Ross v Manpak Holdings Pty Ltd, in the Matter of Manpak Holdings Pty Ltd

The plaintiffs sought a declaration from the Court that they were lawfully entitled to realise proceeds from the sale of trust assets and to distribute these proceeds in accordance with a Deed of Company Arrangement. The case arose from the insolvency of Manpak, a corporate trustee of a trading trust. The plaintiffs, appointed as administrators under a Deed of Company Arrangement, sought to sell the business of Manpak and distribute the proceeds among creditors. The primary legal issue was whether the plaintiffs had the right to apply the trust assets to meet the costs and expenses of the administration and to distribute the remaining proceeds to creditors in accordance with the Deed of Company Arrangement. The court had to consider the application of statutory priorities and the insolvency procedures applicable to the distribution of trust assets.

The court examined the statutory priorities regime and the effect of the Deed of Company Arrangement on the distribution of trust assets. It noted the Full Court's decision in Killarnee and the Victorian Court of Appeal's decision in Re Amerind, which considered the priorities of creditors in insolvency proceedings. The court concluded that there was no relevant distinction between deed administration and liquidation in this context, thus warranting a departure from the Killarnee decision. The court found that the plaintiffs were lawfully entitled to realise the proceeds from the sale of the trust assets and to distribute them in accordance with the terms of the Deed of Company Arrangement. The court emphasised that the statutory priorities regime applied to the distribution of the proceeds, ensuring that certain creditors received priority payments.

The court made orders declaring that the plaintiffs were lawfully entitled to realise the proceeds from the sale of the trust assets and to distribute these proceeds in accordance with the Deed of Company Arrangement. The court further ordered that the costs of the application be paid out of the assets of the Fund. The plaintiffs were granted liberty to apply for further orders as necessary. The decision clarified the application of statutory priorities and insolvency procedures in the context of corporate trustees in deed administration.