Re Admiral Cove Pty Ltd [2023] VSC 537 (7 September 2023)

CORPORATIONS - Liquidation of trustee companies - Trustee right of indemnity - Bare trustee companies - Just and convenient to appoint liquidators as receivers and managers over assets of unit trust pursuant to s 37 of the Supreme Court Act 1986 (Vic).

1 James Patrick Downey (the eleventh plaintiff) and Mr Petr Vrsecky (the twelfth plaintiff) of PKF, Chartered Accountants (together, 'directors'), are Court-appointed directors of the first to tenth plaintiff companies ('Companies'). By originating process dated 6 March 2023 and amended on 15 May 2023, the plaintiffs make application under s 461(1)(k) of the Corporations Act 2001 (Cth) ('Corporations Act') for the just and equitable winding up of the Companies and the appointment of receivers and managers to the property, assets and undertakings of seven associated trusts ('Trusts'). The application is made by the directors because the ongoing governance of the Companies and the Trusts is said to be unworkable.

2 It is necessary to set out some background to the application.

3 The application is preceded by a multiplicity of proceedings ('earlier proceedings') concerning the estate of the late Mr Agostino Pistorino ('Agostino'),[1] who died on 5 January 1999. The earlier proceedings were intensely fought by the surviving members of the Pistorino family, namely:

(a) Aurelia Pistorino ('Aurelia'), Agostino's wife, who subsequently died on 1 May 2015, and her solicitor Vincent Verduci, as executor of her will and trustee of her estate;

(b) Antonio Pistorino ('Antonio'), Agostino's son; and

(c) Giovanna Connell, Agostino's daughter (also known as Joanne Connell) ('Joanne'), and her husband Christopher Connell ('Christopher').

4 The earlier proceedings are extensively described in the judgment of Sifris J (as his Honour then was) in Pistorino (by her litigation guardian, Timothy Charles Finemore) v Connell (No 3)[2] and included an oppression claim, applications for removal of the executors of Agostino's will, a claim under Part IV of the Administration and Probate Act 1958 (Vic), and an application by the trustees of Agostino's estate seeking declarations as to the ownership of real property. The earlier proceedings came to an end on 6 November 2014, following the judgment of Sifris J and orders made the same date. As observed in his Honour's judgment,[3] the earlier proceedings were protracted, costly and the subject of several unsuccessful mediations, including a judicial mediation.[4]

5 Despite the finalisation of the earlier proceedings, it is the directors' view that the relationship between Antonio and Joanne, as ultimate beneficiaries of the assets of the Companies and Trusts ('beneficiaries'), remains fractious.

6 By his will dated 28 December 1994 ('will'), Agostino appointed Antonio, Joanne and Bradford Baker (Agostino's accountant) as executors and trustees of his estate. Probate was granted on 15 January 2001. The will provided that the income of the estate be paid to Aurelia during her lifetime and upon her death, the balance was to be divided into two equal shares, to be held on two separate testamentary trusts, being the Antonio Pistorino Trust and the Giovanna Connell Trust (together, 'testamentary trusts'). The assets of the estate comprise shares and units in various companies and trusts (which are discussed further below), together with loans to family corporations and family members.[5]

7 Pursuant to the terms of Aurelia's will, her estate was divided equally between her children, Antonio and Joanne. On 26 August 2015, probate of her will was granted to her solicitor, Vincent Verduci, who, as already mentioned, is the executor and trustee of her estate.

8 During his lifetime, Agostino purchased multiple commercial properties in the inner suburbs of Melbourne. Whilst the ownership structure sometimes varied, Agostino commonly established a new company and trust to acquire and hold each property. Below is a table setting out each of the Companies established by Agostino, the property or assets held by each company and the Trusts in respect of which certain of the Companies are corporate trustees. I will collectively refer to the properties held by the Companies and Trusts as the 'Properties'.

Admiral Cove Pty Ltd ('Admiral Cove') (registered 21 August 1985)

Admiral Cove Property Trust (trust deed dated 30 October 1986)

Belridge Court Pty Ltd ('Belridge Court') (registered 18 October 1994)

The 211 Lygon Street Trust (trust deed dated 5 December 1994)

Burton Arch Pty Ltd ('Burton Arch') (registered 20 July 1987)

221 Drummond Street Property Trust (trust deed dated 22 September 1987)

Dalwood Meadows Pty Ltd ('Dalwood Meadows') (registered 12 January 1993)

Delrich Ridge Pty Ltd ('Delrich Ridge') (registered 5 January 1996)

280 Lygon Street Unit Trust (trust deed dated 23 January 1996)

Pistorino Investments Pty Ltd ('Pistorino Investments') (registered 15 May 1989)

Piston Holdings Pty Ltd ('Piston Holdings') (registered 3 April 1997)

Pistorino Nominees Pty Ltd ('Pistorino Nominees') (registered 14 December 1977)

Pistorino Family Trust (trust deed dated 1 February 1978)

Reynold Towns Pty Ltd ('Reynold Towns') (registered 20 November 1981)

Reynold Towns Property Trust (trust deed dated 7 March 1985)

541 King Street Nominees Pty Ltd ('541 King Street') (registered 31 May 1982)

541 King Street Unit Trust (trust deed dated 9 July 1982)

9 Save for Delrich Ridge (the fifth plaintiff), the respective memoranda and articles of association of the Companies require that there be a minimum of two directors, including to constitute a quorum. In the case of Delrich Ridge, the company's articles of association require a minimum of one director.

10 The trustees of the Antonio Pistorino Trust and the Giovanna Connell Trust, who are Antonio and Christopher, respectively, hold shares in each of the Companies. In some instances, shares in some of the Companies are also held by other entities within the corporate group, or in the name of individuals.[6] The unitholders and beneficiaries of the Trusts are similarly identified.[7] However, it is uncontroversial that Antonio and Joanne stand as the ultimate beneficiaries of the assets of the Companies and the Trusts.

11 The directors were appointed as independent directors of the Companies on 1 September 2010 pursuant to consent orders made by Croft J on 27 August 2010 in Supreme Court of Victoria proceeding S CI 2009 05816.[8] The appointment of the directors also extended to another company within the Group, Agaupi Investments Pty Ltd, although that entity has since been wound up. At the same time, his Honour appointed Equity Trustees Ltd ('Equity Trustees') as executor and trustee of Agostino's estate from 6 September 2010.

