First Plaintiff v Second Plaintiff

1 Matthew Jess, a principal of Worrells, is the first plaintiff and liquidator (the "Liquidator") of the second plaintiff (the "Company").

2 The Liquidator has deposed and submitted that, based on his investigations, it is evident that the Company acted solely as trustee of the Rygel International Unit Trust (ABN 50 643 754 348) (the "Trust").

3 The Liquidator seeks orders conferring powers on the Company to deal with the Trust's assets and related consequential orders. More specifically, the orders sought in the Originating Process were as follows:

Judicial Advice

1. An order under section 90-15 of the Insolvency Practice Schedule (Corporations) that the first plaintiff is justified and acting reasonably in proceeding on the basis that:

(a) the Company carried on business solely in its capacity as trustee of the Trust;

(b) all assets and undertakings of the Company (including the Property) are properly characterised as property held by the Company in its capacity as trustee of the Trust; and

(c) all of the creditors of the Company are creditors of the Trust.

Conferral of powers on Company

1. An order under section 63 of the Trustee Act 1958 (Vic) that there be conferred on the second plaintiff the power to do all things necessary and convenient to:

(a) sell the assets of the Trust, including the Property;

(b) pay the creditors of the Trust from the proceeds of sale, in accordance the priorities prescribed under the Corporations Act 2001 (Cth);

(c) execute any contracts, tax returns, financial statements or other documents relating to the Trust or its assets.

1. An order under sections 90-15 and 90-20 of the Insolvency Practice Schedule (Corporations) that the first plaintiffs are justified:

(a) in relying on their statutory powers under s 477 of the Corporations Act 2001 (Cth) to take all the steps in paragraph 2 above;

(i) the costs and expenses of administering the Trust (including his remuneration); and

(ii) the creditors of the Trust.

Appointment as receiver

1. Alternatively to paragraphs 2 and 3 above, an order under section s 37 of the Supreme Court Act 1986 (Vic) that the first plaintiff be appointed without security, as receiver and manager of the assets of the Trust, including the Property.

2. Alternatively to paragraphs 2 and 3 above, an order that, to the extent necessary, the need for the first plaintiff to file a guarantee under Rule 39.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) be dispensed with.

3. Alternatively to paragraphs 2 and 3 above, the first plaintiff have, in respect of the assets of the Trust, the powers that a liquidator has under section 477 of the Corporations Act 2001 (Cth) in respect of the property of a company, including to do all things necessary to effect the realisation of the assets of the Trust, including the Property

Cost and expenses

1. The costs, expenses and remuneration incurred by the first plaintiff as liquidator of the second plaintiff, and as the receiver and manager of the assets of the Trust or in administering the Trust (as the case may be), including the costs of this application, be paid in priority from the property of the Trust.

Other matters

1. An order that liberty be reserved to any person who can demonstrate sufficient interest to apply, on not less than 48 hours' written notice to the plaintiffs, to modify or discharge any such order.

(a) the affidavit of Matthew James Jess affirmed on 4 August 2025 ("First Jess Affidavit");

(b) the affidavit of Carl Edward Millington affirmed on 19 November 2025;

(c) the supplementary affidavit of Matthew James Jess affirmed on 27 November 2025 ("Supplementary Jess Affidavit"); and,

(d) written submissions filed 19 November 2025.

6 The Company did not trade and did not have any employees.

7 The Company served as a land holding entity for the property situated at 103 Ordish Road, Dandenong South, Victoria, 3175 (the "Property").

8 The Company became the sole proprietor of the Property on 17 May 2013. Shortly prior to that date:

(a) on 19 March 2013, the Company resolved to accept the appointment and was duly appointed as the trustee of the Trust;

(b) on 1 April 2013, the Property was listed as the registered office address of the Company.

9 At the time of the Liquidator's appointment, the directors were (and remain) Ms Yanli Ji and Ms Jie Fan. The Company's sole shareholder was (and remains) Jiangsu Huifeng Agrochemical Co Ltd ("JHA"), a company registered in Jiangsu Province, People's Republic of China. JHA is also the sole unit holder in the Trust.

10 The Company's only significant asset was the Property. The Property was leased to Profeng Australia Pty Ltd ("Profeng"). Profeng ceased to trade in 2023 and the Property is now vacant.

