Perpetual Corporate Trust Limited v Xu

Perpetual Corporate Trust Limited (the applicant) sought interim orders in the Federal Court of Australia, appointing a trustee to Ms Xu's property. This application was made in the context of a creditor's petition filed by Perpetual seeking sequestration orders against Ms Xu, which was listed for hearing on 3 June 2021. The dispute arose from Ms Xu's failure to comply with a bankruptcy notice, which was based on a Supreme Court of New South Wales judgment in favour of Perpetual.

The court was required to determine whether it was appropriate, pursuant to section 50 of the *Bankruptcy Act 1966* (Cth), to appoint a trustee to Ms Xu's property. The purpose of this interim appointment was to allow the sale of the property to proceed, with any surplus proceeds to be held by the trustee, thereby preserving the status quo and protecting creditors' interests until the determination of the main creditor's petition.

Baird J was satisfied, based on the evidence and submissions presented by the applicant, that the interim orders were appropriate and in the interests of creditors. The court noted that a bankruptcy notice had been validly served on Ms Xu, which was not complied with, leading to an act of bankruptcy. Ms Xu owed a significant unsecured debt to Perpetual, and was in the process of selling one property and purchasing another, with settlement of the sale property likely to occur before the hearing of the creditor's petition. The court found that appointing a trustee to hold the surplus proceeds from the property sale would safeguard the applicant's interests pending the final determination of the sequestration proceedings.