LM v Drake – application for substituted service – Supreme Court of Queensland proceedings 1146/20 – Hearing Date 2 June 2020:

Application filed by the FMIF Receiver on 31 January 2020 for directions as to whether he is justified in making and pursuing the Notice of Appeal in Supreme Court of Queensland proceedings 1146/20 – Hearing Date 2 June 2020

TAKE NOTICE that David Whyte, as the person appointed pursuant to section 601NF of the Corporations Act 2001 (Cth) to take responsibility for ensuring that the FMIF is wound up in accordance with its constitution and as receiver of the property of the FMIF (Mr Whyte), has applied to the Supreme Court of Queensland for directions as to:-

"whether Mr Whyte is and was justified in making and pursuing the Notice of Appeal number 14258 of 2019 dated 20 December 2019 in respect of the Judgment of the Supreme Court of Queensland in LM Investment Management Ltd (receiver appt) (in liq) v Drake & Ors [2019] QSC 281 (the Director Proceedings Judgment) on behalf of the Applicant in this proceeding"

The Notice to the Members of the LM First Mortgage Income Fund (Receiver Appointed) in relation to the application together with a copy of the application and supporting material can be found below.

Further documents filed in the proceedings will be uploaded to this website as and when they become available.

FMIF Receiver’s Court Application for Remuneration Approval – Hearing Date 17 December 2019

On 21 November 2019, the Court Appointed Receiver made an application for the approval of his remuneration for the period 1 May 2019 to 31 October 2019. The Notice to the Members of the LM First Mortgage Income Fund (Receiver Appointed) with respect to that application together with a copy of the application and supporting material can be found below.

The hearing for the remuneration application of the Court Appointed Receiver took place on 17 December 2019. The court approved the remuneration sought of $652,328.05 (inclusive of GST) in respect of work undertaken in dealing with FMIF during the period from 1 May 2019 to 31 October 2019. A copy of the order made on 17 December 2019 is available below:

FMIF Receiver’s Court Application for Remuneration Approval – Hearing Date 2 July 2019

On 6 June 2019, the Court Appointed Receiver made an application for the approval of his remuneration for the period 1 November 2018 to 30 April 2019. The Notice to the Members of the LM First Mortgage Income Fund (Receiver Appointed) with respect to that application together with a copy of the application and supporting material can be found below.

The hearing for the remuneration application of the Court Appointed Receiver took place on 2 July 2019. The court approved the remuneration sought of $1,248,853.10 (inclusive of GST) in respect of work undertaken in dealing with FMIF during the period from 1 November 2018 to 30 April 2019. A copy of the order made on 2 July 2019 is available below:

Application filed on 1 February 2019 for directions in relation to settling Supreme Court of Queensland Proceedings 13534 of 2016 (“the Feeder Fund Proceedings”) on the terms set out in a Deed of Settlement and Release

TAKE NOTICE that David Whyte, as the person appointed pursuant to section 601NF of the Corporations Act 2001 (Cth) to take responsibility for ensuring that the FMIF is wound up in accordance with its constitution and as receiver of the property of the FMIF (Mr Whyte), has applied to the Supreme Court of Queensland for directions whether he is justified:-

  1. in settling Supreme Court of Queensland Proceedings 13534 of 2016 (“the Feeder Fund Proceedings”) on the terms set out in a Deed of Settlement and Release as varied by a Deed of Variation (“the Deed of Settlement”);
  2. in causing LM Investment Management Limited (in liquidation) (LMIM) as responsible entity of the FMIF (receiver appointed) to enter into and perform the Deed of Settlement.

The application filed 1 February 2019 has been listed for hearing before Mullins J on the civil list on 2 May 2019.

The supporting material can be found below:

  • Orders of Mullins J delivered 22 February 2019 (0.3 MB)


    • The Notice to the Members of the LM First Mortgage Income Fund (Receivers and Managers Appointed) (Receiver Appointed) in relation to that application together with a copy of the application and supporting material can be found below. Access to the documents below requires a password which was emailed or posted to your preferred mailing address. If you require assistance, please contact BDO on (07) 3237 5999 or email enquiries@lmfmif.com.au.

