An application for leave to appeal, an extension of time for leave to appeal, and an appeal should leave be granted which concern directions and relief made pursuant to ss 90-15(1) and 90-20(1)(a) of Schedule 2 of the Bankruptcy Act 1966 (Cth) in relation to the administration of a bankrupt estate. The directions and form of relief sought by the trustees in bankruptcy and made by the primary judge were wide-ranging. This appeal focused on three issues concerning the distribution of certain assets:
- Whether the priority regime in ss 108 and 109 of the Bankruptcy Act applies to the distribution of the proceeds of the sale of the assets of the family trust.
- Whether in the distribution of the personal estate of the bankrupt amongst all creditors, the trust creditors must bring into hotchpot the amount which they have received from the proceeds of the sale of the assets of the family trust.
- In dealing with the proceeds of recovery in a preference action referable to a preferred payment by the debtor trustee (now bankrupt) to a trust creditor (the Australian Taxation Office) out of the proceeds of the exercise of the right of exoneration against trust assets, whether the trustees in bankruptcy were required to use that recovered money only for the purpose of discharging trust debts or whether the proceeds of recovery were general non-trust assets of the bankrupt estate.
The full judgment is available here.