Re Global Finance Group Pty Ltd (In liq)

In this case, the liquidator of Global Finance Group Pty Ltd sought a determination regarding the identification and distribution of funds held in the company's trust account. The trust account was used to hold clients' funds in mixed form, and the liquidator was uncertain about the identities of the claimants and the appropriate allocation of losses. The liquidator argued that the funds were held on a Quistclose trust and that tracing principles should apply to identify and recover the funds. The liquidator also sought to determine whether the rule in Clayton's Case applied and whether the pari passu principle should be used to allocate the loss. Finally, the liquidator sought to trace the funds out of the trust account into mortgages held by the company.

The court was required to determine the legal nature of the trust account, whether the funds were held on a Quistclose trust, and if so, whether tracing principles applied. The court also had to determine whether the rule in Clayton's Case applied and whether the pari passu principle should be used to allocate the loss. Additionally, the court needed to consider whether the funds could be traced out of the trust account into the mortgages held by the company.

The court found that the funds in the trust account were held on a Quistclose trust, and tracing principles applied. The court held that the rule in Clayton's Case did not apply and that the pari passu principle should not be used to allocate the loss. The court also found that the funds could be traced out of the trust account into the mortgages held by the company. The court ordered that the funds in the trust account be allocated to the claimants in proportion to their contributions, and that the mortgages held by the company be sold and the proceeds distributed to the claimants in the same proportion.

No further orders were made by the court.