Re The Vertue Of The Coffee Drink Pty Ltd (in liq) [2026] VSC 120 (17 March 2026)

1. The Liquidator has filed and relies on the following materials:

(a) affidavits of Matthew Kucianski sworn 8 January 2026 and 13 January 2026 (Liquidator's Affidavits);

(b) affidavits of Fletcher Nicholas Diamantis affirmed 28 January 2026 and 20 February 2026;

(c) affidavit of Drew Austin affirmed 25 February 2026; and

(d) submissions dated 25 February 2026.

1. The following have been drawn from the Liquidator's Affidavits and filed documents. These are my findings of fact.
2. On 30 November 2012, the Company was incorporated with Michael Cracknell as its director.
3. On 30 November 2012, the Trust was created by deed (Trust Deed).
4. The Company operated in the hospitality industry and historically operated various restaurant businesses across various locations through five trusts:

(a) The Vertue of the Coffee Drink Unit Trust (i.e. - the Trust);

(b) The Vertue Coffee Roasters Unit Trust (Roasters Trust);

(c) The VCR Port Melbourne Café Trust (VCR Trust);

(d) The Harlequin Alley Unit Trust (Harlequin Alley UT); and

(e) The Inwards Goods Unit Trust (Inwards Goods UT).

1. On 1 June 2022, VCR Roast Pty Ltd replaced the Company as trustee of the Roasters Trust.
2. Prior to 30 June 2023, the businesses that had been conducted through the Harlequin Alley UT and the Inwards Goods UT ceased trading.
3. On 29 July 2024, VCR Port Melbourne Café Pty Ltd replaced the Company as trustee of the VCR Trust.
4. In its capacity as trustee of the Trust, the Company had the registered business names of 'Vertue Coffee' and 'Vertue Coffee Roasters'. The Trust is the holder of ABN 26 508 976 855 (Trust ABN), which is associated with those names.
5. Prior to the winding up of the Company, only one of its businesses remained, namely 'Carli' (Business) situated at 181 Elgin Street, Carlton (Carlton Premises). The Business ceased trading shortly prior to the appointment of the Liquidator.
6. The Liquidator has deposed, based on his review of the records of the Company and independent enquiries, that by the time the Company was wound up, its property and liabilities were exclusively held and incurred in its capacity as trustee of the Trust and not in any other capacity, including its own right.
7. The Liquidator has deposed that the Company has a right of indemnity against the assets of the Trust. This is discussed further below.
8. On 23 January 2025, the Liquidator was appointed as liquidator of the Company by resolution of its sole member.

(a) the Initial Trustee Details as 'the Vertue of the Coffee Drink Pty Ltd ACN 161 467 287 of 446 Victoria Street North Melbourne VIC 3051'; and

(b) the Original Members as:

(i) Filippo Di Bella and Gianna Di Bella As Trustee for Di Bella Investment Trust;

(ii) Jalisa Pty Ltd As Trustee for The Jalisa Family Trust; and

(iii) Argent Pursuit Pty Ltd As Trustee for J & M Cracknell Family Trust.

19.2.1 Subject to Member's Approval, the Members may remove the Trustee as a trustee of the Trust.

19.2.2 The Trustee will be automatically removed as trustee of the Trust if:

1. being a company it goes into liquidation or a receiver is appointed in respect of any of its property; or

b. it ceases to carry on business; or

1. it fails or neglects after reasonable notice from the Members to carry out or satisfy any duty imposed upon a Trustee by this Deed.

19.3.1 Subject to Member's Approval, the Trustee may by deed appoint a person or corporation to be a trustee of the Trust.

19.3.2 The Members must give Member's Approval to the form of the deed appointing a person or corporation as trustee of the Trust.

1. Section 63 of the Trustee Act provides:

(1) Where in the management or administration of any property vested in trustees, any sale, lease, mortgage, surrender, release or other disposition, or any purchase, investment, acquisition, expenditure or other transaction, it is in the opinion of the Court expedient, but the same cannot be effected by reason of the absence of any power for that purpose vested in the trustees by the trust instrument (if any) or by law, the Court may by order confer upon the trustees, either generally or in any particular instance, the necessary power for the purpose on such terms and subject to such provisions and conditions (if any) as the Court thinks fit and may direct in what manner any money authorised to be expended, and the costs of any transaction are to be paid or borne as between capital and income.

