers' submission that all stakeholders would potentially lose out or at least be significantly prejudiced if the head‑leases were to come to an end before the Scheme Trees were harvested.
7. In this regard, I noted the right of Prime Grain Pty Ltd to bring to an end the lease of Lot 257 of the Voyager Land as early as 31 October 2024, and the consequences of that right being exercised;[92] and what appeared to be the interests of the Scheme Investors in the Scheme Trees after termination of the lease and management agreements (discussed further below).
8. I was also cognisant that the Receivers' proposed actions would likely be less prejudicial to the interests of the Scheme Investors (whether they were Electing or Non-Electing Growers and assuming they continue to have an interest in the Scheme Trees), than if the Receivers took no action and the head-leases of the Voyager Land came to an end before harvesting of Scheme Trees had occurred. I formed this view noting that on the one hand, after harvesting the Scheme Trees, the Receivers intended to hold the proceeds of sale in escrow until such time as the rights (if any) that Scheme Investors held in those proceeds were determined; and on the other, the materials before the court supported the Receivers' understanding that ownership of the Scheme Trees that remained unharvested at the time of termination or expiry of the leases of the Voyager Land would vest in Prime Grain Pty Ltd as the landowner, and the Scheme Investors would retain no interest in the same.
9. Thirdly, the Receivers were in a position to act immediately, having marketed the Scheme Trees for sale and having identified a preferred bidder.
10. Fourthly, there was a question involving a legal judgment, and the Receivers had a legitimate interest in obtaining certainty. In circumstances where claims had been asserted and were maintained, there was clear utility in the directions sought.
11. Fifthly, notice of the application seeking directions had been given to Scheme Investors, and no party affected by the proposed directions sought to be heard. This was in a context where:

(a) no Scheme Investor had availed themselves of the opportunity to be heard with respect to the application made by Sandalwood Properties Ltd to wind up the Quintis Managed Investment Schemes despite having been given notice of that application; and

(b) the court was informed that after Sandalwood Properties Ltd, as the responsible entity, gave notice of the termination of the lease and management agreements, no investor in any of the Quintis Managed Investment Schemes had disputed the termination of the lease and management agreements.[93]

1. Sixthly, while it had been open for any concerned Scheme Investor to further engage with the Receivers in relation to the claims made, to provide particulars, or to commence proceedings seeking declarations and/or injunctive relief:

(a) the Receivers received no response to the request made of Mr Caling's solicitors in April 2024 for particulars of the basis for Mr Caling's claimed interest;[94]

(b) no proceeding was commenced by any Scheme Investor; and

(c) the Scheme Investors represented by the Sandalwood Growers' Co-op appeared content to rely upon registrations lodged on the PPSR.[95]

1. Seventhly, the directions if given would not prevent Scheme Investors from taking steps in pursuit of any claims they may assert. As noted above, a direction under s 424 does not bind third parties in relation to substantive issues.[96] That is even the case where the third party is joined as a defendant.[97] As was observed by Vaughan J (as his Honour then was) in Re Mirabela Nickel Ltd (receivers and managers appointed) (in Liq); ex parte Madden at [90], the non‑binding nature of a direction under s 424 is consistent with the accepted position that the making of the direction is not an adjudication and is not determinative of rights.
2. In the exercise of discretion I was also cognisant of what the Receivers proposed to do - which was to harvest and sell to a third party the Scheme Trees, being the very property over which claims had been made by certain Scheme Investors. This was a case where the Receivers wished to take steps that could not be unwound.
3. While this was a matter that weighed against the exercise of discretion, it was not sufficient to tip the balance, particularly when regard was had to what the Receivers intended to do with the proceeds of sale.
4. I then turned to the question of whether, taking into account all circumstances including an assessment of the merits of the competing claims concerning the right to the Scheme Trees, the Receivers were justified in acting in the manner proposed.
5. I considered that the position advanced by the Receivers found sufficient support in the terms of the lease and management agreements, so that, in all of the circumstances, the Receivers would be justified in acting in the manner proposed.
6. While expressing no final view, I considered that the materials before the court supported the Receivers' understanding that:

(a) ownership of all Scheme Trees that remain unharvested at the time of termination or expiry of the leases of the Voyager Land in favour of Quintis Forestry Pty Ltd would vest in Prime Grain Pty Ltd as the landowner;

(b) cl 16.1 of the lease and management agreements, properly construed, applied only for so long as a Grower's sub-lease had not been terminated, or with respect to Scheme Trees that had been harvested prior to termination of the applicable lease and management agreement;

(c) the Scheme Trees did not remain the property of the relevant Grower in circumstances where the court had ordered the Quintis Managed Investment Schemes to be wound up by the responsible entity, and the responsible entity had terminated the lease and management agreement for each Quintis Managed Investment Scheme; and

(d) the Growers' interests in the proceeds of sale of harvested Scheme Trees would lie in the distribution mechanism contemplated by cl 6.3(b) of each constitution.

1. Further, the Receivers' asserted position did not appear to be inconsistent with the lease and management agreements, including cl 5.14, because:

(a) the parties to the lease and management agreements had, by the terms of the agreements, acknowledged and agreed that Scheme Trees were and would remain the property of the relevant Grower until the end of the Term (as defined in the lease and management agreements), or otherwise for so long as their Lease has not been terminated in accordance with its terms; and

(b) the Growers' leases had been terminated in accordance with the terms of the lease and management agreements.

1. Having regard to the Receivers' position as summarised out at [78] to [83] above, I found persuasive the submission made on behalf of the Receivers that the directions, if issued, would in effect preserve the interests of all stakeholders, including the Electing and Non‑Electing Growers, and the Receivers' appointees. Further, the evidence before the court suggested that there was likely little prejudice to the Electing and Non-Electing Growers if the directions sought were issued.
2. Finally, I accepted that if the directions sought were not issued, the sale of the Scheme Trees could potentially be undermined and there could be potential disruption to the orderly administration of the receivership.
3. The directions were sought in circumstances where claims had been raised by Scheme Investors. The Receivers sought directions so as to obtain comfort before entering into any binding sale agreement with any potential buyer of the Scheme Trees on the Voyager Land.
4. At paragraphs 66 and 67 of his fourth affidavit, Mr Woodhouse deposed that he was concerned that, without the directions being made, prospective purchasers may be deterred from entering into a sale agreement for the Scheme Trees located on the Voyager Land by virtue of the claims made by some Scheme Investors, and that the Receivers would be hindered in their ability to sell the Scheme Trees on the Voyager Land, and to enter into any binding sale agreement with any prospective purchaser(s). Further, he deposed to being concerned that without the directions sought, the Receivers may be exposed to claims from Scheme Investors (even if those claims were ultimately found to lack merit) to the effect that they had acted unreasonably, inappropriately or otherwise in breach of their duties in selling the Scheme Trees on the Voyager Land.
5. In considering whether the Receivers were justified in acting in the manner proposed, I had regard to the duties that they were obliged to fulfil. As was noted by Vaughan J in Re Mirabela Nickel Ltd (receivers and managers appointed) (in Liq); ex parte Madden at [158], the following propositions identify the relevant duties:

(1) The paramount duty of a receiver is to the security holder of the security interest in respect of which he or she was appointed.

(2) The principal duty of a receiver is to get in the assets of the company and apply the proceeds in discharge of the debt due to the security holder. Liquidating the secured creditor's debt is a matter of 'primary concern'. A receiver's primary duty in exercising his or her powers is to try and bring about a situation in which the secured debt is repaid.

(3) A receiver is under no duty to protect the interests of the unsecured creditors to the prejudice of the security holder.