12 By order of Moore J dated 1 March 2022 in Supreme court of Victoria proceeding S ECI 2019 05533, Equity Trustees was discharged as trustee and executor of the will and estate of Agostino and as trustee of each of the Giovanna Connell Trust and the Antonio Pistorino Trust, with effect from 29 April 2022. Justice Moore also ordered that Christopher and Antonio be appointed as the new trustees of the Giovanna Connell Trust and the Antonio Pistorino Trust.

13 After the directors were appointed by the Court, they set about reviewing the books and records of the Companies to understand the operation of the corporate structure established by Agostino. It became apparent to the directors that the Companies and Trusts have historically been treated as a corporate group ('Group'). The various entities within the Group are also linked by way of inter-entity loans and/or inter-entity shareholdings. It was also evident that the sixth plaintiff, Pistorino Investments, performed a treasury function for the Group in that:

(a) rental proceeds or dividends were largely paid into the Group through the company that held the underlying asset (for example, real property or shares);

(b) outgoings were paid by Pistorino Investments, using funds sourced from the Group; and

(c) inter-company loans were established to account for the sources of funds from which Pistorino Investments made its payments and the relevant entities that were liable for the expenses or liabilities being paid.

14 The distinct function of Pistorino Investments within the Group and the operation of the Group as a whole has not changed whilst under the control of the directors since the resolution of the earlier proceedings.

15 There is some evidence before the Court concerning the financial positions of the Companies, including financial accounts for the Companies and Trusts for the financial year ending 30 June 2022. Mr Vrsecky deposes in his affidavit of 30 May 2023 that while each of the Properties that are tenanted earned more in rental income and recovery of disbursements than was spent on associated expenses (including the directors' fees), once interest on inter-entity loans was applied, there was a loss recorded for the relevant financial year in respect of each of the entities holding the Properties, with the exception of Burton Arch as trustee for the 221 Drummond Street Property Trust. The financial position of each of the Companies for the financial year ended 30 June 2022 can be summarised in the following table:

Net loss of -$11,626 and retained losses of -$176,878

Net loss of -$10,860 and retained losses of -$142,212

Net loss of -$13,974 and retained earnings of $655,407

Net profit of $77,564 and retained earnings of $4.86 million

Net loss of -$20,954 and retained losses of -$2.19 million

Net loss of -$10,520 and retained losses of -$268,029

Net profit of $5,833 and retained losses of -$43,851

Correspondence between directors, beneficiaries and others

16 The directors have repeatedly engaged with the beneficiaries and others concerning the future conduct of the affairs of the Group.

17 On 7 July 2016, the directors wrote to Equity Trustees and Mr Verduci (copied to the beneficiaries) ('7 July 2016 letter') and suggested that the beneficiaries, in conjunction with Equity Trustees and Mr Verduci, should determine the future of the Group. They proposed various options, including the winding up of the Companies and Trusts or the transfer of the Properties to the beneficiaries in specie. No response to that correspondence was received.

18 On 13 March 2019, Thomson Geer, the solicitors engaged by the directors, wrote to Christopher (as trustee of the Giovanna Connell Trust) and the lawyers acting for each of Equity Trustees and Antonio, requesting they attempt to agree on the future conduct of the Companies and Trusts. That letter reiterated the options canvassed in the 7 July 2016 letter. Again, no response was received.

19 In January 2020, the directors' solicitors, Thomson Geer, received a copy of an email sent by Christopher to the solicitors acting for Equity Trustees dated 27 December 2019. In his email, Christopher made certain allegations regarding a form that the directors had caused to be filed with the Australian Securities and Investments Commission ('ASIC'), correcting ASIC's records concerning the ownership of Pistorino Investments. He demanded that the directors resign from each of the Companies. Thomson Geer responded to the allegations on behalf of the directors by letter dated 5 February 2020.

20 On the same day, Thomson Geer separately wrote to Christopher (as trustee of the Giovanna Connell Trust) and the lawyers acting for each of Equity Trustees and Antonio ('5 February 2020 letter') concerning the Group's future and noting the directors' concern that once the underlying assets of the Companies and the Trusts were relevantly divided and distributed to the beneficiaries through their respective trusts, the beneficiaries would remain substantially in dispute. The directors indicated they were agreeable to retiring as directors of the Companies, particularly where one of the two principal stakeholders in the various entities wished them to do so. However, having been appointed by Court order, they considered it was appropriate that Antonio and Joanne, as major stakeholders in the Group, reach agreement on the appointment of new directors, in the absence of which the directors foreshadowed making an application to the Court to enable them to retire.

21 On 29 July 2022, the directors sent substantive correspondence to Christopher (as trustee of the Giovanna Connell Trust) and Antonio (as trustee of the Antonio Pistorino Trust), by which they:

(a) repeated the concern raised in earlier correspondence that once the various shareholdings in the Companies and unit holdings in the Trusts were equally divided between the interests associated with Joanne and Antonio, those parties would still remain in dispute;

(b) articulated their concerns regarding the potential unworkability of the 'strained' relationship between those parties given important decisions concerning the Properties will require unanimous support of both beneficiaries;

(c) noted that Christopher had expressed a desire for the directors to resign. The directors stated they were each willing to resign so long as the beneficiaries agreed on the directors' replacements;

(d) repeated the options raised concerning the future of the Companies and the Trusts; and

(e) proposed an informal meeting to discuss the above issues.

22 The directors did not receive a response to that correspondence.

Relationship between beneficiaries and directors

23 On 15 December 2022, annual general meetings ('AGMs') of five of the Companies were held, namely: Pistorino Investments; Admiral Cove; 541 King Street Nominees; Burton Arch; and Reynold Towns. The directors attended the AGMs, along with a staff member from their office and their solicitor, Norman Fryde of Thomson Geer. Christopher was also in attendance remotely via Zoom.

24 Quorum was reached in respect of 541 King Street Nominees, Burton Arch and Reynold Towns as there were two shareholders present: Christopher on behalf of the Giovanna Connell Trust and Mr Downey as proxy for another entity within the Group. The AGMs for Pistorino Investments and Admiral Cove were adjourned for seven days due to a lack of quorum ('adjourned AGMs').

25 In respect of the three companies with quorum, Mr Downey (on behalf of Pistorino Nominees) moved that the financial and directors' reports for the relevant companies dated 30 June 2022 be adopted. However, Christopher objected for the stated reason that he had insufficient information to make an informed decision about the accounts of Pistorino Investments. Mr Downey voted in favour of the motion and Mr Vrsecky, as chairperson, exercised a casting vote in favour of the motion.

