McLean v Hill, in the matter of TMC Plumbing & Drainage Pty Ltd (in liq) [2019] FCA 1439

McLean v Hill, in the matter of TMC Plumbing & Drainage Pty Ltd (in liq) [2019] FCA 1439

Because TMC acted solely as trustee of the TMC Hill Family Trust and all creditors of TMC were trust creditors, TMC was entitled to a right of indemnity and exoneration from Trust assets. It was therefore appropriate to appoint the Liquidator as receiver and manager over the Trust business and assets and confer powers enabling him to realise those assets and apply the proceeds for Trust creditors, with his costs, expenses and remuneration paid in priority from Trust property.

Jurisdiction
Australia
Judgment Date
02 September 2019
Procedural Posture
Application by Liquidator for Appointment as Receiver and Manager Over Trust Business and Assets / Orders Made After Hearing
Outcome
Application granted; Liquidator appointed without security as receiver and manager over the business and assets of the TMC Hill Family Trust and related orders made.
Legal Topics
['insolvent Corporate Trustee' 'trading Trust' 'right of Indemnity' 'right of Exoneration' 'appointment of Receiver and Manager' 'realisation of Trust Assets' 'trust Creditors']
['corporations' 'corporate Insolvency' 'trusts'] ['insolvent Corporate Trustee' 'trading Trust' 'right of Indemnity' 'right of Exoneration' 'appointment of Receiver and Manager' 'realisation of Trust Assets' 'trust Creditors']

Case Brief

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Procedural Posture

Application by Liquidator for Appointment as Receiver and Manager Over Trust Business and Assets / Orders Made After Hearing

Legal Issues

  1. 1 ['Whether the liquidator should be appointed as receiver and manager over the business and assets of the TMC Hill Family Trust for the purpose of realising trust assets.' 'Whether TMC had a right of indemnity or exoneration from trust assets in respect of liabilities incurred as trustee.' 'Whether the proceeds of trust assets could be applied to trust creditors and the costs, expenses and remuneration of the liquidator and receiver.']

Ratio Decidendi

Because TMC acted solely as trustee of the TMC Hill Family Trust and all creditors of TMC were trust creditors, TMC was entitled to a right of indemnity and exoneration from Trust assets. It was therefore appropriate to appoint the Liquidator as receiver and manager over the Trust business and assets and confer powers enabling him to realise those assets and apply the proceeds for Trust creditors, with his costs, expenses and remuneration paid in priority from Trust property.

Court Disposition

Application granted; Liquidator appointed without security as receiver and manager over the business and assets of the TMC Hill Family Trust and related orders made.

Orders

  • ['Pursuant to s 57(1) of the Federal Court of Australia Act 1976 (Cth), Neil Steward McLean, a registered liquidator, be appointed without security as receiver and manager over the business and assets of the TMC Hill Family Trust.' 'The Receiver have, in respect of the business and assets of the TMC Hill Family...