Australian Securities and Investments Commission v Carey

order made by: FEUTRILL J DATE OF ORDER: 15 NOVEMBER 2024

THE COURT ORDERS THAT:

1. Pursuant to r 8.21 of the Federal Court Rules 2011 (Cth) the applicants be granted leave to amend their originating process in terms of the draft originating process annexed to the affidavit of Simon David Tribble sworn 12 November 2024 with the following amendments:
   1. the proceeding be 'In the matter of the bankrupt estate of Sam Alexander Mitchell';
   2. in paragraph (a) under 'the Applicant seeks':
      1. the words 'about whether' be deleted and the words 'to the effect that' be inserted in substitution for the words deleted;
      2. subparagraphs (a)(ii) and (iv) be deleted;
   3. paragraph (b) under 'the Applicant seeks' be deleted and the following be substituted for that paragraph 'a declaration pursuant to section 30(b) of the Bankruptcy Act 1966 (Cth) (Act) that Sam Alexander Mitchell (the Bankrupt) has a beneficial proprietary interest in one or more of:
      1. the income and corpus of the Edge Family Trust; the Edge Property Trust; and (or) the Edge Ceres Trust;
      2. the units of the Edge Park Management Trust; the Edge Investment Management Unit Trust; the Edge 2020 Trust; and (or) the Edge Caravan Park Unit Trust; and
      3. the issued shares in: (a) The Edge TC Pty Ltd (ACN 145 089 069) (first respondent); (b) Wealthcheck Financial Services Pty ltd (ACN 115 077 775) (second respondent); (c) The Edge Farming Pty Ltd (ACN 628 137 646) (third respondent); (d) Rivera Farming Pty Ltd (ACN 626 497 229) (fourth respondent); (e) Cowl Cowl Management Pty Ltd (ACN 637 938 295) (fifth respondent); (f) The Edge Investment Co Pty Ltd (ACN 638 762 697) (sixth respondent); (h) The Edge 2020 TC Pty Ltd (ACN 638 765 081) (seventh respondent); (i) The Edge Investment Management Pty Ltd (ACN 142 103 722) (eighth respondent); (j) Wealthcheck Funds Management Pty Ltd (ACN 154 863 939) (ninth respondent); (k) The Edge Park Management Pty Ltd (ACN 137 727 649) (tenth respondent); (l) The Edge Ceres Pty Ltd (ACN 657 069 040) (eleventh respondent); (m) Wealthcheck Financial Services Pty Ltd (ACN 115 077 775) (twelfth respondent); (n) S Mitchell Family Pty Ltd (ACN 677 835 460) (fifteenth respondent); and (or) (o) S Mitchell Property Pty Ltd (ACN 677 835 479) (sixteenth respondent), and that such property vested in the applicants pursuant to s 58 and is divisible amongst the creditors of the Bankrupt pursuant to s 116 of the Bankruptcy Act.

• 1. the heading 'Claim for interim relief' and the sentence 'The Applicant also claims interim relief.' be deleted;
  2. paragraph 2 be amended to delete the word 'and' at the end of subparagraph (a), insert '; and' at the end of subparagraph (b) and insert a new subparagraph (c) 'The Edge TC Pty Ltd (ACN 145 089 069)'; and
  3. paragraph 4 be deleted and the words 'Such other relief as this Court may consider just and equitable' be substituted for the words deleted.

1. The originating application, as amended according to paragraph 1 of these orders with such further amendments to renumber the claims for relief as may be considered expedient, be filed on or before 4.30pm (AWST) on 22 November 2024.
2. Pursuant to r 9.05(1) of the Rules the following be joined and added as respondents in the proceeding:
   1. The Edge TC Pty Ltd (ACN 145 089 069) as the first respondent;
   2. Wealthcheck Finance Pty Ltd (ACN 115 379 194) as the second respondent;
   3. The Edge Farming Pty Ltd (ACN 628 137 646) as the third respondent;
   4. Rivera Farming Pty Ltd (ACN 626 497 229) as the fourth respondent;
   5. Cowl Cowl Management Pty Ltd (ACN 637 938 295) as the fifth respondent;
   6. The Edge Investment Co Pty Ltd (ACN 638 762 697) as the sixth respondent;
   7. The Edge 2020 TC Pty Ltd (ACN 638 765 081) as the seventh respondent;
   8. The Edge Investment Management Pty Ltd (ACN 142 103 722) as the eighth respondent;
   9. Wealthcheck Funds Management Pty Ltd (ACN 154 863 939) as the ninth respondent;
   10. The Edge Park Management Pty Ltd (ACN 137 727 649) as the tenth respondent;
   11. The Edge Ceres Pty Ltd (ACN 657 069 040) as the eleventh respondent;
   12. Wealthcheck Financial Services Pty Ltd (ACN 115 077 775) as the twelfth respondent;
   13. John Thomson as the thirteenth respondent;
   14. Andrea Miller as the fourteenth respondent;
   15. S Mitchell Family Pty Ltd (ACN 677 835 460) as the fifteenth respondent;
   16. S Mitchell Property Pty Ltd (ACN 677 835 479) as the sixteenth respondent;
   17. Robin Alexander Mitchell as the seventeenth respondent;
   18. Katy Robin Mitchell as the eighteenth respondent;
   19. Sarah Arnott Mitchell as the nineteenth respondent; and
   20. Wendy Helen Mitchell as the twentieth respondent.
3. The originating application, as amended according to paragraph 1 of these orders, together with the documents referred to in the originating process under the chapeau 'On the grounds stated:' be served personally on the respondents and the interested party in accordance with Part 10 of the Rules.
4. For the avoidance of doubt, the amendment to the originating process is without prejudice to the respondents' and the interested party's right to object to the originating process under the Rules or otherwise.
5. There be no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ORDERS WAD 316 of 2024 IN THE MATTER OF MATTHEW DANIEL VINES AND JOHN GERVESE SHANAHAN IN THEIR CAPACITY AS TRUSTEES OF THE BANKRUPT ESTATE OF SAM ALEXANDER MITCHELL BETWEEN: MATTHEW DANIEL VINES AND JOHN GERVESE SHANAHAN IN THEIR CAPACITY AS TRUSTEES OF THE BANKRUPT ESTATE OF SAM ALEXANDER MITCHELL Applicants AND: THE EDGE TC PTY LTD (ACN 145 089 069) and others named in the schedule First Respondent

order made by: FEUTRILL J DATE OF ORDER: 15 nOVEMBER 2024

THE COURT ORDERS THAT:

