Horwath Corporate Pty Ltd v Huie

In the Federal Court of Australia, Horwath Corporate Pty Ltd sought an interlocutory injunction against Huie. Horwath was the trustee of a trust, with the trust property being shares in a company. Horwath, acting as a nominee company, sought to limit an undertaking it had given to the assets of the trust, excluding its other assets. The legal issue before the Court was whether it was appropriate to limit the scope of the undertaking to only the trust assets.

The Court considered the nature of the relationship between a trustee and a nominee company, and whether it was appropriate to allow the nominee company to limit its undertaking. The Court noted that a nominee company's role was to hold assets on behalf of the trustee, and that the trustee was still ultimately responsible for the assets. The Court found that it was not appropriate to limit the scope of the undertaking to only the trust assets, as it would undermine the principle that the trustee is responsible for the assets. The Court found that the nominee company was not entitled to limit its undertaking in this way. The Court granted an interlocutory injunction against Huie, but did not limit the scope of the undertaking to only the trust assets.

The Court's decision reinforces the principle that a trustee is ultimately responsible for the trust assets, and that a nominee company cannot limit its undertaking in a way that undermines this responsibility. The Court's decision also highlights the importance of maintaining the integrity of the trustee's role in managing the trust assets. The Court's decision provides guidance to nominee companies and trustees on the appropriate scope of undertakings in relation to trust assets.