26 On 22 December 2022, the adjourned AGMs were held. The directors were once again present, along with a representative of their firm and Mr Fryde of Thomson Geer. Christopher attended remotely via Zoom. Minutes of the adjourned AGMs recorded that no quorum was reached because only one shareholder was present and that no business could be conducted. Whilst the Companies' financial and directors' reports as at 30 June 2022 were noted, Christopher objected to those reports and considered they had not been formally tabled because of the lack of quorum. The meetings were then declared dissolved by Mr Vrsecky as chairperson.

27 Mr Vrsecky deposes that during the adjourned AGMs, Christopher called for the resignation of Mr Downey, alleging a lack of independence. Mr Downey responded that he and Mr Vrsecky had been agreeable to stepping down as directors since 2016, so long as replacement directors were appointed. Christopher indicated he had requested the names of potential replacement directors from the Institute of Chartered Accountants and would provide their details in due course, and that Joanne could be appointed as a director. He then stated that the adjourned AGMs were being livestreamed to three social media outlets, which the directors objected to. Additionally, Christopher asserted that the Companies ought to have been in a position to distribute four million dollars to shareholders and foreshadowed taking legal action against the directors. He also indicated he was in dispute with Equity Trustees in respect of the finalisation of accounts of Agostino's estate. Mr Downey then left the adjourned AGMs and it was agreed that the meetings could not continue for want of quorum.

28 The directors instructed Thomson Geer to write to Christopher concerning the matters that transpired at the adjourned AGMs by letter dated 23 December 2022. That letter noted the directors had understood Christopher's demand for Mr Downey's resignation to apply to all of the Companies. The letter once again restated the options for the future of the Group, including the appointment of replacement directors. Particular issue was taken by the directors with Christopher's decision to livestream the adjourned AGMs, which occurred without their consent. No response to the 23 December 2022 letter was forthcoming.

29 On 3 February 2023, on the directors' instruction, Thomson Geer wrote to the beneficiaries and Mr Verduci concerning the status and future of the Companies and the Trusts ('3 February 2023 letter'). That letter stated:

(a) the directors had written to the beneficiaries on numerous occasions since 7 July 2016, proposing options for dealing with the underlying assets of the Group, but there had been no meaningful engagement regarding those matters;

(b) Christopher had previously called for the directors to resign and had also made various allegations against the directors at the adjourned AGMs on 22 December 2022;

(c) as conveyed in the 5 February 2020 letter, the directors were agreeable to retiring, but it was necessary for the beneficiaries to agree upon their replacements;

(d) having regard to the above matters, the directors were of the view that it was inappropriate that they continue to act as directors of the Companies; and

(e) within 14 days, the shareholders of the Companies were requested to agree upon the appointment of replacement directors or resolve to amend the memoranda and articles of association of the Companies to enable the appointment of one director only and agree upon that director, failing which the directors would make an application to the Court for directions without further notice.

30 The 3 February 2023 letter elicited a response from both Joanne and Christopher. On 6 February 2023, Joanne wrote to Mr Verduci seeking his commitment not 'to vote or agree with any and all resolutions with regards the management and operation of the [Companies]'. Then, on 7 February 2023, in his capacity as trustee of the Giovanna Connell Trust, Christopher sent a lengthy letter to Thomson Geer ('7 February 2023 letter') in response to the 3 February 2023 letter. Christopher variously asserted that: whilst the Companies have legal authority over the assets in the Group, the Trusts do not; the Antonio Pistorino Trust and the Giovanna Connell Trust are the 'only relevant stakeholders with decision making powers in the Group'; and 'it is not in the interests of the two testamentary trusts to agree to any proposal to direct Company income and corpus to the [T]rusts'. Christopher further relevantly stated:

[The directors'] insistence at administering the [T]rusts using Company money constitutes a direct and deliberate oppression of the shareholder rights granted to the trustees of two testamentary trust ... Please remind your clients that their responsibility and powers in their roles as directors is limited to prioritising the interests of the Companies and its shareholders.

At the December 2023 AGM's, it is my intention to put forward a motion that the individual trusts are wound up on the grounds that they are obsolete and superfluous to the administration of the ... [G]roup.

...

The facts show that at each AGM held on 15 December 2022, Mr Downey relied on chicanery to put forward motions that have no legal authority and are invalid. Therefore, the accounts for those Companies that held AGMs have not been passed.

...

[I]n signing the minutes for each AGM, Mr Vrsecky was at a minimum, incompetent or at worst, acted [sic] in a duplicitous manner in seeking to use his casting vote in favour of a motion that had no legal authority or relevance to each of the three companies that held AGMs on 15 December 2022. It is indisputable that this provides the necessary legal and factual basis to remove the current directors and trustees from all roles within the Group.

31 In their amended originating process dated 15 May 2023, the plaintiffs seek the following relief:

(a) for the Companies to be wound up under s 461(1)(k) of the Corporations Act on the just and equitable ground;

(b) for Shane Leslie Deane and Nicholas Giasoumi to be appointed as the joint and several liquidators of each of the Companies;

(c) for the appointment of Mr Deane and Mr Giasoumi as receivers and managers to the property, assets and undertakings of each of the Trusts pursuant to s 37 of the Supreme Court Act 1986 (Vic) ('Supreme Court Act') or, alternatively, the Court's inherent jurisdiction;

(d) that all reasonable costs and expenses of the directors incurred in relation to:

(i) the transfer of the books and records of the Companies and Trusts to any replacement directors, liquidators, or receivers and managers; and

(ii) assisting the directors, liquidators, or receivers and managers with a handover of corporate memory

be charged at their respective professional hourly rates and paid out of the assets of the Companies and Trusts;

(e) that the costs of this application be borne by the Companies, such costs to be paid out of the funds of Pistorino Investments and apportioned amongst the Companies by way of inter-company loan adjustments; and

(f) the remuneration of Mr Deane and Mr Giasoumi as liquidators of the Companies and receivers and managers of the Trusts and their reasonable expenses be paid out of the assets of the Companies and Trusts.[9]

32 On 10 March 2023, Connock J made orders referring the originating process to an Associate Judge for hearing and determination pursuant to r 77.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Rules') and, if required, also pursuant to r 16.1(3) of the Supreme Court (Corporations) Rules 2013 (Vic).

33 On 23 March 2023, following a query by the Court, the Court received email correspondence from Thomson Geer confirming that:

(a) Antonio, Christopher, Joanne, and Mr Verduci were not legally represented in relation to the application;

(b) they had been informed by Mr Verduci that he was unlikely to participate in the proceeding; and

(c) they had been unable to engage with Antonio.