1. Upon the applicants giving the usual undertaking as to damages to the Court in writing, pursuant to s 30(1)(b) of the Bankruptcy Act 1966 (Cth) and (or) s 90-15 of Schedule 2 Insolvency Practice Schedule (Bankruptcy) of the Bankruptcy Act, further or in the alternative s 23 and (or) s 57 of the Federal Court of Australia Act 1976 (Cth), the Interim Receivers, appointed pursuant to paragraph 2 of the orders made on 25 October 2024, be appointed interim joint and several receivers, without security, of the property of the following trusts for the purpose of identification, preservation and securing that property in aid of the applicants and for the ultimate benefit of creditors of the estate of the Bankrupt:
   1. the Edge Family Trust;
   2. the Edge Property Trust; and (c) the Edge Ceres Trust.
2. By 4.30pm (AWST) on 19 November 2024 the applicants serve a copy of these orders on:
   1. The Edge TC Pty Ltd (ACN 145 089 069) (first respondent), The Edge Ceres Pty Ltd (ACN 657 069 040) (eleventh respondent), S Mitchell Family Pty Ltd (ACN 677 835 460) (fifteenth respondent) and S Mitchell Property Pty Ltd (ACN 677 835 479) (sixteenth respondent) in accordance with s 109X of the Corporations Act 2001 (Cth);
   2. the Bankrupt (interested party) by dispatch by ordinary prepaid post to his last known residential address in Australia, by airmail to his last known residential address in the United States of America and by electronic mail to his last known electronic mail address;
   3. Andrea Miller (fourteenth respondent) by dispatch by ordinary prepaid post to her last known residential address in Australia, by airmail to her last known residential address in the United States of America and by electronic mail to her last known electronic mail address; and
   4. John Thomson (thirteenth respondent), Robin Alexander Mitchell (seventeenth respondent), Katy Robin Mitchell (eighteenth respondent), Sarah Arnott Mitchell (nineteenth respondent) and Wendy Helen Mitchell (eighteenth respondent) by dispatch by ordinary prepaid post to their last known residential or business address in Australia and by electronic mail to their last known electronic mail address.
3. The applicants and the Interim Receivers have liberty to apply on short notice for further or other orders and (or) to relist the originating process.
4. Any person who is able to demonstrate sufficient interest may apply to set aside or vary these orders upon 48 hours written notice.
5. There be no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ORDERS WAD 316 of 2024 IN THE MATTER OF MATTHEW DANIEL VINES AND JOHN GERVESE SHANAHAN IN THEIR CAPACITY AS TRUSTEES OF THE BANKRUPT ESTATE OF SAM ALEXANDER MITCHELL BETWEEN: MATTHEW DANIEL VINES AND JOHN GERVESE SHANAHAN IN THEIR CAPACITY AS TRUSTEES OF THE BANKRUPT ESTATE OF SAM ALEXANDER MITCHELL Applicants AND: THE EDGE TC PTY LTD (ACN 145 089 069) and others named in the schedule First Respondent

order made by: FEUTRILL J DATE OF ORDER: 29 NOVEMBER 2024

THE COURT ORDERS THAT:

1. Pursuant to r 39.05(e) of the Federal Court Rules 2011 (Cth), paragraph 1 of the orders made on 15 November 2024 appointing Interim Receivers to the property of the Edge Family Trust Edge Property Trust and the Edge Ceres Trust be amended to insert the words 'until further order' after the words 'Federal Court of Australia Act 1976 (Cth)' such that the paragraph be as follows:
2. Upon the applicants giving the usual undertaking as to damages to the Court in writing, pursuant to s 30(1)(b) of the Bankruptcy Act 1966 (Cth) and (or) s 90-15 of Schedule 2 Insolvency Practice Schedule (Bankruptcy) of the Bankruptcy Act, further or in the alternative s 23 and (or) s 57 of the Federal Court of Australia Act 1976 (Cth), until further order, the Interim Receivers, appointed pursuant to paragraph 2 of the orders made on 25 October 2024, be appointed interim joint and several receivers, without security, of the property of the following trusts for the purpose of identification, preservation and securing that property in aid of the applicants and for the ultimate benefit of creditors of the estate of the Bankrupt: (a) the Edge Family Trust; (b) the Edge Property Trust; and (c) the Edge Ceres Trust. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT FEUTRILL J:

Background

1. On 15 November 2024 I made orders on two interlocutory applications the applicants filed on 30 October 2024 and 13 November 2024 respectively. These are my reasons for those orders.
2. The matter first came before me as an urgent duty matter. I made orders on 25 October and varied them by orders made on 31 October 2024. I later published reasons for those orders: Vines, in the matter of the Bankrupt Estate of Mitchell [2024] FCA 1276. These reasons should be read with the reasons in Vines and I adopt in these reasons and use capitalised terms in the same way as they were used in Vines.
3. The background to the present interlocutory applications and the factual foundation for them is set out in Vines and need not be repeated.
4. The interlocutory application filed on 13 November 2024 is an application for leave to amend the originating process and to join a number of respondents to the proceeding. That application was made and listed for hearing on 15 November 2024 in accordance with the orders made on 31 October 2024.
5. The interlocutory application filed on 30 October 2024 is an application to vary the orders made on 25 October 2024 to appoint the Interim Receivers as receivers over the property of three trusts: the Edge Family Trust; the Edge Ceres Trust; and The Edge Investment Management Unit Trust. The hearing of that application was adjourned to 15 November 2024 in accordance with the orders made on 31 October 2024.
6. The applicants filed 18 affidavits in the proceedings and rely on all of them in support of the orders sought on each of the interlocutory applications. Five of the affidavits were read at the hearing on 25 October 2024 and two of the affidavits were read at the hearing on 31 October 2024. Many of the affidavits deal with the service of previous orders or the interlocutory applications on various parties that may be affected by the orders sought. I accept that there was service in accordance with the orders and notice was given to persons potentially affected by the interlocutory applications.
7. The substantive affidavits upon which the applicants rely are as follows:
8. affidavits of Matthew Daniel Vines affirmed 23 October 2024 (Vines 1), affirmed 28 October 2024 (Vines 2) and affirmed 12 November 2024 (Vines 3);
9. an affidavit of Damon Charles Petrie sworn 18 October 2024;
10. an affidavit of Brent Trevor-Alex Kijurina sworn 23 October 2024;
11. affidavits of Simon David Tribble sworn 25 October 2024 and sworn 12 November 2024;
12. an affidavit of Richard Albarran sworn 30 October 2024;
13. an affidavit of Alexander Shaik sworn 30 October 2024;
14. an affidavit of Ryan Eamonn Lennon affirmed 31 October 2024; and
15. an affidavit of Mr Tribble sworn 15 November 2024 to which was attached an affidavit of Mr Kijurina signed by him, evidently, in Singapore on 14 November 2024.
16. I granted the Bankrupt leave to intervene to apply to vary or set aside the orders made on 25 October 2024, as varied on 31 October 2024, and to respond to the applicants' interlocutory applications. The Bankrupt filed an affidavit on 31 October 2024. Subject to an undertaking to file a correctly attested version, it was read at the hearing on 31 October 2024. A correctly attested version was filed but not ultimately relied upon at the hearing on 15 November 2024. The Bankrupt adduced no other evidence, but appeared and made oral submissions on 15 November 2024.

Application to amend originating process and joinder

1. It is convenient to commence with consideration of the application for leave to amend the originating process.
2. The applicants sought leave to amend in terms of a draft minute of proposed amended originating process that was an exhibit to Mr Tribble's affidavit of 12 November 2024. The proposed amended originating process is an application in Form B2 of the Federal Court (Bankruptcy) Rules 2016 (Cth). Leave to amend is sought under r 8.21 of the Federal Court Rules 2011 (Cth).
3. The application was made in accordance with the orders made on 31 October 2024. Those orders contemplated a need to amend the originating process to claim final relief for the reasons given in Vines.
4. There is ample power under r 8.21 to grant leave to amend if considered appropriate. For the reasons given in Vines, it is appropriate to grant the applicants leave to amend the originating process because amendment is necessary to correct a defect or error that would otherwise prevent the Court from determining the real questions raised in the proceeding and, also, to add or substitute a new claim for relief that arises out of the same or substantially the same facts as those already raised to support an existing claim for relief by the applicants.
5. The details of the applicants' proposed claims for relief are identified as the grounds stated in the three affidavits of Mr Vines and the affidavits of Mr Petrie, Mr Kijurina, Mr Albarran and Mr Shaik. The details are also said to be on the grounds stated in Vines. It follows that the details (factual foundation for the claims) are to be found in the affidavits to which reference is made in the minute read with the claims for relief.

