Re Will & Caro Pty Ltd (in liq) [2025] VSC 772 (9 December 2025)

1. The first plaintiff, Mr Andrew James MacNeill ('the Liquidator') was appointed as the liquidator of the second plaintiff, Will & Caro Pty Ltd ('W&C') by this Court on 22 January 2025.
2. The Liquidator's investigations reveal that W&C operated as the corporate trustee of the Will & Caro Family Trust ('the Trust'). Mr William Du was the sole director of W&C at the time that the company was placed into liquidation.
3. The Trust was constituted by a Deed of Trust dated 18 June 2010 ('the Trust Deed') and is a discretionary trust. Clause 47 of the Trust Deed operated as an ipso facto clause and provides, relevantly, in the context of a corporate trustee, as follows:

The appointment of a Trustee terminates automatically if any of the following occurs:

• ...

• ...

• The trustee enters into compulsory or voluntary liquidation (except for the purpose of amalgamation or reconstruction) or has an administration, receiver, official manager, or receiver and manager appointed to any part of its assets.

1. As the authorities referred to below state, the effect of the liquidation of W&C is that it lost office as trustee and became the bare trustee of the assets of the Trust. This application is necessitated by the Liquidator's present inability to realise the property of the Trust and apply the proceeds towards the satisfaction of the liabilities incurred by W&C in its capacity as trustee of the Trust.

1. By originating process filed 13 August 2025, the Liquidator applied under s 90-20 of Schedule 2 Insolvency Practice Schedule (Corporations) ('Schedule 2') to the Corporations Act 2001 (Cth) ('Corporations Act'), s 1318 of the Corporations Act and ss 48, 63, 63A and 67 of the Trustee Act 1958 (Vic) ('Trustee Act') to be conferred with powers to deal with the trust property of W&C.
2. In support of this application, the Liquidator relies on:

(a) his affidavit affirmed 13 August 2025;

(b) affidavit of service of Ms Kathryn Alice Lechner, a solicitor acting for the plaintiffs, affirmed 9 September 2025; and

(c) a further affidavit of service of Ms Lechner affirmed 2 October 2025.

1. The originating process has been served on a number of interested parties. The sole director of W&C, Mr Du, is a bankrupt and the trustee appointed to his bankrupt estate, Mr Paul Allen, has been served in that capacity. Mr Danny Nguyen has been served as the representative of Ms Carolyn Wong, a beneficiary of the Trust. A circular letter has also been provided to creditors of W&C informing them of the intention to make this application. In his affidavit, the Liquidator has deposed that no objection has been received from any creditor.
2. Rule 2.8(3) of the Supreme Court (Corporations) Rules 2023 ('Corporations Rules') requires that for an application under s 90-20 of Schedule 2, the Australian Securities and Investments Commission ('ASIC') be served with the originating process and the supporting affidavit. The solicitors for the Liquidator have complied with this requirement by serving ASIC via email on 26 August 2025 and ASIC confirmed receipt of the documents on the following day.
3. In the originating process, the Liquidator has sought the following relief:

(a) an order pursuant to s 90-15 of Schedule 2 to the Corporations Act that the Liquidator is justified and acting reasonably in proceeding on the basis that:

(i) W&C carried on business in its capacity as trustee of the Trust; and

(ii) all assets of the Company are properly characterised as property held by the Company in its capacity as trustee of the Trust;

(b) An order pursuant to s 63 of the Trustee Act 1958 (Vic) ('Trustee Act'), that W&C have power nunc pro tunc from 22 January 2025 to:

(i) carry on the business of the Trust;

(ii) sell trust property;

(iii) pay the creditors of the Trust from the proceeds of any sale of trust property, in accordance with the priorities prescribed under the Corporations Act; and

(iv) execute any contracts, tax returns, financial statements or other documents relating to the Trust or its assets;

(c) An order pursuant to s 90-15 of Schedule 2 to the Corporations Act that the Liquidator is justified and acting reasonably in proceeding on the basis that he can deal with, hold, apply and/or distribute the Trust Property in accordance with pts 5.5 and 5.6 of the Corporations Act;

(d) An order granting relief pursuant to s 1318 of the Corporations Act and s 67 of the Trustee Act that the Liquidator has acted honestly and ought fairly be excused for any breaches, failures or omissions relating to the liquidation of W&C in dealing with the trust property between the date of his appointment and the date of this order;

(e) An order pursuant to s 90-15 of Schedule 2 to the Corporations Act that the Liquidator is justified and acting reasonably in proceeding on the basis that:

(i) the Liquidator is entitled to be paid from the trust property his remuneration, costs and expenses properly incurred in preserving, realising or getting in the trust property, or in distributing the trust property (once realised), or in conducting the winding up of the Company ('Remuneration and Expenses'); and

(ii) the Remuneration and Expenses include the remuneration, costs and expenses of and incidental to this application and are to be paid in accordance with the priority specified in s 556(1) of the Corporations Act.

