The recent New South Wales Supreme Court decision In re MF Global Australia Ltd (in liq) No 2 [2012] NSWSC 1426 confirmed that the remuneration, costs and expenses incurred by liquidators in preserving, recovering and realising trust assets should be paid out of the trust property generally, rather than being restricted to assets held on trust for the benefit of the company itself.

This decision followed an earlier proceeding related to the liquidation of MF Global Australia Limited (MFGA), in which the liquidators sought directions regarding the distribution of money held on trust by MFGA. In reaching its decision, the Court agreed that the purpose of the earlier proceeding was to determine the manner in which trust assets would be distributed, and therefore, that it was appropriate for the costs of that proceeding to be paid out of the trust property generally. The Court also indicated that in this case there would have been a strong case for the Court to exercise its equitable discretion to allow the liquidators to recover their remuneration and the general costs and expenses of the liquidation from the trust property generally. However, given its other orders, it was unlikely that there would be a shortfall in the liquidation, so such an order was unnecessary.

See court decision here.