Late this afternoon the Full Court of the Federal Court of Australia delivered judgment in Jones (liquidator) v Matrix Partners Pty Ltd, re Killarnee Civil & Concrete Contractors Pty Ltd (in liq)  FCAFC 40. The bench comprised Allsop CJ, Siopis and Farrell JJ. The judgment can now be read on Austlii here.
Their Honours delivered three separate judgments. There was unanimity of decision and reasoning on some of the questions answered, but not others. The Court answered the questions posed for decision as follows –
- The assets of the Trust are not assets in the winding up of the trustee company Killarnee, such that the liquidator did not have power under s 477 to sell the Trust assets (unanimous).
- Two parts –
- The proceeds of realisation of Trust assets are to be applied by the Liquidator in accordance with the priority regime under ss 555, 556, 560 and 561 of the Corporations Act (2:1 – Allsop CJ answered yes, Farrell J answered yes but for different reasons, Siopis answered no).
- The unfair preference proceeds are to be applied in accordance with the priority regime (unanimous, although with the qualification that this was common ground, which their Honours noted they accepted without undertaking any legal analysis).
- Two parts –
- The Liquidator should be directed to deal with the proceeds of realisation of Trust assets as assets in the winding up of the Company (2:1 – Allsop CJ answered yes, Farrell J answered yes in substance, Siopis J answered no).
- The Liquidator should be directed to deal with the unfair preference proceeds as assets in the winding up of the Company (unanimous).
- Neither the proceeds of realisation of Trust assets or the unfair preference proceeds should be distributed by the Liquidator to unsecured creditors of the Trust pari passu after providing for the costs of the administration (unanimous, although Siopis J’s reasons differed to those of Allsop CJ and Farrell J).
More to follow.