Trustee takes surplus after liquidator’s case falls short

When $5,000 all that’s been paid to cover remuneration you can be sure a liquidator of the calibre of Richard Albarran won’t ignore cash sitting in a court bank account waiting to be claimed but as a recent judgment of the NSW Supreme Court shows, even Hall Chadwick’s most prominent partner can’t win over a judge by reputation alone. Even an Albarran must supply proof.

The money, representing surplus proceeds, had come to court after Westpac had sold the family home of Rightquip Pty Ltd (Rightquip) director Triston Smith.

Albarran asserted a right to the money on the basis that Smith had used company funds to purchase the property.

But as is shown in Westpac Banking Corporation; Applications of Rightquip Pty Ltd (in liq) and Gleeson [2026] NSWSC 585 Albarran had precious little in the way of proof to show he was entitled, as liquidator of Rightquip Pty Ltd, to the contested funds. And without proof, the money would by default vest with Smith’s trustee in bankruptcy Bruce Gleeson of Jones Partners.

That absence of evidence was fatal to Albarran’s application.

He had to prove that by taking funds out of the company without entitlement Triston had established a constructive trust in favour of Rightquip in liquidation.

But evidence was put before the court indicating that it was possible the funds smith used to buy the property could be categorised as repayment of loans made to Rightquip.

Neither Albarran’s lawyers or Gleeson’s chose to put Smith in the witness box so the evidence of loans to Rightquip – contained in an email Gleeson’s lawyers put before the court at the 11th hour – wasn’t tested in cross-examination.

The judge had no evidence of corroboration or of contradiction. The application was Albarran’s to make good and he couldn’t. That meant the $164,961.31 paid into the court by Westpac went to Gleeson as trustee. That left the question of costs.

Because liquidator and trustee had run their dispute over who was entitled to the sale surplus as contested litigation Gleeson’s counsel Michelle Meares argued that Albarran should pay the trustee’s costs.

Judge Francois Kunc agreed, and ruled that Gleeson’s costs – apart from those incurred on the day of the hearing – be paid by Albarran personally.