(2) The Court may from time to time rescind or vary any order made under this section, or may make any new or further order.

(3) An application to the court under this section may be made by the trustees, or by any of them, or by any person beneficially interested under the trust.

1. Section 37(1) of the Supreme Court Act 1986 (Vic) (Supreme Court Act) provides that the Court may by order, whether interlocutory or final, grant an injunction or appoint a receiver if it is just and convenient to do so. Section 37(2) provides that an order made under sub-s (1) may be made either unconditionally or on such terms and conditions as the Court thinks just.
2. Rule 39.02(1) of the Supreme Court (General Civil Procedure) Rules 2025 (Vic) relevantly provides that the Court may appoint a receiver at any stage of a proceeding or prior to the commencement of a proceeding.
3. Section 90-20 of the IPSC permits a liquidator to apply for orders under the provision in relation to the external administration of a company.
4. Section 90-15 of the IPSC empowers the Court to make such orders as it thinks fit in relation to the external administration of a company.

1. In Re Kingicretevic Pty Ltd (in liq),[1] I set out the issues that may arise where a corporate trustee of a trading trust has ceased to be trustee because of the appointment of a liquidator to it and has the need to realise trust assets in order to satisfy the company's right of indemnity. I shall not repeat those matters here.
2. In Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd,[2] Gordon J held that it was appropriate for the court to confer a power of sale over trust assets pursuant to s 63 of the Trustee Act where (a) the company had become a bare trustee of the assets held on trust upon the appointment of a liquidator to it, (b) where the company only acted in its capacity as trustee and in no other capacity, (c) where all of the assets owned by the company were held by it in its capacity as trustee, (d) where all liabilities of the company were incurred by it in its capacity as trustee, and (e) where no new trustee had been appointed.

1. The Liquidator seeks orders under the Trustee Act empowering the Company to wind up the Trust and for ancillary orders under the IPSC. The making of orders under the Trustee Act is one of the methods available to a liquidator of a company that has ceased to be trustee of a trust, to facilitate the realisation of trust assets for the purpose of satisfying the former corporate trustee's right of indemnity.

1. In Re Amerind Pty Ltd (receivers and managers apptd) (in liq),[3] Robson J set out non-determinative factors or criteria relevant to determining whether a company has traded in its capacity as trustee of a trust:

(a) 'the existence of constituent trust documents which establish a trust, including any draft trust documents which cross-reference one another';

(b) 'whether accounts were maintained separately to the company's operational expenditure accounts and/or the company's own property';

(c) 'whether the company's name in its capacity as trustee was noted on key employment documents, such as letters of employment and tax file declarations';

(d) 'whether invoices rendered by the company in question were issued by the company in its capacity as trustee of the trust';

(e) 'whether company meeting minutes disclosed the existence of a trust, or disclosed that the company was operating as a trust';

(f) 'whether expenses were accounted as receipts of the company as trustee'; and

(g) 'whether records, contained in the general ledger of the company, recorded activity consistent with the operation of a trust, such as the issue of units'.

1. I am satisfied on the evidence that the assets held by the Company are assets of the Trust and not one of the four other trusts, or held by the Company in its own right, and the liabilities of the Company are liabilities of the Trust and not one of the four other trusts:

(a) first, this is the conclusion reached by the Liquidator based upon his review of the records of the Company and his own enquiries;

(b) second, the Liquidator's inspection of Company records refer to the Company as trustee of the Trust, save in limited instances (such as the lease which relates to premises from which the Trust business was conducted);

(c) third, the assets identified by the Liquidator are assets of the Trust, save for cash at bank in two accounts that have been refunded to the Roasters Trust and the VCR Trust, respectively;

(d) fourth, the Company had ceased to be trustee of the Roasters Trust and the VCR Trust prior to the appointment of a liquidator to it;

(e) fifth, the business of the Harlequin Alley UT and the Inwards Goods UT had ceased trading prior to 30 June 2024; and

(f) sixth, the Trust is the holder of the Trust ABN which is associated with registered business names 'Vertue Coffee' and 'Vertue Coffee Roasters', also held by the Trust.

What is the financial position of the Company and the Trust

1. The following assets of the Company have been identified by the Liquidator:

(a) an outstanding debtor relating to rental arrears under a sub-lease agreement estimated to total $20,189;

(b) two term deposits totalling $114,104;

(c) repayable loan accounts listed as:

(i) 'Ciaran Arden Loan' totalling $39,445; and

(ii) 'Loan - Related Parties' totalling $1,778; and

(d) cash at bank estimated to total $18,103.

