Queensland Nickel Sales Pty Ltd v Park in his capacity as liquidator of Queensland Nickel Pty Ltd (in liq) [2023] FCAFC 150

Queensland Nickel Sales Pty Ltd v Park in his capacity as liquidator of Queensland Nickel Pty Ltd (in liq) [2023] FCAFC 150

The court found that the litigation funding expenses (including the funding premium) and related liabilities were properly and reasonably incurred by the liquidators in pursuit of the Mineralogy proceeding; the expenses were recoverable out of trust assets as trust liabilities. The Vannin LFA was reasonable given market offers and process. The bare trustee (QNI) retained the obligations and entitlement to get in and protect trust property, including by continuing proceedings. The Settlement Deed released the claims the Palmer Parties sought to pursue. Appeal dismissed.

Parties
First Appellant: Queensland Nickel Sales Pty Ltd; Second Appellant: QNI Metals Pty Ltd; Third Appellant: QNI Resources Pty Ltd; First Respondent: John Park and Kelly-Anne Trenfield (in their capacity as liquidators of Queensland Nickel Pty Ltd (in liq)); Second Respondent: Queensland Nickel Pty Ltd (in liquidation); Third Respondent: Vannin Capital Operations Limited
Jurisdiction
Australia
Judgment Date
06 September 2023
Procedural Posture
Appeal / Appeal From Single Judge—full Court Decision
Outcome
Appeal dismissed
Legal Topics
Trustee's Right of Indemnity, Bare Trustee Obligations, Litigation Funding Agreement, Onus of Proof on Commercial Reasonableness, Settlement Deed Effect, Liquidators—powers and Liabilities, Reasonableness of Costs, Construction of Trust Instruments
Trusts and Trustees Corporations Corporate Insolvency Practice and Procedure Trustee's Right of Indemnity Bare Trustee Obligations Litigation Funding Agreement Onus of Proof on Commercial Reasonableness +4 more

Case Brief

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Parties

Queensland Nickel Sales Pty Ltd

First Appellant

QNI Metals Pty Ltd

Second Appellant

QNI Resources Pty Ltd

Third Appellant

John Park and Kelly-Anne Trenfield (in their capacity as liquidators of Queensland Nickel Pty Ltd (in liq))

First Respondent

Queensland Nickel Pty Ltd (in liquidation)

Second Respondent

Vannin Capital Operations Limited

Third Respondent

Procedural Posture

Appeal / Appeal From Single Judge—full Court Decision

Legal Issues

  1. 1 Whether expenses incurred under a litigation funding agreement by the liquidators were properly and reasonably incurred and capable of being paid out of trust assets
  2. 2 Whether QNI as bare trustee retained obligations to get in trust property after being replaced as trustee
  3. 3 Whether the Settlement Deed precluded the appellants from disputing the expenses

Ratio Decidendi

The court found that the litigation funding expenses (including the funding premium) and related liabilities were properly and reasonably incurred by the liquidators in pursuit of the Mineralogy proceeding; the expenses were recoverable out of trust assets as trust liabilities. The Vannin LFA was reasonable given market offers and process. The bare trustee (QNI) retained the obligations and entitlement to get in and protect trust property, including by continuing proceedings. The Settlement Deed released the claims the Palmer Parties sought to pursue. Appeal dismissed.

Court Disposition

Appeal dismissed

Orders

  • The amended notice of appeal filed on 12 December 2022 is to be dismissed.
  • The appellants are to pay the costs of the respondents.