Okara Pty Ltd, (Administrators Appointed, in the matter of Okara Pty Ltd, (Administrators Appointed) [2025] FCA 818 (16 July 2025)

(a) the powers that:

(i) an administrator has in respect of the property of a company pursuant to ss 437A and 442A of the Corporations Act 2001 (Cth) while they are administrators of Okara Pty Ltd (Administrators Appointed) (ACN 010 568 331) (Okara); and / or

(ii) a liquidator has in respect of property of a company pursuant to s 477 of the Corporations Act if they are appointed as liquidators of Okara; and

(b) the power to do all things as necessary or convenient to be done for or in connection with or as incidental to the attainment of the objective of enforcing Okara's right of indemnity and exoneration in respect of debts incurred as trustee of the Trust; and

(c) the powers to sell, convert into cash and deal with any of the Assets.

1. In exercising their powers, the Receivers must provide 7 days' notice to any creditor who has a security interest in an Asset, of the sale and conversion into cash of that asset.
2. The Receivers must not distribute any proceeds of the Trust, arising from the sale of Assets until after the second meeting of creditors has occurred, on or before 25 July 2025.
3. There is liberty to apply to any person who can demonstrate sufficient interest to modify these directions and orders on not less than 3 business days' written notice to the Receivers.
4. The originating process be adjourned to a date to be fixed.
5. The matter be referred to the National Operations Registrar for allocation to a docket judge.
6. Costs be reserved.

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

(Delivered ex tempore, revised from the transcript)

1. This is an application brought by Adam Peter Kersey and Anne Meagher who are the joint and several administrators of Okara Pty Ltd (administrators appointed) (the Company).
2. The administrators seek to be appointed as receivers without security over the assets of the PJ & K Casey Family Trust (the Trust), in respect of which the Company was formerly the trustee, with a power of sale for the purpose of converting such assets into cash in order to satisfy the debts of the Company which were incurred in its capacity as trustee of the Trust.
3. This application has been brought in the duty list on an urgent basis. The circumstances of urgency are described below.
4. On 20 June 2025, Mr Kersey and Ms Meagher were appointed administrators of the Company. Prior to their appointment, an application was filed in the Supreme Court of Victoria to wind up the Company on the grounds of insolvency. On 2 July 2025, that proceeding was listed before a Judicial Registrar, and an adjournment was sought by the administrators, which adjournment was granted until 23 July 2025, which is a week away.
5. Also on 2 July 2025, the first meeting of creditors of the Company was held, whereby the administrators' appointment was confirmed.
6. By way of background, the Company was incorporated on 2 April 1985, was until on or around 7 October 2024 the trustee of the Trust, remains the bare trustee of the Trust, and operated a transport and storage business located at the Port of Bundaberg in Queensland in its capacity as trustee of the Trust. It is not currently trading.
7. The Trust was established by a trust deed dated 18 January 1993. Under clause 27 of that trust deed, the office of trustee shall ipso facto be determined and vacated if such trustee, being a company, shall have a receiver appointed or enter into official management or have a petition filed for its winding up.
8. The Company only traded as trustee of the Trust, and therefore any assets and debts incurred were held or incurred by the Company in its capacity as trustee of the Trust.
9. The investigations of the administrators are ongoing, but to date, they have obtained information that the outstanding debts owed to creditors total approximately $4.9 million. These include secured creditors, some of which have registrations on the Personal Property Securities Register. The administrators have identified trade debtors of approximately $82,000, of which Mr Kersey anticipates approximately $34,000 is recoverable. The Company as trustee of the Trust traded for a short period after the administrators were appointed, and generated approximately $6,000 in income, which amount has since been recovered.
10. The circumstances of urgency relate to two matters.
11. The first relates to a lease agreement and deed of surrender. In or around October 2021, the Company in its capacity as trustee of the Trust entered into a lease agreement with Gladstone Ports Corporation Limited (GPC). The lease is subject to a registered mortgage in favour of the National Australia Bank (NAB). There is also a general security interest against the Company (in its capacity as trustee) in favour of the NAB.
12. Prior to the administrators being appointed, the Company had negotiated a deed of surrender of lease with GPC with respect to the lease, which required GPC to make payment of a surrender fee of $1.1 million. The Company executed the deed of surrender prior to the appointment of the administrators, while GPC countersigned after their appointment. Nevertheless, GPC is agreeable to finalising and completing the transaction proposed in the deed of surrender.
13. There is urgency in dealing with the deed of surrender because the Company is in arrears under the terms of the lease, and the administrators do not have the financial resources available in the administration to make payments in arrears or future lease payments. The deed of surrender, once performed, is likely to pay out all, if not the majority, of the debt owing by the company to GPC, along with the primary secured creditor, NAB. If the deed of surrender cannot be completed, and GPC brings the lease to an end as a result of default by the Company, the debt owed to NAB is unlikely to be paid in full, and this would be of significant prejudice to creditors. If the administrators are appointed as receivers of the assets of the Trust, this will allow them to complete the conditions of the deed of surrender, which is to the benefit of all of the creditors.
14. The second reason for the urgency relates to plant and equipment, including motor vehicles, which are owned by the Company in its capacity as trustee of the Trust. The motor vehicles, plant and equipment are encumbered and subject to purchase money security interest claims or PMSI claims. A significant portion of parties that hold PMSI claims over motor vehicles, plant and equipment have priority over NAB's security interest.
15. The administrators have engaged Grays eCommerce Group Limited to undertake valuations, and it is ultimately proposed to hold a sale through an auction of the motor vehicles, plant and equipment. The urgency arises because the parties that hold valid and enforceable PMSI claims against these items are entitled to collect their assets.
16. At present, the administrators have no authority to deal with the motor vehicles, plant and equipment, including engaging Grays to prepare and complete the proposed auction. Mr Kersey deposes that, in his opinion, a delay in dealing with the sale of the motor vehicles, plant and equipment is likely to put those items at an increased risk of damage or theft, reduce their value, reduce any possible equity in them and increase costs. All of these things, again, would be to the detriment of the creditors. Conversely, an auction organised through Grays will be for the benefit of the creditors.
17. Mr Kersey deposes that, in light of the urgency of these matters and in order to realise the assets and realise the best position for creditors, the administrators require authorisation to deal with the Trust assets "as soon as practical". I am satisfied, based on the evidence of Mr Kersey, that the circumstances justify the urgency of the application, and that it should be heard without sufficient notice being given to third parties who might have wished to be heard.
18. The draft order provided by Mr Downes, who appeared on behalf of the administrators, includes an order that there be liberty to apply to any person who can demonstrate sufficient interest to modify the directions and orders on not less than three business days' written notice to the receivers. In circumstances where third parties who might have wished to be heard on this application were only notified yesterday afternoon, such an order protects their interests.
19. Based on the affidavit of Mr Kersey, I am satisfied that the powers of the Company to act as trustee ceased upon the appointment of the administrators and that the Company did not operate other than as trustee. It is therefore appropriate to appoint the administrators as receivers to permit them to deal with the Trust assets so as to maximise the return to creditors.
20. I am also satisfied that the administrators should be appointed without being required to provide security. The administrators are registered liquidators and hold necessary professional insurances which would cover their appointment as receivers. Further, they are officers of the Court and are accountable to the Court. As observed by Derrington J in Rohrt, in the matter of Australian Cosmetic and Laser Clinic Pty Ltd (administrator appointed) [2025] FCA 797 at [13], it is now routinely the case that persons who are appointed receivers in circumstances such as this one are not usually required to provide security or a guarantee upon their appointment.
21. Other ancillary orders are sought by the administrators, which I am prepared to make today, as contained in the draft order which was handed up and which relate to the powers that the administrators can exercise in their role as receivers. In addition, paragraphs 5 and 6 of the draft order address matters which are for the benefit and protection of third parties who are not present today to be heard on the application. Although the administrators sought other orders today, including declaratory relief, I am not persuaded that it is appropriate to make orders of this kind on an urgent basis and in circumstances where notice was only given yesterday afternoon to third parties who might wish to be heard in relation to those orders. Having said that and as I observed to counsel appearing for the administrators, those additional orders did not seem to me to be problematic, and it might be that many of them could be made by a Judicial Registrar of this Court.

I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Downes.