FSLP Pty Ltd (In Liquidation) v Sunnie 1 Pty Ltd, in the matter of Sunnie 1 Pty Ltd [2025] FCA 893

1. Pursuant to s 57 of the Federal Court of Australia Act 1976 (Cth), Rahul Goyal and Catherine Margaret Conneely are appointed, without security, as receivers and managers, jointly and severally, of all the property, assets and undertakings (collectively, Assets) of the Sunnie 1 Unit Trust, ABN 47 503 098 871 (Trust).
2. The need for Rahul Goyal and Catherine Margaret Conneely, as receivers and managers of the Assets, to file a guarantee under rr 14.21 and 14.22 of the Federal Court Rules 2011 (Cth) is dispensed with.
3. Rahul Goyal and Catherine Margaret Conneely, as receivers and managers of the Assets, have:

(a) all of the powers provided for in s 420 of the Corporations Act (except for subs (2)(s), (t), (u) and (w)) as if references to "the corporation" therein were references to the Trust; and

(b) without limitation to the powers provided for in paragraph 6(a) above, all of the powers necessary and convenient to sell, mortgage, charge, deal with and otherwise to dispose of the Assets.

1. The costs, expenses and remuneration of Rahul Goyal and Catherine Margaret Conneely, as receivers and managers of the Assets, in:

(a) respect of this application;

(b) acting as receivers and managers of the Assets; and

(c) selling, mortgaging, charging, dealing with and otherwise disposing of the Assets,

1. The remuneration of Rahul Goyal and Catherine Margaret Conneely, as receivers and managers of the Assets, is to be calculated and charged on a time-spent basis at the same rates as that applying in their role as liquidators of the Defendant.
2. Rahul Goyal and Catherine Margaret Conneely, as receivers and managers of the Assets, are permitted to draw from the Assets amounts on account of their reasonable costs and expenses, including but not limited to legal costs.
3. Rahul Goyal and Catherine Margaret Conneely, as receivers and managers of the Assets, have liberty to apply to the Court for further orders, directions and/or advice.

1. The costs of and incidental to this application are to be paid out of the assets of the Defendant and/or the Assets.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Delivered ex tempore, revised from transcript

(a) the Defendant (Sunnie 1) be wound up under either s 459A or subs 461(1)(k) of the Corporations Act 2001 (Cth) (Corporations Act); and

(b) Rahul Goyal and Catherine Margaret Conneely (the Liquidators), being the Liquidators of the plaintiff (FSLP), be appointed as the receivers and managers of the property, assets and undertaking of the Sunnie 1 Unit Trust (Sunnie 1 Trust) under s 57 of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act).

