Introduction
This case study is based on Environinvest Limited (Receivers and Managers Appointed)(in liquidation) vs Roger Neil Pescott & Ors (2012) and Environinvest Limited (Receivers and Managers Appointed) (in liquidation) vs Blackburne Pty Ltd (in liquidation) (2012).
Environinvest Ltd was a corporation that manages investment schemes in the field of agriculture (Bloomberg Businessweek, 2014). The corporation was responsible in developing various agriculture investments under the care of agriculture specialist, such as eucalypt plantations and hydroponic tomatoes (Korda Mentha, 2014). Investors would invest in these schemes in order to receive tax deductions (Lonie, 2009). In ...view middle of the document...
The properties related to this case are Eurambeen, Beenak, Lillirie and Modesty Park.
Eurambeen in the beginning was owned by Blackburne Pty Ltd, a trustee of a Pescott family trust. In 2000, a sales agreement had been made between the two companies that cost roughly around $ 3.8 million. In order to receive the deed, Environinvest Ltd had issued Blackburne with 450,478 ordinary shares which was equivalent to $225,240 at the time and was signed off by Dossetor. He was also the director of the other company and the deal was executed solely by him. However, in 2007 the directors decided to transfer the property to Arnac Pty Ltd, a company that was owned by Pescott’s daughter and son-in-law. The transaction concluded with Blackburne transferring the land to Arnac however excluding giving Environinvest Ltd any consideration for it.
STY (Holdings) Pty Ltd was the owner of Beenak before they had decided to sell to Environinvest in 2004 for $ 1.38 million. Payment was made to them but transfer of the title was not complete which went undone till 2005. Subsequently, STY (Holdings) gave up Beenak to St.George Bank as a mortgage without consulting Environinvest.
In 2004, Environinvest had become the registered proprietor of Lillirie. Between 2007 and 2008, the company agreed to sell the land to Trawalla Holdings Pty Ltd, a company directed by Pescott and his wife, for $ 1.6 million which was the purchase price of the land. The sale agreement transcribed that a deposit of $1.12 million was to be paid in 2007 and the balance, $ 480,000 plus 8% interest, would be paid off before 2010. However, by 2008 Environinvest transferred all of the documentation of the property to Trawalla without receiving the rest of the balanced payment mention in the sale agreement.
Similar situation occurs to Modesty Park. Environinvest was the owner of Modesty Park by 2002, later on between 2007 and 2008 the company agreed to sell the land to Pescott for $ 1.33 million. The sale agreement transcribed the deposit of $ 730,000 should be paid and the balance of $ 600,000 plus *% interest would be paid off by 2010. In reality, the company did not receive a single payment from Pescott, as they have made the transaction in the books by cancelling a part of the company’s debt to Pescott.
Next are the Options proceedings. This proceeding relates more to the transactions made by the directors for their own benefits as well for the ones associated to them. The specific parties in this proceedings are; Environinvest Ltd, James Patrick Downey the liquidator of the company, and S.T.Y. (Afforestation) Pty Ltd as the plaintiffs. Roger Neil Pescott, Caroline Pescott, Euan Pescott, Blackburne Pty Ltd, Brabourne Pty Ltd, Mt Ross Pastoral Pty Ltd, Eurambeen Pty Ltd, Maridale (Victoria) Pty Ltd, Carnac Pty Ltd, Clive Randal Dossetor and Grant Anthony Robertson as the list of defendants.
One of the claims in this proceeding is the BEP Blue Gum Project which was formerly owned by Euan...
