Mansfield, in the matter of Palladium Investments International Pty Ltd (in liquidation) [2025] FCA 969 (14 August 2025)

Mansfield v Thousand Angeles Island Pty Ltd (in liq), in the matter of Thousand Angeles Island Pty Ltd (in liq) (No 2) [2021] FCA 283

Naidenov, in the matter of AJW Interiors and Constructions Pty Ltd (in liq) [2024] FCA 25

Re One.Tel Ltd [2014] NSWSC 457

Robinson, in the matter of Reed Constructions Australia Pty Ltd (in liq) [2017] FCA 594

IN THE MATTER OF PALLADIUM INVESTMENTS INTERNATIONAL PTY LTD (IN LIQUIDATION)

DAVID IAN MANSFIELD IN HIS CAPACITY AS LIQUIDATOR OF PALLADIUM INVESTMENTS INTERNATIONAL PTY LTD (IN LIQUIDATION) & RECEIVER AND MANAGER OF THE PALLADIUM TRUST

DAVID IAN MANSFIELD IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF JIN HEUNG YANG

1. Pursuant to sections 37AG and 37AF of the Federal Court of Australia Act 1976 (Cth), on the ground that it is necessary to prevent prejudice to the proper administration of justice, the confidential affidavit of David Ian Mansfield sworn 31 July 2025 and the accompanying confidential exhibit DIM-4 are not to be published and/or accessed except pursuant to an order of the Court until the conclusion of the liquidation of Palladium Investments International Pty Ltd (in liquidation) and/or the conclusion of the administration of the bankrupt estate of Jin Heung Yang (Bankrupt Estate), whichever is the later.
2. Pursuant to s 477(2B) of the Corporations Act 2001 (Cth) and s 90-15 of the Insolvency Practice Schedule (Corporations) (Cth) being schedule 2 of the Corporations Act and r 14.23 of the Federal Court Rules 2011 (Cth), the first plaintiff, David Ian Mansfield in his capacity as liquidator of Palladium (Liquidator) and receiver and manager of the Palladium Trust (Receiver), is justified in taking steps, and to the extent necessary has the Court's approval, to enter into the proposed Second Deed of Variation and perform his obligations under the Second Deed of Variation.
3. Pursuant to s 30(1) of the Bankruptcy Act 1966 (Cth) and section 90-15 of the Insolvency Practice Schedule (Bankruptcy) (Cth) being schedule 2 of the Bankruptcy Act, the second plaintiff, David Ian Mansfield in his capacity as trustee of the Bankrupt Estate, is justified in entering into the Second Deed of Variation and performing his obligations under the Second Deed of Variation.
4. The costs of the interlocutory process filed on 4 August 2025 are costs of this proceeding for the purpose of order 5 made on 29 April 2025 and are payable in accordance with that order.

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

Delivered ex tempore, revised from transcript

1. This application is brought by David Ian Mansfield, in his respective capacities as first, the liquidator of Palladium Investments International Pty Ltd (in liquidation); second, the Court-appointed receiver and manager of the Palladium Trust; and third, in his capacity as the trustee of the bankrupt estate of Jin Heung Yang (Bankrupt Estate). I will refer to Mr Mansfield in his various capacities as the plaintiffs.
2. The plaintiffs' evidence is that apart from the Bankrupt Estate, Palladium does not have any other creditors.
3. In this proceeding, orders were made on 5 December 2024 which, among other things, approved the plaintiffs' entry into a Deed of Settlement and Release in respect of the settlement of a related proceeding in this Court. On 27 March 2025, a further order was made which, among other things, approved the entry into a Deed of Variation which varied the terms of the Deed of Settlement and Release (First Deed of Variation).
4. By interlocutory process filed on 4 August 2025, the plaintiffs seek orders, to the extent necessary, approving the entry into a Second Deed of Variation which would further vary the Deed of Settlement and Release. The proposed further variation, if approved, will have the effect of extending the time to make certain payments under the Deed of Settlement and Release as previously varied and requiring an additional amount to be paid. The endpoint of the timeline for the payments to be made under the Deed of Settlement and Release as varied will not change in terms of the date on which the final payment will be made pursuant to the First Deed of Variation, but the quantum of that payment will increase as a result of, amongst other things, some of the interim payments reducing in quantum.
5. In support of the interlocutory process, the plaintiffs rely on:

(1) a confidential affidavit of Mr Mansfield sworn on 31 July 2025 and confidential exhibit DIM-4; and

(2) a non-confidential affidavit of Mr Mansfield sworn on 6 August 2025 as to service of the interlocutory process.

1. The plaintiffs also rely on the following evidence previously adduced in the related earlier applications:

(1) a non-confidential affidavit of Mr Mansfield sworn on 26 November 2024 and exhibit DIM-1;

(2) a confidential affidavit of Mr Mansfield sworn on 26 November 2024 and confidential exhibit DIM-2, which are the subject of a confidentiality order made on 5 December 2024; and

(3) a confidential affidavit of Mr Mansfield sworn on 28 February 2025 and confidential exhibit DIM-3, which are the subject of a confidentiality order made on 27 March 2025.

