Clark and Aravanis in their capacity as joint and several trustees of the property of Kimber v Owners Corporation SP48216 (No 2)

The matter in the Federal Circuit and Family Court of Australia involved an application by Clark and Aravanis, acting as joint and several trustees of the bankrupt estate of Kimber, to facilitate the sale of real property to complete the administration of the estate. The dispute arose between the trustees and the major creditor, the National Australia Bank Limited, regarding a proof of debt and priority legal costs. The trustees sought declarations and orders to enable the sale of the property, while the bank contested the claim and the priority of its legal costs.

The court was required to determine several legal issues, including whether the trustees could sell the property, the extent of the bank's interest in the net proceeds of the sale, and the priority of the bank's legal costs over other claims against the estate. Additionally, the court needed to address the trustees' request to set aside subpoenas issued to certain individuals and to direct the removal of personal property from the premises.

The court dismissed the application for orders to facilitate the sale, finding that the trustees' application did not meet the necessary criteria for such orders. The court also set aside the subpoenas issued to the individuals. Regarding the separate question concerning the bank's interest in the property, the court declared that the bank is entitled to a 25% interest in the net proceeds following the sale. The court further ordered the bank to vacate the premises and deliver up the keys and security codes within 21 days. The net proceeds of sale are to be distributed according to a detailed hierarchy, with the bank's secured entitlement and legal costs being among the first to be paid. The orders are stayed until 31 January 2022, and the court authorised the trustees to enter into an agreement with the first respondent.