Kite v Mooney, in the matter of Mooney's Contractors Pty Ltd (in liq) (No 2) [2017] FCA 653

FEDERAL COURT OF AUSTRALIA

Kite v Mooney, in the matter of Mooney's Contractors Pty Ltd (in liq) (No 2) [2017] FCA 653 File number: NSD 1228 of 2016

Judge: MARKOVIC J

Date of judgment: 13 June 2017

Catchwords: CORPORATIONS – application for directions under ss 424 and 511 of the Corporations Act 2001 (Cth) (Corporations Act) – application for judicial advice – where insolvent company is trustee of a trading trust – where sole business of the corporate trustee was carrying on the business of the trust – where no assets held by the corporate trustee in its own right – where company ceased to be trustee of the trust upon appointment of external administrators – whether trust assets held by company as bare trustee – whether bare trustee has a right of indemnity for actions undertaken as trustee – whether the right of indemnity is "property of the company" for the purposes of the priority regimes in the Corporations Act – whether employee entitlements ought to be paid out of trust assets in accordance with statutory priority regime – whether liquidators justified in calling for proofs of debt and having recourse to trust assets to satisfy those claims – whether liquidators entitled to costs incurred by the company in realising and dealing with trust assets – whether liquidator's remuneration and costs of the application should be paid out of the assets of the trust TRUSTS AND TRUSTEES – nature of the trustee's right of indemnity – whether trustee's right of indemnity is "property of the company" for the purposes of the priority regime in the Corporations Act – whether the property subject to the lien in support of the trustee's right of indemnity is "property of the company" for the purposes of the priority regime in the Corporations Act – whether the trustee's right of indemnity or the property subject to the lien in support of the trustee's right of indemnity is available to creditors generally or is only available for creditors of the trust to meet trust liabilities