Anderson, in the matter of Allabay Pty Ltd (In Liquidation) [2022] FCA 235

Anderson, in the matter of Allabay Pty Ltd (In Liquidation) [2022] FCA 235

The orders were appropriate because the evidence supported the Liquidator's assessment that the Company operated only as trustee of the Allabay Discretionary Trust and held all assets as trust property; clause 48 of the Trust Deed caused the Company to be a bare trustee upon the Liquidator's appointment; the Company's sole affairs were as trustee of one trust, so realisation and distribution could proceed under the Corporations Act statutory regime; the Liquidator's prior dealings occurred when the Company's trustee status was unclear despite efforts to obtain the Trust Deed; and the Liquidator's remuneration, expenses and application costs were properly payable from trust assets.

Jurisdiction
Australia
Judgment Date
15 March 2022
Procedural Posture
Application by Liquidator for Orders Under the Corporations Act 2001 (cth) and Trustee Act 1958 (vic) Concerning Trust Property of a Company in Liquidation / Orders Made After Hearing on Originating Process
Outcome
Orders made as sought.
Legal Topics
['company in Liquidation Acting as Trustee' 'bare Trustee After Ipso Facto Clause' 'liquidator Dealing With Trust Property' 'judicial Advice and Directions' 'relief From Liability' 'liquidator Remuneration and Expenses From Trust Property']
['corporations' 'corporate Insolvency' 'trusts'] ['company in Liquidation Acting as Trustee' 'bare Trustee After Ipso Facto Clause' 'liquidator Dealing With Trust Property' 'judicial Advice and Directions' 'relief From Liability' 'liquidator Remuneration and Expenses From Trust Property']

Case Brief

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Procedural Posture

Application by Liquidator for Orders Under the Corporations Act 2001 (cth) and Trustee Act 1958 (vic) Concerning Trust Property of a Company in Liquidation / Orders Made After Hearing on Originating Process

Legal Issues

  1. 1 ['Whether the liquidator was justified and acting reasonably in proceeding on the basis that the company carried on business as trustee of the Allabay Discretionary Trust and that all company assets were trust property.' 'Whether the company should have power to carry on the business of the trust and act as trustee of the trust.' 'Whether the liquidator was justified in dealing with, holding, applying and distributing trust property in accordance with Parts 5.5 and 5.6 of the Corporations Act 2001 (Cth).' "Whether the liquidator should be relieved from liability for dealings with trust property before the Court's order." "Whether the liquidator's remuneration, costs and expenses should be paid from trust property in the priority specified in s 556(1) of the Corporations Act 2001 (Cth)."]

Ratio Decidendi

The orders were appropriate because the evidence supported the Liquidator's assessment that the Company operated only as trustee of the Allabay Discretionary Trust and held all assets as trust property; clause 48 of the Trust Deed caused the Company to be a bare trustee upon the Liquidator's appointment; the Company's sole affairs were as trustee of one trust, so realisation and distribution could proceed under the Corporations Act statutory regime; the Liquidator's prior dealings occurred when the Company's trustee status was unclear despite efforts to obtain the Trust Deed; and the Liquidator's remuneration, expenses and application costs were properly payable from trust assets.

Court Disposition

Orders made as sought.

Orders

  • ['Pursuant to s 90-15 of Schedule 2 to the Corporations Act 2001 (Cth), the Liquidator is justified and acting reasonably in proceeding on the basis that the Company carried on business as trustee of the Allabay Discretionary Trust and that all assets of the Company are trust property.' 'Pursuant to s 63 of the...