Plaintiffs v Defendants

1. The Redbar business is a family business which has been in operation since 1971. The business was started by Jack Barker and his son Colin Barker, together with William Reddrop Sr. Jack Barker's fifty-percent shareholding was eventually transferred to his other two sons, Alan and Lindsay, who each then held a 25% share.
2. In 2007, Colin Barker exited the Redbar business and his shareholding was transferred to Daryl and Wayne Barker in equal shares. In 2014, Lindsay Barker exited the business and his shareholding was transferred to Scott Dawson.
3. Alan Barker, was the last to exit the business. In about 2021, the interests Alan Barker and Belnora held in the Redbar business were purchased equally by Daryl Barker and Hunted Raine, and Wayne Barker and Kilalpanina. ASIC records confirm that Alan Barker is no longer a shareholder of either Redbar or Redihitch. The plaintiffs say those transfers were effective on 20 July 2021.
4. Despite his formal exit from the Redbar business, Alan Barker's involvement continued, including performing functions as the office manager of Redbar until about January 2022, and acting as the primary point of contact with the Redbar businesses external accountant until about 30 June 2022.
5. Between about 2018 and May 2025, Finnegan Partners was the external accountants for the Redbar business entities including the plaintiffs. From 2 May 2025 onwards the plaintiffs instructed accountant Mark Shewan of Shewan Cartwright Accountants. It appears Mr Shewan is also the personal accountant of Daryl Barker, Wayne Barker and Scott Dawson.
6. At some point prior to 2 December 2024, the working relationship between Daryl Barker, Wayne Barker and Scott Dawson on the one hand and Alan Barker on the other, broke down.
7. On 2 December 2024, meetings were held for each entity in the Redbar business at which it was unanimously resolved that the Redbar business should be informally wound up. The meetings were each attended by Daryl Barker, Wayne Barker, Scott Dawson and Andrew Reddrop in their capacity as directors (of either the company or a corporate trustee). Alan Barker attended as an observer.
8. The effect of the resolutions passed at these meetings was that:

(i) each of the entities would cease trading;

(ii) agents would be appointed to sell real estate, plant and equipment, and otherwise realise assets;

(iii) cash from the proceeds of the sale of assets would be used to discharge liabilities owed by the entities, whether in full or in part on a pari passu basis;

(iv) the balance of funds would be used to make final distributions to shareholders/unitholders; and

(v) each entity would be deregistered.

1. The present dispute centres around loan accounts recorded in the financial records of Redbar, Redihitch and Excavations for the financial year 30 June 2024.

(a) The Redbar accounts record a liability of $101,600 described as 'unsecured loan - Alan Barker'.

(b) The Redihitch accounts record a liability of $80,397 described as 'unsecured loan - Belnora Pty Ltd atf Alan Barker Family Trust'.

(c) The Excavations accounts record a liability of $8,265 described as 'unsecured loan - Belnora Pty Ltd atf Alan Barker Family Trust'.

1. On 30 April 2025, Alan Barker and Belnora, through their solicitor, wrote to each of Redbar, Redihitch and Excavations demanding payment of the loans recorded in their respective financial accounts. The demand was made in the context of the disposition of assets and distribution of surpluses in the Redbar business as resolved on 2 December 2024.
2. On 7 May 2025, Redbar, Redihitch and Excavations responded through their mutual solicitor, BlueRock Law ('7 May letter'). The 7 May letter said that the process of winding down the Redbar business was underway but far from complete. It noted that the property owned by the Redbar Property Trust had not been sold; payment for the sale of plant and equipment had been received but not yet properly accounted for; issues had been raised as to the proper allocation of sale proceeds between Excavations and Redbar; and litigation was on foot involving an employee claim against Excavations. The 7 May letter then said:

On our instructions, it is not reasonable or prudent for the Redbar Entities to meet your client's claims in full or in part at this time. Once the unanimously agreed process for winding down the entities has taken its course, payments will be made in accordance with the resolutions. Any recovery action that is commenced in the meantime could well trigger the unfortunate consequence for all involved of the appointment of a liquidator by each entity in the Redbar group. It should be self-evident that, if your clients have any entitlements to be received from the Redbar Entities, the appointment of a liquidator to each will severely diminish the Pari Passu return to all creditors of that class.

As a final point, we are also seeking instructions as to the substance of your clients' claims. We are awaiting further instructions on this and will provide a substantive response to you on this matter in due course, which may include a request for further documentation from each of your clients. Our clients reserve all of their rights.

1. On 21 May 2025, creditors' statutory demands were issued by Alan Barker and Belnora to Redbar, Redihitch and Excavations.
2. A response to the statutory demands was sent by letters dated 27 May 2025 ('27 May letters'): one to each of Redbar, Redihitch and Excavations. Each letter recited the history of the Redbar business and the terms upon which Colin and Lindsay exited the business in 2007 and 2014 respectively. They also describe the terms upon which Daryl and Wayne Barker said Alan Barker exited the Redbar business and what that meant for the treatment of the loans recorded in the financial accounts of the companies. The letters are in largely the same terms and, whilst lengthy, merit recitation in these reasons. I have extracted the letter sent on behalf of Redbar by way of example (citations omitted).

As you know, we act for Redbar Plant Hire.

We refer to the creditor's statutory demand issued by your office on 21 May 2025 on behalf of Alan Barker to Redbar Plant Hire (Statutory Demand) alleging that an amount of $101,600 is owed by it as a debt due and payable (Alleged Debt).

As a preliminary matter, the Statutory Demand describes the debt as monies owed as appearing in the financial accounts for Redbar Plant Hire for the year ended 30 June 2024 dated 21 January 2025. Those accounts are not attached to the Statutory Demand.

On the basis of the matters set out in this letter, Redbar Plant Hire rejects that the Alleged Debt is due to your client and seeks that your client withdraws the Statutory Demand by no later than 12.00pm on Thursday, 29 May 2025.

Background

We are instructed to provide the following by way of relevant background:

1. As you will know, our client is part of the corporate group known as "Redbar" which is a family enterprise that has carried on an excavation and demolition business for over 50 years.

2. The participants in the group hold equity in:

   1. Redbar Excavations Pty Ltd as trustee for Redbar Trading Trust (Redbar Excavations);

   2. Redbar Plant Hire;

   3. Redihitch (Australia) Pty Ltd as trustee for Redbar Property Trust (Redihitch);

   4. Garbek Pty Ltd as trustee for Redbar Investments Trust

      (Garbek); and

   5. Redbar Superannuation Fund.

3. The Redbar business was established in 1971 by Jack Barker (50% share), Colin Barker (25% share) and William Reddrop Sr (25% share).

4. Jack Barker eventually relinquished his 50% share to his sons, Lindsay Barker and Alan Barker, who each held a 25% share.

5. Until about 2007, the Redbar business was operated by Colin, William Reddrop Sr, Lindsay, and Alan (First-Generation Directors).

6. As you will know:

   1. Lindsay, Colin and Alan are brothers;
   2. Colin is Daryl Barker and Wayne Barker's father;
   3. Colin is Scott's former father-in-law; and
   4. William Reddrop Snr is Andrew Reddrop's father.

7. We are instructed that Alan was historically the person primarily involved in dealing with and instructing the group's accountants as and when required.

8. For some time, the Redbar business traded successfully and generated profit.

9. As set out below, from about 2007, as each of the First-Generation Directors approached retirement, agreements were formed between each of them with the next generation of directors, pursuant to which the various shareholdings and unitholdings in the Redbar entities were transferred.

10. These transfers took place via verbal, 'handshake' agreements and were not formally documented. Importantly, as is set out below, there was a clear pattern in the way that the liabilities of the Redbar entities to the First-Generation Directors (or their ownership entities) were negotiated and treated by the parties on exit.

Colin's exit

1. Colin Barker (including via his ownership entity Kilapanina Pty Ltd as trustee for Colin Barker Family Trust) gifted his 25% share in each of the following entities to Daryl and Wayne as follows:
   1. in 2003, a 12.5% share in Redihitch was gifted to each of Daryl Barker and Wayne Barker personally; and
   2. upon Colin's retirement in 2007, a 12.5% share in Redbar Excavations, Redbar Plant Hire, and Garbek was gifted to:

      1. Hunted Raine Pty Ltd as trustee for Daryl Barker Family Trust; and

      2. Kilalpanina Pty Ltd as trustee for Wayne Ian Barker Family Trust.

At the time of Colin's exit, Colin informed Daryl and Wayne that he wished to have no further entitlements to or involvement in the business. It was each of Daryl, Wayne and Colin's understanding that Colin's entire interest in Redbar (including by way of equity, retained profits, and shareholder loan accounts) was to be gifted to them. Colin, Daryl and Wayne are prepared to give evidence to this effect.