Declaratory relief as to trustees of trusts

1. The claims for relief commence with a claim for declaratory relief 'about whether' certain companies are trustees of certain trusts and, if not, when the company ceased to be that trustee. I was not prepared to grant leave to amend the originating process to seek relief in such vague terms, but was prepared to grant leave to seek declaratory relief to the effect that nominated companies were the trustees of nominated trusts. The details of the companies and trusts are in the affidavits.
2. The relevant trusts are: the Edge Family Trust; the Edge Property Trust; the Edge Ceres Trust; The Edge Park Management Trust; The Edge Investment Management Unit Trust; The Edge 2020 Trust; and The Edge Caravan Park Unit Trust. At the hearing the Bankrupt contended that, except as to the trustees of the Edge Family Trust and the Edge Property Trust, there is no justiciable controversy about the trustees of the remaining trusts and these are accepted to be: The Edge Ceres Pty Ltd; The Edge Park Management Pty Ltd; The Edge Investment Management Pty Ltd; The Edge 2020 TC Pty Ltd; and The Edge Farming Pty Ltd.
3. The controversy over the trustee of the Edge Family Trust and the Edge Property Trust is described later. As to the trustees of the other trusts, the applicants seek declaratory relief because, for the reasons given in Vines, there is a risk that attempts have been made to change the trustees of these trusts. Therefore, the applicants seek declaratory relief to ensure that the trustees are correctly identified. As will be explained shortly, the applicants also seek declaratory relief about the Bankrupt's proprietary interests in the property of the trusts and shares in the trustee companies. Identification of the correct trustee is, or may be, relevant and of importance to identifying, preserving and securing the Bankrupt's property. I am satisfied, for the purposes of an interlocutory application for leave to amend the originating process, that the amendments should be permitted to seek declaratory relief that identifies the trustees of the trusts.

Declaratory relief as to Bankrupt's proprietary interests in companies and trusts

1. The minute also seeks declaratory relief 'about [the Bankrupt's] entitlement to the assets of' various companies and trusts. The companies are the principal companies and each company that is wholly owned by a principal company. The companies and trusts and the interrelationship between them and the Bankrupt is largely described in Vines.
2. The principal companies are The Edge TC; The Edge Ceres; The Edge Investment Management; and The Edge Park Management. These are referred to as the principal companies because the Bankrupt is the beneficial owner of all the issued shares in those companies. Wealthcheck Finance, The Edge Farming, Rivera Farming, Cowl Cowl Management, The Edge Investment Co, and The Edge 2020 TC are subsidiaries of The Edge TC. Wealthcheck Financial Services is a subsidiary of The Edge Ceres. Wealthcheck Funds Management is a subsidiary of The Edge Investment Management.
3. There are two other relevant companies: S Mitchell Family Pty Ltd and S Mitchell Property Pty Ltd. The Bankrupt is the sole shareholder of S Mitchell Property. As explained later in these reasons, the Bankrupt was the sole shareholder of S Mitchell Family, but there may have been an unauthorised transfer of his share to Mr John Thomson after the Bankrupt became bankrupt.
4. There are seven relevant trusts. Three are discretionary trusts and four are unit trusts. The Edge Family Trust, the Edge Property Trust and the Edge Ceres Trust are discretionary trusts. The Edge Park Management Trust, The Edge Investment Management Unit Trust, The Edge 2020 Trust and The Edge Caravan Park Unit Trust are unit trusts. The discretionary and unit trusts are described in more detail later in these reasons.
5. The Bankrupt opposed the proposed amendment on the ground that, as framed, the declaration sought was too vague to identify with sufficient particularity the assets to which the applicants contend the Bankrupt has an entitlement and, also, that there is an absence of particularity concerning how it is alleged that he has that entitlement. The Bankrupt also submitted that there is no justiciable controversy because it is not disputed or in issue that the shares in the principal companies and S Mitchell Property are his 'property' for the purposes of the Bankruptcy Act 1966 (Cth) and, as such, the shares have vested in the applicants pursuant to s 58 of that Act. Likewise, the Bankrupt evidently accepts that the transfer of his share to Mr Thomson was an error and he remains the sole shareholder of S Mitchell Family and, therefore, that share is his property and has also vested in the applicants.
6. I accept the Bankrupt's submissions to the extent that the proposed form of the declaratory relief about the Bankrupt's entitlement to assets is not sufficiently well defined to identify a justiciable issue. However, I was prepared to grant leave to amend the originating process to seek positive declaratory relief to the effect that the Bankrupt has proprietary interests in the shares of the companies, the units of the unit trusts and the income and corpus of the discretionary trusts.
7. Regarding the Bankrupt's shares in the principal companies and S Mitchell Family and S Mitchell Property, the applicants request declaratory relief to identify and put beyond doubt that the shares in these companies vested in them in accordance with s 58 and are divisible amongst the Bankrupt's creditors in accordance with s 116 of the Bankruptcy Act. While the relief sought may ultimately be determined to be inutile or unnecessary, for the purposes determining whether leave should be granted to amend, I am prepared to accept that the applicants consider there to be a need to obtain the declarations sought to quell a controversy or create certainty for the purposes of the administration of the Bankrupt's estate. At this point, the Bankrupt's assertion that there is no justiciable controversy is not sufficient to preclude the amendment.
8. Regarding the shares in the subsidiary companies, units in the unit trusts and income and corpus of the discretionary trusts, the 'grounds stated' in the affidavits by which it is asserted that the Bankrupt has a direct proprietary interest in that property is more complex and requires some explanation. However, for the reasons given later, I am satisfied that the affidavits, taken with the declaratory relief in the form in which I was prepared to grant leave to amend, provide sufficient particulars of the nature of the applicants' claim for any person interested or affected by the declaratory relief sought to know the case that has to be met having regard to the early stage of the proceeding. Further, while there is not necessarily evidence of every fact that the applicants would need to prove to succeed at trial, the facts deposed are sufficient to disclose a reasonably arguable claim in the sense that, having regard to the facts deposed, there is reason to believe that the applicants will be able to lead evidence at trial that, if accepted, will entitle them to the claimed relief. Also, that using modern case management techniques, the material facts and particulars of the applicants' case and the issues in dispute will become better defined later in the proceeding.
9. The nature of the applicants' reasonably arguable claim, as disclosed in the affidavits, is that the Bankrupt has a contingent proprietary interest in the income and corpus of the Edge Family Trust; the Edge Property Trust; and the Edge Ceres Trust. Through that proprietary interest he has a direct proprietary interest in the property held on trust by the trustees of those trusts and that property includes shares in the subsidiary companies and units in the unit trusts.
10. A longer explanation, by reference to the 'grounds stated' in the affidavits, of the applicants' claim and the legal basis for it is set out below.

