Trio Capital Ltd (Admin App) v ACT Superannuation Management Pty Ltd

In the case of Trio Capital Ltd (Admin App) v ACT Superannuation Management Pty Ltd, the dispute arose in the context of the voluntary administration of Trio Capital Ltd, a corporate trustee managing multiple superannuation trusts. The primary issue was whether the administrators were entitled to allocate payments from the corporate trustee’s assets in such a manner that would shift the burden of recouping their fees and expenses exclusively onto the assets of the solvent trusts, rather than distributing the burden across all trusts, including those that were insolvent. The matter was heard by the Supreme Court of the Australian Capital Territory.

The central legal question was whether the administrators could lawfully structure the payment of fees and expenses from the corporate trustee's assets in a way that privileged solvent trusts over insolvent ones. The court had to consider the legal framework governing corporate voluntary administrations, particularly focusing on the statutory duties and powers of administrators under the Corporations Act 2001 (Cth). It also needed to examine the nature of the relationship between the corporate trustee and the various trusts it administered, including whether there were any restrictions on the allocation of assets in the event of insolvency.

The court concluded that the administrators did not have the authority to unilaterally structure payments in a way that unfairly burdened solvent trusts. The ruling emphasised the statutory duty of administrators to act in the best interests of all creditors, not merely those of the solvent trusts. It was held that the administrators must distribute the burden of recouping fees and expenses proportionally across all trusts, rather than solely relying on the assets of solvent trusts. This decision underscored the principle that the corporate trustee's assets are to be managed impartially for the benefit of all creditors, in line with the statutory provisions governing corporate voluntary administrations.

The court's final orders required the administrators to revise their approach to fee and expense recovery to ensure a fair distribution across all trusts, reflecting the statutory obligations and equitable treatment mandated by the Corporations Act.