(4) However, in a manner akin to a liquidator in a winding up, a receiver also has an obligation to communicate properly and effectively with persons making claims in the receivership. (Footnotes omitted)

1. His Honour further observed at [160] - [162] that:

It is expected ... that an officer in the position of the receivers will not seek to fulfil his or her paramount duty to the security holder in a way that would unreasonably frustrate or inhibit the prosecution of a bona fide claim by a third party. Bona fide claims of third parties in relation to receivership assets ought not be stifled - and in that regard a receiver must be astute to communicate with third parties so as to allow them a reasonable opportunity to ventilate bona fide claims as to assets in the receivership. What is required by way of a reasonable opportunity, and when one ought to be given, will depend on the circumstances of the case.

Once the receiver affords the third party a reasonable opportunity to take proceedings to assert and vindicate its claimed interest or entitlement, there ought to be no proper basis on which to assert default by the receiver when he or she acts - as a receiver must - to satisfy his or her primary duty by distributing the receivership assets pursuant to the security.

It would be incompatible with the receiver's paramount duty to hold off making the distribution to the secured creditor on the off chance that the third party might, at some point, commence proceedings. The receiver owes no duty to the third party to defer making the distribution. Conversely, there is a duty to apply the proceeds in discharge of the debt due to the security holder.

1. In this case, the Receivers sought the directions so as to enable them to move expeditiously to sell the Scheme Trees before the substantive rights of the Scheme Investors could be determined. They did so to avoid the risk of termination and the consequent loss of all rights and interests in the Scheme Trees, which would be to the detriment of the Receivers (and their appointees), the Scheme Investors, and any prospective purchasers of the Scheme Trees.[98] Such action was entirely consistent with the Receivers' paramount duty, while also affording the Scheme Investors further opportunity to ventilate bona fide claims as to the proceeds from the sale of the Scheme Trees.
2. The above were matters which weighed in favour of the exercise of discretion. In all of the circumstances it was appropriate that the Receivers, and the orderly administration of the receivership, be relieved of the risk of the concerns expressed by Mr Woodhouse in his fourth affidavit.

1. In all of the circumstances, and having weighed all of these matters in the balance, I considered it appropriate to give the directions reproduced at sch B to these reasons. I also made orders granting any third party who could show a sufficient interest to vary or discharge the orders liberty to apply on two business days' notice to the Receivers. The orders further compelled the Receivers to give notice to Scheme Investors of the orders made, together with notice of the timeframe within which the Receivers proposed to enter into a sale agreement for the Scheme Trees, and when the Receivers anticipated the Scheme Trees would be harvested, affording them the opportunity to seek injunctive relief.
2. Finally, as to the costs of the application, it was appropriate in all of the circumstances to order that the costs of, and incidental to, the application and the costs reserved from the hearing on 11 July 2024 be costs and expenses in the receivership of Sandalwood Properties Limited and Quintis Forestry Pty Ltd. There was no basis to conclude that the Receivers ought to personally bear the costs of this application, nor that they ought to be borne by another Quintis Group entity.

Quintis (Australia) Pty Ltd (receivers and managers appointed) (administrators appointed)

Sandalwood Properties Ltd (receivers and managers appointed) (administrators appointed) (formerly known as T.F.S. Properties Ltd)

Quintis Forestry Pty Ltd (receivers and managers appointed) (administrators appointed) (formerly known as Tropical Forestry Services Ltd)

Arwon Finance Pty Ltd (receivers and managers appointed) (administrators appointed)

Quintis Leasing Pty Ltd (in liquidation) (receivers and managers appointed) (formerly known as T.F.S. Leasing Pty Ltd)

Fieldpark Pty Ltd (receivers and managers appointed) (administrators appointed)

Mt Romance Holdings Pty Ltd (receivers and managers appointed) (administrators appointed)

Quintis Sandalwood Pty Ltd (receivers and managers appointed) (administrators appointed) (formerly known as Mt Romance Australia Pty Ltd)

About Time We Met Pty Ltd (receivers and managers appointed) (administrators appointed) (formerly known as Australia Sandalwood Oil Co. Pty Ltd)

Sch C - Key lease and management agreement clauses

Application means an application (in the form of the Application Form attached to or accompanying the Product Disclosure Statement) that has been signed by a Grower and on which that Grower has offered to subscribe for one or more Interests by entering into a Lease and Management Agreement in respect of one or more Sandalwood Lots. ...

