In the matter of Direct FX Trading Pty Ltd (in liq) (No 2)

The case involved Direct FX Trading Pty Ltd, which was in liquidation, and various beneficiaries of a fund held by the liquidator. The fund represented moneys held on trust by the company for 2,653 individual beneficiaries. The majority of these beneficiaries were owed relatively small amounts. The liquidator sought directions and judicial advice to determine whether it was justified to distribute the fund only to beneficiaries with balances over $100 on a pro rata basis, and whether the expenses associated with the application and the distribution of the funds should be paid from the trust moneys.

The central legal issues revolved around the equitable distribution of the fund held by the liquidator. The court needed to determine whether the liquidator was justified in distributing the fund only to those beneficiaries with balances over $100 to avoid the fund being exhausted by the costs of distribution. Additionally, the court had to decide whether the expenses of the application and the distribution of the funds should be borne by the beneficiaries or paid from the trust moneys.

The court concluded that the liquidator was justified in distributing the fund to beneficiaries with balances over $100 on a pro rata basis, as the costs of distributing the fund to all beneficiaries would otherwise exhaust the fund. The court found that the expenses of the application and distribution of the funds should be paid from the trust moneys, as the liquidator was acting in the best interests of all beneficiaries by seeking to preserve as much of the fund as possible. The court provided the liquidator with the necessary directions and judicial advice to proceed with the distribution in a manner that balanced the interests of the beneficiaries and the preservation of the fund.

The final orders included directions for the liquidator to distribute the fund to beneficiaries with balances over $100 on a pro rata basis and to pay the expenses of the application and distribution from the trust moneys. The court also provided the liquidator with guidance on how to communicate with the beneficiaries and manage the distribution process to ensure fairness and efficiency.