Hughes, in the matter of Substar Holdings Pty Ltd (in liquidation) [2020] FCA 1863

Hughes, in the matter of Substar Holdings Pty Ltd (in liquidation) [2020] FCA 1863

Upon liquidation, the corporate trustee became a bare trustee and lacked power to realise trust assets absent a court appointment as receiver. It is necessary and appropriate for the liquidators to be so appointed with powers to realise the assets for the benefit of creditors, and to be justified in treating all assets and liabilities as trust assets and liabilities, with remuneration payable from trust property. The orders sought are therefore granted.

Jurisdiction
Australia
Judgment Date
23 December 2020
Procedural Posture
Application Under Corporations Act/insolvency Proceeding / Judgment on Application for Directions/appointment of Receivers
Outcome
Orders granted in terms sought by the liquidators: liquidators appointed as receivers of trust property, directions made authorising proposed treatment of assets and liabilities, remuneration and costs to be paid from trust property.
Legal Topics
['corporate Trustees in Liquidation' 'receivership of Trust Assets' "liquidator's Indemnity" 'distribution of Trust Property in Insolvency' 'judicial Directions to Liquidators']
['corporations' 'insolvency'] ['corporate Trustees in Liquidation' 'receivership of Trust Assets' "liquidator's Indemnity" 'distribution of Trust Property in Insolvency' 'judicial Directions to Liquidators']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Application Under Corporations Act/insolvency Proceeding / Judgment on Application for Directions/appointment of Receivers

Legal Issues

  1. 1 ["Whether liquidators can be appointed as receivers of trust assets after corporate trustee's disqualification due to insolvency" 'Whether liquidators are justified in treating assets and liabilities as trust assets and liabilities' 'Entitlement to remuneration from trust property']

Ratio Decidendi

Upon liquidation, the corporate trustee became a bare trustee and lacked power to realise trust assets absent a court appointment as receiver. It is necessary and appropriate for the liquidators to be so appointed with powers to realise the assets for the benefit of creditors, and to be justified in treating all assets and liabilities as trust assets and liabilities, with remuneration payable from trust property. The orders sought are therefore granted.

Court Disposition

Orders granted in terms sought by the liquidators: liquidators appointed as receivers of trust property, directions made authorising proposed treatment of assets and liabilities, remuneration and costs to be paid from trust property.

Orders

  • ['Liquidators appointed as receivers and managers of trust property under s 57 Federal Court of Australia Act 1976 (Cth)' 'Authorisation to take possession, preserve, maintain and sell trust assets' 'All powers of receivers under s 420 Corporations Act 2001 (Cth), except for sub-ss 420(2)(s), (t), (u), and (w)'...