Collectable Produce means, in relation to a Grower who is an Electing Grower, that Grower's Proportional Share of the Forest Yield. ...

Electing Grower means a Grower who has made an election in accordance with clause 15. ...

Forest Produce means, in relation to a Grower who is a Non-Electing Grower, that Grower's Proportional Share of the Forest Yield.

Forest Yield means produce from the Plantation (expressed in cubic metres) after Harvest and Processing.[99] ...

Growers means all of the persons who are identified as 'growers' under this Agreement and each person who is described as a 'Grower' in any other Lease and Management Agreements entered into relating to the same Scheme. ...

Leased Area means, in relation to a Grower, that specified part of the Plantation as identified in the Annexure (comprising one or more Sandalwood Lots) to be sub-leased by the Grower from the Lessor pursuant to the terms of this Agreement. ...

Non-Electing Grower means a Grower who is not an Electing Grower. ...

Proportional Share means the proportion which the number of Sandalwood Lots sub-leased by the relevant Grower bears to the total number of Sandalwood Lots sub-leased by all Growers for the time being.

Sandalwood Lot means a specified area comprising approximately one sixth (1/6) of a hectare forming part of the Plantation which is sub-leased or intended to be sub-leased to a Grower as more particularly delineated on the Plan and Sandalwood Lots means more than one Sandalwood Lot.

Termination Date means the termination date specified in Item 5 of the Schedule.

Trees means the Sandalwood seedlings or trees from time to time growing on the Leased Area for silvicultural purposes.[100]

SCHEDULE

...

(a) the date on which the Scheme is terminated pursuant to the provisions of the Constitution; or

(b)

(i) if the Grower is a Non-Electing Grower, the date of payment to the Grower of the amount referred to in clause 18.3(c);[101] or

(ii) if the Grower is an Electing Grower, the date of payment by the Grower of the amounts referred to in the notice provided to the Grower in accordance with clause 15.2 or the date on which the Grower collects the Collectable Produce, whichever is the later.

...

5.14 Trees are owned by Grower

The parties acknowledge and agree that the Trees are and will remain the property of the relevant Grower until the end of the Term or otherwise for so long as their Lease has not been terminated in accordance with its terms and that the rights and interests granted to the relevant Grower under this Lease are an independent and severable grant of a property interest in the relevant Sandalwood Lots by the Lessor to the Grower.[102]

15.1 Notice

The Grower had the opportunity when completing the Application, to elect to become an Electing Grower and to take the Collectable Produce, by marking the relevant section of the Application. If the Grower marked the relevant section of the Application, the Grower becomes an Electing Grower for the purposes of this Agreement.

15.2 Notification to Grower

The Responsible Entity must notify an Electing Grower in writing, at a time or times that the Responsible Entity reasonably considers to be appropriate, of the following:

(a) when and from where the Collectable Produce will be available for collection by the Electing Grower;

(b) the Grower's Proportional Share of the Costs of Harvesting and Processing;

(c) any unpaid rent payable to the Lessor pursuant to clause 3;

(d) any unpaid fees payable to the Responsible Entity pursuant to this Agreement;

(e) any other amount due and payable to the Responsible Entity pursuant to the terms of this Agreement or the Constitution; and

(f) any other amount due and payable to the Lessor pursuant to the terms of this Agreement or the Constitution.

An Electing Grower must collect the Collectable Produce on any day specified for collection by the Responsible Entity and pay, at the time of collection to the Responsible Entity all of the amounts specified by the Responsible Entity in the notice provided to the Electing Grower in accordance with clause 15.2.[103]

If the Grower makes an election pursuant to clause 15.1 but fails to collect the Collectable Produce on any specified day or to pay the relevant amounts referred to in the notice provided to the Grower in accordance with clause 15.2 then:

(a) the election is deemed never to have been made;

(b) the Grower is no longer entitled to collect the Collectable Produce; and

(c) the Grower is for all purposes of this Agreement, presumed always to have been a Non-Electing Grower,

in which event the Grower shall pay to the Responsible Entity a further fee of 3% of the Gross Proceeds of Sale.