  • Notice to FMIF members dated 7 March 2019 (0.7 MB)
  • Interlocutory Application dated 1 February 2019 (0.4 MB)
  • Affidavit of David Whyte sworn 31 January 2019 (1.5 MB)
  • Exhibit Volume 1 to the Affidavit of David Whyte (13.8 MB)
  • Exhibit Volume 2 to the Affidavit of David Whyte (10.8 MB)
  • Exhibit Volume 3 to the Affidavit of David Whyte (11.4 MB)
  • Exhibit Volume 4 to the Affidavit of David Whyte (11.4 MB)
  • Affidavit of David Whyte sworn 18 April 2019 (volume 1 of 3) (13.6 MB)
  • Affidavit of David Whyte sworn 18 April 2019 (volume 2 of 3) (12.1 MB)
  • Affidavit of David Whyte sworn 18 April 2019 (volume 3 of 3) (8.7 MB)
  • Affidavit of David Whyte sworn 1 May 2019 (8.1 MB)
  • Affidavit of David Whyte sworn 2 May 2019 (1.3 MB)
  • Affidavit of Ryan John Whyte sworn 2 May 2019 (1.5 MB)
  • Affidavit of Craig Russell Melrose sworn 2 May 2019 (5.0 MB)
  • Written submissions of David Whyte dated 2 May 2019 (0.3 MB)


    • The decision was reserved following the hearing on 2 May 2019 with judgement subsequently delivered on 22 May 2019. A copy of the orders made and judgement are provided below.

  • Orders of Mullins J delivered 22 May 2019 (0.1 MB)
  • Judegement of Mullins J delivered 22 May 2019 (0.3 MB)

    • Application filed on 1 February 2019 for directions in relation to making an interim distribution to the members of the FMIF and to determine the proper entitlements of members holding “Class C” Units in the FMIF

    TAKE NOTICE that David Whyte, as the person appointed pursuant to section 601NF of the Corporations Act 2001 (Cth) to take responsibility for ensuring that the FMIF is wound up in accordance with its constitution and as receiver of the property of the FMIF (Mr Whyte), has applied to the Supreme Court of Queensland:-

    1. for authority to make an interim distribution from the property of the FMIF of up to $40 million among the members of the FMIF;
    2. to determine the proper entitlements of members holding “Class C” Units in the FMIF, having invested in one of the “Non-Australian Dollar Currency Hedged Fixed Term Investment Options”.

    This application is set down to be heard by the Supreme Court of Queensland at Brisbane on 13 March 2019 at 10:00 am.

    The Notice, together with a copy of the application and supporting material can be found below:

    FMIF Receiver’s Court Application for Remuneration Approval – Hearing Date 29 November 2018

    On 14 November 2018, the Court Appointed Receiver made an application for the approval of his remuneration for the period 1 May 2018 to 31 October 2018 together with his remuneration for work undertaken in respect of the Controllership appointments for the period 1 May 2018 to 31 October 2018. The Notice to the Members of the LM First Mortgage Income Fund (Receivers and Managers Appointed) (Receiver Appointed) with respect to that application together with a copy of the application and supporting material can be found below.

    The hearing for the remuneration application of the Court Appointed Receiver took place on 29 November 2018. The court approved the remuneration sought of $1,946,635.35 (inclusive of GST) in respect of work undertaken in dealing with FMIF during the period from 1 May 2018 to 31 October 2018. In addition, the court approved the remuneration sought of $20,902.75 (inclusive of GST) in respect of the work undertaken on the controllerships during the period 1 May 2018 to 31 October 2018. A copy of the order made on 29 November 2018 is available below:

    Application by Mr Park for directions in relation to the dual appointments to wind up the FMIF (“the Application”)

    On 10 October 2018, Mr Park filed an application in Supreme Court of Queensland Proceeding 3508/15 seeking, among other things, orders or directions to the following general effect:

    1. Directions in relation to the dual appointments of Mr Park (the Liquidator) and myself (the Receiver) to wind up the FMIF, including that my appointment to supervise the winding up of the FMIF continue only in relation to certain specified legal proceedings and the Liquidator take responsibility for ensuring that the FMIF is wound up in accordance with its Constitution;
    2. That the Liquidator is directed to act as contradictor to the Breach of Trust Proceeding (Supreme Court of Queensland No 11560/2016) and the Feeder Fund Proceeding (Supreme Court of Queensland No 13534 of 2016);
    3. That the Liquidator and Receiver each submit a budget of remuneration and expenses to the conclusion of the winding up of the FMIF, that the remuneration of the Liquidator and the Receiver be fixed or determined on the hearing of the application in the amount of 50% of the amount of stated in the relevant Budget, and paid during the course of the winding up, with all other remuneration and expenses of the Liquidator and the Receiver to be deferred and sought at the conclusion of the winding up at which time the amounts stated in the Budgets can be reduced, increased or stay the same;
    4. That the costs of the Application be paid from the FMIF and other funds in such proportions as may be just.