Lindsay's exit

1. In 2014, Lindsay Barker (via Yonvale Pty Ltd as trustee for Lindsay Barker Family Trust) (Yonvale) sold his interest in the various Redbar entities to Scott (via Nasram Pty Ltd as trustee for Scott Dawson Family Trust) (Nasram) as follows:

   1. on 13 February 2014, Yonvale sold its interest in Redihitch and Redbar Plant Hire to Nasram; and
   2. on 11 September 2014, Yonvale sold its interest in Garbek and Redbar Excavations to Nasram.

2. The terms of Lindsay's exit similarly included a disposition of all of his interest in the Redbar entities, including by way of equity, retained profits, or shareholder loan accounts.

3. When Scott discussed this transaction with his personal accountant, Mark Shewan of Shewan Cartwright Accountants, Scott explained that he was "taking over everything". In other words, any interest that Lindsay had across the group, is what Scott was acquiring. Mark Shewan advised that Scott should be, as part of the payment to Lindsay, taking over any and all interests of Lindsay in the group. Mr Shewan will give evidence if required and can remember using the specific phrase in his advice that Scott was taking over "_Lock, Stock and Barre_l"

4. In accordance with these terms, all entitlements (including balance sheet liabilities owed by the Redbar entities to Yonvale) were transferred to Scott's trust, Nasram. There were no further liabilities owing from the Redbar entities to Yonvale (nor to Lindsay). Consistent with Colin's exit, Lindsay was to have no ongoing involvement with the Redbar group.

Alan's exit

1. Given the nature and history of the business and the terms of Lindsay and Colin's exits, there was an understanding from those involved in the business that Daryl and Wayne would eventually acquire Alan's interest in Redbar, with Alan's exit being on the same terms.
2. Daryl and Wayne were also aware of the loans recorded in the financial statements of each Redbar entity but were repeatedly told by Alan that the loans were "fictitious" and for accounting purposes only. By way of example we are instructed that when a dividend was paid for 2019-2020 financial year, Daryl questioned Alan as to why the dividend was paid prior to the recorded loans. Alan told Daryl that the loans were for accounting purposes only. Daryl is prepared to give evidence to this effect if so required.
3. By around April 2021, Alan, Daryl and Wayne agreed on a sale price for Alan's interest in Redbar, being $525,000 (Purchase Price).
4. At this time, Alan and Daryl had a discussion at the Redbar office located at 94 Newlands Road, Reservoir. During this discussion Daryl, referring specifically to the loans, asked Alan: "if we pay you the agreed amount, is there any other money owing to you?" Alan responded by saying "no".
5. Having regard to the terms of Colin and Lindsay's exits and the family relationship, Daryl and Wayne took Alan at his word.
6. Scott Dawson was also present during the discussion referred to at paragraph 19 above. Scott will give evidence as to what he heard Alan say which will corroborate Daryl's evidence.
7. In reliance on the representations made to them at various times by Alan, Daryl and Wayne paid the Purchase Price to Alan:

a. on 16 April 2021, Wayne paid his portion, being $262,500; and

b. on 10 June 2021, Daryl paid his portion, being $262,500.

1. When Daryl and Wayne advised their accountant (Mark Shewan) of the transaction, they had informed Mark that they were doing "exactly what happened when Lindsay's transaction took place".

2. Alan continued in his role as office manager of Redbar until around January 2022 and continued to be paid at the rate of a director until this time.

3. Alan also continued to be the contact point with the external accountants, Finnegans, beyond this time, until around 30 June 2022, at which time the business introduced Xero software.

4. In March 2024, Scott, Daryl, and Wayne contacted Finnegans to ask why the balance sheets still showed that loans were owing to Alan. On 20 March 2024 Finnegans responded to this question by stating that:

"Alan's loan balance in the Property Trust was moved in the 2022 financial year from a Beneficiary Loan account to an outstanding loan, as he was no longer a Beneficiary (having sold his Units/Shares).

Please note that if it was always the intention for Alan's entitlements in the Trust to be split between Wayne and Darryl [sic] we will need to confirm with Alan and prepare necessary documentation."

A copy of this email is enclosed.

1. Finnegans, acting on Alan's instructions, changed the loan, but not in accordance with what the parties verbally agreed, as stated above. This highlights that no forensic weight can be placed on the financial statements and balance sheets.

2. Daryl and Wayne, by virtue of the history and family relationship, elected not to obtain independent legal advice as to why these loans remained on the balance sheets after they acquired Alan's interest. Instead, they relied upon Alan's express representations that the loans were fictitious, and that Alan was not entitled to recover them, as Daryl and Wayne had paid the Purchase Price and acquired Alan's interest.

Recent history

29. Alan has, tellingly, not made any demand whatsoever for repayment of the Alleged Debt, until your recent correspondence dated 30 April 2025.

1. As you may know the working relationship between Daryl, Wayne and Scott, on the one hand, and Andrew on the other, has broken down.

2. As a result, on 2 December 2024 there was a meeting of all Redbar entities, at which each entity unanimously resolved to conduct an informal winding up process, whereby:

   1. the entities would cease trading;
   2. agents would be appointed to sell real estate, plant and equipment, and otherwise realise assets;
   3. cash from the proceeds of this would be used to discharge liabilities owed by the entities, whether in full or on a pari passu basis;
   4. the balance of funds would be used to make final distributions to shareholders/unitholders; and
   5. each entity would be deregistered.

3. In attendance at the meeting was Daryl Barker, Wayne Barker, Scott Dawson, Andrew Reddrop, Alan Barker, Joy Reddrop, Michelle Borowski, and Harrison Lowe (of our office).

4. A copy of the minutes of this meeting is enclosed. As noted above, Alan was also present at the meeting. He was invited to attend on the basis that the records show he has retained an interest in Garbek.

5. We are instructed that Alan's continued interest in Garbek is a matter that is disputed by Daryl and Wayne. Notwithstanding that they understood Garbek to be a dormant entity, Alan's interest in Garbek ought to have been transferred to Daryl and Wayne upon Alan's exit. We refer to paragraph 22 above. You will see that the email from Finnegans of 20 March 2024 demonstrates that Alan did not instruct Finnegans to transfer his interest in Garbek.

Section 458H - Genuine Dispute

As you would be aware, the threshold to set aside a Statutory Demand based on a genuine dispute under s. 459H(1)(a) of the _Corporations Act 200_1 (Cth) (Corporations Act) is low, that being there is a serious question to be tried as to the existence of the sum of the debt and that the dispute is genuine and rational, not spurious, hypothetical, illusory or misconceived.

It is self-evident that there is a genuine dispute in relation to the existence of the Alleged Debt:

• the payment of the Purchase Price to Alan was in full and final consideration for the disposal of all of the entirety of his interest in Redbar, including by way of equity, retained profits, or alleged shareholder loan accounts; and

• at various times, including in April 2021, Alan made express representations to Daryl, which can be corroborated by Scott, that the loans were fictitious and did not represent any actual liability owed by Redbar to him. Again our clients are prepared to give evidence on these matters should they be required.

For these reasons the Court will find that a genuine dispute exists as to the existence of the Alleged Debt and the Statutory Demand will be set aside pursuant to s. 458H(1)(a) of the Corporations Act.

Solvency

As for the financial position of Redbar Plant Hire we note the following:

1. Redbar Plant Hire has approximately $1,178,971.56 cash in bank, substantially from the sale of plant and equipment;

2. It is owed a related party loan from Redbar Excavations in the amount of approximately $420,203;

3. It has used the proceeds from the sale of the plant and equipment to discharge all chattel mortgage liabilities; and

4. The remaining liabilities recorded in the draft financial statements of Redbar Plant Hire, upon which your client relies, are therefore estimated at $301,600.

Redbar Plant Hire clearly has sufficient assets to meet its liabilities (even for present purposes, accounting for the disputed Alleged Debt). It beggars belief that the Statutory Demand would be issued in these circumstances.

It is an abuse of process to use the statutory demand process to seek to recover a debt from a plainly solvent company. There is no doubt that our client would be able to resist any winding up application (should it failed to have complied with the Statutory Demand) by proving solvency. The Courts have emphasised that the statutory demand process is not to be used for the "coercive collecting of disputed debts from solvent companies".

Next Steps

Please confirm by no later than 12.00pm on Thursday, 29 May 2025 that the Statutory Demand is withdrawn.

If we do not receive such written confirmation our client will have no alternative but to urgently issue a Court application to set aside the Statutory Demand on the grounds set out above.

This will force our client to incur substantial legal costs, including preparing affidavit material and briefing counsel. Should this be necessary, we will rely on this letter and seek indemnity costs from your client.

We otherwise expressly reserve our client's rights.

1. On 30 May 2025 the Alan Barker and Belnora responded as follows:

Dear Mr Marsh,

Monies owing to Alan Barker by Redbar Plant Hire Pty Ltd

Monies owing to Belnora Pty Ltd by Redihitch (Australia) Pty Ltd as trustee for Redbar Property Trust

Monies owing to Belnora Pty Ltd by Redbar Excavations Pty Ltd as trustee for Redbar Trading Trust

We refer to your letters to us dated 27 May 2025 concerning our client's statutory demands issued to the above Redbar Entities you act for.

Our clients dispute the accounts of the discussions about the sale of our clients' shares and interests in the Redbar Entities set out in your letter. The sale of our clients' interests did not include or subsume the loans owing to our clients by each entity.

The terms of "Colin's Exit" and "Lindsay's Exit" are entirely irrelevant to proving or disproving the terms of the sales of our clients' shares and interests. However, we note that each of these transactions is said to have included the "gifting" of those sellers' shareholder loan accounts, which is at odds with your clients' allegations that Mr Barker called the loans "fictitious" or for "accounting purposes only".

We have been instructed to issue legal proceedings for the recovery of our clients' loans. Kindly let us know whether you have instructions to accept service of suit on behalf of the debtor entities set out above by return email transmission at your earliest convenience.

We note that in prior correspondence to us notably on 7 May 2025 and 27 May 2025, you have variously stated the Redbar Entities are in the process of "an informal winding down", "winding up", selling their assets and discharge liabilities, with the objective of making a distribution of the remaining net proceeds to shareholders and beneficiaries.

Our clients are understandably concerned that this process will occur during the time it will take to litigate our clients' loan claims, and that each debtor company's assets will be dissipated prior to our clients' claims being heard and determined.

In the circumstances, our client seeks written undertakings from your clients that no assets will be distributed to the shareholders or beneficiaries of the above debtor entities until such time as our clients' claims are resolved, either by mutual agreement or Court order.

Please note that if adequate undertakings are not received by close of business this coming Wednesday, 4 June 2025, then our clients will have no choice but to seek an injunction to prevent the distribution of assets until the determination of our clients' claims.

If this becomes necessary, then our clients will rely on the contents of this letter in seeking orders against your client that our client's costs be calculated and paid on an indemnity basis.

We trust that such an application will not be necessary and look forward to hearing from you.

1. On 4 June 2025, Redbar foreshadowed a court application for interpleader relief. A similar letter would be sent in respect of Redihitch on 6 June 2025, in which it was also noted:

It is also inappropriate to involve Redihitch unnecessarily in proceedings which are, on any view, a dispute between Mr Alan Barker, on the one hand and Daryl and Wayne Barker, on the other, as to the same alleged debt owed by Redihitch.

The Interpleader process as set out in the Redbar Plant Hire letter [of 4 June 2025] is the appropriate way to allow a Court to determine which party has the best claim to the amount of $80,397. The Company will be convening a directors' meeting next week to confirm instructions to commence the Interpleader process.

1. On 5 June 2025, at a meeting of the directors of Redbar, a resolution was passed to instruct Blue Rock Law to issue an originating motion on behalf of Redbar, seeking orders and relief pursuant to r 12.02 of the Rules, as an interpleader summons, in relation to the debt of $101,600 allegedly owed to Alan Barker or, in the alternative, Kilalpanina as trustee for Wayne Ian Barker Family Trust and Hunted Raine Pty Ltd as trustee for Daryl Barker Family Trust. Scott Dawson deposes that:

At that meeting, I heard Daryl say to those in the meeting words to the effect that he and Wayne considered the dispute regarding the disputed sum to be one concerning Alan on the one hand and Hunted Raine and Kilalpanina on the other.

1. On 8 July 2025, the plaintiffs each filed an originating process seeking interpleader relief.
2. On 29 July 2025, the directors of Redihitch passed a resolution ratifying the decision to commence the application for interpleader relief as filed on 8 July 2025.
3. The Redbar resolution noted the following:

[...]

1. On 21 May 2024, the Company was served with creditors' statutory demands by Alan Barker and by William George Reddrop. From this time the Company has been instructing Blue Rock Law to advise and respond to these demands. The directors wish to ratify the appointment of Blue Rock Law.

2. As a result of a letter from Blue Rock Law raising a genuine dispute to the Alan Barker Claim, Mr Barker withdrew the statutory demand.

3. By letter dated 30 May 2025, Mr Barker's lawyers advised of instructions to issue legal proceedings and also injunctive proceedings to frustrate the resolutions of 2 December 2024.

4. It was noted that the Alan Barker claim has been disputed by Daryl and Wayne Barker on the basis that the loan is owed by the Company to them as from the date they agreed to purchase all of Mr Alan Barker's interests in the Company (and related entities in the Redbar Group).

5. In order to protect the Company from unnecessary litigation, the directors wish to resolve to admit that a liability of $101,600 is owed, and to issue an Originating Motion seeking orders and relief pursuant to Reg 12.02 of the Supreme Court rules as an Interpleader summons seeking orders to pay the $101,600 liability into Court as a stakeholder and to be further excused from proceedings.

[...]

1. The Redihitch resolution also recorded the following:
   1. On 21 May 2025, the Company was served with a creditors' statutory demand by Belnora Pty Ltd as trustee for Alan Barker Family Trust.
   2. The demand relates to an amount of $80,397, being an amount described as 'Unsecured Loan - Belnora Pty Ltd ATF Alan Barker Family Trust' in the statement of financial position forming part of the financial accounts for Redbar Property Trust for the income year ended 30 June 2024.
   3. The Company has been instructing BlueRock Law to advise and respond to this demand. As a result of a letter from BlueRock Law raising a genuine dispute to the Belnora claim, Belnora withdrew the statutory demand.
   4. By letter dated 30 May 2025, Belnora's lawyers advised of instructions to issue legal proceedings in respect of the alleged debt and also to issue injunctive proceedings to frustrate resolutions by the Company on 2 December 2024, relating to the disposition of assets of the Redbar Property Trust.
   5. It was noted that the Belnora claim has been disputed by Daryl Barker and Wayne Barker, on the basis that the loan the subject of the demand is owed by the Company to their respective entities, being Hunted Raine Pty Ltd as trustee for Daryl Barker Family Trust, and Kilapanina Pty Ltd as trustee for Wayne Ian Barker Family Trust, as from the date those entities agreed to purchase all of Belnora's interests in the Company (and related entities in the Redbar Group).
   6. In order to protect the Company from unnecessary litigation, the directors of the Company instructed BlueRock Law to admit that a liability of $80,397 is owed, and to issue an Originating Motion seeking orders and relief pursuant to Reg. 12.02 of the Supreme Court rules as an Interpleader summons seeking orders to pay the $80,397 liability into Court as a stakeholder and to be further excused from proceedings.
2. Insofar as Excavations was concerned, the position was slightly different. On 4 June, Excavations followed up its 27 May letter with the following ('4 June letter'):

As you know, we act for Redbar Excavations.

On 3 June 2025, the directors of Redbar Excavations met to consider various issues, including with respect to demands made by your clients.

Furthermore, given all assets have been realised and the entity no longer trades, an assessment of solvency was made.