If, on any day of collection, any of the amounts referred to in the notice provided to the Electing Grower in accordance with clause 15.2 are not ascertainable then the Responsible Entity must provide to the Electing Grower an estimate of the amount which is not ascertainable and the Electing Grower must pay that amount in satisfaction of its obligations. When, subsequently, the actual amount payable is ascertained, the difference between the estimated and actual amounts must be paid to or refunded by the relevant party as the case may be.

Subject to clauses 7 and 25, at all times, the Grower has full right, title and interest:[104]

(a) if the Grower is a Non-Electing Grower, in the Forest Produce and the right to have the Forest Produce sold for the benefit of the Grower; or

(b) if the Grower is an Electing Grower, in the Collectable Produce.

A Non-Electing Grower must accept the payment referred to in clause 18.3(c) in full satisfaction and discharge of the Non-Electing Grower's rights in relation to the Forest Produce.

An Electing Grower must take the Collectable Produce in full satisfaction and discharge of the Electing Grower's rights in relation to the Collectable Produce.

The Responsible Entity must direct any purchaser of Forest Yield to pay the Gross Project Proceeds to the Responsible Entity and the Responsible Entity must deposit the Gross Project Proceeds into the Proceeds Fund.

Within 10 Business Days of receiving Gross Project Proceeds, the Responsible Entity must pay to itself, from those Gross Project Proceeds:

(a) the Grower's Proportional Share of the Costs of Harvest and Processing; and

(b) the Non-Electing Grower's Proportional Share of the Selling and Marketing Fee.

Within 5 Business Days of making the payments referred to in clause 18.2, the Responsible Entity, from the Net Proceeds of Sale:

(a) must pay any outstanding fees (including the Incentive Fee, if applicable) due and payable to the Responsible Entity pursuant to this Agreement or the Constitution;

(b) must pay any outstanding amounts owed to the Lessor pursuant to the terms of this Agreement or the Constitution; and

(c) must distribute the remainder to the Non-Electing Grower.

The Responsible Entity must obtain an auditor's certificate within 5 Business Days of receipt of Gross Project Proceeds stating the:[105]

(a) Gross Project Proceeds received by the Responsible Entity,

(b) total volume of the Forest Yield included in the sale; and

(c) total Costs of Harvest and Processing.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Korda v Silkchime Pty Ltd [2010] WASC 155; (2010) 243 FLR 269 [32]; citing Sanderson v Classic Car Insurances Pty Ltd (1985) 10 ACSR 115; (1986) 4 ACLC 114 and Re Southern Cross Airlines Holdings Ltd (in liq) [2001] 1 Qd R 84; (1998) 145 386; Re Mirabela Nickel Ltd (receivers and managers appointed) (in Liq); ex parte Madden [2018] WASC 335 [85].

[2] Re GB Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674, 679 ‑ 680; Re Anglican Insurance Ltd [2008] NSWSC 41; (2008) 26 ACLC 147 [38] ‑ [39]; Handberg v MIG Property Services Pty Ltd [2010] VSC 336; (2010) 79 ACSR 373 [7]; Saraceni v Jones [2012] WASCA 69; (2012) 42 WAR 518 [159]; Re Mirabela Nickel Ltd (receivers and managers appointed) (in Liq); ex parte Madden [85].

[4] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, pars 10 - 11.

[5] As permitted by the Supreme Court (Corporations) (WA) Rules 2004 r 2.2(1)(b).

[6] Affidavit of S Commadeur affirmed on 11 July 2024, pars 7 - 10; fourth affidavit of DH Woodhouse affirmed on 5 July 2024, pars 12, 40 - 43; certificate of urgency filed on 8 July 2024.

[8] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 12(a) ‑ (b).

[9] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 12(d).

