In the matter of Gramarker Pty Ltd; Clifford Sanderson (as liquidator of Gramarker Pty Limited) v Simon Kerr [2014] NSWSC 243

In the matter of Gramarker Pty Ltd; Clifford Sanderson (as liquidator of Gramarker Pty Limited) v Simon Kerr [2014] NSWSC 243

The circumstances were closely analogous to Re Indopal: Gramarker Pty Limited had been wound up, the trust deed disqualified a corporate trustee on liquidation, no replacement trustee had been shown to have been appointed, and the company’s apparent liabilities were incurred as trustee and related to the trust property. The trustee’s right of indemnity would be secured by an equitable lien, making it appropriate and convenient to appoint the liquidator as receiver of the trust assets, while restricting distributions pending further directions to protect trust assets and beneficiary interests.

Jurisdiction
Australia
Judgment Date
03 March 2014
Procedural Posture
Corporations Winding Up Application by Liquidator for Appointment as Receiver of Trust Assets / Summons Filed on 29 November 2013; Principal Judgment
Outcome
Liquidator appointed as receiver of the assets of the trust, with powers under Corporations Act s 477(2) in respect of the trust property and restrictions on distribution without further directions.
Legal Topics
['winding Up' 'liquidators' 'corporate Trustee in Liquidation' 'discretionary Trust' 'receiver of Trust Assets' 'trustee Indemnity and Equitable Lien']
['corporations' 'trusts' 'insolvency'] ['winding Up' 'liquidators' 'corporate Trustee in Liquidation' 'discretionary Trust' 'receiver of Trust Assets' 'trustee Indemnity and Equitable Lien']

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Procedural Posture

Corporations Winding Up Application by Liquidator for Appointment as Receiver of Trust Assets / Summons Filed on 29 November 2013; Principal Judgment

Legal Issues

  1. 1 ['Whether the liquidator of a company that had been trustee of a discretionary trust should be appointed without security as receiver of the assets of the trust.' 'Whether the liquidator should have all powers in relation to the trust assets exercisable by the trustee under the trust deed and powers under (CTH) Corporations Act 2001, s 477(2).' 'Whether distribution of trust assets should occur only with further directions of the Court.']

Ratio Decidendi

The circumstances were closely analogous to Re Indopal: Gramarker Pty Limited had been wound up, the trust deed disqualified a corporate trustee on liquidation, no replacement trustee had been shown to have been appointed, and the company’s apparent liabilities were incurred as trustee and related to the trust property. The trustee’s right of indemnity would be secured by an equitable lien, making it appropriate and convenient to appoint the liquidator as receiver of the trust assets, while restricting distributions pending further directions to protect trust assets and beneficiary interests.

Court Disposition

Liquidator appointed as receiver of the assets of the trust, with powers under Corporations Act s 477(2) in respect of the trust property and restrictions on distribution without further directions.

Orders

  • ['The plaintiff Clifford Sanderson be appointed without security as receiver of the assets of the GMK Property Number 1 Trust.' 'The plaintiff has in respect of the trust property the powers that a liquidator has in respect of the property of a company under the Corporations Act s 477(2).' 'The plaintiff not...