FMIF Receiver’s Court Application for Remuneration Approval – Hearing Date 30 November 2017

On 10 November 2017, the Court Appointed Receiver made an application for the approval of his remuneration for the period 1 May 2017 to 31 October 2017 together with his remuneration for work undertaken in respect of the Controllership appointments for the period 1 May 2017 to 31 October 2017. 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 30 November 2017. The court approved the remuneration sought of $1,280,897.20 (inclusive of GST) in respect of work undertaken in dealing with FMIF during the period from 1 May 2017 to 31 October 2017. In addition, the court approved the remuneration sought of $26,155.25 (inclusive of GST) in respect of the work undertaken on the controllerships during the period 1 May 2017 to 31 October 2017. A copy of the order made on 30 November 2017 is available 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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