Lombe v Wagga Leagues Club Ltd

In this matter, Lombe, a former employee, sued Wagga Leagues Club Ltd in the Supreme Court of New South Wales, seeking to assert priority over certain payments during the club's liquidation. The primary issue was whether Lombe, who had contributed to a fund under a deed of company arrangement, was entitled to priority under section 560 of the Corporations Act 2001. Additionally, the court needed to determine if a charge that was void against the liquidator, due to non-registration within the required timeframe, could be validated against the liquidator with limited effect and operation. The final issue was whether the residue of funds held by the deed administrators after the termination of the deed of company arrangement became subject to a trust.

The court held that Lombe was not entitled to priority under section 560 as his contributions did not constitute an unpaid contribution to the fund from which employee entitlements were met. The court also found that it lacked jurisdiction to validate the charge against the liquidator, as the charge was void for non-registration. The residue of funds held by the deed administrators did not become subject to a trust upon termination of the deed of company arrangement, and any such trust did not survive the termination.

The court ruled in favour of Wagga Leagues Club Ltd on all issues. It dismissed Lombe's claim for priority payment and denied the liquidator's application to validate the charge. The court also held that no trust arose in favour of creditors upon the termination of the deed of company arrangement.