In the matter of MF Global Australia Limited (in liquidation) [2012] NSWSC 1524

In the matter of MF Global Australia Limited (in liquidation) [2012] NSWSC 1524

Directions and judicial advice were granted approving entry into the Settlement Deed and the pro-rata apportionment of Agreed Costs among client and house funds, as the compromise provided substantial recoveries, avoided litigation, and no unreasonable conduct was found by liquidators, with client funds subject to statutory trust under the Corporations Act.

Parties
Liquidator, First Plaintiff: Christopher Robert Campbell; Liquidator, First Plaintiff: Vaughan Neil Strawbridge; Liquidator, First Plaintiff: David John Frank Lombe; Second Plaintiff: MF Global Australia Limited (in liquidation)
Jurisdiction
Australia
Judgment Date
11 December 2012
Procedural Posture
Application for Judicial Advice/directions in Liquidation / Final Orders Made Approving Settlement and Directions
Outcome
Orders made approving settlement and directions as sought by liquidators, with liberty to apply to vary directions.
Legal Topics
Liquidator's Application for Judicial Advice, Compromise of Claims in Liquidation, Statutory Trusts Over Client Funds, Apportionment of Costs in Settlement, Approval of Settlement Deeds in Insolvency
Corporations Law Insolvency Trusts Liquidator's Application for Judicial Advice Compromise of Claims in Liquidation Statutory Trusts Over Client Funds Apportionment of Costs in Settlement Approval of Settlement Deeds in Insolvency

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Parties

Christopher Robert Campbell

Liquidator, First Plaintiff

Vaughan Neil Strawbridge

Liquidator, First Plaintiff

David John Frank Lombe

Liquidator, First Plaintiff

MF Global Australia Limited (in liquidation)

Second Plaintiff

Procedural Posture

Application for Judicial Advice/directions in Liquidation / Final Orders Made Approving Settlement and Directions

Legal Issues

  1. 1 Whether jurisdiction to provide judicial advice/directions is established under Corporations Act and Trustee Act
  2. 2 Whether liquidators are justified in compromising the Cross-Claim and making balancing payments to effect settlement
  3. 3 Whether proposed settlement and cost apportionment between client and house funds is appropriate

Ratio Decidendi

Directions and judicial advice were granted approving entry into the Settlement Deed and the pro-rata apportionment of Agreed Costs among client and house funds, as the compromise provided substantial recoveries, avoided litigation, and no unreasonable conduct was found by liquidators, with client funds subject to statutory trust under the Corporations Act.

Court Disposition

Orders made approving settlement and directions as sought by liquidators, with liberty to apply to vary directions.

Orders

  • Approval of entry into Settlement Deed compromising Cross-Claim in Federal Court proceedings.
  • Direction to liquidators and MFGA to make balancing payments to reflect pro-rata apportionment of Agreed Costs between client and house funds.