In the matter of Bigdeal Artist Management Pty Limited (in liquidation) [2015] NSWSC 936

In the matter of Bigdeal Artist Management Pty Limited (in liquidation) [2015] NSWSC 936

Leave was granted because SEQ advanced a proprietary claim to monies held by a company in liquidation and that claim had a solid foundation. Clause 2.4 of the CAMA created an express trust over the collected gross receipts until distribution in accordance with the parties' entitlements. The variation made by SEQ and the Company gave SEQ priority to the Deferred Fees, and the payment to the Company's liquidators was not a distribution in accordance with those entitlements. The trust therefore did not terminate upon that payment, and the liquidators received the trust funds as volunteers and remained bound by the trust. SEQ was entitled to payment from the First and Second Defendants.

Jurisdiction
Australia
Judgment Date
16 July 2015
Procedural Posture
Originating Process Seeking Leave Under S 500(2) of the Corporations Act 2001 (cth) and Proprietary Trust Relief Against a Company in Liquidation / Final Determination of Application in the Equity Division Corporations List
Outcome
SEQ's claim succeeded; leave was granted nunc pro tunc and the First and Second Defendants were ordered to pay SEQ $168,349.14, with no order as to costs.
Legal Topics
['leave to Commence and Maintain Proceedings Against Company in Voluntary Liquidation' 'proprietary Claim' 'express Trust' 'distribution of Trust Property' 'tracing Trust Property Into Hands of Volunteer']
['corporations' 'equity' 'trusts'] ['leave to Commence and Maintain Proceedings Against Company in Voluntary Liquidation' 'proprietary Claim' 'express Trust' 'distribution of Trust Property' 'tracing Trust Property Into Hands of Volunteer']

Case Brief

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Procedural Posture

Originating Process Seeking Leave Under S 500(2) of the Corporations Act 2001 (cth) and Proprietary Trust Relief Against a Company in Liquidation / Final Determination of Application in the Equity Division Corporations List

Legal Issues

  1. 1 ['Whether leave should be granted under s 500(2) of the Corporations Act 2001 (Cth) for SEQ to commence and maintain proceedings against Bigdeal Artist Management Pty Limited (in liquidation).' 'Whether monies held by Investec under the Collection Account Management Agreement were held on trust for the relevant parties, including SEQ.' 'Whether the variation made by SEQ and the Company entitled SEQ to payment of the Deferred Fees in priority to other post-event expenses.' 'Whether the trust terminated when Investec paid monies to the liquidators of the Company.' 'Whether the liquidators received the relevant trust funds as volunteers and were bound by the trust.']

Ratio Decidendi

Leave was granted because SEQ advanced a proprietary claim to monies held by a company in liquidation and that claim had a solid foundation. Clause 2.4 of the CAMA created an express trust over the collected gross receipts until distribution in accordance with the parties' entitlements. The variation made by SEQ and the Company gave SEQ priority to the Deferred Fees, and the payment to the Company's liquidators was not a distribution in accordance with those entitlements. The trust therefore did not terminate upon that payment, and the liquidators received the trust funds as volunteers and remained bound by the trust. SEQ was entitled to payment from the First and Second Defendants.

Court Disposition

SEQ's claim succeeded; leave was granted nunc pro tunc and the First and Second Defendants were ordered to pay SEQ $168,349.14, with no order as to costs.

Orders

  • ['Leave be granted pursuant to s 500(2) of the Corporations Act 2001 (Cth), nunc pro tunc, for the plaintiff to commence and maintain these proceedings against Bigdeal Artist Management Pty Limited (ACN 003 657 387) (in liquidation).' 'The First Defendant and the Second Defendants (in their capacity as liquidators...