1. On 24 October 2025, I made orders which are set out for convenience of reference at the conclusion of these reasons. I indicated that I would provide reasons at a later date.

1. W&C was incorporated on 18 June 2010. At the time it went into liquidation, it operated from premises located at Bayswater, Victoria ('the Premises').
2. From the date of its incorporation until 14 December 2016, W&C had two directors, Mr Du and Ms Wong. Mr Du became the sole director of the company after Ms Wong's resignation on 14 December 2016. Mr Du remained the sole director of the company until 10 March 2025, when he was automatically removed as a director when a sequestration order was made against him and Mr Allen was appointed as his bankruptcy trustee.
3. Prior to W&C being placed into liquidation, it was involved in retail and wholesale sales of home décor, jewellery and gifts under the name 'Short Story' ('the Business').
4. At the date of liquidation, W&C held $3,937.39 in cash at bank. The amount of $14,946.60 has subsequently been collected from pre-appointment debtors.
5. W&C had plant and equipment consisting of a forklift and truck, pallet racking, a solar panel system, and several computers and IT equipment (collectively, 'the P&E'). The Liquidator sought advice from sales agents who estimated the total realisable value of the P&E to be approximately $2,000 - $3,000 (incl. GST) before any selling costs. The Liquidator has accepted an offer to purchase the P&E for $2,000 (incl. GST).
6. W&C was also the registered owner of a Lexus motor vehicle which was subject to finance with Toyota Finance, with approximately $148,893.69 owed on the lease at the time of the Liquidator's appointment. The Liquidator disclaimed his interest in the vehicle as its estimated value was less than the payout figure on the lease.
7. The quantum of the creditors of W&C is presently unknown but the information currently available to the Liquidator reveals that:

(a) W&C has priority creditors with debts totalling $101,943.57, which are anticipated to increase following the submission of Superannuation Guarantee Charge statements in respect of unpaid superannuation; and

(b) has unsecured creditors totalling $2,790,195.56.

(a) W&C held a 12 month lease of the Premises, commencing on 17 February 2024, after which, the lease provided for an ongoing tenancy on a month to month basis;

(b) W&C had ceased trading;

(c) W&C's primary assets were its trading stock and its intellectual property used in the conduct of the Business; and

(d) Courtney Brands Pty Ltd ('Courtney Brands') had expressed interest in purchasing W&C's business assets.

1. A dispute arose when Mr Du asserted that the intellectual property used in the Business was not owned by W&C but by a related entity, Will & Caro Group Pty Ltd ('WCG'); this was disputed by the Liquidator.
2. An in-principle agreement to resolve that dispute was reached on or about 16 April 2025 but this agreement was not promptly formalised. Because there was a concern that Courtney Brands would lose interest in the sale and the mounting liability for rent for the Premises, the Liquidator reached a settlement with WCG on 30 June 2025. The terms of the settlement are confidential but the Liquidator states that it they conditional upon this application being made and the completion of the sale of business assets to Courtney Brands.
3. On 1 August 2025, Courtney Brands, W&C and the Liquidator entered into the Asset Sale and Purchase Agreement ('ASPA').
4. The ASPA provides that:

(a) Final Completion (as defined in the ASPA) is conditional upon the orders sought in this proceeding being granted; and

(b) the Purchase Price (as defined in the ASPA) is to be held from Provisional Completion (as defined in the ASPA) until the sale becomes unconditional.

1. Provisional completion of the sale took place on 1 August 2025. Since that time, the proceeds of the sale have been held in the trust account of the solicitors for the Liquidator.