1. The extant confidentiality orders in relation to the confidential evidence referred to in subparagraphs 6(2) and (3) will continue to apply to this evidence.
2. The evidence relied on in this application demonstrates service of this application on each of the creditors of the Bankrupt Estate, the bankrupt and the Australian Securities and Investments Commission (ASIC). Service was effected by communications on 5 August 2025. I am satisfied, in terms of ASIC in particular, that under r 2.8 of the Federal Court (Corporations) Rules 2000 (Cth) the period of notice given is reasonable in the circumstances of this application.
3. The proceeding was called on and also called outside the courtroom. No interested party appeared or sought to be heard on this application.
4. The principles relevant to the Court's approach to applications under s 477(2B) of the Corporations Act 2001 (Cth) are well-established and have been set out in many cases including Robinson, in the matter of Reed Constructions Australia Pty Ltd (in liq) [2017] FCA 594 at [33]- [39] (Gleeson J); Hughes, in the matters of Sales Express Pty Ltd (in Liq) [2016] FCA 423 at [20] (Edelman J); Hundy (liquidator), in the matter of 3 Property Group 13 Pty Ltd (in liquidation) (No 2) [2023] FCA 173 at [17]- [24] (Wigney J); Alfonso, in the matter of Pinnacle Fire Protection Pty Ltd (in liq) v Woods [2021] FCA 1402 at [13]- [15]; and Naidenov, in the matter of AJW Interiors and Constructions Pty Ltd (in liq) [2024] FCA 25 at [83]. I adopt and apply those principles. For the reasons identified by the plaintiffs in their written submissions in support of an earlier application in this proceeding, I accept that similar principles apply to the orders sought under s 30(1) of the Bankruptcy Act 1966 (Cth) and s 90‑15 of the Insolvency Practice Schedule (Bankruptcy) (Cth) in the present context: Mansfield v Thousand Angeles Island Pty Ltd (in liq), in the matter of Thousand Angeles Island Pty Ltd (in liq) (No 2) [2021] FCA 283 at [36] (Farrell J).
5. Having regard to the conduct of the parties since the Deed of Settlement and Release was entered into and the circumstances leading up to the entry into the Second Deed of Variation, I am satisfied that Mr Mansfield's explanation for his view that the further variation is reasonable and appropriate in the circumstances is reasonably based.
6. Where an agreement which gives rise to obligations over a period of more than three months is varied, it is appropriate to seek the Court's approval under s 477(2B) of the Act. Perhaps in the present case where a variation to an agreement that has previously been approved by the Court is being sought the plaintiffs are seeking approval out of an abundance of caution. In making the orders today, I will make clear that approval under s 477(2B) is given to the extent necessary and noting the particular terms of the Second Deed of Variation which provide for the plaintiffs to seek the Court's approval for entry into the Second Deed of Variation.
7. In entering into the Second Deed of Variation, Mr Mansfield has exercised his commercial judgement and I have no reason to suspect any impropriety or bad faith on his part in doing so.
8. Mr Mansfield, based on his experience as a liquidator and the matters to which he has deposed in his confidential affidavit, has formed the view that entry into the Second Deed of Variation is a reasonable and appropriate course of action. I will not rehearse those matters which are confidential in nature. I note, in particular, that the arrangements in relation to the relevant security for payment of the settlement sums have been addressed in the evidence and Mr Mansfield's rationale for reaching the commercial judgement that the second variation is in the interests of creditors is explained and is reasonably based. Upon my review of Mr Mansfield's evidence and noting the role of the Court on an application such as this, I am satisfied that the course proposed is in the best interests of creditors and is consistent with the objectives of the statutory scheme: see Re One.Tel Ltd [2014] NSWSC 457 at [26] (Brereton J, as his Honour then was).
9. The Second Deed of Variation varies the obligations of the parties under the Deed of Settlement and Release (as varied by the First Deed of Variation) in a limited way. It is not unusual for the Court to consider variations to agreements which were the subject of prior approval under s 477(2B) of the Act: Kogan, in the matter of Rogulj Enterprises Pty Ltd (in liq) (No 2) [2021] FCA 1504 at [10]. The present circumstances are a clear example of a case where the decision to vary the earlier agreement has been carefully considered and the reasons for doing so have been addressed in the evidence.
10. The form of the approval orders sought by the plaintiffs on the interlocutory process is consistent with previous orders made in this proceeding on 5 December 2024 and 27 March 2025.
11. During the course of the hearing, the plaintiffs identified the need for a suppression and non-publication order under ss 37AG and 37AF of the Federal Court of Australia Act 1976 (Cth) with respect to the confidential affidavit of Mr Mansfield sworn on 31 July 2025 and confidential exhibit DIM-4, due to the commercially sensitive and confidential material contained therein. I am satisfied that it is necessary to prevent prejudice to the proper administration of justice to make the order sought.
12. Consistently with orders previously made in this proceeding and the rationale which informed the making of those orders, costs of this interlocutory process should form part of the costs of the proceeding and be a cost in the liquidation of Palladium and in the administration of the Bankrupt Estate, to be apportioned in the same ratio as provided for in the previous orders made on 29 April 2025.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman.