The Full Federal Court has just handed down its decision in the much anticipated Killarnee decision on trust assets and liquidations.
The Court has held (in summary):
(a) the Trust Assets at the time of the winding-up of Killarnee are not assets of the Company and therefore not capable of being sold by the Liquidator, pursuant to s477 Corporations Act. This appears to be due to the trust being deemed a bare trust;
(b) post-appointment Trust Asset proceeds are to be treated in accordance with the priority regime in s556; and
(c) the Liquidator is to be directed, pursuant to s 511 of the Corporations Act, to deal with the proceeds as assets in the Liquidation, notwithstanding the complications from the bare trust.
Interestingly Allsop CJ (in obiter at para 30) favoured Re Suco Gold over Re Enhill, in contrast to the Amerind decision.
Re Suco limited Trust Assets to Trust Creditors.
All 3 Justices give separate judgements, and so all 225 paragraphs will need to be fully digested over the coming days to work out how this interacts with the very recent Victorian Court of Appeal decision in Amerind.