Australia, June 18 -- New South Wales Land and Environment Court issued text of the following judgement on May 19:

1. These two related proceedings arise from the breakdown of a business relationship between Mrs Joy Wylie and Mr Jeffrey Williams. Mr Williams is the former son-in-law of Mrs Wylie.

2. Mrs Wylie and Mr Williams are the directors of JR Enterprises Pty Ltd, which is the trustee for the JR Enterprises Unit Trust (the Trust).

3. JR Enterprises, in its capacity as trustee of the Trust, operated a hotel business known as the Crocodile Farm Hotel (the Business), on premises located at 262 Liverpool Road, Ashfield, New South Wales (the Land).

4. The units in the Trust have at all times been held:

1) as to 50%, by Wylie's Securities Pty Ltd, a company of which Mrs Wylie is a director and shareholder; and

2) as to 50%, by Jada Investments Pty Ltd, a company of which Mr Williams is the sole director and shareholder.

5. In addition, Wylie's Securities and Jada:

1) each held 50% of the shares in JR Enterprises; and

2) owned the Land in equal shares.

6. In 2020, Mrs Wylie and Wylie's Securities commenced proceeding 2020/304314 against Mr Williams, Jada and JR Enterprises (the Wylie Proceeding).

7. On 9 May 2022, orders were made in the Wylie Proceeding appointing Mr John Musca of Jones Lang LaSalle's Hotels and Hospitality Group and Mr Andrew Jolliffe of HTL Property as trustees for the sale of the Land and the Business (the Trustees).

8. On 14 June 2022, orders were made in the Wylie Proceeding, by consent, that Mr Williams and Jada pay compensation to JR Enterprises in the amount of $1.5m (the Judgment Debt), as well as orders that Mr Williams and Jada pay the Plaintiffs' costs and that the proceeding be dismissed.

9. On 31 January 2023, the Trustees completed the sale of the Land and the Business. The net sale proceeds were around $34.4m. Interim distributions totalling around $27.8m have been paid from those proceeds to Jada, Wylie's Securities and JR Enterprises. The Trustees' solicitors continue to retain an amount of around $6.6m.

10. By an Amended Interlocutory Process filed in the Wylie Proceeding on 18 November 2024, Mrs Wylie and Wylie's Securities (the Wylie Parties) sought leave to bring a derivative action on behalf of JR Enterprises against Mr Williams and Jada (the Williams Parties) for the enforcement of the Judgment Debt (the Derivative Action).

11. Following the filing of this application, the Williams Parties demanded that the Trustees distribute to Jada one half of the funds which they retained.

12. On 20 December 2024, I granted the Wylie Parties leave to bring the Derivative Action in respect of the Judgment Debt: In the matter of JR Enterprises Pty Ltd atf the JR Enterprises Unit Trust [2024] NSWSC 1671.

13. On 2 April 2025, the Trustees commenced proceeding 2025/136362, seeking judicial advice as to whether they are justified in retaining the sum of around $6.6m on account of potential third party or beneficiary claims against the Trustees and potential future tax and capital gains liabilities arising out of the sale of the Business (the Judicial Advice Application).

14. The Derivative Action was heard together with the Judicial Advice Application.

15. Because there is an issue in the Derivative Action as to the likelihood, timing and quantum of any further distribution by the Trustees from the funds retained by them, it is convenient to deal with the Judicial Advice Application before dealing with the Derivative Action.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/196e5a2776f961aba6bbcd53)

Disclaimer: Curated by HT Syndication.