Re BRC Group Pty Ltd (in liq) [2025] VSC 771 (9 December 2025)

1. The plaintiff, Glen Anthony Crisp, ('the Liquidator') was appointed the liquidator of BRC Group Pty Ltd (in liq) ('BRC') by an order of this Court on 30 April 2025.
2. BRC was appointed as the trustee for the BRC Group Unit Trust (ABN 81 202 775 658) ('the BRC Trust') by a trust deed ('the Deed') dated 28 June 2017.
3. By originating process filed 7 August 2025, the Liquidator applies under s 63(1) of the Trustee Act 1958 (Vic) ('Trustee Act') or alternatively s 37 of the Supreme Court Act 1986 (Vic) ('Supreme Court Act') or r 39.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Rules') to be given certain powers to enable the realisation of the trust assets to satisfy the claims of BRC's creditors.
4. In support of the originating process, the Liquidator relies on his affidavits sworn 7 August 2025 and 26 August 2025 together with an affidavits of service of Tania Kirby deposing to service of the evidence and the written submissions relied upon on the director of BRC and the unitholders of the BRC Trust. The unitholders support the application. BRC's creditors were notified in a report to creditors issued on 24 July 2025 that this application would be brought. One of those creditors, Watagan Park Pty Ltd, is funding this application.
5. In the originating process, the Liquidator sought the following relief:[1]

(a) pursuant to s 37 of the Supreme Court Act, that he be appointed receiver of the business and assets of the BRC Trust for the purpose of realising those assets and distributing them in accordance with the priorities contained in pt 5.6 of the Corporations Act 2001 (Cth) ('Corporations Act');

(b) a dispensation from the requirement for him to give security in the form of a guarantee pursuant to r 39.05 of the Rules.

(c) that he have, in respect of the assets of the BRC Trust, the powers that a receiver has in respect of the business and property of a company under s 420 of the Corporations Act (other than s 420(2)(s)(t)(u) and (w)) as if the reference in that section to 'the corporation' were a reference to the BRC Trust, including without limitation, the power to do all things necessary or convenient to:

(i) take control of and manage the BRC Trust assets, including but not limited to recovering any debts owed to the BRC Trust;

(ii) demand the books and records of the BRC Trust from any person;

(iii) investigate transactions made using funds derived from the assets of the BRC Trust;

(iv) execute any necessary documents on behalf of the BRC Trust;

(v) sell any assets of the BRC Trust;

(vi) distribute or apply the BRC Trust assets in accordance with the Unit Trust Deed dated 28 June 2017 and any applicable legal requirements;

(vii) take any further action required to ensure the proper administration and management of the BRC Trust assets; and

(viii) determine and make payment of claims against the assets of the BRC Trust.

(d) the Liquidator's remuneration, costs and expenses as the Liquidator of BRC and as the receiver of the assets of the BRC Trust, be paid from the assets of the BRC Trust.

(e) provision that he may apply to the Court for orders discharging and releasing him as receiver of the assets of the BRC Trust on seven business days' notice by sending an email to the Commercial Court Registry.

(f) any persons who can demonstrate sufficient interest to modify or discharge any of these orders have liberty to apply on 48 hours' notice to the plaintiff; and

(g) such other order as the Court deems fit.

1. On the return of this matter, I made the orders which are appended to these reasons and indicated that I would provide reasons at a later time.

1. At the time of the Liquidator's appointment, Paul Docherty and Mark Dinnison were the directors of BRC. Mr Docherty remains the sole director of the company but Mr Dinnison has ceased to hold that position. His resignation appears to have come into effect on 16 July 2025. Mr Docherty and Mr Dinnison are the current shareholders of BRC, holding 40 and 25 ordinary shares respectively.
2. On 28 June 2017, BRC was appointed as the trustee of the BRC Trust pursuant to the Deed.
3. The Liquidator's investigations reveal that BRC did not trade in its own right. In this regard, the following evidence was adduced:

(a) the winding up application to wind up BRC proceeded on the basis that BRC was in its capacity as the trustee of the BRC Trust and orders were made against it in that capacity;

