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Re Timbercorp Securities Limited (In liq) [2011] VSC 24

by Martha.Ware 18. April 2011 08:36


Timbercorp Securities Limited (in liq) was the responsible entity for two projects which its liquidators were in the process of winding up. The liquidators sought, and were granted, Court directions under s 511 of the Corporations Act that they were justified in terminating or surrendering the investors rights in licences to grow grapes on land owned by a third party.


The third party was the responsible entity for a trust. It was in receivership. The receivers and managers contracted to sell the land unencumbered by the investor’s licences and rights.


The court’s function was not to substitute its commercial judgment for that of the liquidators but to supervise and consider whether there was any impropriety or other good reason which may indicate the liquidators may be acting inappropriately or unreasonably in their actions: [3]. It was relevant whether there was prejudice to the investors or secured creditors. It was intended to hold the sale proceeds in trust pending Court determination of party’s rights: [4]. Further the project’s constitutions had been amended under s 601GC(1)(b) of the Corporations Act to allow the termination or surrender of the licences: [5].



The court held the exercise of s 601GC(1)(b) power was valid. The liquidators had considered the effect on the member’s rights before and after the proposed amendments and their opinion was reasonably held. The liquidators had followed the same process used in winding up other schemes. The third party’s receivers and managers had undertaken a robust, thorough sales process calculated to maximise value: [6]. The third party’s receivers and managers supported the proposed orders, the investors were not opposed and ASIC neither opposed nor consented to the application.


Relevant paragraphs of Ford

[11.265], [22.505], [27.161], [27.171], [27.182], [27.480], [27.540], [27.550], [27.610], [27.620]


Ford's Principles of Corporations Law


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