Scott v Emancee Pty Limited (in liq) [2024] FCA 600

Federal Court of Australia

Scott v Emancee Pty Limited (in liq) [2024] FCA 600 File number: NSD 254 of 2022

Judgment of: JACKMAN J

Date of judgment: 24 May 2024

Catchwords: BANKRUPTCY AND INSOLVENCY – judicial advice and direction to trustee – where trustee in potential position of conflict – requested orders made

Legislation: Bankruptcy Act 1966 (Cth) sch 2 ('Insolvency Practice Schedule') ss 60-10, 90-15 Trustee Act 1925 (NSW) ss 63, 93

Division: General Division

Registry: New South Wales

National Practice Area: Commercial and Corporations

Sub-area: Corporations and Corporate Insolvency

Number of paragraphs: 24

Date of hearing: 24 May 2024

Counsel for the Applicant: Mr J Foley

Solicitor for the Applicant: Cowell Clarke Commercial Lawyers

ORDERS NSD 254 of 2022

BETWEEN: CATHERINE JANE ROSENA SCOTT Plaintiff

AND: EMANCEE PTY LIMITED (IN LIQ) Defendant

order made by: JACKMAN J DATE OF ORDER: 24 MAY 2024

THE COURT ORDERS THAT:

1. Pursuant to s 90-15 of the Insolvency Practice Schedule, John Maxwell Morgan in his capacity as liquidator of Emancee Pty Limited (in liq) is justified in admitting to proof in the winding up of Emancee Pty Limited (in liq) the proof of debt lodged on behalf of McUnits Pty Ltd as trustee for the Consolidation Trust dated 21 February 2024 in the amount of $3,838,414.00. 2. Pursuant to s 63 of the Trustee Act 1925 (NSW), John Maxwell Morgan in his capacity as trustee of the McIntyre Settlement Trust is justified in paying to Emancee Pty Limited (in liq), and specifically into the winding-up account he operates in his capacity as liquidator of Emancee Pty Limited (in liq), the following amounts from the assets of the McIntyre Settlement Trust: (a) the sum of $6,241,968.47; and (b) such further sum or sums necessary to satisfy the following obligations: (i) any future amount fixed by a remuneration determination made in the winding up of Emancee Pty Limited (in liq) pursuant to s 60-10 of the Insolvency Practice Schedule; (ii) any future amount fixed on account of internal disbursements by a resolution of creditors made in the winding up of Emancee Pty Limited (in liq) pursuant to s 60-20(4)(c)(ii) of the Insolvency Practice Schedule; (iii) any future amount he reasonably incurs in his capacity as liquidator of Emancee Pty Limited (in liq) on account of arm's length disbursements; and (iv) repayment of any amounts owed to any creditors which lodge claims in the liquidation which are admitted after the date of this order. 3. Pursuant to s 90-15 of the Insolvency Practice Schedule, John Maxwell Morgan in his capacity as liquidator of Emancee Pty Limited (in liq) is justified in drawing from the winding up account he operates in his capacity as liquidator of Emancee Pty Limited (in liq) any amount mentioned in order 2(b)(i) herein only upon: (a) providing all known creditors of Emancee Pty Limited (in liq) with 14 days written notice of his intention to do so; and (b) no application being made to review the relevant remuneration determination being made pursuant to s 60-11 of the Insolvency Practice Schedule or the final determination of any such application. 4. Pursuant to s 93 of the Trustee Act 1925 (NSW), the costs of John Maxwell Morgan of and incidental to this application be paid on an indemnity basis out of the assets of the McIntyre Settlement Trust. 5. There be liberty to apply. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.