After due consideration of this, the directors resolved:

• to make a pari passu (equal share) payment to all admitted creditors of the company, in the amount of approximately $0.51 per $1.00 owed; and

• following the pari passu payments described above, to appoint Richard Lawrence of Mackay Goodwin as administrator pursuant to section 436(A)(1)(a) and (b) of the Corporations Act 2001.

We refer now to your previous correspondence, including:

• the creditor's statutory demand issued by your office on 21 May 2025 on behalf of Carally (Carally Demand); and

• your letter to us dated 30 May 2025 regarding (inter alia) a loan allegedly owed by our client to Belnora (Belnora Demand).

Carally Demand

We are instructed that there is no dispute as to the Carally Demand. For the avoidance of doubt:

• Carally is an admitted creditor of Redbar Excavations;

• the amount owing to Carally is $46,679.99; and

• the directors have resolved to make pari passu payments to admitted creditors of the company in the amount of $0.51 per $1.00.

In accordance with the above, Redbar Excavations has made a pari passu payment to Carally in the amount of $24,068.20. This payment was made to the following account (as per the details provided in your letter dated 30 April 2025):

...

Belnora Demand

The position of the directors is that the company is not liable to Belnora for repayment of the Belnora Demand. Our client refers to and repeats the facts set out in our letter to you of 27 May 2025.

On the instructions of the directors of the company, this liability was assigned in equal parts to Hunted Raine Pty Ltd as trustee for Daryl Barker Family Trust and Kilalpanina Pty Ltd as trustee for Wayne Ian Barker Family Trust, in accordance with the terms of those entities' purchase of Belnora's interest in the Redbar group.

1. Excavations was duly placed into voluntary administration on 4 June 2025, and Richard Lawrence of Mackay Goodwin was appointed as administrator.
2. In its report to creditors dated 2 July 2025, the voluntary administrators of Excavations noted this about Belnora's demand to Excavations.

Related Parties

I have identified the following amounts owed by the Company to related parties:

Belnora Pty Ltd as Trustee for Alan Barker Family Trust

Carally Pty Ltd as Trustee for Reddrop Family Trust

Garbek Pty Ltd as Trustee for Redbar Investment Trust

Nasram Pty Ltd as Trustee for Scott Dawson Family Trust

Redihitch (Australia) Pty Ltd as Trustee for Redbar Property Trust

I note that I have not undertaken a formal adjudication of any creditor claims and the contents of this report does not constitute a formal adjudication of any creditor claims against the Company.

Belnora Pty Ltd

I advise that on or around 21 May 2025, Belnora Pty Ltd issued a Statutory Demand to the Company for the amount of $8,265.00, representing the balance of an outstanding loan owed by the Company.

I note that I have received a formal proof of debt in relation to same.

The Company disputes this amount, and I am advised that the Company alleges that Belnora Pty Ltd assigned all outstanding loans, including the $8,265.00, at the time Alan Barker transferred his shareholding in the Company to other related entities.

The Statutory demand has been subsequently withdrawn; however, I note that there is a dispute as to whether the terms of the transfer by Belnora Pty Ltd included the assignment of the loan account to the entities that purchased its interest in the Company.

Further investigations will be required by the Liquidator should the Company be wound up.

1. As at 31 July 2025, Redbar had cash at hand of $1,222,772.91 and was ready to transfer the disputed sum into court or give security of an equivalent value to the satisfaction of the Court.
2. As at 4 July 2025, Redihitch had cash at hand on behalf of the Redbar Property Trust of $93,149.06 and was ready to transfer the disputed sum into court or give security of equivalent value to the satisfaction of the Court.
3. To date, neither plaintiff has been sued in respect of the disputed sums.

1. On this application, the plaintiffs seek interpleader relief in respect of claims made by Alan Barker and Belnora for loans recorded in their favour in the accounts of the plaintiffs. Alan Barker and Belnora are named defendants to the applications. Also joined as defendants are Hunted Raine and Kilalpanina. BlueRock Law, solicitors represent the plaintiffs, Hunted Raine and Kilalpanina.
2. Scott Dawson deposes that the plaintiffs have addressed the summonses for hearing of the interpleader application to both the named defendants and to Daryl Barker and Wayne Barker personally so those individuals can personally claim an interest in the disputed sums instead of Hunted Raine and Kilalpanina. No such application has been made by Daryl and Wayne Barker personally.
3. Scott Dawson also deposes that the plaintiffs expect to be sued in respect of competing claims against them by Alan Barker and Belnora on the one hand and Hunted Raine and Kilalpanina on the other. Both plaintiffs say that it is Hunted Raine and Kilalpanina rather than Daryl and Wayne personally which appear to make the claims in respect of the disputed sum because:

(a) Hunted Raine and Kilalpanina are shareholders of the plaintiff and unitholders of the Redbar Property Trust;

(b) Daryl and Wayne paid money to Alan in consideration for his rights and entitlements as a shareholder and unitholder; and

(c) it seems the shares and units formerly held by Alan and Belnora were to be transferred to Hunted Raine and Kilalpanina following Daryl and Wayne's payments to Alan.

1. At [36] of each of his affidavits Scott Dawson says:

[In respect of Redihitch] ... The plaintiff's decision to join Hunted Raine and Kilalpanina as defendants to this proceeding is based on the plaintiff's position that, as a matter of substance, the rights and entitlements in respect of the Trust, held by Alan through his own family trust, were ultimately to be transferred to Hunted Raine and Kilalpanina as unitholders.

....

[In respect of Redbar] .... The plaintiff's decision to join Hunted Raine and Kilalpanina as defendants to this proceeding is based on the plaintiff's position that, as a matter of substance, the rights and entitlements held by Alan as shareholder in the plaintiff were to be transferred to Hunted Raine and Kilalpanina as shareholders.

1. In Australian Customer Target Information Company Pty Ltd v Cabool Holdings Pty Ltd & Anor[1] Campbell J explained the foundations of the interpleader procedure as an equitable remedy:
   1. The origins of the law of interpleader were in equity's concern for preventing multiplicity of proceedings; where there was a situation where a person who made no claim to be entitled to a particular item of property was likely to be sued by two different people concerning that properly, the Equity Court would sometimes permit the property in dispute to be placed in the custody of the Court, and would allow the person who claimed no interest in that property to be freed of the litigation.
   2. As the name suggests, part of the relief which was granted by the Court was requiring those parties who made claims to the property in dispute to plead amongst each other. Requiring them to 'inter-plead' in that fashion was itself part of the remedy, and was the means whereby the person who made no claim to the property could be freed from all the claims against him or her.
2. Order 12 of the Rules relevantly provides the following: [2]

Order 12 [rr 12.01 - 12.12] Interpleader

12.01 Definitions

In this order, unless the context of subject matter otherwise requires -

claimant means a person making a claim to or in respect of a property in dispute;

...

stakeholder means an applicant under Rule 12.02;

...

12.02 Stakeholder's interpleader

(1) Where -

(a) a person is under a liability (otherwise than as a sheriff) in respect of a debt or other personal property; and

(b) the person is sued or expects to be sued in any court for or in respect of the debt or property by two or more persons making adverse claims to or in respect of the debt or property -

the Court may, on application by that person, grant relief by way of interpleader.

...

12.08 Powers of Court

On application for relief by way of interpleader the Court may -

(a) where a proceeding in the Court is pending in which the applicant is sued for or in respect of any of the property in dispute -

(i) order that any claimant be added as a defendant in that proceeding in addition to or in substitution for the applicant; or

(ii) order that the proceeding be stayed or dismissed;

(b) order that a question between the claimants be stated and tried and direct which of the claimants is to be plaintiff and which defendant;

(c) where proceedings in any other court are pending in which the applicant is sued for or in respect of any of the property in dispute, restrain the further continuance of those proceedings;

(d) order the applicant -

(i) to pay or transfer any of the property in dispute into court; or

(ii) otherwise to dispose of any of the property;

(e) where a claimant claims to be entitled by way of security for debt to any of the property in dispute, make orders for the sale of any of the property and for the application of the proceedings of sale;

(f) summarily determine any question of fact or law arising on the application; and

(g) make such order or give such judgment it thinks fit.

...

12.10 Neutrality of applicant

(1) Where a stakeholder applies for relief by way of interpleader, the Court may dismiss the application or give judgment against the applicant unless the Court is satisfied that the applicant -

(a) claims no interest in the property in dispute except for charges or costs; and

(b) does not collude with any claimant.

(3) Nothing in this Rule affects the power of the Court in other cases to dismiss the application or to give judgment against the applicant.

1. Similar rules in respect of interpleader relief are found in r 43.2(1) of the Uniform Civil Procedure Rules 2005 (NSW) and rr 18.01 and 18.05 of the Federal Court Rules 2011 (Cth). Whilst the precise language of these rules can differ, the legal principles that underpin them are common and can be summarised as follows.
2. The onus is on the applicant to demonstrate it is a stakeholder of disputed property who is being sued or expects to be sued by two or more claimants.[3] Where proceedings have not been issued, there must be a real foundation for an expectation of a rival claim.[4]
3. Examples of where a claim has been considered not valid for the purposes of granting interpleader relief include: where the claim is '...an absurd one or one without substance, in the sense that it had no possible prospect of success';[5] or where one claim is valid but another is not;[6] or where the relevant stakeholder had 'no defence to the action' brought by a particular claimant.[7]
4. A 'bald assertion' of an entitlement will not be sufficient. The competing claimants must each articulate a '...cogent or arguable basis for the existence of a legal claim'.[8]
5. For the purposes of Order 12 of the Rules, the Court may grant interpleader relief where the applicant is under a liability in respect of a debt or other personal property, has been sued or expects to be sued in any court in respect of the debt or other personal property by two or more persons making adverse claims, claims no interest in the debt or personal property other than for charges or costs, and is not in collusion with any claimant.
6. In Toll Holdings Ltd v Stewart,[9] Rares J set out the legal principles as to collusion at [82] - [84].

As the hearing to r 18.05 connotes, the rule is concerned to ensure that the stakeholder is neutral. The requirement in r 18.05(b) that the stakeholder has not colluded derives from the equitable remedy of interpleader as explained in Daniell: The Practice of the High Court Chancery (1867) Vol 2 at 1419 and Story's Equity Jurisprudence (1884) (1st English ed: ed WE Grisby) at s809 p 544, s816-s817, pp 547-550; (1920) (3rd English ed) Ch 8. In Tenterden's Law of Merchant Ships and Seamen (11th ed; 1867) ed by William Shee at 440-441, there is a discussion of interpleader in cases of stoppage in transitu.

A person seeking to interplead must be in a real position of impartiality between the parties: Murietta v The South American Company Ltd (1893) 62 LJKB 396 at 397 per Wills J, 398 per Charles J. There Charles J said that "collusion" in the sense of interpleader processes does not necessarily entail anything morally wrong. Their Lordships said that collusion involved playing "the same game as one of the parties". Similarly, in Smith v Nixon (1885) 7 ALT 74 at 384, Higinbotham J emphasised that the stakeholder seeking to interplead must have maintained a strictly neutral position between the parties.

1. In Smith v Nixon[10] the Court said that:

... the applicant [for interpleader relief] must stand in and have maintained a strictly neutral position between the two rival claimants; that he must not have identified himself with the interests of either party; that he must not have assisted or be assisting the one side against the other; that he must not favour one and work against the other; and that he must not have brought himself into the position which he occupies by his own voluntary act, or at the request of one of the parties, or by his officious or unnecessary intermeddling.

1. For convenience, for the balance of these reasons I will refer to Redbar and Redihitch as "the plaintiffs". I will refer to Alan Barker and Belnora as the "Alan Barker Claimants" and Hunted Raine and Kilalpanina as the "Daryl and Wayne Barker Claimants".

1. The submissions made in respect of each plaintiff to each proceeding are the same, save for the identity of the relevant defendants and the money sought to be paid into Court.
2. The plaintiffs accept they are each under a liability in respect of a debt, being the liability expressed in their respective financial accounts but say that they do not claim that liability is owed either to the Alan Barker Claimants or the Daryl and Wayne Barker Claimants.
3. The plaintiffs also submit they expect to be sued in respect of 'rival claims' over the liability recorded in the financial accounts. Their expectation lies in the fact that each plaintiff has been served with a statutory demand by the Alan Barker Claimants which the plaintiffs say they now appreciate are disputed sums by reason of the Daryl and Wayne Barker Claimants' claims.
4. The plaintiffs contend that the rival claims go beyond mere assertions and would be capable of founding a cause in action against them either as debts owed to the:

(a) Alan Barker Claimants by reason of the debts recorded in the financial accounts; and

(b) Daryl and Wayne Barker Claimants, either by reason of an amendment to the accounts to reflect some assignment of those rights when Alan Barker and Belnora's shareholdings were purchased, or as monies held on trust for pending distribution during the informal winding up.

1. The plaintiffs also say they would be capable of defending the claims on the basis that 'for example in respect of a claim by Alan and Belnora, the money was not a debt payable to those persons because it was instead payable to either or both of Hunted Raine and Kilalpanina.'[11]
2. The plaintiffs contend there is no evidence to suggest collusion between either plaintiff or the Daryl and Wayne Barker Claimants in either proceeding.
3. The plaintiffs say they are not siding with any one claimant or otherwise advocating for a particular outcome. They deny that either plaintiff is assisting or has assisted any of the claimants in a bid against the other. Rather, they say they have been met with competing claims in the context of an attempt to distribute funds to the appropriate persons in an informal winding up process and in respect of matters in which they have no interest.
4. The plaintiffs reject the suggestion that the articulation of the Daryl and Wayne Barker Claimants' claims in the 27 May letters suggests or establishes collusion with those claimants, rather the plaintiffs submit the content of the letters was sent for the objective purpose of demonstrating a genuine dispute in response to the statutory demands.
5. Whilst the plaintiffs acknowledge there is a degree of connection between 'some of the claimants' they say that there is 'no identity between those claimants and the directors [of the plaintiffs]'. Whilst Daryl and Wayne Barker are directors on the plaintiff and involved in passing the resolutions to commence these applications for interpleader relief, the plaintiffs say that at the time the resolutions were passed each director was simply acting in his capacity as director and fulfilling those duties appropriately. In effect, the plaintiffs say that whilst that decision to apply for interpleader relief was voluntary, the position the plaintiffs find themselves in, is not.

1. The Alan Barker Claimants object to interpleader relief being granted on the basis that first, the plaintiffs have not maintained strict neutrality and secondly, there is no evidence that the plaintiffs are being sued or expect to be sued in respect of disputed amounts by two or more persons.
2. On the question of strict neutrality, the Alan Barker Claimants submit that the circumstances in which the dispute has arisen are incompatible with the submission that the plaintiffs are neutral as between the claimants.
3. First, they rely on the fact that the Daryl and Wayne Barker Claimants include family trusts controlled by Daryl Barker and Wayne Barker, who are also two of the directors of the plaintiffs.
4. Secondly, the Alan Barker Claimants say the effect of the 27 May letters was that the plaintiffs adopted the Daryl and Wayne Barker Claimants' position in opposition to the statutory demand. To that end, the Alan Barker Claimants say the letters go beyond merely describing the claims of the Daryl and Wayne Barker Claimants. Rather, the letters are written in 'tendentious terms' favouring the position of the Daryl and Wayne Barker Claimants and rejecting the claims advanced by the Alan Barker Claimants. They say that because:

(a) despite the books and records of the plaintiffs recording the existence of loans in Alan Barker's favour, the plaintiffs contended for terms of Alan Barker's exit from the Redbar business that had the effect of transferring the loans; and

(b) the plaintiffs explained why the financial statements still reflected loans owed to Alan by reference to discussions between the three individuals including alleged representations made by Alan Barker to Daryl and Wayne Barker that the loans were 'fictitious' and by Alan Barker to Daryl Barker with Scott Dawson that Alan would no longer have an entitlement to his loan when his interests were sold.

