Donnelly (Liquidator), in the matter of Dunjey Property Pty Ltd (in liq) [2023] FCA 1254

Donnelly (Liquidator), in the matter of Dunjey Property Pty Ltd (in liq) [2023] FCA 1254

The evidence supported the inference that the Company carried on business only as trustee of the four Trusts, with no assets, liabilities, bank accounts, tax registration or financial statements in its own right. On liquidation the Company was removed as trustee and held trust assets as bare trustee, but its right of exoneration and accompanying equitable lien endured. Because neither the Company nor its liquidators could sell trust assets without Court authority, it was appropriate to appoint the liquidators as receivers and managers of each Trust's assets so those assets could be realised to discharge liabilities incurred as trustee of that Trust only. The costs of the application were...

Jurisdiction
Australia
Judgment Date
18 October 2023
Procedural Posture
Corporations Insolvency Application for Directions and Appointment of Receivers and Managers Over Trust Assets / Unopposed Application; Orders Made After Hearing and Further Affidavit Evidence
Outcome
Orders made largely in the terms sought by the plaintiffs.
Legal Topics
['trustee Company in Liquidation' 'right of Indemnity' 'right of Exoneration' 'equitable Lien' 'bare Trustee' 'appointment of Receivers and Managers' 'realisation of Trust Assets' 'multiple Trusts and Trust Creditors']
['corporations' 'insolvency' 'trusts' 'equity'] ['trustee Company in Liquidation' 'right of Indemnity' 'right of Exoneration' 'equitable Lien' 'bare Trustee' 'appointment of Receivers and Managers' 'realisation of Trust Assets' 'multiple Trusts and Trust Creditors']

Case Brief

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Procedural Posture

Corporations Insolvency Application for Directions and Appointment of Receivers and Managers Over Trust Assets / Unopposed Application; Orders Made After Hearing and Further Affidavit Evidence

Legal Issues

  1. 1 ['Whether the plaintiffs were justified in proceeding on the basis that Dunjey Property Pty Ltd carried on business solely as trustee of the four Trusts.' 'Whether the plaintiffs should be appointed as receivers and managers over the property, assets and undertakings of each Trust to realise trust assets and discharge liabilities incurred as trustee.' 'Whether assets of a given Trust may be realised only for liabilities attributable to that Trust.' 'Whether the costs of the application should be paid from the assets of each Trust.']

Ratio Decidendi

The evidence supported the inference that the Company carried on business only as trustee of the four Trusts, with no assets, liabilities, bank accounts, tax registration or financial statements in its own right. On liquidation the Company was removed as trustee and held trust assets as bare trustee, but its right of exoneration and accompanying equitable lien endured. Because neither the Company nor its liquidators could sell trust assets without Court authority, it was appropriate to appoint the liquidators as receivers and managers of each Trust's assets so those assets could be realised to discharge liabilities incurred as trustee of that Trust only. The costs of the application were...

Court Disposition

Orders made largely in the terms sought by the plaintiffs.

Orders

  • ['Pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations), the plaintiffs were directed that they were and are justified and acting reasonably in proceeding on the basis that the Company carried on business solely as trustee of Trust 1, Trust 2, Trust 3 and Trust 4.' 'Pursuant to s 57 of the Federal...