34 On the same day, Joanne and Christopher separately confirmed by email to the Court that they did not intend to participate in the proceeding.

35 On 24 March 2023, the Court made timetabling orders on the papers for the further conduct of the proceeding. The orders contemplated that Antonio (as trustee of the Antonio Pistorino Trust), Christopher (as trustee of the Giovanna Connell Trust), Joanne, and Mr Verduci (as executor and trustee of the estate of Aurelia) (together, 'interested persons') be permitted to file and serve any affidavit material and written submissions. The matter was listed for hearing on 12 May 2023 and the plaintiffs were required to serve a copy of those orders on the interested persons, none of whom elected to file any material in relation to the application.

36 When the matter came on for hearing on 12 May 2023, Ms Bell of counsel appeared on behalf of the plaintiffs and made oral submissions in support of the application. Consistent with the earlier email advice referred to above, there was no appearance by any of the interested persons. Following an exchange between counsel and the bench, the plaintiffs sought leave to amend the originating process to clarify the source of the Court's jurisdiction to appoint receivers and managers to the Trusts and to file and serve supplementary affidavit material and written submissions in support of the application. The balance of the hearing of the application was to be undertaken on the papers.

37 Importantly, the Court made an additional order pursuant to ss 467(1)(c) and 467(3)(f) of the Corporations Act, requiring the plaintiffs to write a letter to the interested persons to the following effect:

(a) advising that the letter was written by order of the Court;

(b) advising that the directors intend to resign from office but are prevented from doing so due to the operation of the Corporations Act;

(c) noting that the constitutions (or memoranda and articles of association) of the Companies require a minimum number of directors;

(d) requesting that within 14 days of the letter being sent, the shareholders of the Companies either:

(i) agree upon, or nominate, replacement directors; or

(ii) agree to amend the constitutions of the Companies to allow the Companies to have one director and agree upon, or nominate, a replacement director; and

(e) advising that their position in relation to the directors' replacement would be relied upon by the plaintiffs in support of their application.

38 There is evidence that the plaintiffs complied with the Court's further orders of 12 May 2023, including the sending of the Court-mandated letter to the interested persons, which occurred on 15 May 2023. None of the interested persons provided a substantive response to that letter.

39 In support of their application, the plaintiffs rely on the following material:

(a) the affidavits of Petr Vrsecky sworn 2 March 2023 and 30 May 2023;

(b) the affidavit of Norman Samuel Fryde sworn 22 March 2023;

(c) consents to act as joint and several liquidators of the Companies and receivers and managers of the Trusts signed by Shane Leslie Deane and Nicholas Giasoumi on 6 March 2023;

(d) the affidavit of Joshua Kyle Hawes sworn 2 June 2023;

(e) the affidavit of Mitchell Arthur Stewart sworn 30 May 2023;

(f) four affidavits of service of Brent Speck relating to service on Vincent Verduci, Christopher Connell, Joanne Connell and Antonio Pistorino, respectively, all sworn 22 March 2023, along with his further affidavit sworn 12 May 2023 concerning service of additional documents on the same four persons;

(g) two affidavits of Rachel Van Gemert, regarding the filing of the required ASIC Form 519 and the publication of the application, both sworn 6 May 2023;

(h) outline of submissions dated 4 May 2023 together with supplementary submissions dated 2 June 2023; and

(i) an email from Thomson Geer dated 5 September 2023 (in response to an email from the Court dated 4 September 2023) clarifying the jurisdictional bases of a number of ancillary orders sought in the application.

40 Section 203AB(1) of the Corporations Act states:

The resignation of a director of a company does not take effect if, at the end of the day that the resignation is to take effect, the company does not have at least one director.

41 Section 461(1)(k) of the Corporations Act provides:

The Court may order the winding up of a company if:

...

the Court is of opinion that it is just and equitable that the company be wound up.

42 Pursuant to s 462(2)(a) of the Corporations Act, a winding up order under s 461(1)(k) may be sought by the relevant company.

43 Section 467(1)(c) of the Corporations Act provides that on hearing a winding up application, the Court may 'make any interim or other order that it thinks fit'.

44 Section 466(4) states that:

Where any winding up order is made upon the application of the company or a liquidator of the company, the costs incurred must, subject to any order of the Court, be paid out of the property of the company in like manner as if they were the costs of any other applicant.

45 As I stated in Re Docklands Chiropractic Clinic Pty Ltd:[10]

[T]he categories of circumstances which trigger the just and equitable jurisdiction are not closed or rigid.[11] The court must consider the factual matrix of the dispute in order to be satisfied whether sufficient reason exists to wind the company up.[12] In Re Catombal Investments Pty Ltd,[13] Brereton J further explained:

[t]he court is not restricted in exercising its discretion to particular factual categories [Re Straw Products Pty Ltd [1942] VicLawRp 36; [1942] VLR 222 at 223]. And, the question whether it is just and equitable is a question of fact, in respect of which each case must depend on its own circumstances [Re Bleriot Manufacturing Aircraft Co Ltd (1916) 32 TLR 253 at 255].[14]

46 Matters that inform the question of whether a just and equitable winding up order should be made relevantly include:

(a) a deadlock in the management of the company;[15]

(b) where the company is in a state of corporate paralysis;[16] and

(c) a breakdown in the relationship between the shareholders.[17]

47 As Dodds-Streeton JA explained in Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd:[18]

Winding up is the characteristic remedy in circumstances where a working relationship predicated on mutual co-operation, trust and confidence has broken down, whether resulting in deadlock or otherwise. Equity would not ordinarily order the continuation of such an association where it would be a futility, would require continuing supervision or would be tantamount to specific enforcement of a contract of personal services.[19]

48 Given the present circumstances, it is necessary to say something further about the concept of corporate paralysis. Depending on the facts, corporate paralysis may be regarded as a species of deadlock or a distinct and unique factor justifying a winding up order.

49 In CIC Insurance Ltd v Hannan & Co Pty Ltd ('CIC Insurance'),[20] Barrett J held that where directors of a company had resigned and there was no prospect of new directors being appointed to replace them, the Court would be furnished with a basis for the winding up of the company on the just and equitable ground.[21] His Honour further stated:

The fact that directors are unable or unwilling to act so that there is a power vacuum at board level is probably not, of itself, sufficient to justify winding upon the just and equitable ground since it is always open to the members to appoint directors who can function as a board: Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692. There must be some additional element of corporate paralysis such as absence of any prospect of the company continuing to operate: Re Vision Image (Aust) Pty Ltd Cheng v Yeo [1998] WASC 38 ... In the present case, such an additional element comes from the practical reality that no one can be found to accept appointment to the board, coupled with the express wish of the sole shareholder that provisional liquidators be appointed, itself an acknowledgment that the shareholder sees no point in trying to restore the board of directors to functioning status.[22]

50 In Great Australian Resources Pty Ltd; Re Platinum Mining Ventures Ltd ('Great Australian Resources'),[23] a parent company applied to wind up its subsidiary on the just and equitable ground in circumstances where the subsidiary did not have any directors and no new directors could be arranged to join the board. Citing CIC Insurance, Barker J determined to wind the company up under s 461(1)(k) on the basis of 'an advanced state of corporate paralysis'.[24] His Honour noted the company was 'empty, lifeless and practically unable to operate', did not trade, had no assets, accounts, sources of revenue, directors or officers and was unlikely to be revived.[25] Whilst his Honour did not consider that any party would be prejudiced by a winding up order, if the company did again become viable, any concerned party could seek the termination of the winding up under s 482 of the Corporations Act.[26]

51 Finally, the following additional matters are relevant to the exercise of the Court's discretion to order a just and equitable winding up:

(a) in determining the relative justice of a winding up, the Court will balance the interests of all parties potentially affected by it,[27] together with the broader public interest;[28]

(b) the Court will consider the financial position of the relevant company or companies and the availability of any alternative and less drastic remedy.[29] As Sifris J (as his Honour then was) said in Exton v Extons:[30]

Courts are 'extremely reluctant to wind up a solvent company'.[31] ... As the Court of Appeal has observed, '[i]t is well accepted that the winding up of a solvent and flourishing company should be a last resort'.[32] Courts will consider whether any other relief would be preferable to a winding up order.[33]

(c) however, solvency will not operate as a complete barrier to a just and equitable winding up, particularly where other factors weigh heavily in favour of a winding up, including serious and ongoing breaches of the Corporations Act.[34]

52 As a threshold question, it is necessary to consider whether the underlying state of affairs are sufficient to engage the Court's jurisdiction under s 461(1)(k). The directors, who were appointed by this Court as independent officers of the Companies, no longer consider their positions to be tenable and have clearly indicated their intentions to resign. Given the allegations that have been made against the directors by Christopher (as trustee of the Giovanna Connell Trust) and his call for them to resign, together with the unproductive relationship between the directors and the beneficiaries, I accept the directors' assessment that their positions are no longer tenable.

53 However, as previously identified, the relevant memoranda and articles of association of the Companies require that the Companies have at least two directors (or, in the case of Delrich Ridge, a minimum of one director). The directors therefore cannot resign without replacement directors being appointed. Moreover, by operation of s 203AB of the Corporations Act, any resignation by the directors would be ineffective unless there is at least one director appointed to each of the Companies. But, over the course of more than three years, no alternative directors have been agreed upon or nominated by the interested persons. This is despite repeated invitations and requests by the directors that they do so and following the service of the Court-mandated letter calling for the interested persons to agree upon or nominate any candidates as replacement directors within 14 days.

54 The Court's jurisdiction to wind up the Companies under s 461(1)(k) is therefore enlivened. Having further regard to the underlying factual matrix of the proceeding, the Court's discretion should, in my view, be exercised in favour of the winding up of the Companies for the reasons below.

55 First, the evidence discloses a deadlock in the management of the Companies. Attempts to hold AGMs in December 2022 for Admiral Cove and Pistorino Investments were stymied by a lack of quorum of two shareholders and there was difficulty passing motions for the adoption of financial and other reports for 541 King Street Nominees, Burton Arch and Reynold Towns on account of objections raised by Christopher (as trustee of the Giovanna Connell Trust). Some reports could only be adopted by one of the directors exercising a casting vote as chairperson (which is the subject of complaint), while other accounts have not been adopted altogether because of the lack of quorum. Moreover, it appears that the livestreaming of meetings of two of the Companies by Christopher disrupted the orderly conduct of those meetings and, were such behaviour to be repeated, would likely disrupt future meetings. The above matters are evidence of real impediments to the proper corporate governance of the relevant Companies. I accept the directors' submission that it is reasonable to infer these governance challenges are likely to affect the other Companies given the nature of operations within the Group.

56 Further, in his affidavit of 30 May 2023, Mr Vrsecky deposes that although he and Mr Downey authorised the expenditure of funds on the maintenance of the Properties when necessary, the directors' view is that a number of the Properties could potentially have their value enhanced through expenditure on capital improvements. Depending on the nature and scope of those improvements, funding could conceivably be made available by the Group or through funds borrowed from external financiers. However, the directors have not been in a position to discuss any of these matters with Antonio due to what appears to be his unwillingness to engage with them. Since their appointment approximately 13 years ago, the directors have been unable to speak with Antonio and have only received one email from him in 2018, despite numerous correspondence being sent to him by the directors. Antonio has failed to respond to the directors' requests to: update his contact details; provide a tax file number for the Antonio Pistorino Trust; provide account details for the purposes of making a profit distribution; and confirm whether he wished to inspect the Properties. As trustee of one of the shareholders of the Companies and as one of two ultimate beneficiaries of the assets held by the Group, Antonio's ongoing disengagement impedes the ability of the Companies to make critical decisions concerning the assets that they hold.

57 The deadlock in the Companies also manifests as a form of corporate paralysis in circumstances where the directors wish to resign but cannot do so. That is because of the requirements of the memoranda and articles of association of the Companies, the operation of s 203AB of the Corporations Act, and the fact that the shareholders of the Companies cannot (or will not) attend to the appointment of replacement directors. The situation of corporate paralysis or deadlock crystallised when the shareholders failed to substantively respond to the Court-mandated letter, which squarely put them on notice of the directors' wish to resign and requested that they agree upon or nominate alternative appointees. Whilst the state of corporate paralysis is not so dire as that described in Great Australian Resources, it is analogous to the position in CIC Insurance. The practical reality is that no one has been put forward to accept appointments to the boards of the Companies to replace the directors.

