Saker, in the matter of Great Southern Managers Australia Ltd (Receivers and Managers Appointed) (in liquidation) (No 2) [2011] FCA 958

Saker, in the matter of Great Southern Managers Australia Ltd (Receivers and Managers Appointed) (in liquidation) (No 2) [2011] FCA 958

The liquidators are entitled to indemnity for funds paid in to rectify earlier erroneous insurance distributions, as the error resulted from honest mistake and was promptly corrected; such conduct does not amount to dishonesty or culpable neglect so as to forfeit the right to indemnity. The management fee set-off and related questions cannot presently be safely determined due to insufficient evidence and argument from PSL, and are adjourned to enable further submissions.

Jurisdiction
Australia
Judgment Date
23 August 2011
Procedural Posture
Application for Directions in Liquidation / Interlocutory – Determination of Questions Under S 511 Corporations Act 2001 (cth)
Outcome
Plaintiffs entitled to indemnity; further management fee/set-off questions adjourned for submissions.
Legal Topics
["liquidators' Directions" 'right of Indemnity' 'set Off' 'management Fees in Managed Investment Schemes' 'proper and Honest Conduct of Trustees and Responsible Entities']
['corporations Law' 'equity' 'trusts'] ["liquidators' Directions" 'right of Indemnity' 'set Off' 'management Fees in Managed Investment Schemes' 'proper and Honest Conduct of Trustees and Responsible Entities']

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Procedural Posture

Application for Directions in Liquidation / Interlocutory – Determination of Questions Under S 511 Corporations Act 2001 (cth)

Legal Issues

  1. 1 ['Whether liquidators are entitled to indemnity from scheme property for payments made to correct past distribution errors' 'Whether liquidators should recover or pay certain funds to the incoming responsible entity' 'Whether the outgoing or incoming responsible entity is entitled to management fees or set-off for claims by investors']

Ratio Decidendi

The liquidators are entitled to indemnity for funds paid in to rectify earlier erroneous insurance distributions, as the error resulted from honest mistake and was promptly corrected; such conduct does not amount to dishonesty or culpable neglect so as to forfeit the right to indemnity. The management fee set-off and related questions cannot presently be safely determined due to insufficient evidence and argument from PSL, and are adjourned to enable further submissions.

Court Disposition

Plaintiffs entitled to indemnity; further management fee/set-off questions adjourned for submissions.

Orders

  • ['Plaintiffs to file within 10 days a minute of orders reflecting the reasons for judgment, including a provision enabling Primary Securities Ltd to file further submissions in response to plaintiffs’ reply submissions within 21 days.']