The intersection of trust law and statutory insolvency regimes continues to tantalise but the prospect of the settlement of principles now appears closer
The Full Court of the Federal Court (not sitting as an appellate court but at first instance on referral from a single judge) has recently considered the interrelationship of trust law and the insolvency regime under the Corporations Act 2001 (Cth). The case of Jones (Liquidator) v Matrix Partners Pty Ltd, in the matter of Killarnee Civil & Concrete Contractors Pty Ltd (in liq) (‘Killarnee’) has been the subject of considerable interest and comment and has been followed in two Federal Court decisions. It was a split decision and has not altogether settled the law. The High Court is expected to provide further guidance on the vexed issues referred to in Killarnee. In the writer’s opinion, the judgment of the Chief Justice of the Federal Court in Killarnee does however give the clearest guide as to how liquidators should conduct relevant aspects of the liquidation of insolvent trustee companies to which they have been appointed. The judgment draws upon decisions of the Full Court of the South Australian Supreme Court and, crucially, the High Court.