Mohen (Liquidator), in the matter of Willco Breads Pty Ltd (in liq) [2019] FCA 1539

Mohen (Liquidator), in the matter of Willco Breads Pty Ltd (in liq) [2019] FCA 1539

Where liquidators are appointed and the company ceases to be trustee by operation of the trust deed, they can only realise trust assets through appointment as receivers by the court. Liquidators who sell trust property without knowing they had no power of sale may be excused under s 1318 of the Corporations Act if they acted honestly and without gross carelessness.

Jurisdiction
Australia
Judgment Date
18 September 2019
Procedural Posture
Corporations Insolvency / Interlocutory Application for Receivership Orders and Relief From Liability
Outcome
Orders made as sought.
Legal Topics
["liquidator's Powers" 'trustee Company Insolvency' 'court Appointment of Receivers' 'indemnity and Priority of Trust Creditors' 'relief Under S 1318 of Corporations Act']
['corporations' 'insolvency' 'trusts'] ["liquidator's Powers" 'trustee Company Insolvency' 'court Appointment of Receivers' 'indemnity and Priority of Trust Creditors' 'relief Under S 1318 of Corporations Act']

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Procedural Posture

Corporations Insolvency / Interlocutory Application for Receivership Orders and Relief From Liability

Legal Issues

  1. 1 ['Whether liquidators of a company that has ceased to be trustee upon liquidation can realise trust property' 'Whether orders for appointment as receivers should be made to enable realisation of trust assets' 'Whether liquidators should be excused under s 1318 of Corporations Act for breaches relating to sale of trust assets']

Ratio Decidendi

Where liquidators are appointed and the company ceases to be trustee by operation of the trust deed, they can only realise trust assets through appointment as receivers by the court. Liquidators who sell trust property without knowing they had no power of sale may be excused under s 1318 of the Corporations Act if they acted honestly and without gross carelessness.

Court Disposition

Orders made as sought.

Orders

  • ['Declaration that the liquidators acted honestly and are excused for any breaches relating to the sale of the Holden Rodeo vehicle (trust property).' 'Second affidavit of Jerome Hall Mohen marked confidential under s 37AF of the Federal Court of Australia Act 1976 (Cth) until conclusion of proceedings.'...