11 On 17 July 2024, the Supreme Court of Victoria made orders that the Company be wound up in insolvency.

12 Shortly after his appointment, the Liquidator was approached by Ms Tan, a solicitor acting on behalf of Ms Ji, in relation to the potential termination of the winding up. On 2 August 2024, a call was held during which Ms Ji's wish to terminate the liquidation was conveyed to Ms Joiner of Worrells. On 28 August 2024, Ms Tan wrote to a representative of the Worrells, as follows:

Mdm Ji still intends to proceed with the application to terminate the liquidation, and preparation of the relevant material to terminate the liquidation are underway. In that regard, are you able to provide an update on the debts owed by Rygel so that our clients can prepare the funds to repay the debts?

13 On 17 September 2024, a representative of Worrells responded by letter as follows:

I refer to previous correspondence in relation to the Company, specifically the correspondence surrounding your intention to proceed with an application to terminate the liquidation pursuant to section 482 of the Corporations Act 2001.

Generally, an application to court for an order terminating the winding up of a company happens shortly after the initial winding up was ordered, whilst an application can be made at any time, it becomes less viable the longer the liquidation continues. I therefore suggest that this application be made as soon as possible.

14 The letter also communicated the identity and quantum of the then known creditors, in the sum of $206,657.

15 By April 2025 no such application had been made to terminate the liquidation.

16 On 30 April 2025, the Liquidator's solicitors wrote to Ms Ji's solicitors requesting that any termination application be made by 23 May 2025. The solicitors received a response stating that Ms Ji's solicitors no longer act for Ms Ji. On 15 May 2025, the Liquidator's solicitors wrote to Ms Ji directly. The Liquidators' solicitors did not receive any response.

17 As a consequence, the Liquidator resolved to progress the liquidation of the Company.

18 The Liquidator seeks a direction that he is justified and acting reasonably in proceeding on the basis that the Company acted solely as trustee of the Trust.

19 Section 90-20 of the Insolvency Practice Schedule (Corporations) ("IPSC") (being Schedule 2 to the Corporations Act 2001 (Cth) (the "Act") permits the Liquidator to apply for orders under s 90-15 in relation to the external administration of a company. Section 90-15 of the IPSC empowers the Court to make such orders as it thinks fit in relation to the external administration of a company. These include, under s 90-15(3)(a), "an order determining any question arising in the external administration of the company".[1] Such a question includes a direction on a legal issue of substance or procedure or of power, propriety or reasonableness.[2]

20 Proposed order 1 is a direction that the Liquidator is justified and acting reasonably in proceeding on the basis that:

(a) the Company carried on business solely in its capacity as trustee of the Trust;

(b) all assets and undertakings of the Company (including the Property) are properly characterised as property held by the Company in its capacity as trustee of the Trust; and

(c) all of the creditors of the Company are creditors of the Trust.

21 In Re Amerind Pty Ltd (receivers and managers apptd in liq) ("Re Amerind"),[3] Robson J stated:[4]

Whether a company trades in its own right or as trustee of a trust largely depends on factors which are specific to the circumstances at hand. There is no one determinative factor or set criteria. Courts have, however, taken into account the following matters:

(a) the existence of constituent trust documents which establish a trust, including any draft trust documents which cross-reference one another;

(b) whether accounts were maintained separately to the company's operational expenditure accounts and/or the company's own property;

(c) whether the company's name in its capacity as trustee was noted on key employment documents, such as letters of employment and tax file declarations;

(d) whether invoices rendered by the company in question were issued by the company in its capacity as trustee of the trust;

(e) whether company meeting minutes disclosed the existence of a trust, or disclosed that the company was operating as a trust;

(f) whether expenses were accounted as receipts of the company as trustee; and

(g) whether records, contained in the general ledger of the company, recorded activity consistent with the operation of a trust, such as the issue of units.

22 In this case, (b), (c) and (d) of the Re Amerind factors are of little relevance given that the Company (and the Trust) did not trade. However, I am satisfied that the following matters justify the conclusion that the Company acted solely as trustee of the Trust:

(a) The Liquidator has identified a copy of a trust deed executed by the Company in respect of the Trust;

(b) Ms Ji and her solicitors informed the Liquidator's staff that the Company was a "simple company" that is a "holding company of property" whose purpose was to hold the Property;

(c) The Liquidator has identified in the Company's books and records an audit report for the financial year ending 30 June 2018. The audit report:

(i) states that "[t]he principal activities of the Company during the financial year were remained [sic] unchanged and the Company was acting as trustee of the Rygel International Unit Trust", "[a] review of the operations of the Company during the financial year and the results of those operations show the company did not trade, but acted as Trustee for Rygel International Pty Ltd" and "the company expects to maintain the present status of operations and hence there are no likely developments in the operations in future years";

(ii) does not record any profit or loss, or cash flow, from trading activities;

(iii) does not list the Property as an asset of the Company; and

(iv) records as the sole asset of the Company as $100 in paid up share capital;

(d) the Liquidator has obtained financial statements for the Trust in respect of the financial year ending on 30 June 2022 that appear to include the Property as an asset of the Trust and it is the Liquidator's belief that they do because the documents record:

(i) a "Building" and "Land" as assets on the Balance Sheet; and

(ii) a depreciation schedule, which refers to a "Warehouse Building" purchased in May 2013 which correlates to the date on which the Company became the registered proprietor of the Property.