The discretionary trusts

1. As was explained in Vines, The Edge TC is, or was, trustee of the Edge Family Trust and The Edge Ceres is, or was, trustee of the Edge Ceres Trust.
2. The Bankrupt was the original trustee of the Edge Family Trust. The Bankrupt is the Appointor under the Edge Family Trust deed. The Appointor has power to appoint a new trustee. The trust deed also makes provision for the Beneficiaries to appoint a new trustee by unanimous agreement. The Bankrupt resigned and The Edge TC was appointed trustee on 7 July 2010. On 27 June 2018 the trust name was changed to its present name. By a deed made on 14 September 2022 the trust deed was amended to include a term that precludes the trustee from resigning or being disqualified from holding office or otherwise being replaced without ADM Capital Investment's consent until the Secured Moneys under the Note Subscription Agreement have been repaid in full.
3. The applicants contend that, as a consequence of the last amendment to the trust deed, the power of the Appointor and of the Beneficiaries to appoint a new trustee remains subject to the consent of ADM Capital Investments. The validity of that amendment to the trust deed now appears to be contested by the Bankrupt and the Beneficiaries. As explained in Vines, the Nominated Beneficiaries have sought to exercise their power under the trust deed to appoint S Mitchell Family as trustee of the trust. That appointment is disputed. That is one of the reasons the applicants seek a declaration that The Edge TC is the trustee of the Edge Family Trust.
4. The Bankrupt is a Nominated Beneficiary under the Edge Family Trust deed. The other Nominated Beneficiaries are Robin Alexander Mitchell, Wendy Helen Mitchell and Katy Robin Mitchell. I infer these other beneficiaries are members of the Bankrupt's family. The Beneficiaries of the trust are the Nominated Beneficiaries and the General Beneficiaries. The General Beneficiaries include the Nominated Beneficiaries and the class extends to natural persons and legal persons related to the Nominated Beneficiaries in various ways. The trust deed confers a discretionary power on the trustee to appoint the income and corpus of the trust on the Beneficiaries until the Vesting Day.
5. The Edge Ceres was the original trustee of the Edge Ceres Trust. The Bankrupt is the Appointor and Controller under the Edge Ceres Trust deed. The Appointor has power to appoint a new trustee. The trustee has a power to amend the trust deed, but the Controller has a power, in effect, to veto such amendments. The Bankrupt is the Principal Beneficiary under the Edge Ceres Trust deed. The Beneficiaries of the trust are the Principal Beneficiary and natural persons and legal persons related to the Principal Beneficiary in various ways. The trust deed confers a discretionary power on the trustee to appoint the income and corpus of the trust on the Beneficiaries until the Distribution Date which is the Vesting Date unless an earlier date is determined by the trustee.
6. The Edge Property Trust was not described in Vines. The existence of that trust was raised in the affidavits filed after 25 October 2024. The terms of the trust deed appear to be the same or substantially the same as the Edge Family Trust before the last amendment of that trust deed. The Bankrupt was the original trustee of the Edge Property Trust. The Edge TC was later appointed trustee of that trust by a deed dated 7 July 2010. The trust name was changed to the Edge Property Trust by a resolution deed dated 27 June 2018. The Bankrupt is the Appointor under that trust. The Appointor has power to appoint a new trustee. The trust deed also makes provision for the Beneficiaries to appoint a new trustee by unanimous agreement. The Bankrupt is a Nominated Beneficiary. The other Nominated Beneficiaries are Robin Alexander Mitchell, Wendy Helen Mitchell and Sarah Arnott Mitchell. Again, I infer the other Nominated Beneficiaries are related to the Bankrupt. The General Beneficiaries include the Nominated Beneficiaries and the class extends to natural persons and legal persons related to the Nominated Beneficiaries in various ways. The trust deed confers a discretionary power on the trustee to appoint the income and corpus of the trust on the Beneficiaries until the Vesting Day.
7. The expression 'discretionary trust' is normally used to describe a kind of express trust in which, unlike a fixed trust, the entitlement of the beneficiary to income or to corpus or both is not immediately ascertainable: Australian Securities and Investments Commission v Carey (No 6) [2006] FCA 814; 153 FCR 509 at [19] (French J), citing Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; 192 CLR 226 at [8] and Commissioner of Taxation (Cth) v Vegners (1989) 20 ATR 1645 at 1649-1650 (Gummow J). In general, a beneficiary of such a trust has a right to compel the trustee to consider whether or not to make a distribution to him or her and a right to the proper administration of the trust: Gartside v Inland Revenue Commissioners [1968] AC 553 at 617. That right may be considered a chose in action and, in that sense, a property right: Kennon v Spry [2008] HCA 56; 238 CLR 366 at [74], [75] (French CJ), see also [125] (Gummow and Hayne JJ). The expression 'discretionary trust' is a descriptive not normative term. The precise rights of the trustee and beneficiaries must be determined by reference to the relevant trust instrument. Here, each of the Edge Family Trust, the Edge Property Trust and the Edge Ceres Trust is a discretionary trust.

Trustees of the discretionary trusts

1. The Edge Ceres is presumptively the trustee of the Edge Ceres Trust. The Bankrupt is the sole shareholder and was, until he became bankrupt, the sole director of The Edge Ceres. Therefore, at all material times before he became bankrupt, the Bankrupt controlled the trustee of the Edge Ceres Trust. That control was able to be exercised as Appointor of the trustee of that trust and as the sole shareholder and director of the current trustee of that trust. As a consequence, it is reasonably arguable that the Bankrupt had control of the power of selection and appointment of the income and corpus of that trust.
2. As already mentioned, there is controversy regarding the current trustee of the Edge Family Trust and the Edge Property Trust. The possible trustees are The Edge TC as trustee of both trusts, or S Mitchell Family as trustee of the Edge Family Trust and S Mitchell Property as trustee of the Edge Property Trust.
3. The Bankrupt is the sole shareholder of The Edge TC. At the time he became bankrupt he was not a director of The Edge TC. Before he became bankrupt, receivers and managers were appointed by ADM Capital Investments as the Security Trustee pursuant to a security it held over certain property of The Edge TC. At that time, the Bankrupt and David Timothy John Whyte were directors of the company. The receivers and managers exercised their power as controllers of the Bankrupt's shares to remove the Bankrupt and appoint Damon Charles Petrie as a director of The Edge TC on 23 May 2024. Mr Whyte had evidently been appointed on 21 September 2022. Therefore, at the time he was made bankrupt, the directors of The Edge TC were Mr Petrie and Mr Whyte, and otherwise the Bankrupt had not been the sole director of that company since 21 September 2022. Mr Whyte and Mr Petrie each resigned on 18 October 2024 and Ms Miller (the Bankrupt's wife) was purportedly appointed as a director of that company on the same day.
4. While the Bankrupt's 'control' over The Edge Ceres and the Edge Ceres Trust before he was made bankrupt is evident, the nature of the Bankrupt's 'control' over The Edge TC is not as obvious. Nonetheless, while at the time he was made bankrupt he was not a director of The Edge TC and from September 2022 he was not the sole director of that company, at all material times the Bankrupt was the sole shareholder of that company. Subject to the amendments to the Edge Family Trust deed and the appointment of receivers and managers over his shares, the Bankrupt remained the Appointor and sole shareholder of The Edge TC. Subject to the appointment of the receivers and managers, the Bankrupt, in effect, retained control over the trustee and the appointment of its directors. It is reasonably arguable that through his shareholding of the entrenched trustee he had effective control over the power of selection and appointment of the income and corpus of the Edge Family Trust to the extent that The Edge TC remained trustee of that trust. Similar considerations apply to his control of the power of selection and appointment under the Edge Property Trust through The Edge TC as trustee of that trust.
5. An ASIC historical company extract records that S Mitchell Family was incorporated on 31 May 2024 and, at that time, the Bankrupt was a sole shareholder and director of that company. It also records that Mr Thomson is now the sole shareholder and director of that company. It indicates that the effective date of the change to the company's membership and directorship was 18 October 2024. That is, after the Bankrupt became a bankrupt and was disqualified from occupying the office of director of that company and, prime facie, his shares in that company vested in the applicants as his trustees in bankruptcy pursuant to s 58 of the Bankruptcy Act. It follows that it is reasonably arguable that the appointment of Mr Thomson as director and the transfer of the shares to him were unauthorised and invalid. As a consequence, it is reasonably arguable that S Mitchell Family has no validly appointed director and the Bankrupt's share in that company has vested in the applicants.
6. An ASIC historical company extract records that S Mitchell Property was also incorporated on 31 May 2024 and that the Bankrupt is the sole shareholder and director of that company. It does not record there having been any attempt to change the shareholder and director of that company. The Bankrupt's share in that company has, prima facie, vested in the applicants as his trustees in bankruptcy and he is disqualified from holding the office of director of that company.
7. It follows that if S Mitchell Family is trustee of the Edge Family Trust and if S Mitchell Property is trustee of the Edge Property Trust, it is reasonably arguable that the Bankrupt had, before he became bankrupt, effective control over the power of selection and appointment under the trust deed applicable to each of those trusts.

