Brooks, in the matter of Tease Hair & Spa Pty Ltd (in liquidation) [2022] FCA 457

Brooks, in the matter of Tease Hair & Spa Pty Ltd (in liquidation) [2022] FCA 457

The Court made the orders because the evidence showed that the company had only ever traded as trustee of the Hoggins Family Trust, had become a bare trustee without power to deal with Trust assets, and needed powers conferred under s 47 of the Trustee Act 1898 (Tas) to realise and administer Trust property for creditors. The liquidator had acted reasonably, retrospective relief was appropriate for prior dealings with Trust property, distribution under Parts 5.5 and 5.6 of the Corporations Act 2001 (Cth) was appropriate, and the liquidator's costs, expenses and remuneration should be paid in priority from Trust property.

Jurisdiction
Australia
Judgment Date
28 April 2022
Procedural Posture
Application by a Liquidator and Company for Orders and Directions to Facilitate Dealing With and Distribution of Company Assets and Assets of the Hoggins Family Trust / Determined on the Papers
Outcome
Orders made as sought by the plaintiffs.
Legal Topics
['liquidator Directions' 'trading Trust' 'bare Trustee' 'trust Property' 'statutory Powers of Liquidator' 'retrospective Trustee Powers' 'right of Indemnity and Equitable Lien' 'liquidator Costs and Remuneration']
['corporations' 'corporate Insolvency' 'trusts'] ['liquidator Directions' 'trading Trust' 'bare Trustee' 'trust Property' 'statutory Powers of Liquidator' 'retrospective Trustee Powers' 'right of Indemnity and Equitable Lien' 'liquidator Costs and Remuneration']

Case Brief

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Procedural Posture

Application by a Liquidator and Company for Orders and Directions to Facilitate Dealing With and Distribution of Company Assets and Assets of the Hoggins Family Trust / Determined on the Papers

Legal Issues

  1. 1 ['Whether the liquidator was justified in proceeding on the basis that the company had acted solely as trustee of the Hoggins Family Trust and in no other capacity.' 'Whether the Court should confer on the company, nunc pro tunc, powers under s 47 of the Trustee Act 1898 (Tas) to wind up the Trust and deal with Trust property.' 'Whether the liquidator could rely on powers under s 477 of the Corporations Act 2001 (Cth) to take all necessary steps to wind up the Trust.' 'Whether the liquidator could deal with, hold, apply and distribute Trust property in accordance with Parts 5.5 and 5.6 of the Corporations Act 2001 (Cth).' "Whether the liquidator's costs, expenses and remuneration, including application costs, should be paid in priority from Trust property."]

Ratio Decidendi

The Court made the orders because the evidence showed that the company had only ever traded as trustee of the Hoggins Family Trust, had become a bare trustee without power to deal with Trust assets, and needed powers conferred under s 47 of the Trustee Act 1898 (Tas) to realise and administer Trust property for creditors. The liquidator had acted reasonably, retrospective relief was appropriate for prior dealings with Trust property, distribution under Parts 5.5 and 5.6 of the Corporations Act 2001 (Cth) was appropriate, and the liquidator's costs, expenses and remuneration should be paid in priority from Trust property.

Court Disposition

Orders made as sought by the plaintiffs.

Orders

  • ['Pursuant to s 90-15 of Schedule 2 to the Corporations Act 2001 (Cth) (Insolvency Practice Schedule (Corporations)) (IPS), the first plaintiff is justified and acting reasonably in proceeding on the basis that the second plaintiff (Company), has at all material times since its incorporation, acted solely as the...