1. Sunnie 1 has not filed a notice of appearance. When the matter was called on for trial, there was no appearance for Sunnie 1 and I granted the plaintiff's application for an order under r 30.21(1)(b)(i) of the Federal Court Rules 2011 (Cth) that the hearing proceed generally. In light of the comprehensive written submissions by counsel for the plaintiff, and the able and efficient way in which the plaintiff's solicitors have conducted the matter, I am able to decide the matter ex tempore.
2. FSLP and Sunnie 1 are related companies and form part of a group of ten companies (Guo Group) which are ultimately owned and controlled by Mr Fu Min Guo (Mr Guo). The Guo Group appears to have been formed for the purpose of purchasing and developing land in Sydney, and there are a number of inter-company loans within the Guo Group.
3. On 7 November 2024, the secured lenders to the Guo Group appointed the Liquidators as the administrators of FSM Development Pty Limited (FSM), Markham Property Development Pty Limited (Markham), GY Investments Australia Pty Limited (GY), Frank & Sunnie Pty Limited (Frank) and FSLP (collectively, the Companies) under s 436C of the Corporations Act.
4. On 21 November 2024, the secured lenders to the Guo Group appointed the Liquidators as the receivers and managers of the property assets and undertaking of SGLL1 Pty Limited (SGLL), Frank & Lily Pty Limited (Lily) and the Frank & Lily Family Trust (Lily Trust).
5. On 29 November 2024, Markovic J appointed the Liquidators as the receivers and managers of the property assets and undertaking of the Frank & Sunnie Family Trust (Frank Trust) pursuant to s 57 of the Federal Court Act, as a consequence of their appointment as the administrators of its trustee, being Frank.
6. On 12 December 2024, the Liquidators convened concurrent meetings of the creditors of the Companies. At those meetings, the creditors resolved to appoint the Liquidators as the liquidators of the Companies.
7. As noted above, Sunnie 1 forms part of the Guo Group. It was incorporated on 1 November 2021, and Mr Guo is its sole director and secretary. It is wholly owned by Lily as trustee of the Lily Trust.
8. Sunnie 1 is the trustee of the Sunnie 1 Trust, which is a unit trust constituted by a trust deed (Sunnie 1 Trust Deed) dated 1 November 2021. The sole unit holder of the Sunnie 1 Trust is Lily as trustee for the Lily Trust.
9. The Liquidators, who are the receivers and managers of the sole unit holder of the Sunnie 1 Trust (being Lily as trustee for the Lily Trust), understand on the basis of all the information available to them that Sunnie 1 only ever carried on business as trustee of the Sunnie 1 Trust.
10. The books and records for FSLP record that Sunnie 1 is indebted to FSLP for $2,008,989.60. Similarly, the books and records for FSM record that Sunnie 1 is indebted to FSM for $500,291.03.
11. FSLP was the company responsible for undertaking a development on land located at 2-4 Eaton Road and 205 Pacific Highway, Lindfield. The development concerns construction of a three-storey building comprising four apartments and six townhouses over a single level of basement car parking for twenty-four vehicles. The Lindfield land is owned by Lily and SGLL. However, Lily's portion is owned by it in its capacity as trustee of the Lily Trust.
12. FSM was the company responsible for undertaking a development on land located at 313-335 Liverpool Road, Ashfield. That development concerns the construction of an eight-storey mixed-use development comprising eight ground floor retail lots, twenty-eight residential apartments, two levels of basement parking and a communal rooftop garden. The land in Ashfield originally consisted of three separate parcels of land which were owned by each of Markham, GY and Frank. However, Frank's portion is owned by it in its capacity as trustee of the Frank Trust.
13. On 27 February 2025, the Liquidators caused FSLP to issue a demand (FSLP Demand) to Sunnie 1 for the payment of $2,008,989.60, pursuant to s 459E of the Corporations Act. Attached to the FSLP Demand was an affidavit affirmed by Mr Goyal confirming the indebtedness of Sunnie 1 to FSLP.
14. At the same time, the Liquidators caused FSM to issue a demand (FSM Demand) to Sunnie 1 for the payment of $500,291.03, again pursuant to s 459E of the Corporations Act. Attached to the FSM Demand was an affidavit affirmed by Mr Goyal confirming the indebtedness of Sunnie 1 to FSM.
15. On 27 February 2025, the FSLP Demand was sent by express post to the registered office of Sunnie 1. The records of Australia Post confirmed that the FSLP Demand was received by Sunnie 1 on 3 March 2025. Consequently, the period for compliance with the FSLP Demand ended on 24 March 2025. At the same time the FSM Demand was sent by express post to the registered office of Sunnie 1. The records of Australia Post confirm that the FSM Demand was received by Sunnie 1 on 3 March 2025. Consequently, the period for compliance with the FSM Demand ended on 24 March 2025.
16. Sunnie 1 did not make any application to set aside either the FSLP Demand or the FSM Demand and the relevant debts remain due and payable.
17. On 13 June 2025, the originating process in these proceedings was lodged with the Court and on 17 June 2025 it was accepted for filing by the Court.
18. On 17 June 2025, FSLP lodged a Form 51 Notice with ASIC.
19. On 19 June 2025 the originating process, the affidavit of Mr Goyal and its Exhibit RG-1, the affidavit of Ms Therese Diab, and the Consent of Liquidators were served in person on the registered office of Sunnie 1.
20. On 3 July 2025, FSLP caused the notice of winding up to be published on ASIC's notices website.
21. The evidence establishes that FSLP and FSM are both creditors of Sunnie 1 and consequently FSLP has standing under subs 459P(1)(b) of the Corporations Act to apply to the Court for orders that Sunnie 1 be wound up under s 459A of the Corporations Act. Section 459A provides, in turn, that the Court may order that an insolvent company be wound up in insolvency.