(e) the Company was registered for an ABN on 22 March 2012 and that registration has lapsed;

(f) the Company was never registered for GST;

(g) the only bank accounts identified by the Liquidators are in the name of the Company in its capacity as trustee of the Trust.

23 The Supplementary Jess Affidavit relevantly identified the existence of further audit reports for the Company for the financial years ending 2013-2017 which supported the conclusion that the Company did not trade.

24 Mr Hibbard, in his careful and detailed submissions, submitted that the only factor that might weigh against a conclusion that the Company operated as trustee of the Trust is that the lease between the Company and Profeng does not refer to the Trust. I do not consider that this militates firmly, or sufficiently firmly, against such a conclusion in circumstances where the Company financials disclose no revenue in 2013-2018, when the lease was on foot and the Trust financials do disclose revenue for 2022 which may be consistent with rental receipts when the lease was on foot.

25 Applying the decision in Re Amerind to the present circumstances, I am satisfied that the Liquidator is acting reasonably and is justified in proceeding on the basis that:

(a) the Company carried on business solely in its capacity as trustee of the Trust;

(b) all assets of the Company are properly characterised as property held by the Company in its capacity as trustee of the Trust; and

(c) any properly identified creditors of the Company are creditors of the Trust.

Proposed orders 2 and 3(a) (conferral of powers on Company)

26 On the appointment of the Liquidator as liquidator of the Company, cl 20.3 of the Trust deed caused the Company to be removed as trustee of the Trust, with the effect that the Company held the Trust property solely as bare trustee.[5] Clause 20.3 provides that:

20.3 Vacation of Office

If the Trustee is a Corporation and it enters into any administration, receivership or liquidation (whether compulsorily or voluntarily, not being merely a voluntary liquidation for the purposes of amalgamation or reconstruction), the Trustee is deemed to have vacated office as trustee and the Unitholders may appoint a new or additional Trustee under clause 20.1.

27 The originating process seeks orders conferring powers on the Company to deal with Trust assets (originating process [2]-[3]), alternatively appointing the Liquidator as receiver and manager of the property of the Trust (originating process [4]-[6]). Either the Liquidator must be appointed as receiver, or an order made conferring powers on the Company, in order for the Liquidator to deal with Trust assets. The Liquidator seeks that an order be made conferring powers on the Company. That is because, in this case, doing so is more efficient than appointing the Liquidator as receiver.

28 It is by now well-established that:[6]

(a) a corporate trustee, such as the Company, retains a right of indemnity over trust assets, relating to liabilities incurred by reason of acting as trustee;

(b) this right of exoneration generates a supporting lien or charge, being a beneficial proprietary interest in the trust assets in favour of the former trustee of the trust;

(c) the former trustee holds title to the trust assets as bare trustee with limited powers to deal with those assets, but the ability to retain possession (as against beneficiaries) for the purpose of achieving its right of indemnity;

(d) where the former trustee is a bare trustee, the liquidator may not sell trust assets without an order of the Court, or the appointment of a receiver and manager over the trust assets; and

(e) "courts are generally willing, upon an appropriate application, to make orders permitting the liquidator of a (former) corporate trustee to sell trust assets".[7]

29 It is now well recognised that "[t]here is no bright line about whether the preferable course is to confer power under the Trustee Act or to appoint a receiver under the Supreme Court Act".[8]

30 The appointment of a receiver has been described as "the more common course".[9] The "general ground on which the court appoints a receiver is, ultimately, in every case the protection or preservation of property for the benefit of persons who have an interest in it".[10] It follows that the Court has considered it appropriate to make an appointment as receiver where there is a risk that the trustee of the trust might be replaced,[11] or the trustee has in fact been replaced.[12]

31 In Caterpillar Financial Australia v Ovens Nominees Pty Ltd,[13] Gordon J stated that orders under s 63 of the Trustee Act 1985 (Vic) ("Trustee Act") would be appropriate when:[14]

(a) the company has become a bare trustee of the assets of the trust upon the appointment of the liquidator;

(b) the company had acted only as trustee of the trust and in no other capacity;

(c) all assets owned by the company were held by it as trustee and all liabilities incurred by it were incurred in its capacity as trustee; and

(d) no new trustee had been appointed.

32 Recently, in Re Trident Star Enterprises Pty Ltd (admin apptd),[15] Cosgrave J treated the following factors as being relevant to the appropriateness of the Court making orders conferring powers under s 63(1) of the Trustee Act:[16]

(a) the property of the trust will be exhausted following its sale and subsequent distribution to creditors;

(b) the company has become a bare trustee, it acted only as trustee of the trust and all of its assets and liabilities were held in its capacity as trustee;

(c) no new trustee has been appointed or is likely to be appointed;

(d) conferring a power of sale upon the company is more convenient and cost efficient, including because a court-appointed receiver has obligations to account and must make an application to discharge his or her appointment at its conclusion;

(e) there is no risk of confusion as to the capacity in which the relevant appointee acts.

33 To that list, one ought add, the fact that the trust is not trading.[17]

34 The plaintiffs submitted that the limited assets of the Trust justified making this order. I reject that submission. The evidence suggested that the total amount of funds available for unsecured creditors, if the Property was sold at its current valuation of $2.8m, would be in the order of $2.75m. The unsecured creditors' claims are estimated to be in the vicinity of $207,459. There will therefore be a substantial surplus available for distribution following the realisation of the Trust assets.

35 I am nonetheless satisfied that conferring a power of sale upon the company is more convenient and cost efficient in circumstances where JHA (as the likely beneficiary of any surplus) has not opposed the relief sought. That fact, together with the fact that Trust did not trade and there is no absence apparent risk that the Trustee might be replaced, means that it is appropriate in the circumstances of this case for orders to be made conferring the relevant Trustee Act powers on the Company.

36 In light of the likely substantial surplus, I will however require the Liquidator to apply for further directions following the effectuation of paragraphs 2 and 3 of my orders as attached to Annexure A of these reasons.

37 The Liquidator also sought that the conferral order be made "nunc pro tunc" with effect from the date of his appointment. Such an order will guard against any risk created by an inadvertent step taken beyond his powers as liquidator of a bare trustee company - for example, by the act of engaging solicitors. I consider that if any steps were taken without power, uncertainty in the conduct of the liquidation would arise with attendant cost. A nunc pro tunc order is warranted.

38 As the Liquidator has incurred, and will incur, expenses in relation to the preservation and realisation of the Trust property, the Plaintiffs seek a direction that the Liquidator is justified and acting reasonably in paying from the Trust property his remuneration, costs and expenses properly incurred in administering the Trust.

39 The Company operated exclusively as trustee of the Trust and did not undertake any activities or conduct any business in its own right. As Black J has observed "a liquidator of a trustee company is entitled to be paid his or her remuneration, whether for administering the trust assets or for general liquidation work, out of trust assets where that company has no assets other than its rights against the trust assets."[18]

40 Mr Jess has set out the tasks undertaken by the Liquidator since his appointment, including investigations into: the Trust property; current financial position of the Company as trustee; and, the Trust's creditors. The Liquidator will also have to undertake further work to realise the Trust assets, including the payment of creditors and distribution of the surplus assets.

41 In those circumstances, it is appropriate for the Court to confirm:

(a) the Liquidator's entitlement to be indemnified out of the Trust assets in respect of the costs and expenses incurred;

(b) that the Liquidator's remuneration and expenses are to be paid out of Trust assets; and

(c) that the costs of this application be met from the property held on Trust.

42 Ms Ji and JHA have stated that they do not oppose the orders sought by the Liquidator.

43 The Liquidator's solicitor has sent a copy of the originating process and the First Jess Affidavit to Ms Fan by registered post to the address given for her in ASIC's records. The documents were sent under cover of a letter inviting Ms Fan to contact the solicitors as soon as possible if she intends to oppose or be heard in relation to the application. The letter was "delivered with signature" on 23 October 2025. The Liquidator's solicitors have received no response.

44 The Liquidator's solicitors have provided a copy of the originating process and the First Jess Affidavit to ASIC. ASIC has not taken a formal position on the application.

45 I make orders in the form of Annexure A to these reasons.

IN THE MATTER OF RYGEL INTERNATIONAL PTY LTD (IN LIQUIDATION) (ACN 156 055 855)

IN HIS CAPACITY AS LIQUIDATOR OF RYGEL INTERNATIONAL PTY LTD (IN LIQUIDATION) (ACN 156 055 855)

RYGEL INTERNATIONAL PTY LTD (IN LIQUIDATION) (ACN 156 055 855)

At the hearing of the originating process filed 19 August 2025

1. This Order is authenticated by the Judge of the Court pursuant to Rule 60.02(1)(a) of the Supreme Court (General Civil Procedure) Rules 2025 (Vic) ('Rules').