    Copies of documents relevant to the above proceeding are below:

    The application is set down for a final hearing on 10 December 2018, in the Supreme Court of Queensland. The members of FMIF are not respondents to the application but any member is entitled to be heard in the application if they wish.

    Members should read the Notice and the Application for full details of the orders or directions sought and the steps to be taken by any member that wishes to appear.

    Further information can be found at https://www.lminvestmentadministration.com

    Notice to Members

    TAKE NOTICE that John Richard Park, the Liquidator of LMIM, has applied to the Supreme Court of Queensland for the determination and fixing of the Liquidators’ remuneration. A copy of the application and notice issued to members of the FMIF is below:

    Please note that there is a typographical error in the fax number of Russells in the Notice to Members. The correct fax number for Russells is +61 7 3004 8899.

    Further information can be found at https://www.lminvestmentadministration.com.

    To the members of the LM Currency Protected Australian Income Fund ARSN 110 247 875 (Receiver Appointed)(“CPAIF”) and the members of the LM Institutional Currency Protected Australian Income Fund ARSN 111 052 868 (Receiver Appointed)(“ICPAIF”)

    TAKE NOTICE that David Whyte, the person appointed pursuant to section 601NF(1) of the Corporations Act 2001 (Cth) to take responsibility for ensuring that THE LM FIRST MORTGAGE INCOME FUND ARSN 089 343 288 (Receivers and Managers Appointed) (Receiver Appointed) (“FMIF”) is wound up in accordance with its constitution, has applied to the Supreme Court of Queensland including for declarations that:

    1. would, depending on the amount ultimately available for distribution in the winding up of the FMIF, have the effect of reducing or eliminating any distribution to be paid to the CPAIF and the ICPAIF, to the extent of the value of redemptions that were allowed in favour of the Class B unitholders between 11 May 2009 and 31 January 2013 without power and in breach of trust, as adjusted for any overpayment or underpayment of capital distributions made in February and June 2013;
    2. would adjust the number of units held by the CPAIF and the ICPAIF in the FMIF to reinstate those units, but also to cancel further units in the FMIF issued to the CPAIF and the ICPAIF between 1 July 2011 and 1 November 2012 without power and in breach of trust.

    Following the hearing of an application in the above proceedings on 29 May 2018, orders were made on 13 June 2018 (the 13 June 2018 Orders) that, inter alia, the parties to the proceedings engage in a mediation on a date to be agreed and to be completed by 28 September 2018.

    In accordance with order 18 of his Honour Justice Jackson’s Orders dated 13 June 2018, notice is hereby given to the members of the CPAIF and the ICPAIF of the Orders of his Honour Justice Jackson dated 4 September 2018 (the 4 September 2018 Orders).

    The 4 September 2018 Orders amend the 13 June 2018 Orders by providing for mediation to take place on 5 and 6 November 2018.

    Any member has a right to apply to the Court if they wish to be heard in the proceeding or to be represented in the mediation.

    Any member who wishes to know more about the proceedings and the proposed mediation in the proceedings, including if the member wishes to request any material relating to the mediation, should contact the solicitors for the receiver of the CPAIF and the ICPAIF, Messrs. David O’Farrell of HWL Ebsworth, on +61 7 3169 4844.

    Copies of documents relevant to the above are below:

    Application by LMIM and its liquidators for indemnity for expenses from the assets of the FMIF

    On 16 May 2016, LMIM as Responsible Entity of the FMIF and the Liquidators of LMIM (Mr Park and Ms Muller of FTI), filed an Application (“the Application“) for orders concerning payment of certain costs and expenses for which LMIM claims indemnity from the assets of the FMIF.