1. Thirdly, in the letter written on 4 June 2025 on behalf of Excavations, that entity, through its common directorship, aligned itself with Daryl Barker and Wayne Barker's position - a position that was communicated to the voluntary administrator of Excavations. The Alan Barker Claimants say the directors of Excavations are the same directors of the plaintiffs and, to the extent that the position taken in respect of Excavations is partisan it also reflects the plaintiffs' position and is tantamount to evidence that the plaintiffs have 'sided' with the Daryl and Wayne Barker Claimants.
2. Fourthly, the proper course would have been for the plaintiffs to pay the Alan Barker Claimants the sums recorded in the financial accounts as owed, so that any right the Daryl and Wayne Barker Claimants may have would lie against the Alan Barker Claimants, not the plaintiffs.
3. Fifthly, the plaintiffs were not parties to any oral agreements as to the treatment of the accounts as now contended and therefore, by adopting Daryl Barker and Wayne Barker's positions, have brought themselves into the current position by its own voluntary acts, in that:

(a) Daryl Barker and Wayne Barker voted in favour of the resolutions to bring the interpleader proceedings; and

(b) BlueRock Law acts for the plaintiffs on the instructions of Daryl Barker, Wayne Barker and Scott Dawson as well as for Hunted Raine and Kilalpanina.

1. On the question of whether there is a real expectation of being sued by two or more persons, the Alan Barker Claimants submit that there is no evidence that either of the plaintiffs have a real expectation of being sued by the Daryl and Wayne Barker Claimants in respect of the disputed amounts. That is, the evidence does not show that Hunted Raine or Kilalpanina ever made a demand on the plaintiffs for the disputed sum or threatened legal proceedings.
2. Furthermore, the Alan Barker Claimants submit that the claims raised by the Daryl and Wayne Barker Claimants are properly construed as claims against Alan Barker in respect of any oral agreement or representations made, on the basis that the Alan Barker Claimants failed to effect an assignment of the loan accounts. To that end, the Alan Barker Claimants say no right of action lies against the plaintiffs for the representations the Daryl and Wayne Barker Claimants allege were made.

1. For the purposes of r 12.02(1)(a) of the Rules, it is not in issue that the plaintiffs are each 'under a liability in respect of a debt or other personal property' namely the loans recorded in the financial accounts. Likewise, for the purposes of r 12.10(1)(a) of the Rules, it is common ground the plaintiffs claim no interest in the debt in dispute except for charges or costs.
2. The two areas of contention on this application are whether the plaintiffs can expect to be sued by both the Alan Barker Claimants and the Daryl and Wayne Barker Claimants and whether relief ought not be granted because the plaintiffs have colluded with the Daryl and Wayne Barker Claimants in the sense that the plaintiffs lack neutrality.

1. To make a finding pursuant to r 12.02(1)(b) of the Rules that the plaintiffs expect to be sued in any court for or in respect of the debt by two or more persons making adverse claims, there must be a cogent and arguable basis for each of the rival claims and both claimants must be expected to sue (as opposed to just one of the claimants).
2. I am satisfied, based on the face of the entries in the financial accounts of the plaintiffs, that the Alan Barker Claimants have an arguable basis for their claims.
3. I am equally satisfied that the Daryl and Wayne Barker Claimants have an arguable basis for their claims. Daryl and Wayne Barker maintain that the terms of the sale of Alan and Belnora's interests in the Redbar business included the assignment of their respective loans to the Daryl and Wayne Barker Claimants. Those claims are said to be supported by reference to the terms upon which Colin Barker and Lindsay Barker exited the business, as well as the evidence of Scott Dawson.
4. Whilst I accept that Alan Barker denies the claims, the fact the parties seem to accept there is a genuine dispute between the two sets of claimants - a position reasonably taken by both claimants in respect of the statutory demands issued in May 2025 - suggests there is at least an arguable basis for the claims of the Daryl and Wayne Barker Claimants.
5. That is not to say I have formed a view of the merits of those claims or which claim is preferred or more likely to succeed - that is not necessary for the purposes of r 12.02(1)(b) of the Rules. It is sufficient that I am satisfied the claims asserted are cogent and arguable, which I am.
6. Rule 12.02(1)(b) of the Rules also requires the defendant to have an expectation of being sued in a court by two or more persons.
7. The plaintiffs submit that the real foundation for the expectation of a suit by way of rival claims is found in both the service of statutory demands by the Alan Barker Claimants and the claims of the Daryl and Wayne Barker Claimants as articulated in the 27 May letters.
8. More particularly, the plaintiffs say that each claim would sustain a cause of action against the plaintiffs because the Alan Barker Claimants could sue for recovery of debts owed based on the financial accounts and the Daryl and Wayne Barker Claimants could seek mandatory injunctive relief against the plaintiffs to amend the accounts on the basis that the benefit of those loans is held on trust for the Daryl and Wayne Barker Claimants.
9. Whilst the plaintiffs may be right as to the sustainability of the causes of action available to the respective claimants, that does not necessarily equate to whether or not both sets of claimants are expected to sue. Rule 12.02(1)(b) requires there to be an expectation of being sued in the sense that there is a likelihood of the plaintiffs being sued, rather than merely the existence of an arguable claim.
10. The evidence is clear that, if the plaintiffs do not pay the amounts in dispute to the Alan Barker Claimants, it is inherently likely the Alan Barker Claimants will institute proceedings against the plaintiffs for payment of the loans. On 30 April 2025, the solicitors, writing on behalf of the Alan Barker Claimants maintained that notwithstanding the withdrawal of the statutory demands, they had instructions to 'issue legal proceedings for the recovery of our client's loans'. Having formed the view there is a rival claim, the plaintiffs have shown no indication they intend to make payment to the Alan Barker Claimants in accordance with the financial accounts. In my view, it seems clear that the plaintiffs have an expectation of being sued by the Alan Barker Claimants.
11. In contrast, there is no objective evidence led by the plaintiffs which suggests the Daryl and Wayne Barker Claimants are expected to sue the plaintiffs.
12. There is nothing in the correspondence to suggest that any of Daryl Barker, Wayne Barker, Hunted Raine or Kilalpanina have or intend to sue the plaintiffs. Mr Dawson does not depose to the plaintiffs having received any such demand. Rather, his evidence is that the claims made by the Daryl and Wayne Barker Claimants 'appear to be claims by Hunted Raine and Kilalpanina rather than Daryl Barker and Wayne Barker personally'. Neither Daryl Barker or Wayne Barker have given evidence of an intention to sue the plaintiffs either on their own behalf or on behalf of Hunted Raine or Kilalpanina. The only indication of the commencement of any proceeding other than by the Alan Barker Claimants was made by the plaintiffs in response to the statutory demands issued.
13. Whilst the plaintiffs submit that the likely suit by the Daryl and Wayne Barker Claimants is a proceeding in the form of mandatory relief, no such proceeding has been commenced to date, indeed, no steps at all have been taken at all to amend the financial accounts to reflect the Daryl and Wayne Barker Claimants' position.
14. The 27 May letters state that the accounts still record the loans owed to the Alan Barker Claimants because of Alan's failure to give the proper direction to Finnegans at the time of the transfer in ownership. Daryl and Wayne Barker say because of the historical and familial relationship between the parties, they elected not to obtain independent legal advice about the loans when they learned in March 2024 those loans remained on the balance sheets. Rather, they say they relied upon Alan's express representations that the loans were fictitious, and that Alan was not entitled to recover them. They do not say whether they took that position as the controllers of Hunted Raine and Kilalpanina or as directors of the plaintiffs. Given Daryl and Wayne Barker are both directors of plaintiffs and have been in a position of control over the financial records of the Redbar business since 2023 at the latest, there is no proper explanation as to why they did not simply amend the financial accounts to reflect what the Daryl and Wayne Barker Claimants say is the correct position in respect of the loans.
15. The only credible explanation as to why that did not occur is that Daryl and Wayne, having formed the view the loans were assigned to them or their related entities, proceeded on that basis when conducting the ongoing business of the plaintiffs and ultimately the winding up of the Redbar business. They did this despite the financial records not being accurate but with no intention to either amend those financial records or to sue the plaintiffs (of which they are both directors) either for the debt they now say is owed or to rectify the accounts.
16. The question is whether, in light of the claims made by the Alan Barker Claimants, there is now an expectation the plaintiffs are likely to be sued by two or more claimants.
17. In Pike[12] the stakeholder making the application for interpleader relief was a bank which held a deposit account in the name of one of the claimants (Nathan) but which funds had been deposited into by the rival claimant (Kevin). The dispute was in relation to who was entitled to the funds of the account, as both Nathan and Kevin had directed the bank to take different steps in respect of the account. Nathan took his claim to the Australian Financial Complaints Authority ("AFCA") which made a determination in his favour. The bank, which was bound by the decision of AFCA, nevertheless formed the view it had contractual and equitable obligations to Kevin, and sought interpleader relief in the District Court of New South Wales. Having determined each claimant had arguable claims, the Court considered the likelihood of both parties suing the bank for recovery. The Court had evidence before it that Kevin was expected to commence proceedings against the Bank but Nathan gave evidence of a current intention to rely upon the AFCA determination and take no active part in any proceedings. In finding there was an expectation two or more persons would be sued, Andronos DCJ found that:[13]

I consider that, if interpleader relief were not granted, Nathan would be likely to bring proceedings against the plaintiff, seeking to enforce the determination of 7 March 2024. The plaintiff has made it clear that it does not accept that it could disburse the Funds to Nathan without risking a breach of its contractual and/or equitable obligations to Kevin (much as it considered it could not disburse the Funds to Kevin without risking the breach of its obligations to Nathan). It is likely that the plaintiff would have required an order from a court to do so, in which proceedings the competing claims could be ventilated, which is of course what it seeks to achieve in these proceedings. Such proceedings, if initiated by Nathan, would be proceedings "in relation to" the Funds (using the language of 43.2(1) [of the Uniform Civil Procedure Rules 2005]).

1. Adopting a similar approach, objectively and logically it seems that if interpleader relief is not granted, the Alan Barker Claimants will sue the plaintiffs for recovery of the debt. That will leave the plaintiffs in a position where they have to defend the claim.
2. Presently, the only defence articulated by the plaintiffs is the existence of the claims of the Daryl and Wayne Barker Claimants. In those circumstances the plaintiffs, on the instructions of their directors (including Daryl and Wayne), would have to either formally adopt the position of the Daryl and Wayne Barker Claimants or otherwise meet the demands of the Alan Barker Claimants. However, as the Alan Barker Claimants point out, the real dispute between the claimants is in contract or for representations made between Daryl, Wayne and Alan in respect of the sale and purchase of the shares. To that end, if the Alan Barker Claimants sue, the Daryl and Wayne Barker Claimants will have to be joined or intervene if they wish to advance their claims.
3. Any action the Daryl and Wayne Barker Claimants would seek to take would be against the Alan Barker Claimants in the context of a defensive suit by the plaintiffs or interventionist suit should the Alan Barker Claimants press their claims. In my view that would be sufficient to satisfy r 12.02(1)(b) of the Rules. Even if the only relief sought by the Daryl and Wayne Barker Claimants against the plaintiffs is by way of mandatory injunction that is a suit 'for or in respect of the debt'.
4. Furthermore, considering the likelihood of such proceedings being commenced it might seem that granting interpleader relief is the most efficient way to proceed with the dispute. However, in my view and for the reasons that follow, the question of collusion looms large and ultimately against the granting of interpleader relief.

1. Rule 12.10(1)(b) of the Rules states that the Court may dismiss the application unless it is satisfied that the applicant does not collude with any claimant. Neutrality is central.
2. In Toll Holdings[14] the stakeholder, Toll had entered into a freight services agreement with Dick Smith Electronics Pty Ltd for the provision of freight services globally and internationally. Dick Smith Electronics had a trading agreement with Chinese company Shenzen MTC Co Ltd (MTC) for the supply of electronic goods. On 4 January 2016, Dick Smith went into administration and receivers and managers were appointed. A dispute arose between Dick Smith Electronics Pty Ltd and MTC about which entity was entitled to delivery of containers being held at the time by a third party warehousing contractor. The evidence showed that at the request of MTC, Toll issued new bills of lading and changed the locks to the warehouse before knowing the true position as between Dick Smith Electronics and MTC.
3. At [87] - [89], Rares J found:

[87] By acting on MTC's instruction to issue the to order bills of lading, Toll did more than merely hold the cargoes for MTC in accordance with its obligations as bailee under s 46 of the Sale of Goods Act. Rather, Toll attempted to change the locks to the warehouse in a way that would alter the then subsisting contractual arrangements between MTC and Dick Smith. And it did so at a time when, as Mr Arfan-Sayed said, Toll had no clear knowledge of the position between those protagonists.

[88] Toll argued that nothing came of the act of issuing a new set of bills. That may be so, but its conduct was not neutral. Moreover, Toll argued that it was entitled to issue the new bills because the telex release bills were sea waybills within the meaning of s 5 of the Sea-Carriage Documents Act 1997 (NSW) and, so, not negotiable. It contended that a transfer of those telex release bills would be, by force of s 9(2)(c) of that Act, without prejudice to MTC's rights as a contracting party. It contended that accordingly, since Toll thought that MTC had the right to call for the new bills, it (Toll) could create them.

[89] First, as I have said, changing the locks to the warehouse not knowing if that was lawful, was not a neutral act. Toll played MTC's game. Secondly, as I have found above, Toll converted the cargoes and has a real interest as a party to these proceedings rather than being a neutral stakeholder.

1. In my view, the evidence in this case demonstrates that the plaintiffs have not remained strictly neutral and have acted in a manner that identifies with the interests of the Daryl and Wayne Barker Claimants.
2. On the face of the correspondence between the parties, the plaintiffs initially appeared to adopt a somewhat neutral position. In the 7 May letter, which responded to the initial demand from the Alan Barker Claimants, the plaintiffs did not indicate a view as to whether the debts claimed by the Alan Barker Claimants were owed; rather, they stated that further steps needed to be taken in the informal winding up of the plaintiffs before any demands could be met. Whilst the 7 May letter did state that 'it should be self-evident that, if your clients have any entitlements to be received from the Redbar Entities, appointment of a liquidator to each will severely diminish the Pari Passu return to all creditors of that class,' no competing or rival claim was identified. It might also be accurate to say that the purpose of the 27 May letters was to articulate the opposing claim and demonstrate a genuine dispute between the claimants.
3. However, the plaintiffs' true position has, in practice, always been one aligned with and in favour of the Daryl and Wayne Barker Claimants.
4. First, it is difficult to separate the identity of Daryl and Wayne Barker as directors of the plaintiffs and as the controlling minds of the Daryl and Wayne Barker Claimants.
5. Scott Dawson gives evidence that the 'directors of the plaintiff[s] instructed BlueRock Law' in respect of the 27 May letters sent on behalf of the plaintiffs (and Excavations). Given the specific facts relied upon in those letters it is reasonable to assume, Daryl and Wayne Barker were involved in providing instructions as to the nature of the claims. Whilst the letters did set out the precise claim made by the Daryl and Wayne Barker Claimants, it did so in a way that adopted their position. The letters expressly 'rejected' any liability to the Alan Barker Claimants and sought immediate withdrawal of the statutory demands. The letters indicated that Colin Barker, Daryl Barker and Wayne Barker would all give evidence as to the veracity of the claims made by the Daryl and Wayne Barker Claimants on behalf of the plaintiffs and that Scott Dawson would give evidence corroborating Daryl Barker's evidence, and Mark Shewan (the plaintiffs' accountant and the directors' personal accountant) would give evidence that corroborated Scott Dawson's evidence. Put another way, two directors of the plaintiffs, who are also the controlling minds of the Daryl and Wayne Barker Claimants, would give evidence in a Court proceeding on behalf of the plaintiffs as to the foundation for their claims, supported by a third director of the plaintiffs.
6. In one sense, the common identity is not surprising. The dispute between the relevant claimants arises from the sale of Alan Barker's interests in the Redbar business to Daryl and Wayne Barker. The individuals involved are (and must be) necessarily involved both in respect of their own interests and the interests of the plaintiffs. Indeed, as both directors and equal shareholders in the plaintiffs, it is difficult to see how the Daryl and Wayne Barker Claimants' interests could not have a degree of connection or affiliation with the plaintiffs that impacts upon the plaintiffs' neutrality.
7. For example, it is that connection that informs the plaintiffs' submission that their likely defence to any claim brought by the Alan Barker Claimants will be that the Daryl and Wayne Barker Claimants have a claim to the debt. It is also that connection that leads to the individual directors of the plaintiffs each indicating their willingness to go on oath in Court proceedings on behalf of the plaintiffs in opposition to the statutory demands. It is that connection that makes it reasonable to infer that those individuals would also give evidence in support of the Daryl and Wayne Barker claims, should they be raised as a defence to any proceeding commenced by the Alan Barker Claimants. In my view, the degree of connection or affiliation in this case goes beyond the impartiality and neutrality required for the making of interpleader relief. To the contrary, through Daryl Barker, Wayne Barker and Scott Dawson, the identity of the Daryl and Wayne Barker Claimants and the plaintiffs are one and the same. Any attempted distinction between the two is illusory.
8. Secondly, the manner in which the plaintiffs have conducted themselves suggests they are "playing the same game" as the Daryl and Wayne Barker Claimants.
9. The 27 May letters make it clear that:

(a) from at least 2021 when Daryl and Wayne purchased Alan Barker's interests in the Redbar business, Daryl and Wayne were of the view that all of Alan's rights and entitlements (including the disputed loans) were transferred or assigned to them;

(b) when, in March 2024, Daryl and Wayne Barker learned the loans were still recorded in the financial accounts of the plaintiffs in favour of the Alan Barker Claimants they took no steps to amend those accounts (in their capacity as directors of the plaintiffs) but rather relied on the representations they say Alan made about the "fictitious" nature of the accounts; and

(c) no claim has been made by the Daryl and Wayne Barker Claimants at any point in time for the disputed loans until the claim was made by the Alan Barker Claimants.

1. As I said earlier, if Daryl and Wayne Barker formed the view the assignment of the loans had taken place at the time of purchase in 2021, and formed that view based on representations made by Alan Barker as to why the loans were still inaccurately recorded in the financial accounts in 2024, there is no explanation as to why Daryl and Wayne Barker, in their capacity as shareholders of the plaintiffs, did not ask the plaintiffs to amend or rectify the accounts. Indeed, there is no explanation as to why Daryl and Wayne Barker, as directors of the plaintiffs (and Excavations), did not ensure the accounts were accurate insofar as they represented their understood position. To the contrary, it seems that notwithstanding the perceived inaccuracies in the financial accounts, Daryl and Wayne Barker were content to proceed on the basis the loans had been assigned a position that would have persisted throughout the winding up of the plaintiffs, but for the Alan Barker Claimants demands. To the extent that Daryl and Wayne's knowledge is knowledge of the plaintiffs (and that knowledge is corroborated by Scott Dawson) it appears the plaintiffs have adopted the position of the Daryl and Wayne Barker Claimants. By not taking the necessary steps to ensure the accounts were 'accurate' but relying upon the views of Daryl and Wayne Barker as to the assignment of the loans, the plaintiffs now find themselves in a position that is, in my view, of their own (directors') making.
2. Thirdly, I disagree with the plaintiffs' submission that the actions of the directors in electing to seek interpleader relief is an indication of their neutrality.
3. The plaintiffs have denied the Alan Barker Claimants' claim from the outset. They have refused to make payment of the loans during the course of the winding up of the Redbar business. They have opposed statutory demands issued in respect of the loans. For the reasons I have previously identified, they have adopted the position of the Daryl and Wayne Barker Claimants from a point in time well before the Alan Barker claims were made. They have also continued to wind up the Redbar business consistent with that position.
4. To that end, the course adopted in respect of Excavations is also instructive. Insofar as Belnora's claim was concerned, three of the directors of Excavations (being Daryl Barker, Wayne Barker and Scott Dawson) considered claims made against that entity for the purposes of making pari passu payments to admitted creditors (which did not include Belnora) and then appointed an administrator to the company.
5. The 4 June letter confirmed that the directors of Excavations had formed the view that Excavations was not liable to Belnora for repayment of the Belnora demand. In forming that view, the directors of Excavations relied upon the factual matters set out in 27 May letter, and restated the directors' instructions that the liability was assigned to the Daryl and Wayne Barker Claimants in accordance with the agreement reached at the time of purchase of Belnora's interest in Excavations. That position was restated again in the administrators' report of July 2025 where Belnora's proof of debt is acknowledged but it is Excavations who denies the existence of the loan. There is no reference to a competing or rival claim by another creditor who has proved in the liquidation (i.e, Hunted Raine or Kilalpanina).
6. In taking the above steps in the manner described, the directors of Excavations went beyond mere acknowledgement of competing claims made by the respective sets of claimants. Rather, Excavations' directors made determinations as to which claims of creditors are to be admitted and rejected (including Belnora's claim). They have rejected the Belnora claim on the same basis as alleged in respect of the plaintiffs.
7. Now, whilst it remains that Excavations is not a plaintiff to this proceeding, it seems incredible to distinguish between the actions of Excavations (by its directors) and that of the plaintiffs (by their directors). The only material difference between the positions of those entities is that on 4 June 2025 the directors of Excavations formed a view about the solvency of that company which warranted final distributions being made and an administrator being appointed. Otherwise, the individuals are the same and their approach in respect of the Alan Barker Claimants' claims is the same. Those individuals who are engaged in winding up the entirety of the Redbar business, including the plaintiffs, and dealing with each of the relevant entities in respect of the debts claimed are the same individuals who have provided instructions to each of the three entities as to the factual basis upon which the claims of the Alan Barker Claimants should be rejected.
8. In my view, by proceeding on the basis of the Daryl and Wayne Barker Claimants' view since at least 2024 the plaintiffs have adopted the position of those claimants. By not amending the financial accounts (despite having formed that view) the plaintiffs have voluntarily placed themselves in the position they now find themselves. In relying upon instructions of three directors, all of whom would give evidence in support of the Daryl and Wayne Barker Claimants' claims and two of whom are the claimants themselves, there is no real difference in identity between the plaintiffs and the Daryl and Wayne Barker Claimants. It therefore follows the plaintiffs have a real interest in this proceeding and are not neutral.
9. I do note, that in making these findings I have not suggested any moral wrongdoing on the part of the plaintiffs. In this case it is simply that the plaintiffs have not maintained a strictly neutral position between the parties - nor could they be expected to where their guiding minds are the guiding minds of the Daryl and Wayne Barker Claimants themselves.

1. The application for interpleader relief is refused.

KILALPANINA PTY LTD (ACN 005 303 908) AS TRUSTEE FOR WAYNE IAN BARKER FAMILY TRUST

HUNTED RAINE PTY LTD (ACN 169 373 675) AS TRUSTEE FOR DERYL BARKER FAMILY TRUST

REDIHITCH (AUSTRALIA) PTY LTD (ACN 006 306 805) AS TRUSTEE FOR REDBAR PROPERTY TRUST

BELNORA PTY LTD (ACN 052 024 781) AS TRUSTEE FOR ALAN BARKER FAMILY TRUST

KILALPANIA PTY LTD (ACN 005 303 908) AS TRUSTEE FOR WAYNE IAN BARKER FAMILY TRUST

HUNTED RAINE PTY LTD (ACN 169 373 675) AS TRUSTEE FOR DARYL BARKER FAMILY TRUST

[1] [2003] NSWSC 753.

[2] Rule 12 applies to situations where a person seeks interpleader relief either as a stakeholder or a sheriff. It is common ground this application is only concerned with those aspects of the rule that apply to stakeholder interpleader relief.

[3] Australian Military Bank Ltd v Pike [2024] NSWDC 350 (Pike), [29].

[4] Watson v Park Royal (Caterers) Ltd [1961] 2 All ER 346, 352 cited with approval in Guerinoni v Dennix Castino trading as Castino & Co Chartered Accountants [2008] NSWSC 175 (Guerinoni), [7] and Poraviappan v Alderuccio Solicitors [2016] VSC 417 (Poraviappan), [39].

[5] Poraviappan (n 4), [40] quoting BHP Petroleum Pty Ltd v Jovista Pty Ltd (Supreme Court of Victoria, Byrne J, 2 June 1995).

[6] Sun Insurance Office v Galinsky [1913] UKLawRpKQB 231; [1914] 2 KB 545, 552.

[8] Guerinoni (n 4), [15] as cited in Pike (n 3), [29] - [30].

[9] [2016] FCA 256 ('Toll Holdings').

[10] (1885) 7 ALT 74.

[11] Plaintiff, 'Plaintiff's outline of submissions', Submissions in Redihitch (Australia) Pty Ltd (ACN 006 306 805) as trustee for Redbar Property Trust, S ECI 2025 03831 and in Redbar Plant Hire Pty Ltd (ACN 004 985 040), S ECI 2025 03828, 26 August 2025, [16].