58 In the circumstances, it would be unjust and inequitable to compel the directors to remain in their Court-appointed roles on an indefinite basis. To do so would be the equivalent of granting specific enforcement of a contract of personal services, which equity would not allow.[35]

59 Secondly, having regard to the history of the earlier proceedings, it is apparent there has been an irretrievable breakdown in the relationship between Antonio and Joanne, as ultimate beneficiaries of the assets of the Group and whose interests are represented by the testamentary trusts, which hold a significant portion of the shares in the Companies. There is also evidence that in June 2022, Joanne informed a representative of the directors' staff that she and Antonio no longer talked to one another. Further, the directors have expressed the view that in the event the assets of the Companies and Trusts are equally divided between the interests associated with Joanne and Antonio, those parties would remain in dispute. I accept that assessment, considering the extent and duration of the earlier proceedings. A better course is for liquidators to take control of the Companies, carry out a structured sale of the relevant Properties, deal with the liabilities of each of the Companies, including inter-company loans, and distribute the net assets to the beneficiaries.

60 Thirdly, having regard to the available financial information pertaining to the Companies, it would appear that:

(a) three of the Companies are cash flow and balance sheet insolvent, being: Admiral Cove, Reynold Towns, and 541 King Street;

(b) three are cash flow negative, but balance sheet positive, namely: Belridge Court, Delrich Ridge, and Piston Holdings;

(c) all of the Companies that hold the Properties, save for Burton Arch, recorded a loss in the financial year ended 30 June 2022; and

(d) four of the Companies appear to be solvent on both cash flow and balance sheet bases, namely: Burton Arch, Dalwood Meadows, Pistorino Investments, and Pistorino Nominees. I note, however, that Christopher has raised objection to the approval of the accounts for Burton Arch and that the accounts of Pistorino Investments have not been approved and were also objected to by Christopher.

61 The financial position of the Companies is therefore best described as mixed. Whilst some of the Companies appear insolvent, others may need to realise their assets to remain solvent, and others are solvent on any view. Regardless, as previously explained, solvency will not operate as a complete barrier to a just and equitable winding up, particularly where there are other compelling reasons for a winding up, as there are in this case.

62 Fourthly, there appears to be no alternative or less drastic remedy than the winding up of the Companies. The interested persons are unwilling or unable to agree upon or nominate alternative directors to enable the directors to resign and for the Group to continue its operations. Further, none of the interested persons have elected to participate in the proceeding or have otherwise identified any alternative remedy to a winding up. When the directors raised the option of the Properties being transferred to the beneficiaries in specie with any necessary cash adjustment as an alternative to a winding up, the interested persons did not engage.

63 Lastly, the interested persons have not raised any opposition to the relief sought by the directors or identified any prejudice they will experience if the Companies are wound up. Should they identify any such prejudice, they may elect to make application to terminate the liquidations of the Companies, which would undoubtedly require them to agree upon or nominate new directors. By contrast, the directors will experience significant prejudice if the relief sought is not granted because they will be impelled to remain in their current roles, which are untenable. I also do not consider that the public interest would be well-served by keeping the directors, as independent Court-appointees, shackled to the Companies indefinitely.

64 In winding up the Companies under s 461(1)(k) of the Corporations Act, I will also appoint Shane Leslie Deane and Nicholas Giasoumi as joint and several liquidators to each of the Companies ('liquidators').

Appointment of liquidators as receivers and managers of Trusts

65 I am satisfied that pursuant to s 37 of the Supreme Court Act and the inherent power of the Court, the liquidators should also be appointed as receivers and managers over the assets and undertakings of the Trusts. I consider such an order to be just and convenient for the following reasons:

(a) in the case of each of the Trusts, with the exception of the 211 Lygon Street Trust (of which Belridge Court is trustee), the relevant trust deeds provide that the office of trustee will be vacated upon the making of a winding up order and the appointment of liquidators. This will render each of the Companies (other than Belridge Court) a bare trustee. As bare trustee, the relevant company's duties, powers, and rights would be limited to protecting the trust assets, but would not extend to a power of sale.[36] However, it would retain its right of indemnity, which is secured by a lien over the assets of the relevant trust;[37]

(b) with respect to each of the Trusts, the relevant trust deeds grant the trustee company a right of indemnity out of the trust assets against any liabilities incurred in the administration of the trust. It is well-established that a receiver and manager may be appointed over trust property to secure the trustee's right of indemnity;[38]

(c) the weight of authority suggests that in circumstances where a liquidator is seeking to deal with and sell assets of a trust in the exercise of the trustee's right to indemnity, the liquidator must first obtain a court order for sale or an order for the appointment of a receiver to realise the assets of the trust;[39]

(d) the relevant trust deeds for each of the Trusts (apart from the trust deed for the 211 Lygon Street Trust, in respect of which Belridge Court is trustee) contain a clause empowering the unitholders to remove and replace a trustee at any time. There is conflicting authority on the question of whether a former trustee has the right, as against a new trustee, to retain possession of trust assets as security for an accrued right of indemnity.[40] Although there is presently no indication that the unitholders will take steps to remove the relevant Companies as trustees, having regard to the conflict in the authorities, the history of dispute in the earlier proceedings and the dysfunctional relationship between the directors and the beneficiaries, I accept the directors' submission that the liquidators should also be appointed as receivers and managers of the trust assets. This will ensure the liquidators' power to realise the assets is maintained and that any right of indemnity held by the Companies can be exercised. Further, the appointment of the liquidators as receivers and managers pre-empts potential difficulties concerning the operation of the indemnities under the trust deeds and potentially minimises future costs and disputes;[41] and

(e) appointing the liquidators as receivers and managers of the Trusts will optimise the conduct of the liquidations, protect the assets of the Trusts, and facilitate the orderly and timely sale of those assets. The proceeds arising from an exercise of the trustee's right of indemnity in respect of each of the Trusts may then be applied in satisfaction of trust liabilities to which the right relates and according to the priority regime enshrined in the Corporations Act.

66 It will be necessary for the directors to expend time effecting the orderly handover of the books and records of the Companies and Trusts to the liquidators/receivers and managers and to otherwise assist the liquidators/receivers and managers in transferring approximately 13 years of corporate memory. I accept the Director's submission that they should be paid their reasonable costs and expenses for performing this work, at their respective hourly rates, from the assets of the Companies and Trusts. Further, I accept it would be appropriate that the directors' costs and expenses be paid initially from the assets of Pistorino Investments, given its treasury function within the Group, and then apportioned as between the Companies by way of inter-company loan adjustments.

67 It appears the Court can make such an order under s 467(1)(c) of the Corporations Act, which is broadly expressed to enable the Court to 'make any interim or other order that it thinks fit' on hearing a winding up application.[42] In my view, the order for the payment of the directors' fees and expenses serves an auxiliary function in the exercise of the Court's jurisdiction to order the just and equitable winding up of the Companies under s 461(1)(k).

