ASIC v Nelson [2003] NSWSC 129

Procedural Posture

Corporations Winding Up; Application for Directions Concerning Distribution of Trust Funds / Interlocutory Application by Liquidator

Legal Issues

1. 1 ['Whether the liquidator should be directed that the remaining property of multiple trusts may be treated as a single fund.' 'Whether mixed trust funds should be distributed rateably among known beneficiaries where tracing is difficult or impossible.' "Whether the liquidator's remuneration, costs, charges and expenses should be paid in priority from the pooled funds."]

Ratio Decidendi

Because funds from the Barroin and Provest trusts had been repeatedly and physically mixed, records were incomplete, tracing to each beneficiary's precise equitable interest was unclear or impossible, and no beneficiary could safely be identified as entitled under a first in, first out approach, the rateable solution was required and the liquidator was justified in pooling the remaining funds, paying his winding up costs first, and distributing the balance pari passu among adjudged beneficiaries according to their claims.

Court Disposition

Application granted; direction and costs order made.

Orders

• ['The liquidator is justified in proceeding and making a first and final distribution of the funds comprising the remaining property of the trusts as if and on the basis that the funds comprise a single fund.' "The funds are to be applied first in payment of the liquidator's remuneration, costs, charges and expenses...