Re South West Kitchens (WA) Pty Ltd

In the case of Re South West Kitchens (WA) Pty Ltd, the primary concern was whether liquidators appointed to a company that had acted as a trustee of a trust could exercise a statutory power of sale under the Corporations Act 2001 (Cth) over trust assets, despite the company's disqualification as a trustee following its liquidation. The court was required to decide whether the liquidator's statutory power of sale was limited by the terms of the private trust agreement or if it could be exercised independently of the trust deed. The liquidators sought a court order to facilitate the sale of trust assets held by the company.

The court's reasoning was that the statutory power of sale granted to liquidators under s 477 of the Corporations Act is not constrained by the terms of a private trust agreement. The court found that a liquidator of a trustee company, upon appointment, acquires the rights of indemnity and exoneration of the former trustee and may exercise the statutory power of sale independently of the trust deed. This approach ensures that liquidators do not need to seek court approval for every sale of trust assets, which would be highly inconvenient. The equitable lien, which secures the rights of indemnity and exoneration, does not confer a power of sale but rather is enforceable through judicial sale or appointment of a receiver with a power of sale.

Consequently, the court declared that the liquidators had the power to sell, dispose, or otherwise deal with the trust assets in the course of the winding up of the company. The court also ordered that the costs of the proceedings be paid from the trust assets. This decision aligns with the principle that while seeking court assistance may be appropriate in some instances, it is not a mandatory requirement for every sale of trust assets by a liquidator.