1. On 18 June 2010, W&C was appointed trustee of the Trust by the Trust Deed. The trust is a discretionary trust with Ms Wong and Mr Du as the named beneficiaries. The Liquidator believes that there have been no amendments to the Trust Deed.
2. As has been mentioned, Clause 47 of the Trust Deed is in the form of an ipso facto clause which operates so that W&C was automatically removed as trustee of the Trust when the company went into liquidation. As a consequence of this, W&C ceased to hold office as trustee of the Trust and holds the assets of the Trust as bare trustee.[1] There is no evidence indicating that a replacement trustee has been appointed.
3. Following his investigations into the affairs of W&C, including enquiries made of the Australian Taxation Office ('ATO') and a review of the books and records of the company, the Liquidator has concluded that W&C was not conducting any activities other than as trustee of the Trust and its role was exclusively to perform the role as trustee of the Trust.
4. The Liquidator's conclusion in this regard is based on:

(a) information received from the ATO with its proof of debt indicating that W&C had incurred liabilities to the ATO in its capacity as trustee of the Trust and that an amount of $168,160.65 was owing by the Trust in respect of its Running Balance Account Deficit Debt for BAS liability as at 22 January 2025;

(b) taxation returns were prepared for W&C in its capacity as trustee of the Trust for 2020, 2021 and 2022;

(c) externally prepared financial statements were prepared for W&C in its capacity as trustee of the Trust;

(d) correspondence from Aspire Wealth, the Company's external accountants referred to the Company as trustee of the Trust;

(e) a search conducted of the Australian Business Register revealed an Australian Business Number ('ABN') registered for the Trust from 1 July 2010 but no registration of an ABN for the company in its own right;

(f) W&C engaged employees in its capacity as trustee of the Trust;

(g) W&C held nine bank accounts with the Commonwealth Bank of Australia ('CBA') which were all in the name of the company as trustee of the Trust;

(h) W&C also held a bank account with the Australia and New Zealand Banking Group Limited ('ANZ') which was in the name of the company as trustee of the Trust;

(i) invoices issued by W&C refer to the ABN of the Trust, and not the company in its own right; and

(j) the plaintiff in the Winding up Proceeding, Fundit Limited, registered its interest in W&C's assets on the Personal Property and Securities Register by reference to the ABN of the Trust, rather than by reference to W&C by its ACN.

(a) incurred liabilities solely in its capacity as trustee of the Trust;

(b) at all relevant times held, and continues to hold, all property in its capacity as trustee of the Trust; and

(c) by reference to the terms of the Trust Deed, has a right of indemnity from the assets of the Trust.[2]

1. The Liquidator estimates that as of the date of his affidavit, his renumeration in the liquidation of W&C will be in the order of $246,500.10 (including GST). He states that the costs of the liquidation are as follows:

(a) internal disbursements of $770 (incl. GST);

(b) external disbursements of $3,697.76 (incl. GST);

(c) legal fees of approximately $80,000.00 (incl. GST);

(d) post-appointment rent and outgoings in respect of the Premises of $24,132.22 (incl. GST); and

(e) costs incurred by FundIT Limited in respect of its costs of the winding up application which are yet to be taxed.

1. The Liquidator states that as of the date of his affidavit he has not drawn any fees. He has received an amount of $3,453.45 (including GST) provided by the Department of Employment and Workplace Relations for services related to the verification of employee entitlements under the Fair Entitlements Guarantee Act 2012. This form of remuneration is not paid from the assets of W&C and is not subject to creditor approval.

1. The Liquidator sought that an order be made pursuant to s 90-15 of Schedule 2 confirming the Liquidator's opinion in relation to W&C's role as the corporate trustee of the Trust.
2. Section 90-15 provides relevantly as follows:

90‑15 Court may make orders in relation to external administration

Court may make orders

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

Orders on own initiative or on application

(2) The Court may exercise the power under subsection (1):

(a) on its own initiative, during proceedings before the Court; or

(b) on application under section 90‑20.

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

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

1. The Liquidator submitted that the function of such a direction:[3]

is not to determine rights and liabilities arising out of a particular transaction, but to confer a level of protection on the administrator. An administrator who acts in accordance with a judicial direction, having made full and fair disclosure to the court of the material facts, has 'protection against claims that they have acted unreasonably or inappropriately or in breach of their duty in making the decision or undertaking the conduct' proposed.

1. The Liquidator's submissions refer to Re Ansett Australia Limited and Korda[4] in support of this contention and observes that although a court will not give a direction in respect of a decision that is purely commercial, a direction may be provided where there is a 'particular legal issue raised for consideration or attack on the propriety or reasonableness of the decision in respect of which the directions are sought'.[5]
2. It was submitted that the power under s 90-15 is a broad one and has been given a liberal construction to give directions in a wide variety of circumstances.[6]
3. The Liquidator submitted that the relief claimed in this case is appropriate to enable the sale of trust assets and the distribution of the proceeds among trust creditors by conferring on the liquidator of a corporate trustee of a bare trust the power to either deal with assets of the trust under the Trustee Act or to have the liquidator appointed as a receiver.[7]
4. The Liquidator submits that as W&C has ceased trading and the evidence is compelling that it operated solely as the trustee of the Trust,[8] it is appropriate for the Court to make proposed orders set out in paras 9(a)(i) and (ii) of these reasons.