(b) ABN registration details for the business name 'BRC Capital' record that BRC acts as trustee of the Trust;

(c) BRC did not maintain separate bank accounts from the BRC Trust;

(d) BRC operated solely as an investment entity and did not employ any staff. As a result, there are no employment-related documents identifying BRC as acting in its capacity as trustee;

(e) BRC did not engage in any trading activities, nor did it issue any invoices. All investments (shares held in related entities) and any loans advanced by third parties to fund those investments were recorded in the name of BRC in its capacity as trustee of the Trust;

(f) Company documents, including resolutions of the directors, record that BRC was acting as trustee of the BRC Trust;

(g) all financial records are in the name of the BRC Group, being the trading name used by BRC on behalf of the BRC Trust;

(h) all company ledgers reflect only trust-related activities;

(i) in proceedings to set aside a creditor's statutory demand which was in response to a demand issued by Watagan Park Pty Ltd,[2] BRC, in its capacity as trustee of the BRC Trust, unsuccessfully sought to set aside a creditors statutory demand, and then unsuccessfully appealed the decision of Barrett AsJ to the Court of Appeal.[3]

1. The Liquidator states that the BRC Trust operated as a vehicle for managing and dealing with assets of BRC and was structured as a unit trust trading as BRC Capital.
2. The BRC Trust's register of unitholders as at 30 June 2022 identified 12 unitholders who held units ranging from 2% to 37% of the 430 issued units.
3. Clause 20.3(a) of the Deed operates as an ipso facto clause and provides that the trustee is deemed to have retired if it is placed into liquidation, with the effect that the trustee became bare trustee and ceased to have power to deal with the assets of the Trust, except to the extent necessary to facilitate the transfer of control to a new trustee.[4] In those circumstances, a trustee cannot sell the trust's property without an order of the Court.[5] The rationale for this is that the trust assets are not 'property of the company but are instead trust property in which the corporate trustee has a proprietary interest by way of lien or charge to secure its right of exoneration.[6]
4. The Deed does not contain a mechanism for automatically appointing a replacement trustee in the event the trustee retires pursuant to cl 20.3(a), however, pursuant to cl 20.2 of the Deed, a trustee may be appointed by a resolution passed by unitholders holding not less than 75% of the units. The Liquidator is not aware of any resolution being passed by the unitholders appointing a new trustee.
5. On 30 April 2025, BRC was placed into liquidation and, by operation of cl 20.3(a) of the Deed, BRC was deemed to have automatically retired as trustee of the BRC Trust on that date.
6. The Liquidator has identified substantial real estate assets located in Arden Street, North Melbourne ('Arden Street Properties'). By reason of the operation of the ipso facto clause, the Liquidator is presently unable to deal with the Arden Street Properties or any other trust assets in the course of BRC's liquidation. These events gave rise to the present application in which the Liquidator seeks orders that he be appointed as receiver and manager of the business and assets of the BRC Trust for the purpose of realising those assets and distributing the proceeds in accordance with the priorities in pt 5.6 of the Corporations Act, together with the further relief set out in para 5 above.
7. On 14 May 2025, The Liquidator notified BRC's creditors that the company was in liquidation.
8. The Liquidator's investigations have revealed:

(a) three secured creditors of BRC who have lodged formal proofs of debt totalling $39,605,381.78; and

(b) nine unsecured creditors (additional to those mentioned in the ROCAP and Statement of Affairs who have lodged formal proofs of debt totalling $10,547,895.17.

1. On 24 July 2025, the Liquidator issued a report to creditors, who included the following secured creditors:

(a) Goldhill Junction Pty Ltd;

(b) Matthew W Bailey Family Trust; and

(c) Bizcap Au Pty Ltd.

1. The Liquidator states that as at 26 August 2025, he had not received any responses either in opposition or in support of the application from creditors, save for Watagan Park Pty Ltd.
2. The Arden Street Properties are in the process of being acquired by the following entities ('Arden Entities'):

(a) Arden Holdings No 1 Pty Ltd ATF BRC Partnership No 1 Unit Trust;

(b) Arden Holdings No 2 Pty Ltd ATF BRC Partnership No 2 Unit Trust;

(c) Arden Holdings No 3 Pty Ltd ATF BRC Partnership No 3 Unit Trust;

(d) Arden Holdings No 4 Pty Ltd ATF BRC Partnership No 4 Unit Trust; and

(e) Arden Holdings No 5 Pty Ltd ATF BRC Partnership No 5 Unit Trust.

1. The BRC Trust is associated with these property interests as it holds approximately 70% of the units in each of the Arden Entities. The Arden Properties are currently owned by companies controlled by the Theodossi Family Pty Ltd with a purchaser's caveat lodged by the Arden Street Entities. The Liquidator deposes that a deposit of $22 million has been paid by the Arden Entities, with settlement scheduled for 1 December 2025.
2. The Liquidator states that given the substantial liabilities owed by BRC to both secured and unsecured creditors, the realisation of the interests in the Arden Street properties is necessary to satisfy BRC's right of indemnity and, ultimately, to enable a distribution to creditors in accordance with the priorities prescribed in the Corporations Act.

1. Written submissions were provided by Ms Tyson , counsel for the Liquidator, which identified the applicable legal principles directed to whether a receivership is more appropriate course when compared to conferral of the powers of a trustee under the Trustee Act.
2. The submissions contend, which is not controversial, that the trustee, though removed from office, retains its right of indemnity to resort to the trust assets to vindicate its right to be exonerated for the liabilities incurred as the trustee.[7] There are two avenues available to achieve this, the trustee may either:

(a) apply for powers under s 63 of the Trustee Act;[8] or

(b) seek an order pursuant to s 37(1) of the Supreme Court Act or r 39,02 of the Rules to be appointed a receiver and manager of the trust property.[9]

1. In Re Waratah Group Pty Ltd ('Waratah') Delany J surveyed the recent authorities on the issue of which of these courses should be adopted and observed that 'there is no "bright line" that provides assistance to the Court to determine whether, the preferable course is to confer power under the Trustee Act or, instead, to make an appointment pursuant to the Supreme Court Act.'[10]
2. In expressing the advantage of a receivership, his Honour concurred with the view expressed by McDonald J in Pitard Consortium Pty Ltd v Les Denny Pty Ltd,[11] that:[12]

If no appointment as receivers and managers is made and a new trustee is appointed, for whatever reason, the trust property will not have been preserved for the benefit of the liquidators and trust creditors (including former Company employees) as persons interested in that property. Attempts by the liquidators to fulfil their statutory obligation to get in and take possession of the assets may be frustrated, as would the objectives of the Act.

The appointment of the liquidators as receivers and managers pre-empts any such potential difficulties.

1. Delany J observed that the circumstances in which an appointment might be made 'include where it is necessary for the protection or preservation of trust property for the benefit of persons who have an interest in that property'.[13]
2. In Re Cremin, Brimson Pty Ltd (in liq) ('Cremin'),[14] Moshinsky J considered a case in which the trust deed removed the company in liquidation by operation of an ipso facto clause where it was expected to continue to trade the business of the trust. His Honour found it more appropriate to appoint the liquidator as receiver and manager of the assets and undertaking of each trust despite the liquidator seeking an order pursuant to s 63 of the Trustee Act. He described the appointment of a receiver as 'the more common course'.[15]
3. Sloss J made orders appointing the liquidators as receivers and managers over trust property pursuant to s 37 of the Supreme Court Act in Re All Purpose Labour Pty Ltd (in liq)[16] ('All Purpose Labour') by reason that there was 'the potential, albeit very minimal, for the unitholder unilaterally to appoint a new trustee, which would result in the Liquidators (as former trustee) potentially losing their right to retain trust assets as security for their accrued right of indemnity'.[17]
4. As has been mentioned, in the case of BRC, the Trust deed permitted the voting unit holders to appoint a new trustee by notice in writing delivered to the trustee with the consent of not less than three quarters of the voting unitholders.
5. Ms Tyson also referred to authorities which suggest that the key incentive for liquidators to apply for powers pursuant to s 63 of the Trustee Act instead of s 37 of the Supreme Court Act is to avoid the procedural complications and costs involved in a receiver's obligation to account and to apply for discharge at the end of their appointment.[18]
6. In Jones v Matrix Partners Pty Ltd; re Killarnee Civil & Concrete Contractors Pty Ltd (in liq) ('Killarnee'), Allsop CJ observed that 'where there appears to be no issue but that the right of exoneration exhausts the trust property, the liquidator ... could be given power to sell the property without the need to be appointed a receiver'.[19]
7. Other factors which makes orders under state legislation such as s 63(1) Trustee Act appropriate were summarised by Anastassiou J in Mutton (liquidator), re Balsub Pty Ltd (in liq),[20] who noted the following matters in the circumstances of that case:

(a) the company has become a bare trustee of the assets of the trust upon the appointment of the liquidator;

(b) the company had acted only as trustee of the trust and in no other capacity;

(c) all assets owned by the company were held by it as trustee and all liabilities incurred by it were incurred as trustee; and

(d) no new trustee had been appointed.

1. In her submissions, Ms Tyson identified the following characteristics of the BRC Trust:

(a) the Liquidator has evidenced that BRC has only acted as trustee of the BRC Trust;

(b) BRC has incurred debts as trustee of the BRC Trust in the vicinity of $49 million;

(c) the assets of the trust mainly consisted of property interests in the Arden Street Properties;

(d) insolvent trading claims may exist against the directors of BRC;

(e) clause 20.2 of the Trust Deed permits a trustee to be removed or appointed by a resolution passed by the holders of no less than 75% of the units; and

(f) clauses 16.14 and 16.15 also permit the passing of resolutions without a meeting.

1. Although the Liquidator's evidence is that no resolution to appoint a new trustee has been passed and the Liquidator has not called a meeting of unitholders under clause 20.4 of the Deed and does not consider it his role as liquidator to do so, Ms Tyson submits that the unitholders could nevertheless seek to pass a resolution to appoint a new trustee under cl 20.2 of the Trust Deed. The Liquidator has also expressed this concern in his second affidavit.
2. Ms Tyson therefore seeks orders for the Liquidator to be appointed receiver and manager of the assets and undertaking of the BRC Trust noting that:

(a) the Court's power to appoint a receiver under s 37 of the Supreme Court Act is enlivened by reason that it is necessary for the protection or preservation of trust property for the benefit of persons who have an interest in that property;

(b) there is a risk that Unitholders holding at least 75% of the units issued in the Trust could appoint a new trustee;

(c) if that occurs the Liquidator would potentially lose his right to retain trust assets as security for the accrued right of indemnity;[21]

(d) the Liquidator considers that his appointment as receiver and manager is the more practical course, by reason that the assets held are units in trusts and not in the form where a simple power of sale would be sufficient to properly protect the BRC's right of indemnity;

(e) whilst the appointment as receiver imposes additional obligations in the sense of requiring the receiver to apply to the Court for his later discharge, the broad powers of a receiver and manager, which would withstand the later appointment of a trustee to the Trust, may avoid the need for costly future Court applications;

(f) BRC's liabilities exceed its assets and has an overall deficiency such that, as was stated in All Purpose Labour at [58] and in Waratah at [57], 'all that can be done to minimise future costs and disputes and to aid the conduct of the administration in insolvency should be done'.

