Park v Whyte (No 3)

In this case, the applicants were appointed as administrators and subsequently liquidators of a responsible entity that managed several registered investment schemes. The respondent was appointed to ensure the largest scheme was wound up according to its constitution. The applicants sought to be indemnified for various expenses incurred during the liquidation, including legal costs, assessors' costs, and insurance premiums. The respondent argued that any indemnity claims by the applicants should be offset against potential claims against the second respondent for breaches of trust or duty. The applicants countered that they had a right to direct payment from the trust property, exempt from any set-off.

The court considered whether the expenses claimed by the applicants were reasonably incurred and should be paid from the trust property of the registered investment scheme. The court also had to determine if any successful indemnity claims by the applicants should be reduced by any claims against the second respondent for breaches of trust or duty. In resolving these issues, the court examined the statutory framework governing managed investment schemes, the nature of the indemnity claims, and the implications of direct payment from the trust property.

The court found that the first applicants were entitled to be indemnified for certain expenses, including insurance premiums and legal costs. However, the court determined that the claims should be proportionately reduced to account for potential claims against the second respondent. The court ordered that the first applicants and the respondent draft an order detailing the agreed amounts for payment from the LM First Mortgage Income Fund. If the parties could not agree within a specified period, the matter would be relisted for further hearing.

The final orders of the court were that the first applicants were entitled to specified sums from the LM First Mortgage Income Fund for certain expenses, with the amounts to be determined by the parties or by further order of the court. The court also set a deadline for the parties to exchange submissions on costs and scheduled a hearing to address any remaining issues regarding costs and outstanding questions under the orders.