Re Nilant

The plaintiffs, Charles Philippe Louis Nilant and Oren Zohar, as voluntary administrators of Smartworld Corporation Pty Ltd, sought an order from the Supreme Court of Western Australia under the Trustees Act 1962 (WA) or the Corporations Act 2001 (Cth) that they be permitted to transfer funds held in trust for Smart America Development Corporation, a subsidiary of the company, to Morestar Nominees Pty Ltd as trustee of the Smartworld Creditors' Trust. The plaintiffs sought this order to satisfy a debt of over A$8,000,000 owed by Smart America to the company. Barker J examined various sections of the Trustees Act 1962 (WA) and the Corporations Act 2001 (Cth) but found that none of these provisions authorised the Court to make an order of the type sought by the plaintiffs. Specifically, s 89(1) of the Trustees Act 1962 (WA) did not permit the Court to confer a power on the trustee in the best interests of the persons beneficially interested under the trust, as the proposed transaction would benefit the creditors of the Smartworld Creditors' Trust, but not Smart America, the relevant beneficiary. Similarly, s 90(1) of the Trustees Act 1962 (WA) did not apply, as neither the plaintiffs nor Smart America were persons to which any of the provisions of s 90(1) applied. Additionally, s 92(1) of the Trustees Act 1962 (WA) did not permit the Court to make a direction authorising the payment of the funds held on trust for Smart America to the Smartworld Creditors' Trust, as such a direction would not respect the management or administration of the property subject to the trust. Finally, s 447A and s 447D of the Corporations Act 2001 (Cth) did not authorise the Court to make any "directions" in terms of the order the plaintiffs sought. The plaintiffs made their application as trustees of the funds they held for Smart America and not as administrators of the company. Therefore, Barker J dismissed the application as the Court did not have the power to make an order of the type the plaintiffs sought.