Bankrupt's alleged proprietary interests in the discretionary trusts

1. In Carey (No 6) French J surveyed a number of authorities relating to the nature of the right of a beneficiary under a discretionary trust (at [16]-[39]) and the concept of 'property' as defined in s 9 of the Corporations Act 2001 (Cth). His Honour considered that, while 'property' should not be narrowly construed, in the ordinary case a beneficiary of a discretionary trust does not have an equitable interest in the trust income or property which would fall within even the most generous definition of property in s 9 of the Corporations Act and, thereby, was not amenable to control by receivers under s 1323 of that Act. Similar considerations apply to the concept of 'property of a bankrupt' for the purposes of the Bankruptcy Act such that, in the ordinary case, a beneficiary of a discretionary trust would not have an equitable interest in the income or property of that trust.
2. However, in Carey (No 6) French J distinguished the 'ordinary case' from the case in which the beneficiary effectively controls the trustee's power of selection. In the latter case, then the beneficiary has something approaching a general power which is akin to a proprietary interest: Carey (No 6) at [29]. His Honour explained: 36 … where a discretionary trust is controlled by a trustee who is in truth the alter ego of a beneficiary, then at the very least a contingent interest may be identified because, to use the words of Nourse J, "it is as good as certain" that the beneficiary will receive the benefits of distributions either of income or capital or both. 37 As discussed earlier, the beneficiary who effectively controls the trustee's power of selection because he or she is the trustee or one of them and/or has the power to appoint a new trustee has something approaching a general power and the ownership of the trust property. There are cases in the Family Law jurisdiction which have dealt with like circumstance. In Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337, Gibbs J said (at 354-355): … if a company is completely controlled by one party to a marriage, so that in reality an order against the company is an order against the party, the fact that in form the order appears to affect the rights of the company may not necessarily invalidate it. Stephen, Aickin and Wilson JJ agreed.
3. His Honour went on to consider a proposal for orders for the appointment of receivers under s 1323(1)(h) of the Corporations Act to be made in relation to trusts of which certain individuals were the effective controller and thereby enjoyed at least a contingent interest if not the effective ownership of the trust property: Carey (No 6) at [46]. The possibility of making such orders was entertained on the ground that the individuals had something akin to a general power of selection and proprietary interest in the income and corpus of the trusts.
4. The approach of French J in Carey (No 6) was not followed or applied to the meaning of 'property of a bankrupt' for the purposes of the Bankruptcy Act in at least two first instance judgments: Fordyce v Ryan [2016] QSC 307; [2017] 2 Qd R 240 at [21]-[37] (Jackson J); Re Pleash (as liquidators of Equititrust Ltd (in liq) (recs and mgrs. apptd)) (No 3) [2017] FCA 1074 at [13]-[23] (Reeves J). Further, in different circumstances, the Full Court in effect, confined the reasoning of French J in Carey (No 6) to the meaning of 'property' in the Corporations Act. But, while resisting the notion that the reasoning in Carey (No 6) was of more general application, the Court appeared to accept that in the construction of other legislation the controller of a discretionary trust might be regarded as having 'property' for the purposes of that legislation if something short of ownership provides the necessary connection between the person and the property denoted by the word 'of': Swishette Pty Ltd v Australian Competition and Consumer Commission [2017] FCAFC 45; 249 FCR 483 at [16]-[28] (Middleton, Foster and Davies JJ). Further, in the context of an application for a freezing order against a third party company, Gordon J relying on Carey (No 6) considered that there was a good arguable case that the appointor, sole director and shareholder of a trustee company had a contingent interest in the property of the trust of the kind French J identified: Deputy Commissioner of Taxation v Vasiliades [2014] FCA 1250; 323 ALR 59 at [61].
5. The term 'property' is defined broadly in s 9 of the Corporations Act to mean 'any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action'. Section 1323(1)(h) of the Corporations Act uses the expression 'property of that person'. The term 'property' is defined in s 5 of the Bankruptcy Act differently, but similarly broadly, to mean 'real or personal property of every description, whether situate in Australia or elsewhere, vested or contingent, arising out of or incident to any such real or personal property'. Section 58 of the Bankruptcy Act uses the expression 'property of the bankrupt'. As noted in passages from Carey (No 6) cited earlier in these reasons, French J focussed on the reference to contingent interests in s 9 of the Corporations Act and reasoned that a beneficiary of the controller of a trustee that is the beneficiary's alter ego has at least a contingent interest because it is as good as certain that the power of selection will be exercised in that beneficiary's favour. With due respect to those who have expressed different views, I consider the law to be sufficiently unsettled that it is reasonably arguable that such a beneficiary's interest in the discretionary trust may be regarded as contingent property within the meaning of property in s 5 the Bankruptcy Act.
6. It follows that, having regard to the terms of the trust deeds, the Bankrupt's power as Appointor and effective control over the trustees of the trusts, it is reasonably arguable that the Bankrupt has effective control of the power of selection under the trust deeds approaching a general power and something akin to a contingent proprietary interest in the income and corpus of the trusts. In my view, the 'grounds stated' in the affidavits provide a sufficient basis for that allegation to be made and support for a claim for a declaration to the effect that the Bankrupt has a proprietary interest in the income and corpus of those trusts. Therefore, I allowed the originating process to be amended to claim a declaration to that effect.