1. Based on the evidence referred to by the Liquidator which is outlined above in para [26]-[28], I am satisfied that its sole activity was to perform its role as the trustee of the Trust and did not conduct any other activity.
2. I am also satisfied that all of the assets of W&C are properly characterised as property held by it as trustee of the Trust.
3. In my opinion it is appropriate to grant the relief sought by the Liquidator that he is justified and acting reasonably in proceeding on the basis described.

1. The second proposed order sought powers to be conferred on the Liquidator pursuant to s 63 of the Trustee Act.
2. Section 63 provides that:

63 Power of Court to authorize dealings with trust property

(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, 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 authorized to be expended, and the costs of any transaction are to be paid or borne as between capital and income.

1. The Liquidator's submissions referred to Re Winex Property Pty Ltd (in liq) where several established principles were identified:[9]

(a) a corporate trustee, such as W&C, retains a right of indemnity over the trust assets, relating to liabilities incurred by reason of acting as trustee;

(b) this right of exoneration generates a supporting lien or charge, being a beneficial proprietary interest in the trust assets in favour of the former trustee of the trust;

(c) the former trustee holds title to the trust assets as bare trustee with limited powers to deal with those assets, but the ability to retain possession (as against beneficiaries) for the purpose of achieving its right of indemnity;

(d) where the former trustee is a bare trustee, the liquidator may not sell trust assets without an order of the Court, or the appointment of a receiver and manager over the trust assets; and

(e) courts are generally willing, upon an appropriate application, to make orders permitting the liquidator of a former trustee to sell trust assets.[10]

1. The Liquidator submitted, citing Caterpillar Financial Australia Limited v Ovens Nominees Pty Ltd,[11] that the Court may authorise a company acting as a bare trustee to deal with trust assets and apply trust assets to meet claims under s 556 of the Corporations Act in the course of the winding up the company.[12]
2. It was submitted that such an order is appropriate in circumstances where:[13]

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

(b) the company has 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 in its capacity as trustee; and

(d) no new trustee has been appointed.

1. Reference was also made to the observations made by Moshinsky J in Cremin, Re Brimson Pty Ltd (in liq) ('Re Brimson') that:[14]

It is now settled that the liquidator of an insolvent (former) corporate trustee cannot sell the trust's property without order of the Court, or by appointment of a receiver over the trust assets ... The rationale for this position is that, on a proper understanding, the trust assets are not the '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 ... Thus, to the extent that the subject of a sale is the whole of a trust asset, rather than merely the company's lien or charge in respect of that asset, it is not authorised by the power of sale in s 477(2)(c).

The courts are generally willing, upon an appropriate application, to make orders permitting the liquidator of a (former) corporate trustee to sell trust assets. In situations where the property of the trust will be exhausted following its sale and subsequent distribution to creditors, it may be appropriate merely to give the liquidator a power of sale ... The more common course is, however, for the liquidator of the insolvent (former) corporate trustee to apply to be appointed a receiver for the purpose of selling the trust assets and distributing the proceeds among trust creditors ...

1. The Liquidator's submissions addressed the reason as to why he seeks powers under s 63 of the Trustee Act rather than seek appointment as a receiver over the trust property under s 37(1) of the Supreme Court Act 1986 (Vic) as the mechanism to effect a sale of the assets.[15]
2. The submissions noted that in Deppeler, Re Old Port Road Pty Ltd (in liq) ('Deppeler')[16] O'Bryan J commented that 'there is no "bright line"[17] that provides assistance to the Court to determine whether ... the preferable course is to make orders permitting the former corporate trustee to sell assets or to appoint a receiver'.[18] However it was submitted the following circumstances favour an order under s 63 of the Trustee Act:[19]

(a) the property of the trust will be exhausted following its sale;

(b) the conferring of a power of sale upon the Liquidator appears the most convenient and efficient way to proceeding;

(c) no new trustee has been appointed or is likely to be appointed;

(d) As W&C is not trading, there is no on-going business to be conducted; and

(e) where the Liquidator is given power of sale, there is no risk of confusion as to roles or as to the capacity in which the Liquidator is acting, as might be the case if the appointment was as receiver and manager.

