Peter Sleiman Investments Pty Ltd as trustee for the Sleiman Family Trust v Deputy Commissioner of Taxation

[2017] NSWCA 81

NSW Court of Appeal

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Interrogate

Catchwords

1. Corporations
2. › Winding up
3. › Winding up in insolvency
4. › Discretion to adjourn or stay
5. › Judgment debt based on tax assessment subject to challenge in AAT
6. › Whether stay should be granted when AAT hearing imminent
7. › Whether payment of GST debt altered basis of discretion
8. › Corporations Act 2001 (Cth)
1. Property
2. › Alienation of property
3. › Conveyancing Act 1919 (NSW), s 37A
4. › Alienation with intent to defraud creditors
5. › Trust restructure
6. › Declaration by trustee that assets held on new unit trusts
7. › Whether declaration of trust constituted 'alienation' of property
8. › Whether trustee's right of indemnity was alienated where consideration of equal or greater value received
1. Trusts and Trustees
2. › Trustee's right of indemnity
3. › Nature of right of indemnity over trust assets
4. › Right extends to trust assets from time to time
5. › Whether right of indemnity lost when trust assets exchanged for consideration of equal or greater value
6. › Trustee Act 1925 (NSW), s 59
1. Equity
2. › Declaratory relief
3. › Absence of proper contradictor
4. › Whether declarations should be granted where they might impact future liquidator's powers

Quick Take

A trustee's right of indemnity attaches to trust assets from time to time; where a trustee disposes of trust assets without breach of trust and for fair value, the right of indemnity attaches to the consideration received, and the disposition does not constitute an 'alienation of property' under s 37A of the Conveyancing Act 1919 (NSW). Where a winding up order is based on a judgment debt founded on a tax assessment subject to challenge in the AAT, and the AAT hearing is imminent, the appropriate course may be to confirm the winding up order but continue a stay pending the AAT determination. The question of whether the statutory right of indemnity under s 59(4) of the Trustee Act 1925 (NSW) may be displaced by the trust deed remains unsettled.