QNI Metals Pty Ltd v Queensland Nickel Pty Ltd (in liquidation) & Anor; Mineralogy Pty Ltd v Queensland Nickel Pty Ltd (in liquidation) & Ors

The High Court of Australia considered appeals arising from proceedings concerning the administration of Queensland Nickel Pty Ltd (in liquidation) and its associated entities. The primary dispute involved claims by QNI Metals Pty Ltd and Mineralogy Pty Ltd against the liquidators of Queensland Nickel and related parties, concerning the proper distribution of assets and the determination of priority of claims in the liquidation.

The central legal issues before the High Court were: (1) whether certain payments made by Queensland Nickel to its parent company, QNI Metals, constituted unfair preferences under the *Corporations Act 2001* (Cth); (2) the proper characterisation and distribution of funds held in a trust account established for the benefit of Mineralogy; and (3) the extent to which the liquidators were entitled to indemnity from the assets of the liquidation for costs incurred in defending claims brought by Mineralogy.

The High Court analysed the provisions of the *Corporations Act* relating to unfair preferences, focusing on the intention of the insolvent company and the financial position of the recipient. Regarding the trust account, the Court examined the terms of the trust deed and the conduct of the parties to determine whether the funds were properly held on trust for Mineralogy or were available to the liquidators. The Court also considered the principles of liquidator indemnity, balancing the need for liquidators to be able to perform their duties against the rights of creditors and beneficiaries.

The High Court allowed the appeal in part, varying the orders of the Full Federal Court. It found that certain payments were indeed unfair preferences and ordered their repayment to the liquidators. The Court also made declarations regarding the beneficial ownership of the funds in the trust account and clarified the scope of the liquidators' indemnity.