1. The following liabilities of the Company have been identified by the Liquidator:

(a) one priority unsecured creditor for the sum of $29,609; and

(b) 15 non-priority unsecured creditors totalling $260,594.

1. A search of the Personal Property Securities Register discloses a grant in favour of H.A. Bennett & Sons Pty Ltd of a security interest in goods supplied to the grantor (i.e. - a purchase money security interest). The grantee of the security interest has not submitted a proof of debt or responded to communications from the Liquidator.
2. The Liquidator has realised property totalling around $128,834.
3. As at 25 February 2026, the Liquidator has incurred remuneration of around $60,000 and $464 in expenses. Creditor approval totalling $81,857 has been obtained, of which around $30,000 has been drawn, including to repay expenses.

Is it appropriate to make orders under s 63 of the Trustee Act

1. I am satisfied that it is appropriate to make orders under s 63 of the Trustee Act facilitating the realisation of Trust assets by the Liquidator and to wind up the Trust:

(a) first, the Company has become bare trustee of the assets of the Trust by reason of it ceasing to trade prior to the appointment of the Liquidator, alternatively upon the appointment of the Liquidator;

(b) second, it is strongly arguable that only an incumbent trustee has the power, with member approval, to appoint a replacement trustee. Unlike the situation in Waratah Group Pty Ltd (in liq),[4] because of the terms of the Trust, there is little risk that a new trustee will be appointed so as to interfere with the ability of the Liquidator to realise trust assets in accordance with orders made by me;

(c) third, while the company acted as trustee of other trusts, the evidence suggests that the only assets held by it are assets of the Trust and the only liabilities are liabilities of the Trust;

(d) fourth, the Company has a substantial right of indemnity against the assets of the Trust which exceeds the (relatively modest) known assets of the Trust; hence the trust property is likely to be exhausted following its sale and distribution to creditors;

(e) fifth, the Company is not trading; and

(f) sixth, no new trustee has been appointed.

1. I accept that conferral of powers under the Trustee Act in the present case is preferrable to the appointment of the Liquidator as receiver of the trust assets in circumstances where there is limited risk of a new trustee being appointed to the Trust, the Business is no-longer trading, and the property of the Trust is likely to be exhausted following its sale and distribution. The course chosen will also carry with it efficiencies and cost savings by having the Liquidator act in a single capacity.[5]

Should the further orders sought by the Liquidator be made

1. The Liquidator seeks that ancillary orders be made under the IPSC in terms set out in orders 2 to 5 of the draft orders. The orders made are modelled on those made by O'Callaghan J in Re Tease Hair & Spa Pty Ltd (in liq),[6] including orders making the appointment nunc pro tunc. I am satisfied that it is appropriate for those orders to be made, in particular:

(a) order 2 provides that the Liquidator/receiver is justified and therefore acting reasonably in treating all of the assets as Trust assets and all of the liabilities as Trust liabilities, which is consistent with my earlier findings;

(b) orders 3, 6 and 7 make provision for payment of the Liquidator/receiver's remuneration and expenses, including for work done in winding up the Trust. Those orders are consistent with the principles set out above;

(c) orders 4 and 5 make provision with respect to the winding up of the Trust. Given that the Business is no longer trading and that it would appear there is a deficiency in the assets of the Trust, it is appropriate for the orders to be made; and

(d) order 8 makes provision for service of the orders that are made.

1. I will add one further order to the draft orders proposed by the plaintiffs:

(a) any person who can demonstrate sufficient interest to modify these orders have liberty to apply on not less than 72 hours' notice to the first plaintiff.

1. In the premises, I am satisfied that it is appropriate to make orders under the Trustee Act facilitating the sale of the Trust assets. I am satisfied that the ancillary orders sought by the Liquidator ought to be made in terms of the draft orders submitted to the Court. I will ask the plaintiffs to submit a form of orders that includes the additional order that I have indicated above.

[1] [2026] VSC 96 (6 March 2026), [19].

[2] [2011] FCA 677, [36].

[3] [2017] VSC 127, [46] (citations omitted).

[4] [2020] VSC 523.

[5] Re Cloud Nine Melbourne Pty Ltd (In Liq) [2024] VSC 357, [22].

[6] [2022] FCA 457.