Trustees rights on liquidation (indemnification and exoneration)

Caterpillar Financial Australia Limited v Ovens Nominees Pty Ltd [2011] FCA 677

A corporate trustee enters liquidation, its position is as follows:

(i)          its right of indemnity, or exoneration, is retained (at [16]);

(ii)         it continues to have the right to meet creditors’ claims related to any liabilities incurred by it in its capacity as trustee, out of the trust assets (at [15]–[16]); and

(iii)        in addition, its liquidator has the right to claim costs and expenses incurred in winding up the corporate trustee insofar as that relates to its role as trustee and its liquidator has a right of indemnity against the trust assets in respect thereof and a right of exoneration against the trust assets in respect of any prospective liability (at [17]).