Bankrupt's alleged proprietary interest in the subsidiary companies

1. As explained in Vines, The Edge TC is recorded as the owner of all the shares in: Wealthcheck Finance; The Edge Farming; Rivera Farming; Cowl Cowl Management; The Edge Investment Co; and The Edge 2020 TC. ASIC historical company extracts record that The Edge TC is not the beneficial owner of the shares in those companies. At the time the orders were made on 25 October 2024, I inferred that the shares in those companies were held on trust for the Beneficiaries of the Edge Family Trust. However, the additional affidavit material suggests that the shares in certain companies may be held on trust for the Bankrupt. Otherwise, it is reasonable to infer that the shares are held on trust for the Beneficiaries of the Edge Family Trust or the Edge Property Trust. In either case, it is reasonably arguable that the Bankrupt has a proprietary interest in the shares through his proprietary interest in those discretionary trusts. For similar reasons, it is reasonably arguable that the Bankrupt has a proprietary interest in the shares in Wealthcheck Financial Services which are owned by The Edge Ceres.
2. The shares in Wealthcheck Funds Management are owned by The Edge Investment Management. Similarly, an ASIC historical company extract reveals that The Edge Investment Management is not the beneficial owner of those shares. It is reasonable to infer that the shares in Wealthcheck Funds Management are held on trust for the unitholders of The Edge Investment Management Unit Trust. For the reasons that will be explained when I deal with the Bankrupt's alleged proprietary interests in the unit trusts, I am satisfied that, based on the Bankrupt's relationship with the other companies and trusts, and on the information available at this stage of the proceeding, it is reasonable to infer that the Bankrupt has a direct proprietary interest in the units in The Edge Investment Management Unit Trust and through that interest, has a proprietary interest in the shares in Wealthcheck Funds Management. And, otherwise, it is reasonable to infer, for the purposes of identifying a reasonably arguable claim, that the shares in that company are held on trust for the ultimate benefit of the Bankrupt.
3. For these reasons, in addition to the principal companies and S Mitchell Family and S Mitchell Property, on the 'grounds stated' in the affidavits it is reasonably arguable that the Bankrupt has proprietary interests in the shares in the subsidiary companies. Therefore, the affidavits support a claim for declaratory relief to that effect and I allowed an amendment to seek such relief.

Bankrupt's alleged proprietary interest in the units of the unit trusts

1. The relevant unit trusts are: The Edge Park Management Trust; The Edge 2020 Trust; and The Edge Caravan Park Unit Trust and The Edge Investment Management Unit Trust.
2. The Edge Investment Management Unit Trust and its relationship to the Bankrupt and subsidiary and principal companies is described in Vines. The other trusts are not addressed in Vines as their existence was raised in affidavits filed after 25 October 2024. A description of the additional unit trusts and their relationship to the Bankrupt, subsidiary companies and principal companies is set out below.

The Edge Park Management Trust

1. The Edge Park Management Trust is a unit trust of which The Edge Park Management is trustee. There is evidence that the unit holder of the units in that trust is The Edge 2020 TC. The Edge 2020 TC is a subsidiary of The Edge TC. For reasons already described, it is reasonably arguable that the Bankrupt has a proprietary interest in the shares in The Edge 2020 TC. The shares in The Edge 2020 TC, in turn, have a value which is, at least in part, based on the value of its units in The Edge Park Management Trust.

The Edge 2020 Trust

1. The Edge 2020 Trust is a unit trust of which The Edge 2020 TC is trustee. The Edge TC was the initial unitholder of that trust. However, there is evidence to suggest that The Edge Investment Co is now the unitholder or an additional unitholder of the units in that unit trust. The Edge Investment Co is another subsidiary of The Edge TC. To the extent that The Edge TC is a unitholder, it is reasonable to infer that the units are held on trust for the Beneficiaries of the Edge Family Trust or the Edge Property Trust. Therefore, it is reasonably arguable that the Bankrupt has a beneficial interest in the units in The Edge 2020 Trust through his proprietary interest in the discretionary trusts. To the extent that The Edge Investment Co is a unitholder, that will have an effect on the value of the shares in that company. For the reasons already given, it is reasonably arguable that the Bankrupt has a proprietary interest in the shares in that company.

The Edge Caravan Park Unit Trust

1. The Edge Caravan Park Unit Trust is a unit trust of which The Edge Farming is trustee. The Edge TC was the initial unit holder of all units in that unit trust. The Edge Farming is also a subsidiary of The Edge TC. The Interim Receivers have not been appointed receivers of the property of The Edge Farming because there is an existing receiver and manager in place. The evidence does not reveal the extent to which the property of The Edge Caravan Park Unit Trust is or is not the subject of that receivership. However, based on the instrument of the appointment of the receiver and manager, it does not appear to be the same property. Accordingly, it is reasonable to infer that the units in The Edge Caravan Park Unit Trust are held on trust for the Beneficiaries of the Edge Family Trust or the Edge Property Trust. Therefore, it is reasonably arguable that the Bankrupt has a proprietary interest in those units. If the units are held by The Edge TC in its own right then the value of the units will affect the value of the shares in The Edge TC which are property of the Bankrupt.

The Edge Investment Management Unit Trust

1. While the trust instrument is not in evidence, it is reasonable to infer that The Edge Investment Management Unit Trust is a unit trust of which The Edge Investment Management is trustee. It is also reasonable to infer that the shares in Wealthcheck Funds Management are property held on trust for that unit trust. Having regard to the manner in which the units in the other unit trusts are held, it is reasonable to infer, for the purposes of a reasonably arguable claim, that these units are held by The Edge TC or one of its subsidiaries, or The Edge Ceres or Wealthcheck Finance and through one or more of those companies the Bankrupt has a direct proprietary interest in these units or an indirect interest in the value of those units through a proprietary interest in the shares of the company that is the unitholder.

Reasonable grounds for declaratory relief

1. It follows that 'on the grounds stated' in the affidavits it is reasonably arguable that the Bankrupt has a proprietary interest in the units of one or more of the unit trusts. If not a direct proprietary interest, then an indirect interest in that the units are held by a company and the Bankrupt has a proprietary interest in the shares of that company and, thereby, the value of the units will affect the value of the property divisible amongst the Bankrupt's creditors. Therefore, the affidavits support a claim for declaratory relief to the effect that the Bankrupt has a proprietary interest in the units of each of the relevant unit trusts.

Declaratory and other relief concerning shares in companies

1. The applicants also seek declaratory relief to the effect that the shares in The Edge TC; The Edge Investment Management; The Edge Ceres; The Edge Park Management; S Mitchell Family and S Mitchell Property vested in them in accordance with s 58 of the Bankruptcy Act. They seek corresponding orders pursuant to s 1072C and s 175 of the Corporations Act to the effect that the applicants be registered as the holders of those shares and that the register of members of those companies be corrected to record them as the members of those companies.
2. The Bankrupt objected to these amendments to the originating process on the ground that there was no justiciable controversy and, in substance, the orders sought were inutile and unnecessary. As already explained, there is controversy over the holder of the share in S Mitchell Family, at least, on the face of the ASIC register. For similar reasons that I consider it appropriate to allow the amendments to claim declarations to the effect that the Bankrupt has proprietary interests in the shares in the principal companies, S Mitchell Family and S Mitchell Property which have vested in the applicants, I consider it is appropriate to allow the amendments the applicants have sought to claim the declaratory relief and orders under the Corporations Act.