1. Ms Tyson submitted that the Liquidator be appointed receiver and manager without the requirement of security, noting that the same course was adopted in Re Pires Consulting Holding Pty Ltd (in liquidation)[22] by reason that the person seeking appointment is a liquidator and was therefore already subject to obligations under the Corporations Act.[23]

1. I am satisfied that on the evidence, BRC has only ever traded as trustee of the BRC Trust. There is no evidence that it carried out any trading activity under any other auspices. By operation of cl 20.3(a) of the Deed, when BRC was placed in liquidation it was automatically removed as trustee of the trust, became the bare trustee of the trust assets and, although retaining its right of indemnity, lost its ability to have access to the trust assets to satisfy the claims of the creditors. It therefore became incumbent upon the Liquidator to make the application to the Court to appropriately realise the trust assets to satisfy what are very substantial claims by creditors.
2. I am satisfied that the appointment of the Liquidator as receiver of the trust's assets the appropriate course of action in the present circumstances. Clause 20.2 of the Trust Deed gives rise to the possibility that a new trustee could be appointed by a resolution passed by no less than 75% of the units which would clearly frustrate the exercise of satisfying the claims of creditors.
3. I also consider that it is appropriate to order that the Liquidator have, in respect of the assets of the BRC Trust, the powers that a receiver has in respect of the business and property of a company under s 420(2) of the Corporations Act (other than s 420(2)(s)(t)(u) and (w), which have no application in the context of this case) as if the reference in that section to 'the corporation' were a reference to the BRC Trust.
4. Rule 39.05 of the Supreme Court (General Civil Procedure) Rules 2015 provides that a receiver under that rule shall provide security:

39.05 Security by receiver

Unless the Court otherwise orders -

(a) a receiver shall give security approved by the Court that the receiver will account for what the receiver receives as receiver and deal with it as the Court directs;

(b) the security shall be given by guarantee in Form 39A and filed;

(c) the guarantee shall be given by a bank or an insurer.

1. However in Sapphire (SA) Pty Ltd v Ewens Glen Pty Ltd (No 2), in similar circumstances to those here, Besanko J observed:

In my opinion, this is an appropriate case to otherwise order and not require the receivers and managers to provide security. The receivers and managers are joint and several liquidators of the defendant and they are subject to obligations under the Corporations Act. They are official liquidators under s 1283 of the Act. It is clear enough I think that the trust assets will have to be sold to meet the liabilities of the defendant as trustee (see paragraphs 5, 6 and 16 in my earlier reasons). In the circumstances, it is appropriate to order that the liquidators be appointed receivers and managers without security.

1. I am satisfied that in this matter the appointed receiver, the Liquidator, would also be subject to the obligations under the Corporations Act and the Court is empowered to order otherwise to forgo the requirement for the receiver to provide security.
2. A liquidator's costs are payable out of the trustee's right of indemnity over trust assets particularly where the company in liquidation acted solely as corporate trustee.[24] The Liquidator is entitled to his remuneration in going about the liquidation and the receivership; BRC carried on no other activity other than trustee of the BRC Trust.[25] Further, those costs should be paid in accordance with the priorities in s 556(1) of the Corporations Act.
3. For the sake of completeness, I set out the orders I made in the proceeding on 28 August 2025.

THE COURT ORDERS THAT:

1. Pursuant to s 37 of the Supreme Court Act 1986 (Vic), Glenn Anthony Crisp be appointed receiver and manager ('Receiver') of the assets and undertakings ('Trust Property') of the BRC Group Unit Trust (ABN 81 202 775 658) ('BRC Trust') established by the Unit Trust Deed dated 28 June 2017.

2. The need for the Receiver to give security in the form of a guarantee in Form 39A, and to file that guarantee, pursuant to r 39.05 of the Rules, be dispensed with.

3. The Receiver be authorised to have possession of, call in, preserve, maintain and sell the assets comprising the Trust Property.

4. The Receiver have, in respect of the Trust Property, the powers that a receiver has in respect of the business and property of a company under s 420 of the Corporations Act 2001 (Cth) ('Corporations Act') (other than s 420(2)(s)(t)(u) and (w)) as if the reference in that section to 'the corporation' were a reference to the Trust, including without limitation, the power to do all things necessary or convenient to:

(a) take control of and manage the Trust Property, including but not limited to recovering any debts owed to the BRC Trust;

(b) demand the books and records of the BRC Trust from any person;

(c) investigate transactions made using funds derived from the Trust Property or previous assets of the BRC Trust;

(d) execute any necessary documents on behalf of the BRC Trust;

(e) sell the Trust Property;

(f) take any further action required to ensure the proper administration and management of the Trust Property; and

(g) determine and make payment of claims against the Trust Property.

