Dayroll Pty Ltd (in Liq) v Dayroll NSW Pty Ltd [2009] NSWSC 895

Dayroll Pty Ltd (in Liq) v Dayroll NSW Pty Ltd [2009] NSWSC 895

The liquidator is entitled to indemnity out of trust assets only for costs reasonably and properly incurred in the administration of the trust, not for costs incurred in his capacity as liquidator of the company or in defending proceedings for his own benefit; in this case, only $15,000 (the amount of the respondent's open offer) is allowed as indemnity, with the remainder to be paid to the new trustee, and no order as to costs is made.

Parties
Applicant: Dayroll Pty Ltd (in liquidation); First Respondent: Dayroll NSW Pty Ltd; Second Respondent: Max Christopher Donnelly (as Liquidator of Dayroll Pty Ltd (in Liq))
Jurisdiction
Australia
Judgment Date
31 August 2009
Procedural Posture
Application for Indemnity and Related Relief (trustee/liquidator) / Judgment After Contested Interlocutory Hearings
Outcome
Liquidator entitled to indemnity for costs to the extent of $15,000 only. Remainder of trust funds, plus interest, payable to the new trustee. No order as to costs.
Legal Topics
Indemnity of Trustees, Liquidator's Rights, Costs Incurred by Liquidator, Trust Property, Administration of Trusts
Equity Trusts and Trustees Insolvency Indemnity of Trustees Liquidator's Rights Costs Incurred by Liquidator Trust Property Administration of Trusts

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 11 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

Dayroll Pty Ltd (in liquidation)

Applicant

Dayroll NSW Pty Ltd

First Respondent

Max Christopher Donnelly (as Liquidator of Dayroll Pty Ltd (in Liq))

Second Respondent

Procedural Posture

Application for Indemnity and Related Relief (trustee/liquidator) / Judgment After Contested Interlocutory Hearings

Legal Issues

  1. 1 Whether the liquidator is entitled to indemnity out of trust assets for costs incurred in relation to the liquidation of the trustee company and/or in the administration of the trust.
  2. 2 Whether the costs claimed were properly and reasonably incurred in the administration of the trust.
  3. 3 Extent to which costs incurred in defending proceedings are for the liquidator's benefit versus the trust's benefit.

Ratio Decidendi

The liquidator is entitled to indemnity out of trust assets only for costs reasonably and properly incurred in the administration of the trust, not for costs incurred in his capacity as liquidator of the company or in defending proceedings for his own benefit; in this case, only $15,000 (the amount of the respondent's open offer) is allowed as indemnity, with the remainder to be paid to the new trustee, and no order as to costs is made.

Court Disposition

Liquidator entitled to indemnity for costs to the extent of $15,000 only. Remainder of trust funds, plus interest, payable to the new trustee. No order as to costs.

Orders

  • Certify the reasonable costs and expenses of Dayroll Pty Ltd (in liquidation) for the administration of the 9 Parramatta Road Unit Trust for the period from 27 July 2008 to 30 April 2009 are $15,000.
  • Declare that Max Christopher Donnelly is entitled to be indemnified out of the assets of the 9 Parramatta Road Unit Trust to the extent of $15,000 for the costs of administration of the trust for the period from 27 July 2008 to 30 April 2009.