Liquidators can seize trust property
Brooks (Liquidator) v Bull, in the matter of DV Bull Pty Ltd (in liq) [2021] FCA 967 (17 August 2021)
Justice Davies granted an order pursuant to s 530C of the Corporations Act 2001 (Cth) that a liquidator be issued a warrant authorising her to search and seize property of the company in liquidation.
In her application for the warrant, the liquidator gave evidence that the company carried on a furniture retail business on behalf of a trust, of which it was the trustee.
The company’s financial records indicated that the company, in its capacity as trustee, held inventory of some value at premises from which the company carried on business. However, the company’s director had not given full and frank disclosure as to whether stock had been removed from those premises and gave the liquidator inconsistent information.
Her Honour summarised the three requirements for the making of an order under s 530C:
the company is being wound up;
the application is made by a liquidator; and
the Court is satisfied that a person has concealed or removed property of the company with the result that the taking of the property into the custody or control of the liquidator will be prevented or delayed.
Her Honour confirmed that, the fact that the property in question was trust property, did not preclude it from being property of the company for the purposes of s 530C. For this proposition, her Honour cited Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth [2019] HCA 20; (2019) 386 ALR 390 at [90].