1. The Liquidator also submits that because of his need to sell the assets expeditiously lest the value of the assets be further diminished also supports an order to be made under s 63 of the Trustee Act.[20]

1. It is uncontroversial that W&C was automatically removed as the trustee of the Trust by operation of cl 47 of the Trust Deed when it was ordered to be wound up on 22 January 2025. From that time, W&C became the bare trustee of the Trust and lost any rights to deal with the assets of the Trust. As the authorities have made clear, the courts are generally willing in such circumstances, upon a properly evidenced application, to make orders permitting the liquidator of a former trustee to sell trust assets in order to access the right to indemnification.[21]
2. I am of the opinion that in the circumstances of this case conferral of powers under s 63 of the Trustee Act is the appropriate course. W&C has ceased trading. The assets of W&C consist of cash of $3,937.39, debts collected of $14,946.60 and P&E of $2,000. As against this, liabilities are said to amount to $2,892,139.13;[22] the trust property will clearly be exhausted following distribution to creditors. There is nothing in the evidence which suggests that a new trustee has been appointed nor is it likely.

1. The Liquidator sought an order that he is justified and otherwise acting reasonably in proceeding on the basis that he can deal with, hold, apply and/or distribute the trust property in accordance with pts 5.5 and 5.6 of the Corporations Act.
2. The Court has granted such relief in a number of cases[23] in circumstances where a company acted only as the trustee of a single trust, following Allsop CJ's judgment in Re Killarnee Civil & Concrete Contractors Pty Ltd (in liq):[24]

In such circumstances, the property of the company that includes the right of exoneration and the funds obtained from its exercise is to be distributed in accordance with the statutory command: ss 501 and 556. In such circumstances, the words of the statute are to be applied to direct the distribution of the property of the company. [25]

Where the corporation has only ever acted as trustee of one trust and that has been the totality of its affairs, there is no reason either in principle or by reference to context or text why the words of the statute setting out the order of priorities should not be followed.

1. The Liquidator contended that it was appropriate for the Court to grant such relief in the form sought by him in this case.

1. The evidence is that W&C has only ever acted as trustee of the Trust and that this has been the totality of its affairs. As such there are no non-trust creditors and the authorities[26] dealing with this issue indicate that the proceeds from the exercise of the right of exoneration should be distributed to the creditors in accordance with the priorities provided for in s 556 of the Act in the form proposed by the Liquidator in his third proposed order.

1. The Liquidator sought an order pursuant to s 1318 of the Corporations Act or, alternatively, s 67 of the Trustee Act that he be relieved from liability arising from his dealings thus far with the trust property of the Trust as discussed in paras 14-16 of these reasons.
2. Section 1318 provides:

(1) If, in any civil proceeding against a person to whom this section applies for negligence, default, breach of trust or breach of duty in a capacity as such a person, it appears to the court before which the proceedings are taken that the person is or may be liable in respect of the negligence, default or breach but that the person has acted honestly and that, having regard to all the circumstances of the case, including those connected with the person's appointment, the person ought fairly to be excused for the negligence, default or breach, the court may relieve the person either wholly or partly from liability on such terms as the court thinks fit.

(2) Where a person to whom this section applies has reason to apprehend that any claim will or might be made against the person in respect of any negligence, default, breach of trust or breach of duty in a capacity as such a person, the person may apply to the Court for relief, and the Court has the same power to relieve the person as it would have had under subsection (1) if it had been a court before which proceedings against the person for negligence, default, breach of trust or breach of duty had been brought.

1. Section 67 states:

67 Power to relieve trustee from personal liability

If it appears to the Court that a trustee, whether appointed by the Court or otherwise, is or may be personally liable for any breach of trust, whether the transaction alleged to be a breach of trust occurred before or after the commencement of this Act, but has acted honestly and reasonably, and ought fairly to be excused for the breach of trust and for omitting to obtain the directions of the Court in the matter in which he committed such breach, then the Court may relieve him either wholly or partly from personal liability for the same.

1. The Liquidator referred to the discussion in Re Matthew Forbes Pty Ltd (in liq) ('Re Matthew Forbes') where the purpose of s 1318 was described as being:[27]

to excuse company officers from liability in situations where it would be unjust and oppressive not to do so, recognising that such officers are business persons who act in the environment involving risk in commercial decision-making.

1. In Amirbeaggi, Re Simpkiss Pty Ltd (in liq),[28] Markovic J identified the criteria required to be satisfied before the Court could grant the relief sought:[29]

(a) the insolvency practitioner has reason to apprehend that a claim would, or might, be made against them;

(b) such a claim is in respect of any negligence, default, breach of trust or breach of duty by them in their capacity as insolvency practitioner; and

(c) the insolvency practitioner has acted honestly in relation thereto.