[10] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 14.

[11] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 12(e).

[12] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 14(a), DHW-33.

[13] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 14(b), DHW-34, DHW-35.

[14] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, pars 11 and 19.

[15] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 20.

[16] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW-33 (cl 2.1 of the 2007 Quintis Managed Investment Scheme lease and management agreement, page 766), DHW-34 (cl 2.1 of the 2008 Quintis Managed Investment Scheme lease and management agreement, page 973); DHW-35 (cl 2.1 of the 2009 Quintis Managed Investment Scheme lease and management agreement, page 1203).

[17] As recorded in the Recitals to the sub-leases, attached to the fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW-22(a) (page 319), DHW-23(a) (page 358).

[18] As recorded in the Recitals to the sub-leases, attached to the fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW-22(a) (page 319), DHW-23(a) (page 358).

[19] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, pars 20(c), 24, DHW-30.

[20] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 25, DHW-33, DHW-33(a), DHW-33(c) (2007 Quintis Managed Investment Scheme); par 26, DHW-34, DHW-34(a), DHW-34(b) (2008 Quintis Managed Investment Scheme); par 27, DHW-35, DHW-35(a), DHW-35(b) (2009 Quintis Managed Investment Scheme).

[21] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 12(a), DHW-22.

[22] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 12(a).

[23] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 12(b), DHW-23.

[24] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 12(b).

[25] As was recorded in cl 15.1 of the lease and management agreements, which section is reproduced at sch C to these reasons.

[26] 'Forest Produce' was a term defined in the lease and management agreements, which definition is reproduced at sch C to these reasons.

[27] 'Collectable Produce' was a term defined in the lease and management agreements, which definition is reproduced at sch C to these reasons.

[28] As was recorded in cl 15.1 to cl 15.5 of the lease and management agreements, which sections are reproduced at sch C to these reasons.

[29] Clause 16.1 of the lease and management agreements is reproduced at sch C to these reasons.

[30] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW-33 (cl 17.1 of the 2007 Quintis Managed Investment Scheme lease and management agreement, page 775), DHW-34 (cl 17.1 of the 2008 Quintis Managed Investment Scheme lease and management agreement, page 982); DHW-35 (cl 17.1 of the 2009 Quintis Managed Investment Scheme lease and management agreement, page 1212).

[31] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, pars 28 - 30, DHW-33, DHW-34, DHW‑35, DHW-36, DHW-37.

[32] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 16, DHW-3.

[33] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 17, DHW-4.

[34] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 19, DHW-5.

[35] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 18.

[36] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW-25(a) (ts 37 (12 March 2024)).

[37] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 20, DHW-6.

[38] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 2.

[39] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 22.

[40] First affidavit of DH Woodhouse affirmed on 15 April 2024, pars 23 - 24, DHW-8.

[41] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 25, DHW-9; fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 2.

[42] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW-33(a) (2007 Quintis Managed Investment Scheme constitution, page 821); DHW-34(a) (2008 Quintis Managed Investment Scheme constitution, page 1025); DHW-35(a) (2009 Quintis Managed Investment Scheme constitution, page 1259).

[43] Corporations Act s 601ND(1)(a) and (2).

[44] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 15.

[45] The extempore reasons of Cobby J: ts 36 - 50 (12 March 2024), and the orders made on 12 and 14 March 2024, attached to the fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW-25.

[46] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 16, DHW-25, DHW-25(a).

[47] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW-33(a) (2007 Quintis Managed Investment Scheme constitution, page 822); DHW-34(a) (2008 Quintis Managed Investment Scheme constitution, page 1026); DHW-35(a) (2009 Quintis Managed Investment Scheme constitution, pages 1259 ‑ 1260).

[48] First affidavit of DH Woodhouse affirmed on 15 April 2024, par 21.

[49] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 17, DHW-26; see also the first affidavit of DH Woodhouse affirmed on 15 April 2024, par 21, DHW-6.

[50] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 17, DHW-26.

[51] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 23, DHW-31.