68 Further or alternatively, the order may be made under ss 90-15(1) and (2) of the Insolvency Practice Schedule (Corporations) (which is Schedule 2 of the Corporations Act) ('IPS'), which allows the Court to 'make such orders as it thinks fit [including on the Court's own initiative] in relation to the external administration of a company'. According to s 90-15(3)(a), such orders may include 'an order determining any question arising in the external administration of the company'. Section 90-15 is therefore broad in its scope and contemplates not only the exercise of judicial discretion, but also the determination of substantive rights.[43] Here, the Court's jurisdiction under s 90-15 is available as a consequence of the decision to place the Companies into external administration. The order will be framed to the effect that the directors be entitled to payment of their reasonable costs and expenses for the relevant handover work and that the liquidators would be justified and acting reasonably in paying those costs and expenses out of the assets of Pistorino Investments and apportioned amongst the Companies by way of inter-company loan adjustments.

69 Similarly, pursuant to ss 467(1)(c) and 466(4) of the Corporations Act, and in the exercise of the Court's broad costs discretion under s 24 of the Supreme Court Act, I will order that the costs of this application be borne by the Companies, with such costs to be initially paid out of the assets of Pistorino Investments and later apportioned amongst the Companies by way of inter-company loan adjustments.

70 Finally, in their amended originating process dated 15 May 2023, the plaintiffs had sought an order that the remuneration of Mr Deane and Mr Giasoumi as liquidators of the Companies and receivers and managers of the Trusts be payable on a time basis, according to the scale of charges of their firm, Dye & Co Pty Ltd, with such remuneration to be paid (after assessment in accordance with the Corporations Act), together with their reasonable expenses, from the assets of the Companies. By their email dated 5 September 2023 (in response to the Court's email of 4 September 2023), Thomson Geer confirmed this aspect of the ancillary relief was no longer sought. In my view, such an order would have been unnecessary and peremptory. The liquidators are entitled to seek the determination of their remuneration in the ordinary course under the process contemplated by s 60-10 of the IPS. A time-based approach to determining a liquidator's remuneration is one method of working out the appropriate remuneration. Other available methods include an ad valorem approach by reference to a percentage or proportion of the assets in the relevant Companies. It is for the liquidators to consider which method of calculating their remuneration is reasonable in the circumstances and for creditors, a committee of inspection, or the Court to determine whether such method of calculation is appropriate under ss 60-10(1) and (3) of the IPS. To that end, I agree with the plaintiffs' suggestion that the liquidators should be granted liberty to apply in relation to their remuneration.

71 In the exercise of my discretion, I have determined to wind up each of the Companies because it is just and equitable to do so in accordance with s 461(1)(k) of the Corporations Act. Shane Leslie Deane and Nicholas Giasoumi will be appointed joint and several liquidators of the Companies accordingly. I have also decided it is just and convenient for the liquidators to be appointed receivers and managers over the assets of the Trusts. I will ask the plaintiffs to formulate orders to give effect to these reasons.

ADMIRAL COVE PTY LTD (ACN 006 462 568) as trustee for the ADMIRAL COVE PROPERTY TRUST

BURTON ARCH PTY LTD (ACN 006 816 691) as trustee of the 221 DRUMMOND STREET PROPERTY TRUST

DELRICH RIDGE PTY LTD (ACN 072 359 936) as trustee of the 280 LYGON STREET UNIT TRUST

PISTORINO NOMINEES PTY LTD (ACN 005 404 204) as trustee of the PISTORINO FAMILY TRUST

REYNOLD TOWNS PTY LTD (ACN 005 936 452) as trustee of the REYNOLD TOWNS PROPERTY TRUST

541 KING STREET NOMINEES PTY LTD (ACN 006 036 086) as trustee of the 541 KING STREET UNIT TRUST

[1] For ease of reference, and without any intended disrespect, the participants in the earlier proceedings will be referred to by their first names.

[2] [2014] VSC 551 ('Pistorino v Connell (No 3)').

[6] In particular: Admiral Cove holds shares in Burton Arch; Pistorino Nominees holds shares in Reynold Towns and 541 King Street; Joanne Connell owns shares in Dalwood Meadows; and Vincent Verduci owns shares in Pistorino Investments, Dalwood Meadows, Pistorino Nominees, and Admiral Cove.

[7] The affidavit of Petr Vrsecky sworn 2 March 2023 exhibits a table at pages 27-8 of the exhibit bundle, setting out the unitholders and beneficiaries of each the Trusts. The table erroneously identifies the Agostino Pistorino Trust as being one of the beneficiaries of the Trusts. By email to the Court dated 5 September 2023, the plaintiffs clarified that such references should be read as the Antonio Pistorino Trust.

[8] Proceeding S CI 2009 05816 was commenced by Mrs Aurelia Pistorino in April 2009 to remove Bradford Baker (Agostino's accountant) and Mrs Joanne Connell as executors of Agostino's will and trustees of his estate.

[9] By email dated 5 September 2023 (in response to an email from the Court dated 4 September 2023), the plaintiffs' solicitors confirmed that this last aspect of the relief sought was no longer pressed.

[10] [2020] VSC 364, [21]-[22] ('Docklands Chiropractic').

[11] Ebrahimi v Westbourne Galleries Ltd [1973] AC 360, 379 (Lord Wilberforce). See also Australian Securities and Investment Commission v Storm Financial Ltd [2009] FCA 269; (2009) 71 ACSR 81, [65] (Logan J); ASIC v Letten (No 10) [2011] FCA 498, [12] (Gordon J) ('ASIC v Letten').

[13] [2012] NSWSC 775.

[15] Re Yenidje Tobacco Company Ltd [1916] 2 Ch 426; Johnny Oceans Restaurant Pty Ltd v Page [2003] NSWSC 952; Clarke v Bridges [2004] FCA 394; Booker v You Run the Business Pty Ltd [2008] FCA 1762; Re Dawning Investments Pty Ltd (2022) 68 VR 226 ('Re Dawning Investments').

[16] Re Vision Image (Aust) Pty Ltd Cheng v Yeo [1998] WASC 38; CIC Insurance Ltd v Hannan & Co Pty Ltd [2001] NSWSC 437; (2001) 38 ACSR 245; Great Australian Resources Pty Ltd; Re Platinum Mining Ventures Ltd [2011] FCA 1472.

[17] Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343; Re Dawning Investments.

