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For this task, assume you are a junior solicitor and have just joined the insolvency team. The partner who heads your team has asked you for a memorandum summarising the issues with respect to certain property interests that might be available to the liquidator of a company on the facts of the following scenario. The liquidator has sought advice from your partner to confirm which property belongs to the company that can be sold. [You can assume for these purposes that the role of the liquidator is to collect all the property of the company which will be sold to form a pool from which creditors of the company will be paid.]
Your task is to write a concise file note that identifies for the partner the potential issues that might arise in relation to determining the property owned by Mineral Mining Masters Pty Ltd which is capable of being realised for distribution to its creditors. This is to be based on the facts set out below representing notes that you have taken down from your instructions from the meeting with representatives of the company.
It is a memorandum for internal purposes in your firm. However it is designed to assist your partner in the preparation of his or her advice to the client. Your role is to assess the different items of property for your partner’s consideration, and identify the issues that might arise affecting whether it is property of the insolvent company which is available to be sold.
dealing with types of property, legal and equitable property interests and aspects of bailment and agency. You do not need to discuss general theoretical matters such as the nature of property as power exercisable over a thing. Focus on the types and characteristics of the property in the question.
Word length: 1500 words not including footnotes.

Mineral Mining Masters Pty Ltd is a mineral mining specialist company that operates by leasing land at different sites on which there is an identified source of mineral. Before the lease is taken, surveys and tests are conducted to locate the mineral reserves. The company has historically conducted the mining operations at the leased mining sites, and then sent the ore for processing to its subsidiary company Mineral Production Masters Pty Ltd located in Newcastle, NSW.
In January 2019 Mineral Mining Masters took a lease of a property known as “Green Hills”, owned by Mr Roland Hill, which is situated in the Hunter Valley, in New South Wales. The Property was used by it to mine and process tantalum mineral ore used in making metal alloys. The mine site was very rich in deposits.
At the time the lease was being negotiated, the Property had an existing mining plant installed on the property from the outgoing tenant, Ore-some Excavators Pty Ltd. That plant and equipment bolted to the ground to stabilize it included a feed conveyor, a large roll crusher for size reduction (the feet of which were concreted to the floor of the mine), a discharge conveyor for conveying primary crushed ore to the drying shed, and another conveyor. Mineral Mining Masters purchased from Ore-some that plant (worth $100K) and also the goodwill of the Ore-some business (worth $50K), paying $150K in total.
Mineral Mining Masters entered into 5 year lease of Green Hills from Mr Hill. A term of the lease provided that if the lease was terminated for non-payment, any fixtures on the property would be automatically transferred to the lessor as at the date of termination.
Initially the operation was successful. The company applied for a patent over its extraction method, which was granted in May 2019. The increase in use of the minerals led to a significant number of purchase orders. Customers of its ore were allowed to purchase unprocessed ore by the tonne and payment terms were 60 days. One of their regular customers, Singleton Ore, entered into an arrangement with the company to leave their ore with Mineral Mining Masters on site after payment for the company to process it for them and return it to them.
Mineral Mining Masters used a local buying agent, Tony Rockwell, to get good deals on equipment that it needed. Mr Rockwell entered into agreements to acquire considerable further machinery and equipment from local manufacturers for mining and dealing with the ore to prepare it to be transported for production in Newcastle. The agreement was that if Mr Rockwell proposed a purchase, the directors of the company would approve it and give him written authority to purchase. Through Mr Rockwell the company purchased a drying shed in mid 2020 that was erected on the property from pre-fabricated steel panels, built to be quickly assembled and dismantled for rebuilding on another site.
It borrowed $1M on 1 February 2019 from Hunter Finance to finance all this machinery and equipment and gave a security interest over all its present and future chattels to secure the loan.
The company entered into a 12 month lease from Hunter Specialist Mines Leasing on 1 March 2019 of a plate feeder for discharge of ore stored in the receiving hopper, as well as a large, 4 tonne, triple deck vibrating screen, from which the crushed ore product was taken via belt feeders to distribution boxes where it was fed to hoppers above the bagging stations constructed at the back of the sheds, with an option to purchase.
At that time it also decided to make some investments. In 2020 it purchased 500 shares in BHP, from which it was to receive annual dividends, and also acquired 100 units in a unit trust, of which Newcastle Professional Trustee Pty Ltd was the trustee.
The company exercised the option under the lease with Hunter Specialist Mines Leasing on 1 March 2020.
Mr Rockwell saw a good deal advertised on a second-hand hopper and thought he needed to act quickly so he also entered an arrangement on 1 February 2021 to purchase a receiving hopper for ore delivered by truck where payment was made in instalments over 12 months and title was to be transferred on payment of the last instalment. He planned to tell the directors as soon as it was signed but he forgot.
Things seemed to be going very well for the company. However with the continued effect of the ongoing pandemic affecting staffing and operations and export arrangements, Mineral Mining Masters fell into arrears in early 2021 and could not make its lease payments, or its payments to its financiers, or pay its other creditors. It was owed $200K from customers however those customers were also having trouble paying and the accounts were outstanding at the time the company went into financial distress and remain outstanding.
Mr Hill terminated the lease on 1 April 2021 and Hunter Finance placed Mineral Mining Masters into receivership on 1 May 2021.
At the time there was $50K worth of unprocessed ore on site. However $10K worth of ore was due to be collected by Singleton Ore on 1 June 2021.
Hunter Finance entered into an agreement with Singleton Ore to sell to Singleton all the company’s assets over which it had a security interest pursuant to the terms of the load agreement entered into on 1 February 2019. However, it appears there is a dispute between Singleton Ore as purchaser and Mr Hill as to who is entitled to some of the assets.
Mineral Mining Masters is being placed into liquidation. The liquidator has now sought advice as to which property is property of the company that might be sold for distribution.

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