1. Cosgrave J in Trident observed that the liquidator's apprehension must have an 'objective basis'.[30]
2. It was further submitted in relation to s 67 of the Trustee Act, that the clause similarly 'empowers the Court to excuse a breach of trust by a trustee who has acted honestly and reasonably'.[31] In Re Mali Nominees Pty Ltd (in liq),[32] Button J stated that:

...it has been observed that where a trustee's conduct would have been authorised by the Court had the trustee sought such authorisation, the 'trustee may expect to be excused'.

1. Applying these principles extracted from the authorities, it was submitted that there is no suggestion that the Liquidator has not acted honestly and reasonably and he has diligently gone about his task in the interests of creditors of the Trust. While the prospect of a claim being made against him might be unlikely, it was submitted that this does not mean that at no time in the future would a creditor or other interested person decide to pursue a claim against him.[33] Therefore, the Liquidator contended that he ought to be excused from liability for any dealing with trust property from the date of his appointment.

1. The relief sought by the Liquidator in the fourth proposed order is made pursuant to s 1318 of the Corporations Act and/or s 67 of the Trustee Act in apprehension of any future claim that will or might be made against the Liquidator in respect of any negligence, default, breach of trust or breach of duty in his dealings with the trust property whilst a bare trustee of the assets of the Trust.
2. There is no evidence that there are any civil proceedings on foot against the Liquidator. The applicable section must then be s 1318(2) of the Corporations Act. The section specifies that the liquidator must have 'reason to apprehend that any claim will, or might, be made against' them.
3. There appears to be a range of strictness in the authorities when applying the statutory criteria in s 1318(2) in particular in regard to whether there is 'reason to apprehend any claim will, or might be made against' an insolvency practitioner. Some courts have taken a liberal approach while others have a more strict view.
4. In Mutton (Liquidator), Re Balsub Pty Ltd (In Liq)[34] ('Mutton'), Anastassiou J took a relatively strict approach and rejected an application for such an order on the basis of the insufficiency of evidence:[35]

On the present state of the evidence I am not satisfied that I should grant an order relieving the Liquidator from liability for past dealings with trust property. This is so as the Liquidator's affidavit provides little detail of any dealings with trust property or actions taken in respect of trust property to date. Further, the Liquidator's affidavit does not indicate at what time the Liquidator became aware Balsub was a bare trustee nor what he did from that date onward. While the Liquidator acknowledges Balsub is a bare trustee and therefore lacks power to deal with trust assets, he does not specify when he became aware of this and what transactions have occurred before or since becoming aware that Balsub became a bare trustee upon being wound up.

1. Similarly, in Total Truss Systems Pty Ltd (in liq),[36] despite the liquidators having withdrawn their request for an order pursuant to s 1318, I noted that:

I would have declined to make orders under s 67 of the Trustee Act or s 1318 of the Act if such part of the application had been pressed by reason of the absence of any evidence any foreshadowed claim against the liquidators, but I am prepared to observe that this does not preclude the liquidators seeking to raise defences which rely on those provisions if that course is subsequently necessary.

1. Another line of authority however, demonstrates that a rather liberal approach has on occasion been employed in the making of orders pursuant to s 1318.
2. Examples of this approach are found in the decisions of this court in Re St George's Development Company Pty Ltd (in liq) ('St George's')[37] and Re Matthew Forbes where relief under s 1318(2) was granted.[38]
3. In St George's, Kennedy J observed when granting an order under s 1318:[39]
   1. It is not evident that the Liquidator has undertaken actions beyond his power. However, given there is some doubt as to the powers of a bare trustee, the order sought is appropriate.
   2. I am satisfied that the Liquidator has acted honestly and reasonably in dealing with the trust property with the result that the order will be made.
4. In Matthew Forbes, Riordan J observed when making an order under s 1318:

1. The purpose of s 1318 is to excuse company officers from liability in situations where it would be unjust and oppressive not to do so, recognising that such officers are business persons who act in the environment involving risk in commercial decision-making. 2. I am satisfied that in:

(a) treating the assets of the Company as assets held in its capacity as trustee of the Trust; and > > (b) carrying on the business of the Company for the purpose of realising the sale of the business,

the Liquidators have acted honestly, reasonably and in the best interests of the Company and the Trust. Accordingly, I am prepared to make an order relieving them from any liability for dealing with the trust property, limited to those respects, between the date of their appointment and the date of this order.

