A recent Federal Court decision has confirmed that liquidators of a corporate trustee are entitled to be remunerated out of the trust assets for costs incurred in monitoring and investigating claims made against the trust.
In Owen, in the matter of RiverCity Motorway Pty Limited (Administrators Appointed) (Receivers and Managers Appointed)  FCA 1008, the liquidators of RiverCity Motorway Management Limited sought directions pursuant to section 511(1) of the Corporations Act 2001 (the Act) on, among other things, the following issues:
- Whether the liquidators are 'officers' of the company in its capacity as Responsible Entity (RE) for two managed investment schemes (the trusts);
- Whether the liquidators are entitled to remuneration out of the trust assets for work done monitoring and investigating court proceedings involving the company and the trusts; and
- The validity of the appointment of two committees of inspection.
Justice Greenwood held that the liquidators are not officers of the company in its capacity as RE. Section 601FD of the Act provides that an officer of an RE must, among other things, act in the best interests of the members, and that if there is a conflict between the members' interests and the interests of the RE, the officer must give priority to the members' interests. However, section 9 of the Act defines an officer of a corporation to mean a liquidator of the corporation, 'unless the contrary intention appears'. Given that a liquidator owes duties to the general body of creditors and those duties are not subordinated to the interests of scheme members, Justice Greenwood was satisfied that a 'contrary intention' appears and a liquidator of an RE is not an officer of the company for the purposes of the Act.
In relation to the liquidators' remuneration, Justice Greenwood said that it was a proper exercise of the powers and functions of the liquidators to continue to monitor and investigate the claims made in the court proceedings and take steps to identify, preserve and enforce rights under any policy of insurance that might respond to those claims. Given that such work is done for the benefit of the trusts and the contingent creditors of those trusts, it is appropriate to allow the liquidators direct recourse to the assets of the trusts for their costs and expenses in doing the work.
Finally, the two committees of inspection were held to have been validly appointed.Section 548(1) of the Act provides that a liquidator of a company must, if so requested by a creditor or contributory, convene separate meetings of the creditors and contributories for the purpose of determining whether a committee of inspection should be appointed. As no such request was made, the fact that separate meetings were not held did not render the appointment of the committees invalid.