Lumsden, Leon Alfred v Long, George Walter [1998] FCA 1304

Lumsden, Leon Alfred v Long, George Walter [1998] FCA 1304

Where a liquidator and the company have recovered assets and unwound an invalid receivership, the obligation to pay priority creditors attaches to those recovered assets, and the liquidator—not the former receiver—is liable to pay such claims out of company property.

Jurisdiction
Australia
Judgment Date
16 October 1998
Procedural Posture
Corporations Winding Up Liquidator Application for Declaratory Relief / Judgment After Hearing
Outcome
Application for declaration against respondent dismissed except as to declaration of applicant's liability. Costs to respondent.
Legal Topics
['receivership' "liquidators' Duties" 'priority Creditors' 'statutory Trusts']
['corporations Law' 'insolvency'] ['receivership' "liquidators' Duties" 'priority Creditors' 'statutory Trusts']

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Procedural Posture

Corporations Winding Up Liquidator Application for Declaratory Relief / Judgment After Hearing

Legal Issues

  1. 1 ['Whether a former receiver remains personally liable to priority creditors after resignation and return of assets to a liquidator' 'Whether the liquidator, upon recovery of company assets, assumes the obligation to pay priority creditors under the Corporations Law']

Ratio Decidendi

Where a liquidator and the company have recovered assets and unwound an invalid receivership, the obligation to pay priority creditors attaches to those recovered assets, and the liquidator—not the former receiver—is liable to pay such claims out of company property.

Court Disposition

Application for declaration against respondent dismissed except as to declaration of applicant's liability. Costs to respondent.

Orders

  • ['The applicant is liable to pay the priority claims listed in paragraph 5 of the application dated 6 May 1998 out of the property of the company.' 'The application is otherwise dismissed.' "The applicant pay the respondent's costs of the proceeding to be taxed in default of agreement."]