1. In Trident, the administrators' motivations for seeking an order under s 1318(2) of the Corporations Act were comparable to the present case, where '[t]hey acknowledge that while the prospect of a claim being made them is unlikely, that does not mean that a creditor or unitholder will not decide to pursue a claim against the Administrators in the future. Accordingly, they considered it prudent to seek an order under s 1318 of the Corporations Act.' [40]
2. In Trident, Cosgrave J remarked that: [41]

the absence of any evidence of a threat of a claim does not eliminate the possibility that such a claim could be brought in the future. Therefore, I am satisfied that the Administrators have an 'objective basis' for apprehending that a claim might be made against him arising out of the circumstances of this case.

1. Although the Liquidator has not explained why he has reason to apprehend that a claim might be made against him, since his appointment the assets under his control and with which he has been dealing as liquidator were only held by W&C as bare trustee. I am content to adopt the more liberal approach taken in Trident, Mathew Forbes and St George's and grant the relief sought by the Liquidator in the fourth of the proposed orders. The Liquidator was appointed by orders of the Court and there is nothing to suggest that he was not acting honestly and bone fide and I consider that he is entitled to be given a level of protection to enable him to perform his statutory functions.

1. The final substantive relief sought in the originating process relates to an order pursuant to s 90-15 of Schedule 2 that the Liquidator is entitled to be indemnified from the trust property for his Remuneration and Expenses.
2. The Liquidator refers to the principle described by Black J in Re JML Property Services Pty Ltd (in liq) that:[42]

... a liquidator of a trustee company is entitled to be paid his or her remuneration, whether for administering the trust assets or for general liquidation work, out of trust assets where that company has no assets other than its rights against the trust assets.

1. It was submitted that Mr MacNeill's affidavit reveals that:

(a) the Liquidator has undertaken a range of tasks since his appointment and has yet to draw any fees;

(b) W&C operated exclusively as trustee of the Trust and did not undertake any activities or conduct any business in its own right; and

(c) save for the rights of exoneration and the supporting liens, W&C has no assets of its own.

1. The Liquidator contended that in those circumstances it is appropriate for the Court to confirm:

(a) the Liquidator's entitlement to be indemnified out of the trust assets in respect of the costs and expenses incurred;

(b) that the Liquidator's remuneration and expenses are to be paid out of trust assets; and

(c) that the costs of this application be met from the property held on trust.

1. I am content to make the final proposed order to pay the Liquidator's costs from the assets of the Trust as is the usual course. In Carter Holt v Commonwealth, Gordon J observed that a liquidator's costs should be payable out of the trustees right of indemnity over trust assets, particularly where, as here, the company in liquidation acted solely as corporate trustee.[43]

1. For convenience, I recite the orders I made in this application on 24 October 2025. I note, however, the sequence of the orders are does not follow the structure in which they were sought, for the reason that proposed orders 1, 3, 4 and 5 are not actions to be ordered by the Court but are in the form of declarations.

THE COURT DECLARES THAT:

1. Pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations) ('IPS') being Schedule 2 to the Corporations Act 2001 (Cth) ('Corporations Act'), the first plaintiff ('Liquidator') is justified and acting reasonably in proceeding on the basis that:

(a) the second plaintiff ('Company') carried on business in its capacity as trustee of the Will & Caro Family Trust (ABN 82 776 267 312) ('Trust'); and

(b) all assets of the Company are properly characterised as property held by the Company in its capacity as trustee of the Trust ('Trust Property').

1. The Liquidator is justified and acting reasonably in proceeding on the basis that he can deal with, hold, apply and/or distribute the Trust Property in accordance with pts 5.5 and 5.6 of the Corporations Act.

2. Pursuant to s 1318 of the Corporations Act and s 67 of the Trustee Act, the Liquidator has acted honestly and ought fairly be excused for any breaches, failures or omissions relating to the liquidation of the Company in dealing with the Trust Property between the date of his appointment and the date of this order.

3. The Liquidator is justified and acting reasonably in proceeding on the basis that:

(a) the Liquidator is entitled to be paid from the Trust Property their remuneration, costs and expenses properly incurred in preserving, realising or getting in the Trust Property, or in distributing the Trust Property (once realised), or in conducting the winding up of the Company ('Remuneration and Expenses'); and

(b) the Remuneration and Expenses include the remuneration, costs and expenses of and incidental to this application and are to be paid in accordance with the priority specified in s 556(1) of the Corporations Act.

THE COURT ORDERS THAT:

1. Pursuant to s 63 of the Trustee Act, there be conferred on the Company nunc pro tunc the power to do all things necessary and convenient to:

(a) carry on the business of the Trust;

(b) sell the Trust Property;

(c) pay the creditors of the Trust from the proceeds of any sale of Trust Property, in accordance with the priorities prescribed under the Corporations Act; and

(d) execute any contracts, tax returns, financial statements or other documents relating to the Trust or its assets.