[18] [2008] VSCA 86; (2008) 66 ACSR 325 ('Koko Black').

[19] Ibid, 341 [119] (Ashley JA agreeing at 327 [1], Forrest AJA agreeing at 353 [191]).

[20] [2001] NSWSC 437; (2001) 38 ACSR 245.

[23] [2011] FCA 1472.

[27] Re G Jeffrey (Mens Store) Pty Ltd (1984) 9 ACLR 193, 201 (Crockett J); Re Docklands Chiropractic, [37]-[42]; Re JSSP Holdings Pty Ltd [2021] VSC 33, [15] (Hetyey AsJ) ('Re JSSP Holdings').

[28] Re Walter L Jacob & Co Ltd (1988) 5 BCC 244, 251 (Nicholls LJ); Australian Securities and Investments

Commission v AS Nominees Ltd [1995] FCA 1663; (1995) 62 FCR 504, 530-1 (Finn J); Re JSSP Holdings, [16].

[29] See Exton v Extons [2017] VSC 14; (2017) 53 VR 520, 545 (Sifris J); Re Wyndham Park Estate Pty Ltd [2019] VSC 92, [40]-[42] (Sifris J).

[30] [2017] VSC 14; (2017) 53 VR 520.

[31] International Hospitality Concepts Pty Ltd v National Marketing Concepts Inc (No 2) (1994) 13 ACSR 368, 372 (Young J).

[32] French v Smith [2004] VSCA 207, [122] (Charles and Chernov JJA and Harper AJA); Sassine v Ray & Sons Construction Pty Ltd [2012] NSWSC 307, [21] (Black J).

[33] Turner v Ulicorp Pty Ltd [2007] NSWSC 206, [24] (Barrett J); Host-Plus Pty Ltd v Australian Hotels Association [2003] VSC 145, [67] (Hansen J).

[34] See Australian Securities and Investments Commission v ActiveSuper Pty Ltd (No 2) [2013] FCA 234; (2013) 93 ACSR 189, 195 [24] (Gordon J).

[35] See Frith v Frith [1906] UKLawRpAC 8; [1906] AC 254, 261, citing Ogden v Fossick [1862] EngR 1142; (1862) 4 De GF & J 426; Maiden v Maiden [1909] HCA 16; (1909) 7 CLR 727, 737 (Griffth CJ); JC Williamson Ltd v Lukey and Mulholland [1931] HCA 15; (1931) 45 CLR 282, 297-8 (Dixon J, Duffy CJ agreeing at 290); Koko Black, 341 (Dodds-Streeton JA).

[36] Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd [2011] FCA 677, [26], [28] (Gordon J) ('Caterpillar Financial'); Kitay, Re South West Kitchens (WA) Pty Ltd [2014] FCA 670, [20] (McKerracher J) ('Kitay'); Re Cremin, Brimson Pty Ltd (in liq) [2019] FCA 1023; (2019) 136 ACSR 649, 655-6 [49]-[50] (Moshinsky J) ('Re Cremin').

[37] Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth of Australia [2019] HCA 20; (2019) 268 CLR 524, 542-4 [29]-[32] (Kiefel CJ, Keane and Edelman JJ), 578 [132] (Gordon J) ('Carter Holt'); Jones (in his capacity as liquidator of Killarnee Civil & Concrete Contractors Pty Ltd (in liq) v Matrix Partners Pty Ltd [2018] FCAFC 40; (2018) 354 ALR 436 ('Killarnee'); Rohrt v Princes Square (No 2) (2021) 151 ACSR 270, 281-2 (Anderson J) ('Rohrt v Princes Square (No 2)'); Caterpillar Financial, [26], [28] (Gordon J); Kitay, [20] (McKerracher J); Re Cremin, 655-6 [49]-[50] (Moshinsky J).

[38] Rohrt v Princes Square (No 2), 282 (Anderson J), citing SMP Consolidated Pty Ltd (in liq) v Posmot Pty Ltd [2014] FCA 1382, [7] (Yates J) and the authorities cited there.

[39] Killarnee, [44] (Allsop CJ); Re Carello, Re Gembrook Investments Pty Ltd (in liq) [2019] FCA 1143, [21] (Colvin J); Re Waratah Group Pty Ltd (in liq) [2020] VSC 523, [36] (Delany J) ('Waratah Group'); Re Parkway One Pty Limited (No 2) [2020] NSWSC 191 (Rees J); Re Glenvine Pty Ltd (In Liq) [2020] NSWSC 866, [46] (Black J); Rohrt v Princes Square (No 2), 282-3 (Anderson J).

[40] Cases that suggest a former trustee does not have the right to retain possession of trust assets over a new trustee in satisfaction of the right of indemnity include: Hillig v Darkinjung Local Aboriginal Land Council [2006] NSWSC 1371; (2006) 205 FLR 450; Ronori Pty Ltd v ACN 101 071 998 Pty Ltd [2008] NSWSC 246; Lemery Holdings Pty Ltd v Reliance Financial Services Pty Ltd [2008] NSWSC 1344; (2008) 74 NSWLR 550, 561 (Brereton J); Michell (Liquidator) v Delltta Holdings Pty Ltd (in liq) atf The Brookhill Trust [2019] FCA 2133, [8] (Davies J); Pitard Trust v Les Denny Pty Ltd [2019] VSC 614, [2], [11], [38] (McDonald J). Cases that suggest the trustee has the right to retain possession of the trust property until the right of indemnity has been exercised include: Re Suco Gold Pty Ltd (In Liquidation (1983) 33 SASR 99, 109 (King CJ, Jacobs J agreeing at 111, Matheson J agreeing at 115); Apostolou v VA Corporation Aust Pty Ltd [2010] FCA 64; (2010) 77 ACSR 84, 94-5 (Finkelstein J); Prior v Simeon (No 2) [2011] WASC 61, [20] (Corboy J); Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd [2011] FCA 677, [18] (Gordon J); Re Neeeat Holdings (in liq) (2013) 299 ALR 744, 749-50 [22] (Kenny J).

[41] See Waratah Group, [57] (Delany J).

[42] See Re Skytraders Pty Ltd [2022] VSC 416, [493]-[494] (Button J) for a discussion of the scope of s 467(1)(c) of the Corporations Act 2001 (Cth).

[43] Re Polat Enterprises Pty Ltd (in liquidation) [2020] VSC 485, [31] (Hetyey AsJ). See also Michael Murray and Jason Harris, Keay's Insolvency: Personal & Corporate Law and Practice (Lawbook, 11th ed, 2018) [10.335].