1. Pursuant to section 90-15 of the Insolvency Practice Schedule (Corporations) (Insolvency Practice Schedule), being Schedule 2 to the Corporations Act 2001 (Cth) (Corporations Act), the first plaintiff (Liquidator) is justified and acting reasonably in proceeding on the basis that:

(a) the second plaintiff (Company) carried on business solely in its capacity as trustee of the Rygel International Unit Trust (ABN 50 643 754 348) (Trust);

(b) all assets and undertakings of the Company (including the property situate at 103 Ordish Road in Dandenong South, Victoria 3182, more particularly described in certificate of title volume 09752 folio 544 (Property)) are properly characterised as property held by the Company in its capacity as trustee of the Trust; and

(c) any properly identified creditors of the Company are creditors of the Trust.

1. Pursuant to s 63 of the Trustee Act 1958 (Vic) there be conferred on the Company nunc pro tunc with effect from 17 July 2024 the power to do all things necessary and convenient:

(a) to sell the assets of the Trust, including the Property;

(b) to pay the creditors of the Trust from the proceeds of sale, in accordance the priorities prescribed under the Corporations Act; and

(c) to execute any contracts, tax returns, financial statements or other documents relating to the Trust or its assets.

1. Pursuant to ss 90-15 and 90-20 of the Insolvency Practice Schedule, the Liquidator is justified:

(a) in relying on his statutory powers under s 477 of the Corporations Act to take all the steps described in paragraph 2 above; and

(b) in paying from the Trust assets:

(i) the costs and expenses of administering the Trust (including his remuneration); and

(ii) the creditors of the Trust.

1. Within 7 days of the completion of the steps set out in orders 2 and 3 above, the Liquidator must notify the Court and apply for directions with respect to the anticipated remaining surplus of the assets of the Trust.
2. The costs, expenses and remuneration incurred by the Liquidator as liquidator of the Company in administering the Trust, including the costs of this application, be paid in priority from the property of the Trust.
3. There be liberty to apply to any person who can demonstrate sufficient interest to apply, on not less than 48 hours' written notice to the plaintiffs, to modify or discharge these orders.

[1] Sparks, in the matter of IG Energy Holdings (Australia) Pty Ltd (No 3) [2023] FCA 1002, [46] (Anderson J).

[2] Re Ansett Australia Ltd (No 3) [2002] FCA 90; (2002) 115 FCR 409, 428 [65]; [2002] FCA 90 (Goldberg J).

[3] (2017) 320 FLR 118; [2017] VSC 127.

[5] CGU Insurance Limited v OneTel Limited (in liq) [2010] HCA 26; (2010) 242 CLR 174, 182 [32]; [2010] HCA 26 (French CJ, Heydon, Crennan, Kiefel and Bell JJ).

[6] In the matter of Winex Property Pty Ltd (in liq) [2025] VSC 167, [29], [31] (Matthews J).

[7] Re Cremin, in the matter of Brimson Pty Ltd (in liq) [2019] FCA 1023; (2019) 136 ACSR 649, 656 [50]; [2019] FCA 1023 (Moshinsky J) ('Brimson').

[8] Re Urban Property Pty Ltd [2021] VSC 847, [34] (M Osborne J) ('Re Urban Property').

[10] Yunghanns v Candoora No 19 Pty Ltd [2000] VSC 300; (2000) 35 ACSR 34, 47 [65]; [2000] VSC 300 (Warren J).

[11] Re Parkway One Pty Ltd (No 2) [2020] NSWSC 191, [11] (Rees J); Re Waratah Group Pty Ltd (in liq) [2020] VSC 523, [49]-[57] (Delany J); Re Civil Construction Network Services Pty Ltd (in liq) [2020] VSC 474, [8] (Delany J) ('Re Civil Construction').

[12] As occurred in Michell (Liquidator) v Delltta Holdings Pty Ltd (in liq) atf Brookhill Trust [2019] FCA 2133.

[13] [2011] FCA 677.

[14] Ibid [35]-[36]. Cited with approval in Re Urban Property [35].

[15] [2025] VSC 215.

[17] Re Civil Construction [30] (Delany J).

[18] ln the matter of JML Property Services Pty Ltd (in liq) [2018] NSWSC 1069, [10] (Black J).