Re St Gregory's Armenian School Inc

In the case of Re St Gregory's Armenian School Inc, the dispute involves the winding up of the corporation and the rejection of proofs of debt by the liquidator. The plaintiffs sought to set aside the liquidator's decision to reject their proofs of debt under section 1321 of the Corporations Act 2001 (Cth). The court was required to determine whether the liquidator's decision was lawful and if the plaintiffs had grounds to challenge it. Additionally, the liquidator cross-claimed against the plaintiffs, alleging unjust enrichment and breaches of fiduciary duty, no conflict, and no profit rules. The court also considered whether an account of profits was warranted under the rule in Cherry v Boultbee and whether the liquidator was estopped from pursuing these claims due to Anshun estoppel.

The court examined the liquidator's authority to reject proofs of debt and the criteria for setting aside such a decision. It found that the liquidator had the discretion to reject proofs of debt that were not properly substantiated or were otherwise improper. The plaintiffs had to demonstrate that the liquidator acted beyond their authority or made an error of law in rejecting their proofs of debt. Regarding the cross-claims, the court assessed whether the plaintiffs had been unjustly enriched and whether the liquidator had breached any fiduciary duties. The court also considered whether there was a breach of the no conflict or no profit rules and whether the plaintiffs had profited from such breaches. The court further evaluated the application of the rule in Cherry v Boultbee to determine if an account of profits was necessary and whether Anshun estoppel applied to prevent the liquidator from pursuing the cross-claims.

The court concluded that the liquidator's decision to reject the proofs of debt was lawful and that there were no grounds for setting it aside. The plaintiffs failed to show that the liquidator acted beyond their authority or made an error of law. The court also found that the plaintiffs had not been unjustly enriched and that the liquidator had not breached any fiduciary duties, the no conflict rule, or the no profit rule. The court determined that an account of profits was not warranted and that the liquidator was not estopped from pursuing the cross-claims due to Anshun estoppel. The plaintiffs' application to set aside the liquidator's decision and their claims against the liquidator were dismissed.