Re Metrobore Australia Pty Ltd

The case of Re Metrobore Australia Pty Ltd involved a dispute regarding the administration of a trustee company and the power of sale conferred upon the administrators. The company had entered into administration, triggering a provision in the Trust Deed that required the Trustee to retire. The unitholders sought to appoint a new trustee but were unable to do so due to the terms of the Trust Deed. The issue before the court was whether the unitholders had the right to appoint a new trustee and whether the administrators had the power to realise the company’s assets.

The court examined the Trust Deed, which explicitly provided for the Trustee’s retirement upon the company entering administration. It was noted that the Deed did not confer any power upon the unitholders to appoint a new trustee. The court held that, given the specific terms of the Trust Deed, the unitholders were precluded from appointing a replacement trustee. Additionally, the court found that the Deed conferred an express power of sale upon the administrators, enabling them to realise the company’s assets in the course of the administration.

Consequently, the court ruled in favour of the administrators, affirming their authority to realise the company’s assets in accordance with the powers granted by the Trust Deed. The unitholders' attempt to appoint a new trustee was dismissed due to the explicit provisions of the Trust Deed. The court emphasised the importance of adhering to the terms of the Trust Deed, particularly in matters of trustee appointment and asset realisation during administration.

The final orders of the court confirmed the administrators' powers as set out in the Trust Deed and denied the unitholders the right to appoint a new trustee. This decision underscores the necessity for parties to carefully consider and adhere to the terms of trust deeds in the administration of companies.