Photo: Hall Chadwick
In his April 18 judgement, Federal Court justice John Reeves said that while the Hall Chadwick partners had breached Corporations and Trust law statutes in the disposal of assets of Suncoast Restoration Pty Ltd, they had done so unknowingly.
Not only that, the judge lay the blame for the mistake with the insolvency operator's former solicitors and lauded the unwittingly erring pair for moving swiftly to rectify the situation as soon as they learned there was a problem. Read the judgement here.
Pleash and Albarran were appointed joint administrators of Suncoast Resoration Pty Ltd in February, 2012. At that time Suncoast Restoration was sole trustee of a superannuation fund called the Allen's Asphalt Staff Superannuation Fund.
Unbeknownst to them, the appointment of administrators or the passing of a resolution to wind the company up in liquidation automatically disqualified Suncoast Restoration from its role as sole trustee of the super fund under a clause contained in the fund's trust deed.
Pleash and Albarran were then appointed joint liquidators of Suncoast Restoration in March, 2012.
Justice Reeve said the status of Suncoast in liquidation reverted to that of bare trustee, meaning "Suncoast did not have the power to sell the assets of the Trust Fund".
His honour also said that Pleash and Albarran's predicament was further complicated by the fact that "the only relevant asset in Suncoast’s winding up was its right to be indemnified out of the assets of the Trust Fund to meet the liabilities it had incurred as its trustee."
Apparently the Hall Chadwick duo learned about Suncoast's reversion to bare trust status in October 2012, after engaging new solicitors, and after they had entered into an agreement to sell the trust's main asset, a property on Bribie Island off Queensland's south east coast.
According to the judgement, blame lay with the liquidator's previous law firm, which had made no reference to the implications for Suncoast's status as corporate trustee if it was placed in administration or wound up.
An affidavit filed by Pleash included a letter of advice received from their previous solicitors dated late March, 2012.
Justice Reeves said "This letter is significant as it does not mention any concern about Suncoast’s continuing role as trustee of the Trust Fund."
Pleash did not respond to SiN's enquiries.