Salayog Super Nominees Pty Limited v Purchas

Salayog Super Nominees Pty Limited sought to recover costs from Purchas, the liquidator of a company that had acted as the corporate trustee of two separate trusts. The company owned two properties, one of which had defaulted, leading to the appointment of Purchas as liquidator. Salayog sought to recover its costs from the equity in the non-defaulting trust property. The defendants applied for orders to appoint Purchas as receiver of the assets of both trusts.

The central issue before the court was whether Purchas, as liquidator of the corporate trustee, was entitled to seek payment of general winding-up costs by accessing the equity in the non-defaulting trust. The court had to consider the scope of the liquidator's powers and the extent to which they could be exercised over assets not directly associated with the default that led to the winding-up order. The court also had to determine if there were any circumstances under which the liquidator could access the equity of the non-defaulting trust to cover costs incurred in the winding up of the company.

The court ruled that the liquidator was entitled to access the equity in the non-defaulting trust to the extent necessary to cover costs associated with the winding up of the corporate trustee. The court found that the liquidator's appointment extended to all assets of the company, including those held in trusts, to ensure the orderly administration of the winding-up process. The court granted the application in part, allowing the liquidator to access the equity in the non-defaulting trust to the extent necessary to cover costs but limited the scope of the liquidator’s powers to prevent abuse or overreach.

Salayog Super Nominees’ claim was dismissed, and the court ordered that Salayog pay the defendants’ costs of the application and the proceeding on the standard basis. This decision clarifies the scope of a liquidator's powers in relation to trust assets, affirming that while the liquidator can access the equity of all trust assets to cover winding-up costs, such access must be proportionate and justified.