    David Whyte applied to the Court for Directions as to whether he is justified in, amongst other things, responding to the Application by raising certain matters, including the ‘clear accounts’ rule. On 30 May 2017, Burns J directed that Mr Whyte is justified in raising the clear accounts rule, in response to the Application, in relation to certain identified claims against LMIM.

    The Application was heard on 19 and 20 June 2017 and the decision was reserved. Judgement was delivered on 17 October 2017 and a copy of the judgement is included below.

    The Application and supporting Affidavits, the orders of Burns J, the affidavits to be relied upon by Mr Whyte in response to the application and the judgement are below:

    Important Notice to Members

    On 15 March 2018, the Australian Securities and Investments Commission, on my application, issued instrument 18-0166 under subsections 111AT(1) and 601QA(1) of the Corporations Act 2001 granting LM Investment Management Limited (in liquidation) (receivers and managers appointed), in its capacity as responsible entity of the LM First Mortgage Income Fund (receiver appointed) (“FMIF”) an exemption from compliance with its obligations under:

    1. the disclosing entity provisions in Part 2M.3 of the Act in relation to a financial year or half year of the FMIF;
    2. section 601HG of the Act in relation to a financial year of the FMIF.

    The exemption applies during the period ending on 16 March 2020. A notice explaining the instrument of relief and a copy of the instrument can be found below.

    Court Application by the Liquidators of the Responsible Entity of the LM First Mortgage Income Fund (‘LMIF’) on residual powers and remuneration

    TAKE NOTICE that John Richard Park and Ginette Dawn Muller, the liquidators of LM Investment Management Limited (in liquidation) (receivers and managers appointed)(LMIM) ACN 077 208 461, the responsible entity of the FMIF, and LMIM have applied to the Supreme Court of Queensland in proceeding no. 3508 of 2015 for directions and orders in relation to the extent of their powers and responsibilities as such liquidators and in respect of their remuneration as such liquidators, in relation to the winding up of the FMIF and LMIM.

    The Notice to the Members of the LM First Mortgage Income Fund (Receivers and Managers Appointed) (Receiver Appointed) with respect to that Application together with a copy of the application and supporting material can be found below.

    A Further Amended Originating Application (“the Further Application”) has been filed in the Supreme Court of Queensland proceeding 3508 of 2015, by LM Investment Management Limited (In Liquidation) (“LMIM”), and the liquidators of LMIM, John Park and Ginette Muller. The Further Application seeks orders concerning (among other things) the remuneration of Mr Park and Ms Muller.

    The Further Application was heard on 22 February 2016 and 14 March 2016. The decision was reserved and judgement was delivered on 17 October 2017.

    A copy of the Further Application and other material in relation to the proceedings, the Notice to members of the FMIF about the Further Application and a copy of the judgement are available below.

    Further documentation will be uploaded to this website as it becomes available.

    Appointment of Court Appointed Receiver

    Pursuant to an Order of the Supreme Court of Queensland on 8 August 2013, David Whyte of BDO was appointed Receiver of the LM First Mortgage Income Fund (‘FMIF’) and to take responsibility for the winding-up of FMIF in accordance with its constitution. A copy of the Court Order and Judgement is available below.

    Sealed order of the Supreme Court of Queensland on 21 August 2013 (381 kB)
    Judgement of Justice Dalton delivered on 8 August 2013 (2.6 MB)

    On 20 December 2013 the Queensland Supreme Court made orders in relation to the costs of these proceedings. It ordered that:

    1. Trilogy Funds Management Ltd pay 7% of LM Investment Management Ltd (in Liquidation) (Receivers and Managers Appointed) (“LMIM”) costs of the proceeding; and
    2. LMIM is to be indemnified from the FMIF only to the extent of 20% of its costs of the proceeding.

    LMIM also gave an undertaking that it would not seek from the FMIF any costs of or incidental to the investor meeting convened by notice dated 26 April 2013.

    A copy of the order is available below:

    As advised in our reports to investors, FTI appealed the above decision. This matter was heard by the Court of Appeal on 28 November 2013 with the decision to dismiss the appeal being handed down on 6 June 2014. A copy of the judgement in this respect is available below:

    Judgment of Justice Fraser & Justice Gotterson & Justice Daubney delivered on 6 June 2014 (7.1 MB)

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