22. The evidence establishes that the period for compliance with the FSLP Demand and the FSM Demand expired on 24 March 2025 and that neither demand was satisfied nor the subject of any application setting them aside. Consequently, pursuant to s 459F of the Corporations Act, Sunnie 1 is taken to have failed to comply with the FSLP Demand and the FSM Demand on 25 March 2025.
23. As noted above, the originating process was lodged with the Court on 13 June 2025 and accepted for filing on 17 June 2025. Thus the originating process was made within three months of the date when Sunnie 1 is taken to have failed to comply with the FSLP Demand and the FSM Demand. Consequently, pursuant to subs 459C(2)(a) of the Corporations Act, the Court must presume that Sunnie 1 is insolvent, except so far as the contrary is proved for the purposes of the application (see subs 459C(3)). There is no contrary proof.
24. I am satisfied that the procedural requirements have been fully complied with. The prescribed notice, being Form 519, was lodged with ASIC on 17 June 2025 in accordance with subss 465A(1)(a) and 470(1)(a) of the Corporations Act and reg 1.0.03A of the Corporations Regulations 2001 (Cth) (the Corporations Regulations). The originating process and supporting material were personally served on Sunnie 1 on 19 June 2025 in accordance with subs 465A(1)(b) of the Corporations Act. As noted above, FSLP caused a Notice of Winding up to be published on ASIC's notices website with the prescribed information on 3 July 2025, in accordance with subs 465A(1)(c) of the Corporations Act, reg 5.4.01A of the Corporations Regulations and r 5.6(2) of the Federal Court (Corporations) Rules 2000 (Cth).
25. It is well established that, where a company is insolvent, the Court will only decline to order a winding up for compelling reasons. As noted above, Sunnie 1 is presumed to be insolvent pursuant to s 459C(2)(a) of the Corporations Act. Further, Sunnie 1's failure or refusal to engage with the claims advanced in the originating process or to appear in the proceedings means that there are no compelling reasons advanced as to why it should not be wound up.
26. Accordingly, it is appropriate to order that Sunnie 1 be wound up in insolvency. There is no need to consider the plaintiff's alternative application for winding up pursuant to subs 461(1)(k) of the Corporations Act.
27. Section 532 of the Corporations Act disqualifies a person from seeking to be appointed as a liquidator of a company in the circumstances set out in subs (2). However, that section permits the Court to grant leave to an affected liquidator to so act. Mr Goyal does not believe that the Liquidators are disqualified from accepting an appointment as the liquidators of Sunnie 1. Nevertheless, because of their various external administration appointments to various companies within the Guo Group, the complexity of the interrelationships between the companies within that group, and the cross-collateralisation of the various finance facilities, there is a remote possibility that some overlooked circumstance might fall within the matters identified in subs 532(2), such as (ii) which excludes an appointment where "the person is an officer or employee of any body corporate that is a secured party in relation to property of the company".
28. In order to avoid this possibility and for an abundance of caution, the plaintiff submits, and I accept, that leave should be granted under s 532(2) for the Liquidators to accept the appointment. As Derrington J said in Michael, in the matter of Scenic Hinterland Day Tours Pty Limited (in liq) [2023] FCA 1277; (2023) 170 ACSR 500 at [20], there are a number of cases in which leave has been granted only "so far as it is necessary" or "out of an abundance of caution" where, as here, there is doubt as to whether leave is required.
29. As noted above, the Liquidators understand on the basis of all the information available to them that Sunnie 1 only ever carried on business as trustee of the Sunnie 1 Trust. Further, as noted above, the evidence establishes that at the very least, Sunnie 1 is indebted to FSLP for $2,008,989.60 and FSM for $500,291.03. Consequently, the evidence supports the conclusion that Sunnie 1 has incurred substantial liabilities in its capacity as trustee of the Sunnie 1 Trust.
30. In these circumstances, Sunnie 1 has a right to be indemnified out of and exonerated from the assets of the Sunnie 1 Trust in respect of those liabilities under cl 18.2 of the Sunnie 1 Trust Deed. Sunnie 1's right to indemnity and exoneration constitutes a proprietary interest in the assets of the Sunnie 1 Trust by way of a charge or right of lien over those assets. That right survives, and is not otherwise affected by, its removal as trustee, but it does not itself confer a power of sale.
31. The effect of cl 20.3 of the Sunnie 1 Trust Deed is that Sunnie 1 will be deemed to have retired as trustee when it goes into liquidation. Sunnie 1 will then hold the assets of the Sunnie 1 Trust as bare trustee. Consequently, upon its winding up, Sunnie 1 will only be able to enforce its charge and lien over the assets of the Sunnie 1 Trust through the Court by either the appointment of a receiver with a power of sale or by a judicial sale. It is now well established that in circumstances such as these, the appropriate course of action is for the Court to appoint the Liquidators as the receivers of the assets of the Sunnie 1 Trust for the purpose of realising the assets for the benefit of creditors. That is plainly the appropriate course in the present case.
32. Further, upon their appointment, the Liquidators in their capacity as the receivers and managers of the assets of the Sunnie 1 Trust are entitled to have their remuneration, costs and expenses paid from the assets of the Sunnie 1 Trust in priority to other creditors.
33. Accordingly, it is appropriate that the Court appoint liquidators as the receivers and managers of all the property assets and undertaking of the Sunnie 1 Trust and to otherwise make the orders sought by the plaintiff.

I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackman.