Plaintiffs v Defendants

1 Before the Court are a number of applications brought by Richard Rohrt ('liquidator') in his capacity as liquidator of Martar Pty Ltd (in liq) ('Martar') and Quinmar Pty Ltd (in liq) ('Quinmar') (together, 'Companies') and as receiver of the Martar Family Trust and the Tarquinio Family Trust (together, 'Trusts'). In short, the liquidator seeks leave to adjudicate certain proofs of debt lodged by the defendants ('excepted proofs') in the liquidations of the Companies and directions that he is justified and acting reasonably by satisfying the debts and claims admitted in the liquidations of the Companies from the assets of the Trusts. Other relief sought includes orders fixing Mr Rohrt's remuneration as voluntary administrator, liquidator and receiver and for payment of remuneration out of the assets of the Trusts.

2 The Companies have been in external administration for some time and the liquidations have been marked by ongoing disputes with various interested parties. Consequently, there is a significant volume of material before the Court. I will summarise the most relevant aspects.

3 Peter Tarquinio, who was born on 25 August 1975, and Robert Tarquinio (the first defendant), who was born on 5 January 1977, are brothers. Their parents were Mario Tarquinio and Maria Tarquinio. For ease of reference, and without any intended disrespect, I will refer to the members of the Tarquinio family by their first names.

4 Mario passed away on 20 December 2015, and Maria passed away on 5 July 2019. The second and third defendants are, respectively, administrators of the Estates of Mario and Maria. There has been separate litigation in relation to these deceased estates[1] and the estates separately claim to be creditors of each of the Companies.

5 Martar was incorporated on 3 January 1980. Mario and Maria were directors of the company from its commencement until 10 October 2005. Robert was a director from 12 November 2002 to 10 May 2016. He is also the sole shareholder of the company. Peter has been a director of Martar since 23 November 2015. By a deed of settlement dated 10 October 2005, the Martar Family Trust was established and Martar was made its trustee ('Martar Family Trust deed'). By cl 27.7(h) of the Martar Family Trust deed, the trustee will be automatically removed if the trustee, being a corporation, has a receiver or manager appointed, or enters into official management, administration or liquidation. Clause 23 of the Martar Family Trust deed provides that the trustee is indemnified out of the trust fund against all liabilities incurred in the execution of any rights or obligations in relation to the Martar Family Trust and/or all actions, proceedings, costs, claims and demands concerning the Martar Family Trust.

6 Martar was the registered proprietor of real property at 816 High Street, Thornbury, Victoria 3071 ('Thornbury property'). The Thornbury property was historically leased by Martar to a tenant who operated a restaurant from the premises. As a result of his investigations, the liquidator concluded that Martar's operations solely related to holding the Thornbury property in its capacity as trustee of the Martar Family Trust and Martar did not carry on any business in its own right.

7 Quinmar was established on 8 July 2005. Mario was its inaugural director until 24 May 2016. Peter was then made a director on 24 May 2016 and continues to occupy that role. He is also the sole shareholder of the company. By Deed of Settlement dated 21 February 2002 ('Tarquinio Family Trust deed'), Martar was initially appointed trustee of the Tarquinio Family Trust but was replaced by Quinmar on 8 July 2005. The Tarquinio Family Trust deed was also later amended by Quinmar as trustee on 19 August 2011. Like the Martar Family Trust deed, the Tarquinio Family Trust deed contains a clause (cl 8.4(c)) which relevantly provides that the office of trustee would be determined and vacated if the trustee enters into liquidation. Clause 10.6 relevantly states that providing the trustee has acted in good faith, the trustee would be entitled to indemnification out of the assets of the trust fund against liabilities incurred in the execution of the trust.

8 Quinmar was the sole proprietor of residential property at 73 Wetherby Road, Doncaster, Victoria 3108 ('Doncaster property'). The liquidator concluded that Quinmar's sole activity was to hold the Doncaster property as trustee of the Tarquinio Family Trust.

9 On 16 June 2020, the liquidator was appointed voluntary administrator of Martar and Quinmar by resolution of Peter, as sole director of each company pursuant to s 436A of the Corporations Act 2001 (Cth) ('Act'). The second meetings of the Companies' creditors were held concurrently on 21 July 2020 and adjourned to 22 September 2020. On 22 September 2020, the liquidator was appointed to both Martar and Quinmar by the Companies' creditors in accordance with s 439C of the Act.

Receivership application and August 2021 orders

10 On 1 October 2020, the liquidator made application in this Court to be appointed as receiver over the assets of the Trusts ('receivership application').[2] This was necessary because, pursuant to the relevant trust deeds, the Companies were disqualified from holding the office of trustee by virtue of their entry into liquidation and the offices of trustee were vacated accordingly. Robert initially opposed the receivership application and sought competing orders for the removal of the liquidator, on the basis of an alleged lack of independence, and for the stay or termination of the liquidation of the Companies.

11 On 9 November 2020, approximately one month after he made the receivership application, the liquidator invited purported creditors of each Company to submit proofs of debt. On 19 February 2021, the liquidator notified purported creditors that their claims had either been accepted, rejected in part, or wholly rejected. Peter lodged 11 proofs of debt (totalling $1,827,820.34) in relation to Martar, and 21 proofs of debt (totalling $4,695,732.11) in respect of Quinmar. All of those proofs were rejected, save for a claim of $30,000 in Quinmar, which was initially accepted, but has since been rejected. There have been no appeals in respect of the liquidator's adjudications of the proofs of debt. However, in the course of assessing the proofs of debt, the liquidator identified several claims he was unable to determine because they were difficult to substantiate and/or required legal advice. These claims are the excepted proofs to which I referred earlier.

12 Following a number of returns, the receivership application was listed for final hearing on 5 August 2021. As a consequence of discussions between the legal representatives of the liquidator and Robert, agreement was reached in relation to a form of order involving the liquidator being appointed as receiver of the Trusts, subject to certain conditions. Orders were ultimately made by McMillan J on 6 August 2021 ('August 2021 orders') which, among other things, appointed the liquidator as receiver over all of the present and after acquired property of each of the Trusts pursuant to s 37 of the Supreme Court Act 1986 (Vic) (orders 1 and 7), and incorporated the conditions agreed as between the liquidator and Robert. Those conditions are relevantly that:

(a) the liquidator sell the Thornbury and Doncaster properties but will not make any payment to a creditor without seeking Court approval (para C(ii) of Other Matters);

(b) the liquidator will not draw any remuneration or expenses without Court approval (paras C(iii) and (iv) of Other Matters); and

(c) the liquidator will not adjudicate on the excepted proofs of debt, unless otherwise ordered by the Court (orders 4 and 10).

13 In addition, her Honour made directions, pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations) ('IPS') (which is Schedule 2 of the Act), that the liquidator was justified and acting reasonably in proceeding on the basis that all the assets of the Companies were properly characterised as property held by each of the Companies in their capacity as trustee of each of the relevant Trusts (order 13).

14 In addition, McMillan J ordered that the liquidator file a report detailing the financial position of the Trusts; the proofs of debt admitted and rejected by him; the steps taken to realise the assets of the Trusts and the estimated return to creditors (order 14 of the August 2021 orders). The liquidator subsequently filed this report on 1 December 2021 ('December 2021 report').

15 The following table identifies the creditors of the Companies, the proofs of debts which have been admitted or rejected, and the excepted proofs:[3]

Liquidator's estimate. A proof has not been submitted.

Excepted Proof. Claim reflects amended proof of debt.

$114,998 admitted and balance pending as Excepted Proof

Liquidator's estimate. A proof has not been submitted.

Perpetual Trustee Company Ltd (Redzed Lending Solutions Pty Ltd) ('RedZed')

Excepted Proof. Claim reflects amended proof of debt.

16 The liquidator's investigations into the assets of the Companies are also detailed in the December 2021 report. Whilst the liquidator believes the Companies may have claims against Peter for insolvent trading, he has deemed them uncommercial to pursue. The only material assets of the Companies were the Doncaster and Thornbury properties and their proceeds of sale.

17 In the December 2021 report, the liquidator stated that the adjudication of the excepted proofs would require extensive work. He foreshadowed that, following the realisation of the Companies' real property, there would be a need to apply to the Court pursuant to s 90-15 of the IPS and/or s 554A of the Act for the purpose of referring the determination of the excepted proofs to the Court.

18 The liquidator also explained he had drawn remuneration of around $35,000 from an indemnity provided by Peter on appointment, but had otherwise not been paid for the work undertaken.

19 The total receipts, payments and cash in hand for each of Martar and Quinmar, as at 17 January 2024, can be summarised as follows:

20 From around 22 October 2015, Peter had been living in the Doncaster property pursuant to a residential tenancy agreement supported by a document styled 'heads of agreement.' However, the liquidator's inquiries suggested Peter was not paying rent. The liquidator formed the view that the best interests of creditors would be served if the Doncaster property was sold with vacant possession. Accordingly, on 16 November 2021, the liquidator served a disclaimer notice on Peter in respect of the residential tenancy agreement and heads of agreement. In response, Peter commenced a proceeding in the Federal Court of Australia to set aside the disclaimer notice ('disclaimer proceeding'). On 25 February 2022, O'Callaghan J made orders by consent in the disclaimer proceeding allowing Quinmar to recover possession of the Doncaster property no earlier than 30 June 2022. However, further difficulties arose in August 2022, when Peter commenced proceedings in the Victorian Civil and Administrative Tribunal seeking to remain in possession of the Doncaster property ('VCAT proceeding'). The proceeding was later struck out administratively. Then, on 8 September 2022, the liquidator sought a warrant of possession from the Federal Court, which was issued on 5 October 2022. In the event, Peter ultimately vacated the Doncaster property voluntarily.

21 On 11 March 2020, the liquidator entered into a contract of sale on behalf of Quinmar in respect of the Doncaster property for the purchase price of $1,390,000. Settlement occurred on 10 May 2023. From the settlement proceeds, $273,958.69 was paid to discharge a loan provided by Redzed Lending Solutions Pty Ltd and secured by a mortgage in favour of Perpetual Trustee Company Limited, which had been granted a few days prior to Quinmar going into voluntary administration. The liquidator expects there will be an amount from the sale proceeds available for distribution to Quinmar's creditors.

22 As regards the Thornbury property, on 7 April 2022, the liquidator entered into a contract of sale on behalf of Martar for the sum of $1,421,000, the settlement of which occurred on 6 June 2022. It is also expected there will be an amount from the sale proceeds available for distribution to Martar's creditors.

23 On 20 October 2023, the liquidator prepared a detailed report concerning the excepted proofs ('excepted proofs report'). The excepted proofs concern claims that fall within either of the following two categories:

(a) historical loan accounts recorded as liabilities in the financial reports of Martar or Quinmar; or

(b) claims for the reimbursement of amounts said to have been paid by or on behalf of the relevant creditor, where such expenditure was for the ultimate benefit of Martar or Quinmar.

24 In considering the excepted proofs, the liquidator had regard to the books and records of the Companies, including financial statements. Particular investigation has been directed to the existence of a 'shareholder account' for the purposes of excepted proofs lodged in Martar's liquidation.

25 The excepted proofs report sets out the liquidator's opinion on each of the excepted proofs, which is summarised as follows:

26 As previously noted, by force of the August 2021 orders, the liquidator is currently prevented from adjudicating the excepted proofs.

27 On 24 October 2023, the liquidator filed an originating process ('OP') to bring about the determination of the excepted proofs and for other relief. Notably, the liquidator called for the Court to determine the existence and value of the excepted proofs pursuant to s 90-15 of the IPS in accordance with, and for the amounts of, the proposed adjudications in the excepted proofs report. Alternatively, the liquidator sought an order that the Court revoke the August 2021 orders to the extent that they currently prevent adjudication of the excepted proofs, and a direction he is justified and acting reasonably in admitting or rejecting the excepted proofs pursuant to the excepted proofs report. The liquidator also sought orders enabling him to proceed on the basis that both Martar and Quinmar have a right of indemnity against the property of the relevant Trusts, and that any admitted claims could be satisfied from the relevant trust property. Among other things, he also sought a declaration of indemnification from the assets of the Trusts in respect of his remuneration and expenses (including legal costs and costs associated with this application).

28 The OP named Robert and the administrators of the estates of Mario and Maria as defendants.

29 At a directions hearing on 27 November 2023, the Court raised concerns about the appropriateness of the wholesale referral of the determination of the excepted proofs to the Court. The Court also queried whether it was necessary to formally revoke orders 4 and 10 of the August 2021 orders, or whether the liquidator could simply seek leave to admit or reject the excepted proofs instead.

30 Orders were made at the directions hearing ('November 2023 orders') which, among other things: permitted the plaintiffs to file and serve an amended originating process and an interlocutory process for the approval of the liquidator's remuneration; required the defendants to file and serve notices indicating whether they intended to contest the liquidator's proposed adjudication of the excepted proofs; compelled the plaintiffs to electronically serve Peter[5] and each creditor of the Companies with a copy of the documents filed and the November 2023 orders; and allowed for the filing of any affidavit material by the defendants (and other persons notified of the proceeding) in reply. The amended originating process and the proposed remuneration application were then set down for hearing on 24 April 2024.

31 On 29 November 2023, the plaintiffs' solicitors wrote to the defendants and Peter explaining the basis of the proposed amendments to the originating process and specifically requesting that they consent to the liquidator being granted leave to admit or reject the excepted proofs and to the other relief sought. Whilst the defendants signed proposed consent orders on this basis, no response was ever received from Peter.

32 The plaintiffs then filed their amended originating process on 4 December 2023 ('AOP'). The AOP continued to seek orders that the Court determine the existence and value of the excepted proofs pursuant to s 90-15 of the IPS, with some modifications to the proposed adjudication amounts. As an alternative, the plaintiffs sought orders that, notwithstanding orders 4 and 10 of the August 2021 orders, pursuant to s 90-15 of the IPS, the liquidator be granted leave to admit or reject the excepted proofs 'on the basis set out in the [excepted proofs report]'. In other words, the plaintiffs no longer sought to formally revoke the August 2021 orders. Given the restraints imposed by the relevant August 2021 order were expressed as being subject to further order of the Court, I agree there is no need to revoke the orders.

(a) relief that, notwithstanding the notation at paragraph C(ii) of Other Matters of the August 2021 orders, the liquidator has leave to declare and pay dividends to the creditors of Martar and Quinmar; and

(b) directions under s 90-15 of the IPS that the liquidator would be justified and acting reasonably by:

(i) proceeding on the basis that each of Martar and Quinmar (as trustees) have a right of indemnity from the property of the relevant Trusts in respect of the debts or claims admitted in the Companies' liquidations; and

(ii) satisfying the debts and admitted claims in the Companies' liquidations with the assets of the relevant Trusts.

(The scope of these directions was expanded, appropriately in my view, to now encompass all proofs of debt in the liquidations of the Companies).

34 Lastly, the plaintiffs continue to seek an order pursuant to s 90-15 of the IPS, that the liquidator be indemnified from the assets of the Trusts in respect of his remuneration and relevant expenses.

35 In accordance with the November 2023 orders, notices were filed by or on behalf of each of the defendants in early December 2023, indicating that no one sought to contest the liquidator's proposed adjudications on the excepted proofs.

36 On 13 December 2023, the plaintiffs filed an interlocutory process seeking orders that:

(a) pursuant to s 60-10 of the IPS, the liquidator's remuneration as administrator and liquidator of the Companies be determined; and

(b) pursuant to r 39.06 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Rules') or, alternatively, the inherent jurisdiction of the Court, the liquidator's remuneration as receiver of the property of the Trusts be fixed;

in respect of particular amounts and for defined periods of time ('remuneration application').

37 On 18 December 2023, the plaintiffs sent a circular to Peter and all creditors of the Companies which contained a link to electronic copies of the documents filed in the proceeding and the Court's previous orders.

38 Throughout March 2024, the liquidator's lawyers communicated with Peter and his accountant. Despite Peter previously indicating he did not accept the liquidator's adjudication of his own proofs of debt or the proposed adjudication of the excepted proofs, in an email dated 25 March 2024 from Peter's accountant, it was suggested that Peter was agreeable to the liquidator being granted leave to adjudicate the excepted proofs (in accordance with orders 2 and 5 of the AOP) on the basis that answers be provided to other queries (which I am satisfied were so provided). In any event, granting such leave will not shut Peter out from exercising any rights he may have to appeal the liquidator's adjudications, provided he has standing to do so.[6]

39 The Australian Securities and Investments Commission ('ASIC') was also provided notice (albeit late) of the application in accordance with r 2.8 of the Supreme Court (Corporations) Rules 2023 (Vic). ASIC confirmed it did not propose to appear or intervene in the proceeding and considered the matter to be properly left for the determination of the Court.

40 At the hearing, senior counsel for Robert confirmed that his client neither consented to nor opposed the applications made by the liquidator, including the remuneration application. Mr Maier, the third defendant acting as the administrator of the deceased estate of Maria, appeared in person and adopted the same position. There was no appearance by either the second defendant (being the administrator of the estate of Mario) or Peter. Further, neither Peter, nor any defendant, nor any creditor of the Companies, have filed any affidavit material in opposition to the relief sought in the AOP or the remuneration application.

41 Following the conclusion of the hearing on 24 April 2024, the Court made orders permitting the plaintiffs to file and serve:

(a) a further amended originating process clarifying the extent to which indemnification was sought from the property of the Trusts;

(b) an amended interlocutory process[7] to address a number of queries raised by the Court concerning amounts of remuneration previously approved by creditors of the Companies and the capacity in which the liquidator was claiming remuneration (following his appointment as receiver over the assets of the Trust); and

(c) a further supplementary affidavit to clarify, among other things, aspects of the methodology used in recording work undertaken in the external administration of the Companies.

42 In totality, the plaintiffs rely on the following material in support of their applications:

(a) the affidavits of Richard Rohrt dated 17 October 2023, 10 November 2023, 12 December 2023, 26 February 2024 and 26 April 2024;

(b) the affidavits of Nikita Angelakis dated 8 April 2024 and 23 April 2024;

(c) the December 2021 report;

(d) the excepted proofs report;

(e) a remuneration report dated 10 November 2024, annexed to Mr Rohrt's affidavit of 10 November 2023 ('remuneration report');

(f) submissions dated 9 April 2024; and

(g) supplementary submissions dated 26 April 2024.

Applications made by amended originating process

43 Before determining the applications made by the AOP, it is convenient to set out the applicable statutory provisions and legal principles.

44 Section 90-15 of the IPS states:

(1) The Court may make such orders as it thinks fit in relation to the external administration of a company.

(3) Without limiting subsection(1), those orders may include any one or more of the following:

(a) an order determining any question arising in the external administration of the company...

45 Section 90-20 of the IPS specifies who may apply for an order under s 90-15. Those persons relevantly include a person with a financial interest in the external administration of the company and an officer of the company. There is no question the liquidator has standing under s 90-20.

46 Section 90-15 is broad in its scope and contemplates not only the exercise of judicial discretion, but also the determination of substantive rights.[8] In GDK Projects Pty Ltd, in the matter of Umberto Pty Ltd (in liq) v Umberto Pty Ltd (in liq),[9] Farrell J commented that the power in s 90-15(1) is, 'in its terms, unconstrained'.[10]

47 The principles that were applicable to giving directions under the former and analogous ss 447D(1), 479, and 511 of the Act remain applicable to giving directions under ss 90-15 and 90-20 of the IPS. In Re Ansett Australia Ltd,[11] Goldberg J observed:

...[T]he prevailing principle adopted by the courts, when asked by liquidators and administrators to give directions, is to refrain from doing so where the direction sought relates to the making and implementation of a business or commercial decision, either committed specifically to the liquidator or administrator or well within his or her discretion, in circumstances where there is no particular legal issue raised for consideration or attack on the propriety or reasonableness of the decision in respect of which the directions are sought. There must be something more than the making of a business or commercial decision before a court will give directions in relation to, or approving of, the decision. It may be a legal issue of substance or procedure, it may be an issue of power, propriety or reasonableness, but some issue of this nature is required to be raised.[12]

48 Further, as Austin J explained in Re Currabubula Holdings Pty Ltd:[13]

x The court's power to give directions is not there to provide a liquidator with comfort before he or she takes any step with legal consequences. In most cases the liquidator should apply the law (taking such advice as he or she may think appropriate) and act accordingly, without application to the court.[14]

49 In their written and oral submissions, the plaintiffs confirm that, despite the formulation of the AOP, they no longer press their application for the Court to determine the excepted proofs pursuant to s 90-15 of the IPS. This is a sensible concession. Although I no longer need to determine the point, my tentative view is that whilst s 90-15 of the IPS may confer power on the Court to adjudicate the proofs of debt, the exercise of such power would not be appropriate in this case. To do so would permit the liquidator to abdicate his statutory responsibility to adjudicate the proofs and instead place that burden upon the Court. It is not the Court's role to substitute its own view about whether a proof of debt ought to be admitted in a liquidation.[15] Although there are limited circumstances in which a referral of an aspect of the adjudication process is appropriate,[16] or where judicial direction is properly sought on the task of adjudication where an issue of propriety or reasonableness arises,[17] in the present case, the circumstances warranting such an approach are not obvious. The conventional course is for the liquidator to decide whether to admit or reject a proof of debt and for any person dissatisfied with that decision to appeal to the Court to seek its reversal or modification.[18]

50 As previously stated, the plaintiffs now seek orders that, notwithstanding orders 4 and 10 of the August 2021 orders, pursuant to s 90-15, the liquidator be granted leave to admit or reject the excepted proofs in accordance with the excepted proofs report. I accept such orders are appropriate given the history and circumstances of the external administrations of the Companies, including the receivership application and the operation of the August 2021 orders. In particular:

(a) by virtue of cl 27.7(h) of the Martar Family Trust deed and cl 8.4(c) of the Tarquinio Family Trust deed, the office of trustee in each of the Trusts was determined and vacated once Martar and Quinmar entered into liquidation. Consequently, at the time of filing the receivership application, Martar and Quinmar each held the assets of the relevant trust as bare trustee. As bare trustees, the Companies' duties, powers and rights were limited to protecting the assets of the relevant trusts, but did not include a power of sale;[19]

(b) because the liquidator was not empowered to take any steps to deal with the assets of the Trusts other than to preserve them, it follows that until the receivership application had been determined, the liquidations of the Companies were at an effective standstill. The liquidator's decision to consent to the restrictions on adjudicating the excepted proofs was therefore a pragmatic one to facilitate the continuation of the liquidations;

(c) whilst the restrictions on adjudicating the excepted proofs once allowed work on the liquidations of the Companies to progress, they are now inhibiting the finalisation of the liquidations;

(d) the liquidator's consent to these restrictions must also be viewed in light of the fact that Robert initially opposed the receivership application and sought the liquidator's removal and/or the stay or termination of the liquidation of the Companies. However, Robert no longer seeks these outcomes. In other words, the state of affairs has materially changed since the making of the August 2021 orders; and

(e) no party actively opposes the liquidator adjudicating the excepted proofs. Nor has Peter formally opposed leave being granted to the liquidator to adjudicate the excepted proofs (notwithstanding his historical opposition to the excepted proofs being determined in accordance with the excepted proofs report). Further, no creditors have sought to be heard in relation to this proceeding.

51 It is important to record that, in granting the liquidator leave to adjudicate the excepted proofs, the Court is not adjudicating upon their merits, nor undertaking a review of the correctness of the liquidator's conclusions set out in the excepted proofs report. Moreover, any person aggrieved by the liquidator's adjudications who has sufficient standing can appeal the adjudications in the ordinary course.[20]

Orders regarding indemnification from assets of Trusts

52 Turning then to the question of indemnification, I am satisfied that, pursuant to cl 23 of the Martar Trust deed, Martar is entitled to be indemnified out of the assets of the Martar Family Trust against, among other things, all liabilities incurred in the execution of any rights or obligations in relation to the trust, and for all actions and proceedings concerning the trust. By cl 10.6 of the Tarquinio Family Trust deed, Quinmar is similarly indemnified out of the assets of the trust in relation to its role as trustee. The Companies also have a right of indemnity in equity and under statute.[21] The right of indemnity held by each of the Companies as trustee is secured by equitable lien over the assets of the relevant trust.[22] Moreover, the Companies were not deprived of their right of indemnity or the accompanying lien because of their loss of office as trustees (when placed into liquidation) or their resulting status as bare trustees.[23]

53 Consistent with the directions given in the August 2021 orders, and the evidence presently before the Court, it is apparent that the property of the Companies (including all proceeds of sale) is property held by the Companies in their respective capacities as trustees of the Trusts. The unchallenged evidence confirms that each of the Companies did not carry out any activities other than in their capacities as trustees. Further, I am satisfied that the Companies have no assets in their own right and all of the liabilities of the Companies have been incurred in their capacities as trustees of the relevant Trusts. I accept the plaintiffs' submission that there is no need to distinguish between creditors of the Companies and creditors of the Trusts.

54 The liquidator has presented to the Court information about each proof of debt to be admitted in the liquidation of the Companies, including the excepted proofs, and explained why they are debts properly payable from the assets of the Trusts.

55 In my view, the liquidator is acting reasonably in proceeding on the basis that the Companies have rights of indemnity from the property of the Trusts in respect of the debts or claims admitted in the liquidation of the Companies and that those debts and claims may be satisfied from the property of the Trusts. I will make relevant directions under s 90-15 of the IPS accordingly. There will also be an ancillary order that, notwithstanding the notation at paragraph C(ii) of Other Matters in the August 2021 orders, the liquidator has leave to declare and pay dividends to creditors of the Companies as otherwise permitted by Part 5.6 of the Act.

56 In addition, I will make orders that pursuant to s 90-15 of the IPS, the liquidator is entitled to be indemnified from the assets of the Trusts in respect of his remuneration and expenses incurred while acting as voluntary liquidator and subsequently as liquidator of the Companies (as distinct from when acting as receiver of the Trusts). I will do so for the following reasons.

57 First, where the sole activity of each company was to perform its duties as trustee of the relevant trust, the remuneration and costs of the liquidator are recoverable from the assets of the Trusts, by way of the trustees' indemnity against those assets.

58 Secondly, by orders 3 and 9 of the August 2021 orders, McMillan J ordered that the liquidator, as receiver of the property of the Trusts, be entitled to reasonable remuneration and disbursements properly incurred in the exercise of his powers as receiver, to be paid out of the property of the Trusts as a first charge, after having been approved by the Court. The orders now sought complement these previous orders insofar as they cover the periods during which Mr Rohrt was acting variously as the Companies' voluntary administrator and liquidator. It is necessary and appropriate to make such orders given the history of disputation in the administration of the Companies and Trusts.

59 Thirdly, it seems to me that the liquidator is alternatively entitled to his remuneration and costs pursuant to the principles in Re Universal Distributing Company Ltd (in liq).[24]

60 It is then necessary to consider the liquidator's remuneration application. Before doing so, I will briefly identify the applicable provisions and legal principles.

Remuneration in accordance with remuneration determinations

(1) An external administrator of a company is entitled to receive remuneration for necessary work properly performed by the external administrator in relation to the external administration, in accordance with the remuneration determinations (if any) for the external administrator (see section 60-10).

(1) A determination, specifying remuneration that an external administrator of a company (other than an external administrator in a members' voluntary winding up) is entitled to receive for necessary work properly performed by the external administrator in relation to the external administration, may be made:

(a) by resolution of the creditors; or

(b) if there is a committee of inspection and a determination is not made under paragraph (a) - by the committee of inspection; or

(c) if a determination is not made under paragraph (a) or (b) - by the Court.

Note: For determinations made by the Court, see also section 60-12 (matters to which the Court must have regard).

(3) A determination under this section may specify remuneration that the external administrator is entitled to receive in either or both of the following ways:

(a) by specifying an amount of remuneration;

(b) by specifying a method for working out an amount of remuneration.

63 Section 60-12 of the IPS provides that, in exercising its power to make a remuneration determination in accordance with s 60-10(1)(c), 'the Court must have regard to whether the remuneration is reasonable, taking into account any or all of the following matters':

(a) the extent to which the work by the external administrator was necessary and properly performed;

(b) the extent to which the work likely to be performed by the external administrator is likely to be necessary and properly performed;

(c) the period during which the work was, or is likely to be, performed by the external administrator;

(d) the quality of the work performed, or likely to be performed, by the external administrator;

(e) the complexity (or otherwise) of the work performed, or likely to be performed, by the external administrator;

(f) the extent (if any) to which the external administrator was, or is likely to be, required to deal with extraordinary issues;

(g) the extent (if any) to which the external administrator was, or is likely to be, required to accept a higher level of risk or responsibility than is usually the case;

(h) the value and nature of any property dealt with, or likely to be dealt with, by the external administrator;

(i) the number, attributes and conduct, or the likely number, attributes and conduct, of the creditors;

(j) if the remuneration is worked out wholly or partly on a time-cost basis - the time properly taken, or likely to be properly taken, by the external administrator in performing the work;

(k) whether the external administrator was, or is likely to be, required to deal with one or more controllers, or one or more managing controllers;

(l) if:

(i) a review has been carried out under Subdivision C of Division 90 (review by another registered liquidator) into a matter that relates to the external administration; and

(ii) the matter is, or includes, remuneration of the external administrator;

the contents of the report on the review that relate to that matter;

64 In Re Barokes Pty Ltd (in liq),[25] I identified the process and principles applicable to assessing a liquidator's claim for remuneration. I adopt what I said there and set out the following by way of summary.

65 The onus is on the liquidator to establish that the remuneration claimed is fair and reasonable.[26] If the liquidator establishes a prima facie case on the basis of the proffered material, which may include evidence inadmissible on a strict observance of the rules of evidence, the Court should then consider the validity of any objections.[27] In the absence of determination by members, creditors or a committee of inspection, the ultimate question for the Court in making a remuneration determination is whether the amount claimed by a liquidator is reasonable.[28] Further, a remuneration determination by the Court is not a 'rubber stamping' exercise.[29] The Court must independently consider the nature and extent of the remuneration claimed to make an assessment of its reasonableness, having regard to the work performed and the particular features of the external administration.[30] However, the Court is not required to undertake a line by line review of the billing record provided and can review the narrations 'in a broad way in order to satisfy itself that they support the other evidence led in respect of the claimed remuneration'.[31]

66 Because a receiver is not an 'external administrator' as defined by ss 5-5 and s 5-20 of the IPS, the process in s 60-10(1)(c) does not apply to the claim for remuneration made by Mr Rohrt in his capacity as receiver over the property of the Trusts. Instead, I am empowered to assess his remuneration as receiver pursuant to the August 2021 orders and r 39.06 of the Rules which states that the Court may provide for the remuneration of a receiver.

Operation of August 2021 orders in respect in remuneration

67 The August 2021 orders deal with the remuneration of Mr Rohrt in the following ways:

(a) the August 2021 orders were made without prejudice to:

(i) Mr Rohrt's rights to seek his remuneration and disbursements, including amounts approved by resolutions at reconvened creditors' meetings held on 22 September 2020;

(ii) Robert's rights with respect to the quantum of Mr Rohrt's remuneration (including his rights to object to or seek a review of any remuneration);

(para B of Other Matters);

(b) nothing in the August 2021 orders approves, fixes the quantum, or permits Mr Rohrt to draw any remuneration from the assets of the Companies or the Trusts (para C(iii) of Other Matters);

(c) Mr Rohrt seeking approval of his reasonable remuneration which shall be fixed by further order (para C(iii) of Other Matters);

(d) the liquidator, as receiver of the property of the Trusts, is entitled to reasonable remuneration and disbursements properly incurred in the performance of his duties and the exercise of his powers as receiver of the property of the Trusts, to be paid out of the property of the Trusts as a first charge, after having been approved by the Court (orders 3 and 9); and

(e) the amount of reasonable remuneration of the liquidator, as receiver of the property of the Trusts, may be fixed by further order (orders 5 and 11).

68 Although the regime in Pt 3 of the IPS does not strictly apply to Mr Rohrt's remuneration claimed as receiver of the assets of the Trusts, in assessing the reasonableness of his remuneration, I intend to have regard to the items in s 60-12 of the IPS as broad evaluative factors.

69 By the interlocutory process, the liquidator initially sought approval of his total remuneration in the amount of $464,064.01 (plus GST) for work undertaken in the external administration of the Companies. The liquidator has reviewed the remuneration claimed and considers it is reasonable and that the work undertaken has been necessary and properly performed.

70 The liquidator served his remuneration application on or about 13 December 2023. As already noted, it is not opposed by any of the defendants, Peter or the creditors of the Companies.

71 As a result of a number of adjustments made by the liquidator to the allocation of work, as between the Companies and during the periods of voluntary administration and liquidation, the remuneration claim made at the hearing on 24 April 2024 was as follows:

Voluntary administration period of 16 June 2020 to 22 September 2020

Liquidation period of 23 September 2020 to 29 August 2023

Voluntary administration period of 16 June 2020 to 22 September 2020

Liquidation period of 23 September 2020 to 29 August 2023

72 At a reconvened second meeting of creditors held on 22 September 2020, creditors passed resolutions that Mr Rohrt's remuneration as voluntary liquidator be approved for the period 16 June 2020 to 10 September 2020 in the sums of $59,207 (plus GST) for Martar and $67,414 (plus GST) for Quinmar ('previous remuneration determinations').

73 As is apparent, the liquidator initially sought the Court's approval of remuneration for a period already covered by the previous remuneration determinations. This was apparently done 'out of an abundance of caution' because of complaints by Robert that remuneration was excessive and because of the restraints imposed by the August 2021 orders concerning the drawing of remuneration.

74 However, as I indicated to the liquidator's counsel at the hearing, I am unconvinced the liquidator could proceed on this basis. I do not consider the Court has power under s 60-10(2)(c) of the IPS to separately approve remuneration already approved pursuant to s 60-10(1)(a) following a resolution of creditors.[32] By his supplementary submissions, the liquidator accepts that is so.

75 Accordingly, in his amended interlocutory process dated 26 April 2024, the liquidator excluded the remuneration amounts already approved by the Companies' creditors. Mr Rohrt now only seeks a remuneration determination with respect to his appointment as voluntary administrator, for the period 11 September 2020 to 22 September 2020. He has also sought to isolate the remuneration he is claiming for the period 6 August 2021 to 29 August 2023, in which he acted as both liquidator of the Companies and receiver over the assets of the Trusts.

76 The revised remuneration claim is for the total sum of $336,530.51 (plus GST). It is divided by time periods and the capacity in which Mr Rohrt was acting, as follows:

Remuneration as voluntary administrator for 11 September 2020 to 22 September 2020

Remuneration as liquidator for 23 September 2020 to 5 August 2021

Remuneration as liquidator and receiver of property of Martar Family Trust for 6 August 2021 to 29 August 2023

Remuneration as voluntary administrator for 11 September 2020 to 22 September 2020

Remuneration as liquidator for 23 September 2020 to 5 August 2021

Remuneration as liquidator and receiver of property of Tarquinio Family Trust for 6 August 2021 to 29 August 2023

Total remuneration Quinmar / Tarquinio Family Trust

77 There was discussion at the hearing about whether it was necessary for the liquidator to further distinguish between work undertaken as both liquidator of the Companies, and as receiver of the Trusts, for the period 6 August 2021 to 29 August 2023.

78 In 13 Coromandel Place Pty Ltd v CL Custodians Pty Ltd (in liq),[33] the applicant sought to have his remuneration and expenses as both receiver and provisional liquidator paid out of assets held on trust. In that case, Finkelstein J ultimately determined to make discrete orders for the remuneration of the applicant in his different capacities as receiver and provisional liquidator.[34] In doing so, his Honour held:

The position is a little more involved as regards work done and expenses incurred in what may be described as general liquidation matters. If that work is unrelated to the beneficiaries and their claims it is difficult to see how the cost could be charged against their assets. In the case of a company that has carried on the business of trustee it might be that much of the work involved in the liquidation is chargeable against trust assets if it can be shown that the liquidation is necessary for the proper administration of the trust. But it is unlikely that this will be so where the company did not act solely as trustee or at least did not act in that capacity to a significant extent. In that event, the liquidator will be required to estimate those of his costs that are attributable to the administration of trust property and only those costs will be charged against the trust assets.[35]

79 In Re AAA Financial Intelligence Ltd (in liq),[36] Brereton J (as his Honour then was) confirmed that:

Where the company is trustee of a trading trust and has no other activities, the liquidators are entitled to be paid their costs and expenses, whether for administering the trust assets or for "general liquidation work", out of the trust assets.[37]

80 I accept the liquidator's submission that, in the present case, there is no need to separately identify the work undertaken by him as liquidator of the Companies (attending to general liquidation matters), and work performed as receiver of the Trusts (dealing with their administration). That is because the Companies only ever acted as trustees of the respective Trusts and the work undertaken by the liquidator as receiver is, for all intents and purposes, the same as that undertaken by him as liquidator, and vice versa.

General rulings regarding remuneration application

81 In my view, the liquidator has established a prima facie entitlement to his claim for remuneration on the material relied upon. Set out below are a series of general rulings I have made in relation to the remuneration application. In making these rulings, I have had regard to the principles and statutory provisions referred to earlier, including the factors set out in s 60-12 of the IPS most relevant to the application and the external administrations of the Companies.

82 The liquidator seeks approval for his remuneration on a time-cost basis and has provided the Court with schedules recording the time spent by him and his staff on specific tasks performed during the relevant period. The Court considers the use of a time-based method for determining the remuneration to be appropriate in the circumstances and the narrations contained within the schedules to be meaningful. The work for each of the Companies has been allocated according to the following distinct categories: asset (14% of time spent in Martar and 6.7% of time spent in Quinmar); creditor (32% of time spent in Martar and 32.5% of time spent in Quinmar); investigation (30% of time spent in Martar and 38.2% of time spent in Quinmar); dividend (7% of time spent in Martar and 6.2% of time spent in Quinmar) and administration (17% of time spent in Martar and 16.4% of time spent in Quinmar).

83 The liquidator has also produced various tables in the remuneration report setting out, in summary form, each person who performed work, their role, and the total time billed by each person with the corresponding cost. On inspection, the schedules and summary tables reveal the liquidator has not only charged as 'Principal / Appointee', but also at lower charge out rates in the capacities of 'Manager 1', 'Manager 2', 'Supervisor', 'Senior 1' and 'Senior 2'. The initial material before the Court did not explain why this was the case. Following the hearing, the liquidator filed a further affidavit to explain the logic behind this approach.

84 Mr Rohrt says that, wherever possible, he allocates work to his staff by reference to their expertise, competency and level of seniority, so that charges for work are proportionate. However, it is not always possible to delegate work to staff members of appropriate seniority for reasons of urgency, lack of staff, or the complexity of the appointment and the task at hand. After departing from his previous firm Hamilton Murphy Advisory Pty Ltd, Mr Rohrt founded Kennedy Ryan Advisory as principal. However, he did not have any staff at the new firm during the period December 2022 to May 2023. Because the liquidator was understaffed and unable to delegate work, he undertook less complex work himself and deemed it appropriate to charge for that work at a lower rate commensurate with its complexity.

85 I accept the liquidator's explanation of the circumstances in which he charged his time at different rates according to the complexity of the task he was required to perform. However, I note that these circumstances should have been more fully explained earlier in the remuneration approval process.

Whether work was necessary and properly performed, quality of work performed (s 60-12(a) and s 60-12(d)) and applicable rates

86 I am satisfied the work undertaken by the liquidator during the relevant periods, including in his capacity as voluntary administrator and as receiver of the assets of the Trusts, was, with minor exception, both necessary and properly performed. The evidence also suggests the work has largely been undertaken efficiently, satisfactorily and competently.

87 The rates charged are within the range typically charged by insolvency practitioners and are fair and reasonable given the nature of the appointments, the existence of the Trusts, and the distinct features of the Companies and their liquidations. I note that the scale of fees applicable to Mr Rohrt's appointments as administrator, liquidator, and receiver over the Companies' assets, has apparently remained constant since his initial appointment as voluntary administrator to the Companies over the four year period.

Complexity of work performed (s 60-12(e))

88 The liquidator has been required to address a number of matters of moderate complexity. Those matters included making the receivership application and dealing with Robert's opposition to that application and his complaints about the liquidator's independence. In the particular case of Quinmar, complex tasks performed involved obtaining vacant possession of the Doncaster property, including issuing the disclaimer notice and resisting the disclaimer and VCAT proceedings. In addition, the liquidator's proposed adjudications of the excepted proofs has involved considerable work of some complexity. The excepted proofs report is a substantive document (over 30 pages long) that sets out the liquidator's analysis of the excepted proofs and the basis for the proposed adjudications.

89 The complexity of some of the tasks has necessitated an appropriate level of involvement by the liquidator and senior personnel within the liquidator's office. Generally speaking, it appears that more difficult tasks have been undertaken by people having regard to their level of experience and the less complex tasks have been delegated to more junior staff.

90 However, a perusal of the schedules and summary tables suggests there were some isolated instances where less complex tasks could have been delegated to others within the organisation at a lower charge out rate. For example, on 15 January 2021, Zack Haidarie as a Senior 1 in Martar (with a charge out rate of $350 per hour, exclusive of GST) and as a Senior 2 in Quinmar (with a rate of $320 per hour, exclusive of GST) spent one and a half hours in the external administration of each company printing creditor file notes, proofs of debt and supporting documents.

91 There are also some rare examples of work undertaken which appears to be slightly excessive in the circumstances. For example, even charging at lower charge out rates applicable to Manager 2 and Senior 1, on 18 February 2022, Mr Rohrt spent over three and a half hours in the liquidation of Martar reviewing lengthy correspondence from his lawyers concerning various claims made by Peter. Similarly, Mr Rohrt spent almost 5 hours attending at the Doncaster property on 12 December 2022 and 19 December 2022 (at a lesser charge out rate of $495 per hour, exclusive of GST as a Manager 1).

Application of rulings to remuneration claimed and treatment of expenses

92 Having regard to the foregoing matters, it is efficient and appropriate to apply a global discount of 1% in respect of the work undertaken in the external administration of each of the Companies and in respect of the Trusts (in the liquidator's capacity as receiver). This equates to reductions of $1,707.83 for Martar and $1,657.47 for Quinmar. The remuneration claim will therefore be allowed in the total sums (rounded up to the nearest dollar) of $169,076 (plus GST) for Martar and $164,090 (plus GST) for Quinmar. Although I am referring to the approved remuneration on a global basis, the form of order I will make will specify the relevant remuneration determined for each distinct period and capacity in which Mr Rohrt acted in respect of each of the Companies and Trusts.

93 The Court notes that expenses are claimed in the sum of $12,000, including some internal disbursements (i.e., document production) and external costs (i.e., legal costs). The expenses appear modest and appropriate in the circumstances.

94 Whilst s 60-10 of the IPS does not confer jurisdiction upon the Court to approve a liquidator's expenses and disbursements, I am prepared to make an order pursuant to s 90-15, or alternatively under the inherent jurisdiction of the Court, approving the expenses which are claimed as part of the remuneration application. However, in the likely event the liquidator is registered for GST, any GST component of those expenses will not be allowed because the liquidator would be entitled to claim input tax credits in any event.[38] The Court will also grant, to the extent necessary, Mr Rohrt leave under s 60-20(3)(b) of the IPS to derive a profit or advantage in respect of internal disbursements which have been claimed.

95 I will make orders on the terms set out in the Annexure to these reasons.

RICHARD TRYGVE ROHRT in his capacity as Liquidator of MARTAR PTY LTD (IN LIQUIDATION) (ACN 005 612 546) and QUINMAR PTY LTD

MARTAR PTY LTD (IN LIQUIDATION) (ACN 005 612 546) in its own right and as Trustee for the MARTAR FAMILY TRUST

QUINMAR PTY LTD (IN LIQUIDATION) (ACN 115 195 581) in its own right and as Trustee for the TARQUINIO FAMILY TRUST

DAVID JAMES HUGHES in his capacity as the Administrator of the will and estate of MARIO TARQUINIO

MARK MAIER in his capacity as the Administrator of MARIA TARQUINIO

1. Notwithstanding Order 10 of the Orders made by the Honourable Justice McMillan on 6 August 2021 ('August 2021 Orders'), the first plaintiff ('Liquidator'), pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations) being Schedule 2 to the Corporations Act 2001 (Cth) ('Act' and 'IPS'):

(a) as liquidator of Martar Pty Ltd ('Martar') be granted leave to admit or reject formal proofs of debt or claim lodged with him by:

(i) the second defendant dated 9 July 2020;

(ii) the second defendant dated 9 July 2020;

(iii) the first defendant dated 31 July 2020; and

(iv) the third defendant dated 30 July 2020; and

(b) as liquidator of Quinmar Pty Ltd ('Quinmar') be granted leave to admit or reject formal proofs of debt or claim lodged with him by:

(i) the second defendant dated 9 July 2020; and

(ii) the third defendant dated 30 July 2020,

on the basis set out in the report prepared by the Liquidator dated 20 October 2023.

1. Pursuant to s 90-15 of the IPS, the Liquidator would be justified and acting reasonably by:

(a) proceeding on the basis that Martar has a right of indemnity from the property of the Martar Family Trust ('MFT') in respect of the debts or claims admitted in the liquidation of Martar;

(b) satisfying the debts or claims admitted in the liquidation of Martar from the property of the MFT in accordance with Part 5.6 of the Act;

(c) proceeding on the basis that Quinmar has a right of indemnity from the property of the Tarquinio Family Trust ('TFT') in respect of the debts or claims admitted in the liquidation of Quinmar; and

(d) satisfying the debts or claims admitted in the liquidation of Quinmar from the property of the TFT in accordance with Part 5.6 of the Act.

1. Notwithstanding the notation at para C(ii) of Other Matters of the August 2021 Orders, the Liquidator has leave:

(a) to declare and pay dividends to creditors of Martar as otherwise permitted by Part 5.6 of the Act; and

(b) to declare and pay dividends to creditors of Quinmar as otherwise permitted by Part 5.6 of the Act.

1. Pursuant to s 60-10 of the IPS, the Liquidator's remuneration as administrator of Martar be determined in the amount of $9,304.52 plus GST for the period 11 September 2020 to 22 September 2020.
2. Pursuant to s 60-10 of the IPS, the Liquidator's remuneration as liquidator of Martar be determined in the amount of $85,301.37 plus GST for the period 23 September 2020 to 5 August 2021.
3. Pursuant to s 60-10 of the IPS and r 39.06 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Rules'), or alternatively the inherent jurisdiction of the Court, the Liquidator's remuneration as liquidator of Martar and receiver of the property of the MFT be fixed in the amount of $74,469.66 plus GST for the period 6 August 2021 to 29 August 2023.
4. Pursuant to s 60-10 of the IPS, the Liquidator's remuneration as administrator of Quinmar be determined in the amount of $8,862.98 plus GST for the period 11 September 2020 to 22 September 2020.
5. Pursuant to s 60-10 of the IPS, the Liquidator's remuneration as liquidator of Quinmar be determined in the amount of $80,000.91 plus GST for the period 23 September 2020 to 5 August 2021.
6. Pursuant to s 60-10 of the IPS, and r 39.06 of the Rules, or alternatively the inherent jurisdiction of the Court, the Liquidator's remuneration as liquidator of Quinmar and receiver of the property of the TFT be fixed in the amount of $75,225.77 plus GST for the period 6 August 2021 to 29 August 2023.
7. Pursuant to s 60-20(3)(b) of the IPS, that to the extent necessary, the Liquidator be granted leave to derive a profit or advantage in respect of 'administration expenses' in the sum of $12,000 (which sum is exclusive of GST) as described in paras 155 to 156 of the Liquidator's report dated 10 November 2023.

1. Pursuant to s 90-15 of the IPS, the Liquidator is entitled to be indemnified from the assets of TFT and MFT in respect of:

(a) the Liquidator's properly incurred expenses as administrator or liquidator of Martar and Quinmar between 16 June 2020 and 5 August 2021;

(b) the Liquidator's remuneration determined by creditors of Martar and Quinmar, in his capacity as administrator of Martar and Quinmar, on 22 September 2020;

(c) the Liquidator's remuneration determined by the Court, in his capacity as administrator and as liquidator of Martar and Quinmar, but not as receiver of the MFT and TFT, in accordance with Orders 4, 5, 7 and 8 of these Orders; and

(d) his remuneration and expenses (including legal costs) of and associated with this application.

1. The third defendant's costs of and incidental to the application be costs in the liquidation and fixed in the sum of $8,000 (inclusive of any GST).
2. The costs of the first and second defendants of and incidental to this application be reserved.
3. By 4:00pm on 7 May 2024, any defendant who wishes to seek an order that their costs be costs of the liquidation(s) is to file written submissions of two pages or less regarding their asserted entitlement to costs and the quantum of those costs.
4. By 4:00pm on 10 May 2024, the Liquidator is to file any written submissions, limited to two pages in response.

[1] Supreme Court of Victoria proceedings numbered: S CI 2016 4116 and S ECI 2018 00671.

[2] Supreme Court of Victoria proceeding S ECI 2020 03791.

[3] Following the hearing on 3 May 2024, the plaintiffs provided to the Court an updated creditor table to correct a number of arithmetic errors.

[4] Although this proof of debt claimed the amount of $20,750.60, the liquidator proposes to treat $15,000 as being a claim against Quinmar but which is the subject of a set-off under s 553C of the Act.

[5] Peter was not named as a defendant in the proceeding but was an 'interested person' as the sole member of Quinmar and ostensibly as a secondary beneficiary under the Martar Family Trust deed and Tarquinio Family Trust deed.

[6] See ss 90-15 and 90-20(1)(a) of the IPS which are extracted later in these reasons.

[7] Given the inherent jurisdiction of the Court is invoked, out of an abundance of caution, a referral order was obtained by Connock J on 2 May 2024 that pursuant to r 77.05 of the Rules, and, if required, also pursuant to r 16.1(3) of the Supreme Court (Corporations) Rules 2023 (Vic) the amended interlocutory process filed on 29 April 2024 be referred to Hetyey AsJ for hearing and determination.

[8] See Re Polat Enterprises Pty Ltd (in liq) [2020] VSC 485 [31] (Hetyey AsJ) and Re Barokes Pty Ltd (in liq) [2020] VSC 555 [31] (Hetyey AsJ) ('Re Barokes'). See also Michael Murray and Jason Harris, Keay's Insolvency: Personal and Corporate Law and Practice (Lawbook, 11th ed, 2022) [10.335].

[9] [2018] FCA 541 (Farrell J).

[11] [2002] FCA 90; (2002) 40 ACSR 433 (Goldberg J).

[12] Ibid 451, [65]. See also Re MF Global Australia Ltd (in liq) [2012] NSWSC 994 [7] (Black J).

[13] [2004] NSWSC 255; (2004) 48 ACSR 734 (Austin J).

[15] Re GMG Victoria Holdings Pty Ltd (In Liq) [2021] FCA 86 [24] (Greenwood J) ('GMG Victoria Holdings').

[16] For example, under s 554A(1)(b) of the Act, where a liquidator admits a debt or claim that does not bear a certain value, they may refer the question of value of the debt or claim to the Court.

[17] For example, where a liquidator is in a position of conflict because of the need to both submit and adjudicate upon debts claimed between different entities within a corporate group, the liquidator would be justified in seeking the Court's direction that the liquidator would be acting properly in admitting certain proofs of debt: Re Go Energy Group Ltd [2019] NSWSC 558 [21]-[22] (Black J); GMG Victoria Holdings [25]-[28]; and In the matter of Car Parking Solutions Pty Ltd (in liq) [2023] VSC 362, [91]-[92] (Delany J) ('Car Parking Solutions').

[18] See regs 5.6.54(2) and 5.6.55(1) of the Corporations Regulations 2001 (Cth), s 90-15 of the IPS.

[19] Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd [2011] FCA 677 [26], [28] (Gordon J) ('Caterpillar Financial'); Re Kitay; South West Kitchens (WA) Pty Ltd [2014] FCA 670 [20] (McKerracher J); Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (in liq) [2018] FCAFC 40; (2018) 260 FCR 310, 323 [44], [85]-[92] (Allsop CJ), [139], [142] (Siopis J) and [198] (Farrell J) ('Killarnee'); Re Cremin, Brimson Pty Ltd (in liq) [2019] FCA 1023; (2019) 136 ACSR 649, 655-6 [49]-[50] (Moshinsky J); Break Fast Investments Pty Ltd v Sclavenitis [2022] VSC 288, [51]-[52] (Riordan J).

[20] The Court's orders will contain clear notations in 'Other Matters' to reflect these observations accordingly.

[21] Killarnee,[37]-[41]. See also Trustee Act 1958 (Vic) s 36(2).

[22] Killarnee, 456-7 [89] (Allsop CJ); Re Cremin, Brimson Pty Ltd (in liq) [2019] FCA 1023; (2019) 136 ACSR 649, 655-6 [48]-[50] (Moshinsky J).

[23] See Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd [2011] FCA 677, [26] (Gordon J, as her Honour then was); Kitay, Re South West Kitchens (WA) Pty Ltd [2014] FCA 670, [13] (McKerracher J); Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth of Australia [2019] HCA 20; (2019) 268 CLR 524, [32], [34] (Kiefel CJ, Keane and Edelman JJ), [132] (Gordon J); Killarnee [142]; Re Golden Prosperity Pty Ltd (in liq) [2024] VSC 177 [16] (Gobbo AsJ).

[24] [1933] HCA 2; (1933) 48 CLR 171 (Dixon J).

[25] [2020] VSC 555 [32]-[33] (Hetyey AsJ).

[26] Re ACN 004 323 184 Pty Ltd v Spark [2002] VSC 353, [31] ('Spark') (Dodds-Streeton J, as her Honour then was), citing Venetian Nominees Pty Ltd v Conlan; Venetian Nominees Pty Ltd v Conlan; Johnson v Conlan (1998) 20 WAR 96.

[27] Ibid; Spark [31] cited in Re Tauro Capital Pty Ltd (in liq) [2024] VSC 69, [18] (Caporale JR).

[28] Re Barokes [33], citing Re Twenty-Seventh Android Pty Ltd [2019] VSC 563, [21] (Matthews JR, as her Honour then was) ('Twenty-Seventh Android').

[29] Re Graziers' Investment Company Limited (in Liquidation) and GIC Holdings Pty Ltd [2020] VSC 8, [28] (Hetyey JR, as his Honour then was) ('Re Graziers').

[31] Re Sakr Nominees Pty Limited [2017] NSWSC 668, [29] (Black J); Re Fearndale Holdings Pty Ltd (admin apptd) (recs & mgers apptd) [2020] NSWSC 901, [38] (Black J).

[32] See Re Hundy (liquidator), in the matter of Renewable Energy Traders Pty Ltd (in liq) [2019] FCA 1795, [111], [113] (Griffiths J) and Re Graziers' [2020] VSC 8 [43] (Hetyey JR), where amounts previously approved by members of the companies under s 60-12(a) of the IPS were excluded from a later remuneration application.

[33] [1999] FCA 144; (1999) 30 ACSR 377 (Finkelstein J).

[36] [2014] NSWSC 1004 (Brereton J).

[37] Ibid, [13] (citations omitted). Justice Brereton's statement of principle has subsequently been endorsed in a number of recent decisions: see Australian Securities and Investments Commission (ASIC) v Marco (No 9) [2021] FCA 1306; (2021) 399 ALR 735, [49] (McKerracher J ); Lawrence, in the matter of Ozifin Tech Pty Ltd (in liq) v AGM Markets Pty Ltd (in liq) [2022] FCA 1478, [194] (Beach J); and Car Parking Solutions [2023] VSC 362, [99] (Delany J).

[38] Re F. Basile & Associates Pty Ltd (in liq) [2016] VSC 690 [88]-[89] (Hetyey JR), applying Merringtons Pty Ltd v Luxottica Retail Pty Ltd & Anor [2006] VSC 525 [34], [41] (Wood M, as his Honour then was).