Hundy (liquidator), in the matter of Renewable Energy Traders Pty Ltd (in liq)

The case of Hundy (liquidator), in the matter of Renewable Energy Traders Pty Ltd (in liq) involved the liquidator, Mr Hundy, seeking directions and declarations in respect of assets potentially held on trust. The matter was heard in the Federal Court of Australia. The primary dispute centred on the nature of the assets held by the company, specifically small-scale technology certificates (STCs), which were created under the Renewable Energy (Electricity) Act 2000 (Cth). The liquidator sought to determine whether these assets were held on trust for the benefit of certain claimants, and if so, to what extent.

The court was required to address several legal issues. Firstly, it needed to ascertain whether an express trust existed over the STCs held by the company. This involved examining the principles from Korda v Australian Executor Trustees (SA) Limited [2015] HCA 6; 255 CLR 62 and applying them to the facts of the case. Secondly, the court had to consider the statutory scheme created by the REE Act to understand the role and function of STCs within the legislative framework. Thirdly, the court needed to distinguish between the company's trust assets and its business operation assets, and to determine the appropriate legal classification of the STCs.

The court found that the company, while primarily engaged in the registration and trading of STCs, did not itself install or supply eligible solar products. Instead, it generated revenue through commissions for registering STCs and through trading STCs. The court applied the principles from Korda and concluded that an express trust was identifiable over the STCs. The statutory scheme and the company's business operations were carefully examined, leading to the conclusion that the STCs were indeed held on trust. The court also addressed the distinction between remuneration and disbursements under the Insolvency Practice Schedule, ruling that the liquidator's costs could be paid from the trust assets.

The court ordered that the liquidator provide proposed short minutes of order within 14 days to give effect to these reasons. This decision highlights the importance of understanding the legislative framework and trust principles in determining the classification of assets in insolvency proceedings.