1. There be liberty to apply to any person who can demonstrate sufficient interest to modify these orders on not less than 48 hours' notice to the Liquidator.

7. There be liberty to apply reserved to the Liquidator.

ANDREW JAMES MACNEILL IN HIS CAPACITY AS LIQUIDATOR OF WILL & CARO PTY LTD (IN LIQUIDATION) (ACN 144 693 256)

[1] Cremin, Re Brimson Pty Ltd (in liq) [2019] FCA 1023; (2019) 136 ACSR 649, 656 (Moshinsky J) ('Re Brimson').

[3] Re Union Standard International Group Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 1111, [9] (Stewart J); see also, Re Ansett Australia Limited and Korda [2002] FCA 90; (2002) 115 FCR 409, 419 (Goldberg J) ('Ansett').

[4] [2002] FCA 90; (2002) 115 FCR 409.

[6] Re Poles & Underground Pty Ltd (admins apptd) [2017] FCA 486; discussing s 90-15's precursor provisions in Dean-Willcocks v Soluble Solution Hydroponics Pty Ltd (1997) 42 NSWLR 209, 213 (Young J).

[7] Citing Re Garrows Close Pty Ltd (in liq) [2021] FCA 505, [5] (Beach J).

[8] See Re Civil Construction Network Services Pty Ltd (in liq) [2020] VSC 474, [15] (Delany J) ('Re Civil').

[9] [2025] VSC 167, [29] (Matthews J).

[11] [2011] FCA 677 ( Gordon J) ('Caterpillar').

[13] See ibid, [35]-[36]; Re Kingston Property Holdings Pty Limited (No 2) [2017] FCA 974, [25] (Markovic J); Re Trident Star Enterprises Pty Ltd (admins apptd) [2025] VSC 215, [46]-[57] (Cosgrave J) ('Trident').

[14] Re Brimson, 655-6 (Moshinsky J).

[15] See, e.g., Re All Purpose Labour Pty Ltd [2024] VSC 547 (Sloss J), where the liquidators were appointed as receivers of trust assets.

[16] [2021] FCA 980 (O'Bryan J) ('Deppeler').

[17] An expression also adopted by Delany J in Re Waratah Group Pty Ltd [2020] VSC 523 at [41]

[18] Ibid [17]; see also, Re Urban Property Melbourne Pty Ltd [2021] VSC 847,[34] (M Osborne J) ('Re Urban Property').

[19] Trident, [46]-[60]; Caterpillar, [35].

[22] Debts of $101,943.57 owed to priority creditors and $2,790,195.56 to unsecured creditors.

[23] See, e.g. Re Matthew Forbes Pty Ltd (in liq) [2018] VSC 331, [20] (Riordan J) ('Re Matthew Forbes'); Re St George's Development Company Pty Ltd (in liq) [2018] VSC 595, [31] (Kennedy J); Re Asten Holdings Pty Ltd (in liq) [2020] FCA 1107, [27] (Anderson J); Lawrence (liquidator), in the matter of LXNDR Group Pty Ltd (in liq) [2021] FCA 1243, [24] (Anderson J); Anderson, Re Allabay Pty Ltd (in liq) [2022] FCA 235, [14].

[24] [2018] FCAFC 40; (2018) 260 FCR 310 (Allsop CJ).

[26] See, for example, Brimson at [51]

[27] Re Matthew Forbes, [24]; see also, Re Mackie Group Pty Ltd (in liq) [2017] VSC 477; (2017) 122 ACSR 537, 548 (Kennedy J).

[28] [2018] FCA 2121 (Markovic J) ('Re Amirbeaggi').

[30] Trident, [69] citing Re Suncoast Restoration Pty Ltd (in liq) [2013] FCA 355; (2013) 211 FCR 203, 213 ('Suncoast').

[32] [2022] VSC 28, [45] (Button J).

[33] Re Amirbeaggi, [50]; Jess, in the matter of Westside Group Pty Ltd (in liq) [2020] FCA 1586 at [36].

[34] [2020] FCA 741; (2020) 145 ACSR 342 (Anastassiou J).

[36] (2021) 152 ACSR 323.

[37] [2018] VSC 595 ('St George's').

[38] [2018] VSC 331 ('Matthew Forbes').

[42] [2018] NSWSC 1069, [10] (Black J).

[43] [2019] HCA 20; (2019) 268 CLR 524, 588-9, [169]-[171].