Knight, in the matter of Second ICO Pty Ltd (In Liq) [2020] FCA 608

Knight, in the matter of Second ICO Pty Ltd (In Liq) [2020] FCA 608

Because the Company had been removed as trustee by virtue of its liquidation and held the proceeds of sale of the Trust property as bare trustee, it was appropriate to appoint the liquidator as receiver under s 57(1) to facilitate distribution. Special leave under s 488(2) was appropriate because the liquidator had taken steps to identify creditors, all known creditors would be paid in full, no other creditors were likely to come forward, and the sole beneficiary was entitled to the surplus. The notice and schedule requirements were dispensed with because relevant parties had been served and did not seek to be heard, and the case involved a single beneficiary with no need for adjustment...

Jurisdiction
Australia
Judgment Date
07 May 2020
Procedural Posture
Corporations Application in Liquidation Seeking Appointment of Liquidator as Receiver of Trust Property, Special Leave to Distribute Surplus, and Dispensation With Procedural Requirements / Final Orders Made at First Case Management Hearing
Outcome
Application granted.
Legal Topics
['company in Liquidation Formerly Trustee of Trust' 'bare Trustee' 'appointment of Receiver Over Trust Property' "liquidator's Special Leave to Distribute Surplus" 'dispensation With Notice and Schedule Requirements']
['corporations' 'corporate Insolvency' 'trusts'] ['company in Liquidation Formerly Trustee of Trust' 'bare Trustee' 'appointment of Receiver Over Trust Property' "liquidator's Special Leave to Distribute Surplus" 'dispensation With Notice and Schedule Requirements']

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Procedural Posture

Corporations Application in Liquidation Seeking Appointment of Liquidator as Receiver of Trust Property, Special Leave to Distribute Surplus, and Dispensation With Procedural Requirements / Final Orders Made at First Case Management Hearing

Legal Issues

  1. 1 ['Whether the liquidator should be appointed as receiver of the property of the Crestnut Family Trust under s 57(1) of the Federal Court of Australia Act 1976 (Cth).' 'Whether the liquidator should be granted special leave under s 488(2) of the Corporations Act 2001 (Cth) to distribute the surplus in the winding up.' 'Whether the notice requirements in r 7.9(2) and (3) of the Federal Court (Corporations) Rules 2000 (Cth) and the schedule requirement in reg 5.6.71(1) of the Corporations Regulations 2001 (Cth) should be dispensed with.']

Ratio Decidendi

Because the Company had been removed as trustee by virtue of its liquidation and held the proceeds of sale of the Trust property as bare trustee, it was appropriate to appoint the liquidator as receiver under s 57(1) to facilitate distribution. Special leave under s 488(2) was appropriate because the liquidator had taken steps to identify creditors, all known creditors would be paid in full, no other creditors were likely to come forward, and the sole beneficiary was entitled to the surplus. The notice and schedule requirements were dispensed with because relevant parties had been served and did not seek to be heard, and the case involved a single beneficiary with no need for adjustment...

Court Disposition

Application granted.

Orders

  • ['Pursuant to section 57 of the Federal Court of Australia Act 1976 (Cth), the first applicant was appointed as receivers and managers over the assets of the Crestnut Family Trust.' 'The Liquidator was given, in respect of the assets of the Trust, the powers that a receiver has in respect of the property of a...