[52] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 24, DHW-32.

[53] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW-31 (pages 752 - 753).

[54] As was observed by counsel at the hearing of the application: ts 54 - 55 (18 July 2024).

[55] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, pars 17, 46 - 61.

[56] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, pars 47 - 52.

[57] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 48.

[58] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 49, DHW-41, DHW-42.

[59] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 50.

[60] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 51, DHW-43.

[61] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 52, DHW-43(a).

[62] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 56.

[63] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, pars 54 - 55.

[64] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 58, DHW-46.

[65] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 59, DHW-47.

[66] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 17.

[67] See the fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW-33 (cl 5.14 of the 2007 Quintis Managed Investment Scheme lease and management agreement, pages 769-770), DHW-34 (cl 5.14 of the 2008 Quintis Managed Investment Scheme lease and management agreement, page 976-977); DHW-35 (cl 5.14 of the 2009 Quintis Managed Investment Scheme lease and management agreement, page 1207).

[68] See the fourth affidavit of DH Woodhouse affirmed on 5 July 2024, pars 20(c), 24, DHW-30.

[69] Receivers' outline of submissions, pars 12 - 20.

[70] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW-33(a) (2007 Quintis Managed Investment Scheme constitution, page 822), DHW-34(a) (2008 Quintis Managed Investment Scheme constitution, page 1026), DHW-35(a) (2009 Quintis Managed Investment Scheme constitution, pages 1259 ‑ 1260).

[71] Receivers' outline of submissions, pars 21 - 27.

[72] 'Collectable Produce', 'Proportional Share' and 'Forest Yield' are terms defined in the lease and management agreements, which definitions are reproduced at sch C to these reasons.

[73] Fifth affidavit of DH Woodhouse affirmed on 17 July 2024, pars 11 - 13, DHW-50, DHW-50(a).

[74] Fifth affidavit of DH Woodhouse affirmed on 17 July 2024, par 15, DHW-51.

[75] Fifth affidavit of DH Woodhouse affirmed on 17 July 2024, par 16, DHW-51(a).

[76] Fifth affidavit of DH Woodhouse affirmed on 17 July 2024, par 17, DHW-51(b).

[77] Fifth affidavit of DH Woodhouse affirmed on 17 July 2024, pars 18 - 20.

[78] Fifth affidavit of DH Woodhouse affirmed on 17 July 2024, pars 21 - 25, DHW-52, DHW-52(a), DHW‑52(b) and DHW-52(c).

[79] Fifth affidavit of DH Woodhouse affirmed on 17 July 2024, pars 27 - 28.

[80] Korda v Silkchime Pty Ltd [32]; Re Mirabela Nickel Ltd (receivers and managers appointed) (in Liq); ex parte Madden [85].

[81] Re GB Nathan & Co Pty Ltd (in liq) (679 ‑ 680); Re Anglican Insurance Ltd [38] - [39]; Handberg v MIG Property Services Pty Ltd [7]; Saraceni v Jones [159]; Re Mirabela Nickel Ltd (receivers and managers appointed) (in Liq); ex parte Madden [85].

[82] Re Mirabela Nickel Ltd (receivers and managers appointed) (in Liq); ex parte Madden [86]; Re i‑Prosperity Waterside Rhodes Pty Ltd [2021] NSWSC 1065 [6]; Revroof Pty Ltd (Receivers and Managers Appointed) v Taminga Street Investments Pty Ltd [2023] FCA 543 [12].

[83] Preston, in the matter of Sandalwood Properties Ltd [2018] FCA 547 [42].

[84] Re Mirabela Nickel Ltd (receivers and managers appointed) (in Liq); ex parte Madden [89], where the court summarised the principles that emerged from Preston, in the matter of Sandalwood Properties Ltd.

[85] ASIC v Commercial Nominees of Australia Ltd (2002) 20 ACLC 1238; 42 ACSR 240; [2002] NSWSC 576 [9].

[86] Corporations Act s 9 (par (a) of the definition).