5. The Receiver have the power to:

(a) apply the proceeds from the sale or realisation of Trust Property to discharge the liabilities of BRC Group Pty Ltd ('Company') (all of which were incurred by it in its capacity as trustee) in accordance with the priorities set out in s 556 of the Corporations Act; and

(b) distribute any surplus proceeds from the sale or realisation of the Trust Property (if any) to a new trustee of the BRC Trust, or, if there is no new trustee, to the beneficiaries of the BRC Trust.

1. The costs, expenses and remuneration incurred by the plaintiff, whether incurred as liquidator of the Company or Receiver of the Trust Property pursuant to order 1 above (including this application), be paid in accordance with paragraph 5(a) above from the assets of the Trust.
2. The Receiver may apply to the Court for orders discharging and releasing himself as receiver and manager of the assets of the BRC Trust on 7 business days' notice by sending an email to the Commercial Court Registry.
3. Liberty to apply be granted to the plaintiff and to any person who can demonstrate sufficient interest to modify any directions or orders made pursuant to this originating process on no less than 72 hours' notice to the plaintiff.
4. The plaintiff provide the Australian Securities and Investments Commission with a copy of these orders, the originating process filed and the affidavits of Mr Glenn Anthony Crisp dated 7 August 2025 and 26 August 2025, within 7 days of these orders.

[1] The originating process sought relief under s 63(1) of the Trustee Act and/or s 37 of the Supreme Court Act and/or r 39.02 of the Rules ultimately however The Liquidator only pressed for the relief under s 37 of the Supreme Court Act.

[2] Watagan Park Pty Ltd ultimately applied for and obtained a winding up order against BRC relying on that demand.

[3] Barrett AsJ's reasons in the matter S ECI 2024 01494 are exhibited to Mr Crisp's affidavit; the reasons of the Court of Appeal are found in BRC Group Pty Ltd v Watagan Park Pty Ltd [2024] VSCA 36 (Kennedy, Orr and Kenny JJA). In both judgments, the Court found that there was a loan to BRC in its capacity as trustee of the BRC Trust and the dispute raised by BRC was not genuine.

[4] See generally, Jones v Matrix Partners Pty Ltd; re Killarnee Civil & Concrete Contractors Pty Ltd (in liq) [2018] FCAFC 40; (2018) 260 FCR 310, 332, 344, 352 (Allsop CJ) ('Killarnee').

[7] Re Waratah Group Pty Ltd [2020] VSC 523, [46] (Delany J) ('Waratah') citing Connelly, re Gregorski Investments [2019] FCA 1400 [19].

[11] [2019] VSC 614; (2019) 58 VR 524, 527-9.

[13] Waratah [50] citing Yunghanns v Candoora No 19 Pty Ltd (No 2) [2000] VSC 300; (2000) 35 ACSR 34, 46-50 (Warren J).

[14] [2019] FCA 1023; (2019) 136 ACSR 649, 657.

[16] [2024] VSC 547 (Sloss J) ('All Purpose Labour').

[18] Re Trident Star Enterprises Pty Ltd (admin apptd) [2025] VSC 215, [56].

[20] [2020] FCA 741; (2020) 145 ACSR 342, 348 (Anastassiou J) citing Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd [2011] FCA 677 [35]-[36].

[21] This was a relevant factor guiding the Court in both Waratah and All Purpose Labour, noting that in both cases, the risk of the appointment of a replacement trustee described as not likely.

[22] [2019] VSC 384 (Kennedy J).

[24] All Purpose Labour, [42] (Sloss J), citing Carter Holt v Commonwealth [2019] HCA 20; (2019) 268 CLR 524, 588-9 (Gordon J).

[25] Re Pires Consulting Holding Pty Ltd (in liquidation) [2019] VSC 384, [53]-[54] (Kennedy J).