The Court held that trust funds held by solicitors under a possessory lien were not property of the company available under s 477 of the Corporations Act, following Re Amerind rather than Lane v DCT on the characterisation of the trustee's right of exoneration. The Court found that the solicitors' retaining liens survived the liquidation of the trustee company and were not voidable preferences. To resolve the impasse — where the solicitors' lien was passive, the trustee was a bare trustee lacking active powers, and the beneficiaries of the discretionary trust had no power to direct payment — the Court exercised its power under s 63 of the Trustee Act 1958 (Vic) to confer upon the liquidators the power to apply trust funds to satisfy the solicitors' liens, supplementing any power already available under the Re Universal Distributing principles.
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