[87] Preston, in the matter of Sandalwood Properties Ltd [35], citing Re Rosewood Research Pty Ltd [2014] NSWSC 449 [30].

[88] Preston, in the matter of Sandalwood Properties Ltd [72].

[89] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 12(a).

[90] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 12(b).

[91] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW‑22 (page 304), DHW‑23 (pages 343 ‑ 344).

[92] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, DHW‑22 (cl 6.8, page 304, cl 18.1, page 315).

[93] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 17.

[94] Fourth affidavit of DH Woodhouse affirmed on 5 July 2024, pars 54 - 55.

[95] See [70] and [71] above; fourth affidavit of DH Woodhouse affirmed on 5 July 2024, par 58, DHW-46, par 59, DHW-47.

[96] Re Mirabela Nickel Ltd (receivers and managers appointed) (in Liq); ex parte Madden [90]; citing Korda v Silkchime Pty Ltd [2010] WASC 155; (2010) 243 FLR 269 [35].

[97] Re Mirabela Nickel Ltd (receivers and managers appointed) (in Liq); ex parte Madden [90]; citing White v Huxtable; Re Lake Federation Pty Ltd [2006] FCA 559; (2006) 232 ALR 388 [21].

[98] Receivers' outline of submissions, par 30.

[99] In the lease and management agreement for the 2009 Quintis Managed Investment Scheme, the term 'Forest Yield' includes additional words as recorded here in underline: 'Forest Yield means produce from the Plantation (expressed in cubic metres) after Harvest and Processing, other than the Seeds.'

[100] In the lease and management agreement for the 2007 Quintis Managed Investment Scheme, the term 'Trees' is defined as set out above. In the lease and management agreements for the 2008 and 2009 Quintis Managed Investment Schemes, the term is defined as follows: 'Trees means the Santalum Album trees grown on the Leased Area as part of the Project, and such other trees as may reasonably be necessary or required to enable or encourage the growth of or protect the Santalum album seedlings or trees growing on the Leased Area.'

[101] In item 5 of the schedule to the lease and management agreement for the 2009 Quintis Managed Investment Scheme, the cross-reference in Item 5(b)(i) was to cl 18.3(d) and not to cl 18.3(c). However, this appears to be a typographical error as the lease and management agreement for the 2009 Quintis Managed Investment Scheme did not include cl 18.3(d).

[102] Clause 5.14 is set out as above in the lease and management agreements for the 2007 and 2008 Quintis Managed Investment Schemes. In the lease and management agreement for the 2009 Quintis Managed Investment Scheme, cl 5.14 is made subject to cl 5.15 and cl 19.2.

[103] Clause 15.3 is set out as above in the lease and management agreements for the 2007 and 2008 Quintis Managed Investment Schemes. In the lease and management agreement for the 2009 Quintis Managed Investment Scheme, cl 15.3 includes additional words as recorded here in underline: 'An Electing Grower must collect its share of the Collectable Produce (as determined in accordance with clause 19.2) on any day specified for collection by the Responsible Entity and pay, at the time of collection to the Responsible Entity all of the amounts specified by the Responsible Entity in the notice provided to the Electing Grower in accordance with clause 15.2.'

[104] Clause 16.1 is set out as above in the lease and management agreements for the 2007 and 2008 Quintis Managed Investment Schemes. In the lease and management agreement for the 2009 Quintis Managed and Investment Scheme, cl 16.1 is made subject to cl 19, in addition to cl 7 and cl 25.

[105] Clause 18.4 is set out as above in the lease and management agreement for the 2007 Quintis Managed Investment Scheme. In the lease and management agreements for the 2008 and 2009 Quintis Managed Investment Schemes, cl 18.4 is set out as follows: 'The Gross Project Proceeds will be accumulated and distributed on a quarterly basis. The Responsible Entity must obtain an auditor's certificates to correspond to the distribution to Growers stating the:

(a) Gross Project Proceeds received by the Responsible Entity,

(b) total volume of the Forest Yield included in the sale; and