In the matter of Cannuli Holdings Pty Ltd (in liq) [2018] NSWSC 638

In the matter of Cannuli Holdings Pty Ltd (in liq) [2018] NSWSC 638

It was appropriate for the liquidator to compromise the claim in the manner agreed, as the settlement falls within the prudent range and avoids further litigation risk and expense; there is no evidence of lack of good faith or error of law or principle.

Parties
Applicant on the Application Under S 479 of the Corporations Act/respondent to the Interlocutory Process Filed 24 July 2017: Michael John Morris Smith as liquidator of Cannuli Holdings Pty Ltd; First Applicant on the Interlocutory Process Dated 24 July 2017: Accolade Advisory Pty Ltd; Second Applicant on the Interlocutory Process Dated 24 July 2017: Reliance Financial Services Pty Ltd
Jurisdiction
Australia
Judgment Date
09 May 2018
Procedural Posture
Equity / Application for Directions/compromise Approval
Outcome
Relief granted—liquidator justified in compromising; receivership discharged; liberty to apply reserved to creditors.
Legal Topics
Liquidator Compromise, Direction Under Corporations Act 2001 S 479, Trustee Indemnity, Receivership Discharge
Corporations Law Equity Liquidator Compromise Direction Under Corporations Act 2001 S 479 Trustee Indemnity Receivership Discharge

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Parties

Michael John Morris Smith as liquidator of Cannuli Holdings Pty Ltd

Applicant on the Application Under S 479 of the Corporations Act/respondent to the Interlocutory Process Filed 24 July 2017

Accolade Advisory Pty Ltd

First Applicant on the Interlocutory Process Dated 24 July 2017

Reliance Financial Services Pty Ltd

Second Applicant on the Interlocutory Process Dated 24 July 2017

Procedural Posture

Equity / Application for Directions/compromise Approval

Legal Issues

  1. 1 Whether liquidator is justified in compromising litigation regarding indemnity from trust assets
  2. 2 Whether liquidator should be discharged from receivership

Ratio Decidendi

It was appropriate for the liquidator to compromise the claim in the manner agreed, as the settlement falls within the prudent range and avoids further litigation risk and expense; there is no evidence of lack of good faith or error of law or principle.

Court Disposition

Relief granted—liquidator justified in compromising; receivership discharged; liberty to apply reserved to creditors.

Orders

  • Direct pursuant to s 479(3) of the Corporations Act that Mr Smith is justified in compromising the claim of Cannuli Holdings Pty Ltd for indemnification out of the assets of the Cannuli Family Trust in the manner contemplated by the consent orders dated 9 May 2018.
  • Mr Smith is discharged from any remaining obligation as receiver appointed by the Court on 15 August 2016.