Joinder of respondents

1. Rule 9.05(1) of the Rules provides that a party may apply to the Court for an order that a person be joined as a party to the proceeding if the person ought to have been joined as a party to the proceeding or is a person whose cooperation might be required to enforce a judgment, or whose joinder is necessary to ensure that each issue in dispute in the proceeding is able to be heard and finally determined. Rule 9.05(4) provides that the application need not be served on any person who was not served with the originating application.
2. The applicants applied to join the companies the subject of or interested in the declarations as to the trustees of the trusts, the companies the shares in which it is alleged the Bankrupt has a proprietary interest, the companies the subject of declarations as to the vesting and transfer of shares and recording the applicants as the holders of the shares in the companies' register of members. The applicants have also applied to join companies that are trustees of the unit trusts where it is alleged that the Bankrupt has a proprietary interest in the units. Likewise, the applicants have applied to join the companies that are or may be the trustees of the discretionary trusts in which it is alleged that the Bankrupt has a proprietary interest.
3. In my view, it is appropriate to join these companies as parties to the proceeding. However, I recognise that the companies are without directors, or arguably without validly appointed directors, and, therefore, the extent to which they are able to take any active role in the proceedings is doubtful.
4. The applicants have also applied to join the Nominated Beneficiaries under the Edge Family Trust and Edge Property Trust. Having regard to the declaratory relief sought concerning the Bankrupt's alleged proprietary interest in the property of those trusts and the absence of management of the trustees of those trusts, it is appropriate that these beneficiaries be joined to the proceeding.
5. The applicants have not applied to join the Bankrupt. The Bankrupt is a Nominated Beneficiary of the Edge Family Trust and the Edge Property Trust. The Bankrupt is also the Principal Beneficiary of the Edge Ceres Trust. The Bankrupt clearly has an interest in the relief the applicants seek in the proposed amended originating process. The Bankrupt has been given leave to intervene in the proceeding for the purpose of being heard on the continuation, variation or discharge of the orders made on 25 October 2024 and the applicants' interlocutory applications the subject of these reasons. Subject to hearing from the parties, I would be prepared to give the Bankrupt general leave to intervene in the proceeding or to be joined as a respondent as he appears to be the principal contradictor and person interested in the relief the applicants seek.

Disposition of amendment and joinder application

1. It follows for the reasons given I granted the applicants leave to amend their originating process subject to the amendments set out in the orders made on the interlocutory application. I also made orders for joinder of the various companies and individuals and for personal service of the originating process, as amended, on them in accordance with Pt 10 of the Rules. For the avoidance of doubt, I also made the orders without prejudice to any respondents' right to object to the originating process, as amended, on any ground to which objection may be taken to any originating process filed and served in accordance with the Rules.
2. The order appointing the Interim Receivers as interim receivers of the property of the discretionary trusts has been varied at the time of publication of these reasons to add 'until further order', pursuant to r 39.05(e) of the Rules, to make clear that the appointment is intended to be coterminous with the Interim Receivers' appointment under para 2 of the orders of 25 October 2024.

Application to vary orders of 25 October 2024

1. On 30 October 2024 the applicants filed an interlocutory application to amend the orders made on 25 October 2024 to include orders appointing the Interim Receivers as receivers of the property of the Edge Family Trust, the Edge Ceres Trust and The Edge Investment Management Unit Trust. The affidavit of Mr Tribble of 12 November 2024 exhibited a proposed amended interlocutory application by which it was proposed to appoint the Interim Receivers as receivers of the property of S Mitchell Family and S Mitchell Property (whether or not held on trust) in substitution for the property of the three trusts. During the course of the hearing on 15 November 2024, the proposal to amend the interlocutory application in that manner was abandoned and, instead, a proposal to appoint the Interim Receivers as receivers of the property of the Edge Property Trust in place of The Edge Investment Management Unit Trust was advanced.
2. To explain the reasons for orders made on the application, it is necessary to set out the background and circumstances of the original application, the proposed amendment, abandonment of the proposed amendment, and final proposed orders.
3. When the matter came on for hearing before me on 25 October 2024 on an ex parte urgent basis, the emphasis at that time was on the Bankrupt's proprietary interest in the ordinary shares of the four principal companies and the risk of the dissipation of the property of those companies or companies related to them that might result in dissipation or diminution of the value of the shares and, thereby, the value of the property ultimately available for distribution among the Bankrupt's creditors. Nonetheless, in the course of the submissions made both in writing and orally on that application, reference was made to the possibility that the Bankrupt has a direct proprietary interest in two of the discretionary trusts; namely, the Edge Ceres Trust and the Edge Family Trust. At that time, the interest was characterised by reference to a possibility that the trust arrangement was something akin to a sham. I was not satisfied on the information before me that the trust instruments and trust arrangements could be properly described as a sham. Therefore, the focus of the oral hearing and the written reasons given in support of the orders made on 25 October 2024 was the Bankrupt's proprietary interest in the shares in the principal companies and the derivative value in those shares either through the company's direct ownership of shares in other companies or the trustee companies' right to indemnity out of the property of shares in companies held on trust by those principal companies.
4. In the orders made on 25 October 2024 the Interim Receivers were appointed as receivers of the property of The Edge TC whether or not held on trust and, as explained in Vines, that would have had the effect of appointing the Interim Receivers as receivers of property that the company held as trustee of the Edge Family Trust at the time of their appointment. The same applies to the property of the Edge Property Trust. However, if there had been a valid appointment of S Mitchell Family as trustee of the Edge Family Trust and (or) S Mitchell Property as trustee of the Edge Property Trust before the orders were made on 25 October 2024, the Interim Receivers would not have been appointed as receivers of that property. Evidently, to address that possibility, the applicants initially wanted to amend the interlocutory process to appoint the Interim Receivers as receivers of the property that S Mitchell Family and S Mitchell Property (whether or not held on trust) for essentially the same reason that the Court appointed the Interim Receivers as receivers of the property of The Edge TC.
5. On the evidence before the Court at this time, it is reasonably arguable that each of S Mitchell Family and S Mitchell Property are companies that do not have a validly appointed director. For the reasons given in Vines with respect to the attempt to appoint Ms Miller as a director of The Edge TC, it is reasonably arguable that the purported appointment of Mr Thomson as a director of S Mitchell Family was not authorised and is invalid. Further, as the shares in that company vested in the applicants, it is reasonably arguable that the purported transfer of those shares from the Bankrupt to Mr Thomson was unauthorised and is invalid. In the case of S Mitchell Property, the Bankrupt is disqualified from managing that company and holding office as a director. These matters are further indications supporting the conclusion I reached in Vines to the effect that there is a real risk that property of companies of which the Bankrupt was a director or of which Ms Miller and Mr Thomson are purportedly directors is in jeopardy and at risk of dissipation. They are also matters that, for the reasons given in Vines, would support an order appointing the Interim Receivers as receivers of the property of S Mitchell Family and S Mitchell Property.
6. Further, all other things being equal, as matters presently stand, the applicants as trustees in bankruptcy have the ability to control the appointment of the directors of S Mitchell Family and S Mitchell Property and, therefore, for the reasons given in Vines, irrespective of whether The Edge TC remains the validly appointed trustee of those trusts, the property of those trusts is within the control of the applicants as trustees in bankruptcy. The absence of a validly appointed director and the uncertainty regarding the trustee of the trusts are, for the reasons given in Vines, further reasons that would support an order to appoint the Interim Receivers as receivers of the property of S Mitchell Family and S Mitchell Property.
7. While satisfied that there are grounds to vary the orders made on 25 October 2024 to appoint the Interim Receivers as receivers of the property of S Mitchell Family and S Mitchell Property, for the reasons already given in respect of the application to amend, I am satisfied that it is reasonably arguable that the Bankrupt has a proprietary interest in the property of the discretionary trust and that property has vested in the applicants. For the reasons given in Vines, I am also satisfied that there is a risk of dissipation of the property of the discretionary trusts and that the property of those trusts is in jeopardy.
8. In the event that there is power to remove the current trustees of the discretionary trusts and that power is validly exercised, there is nothing to prevent trust property of the discretionary trusts vesting in new trustees or the Interim Receivers being required to convey trust property to new trustees. Therefore, appointing the Interim Receivers as receivers of the property of the trustee companies (whether or not held on trust) may not be sufficient to safeguard any proprietary interest the Bankrupt has in the income and corpus of the discretionary trusts.
9. On the evidence before the Court at the hearing on 15 November 2024 I was not satisfied that appointing the Interim Receivers as receivers of the property of S Mitchell Family and S Mitchell Property on the same terms as they were appointed receivers of the property of the various companies on 25 October 2024 was sufficient to protect the Bankrupt's arguable proprietary interest in the discretionary trusts. I was, however, satisfied that there were grounds to appoint the Interim Receivers as receivers of the property of the Edge Family Trust and the Edge Ceres Trust as proposed in the original interlocutory application to vary the orders made on 25 October 2024. Further, that there were grounds to appoint the Interim Receivers as receivers of the property of the Edge Property Trust.
10. When the possibility that the Bankrupt had proprietary interest in the property of the discretionary trusts was raised during the oral hearing on 15 November 2024, counsel for the applicants withdrew the application to amend the interlocutory application and pressed for orders to be made more or less in terms of the application as filed on 30 October 2024 except that the property of the Edge Property Trust was substituted for the property of The Edge Investment Management Unit Trust. Upon the Court's enquiry, counsel also indicated that the applicants were prepared to give the usual undertaking as to damages if orders were made for the appointment of the Interim Receivers over the property of the three discretionary trusts.
11. The orders made on 25 October 2024 were of a limited character and were intended to identify, preserve and secure property that would ultimately affect the value of the Bankrupt's shares in the principal companies. That value was inferred to be derived primarily from property of the principal companies. That property included any rights of indemnity from property those companies held on trust. The orders were fashioned and made on the basis that, at that time, I was not satisfied that the Bankrupt had any direct proprietary interest in the property of the discretionary trusts, the units of the unit trusts or the shares of the subsidiary companies.
12. For the reasons given earlier, with the added focus on the declaratory relief sought in the minute of proposed amended originating process and the benefit of further time to consider the factual and legal issues, I am now satisfied that it is reasonably arguable that the Bankrupt has a contingent proprietary interest in the income and corpus of the property held on trust for the Edge Family Trust, the Edge Property Trust and the Edge Ceres Trust. Further, for the reasons given in Vines, I am satisfied there is a real risk that if the property of those trusts is or remains under the control of a trustee appointed by the Bankrupt that property will be dissipated or put beyond the reach of the applicants as the Bankrupt's trustees in bankruptcy and, therefore, will not be, or will not remain available for division among his creditors. In those circumstances, together with circumstances relating to the evident conflicting views about which company is the trustee of the Edge Family Trust and the Edge Property Trust, I am satisfied that it would be appropriate to appoint the Interim Receivers as receivers of the property of the discretionary trusts pending determination of whether or not the Bankrupt has a proprietary interest in that property which has vested in the applicants as his trustees in bankruptcy. For the reasons given in Vines, the power to make such orders arises from one or more of s 30(1)(b) of the Bankruptcy Act, s 90-15 of the IPSB, or s 23 or s 57 of the Federal Court Act.
13. However, unlike the circumstance relating to the appointment of the Interim Receivers over the property the subject of the orders made on 25 October 2024, I am not satisfied that there is no need for the applicants to give the usual undertaking as to damages. The appointment of the Interim Receivers as receivers of the property of the discretionary trusts has the potential to adversely affect the interests of the beneficiaries of those trusts. Therefore, given the intrusive nature of the appointment of receivers over the property of the trusts in such a manner as to affect and interfere with the appointment of new trustees to administer those trusts, the 'price' of the appointment should be the usual undertaking. Upon giving the usual undertaking, I am satisfied that balance of the risk of injustice in the event the appointment should turn out to have been the 'wrong' decision favours the appointment rather than non-appointment of interim receivers.
14. For these reasons, upon the applicants giving the usual undertaking as to damages, the Interim Receivers will be appointed as receivers of the property of the Edge Family Trust, the Edge Property Trust and the Edge Ceres Trust.

