Mark Eade and Sean Russell addressed an audience of insolvency practitioners hosted by the Australian Restructuring Insolvency & Turnaround Association (ARITA) on 21 August 2019 at the McCullough Robertson office (Brisbane) to offer some clarity on a matter that for a number of decades has been uncertain, the treatment of a trustee’s ‘right of indemnity’ upon the occurrence of an insolvency event. In Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth [2019] HCA 20, the High Court provided welcome clarification as to the nature of a trustee’s right of indemnity, and its effect upon the distribution of a company’s property to its creditors in insolvency.
Mark and Sean explored the following matters in light of the High Court’s decision:
- a trustee’s right of indemnity – what it is and how it operates
- how trust assets are to be applied and distributed in insolvency (both company and personal insolvencies)
- the disparity between the decisions of Re Enhill Pty Ltd and Re Suco Gold Pty Ltd
- what issues remain unresolved
