In the matter of North Food Catering Pty Limited [2014] NSWSC 77

In the matter of North Food Catering Pty Limited [2014] NSWSC 77

Because North Food Catering Pty Ltd carried on no activities other than as trustee of the NOFOEM Unit Trust and had no assets other than trust assets, the liquidators were entitled to be paid their remuneration, costs and expenses, including both trust administration work and general statutory liquidation work, out of the trust assets; Westfield's subrogated right arising from indemnity funding should also be recognised by reimbursement from trust assets.

Jurisdiction
Australia
Judgment Date
10 February 2014
Procedural Posture
Liquidators' Application for Advice and Directions Concerning Distribution of Trust Funds / Originating Process Amended in Court; Ex Tempore Principal Judgment
Outcome
Application granted; directions made that the liquidators would be justified in distributing trust funds in the specified order and priority, with liberty to apply.
Legal Topics
['external Administration' 'winding Up' "liquidators' Remuneration" 'trading Trust' 'trust Property' 'application for Directions' 'indemnity Funding' 'subrogation']
['corporations' 'insolvency' 'trusts' 'equity'] ['external Administration' 'winding Up' "liquidators' Remuneration" 'trading Trust' 'trust Property' 'application for Directions' 'indemnity Funding' 'subrogation']

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Procedural Posture

Liquidators' Application for Advice and Directions Concerning Distribution of Trust Funds / Originating Process Amended in Court; Ex Tempore Principal Judgment

Legal Issues

  1. 1 ['Whether liquidators of a company that acted solely as trustee of a trading trust and had no beneficially owned assets were entitled to be paid remuneration, costs and expenses out of trust assets.' 'Whether remuneration for statutory liquidation work, not directly referable to administration of trust assets, could be paid out of trust assets where the company had no assets other than trust assets.' "Whether Westfield Shopping Centre Management Company Pty Limited should be reimbursed from trust assets for indemnity funding advanced and applied to the liquidators' costs, remuneration and expenses."]

Ratio Decidendi

Because North Food Catering Pty Ltd carried on no activities other than as trustee of the NOFOEM Unit Trust and had no assets other than trust assets, the liquidators were entitled to be paid their remuneration, costs and expenses, including both trust administration work and general statutory liquidation work, out of the trust assets; Westfield's subrogated right arising from indemnity funding should also be recognised by reimbursement from trust assets.

Court Disposition

Application granted; directions made that the liquidators would be justified in distributing trust funds in the specified order and priority, with liberty to apply.

Orders

  • ["The second plaintiffs, as liquidators of the first plaintiff, would be justified in distributing the funds held by the first plaintiff as trustee for the Nofoem Unit Trust first in the payment of the second plaintiff's costs and expenses of this application." "The second plaintiffs, as liquidators of the first...