Continuation, setting aside and varying orders

1. While the orders made on 15 November 2024 were made at a hearing at which the Bankrupt was given leave to intervene and at which he appeared and made submissions, the Bankrupt did not have proper notice of the nature of the orders that were ultimately sought and made on the applicants' interlocutory application to vary the orders of 25 October 2024. As explained earlier in these reasons, the orders the applicants sought on the application changed between 30 October and 12 November and then again at the hearing on 15 November 2024. Nonetheless, the orders were made in the interests of expediency and because I was satisfied that the property the subject of the orders would be in jeopardy if the orders were not made at that time. The orders were also made in the absence of the newly joined respondents to the proceeding, in particular, the beneficiaries of the discretionary trusts. Therefore, I record that the orders should not be considered to have been made in the ordinary way after hearing a contested inter partes interlocutory application. The Bankrupt or any other interested party may apply to set aside or vary the orders of 25 October 2024, as varied by the orders made on 31 October and 15 November 2024, as if all those orders were made following an ex parte hearing. I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Feutrill.

Associate: Dated: 29 November 2024 SCHEDULE OF PARTIES Second Respondent: WEALTHCHECK FINANCE PTY LTD (ACN 116 379 104) Third Respondent: THE EDGE FARMING PTY LTD (ACN 628 137 646) Fourth Respondent: RIVERA FARMING PTY LTD (ACN 626 497 229) Fifth Respondent: COWL COWL MANAGEMENT PTY LTD (ACN 637 938 295) Sixth Respondent: THE EDGE INVESTMENT CO PTY LTD (ACN 638 762 697) Seventh Respondent: THE EDGE 2020 TC PTY LTD (ACN 638 765 081) Eighth Respondent: THE EDGE INVESTMENT MANAGEMENT PTY LTD (ACN 142 103 722) Ninth Respondent: WEALTHCHECK FUNDS MANAGEMENT PTY LTD (ACN 154 863 939) Tenth Respondent: THE EDGE PARK MANAGEMENT PTY LTD (ACN 137 727 649) Eleventh Respondent: THE EDGE CERES PTY LTD (ACN 657 069 040) Twelfth Respondent: WEAL THCHECK FINANCIAL SERVICES PTY LTD (ACN 115 077 775) Thirteenth Respondent: JOHN THOMSON Fourteenth Respondent: ANDREA MILLER Fifteenth Respondent: S MITCHELL FAMILY PTY LTD (ACN: 677 835 460) Sixteenth Respondent: S MITCHELL PROPERTY PTY LTD (ACN 677 835 479) Seventeenth Respondent: ROBIN ALEXANDER MITCHELL Eighteenth Respondent: KATY ROBIN MITCHELL Nineteenth Respondent: SARAH ARNOTT MITCHELL Twentieth Respondent: WENDY HELEN MITCHELL