Holland, in the matter of BCNCulinary Arts Pty Ltd (in liq)

The application concerns five companies, each of which was the corporate trustee of a trust, and each of which has been placed into liquidation. The liquidators have sought orders appointing them as receivers and managers of the assets of the various trusts. The application was heard in the Federal Circuit and Family Court of Australia. The primary issue before the court was whether the liquidators should be appointed as receivers and managers of the assets of the trusts, to enable the sale of perishable assets which would otherwise be rendered worthless if not sold promptly.

The court found that the assets of the companies were held on trust and, since the companies had been liquidated, they could no longer exercise their powers as trustees. This would cause difficulties in selling the assets, which were largely perishable, and were subject to security interests. The court held that appointing the liquidators as receivers and managers was necessary to allow them to sell the perishable assets expeditiously, without waiting for the resolution of issues concerning ownership of the assets and any security interests over them. The court noted that the liquidators would be required to make inquiries into those matters after selling the assets. The court further held that the liquidators should be granted the powers of trustees under section 420 of the Corporations Act 2001 (Cth) in respect of each trust, and that they should be able to treat the assets of the companies as being assets of the relevant trust, and the debts and liabilities of the companies as being those of the relevant trust.

The court made orders appointing the liquidators as receivers and managers of the assets of the trusts, and granting them the powers of trustees. It further made orders concerning the distribution of the proceeds of the sale of the assets, and the payment of the liquidators’ costs.