Re Windsor Development Co Pty Ltd (in liq) (No 2) [2024] VSC 297 (7 June 2024)

1. This proceeding was commenced by Mr Mathew Gollant, in his capacity as liquidator (the Liquidator) of Windsor Development Company Pty Ltd (in liquidation) (the Company), and the Company (together, the Plaintiffs). The Plaintiffs bring applications in relation to various agreements entered into or contemplated by the Liquidator to compromise, and thereby realise value in respect of, potential claims of the Liquidator and/or the Company in connection with the liquidation.
2. Four sets of interested persons have participated in this proceeding, namely:

(a) a former director of the Company, Mr Glenn Reindel (Reindel);

(b) a director of a company which has lodged a proof of debt against the Company and a former consultant to the Company, Mr Anthony Baker (Baker); and

(c) two investor parties; Confreight Pty Ltd (Confreight) and Supply Chain Logistics Pty Ltd (SCL) (together, the Investor Parties). The Investor Parties are companies associated with one or both of Mr Dale Monson (Monson) and Mr Vincent Murone (Murone), who are former directors of the Company.

1. The Plaintiffs' applications concern agreements the Liquidator has entered into or proposes to enter into with one or both of Reindel and Baker. The Plaintiffs seek a direction pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations) (the IPS), being Schedule 2 to the Corporations Act 2001 (Cth) (the Corporations Act), that the Liquidator is acting reasonably and is justified in entering into an as-yet unexecuted deed of settlement and release regarding potential claims of the Company and/or the Liquidator with Baker and Reindel. In the alternative, they seek approval by the Court pursuant to s 477(2B) of the Corporations Act for a different and already-executed deed of release and assignment with Baker. In addition, the Plaintiffs seek ancillary orders that would facilitate arrangements contemplated by either of those deeds and the liquidation of the Company more broadly, under the Corporations Act, the Trustee Act 1958 (Vic) (Trustee Act), the Supreme Court Act 1986 (Vic) (the SCA) and the Supreme Court (General Civil Procedure) Rules 2005 (Vic) (the SCR).
2. The Investor Parties oppose the Plaintiffs' applications and seek alternative relief in the proceeding, which I will describe later.

1. The Company was established on 9 December 2015 as a special purpose vehicle for developing a mixed residential and retail site in Windsor, Victoria. The directors of the Company until 12 November 2020 were Monson, Murone, and Reindel, each of whom held shares in the Company through related entities.[1] The Company was trustee of a unit trust named the Windsor Development Company Trust (the Trust) pursuant to a trust deed dated 25 January 2016. It appears that the Company acted only in its capacity as trustee of the Trust. Trust beneficiaries held units in the Trust in equal proportions to their shareholdings in the Company.
2. Baker and Reindel had prior business dealings with each other overseas, separate to the affairs of the Company. Baker acted as project manager for the Windsor development and is a former consultant to the Company. The detail of Baker's management role is the subject of dispute, in terms of the capacity in which he worked and the validity of agreements pursuant to which services were provided by him and/or AB Property Consultancy Pty Ltd (AB Property). Baker is a director of AB Property, which asserts that it is a creditor of the Company. The claim that AB Property is a creditor of the Company has been disputed by the Investor Parties. In connection with a potential insolvent trading claim, it is alleged that Baker may have been a shadow (or de facto) director of the Company.[2]

1. On 16 November 2020, the Company was placed into voluntary liquidation by resolution of its sole shareholder Mr Radau and the Liquidator was appointed. From this time, the Company was 'ipso facto' removed from its position as trustee of the Trust, by operation of the deed of the Trust such that the Company became and remains a bare trustee.
2. After the Company was placed into liquidation, various entities lodged proof of debts against the Company, including the Victorian State Revenue Office (SRO), the Australian Taxation Office (ATO), Jaffe Lee & Associates Pty Ltd (Jaffe Lee),[3] and entities controlled by Monson, Murone, and Baker.[4]
3. The Company's only valuable assets are potential claims it may have against its former directors and consultants, and their respective related entities. The Liquidator's evidence is that, upon his appointment as liquidator, he carried out investigations into the Company's affairs, following which he sought to realise the value of the claims of the Company and/or the Liquidator, by seeking funding to prosecute the potential claims in his capacity as liquidator and by soliciting offers for the compromise and/or assignment of the potential claims.

B.3 Disputes between the various protagonists

1. The relationships between Baker, Reindel, Monson and Murone broke down around the time that the winding up of the Company commenced. Serious allegations of misconduct have been made and a number of proceedings have been filed by these protagonists. The proceedings relate to alleged unpaid loans and debts by Baker and Reindel as against each other, as well as claims by the Investor Parties against Reindel and others about the alleged ransacking of the Company and Trust's assets prior to liquidation, through the transfer of some of the properties in the Windsor development to various protagonists and related parties without any adequate consideration or any consideration at all.
2. The various proceedings which have been filed are as follows:

(a) On 28 June 2021, Reindel, Blizzard Winds Pty Ltd (Blizzard Winds, an entity associated with Reindel), and another company associated with Reindel commenced Supreme Court proceeding S ECI 2021 02247 against Baker (the Reindel and Baker SCV Proceeding). In the Reindel and Baker SCV Proceeding, the plaintiffs seek payment of $1,997,161.30 in relation to an alleged 2014 loan agreement between Reindel and Baker. Baker filed a counterclaim in the Reindel and Baker SCV Proceeding seeking payment of $6,671,735.83 relating to an alleged 2016 loan agreement with Reindel and Blizzard Winds.

(b) On 9 March 2021, the Investor Parties lodged caveats over four properties at the Windsor development which had been transferred to Blizzard Winds. A further caveat was lodged by them on 30 June 2021 over a property transferred to Reindel personally. I will describe these properties which formed part of the Windsor development and are held by Reindel and/or Blizzard Winds as the Reindel Properties. AB Property also lodged caveats over the five Reindel Properties. On 28 July 2021, Reindel, his spouse Ms Anne Runhardt (Runhardt), and Blizzard Winds commenced proceeding S ECI 2021 02659 seeking, inter alia, removal of the caveats lodged by AB Property and the Investor Parties over the Reindel Properties (the Caveat Proceeding).

(c) On 24 August 2021, the Investor Parties commenced Supreme Court proceeding S ECI 2021 03051 against Reindel, Runhardt, Blizzard Winds, the Company, and others,[5] alleging breaches of trust and fiduciary duties connected with the Windsor development and the Trust (the Investor Parties' Proceeding). On 10 September 2021, the Investor Parties issued a summons in the Investor Parties' Proceeding, seeking, inter alia, injunctive relief restraining Reindel and Blizzard Winds from dealing with the Reindel Properties.

(d) On 24 August 2021, County Court proceeding CI-21-03584 was commenced by Reindel and Blizzard Winds against Baker and a related entity seeking payment of $271,500 (the Reindel Baker CCV Proceeding).

1. On 14 September 2021, the Liquidator sought to be joined as an intervener in the Caveat Proceeding and, on 27 September 2021, the Liquidator notified the Court that he no longer wished to be joined to the Caveat Proceeding.
2. On 4 April 2022, Daly AsJ made orders in the Caveat Proceeding removing the caveats lodged by AB Property over the Reindel Properties held by Blizzard Winds but allowing the caveat over the property held by Reindel personally to remain.
3. In the period from August to October 2022, there were further developments in the other proceedings involving the protagonists, as follows:

(a) On 8 August 2022, Daly AsJ delivered a ruling in the Caveat Proceeding and the Investor Parties' Proceeding, ordering that the caveats lodged by the Investor Parties over the Reindel Properties be removed and that Reindel and Blizzard Winds be restrained from dealing with the Reindel Properties until further order.[6]

(b) On 20 September 2022, the Investor Parties filed a summons by which they sought to amend the pleadings in the Investor Parties' Proceeding, inter alia, to seek relief against Baker, his spouse Ms Jasmine Macfarlane (Macfarlane), and AB Property, to recover assets of the Trust.

(c) On 17 October 2022, Daly AsJ ordered that the hearing of the application to amend the pleadings in and join parties to the Investor Parties' Proceeding be adjourned until after the determination of the relief sought in the Original Application. The practical effect of that order is that the Investor Parties' Proceeding is stayed pending determination of this proceeding.

1. The claims that are alleged as against the Baker parties and Reindel parties are listed in Annexure B to the 2023 Deed. The Investor Parties say that, although they do not wholly agree with the characterisation of the claims or the value ascribed to them, the claims listed in the annexure provide a basis for me to interrogate the Liquidator's process in dealing with the parties. I have looked at the claims set out in the annexure, for the purpose of satisfying myself of the Liquidator's process, in light of the submissions made by the parties as to these claims, the defences articulated by the Reindel and Baker parties in correspondence dated 4 April 2023, and the evidence of the Liquidator at the hearing in connection with those claims.
2. Claims as against the Baker parties concern:

(a) transfers of two properties in the Windsor development, giving rise to claims against Baker and MacFarlane, with claims regarding the first property estimated by the Liquidator to be valued at $1,299,999 to $300,000 against Baker, and between $300,000 and $600,000 against MacFarlane, and regarding the second property at valued at $800,000 against Baker, and against MacFarlane at $1,350,000;

(b) cash payments to either AB Property or Baker in the period from 28 September 2017 to 15 October 2020, estimated by the Liquidator to be valued between $2,025,126 and $2,739,809.30; and

(c) a breach of duty by Baker to prevent insolvent trading from 14 July 2020, or from 4 November 2020, with the value of the claim being described as the debts incurred from that time (should Baker be found to have acted as a shadow or de facto director of the Company).

1. Defences raised by Baker in respect of the claims at sub-paragraphs 16(a)-(b) above include that the claims have been released under the First Baker Deed, that cash payments were made with the approval of Reindel, and that the transfers of property were not for substantially less than market value. Specifically, the contract prices for the two properties totalled $1,020,000 and this is said to be the market value for the properties, noting that one was located above an electricity substation which had a material adverse effect on its valuation. With respect to payments to AB Property, the letter dated 4 April 2023 provides that as at the date of liquidation, AB Property was owed $472,500 plus GST.
2. With respect to the claim of insolvent trading at 16(c), it is denied that the Company traded when insolvent, and it is said that the Company did not become insolvent, but if it did, it was in early November 2020, and it is denied that Baker was a shadow or de facto director of the Company.
3. Claims as against the Reindel parties concern:

(a) the transfer of five properties in the Windsor development for undervalue, against Blizzard Winds or Reindel, for a total value estimated by the Liquidator of $2,449,800;

(b) cash payments to either Mondrian Developments Pty Ltd (Mondrian, another Reindel related company) or Blizzard Winds in the period from 12 April 2018 to 5 November 2020, estimated by the Liquidator to be valued between $0 and $3,636,204;

(c) payment of funds on 28 August 2020 to Runhardt, estimated by the Liquidator to be valued at $750,000; and

(d) a breach of duty by Reindel to prevent insolvent trading from 14 July 2020, with the value of the claim described as unfair preferential payments in the sum of $623,024.

1. Defences raised by Reindel in respect of the claims at paragraph 19(a)-(c) above include assertions that Reindel or his associated entities contributed financially to the Company which meant that the Company owed debts to the Reindel parties, and entitlements that Reindel or his associated entities had claims as against the Company for payment of debts accruing to them. The Reindel parties made historical cash contributions of more than $2,950,348.80 between 12 February 2016 and 3 November 2020; paid an 'open space fee' to the City of Stonnington of $230,000; had entitlements for invoice amounts of $302,500 and $785,400; had entitlements for services in connection with a unit in the development of $367,500; had paid wages to Baker directly for work for the Company of $526,797.19; and had an entitlement to remuneration for Reindel of $1,650,000. The Reindel parties claim a total amount of entitlements and historical contributions of $6,812,545.99. This is in excess of the total amount of claims which the Liquidator says he or the Company has as against the Reindel parties of $6,466,014.
2. The defences to the claim at 19(d) regarding the solvency of the company include an assertion that the Company was solvent at all material times, and if it became insolvent at any time, this was no earlier than 6 November 2020; and financial records and legal principles to which Reindel points as providing a strong basis for him to assert that, at all material times, he had no grounds to suspect the Company was insolvent, and which would result in the Liquidator being unable to establish that the Company was insolvent.
3. There were a number of criticisms and potential holes in Baker's and Reindel's defences raised by the Investor Parties. The cross-examination of the Liquidator elucidated his consideration of the Company's claims, and it was clear that he and his team, as well as his legal advisers, had carefully considered the claims and potential defences, as well as their strengths and weaknesses. Further, these matters are all canvassed in the Legal Advice.

B.5 The First Baker Deed and its subsequent variation, and the Plaintiffs' original application

1. On 10 December 2021, the Liquidator (on his own behalf and on behalf of the Company, in its own capacity and formerly as trustee of the Trust) entered into a deed of release and assignment with Baker (First Baker Deed). In brief, the First Baker Deed contained the following key terms:

(a) 'Deposit' was defined as $700,000.

(b) As set out in clause 3.1, Baker was to pay a deposit comprised of (1) $200,000 to the Liquidator within seven days of entry into the deed and (2) a further $500,000 within seven business days of the Liquidator successfully making application to the Court to be appointed receiver of the Trust and obtain any order (if required) pursuant to s 477(2B) of the Corporations Act.

(c) The Liquidator and Company were to release and discharge claims against Baker and his related parties as set out in clause 2.1 of the First Baker Deed. Clause 2.1 relevantly provided:

2.1 In consideration of payment of the Deposit and subject to the terms of this Deed, the Liquidator and the Company hereby release and discharge [Baker] and his related parties from the Released Claims.

(d) The defined term 'Released Claims' were those claims identified in Annexure B to the deed.[7] The claims in Annexure B included potential claims for transfer of properties in the Windsor development for undervalue, voidable transaction claims under s 588FDA of the Corporations Act, and uncommercial transaction or receipt of funds claims under s 588FB of the Corporations Act.

(e) In consideration of payment of the deposit and subject to the terms of the deed, the Liquidator (as Liquidator of the Company and receiver of the Trust) and the Company were to assign to Baker absolutely all rights, title and interest in certain claims set out in Annexure A to the deed.[8] The claims in Annexure A were claims as against Reindel or entities and persons associated with him, including Blizzard Winds, including potential claims for transfer of properties in the Windsor development for undervalue, voidable transaction or receipt of funds claims under s 588FDA of the Corporations Act, and uncommercial transaction claims under s 588FB of the Corporations Act.

(f) The abovementioned assignment was expressed as conditional upon the Liquidator successfully making an application to be appointed receiver of the Trust and obtain any order (if required) pursuant to s 477(2B) of the Corporations Act.

(g) If the application was successful, the Liquidator was entitled to retain the Deposit in full. If the application was not successful and the assigned claims were not assigned to Baker, the Liquidator was required immediately to return $125,000 of the Deposit to Baker.

(h) Requirements for prosecution or settlement of the assigned claims by Baker and the distribution of any monies Baker might recover through prosecution or settlement of the assigned claims.

1. On 18 January 2022, the Plaintiffs commenced this proceeding in connection with the approval of the First Baker Deed, as follows (the Original Application):

(a) the Liquidator sought approval under section 477(2B) of the Corporations Act for his entry into the First Baker Deed on the Company's behalf, such approval being required because the obligations of a party to the agreement might be discharged by performance more than three months after the parties entered into the agreement;

(b) orders were also sought under section 63 of the Trustee Act, and further or alternatively ss 90-15 or 90-20 of the IPS, to confer on the Company powers, nunc pro tunc, necessary to allow assets of the Trust to be dealt with, so that releases of certain causes of action might be given under the First Baker Deed; and

(c) in addition, orders were sought under section 37 of the SCA and rule 39.02 of the SCR for the Liquidator's appointment as receiver and manager of the Trust.

1. Subsequent to the execution of the First Baker Deed, there was a dispute between the parties to that deed regarding whether the releases of Baker and his related entities were of immediate effect upon payment of $200,000 to the Liquidator, or whether the releases were effective only once the Liquidator had successfully made the application to be appointed receiver of the Trust and obtain any order pursuant to s 477(2B) of the Corporations Act. It was the position of Baker that the releases were immediately operative, whereas the Liquidator's position was that the releases were not triggered until the condition precedent of Court approval was satisfied.
2. On 13 July 2022, the agreement between the Liquidator and Baker as set out in the First Baker Deed was varied by a further deed (Deed of Variation).
3. The Deed of Variation operated to amend the terms of the First Baker Deed as follows:

(a) Clause 2.1 was amended to include the word 'Initial' before the word Deposit.

(b) Clause 3.1 was amended to read:

3.1 The Assignee must pay the Deposit to the Liquidator as follows:

a) $200,000 by 17 December 2021 (Initial Deposit);

b) $500,000 within 7 Business Days of the Liquidator satisfying the conditions in Clause 3.3 and the parties otherwise being reasonably satisfied that there are no other matters to be undertaken by them to enable the Assignee to commence any proceeding relating to the Reindel Transfer Claim (Deposit Balance).

Payment of the Deposit is to be made at the direction of the Liquidator. Subject to the release at clause 2.1, the Initial Deposit may be used by the Liquidator for the payment of all costs and expenses incurred by on or behalf of the Liquidator, in respect of the Application.

(c) Clause 3.4, which read '[t]he parties acknowledge and agree that if the Application is not successful and the Assigned Claims are not assigned to the Assignee, the Liquidator shall immediately return $125,000 of the Deposit (without deduction) to the Assignee', was deleted.

(d) Clause 6.3(a) was amended to remove the words 'by 30 September 2022' and the words 'within 60 days of orders being made in the Application in favour of the Liquidator.'

1. The Deed of Variation purportedly amended the First Baker Deed to clarify that the releases of the claims against Baker and his related entities were intended by the parties to be effective from the payment of $200,000, rather than having as a condition precedent the Liquidator's successful application to the Court for approval pursuant to s 477(2B) of the Corporations Act and appointment as receiver of the Trust, and the payment of the deposit total of $700,000. The Deed of Variation also had the effect that none of the $200,000 paid by Baker was refundable by the Liquidator.
2. On 15 August 2022, the Plaintiffs filed an amended originating process which amended the Original Application in this proceeding. By the amended originating process, the Plaintiffs sought the same relief as set out above at paragraph 24, but in connection with the First Baker Deed, as varied by the Deed of Variation.
3. For the sake of clarity, I will call the arrangement between Baker, the Company and the Liquidator set out in the First Baker Deed, and as varied by the Deed of Variation, the Baker Agreement.
4. On 5 October 2022, Reindel filed an interlocutory process in this proceeding, seeking a declaration that the releases in the Baker Agreement do not operate so as to release the claims purported to be released under the agreement and/or an order setting aside the Baker Agreement ab initio.

1. The Original Application (as amended) was heard by Justice Elliott in November 2022. The Liquidator's case was supported by Baker but opposed by Reindel and the Investor Parties. In a ruling following the hearing, Elliott J stated that it was necessary for the Liquidator to provide to the Court his legal advice with respect to the relief sought, prior to his Honour making a final determination regarding the Original Application.[9] The Court ordered that the Plaintiffs file any affidavit evidence on which they seek to rely in respect of legal advice obtained by the Liquidator on a confidential basis by a set date, which was subsequently extended, and the proceeding was adjourned part heard.[10]
2. No affidavit evidence in respect of legal advice was filed by the Plaintiffs at that time.

B.7 Further negotiations involving Baker and Reindel

1. After the hearing of the Original Application, Reindel and Baker approached the Liquidator with a joint offer in respect of potential claims against them. Discussions between those parties ensued.
2. In January 2023, the Liquidator (in his capacity as Liquidator of the Company), Reindel, and Baker exchanged a non-binding heads of agreement (HOA) to negotiate a new set of agreements with respect to various claims. The HOA relates to proposed agreements between combinations of the Liquidator parties (being the Company in its own capacity and as trustee for the Trust and the Liquidator), the Reindel parties (being Reindel, Blizzard Winds (in its own capacity and as trustee for a Reindel family trust), Mondrian, and Runhardt), and the Baker parties (being Baker, AB Property and Macfarlane).
3. The upshot of the HOA was that the Company's and Liquidator's claims against Reindel, Baker and their respective related entities would be released; Baker, Reindel and their respective related entities would make two payments totalling $1.1 million to the Liquidator; the Baker Agreement would be rescinded; and Baker and Reindel (and their respective related entities) would settle their claims against each other. The agreements to give effect to this would be negotiated and finalised, and executed by Baker and Reindel (and their respective related entities), but not by the Liquidator or the Company until directions from the Court had been obtained.
4. The HOA contained the following terms:

(a) Any settlement is subject to:

(i) the Liquidator parties obtaining a direction from the Court pursuant to s 90 of the IPS that the Liquidator is acting reasonably and is justified in entering into a deed of settlement and release with the Reindel and Baker parties (HOA Deed A), and the Liquidator parties entering into the HOA Deed A, as well as a deed terminating the Baker Agreement (HOA Deed B), immediately following the granting of that Court direction;

(ii) the Reindel and Baker parties entering into a deed of release and settlement with each other on terms as set out in the HOA at paragraphs 25 to 33 (HOA Deed C). The Liquidator and the Company were not parties to HOA Deed C.

(b) The Liquidator parties are to obtain advice from counsel and make the application for directions as soon as practicable once the Liquidator parties have received the funding deposit (a defined term explained in greater detail below) and the terms of HOA Deeds A, B and C outlined above have been agreed to by the parties to those respective deeds.

(c) The Baker parties and the Reindel parties will not take any step to oppose the application for directions.

(d) Agreement to be reached on a form of HOA Deeds A and B to be tendered as confidential exhibits by the Liquidator in the application for directions, not to be executed by the Liquidator until the application is granted.

(e) HOA Deed A will be executed by:

(i) the Reindel and Baker parties on agreement as to its terms, and subject to conditions precedent set out in the HOA being met; and

(ii) the Liquidator parties upon the Court granting the application for directions.

(f) HOA Deed B will be executed by:

(i) the Baker parties on agreement as to its terms, and subject to conditions precedent set out in the HOA being met; and

(ii) the Liquidator parties upon the Court granting the application for a direction.

(g) HOA Deed C will be executed by the Baker and Reindel parties on agreement being reached as to its terms and subject to conditions precedent set out in the HOA being met.[11]

(h) Each party relies on the parties paying their contribution to the deposit and settlement sum under the HOA and the Liquidator parties faithfully seeking counsel's advice, making the directions application and executing HOA Deeds A and B upon the Court granting that application.

(i) The Baker parties and Reindel parties will make payment into trust of a non-refundable funding deposit of $200,000, comprised of $100,000 by the Reindel parties and $100,000 by the Baker parties, upon the terms of HOA Deeds A, B, and C being agreed.

(j) The order of application of the funding deposit will be first towards the Liquidator's costs of the application, next to satisfy any adverse costs orders in the application, and third, to be retained by the Liquidator parties and applied as they see fit, unless counsel's advice does not support the application or the Liquidator does not make the application. In either of those two circumstances, the funding deposit is to be paid towards the cost of obtaining the counsel advice and the residue returned to the Baker and Reindel parties.

(k) The Reindel parties will make payment into trust of the settlement sum of $900,000 upon the terms of HOA Deeds A, B, and C being agreed, to be held on trust pending the outcome of the application for directions. The settlement sum is to be paid by the Reindel parties, in addition to their contribution of $100,000 to the funding deposit, described above.

(l) The relevant parties will consent to interim orders:

(i) in the Reindel and Baker SCV Proceeding and the Caveat Proceeding, for adjournments sine die and the vacation of all outstanding timetabling directions;

(ii) for the adjournment of public examinations and production orders addressed to Reindel, Baker, and their related parties in a Supreme Court proceeding relating to public examinations, bearing proceeding number S ECI 2022 02576 (the Examination Proceeding);

(iii) in this proceeding, for a stay or adjournment of the application for relief in the Original Application pending the outcome of the application for directions;

(iv) in this proceeding, for a stay or adjournment of the interlocutory process brought by Reindel in opposition to the Original Application; and

(v) in this proceeding, for the application for the appointment of the Liquidator as receiver of the property of the Trust and/or orders under the Trustee Act, to proceed with the consent of the Baker and Reindel parties.

(m) Conditions precedent for HOA Deed A, which will be contained in a term of the deed, are that it be subject to the granting of the application for directions, execution of HOA Deed B, and the trust relief being granted. Once satisfied, the settlement sum is to be released to the Liquidator parties and, once that sum is released, mutual releases are operative as to any claims the Company or Liquidator may have against the Reindel parties, any claims regarding costs in any of the proceedings, and any claims arising from the caveats lodged by the Liquidator in respect of properties formerly owned by the Company, and any claims that the Liquidator, Company or Reindel parties have or may have had against each other, whether known or not known.

(n) HOA Deed A will contain a term that mutual releases are to be granted as to any claims the Company or Liquidator may have against the Baker parties, any claims regarding costs in any of the proceedings, any claims arising from the caveats lodged by the Liquidator in respect of properties formerly owned by the Company, and any claims that the Liquidator, Company or Baker parties have or may have had against each other, whether known or not known. The mutual releases in respect of the Baker parties are in consideration for the Baker parties agreeing to terminate the Baker Agreement, contributing to the funding deposit, waiving any claim the Baker parties may have had in respect of the monies paid to the Liquidator under the Baker Agreement, and waiving any right to receive a dividend in respect of the proof of debt lodged by AB Property.

(o) HOA Deed A will contain a term that, on release of the settlement sum, the Liquidator will withdraw the caveats lodged by him.

(p) Subject to HOA Deed A, the Baker and Reindel parties which are Company creditors will prove in the liquidation but waive any right to a dividend and vote in favour of resolutions approving the Liquidator's remuneration.

(q) Other terms in HOA Deed A are specified in respect of the progress of the Original Application and the Examination Proceeding.

(r) HOA Deed B will contain a term that it is subject to the granting of the application for directions, and the execution of HOA Deeds A and C, and once satisfied, that the Liquidator parties and Baker parties agree that the Baker Agreement be rescinded ab initio.

1. Following entry into the HOA, negotiations between the relevant parties and their solicitors occurred, with in-principle agreement being reached by the Liquidator, Reindel, and Baker, as to the terms of the three deeds contemplated by the HOA.
2. The two deeds now involving the Liquidator parties were:

(a) a deed of settlement and release between the Liquidator, the Company, Reindel, and Baker (along with associated entities and relatives of Reindel and Baker), with terms along the lines of HOA Deed A (the 2023 Deed); and

(b) a deed of rescission between the Liquidator, the Company, and Baker, to rescind the Baker Agreement, with terms along the lines of HOA Deed B (the Baker Agreement Deed of Rescission)

1. As noted above and as contemplated by the HOA, these deeds have not yet been executed by the Liquidator parties. To reiterate, the execution of the Proposed 2023 Agreement is contingent upon the Liquidator receiving legal advice that he would be acting reasonably and would be justified in entering into the 2023 Deed, and on relief from the Court in the form of a direction pursuant to s 90-15 of the IPS.
2. It is the Proposed 2023 Agreement which is the subject of the Plaintiffs' current application.
3. The 2023 Deed include the following conditions precedent (at cl 4):

(a) the execution of the 2023 Deed by the Liquidator parties and the exchange of the 2023 Deed between the Liquidator parties, the Reindel parties, and the Baker parties;

(b) the execution and exchange of the Baker Agreement Deed of Rescission by the Liquidator parties and the Baker parties; and

(c) the appointment of the Liquidator as receiver of the property of the Trust and/or for orders under the Trustee Act that the Company be conferred with any powers necessary to deal with the property of the Trust.

1. Provisions of the 2023 Deed which clarify aspects of the HOA or are different to the HOA include the following:

(a) Clause 6, regarding the non-refundable 'Funding Deposit' to be paid by the Baker and Reindel parties to be applied first towards the Liquidator's costs of the application for a direction, secondly to satisfy any adverse costs order in that application against the Liquidator parties, and thirdly (should any balance remain), as property of the Company in the winding up.

(b) Clause 10, regarding action available on default of any party to the 2023 Deed (including the ability of parties to commence proceedings to secure a judgment against Reindel in favour of the Liquidator parties for the Settlement Sum, should Reindel fail to pay it, and for specific performance and indemnity costs in respect of other events of default by the parties).

(c) Clause 11, providing for agreement of the parties that the releases in clause 9 may be pleaded as a bar to any action, suit or proceeding regarding the claims released under the 2023 Deed, a covenant not to bring any action suit or proceeding based on the released claims, and clarification that this bar and covenant does not affect the Liquidator's rights to examine or seek production of documents in the Examination Proceeding, in accordance with the terms of the 2023 Deed.

(d) Clause 12, concerning confidentiality of the terms of the 2023 Deed and permitted disclosures of all parties (in circumstances of prior written consent, to limited groups of persons where necessary to give effect to the 2023 Deed, or where compelled by law) and of the Liquidator (who is able to include the 2023 Deed as a confidential exhibit in the proceeding, to disclose the 2023 Deed to statutory creditors of the Company to ascertain their views on it, and to disclose a redacted version of the 2023 Deed to the legal representatives of the Investor Parties).

1. As noted above, Annexure B to the 2023 Deed is a table listing the Liquidator's claims. There is evidence that the Liquidator sought, as part of his consideration process and for the benefit of his counsel when they were preparing the Legal Advice, responses from each of Reindel and Baker as to the claims against them. The Liquidator sought information from them about what their defences to such claims were. By letters dated 4 April 2023, Mills Oakley on behalf of Reindel, Blizzard Winds and Mondrian, and Capstone Koroneos Lawyers on behalf of Baker and MacFarlane separately wrote to the Liquidator's solicitors. Those letters each set out, in some detail, the positions of those persons in respect of the claims against them. As part of this proceeding, the Investor Parties sought to inspect these two letters. This was initially refused by Reindel and Baker but, ultimately, they agreed to provide copies to the Investor Parties.
2. The Baker Agreement Deed of Rescission provides for the rescission of the First Baker Deed and Deed of Variation ab initio, upon satisfaction of the following conditions precedent:

(a) the Court granting the direction pursuant to s 90-15;

(b) the execution and exchange of the 2023 Deed by the Liquidator parties, Reindel parties, and Baker parties; and

(c) the execution and exchange of the Reindel/Baker Deed by the Reindel Parties and Baker Parties.

1. The Baker Agreement Deed of Rescission also provides that, in the event that the conditions precedent are not satisfied (by 1 March 2024 or such later date as agreed by the Liquidator parties, Reindel parties and Baker parties), the rescission set out above does not come into effect and all rights, obligation and terms of the Baker Deed of Rescission which have come into effect shall be rescinded ab initio (cl 4.2).
2. A draft deed of settlement and release, corresponding to HOA Deed C, was negotiated between Reindel and Baker and concluded on or around 6 March 2023.

B.8 Further negotiations involving the Investor Parties

1. The Liquidator informed the Investor Parties that a new agreement was being negotiated, partly in order to solicit from them a competing offer with respect to the liquidation of the Company and the resolution of its possible claims.
2. On 13 February 2023, the Liquidator received a competing proposal from the Investor Parties (the Investor Parties' Proposal).
3. The Investor Parties' Proposal involved the assignment of claims and rights against Reindel, Baker, and their associated entities from the Liquidator and/or the Company to a new entity to be incorporated by the Investor Parties, Roswind Pty Ltd (Roswind), and for that entity to acquire claims and rights to sue conferred on the Liquidator as at that time known and identified.[12] In respect of some claims (such as for breach of directors' duties or insolvent trading) which the Investor Parties acknowledged could not be assigned, the Investor Parties' Proposal stated that, '[s]ubject to what further investigations may uncover, [the Investor Parties] will want the right to fund any recovery proceedings that the liquidator has standing to bring.'
4. In exchange, the Investor Parties would make a lump sum payment of $1.4 million to the Liquidator. The lump sum payment was proposed to be applied towards the satisfaction of the ATO and SRO as creditors of the Company and the liquidator's professional fees incurred, including remuneration and legal fees 'which are to be taxed'. As part of the Investor Parties' Proposal, the Investor Parties would support the Liquidator's appointment as receiver and manager of the Trust, whereupon the Liquidator would agree to sell all Trust assets to the Investor Parties (with the consideration being $1 million out of the lump sum payment). The Investor Parties' Proposal also required the Liquidator to give the Investor Parties access to copies of the books and records of the Company and the Trust.
5. The Investor Parties' Proposal was expressed to be conditional on:

(a) the Court's refusal to approve the Baker Agreement or the Proposed 2023 Agreement;

(b) the appointment of the Liquidator as receiver and manager of the Trust;

(c) the Liquidator warranting that he has not agreed to provide any releases to the Reindel or Baker entities or related parties for Trust claims or compromised any contingent or other claims;

(d) the Liquidator introducing an agreement embodying the Investor Parties' Proposal into the proceeding by way of an application, presenting it as one of the three options available for the Court's consideration, supported by legal advice as required by the Court in respect of the Baker Agreement to date; and

(e) any necessary Court approvals or ratification of the agreement embodying the Investor Parties' Proposal.

1. The Liquidator conveyed the Investor Parties' Proposal to Baker and Reindel, with the aim of eliciting a better counter-offer from Baker and Reindel.
2. The Liquidator also sought clarification from the Investor Parties about aspects of their offer and raised some concerns he had about it. The Liquidator sought to negotiate an indemnity for himself in respect of any claim for breach of the Baker Agreement that might arise from accepting the Investor Parties' Proposal, however, the Investor Parties did not agree to provide an indemnity.
3. On 2 March 2023, the Liquidator's solicitors wrote to the Investor Parties' solicitors to make or reiterate observations as to inconsistencies or matters in the Investor Parties' Proposal which required clarification or which concerned him. In this letter, amongst other things, the Liquidator:

(a) noted that the Investor Parties sought a warranty that the Liquidator had not agreed to provide any releases to Baker or Reindel, in circumstances where the Investor Parties were aware of the Baker Agreement which provided for releases of Baker and his related parties. The Liquidator sought clarification of whether this warranty was to include that release or whether it was only in respect of further releases. The Liquidator stated that if the Investor Parties' condition requiring this warranty included the Baker release contained in the Baker Agreement, then the warranty could not be given and this condition in the offer could not be satisfied;

(b) re-agitated his requirement for an indemnity from the Investor Parties in respect of breaching the Baker Agreement if the Investor Parties' Proposal was accepted. In this regard, the Liquidator set out a number of arguments in respect of the indemnity, including that:

(i) any agreement is subject to obtaining directions from the Court, which will require counsel's opinion which will need to address whether the Liquidator is justified and acting reasonable in entering into an agreement along the lines of the Investor Parties' Proposal;

(ii) an assessment of the reasonableness of the Liquidator's proposed course of conduct must be carried out in the context of other courses of conduct available to him, which will involve (at the very least), a comparison of the Investor Parties' Proposal with the Proposed 2023 Agreement;

(iii) in the absence of an indemnity, acceptance of the Investor Parties' Proposal involves the Liquidator exposing himself to a claim by Baker for breach of the Baker Agreement, whereas acceptance of the Proposed 2023 Agreement does not;

(iv) in those circumstances, the true value of the Investor Parties' Proposal is equal to the amount of consideration received by the Liquidator less his liability to Baker for breach of the agreement with him; and

(v) in circumstances where the Liquidator's liability to Baker may be equal to the value of the releases from which Baker would have benefited, and the value of the claims against Reindel (of which Baker would have taken an assignment), the true value of the Investor Parties' Proposal is likely to be substantially discounted;

(c) stated that the offer was not presently capable of acceptance;

(d) noted that there is no time for acceptance and asked how long it was open for;

(e) noted inconsistencies in the terms of the offer:

(i) the Investor Parties were purporting to purchase all Trust assets, but then referred to assets of the Trust remaining with the Liquidator; and

(ii) there was reference to an assignment of rights which appeared interchangeable with a purchase of Trust assets;

(f) noted a vague reference to the Investor Parties being 'minded to consider, subject to further discussions, additional payments to satisfy any other creditors still owing at the time.' The Liquidator requested clarity about this, stating that if further funds were to be paid by the Investor Parties then it would impact the value of the offer;

(g) stated that the condition that the Investor Parties would want the right to fund any recovery proceedings was vague, and asked whether they intended that some funding arrangement would be included in any documentation of the offer and, if so, what the proposed terms of that arrangement would be;

(h) sought clarification of what was proposed by 'the liquidator's professional fees incurred (including legal fees, which are to be taxed)' meant, in particular:

(i) were the Liquidator's fees (ie remuneration) to be subject to a taxation, or some other review;

(ii) were legal fees incurred throughout the liquidation to date to be taxed, or only in respect of this proceeding; and

(iii) how the costs of undertaking a taxation or some other review of the Liquidator's remuneration and legal fees were to be treated in terms of this requirement;

(i) sought clarification as to whether:

(i) the payment of $1.4 million, which they had already clarified would be paid within 10 business days, was within 10 business days of execution of a mutually agreeable deed or satisfaction of the conditions contained in the offer;

(ii) the statement that causes of action against the Investor Parties' unitholding entities will remain with the receiver/manager of the Trust involved the individuals being released from any causes of action the Company has against them and, if not, were those claims to be part of the Trust assets to be purchased by Roswind;

(iii) any part of the consideration was repayable if the conditions precedent (eg obtaining court orders) could not be satisfied; and

(j) referred to a confusion regarding whether the Investor Parties' Proposal had been intended as an open offer or a confidential and/or without prejudice offer. The Liquidator stated that further communications regarding the Investor Parties' Proposal would be kept confidential unless marked as open.

1. On 17 March 2023, the Investor Parties' representatives wrote to the Liquidator's representatives in reply to the letter dated 2 March 2023. The letter further clarified the Investor Parties' Proposal, as follows:

(a) Regarding review/taxation of the Liquidator's remuneration and legal costs:

It is proposed that all the professional costs incurred in the liquidation be taxed/reviewed. The necessity of undertaking a taxation or review would depend firstly on whether the parties can meet the appropriate test to avoid a taxable bill under Chapter 5 of the Supreme Court (Corporations Rules) 2018. There are, as you would appreciate, steps required to have this assessed and given that your client will have to apply for approval of remuneration, the costs of this exercise should, in our view, be reserved for later.

(b) The warranty sought from the Liquidator would include that he had not provided any releases to Baker and his related parties. The Investor Parties were prepared to carve out the Baker release in the Baker Agreement, but this would fall away if their proposal was accepted by the Court over the Baker Agreement or a new proposal from Baker and Reindel.

(c) The Investor Parties also confirmed that they would not provide the Liquidator with an indemnity with respect to breach of the Baker Agreement, and that they did not agree that the lack of indemnity was a matter which substantially discounted the value of the Investor Parties' Proposal.

(d) Their offer was open for as long as the parties were able and willing to negotiate, with a view to agreeing on a final form of a deed.

(e) The Investor Parties would acquire all of the Liquidator's rights apart from those which cannot under statute be assigned, and once the Liquidator was appointed as receiver and manager of the Trust, all assets of the Trust would be the subject of a separate asset sale and rights deed with Roswind.

(f) In respect of the query referred to at paragraph 55(f) above, this was no more than an indication that the Investor Parties were prepared to consider additional payments to creditors that may still be owing should there be successful recoveries in litigation in excess of the costs/entitlements of Roswind and the unitholders, all of which was speculative;

(g) In respect of the query referred to at paragraph 55(g) above, the Investor Parties want the right to fund further recovery proceedings on behalf of the Liquidator for causes of action which cannot be assigned, should investigations uncover further claims. The Investor Parties do not intend for a specific or separate funding offer to be included in the deed, and the $1.4 million lump sum payment is in full consideration for that right.

(h) The lump sum payment would be paid within 10 business days of the conditions of the offer being met, Court approval, execution of the deed, and the subsequent asset sale and rights deed being executed or agreed to in writing.

B.9 The Liquidator's further amendment of his originating process

1. In May 2023, the Liquidator obtained a memorandum of legal advice in respect of the Baker Agreement, the Proposed 2023 Agreement and Investor Parties' Proposal (Legal Advice).[13] Following receipt of that Legal Advice, the Liquidator and the Company applied to the Court for leave to amend their originating process to include a further application, which I detail at paragraph 62 below.
2. I granted the Plaintiffs' application for leave to amend on 12 July 2023. At that time, I indicated that it would be necessary for the Court to receive a copy of the Legal Advice, in order to consider that further application. Pursuant to those orders, on 13 July 2023, the Plaintiffs filed the further amended originating process (FAOP).
3. The Investor Parties filed an interlocutory process in the proceeding on 29 November 2023 (Investor Parties' IP). The Investor Parties' IP is detailed below at paragraph 63.
4. On 5 February 2024, I made further procedural orders:

(a) extending the time for compliance with Order 1 of the Orders of Elliott J on 9 December 2022, requiring the Plaintiffs to file any affidavits on which they seek to rely in respect of instructions given and legal advice sought by the Liquidator, materials and information provided by him in connection to advice sought, advice obtained by the Liquidator and reliance on all, or any part of, the legal advice (Advice Affidavit);

(b) reserving the question of whether the Court will take account of the Advice Affidavit to when the Court considers and gives its reasons for decision on the FAOP and the Investor Parties' IP; and

(c) directing that the Plaintiffs provide to my Chambers a copy of a supplemental memorandum of advice referred to in the 11th Gollant Affidavit (defined in paragraph 71 below) (the Supplemental Advice) on a confidential basis and without waiving privilege, in accordance with the principles set out in Vickers v Australian Securities and Investments[14]ommission.14

1. Copies of the Legal Advice and the Supplemental Advice have been provided to my Chambers on a confidential basis. The Advice Affidavit (sworn by the Liquidator on 6 February 2024) was also provided to my Chambers on a confidential basis.[15]

(a) in relation to the agreements with Baker and Reindel, and with Baker:

(i) a direction pursuant to s 90-15 of the IPS, that the Liquidator, as liquidator of the Company, is acting reasonably and is justified in entering into the Proposed 2023 Agreement (the Primary Relief), a deed of settlement and release between the Liquidator, the Company, Reindel, and Baker (along with associated entities and relatives of Reindel and Baker), with terms along the lines of HOA Deed A (the 2023 Deed); and

(ii) in the alternative and absent such direction, approval pursuant to s 477(2B) of the Corporations Act, for the Liquidator to enter into the Baker Agreement (the Secondary Relief);[16] and

(b) various ancillary orders, such as orders to facilitate the assignment and/or releases under the Proposed 2023 Agreement or the Baker Agreement and to wind up the Trust, being:

(i) Trustee Orders, being:

• (A) an order pursuant to s 63 of the Trustee Act conferring on the Company the necessary powers to wind up the Trust (including, inter alia, powers to carry on the business of the Trust, sell Trust assets, pay creditors of the Trust, and compromise claims against the Company in its capacity as trustee or against Trust property), with such order to be expressed nunc pro tunc in the event that the Court opts to provide the Secondary Relief;
• (B) orders pursuant to s 90-15 and/or s 90-20 of the IPS, that the Liquidator is:

(1) able to rely on his statutory powers as liquidator pursuant to s 477 of the Corporations Act to take all necessary steps to wind up the Trust; and

(2) justified in paying from Trust property creditors of the Trust and his own costs, expenses and remuneration in respect of his work as liquidator or receiver of the Trust assets;

(ii) Receivership Orders, being:

• (A) an order pursuant to s 37 of the SCA and/or r 39.02 of the SCR appointing the Liquidator without security as receiver and manager of the Trust;
• (B) an order dispensing with the need for the receiver to file a guarantee under r 39.05 of the SCR;
• (C) an order that the receiver is authorised to have possession of, call in, preserve, maintain and sell the assets comprising the Trust property;
• (D) an order providing the receiver with powers:

(1) to do all things necessary or convenient to effect the sale or realisation of the Trust property, with the powers that a liquidator has in respect of property of a company pursuant to s 477(2) of the Corporations Act;

(2) to apply the proceeds from the sale or realisation of Trust property to discharge the liabilities of the Second Plaintiff (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

(3) to distribute any surplus proceeds from the sale of the Trust property to a new trustee of the Trust or, if there is no new trustee, to the unitholders of the Trust,

1. The combination of ancillary orders sought by the Plaintiffs, as set out in sub‑paragraph 62(b) depends on whether the Court is minded to grant the Primary Relief, Secondary Relief, or the alternative relief sought by the Investor Parties. Specifically, in the event that:

(a) the Court grants the Primary Relief, the Plaintiffs seek orders to facilitate the releases contemplated in the Proposed 2023 Agreement, being either:

(i) orders pursuant to s 63 of the Trustee Act and ss 90-15 and 90-20 of the IPS, that is, the Trustee Orders; or

(ii) orders pursuant to s 37 of the SCA and/or r 39.02 of the SCR appointing the Liquidator as receiver of the assets of the Trust, that is, the Receivership Orders;

(b) the Court grants the Secondary Relief, the Plaintiffs seek both the Trustee Orders and the Receivership Orders, on a nunc pro tunc basis, because giving effect to the Secondary Relief involves actions which have already been taken, whereas the Primary Relief does not; or

(c) the Court grants the alternative relief sought by the Investor Parties' IP, the Plaintiffs press their application for ancillary Facilitative Relief, but accept that the appropriate form of this relief could depend on the Court's findings.

1. In the event that the Court does not grant the Primary Relief or Secondary Relief sought by the Plaintiffs in the FAOP, the Investor Parties seek by the Investor Parties' IP:[17]

(a) declarations and orders pursuant to s 90-15 of the IPS and/or the Court's inherent jurisdiction, that the releases in clause 2 of the Baker Agreement are not enforceable, or alternatively, ought to be set aside ab initio (the Baker Deed Relief); and

(b) orders:

(i) that a person to be nominated by the Investor Parties be appointed as trustee of the Trust (pursuant to s 48(1) of the Trustee Act and that the Trust property and assets be vested solely in that trustee; or

(ii) alternatively, that a person to be nominated by the Investor Parties be appointed, pursuant to s 37 of the SCA and/or r 39.02 of the SCR, without security, as receiver and manager of the Trust; and

(iii) ancillary orders, such as orders allowing the receiver to have possession of, call in, preserve, maintain and sell the assets comprising the Trust property, and empowering the receiver to do all things necessary or convenient to effect the sale or realisation of the Trust property,

1. Due to the way that the FAOP is framed, the Plaintiffs' Primary Relief claim falls to be determined first. Should I refuse to grant the Primary Relief, I must decide on the Secondary Relief application.
2. The Investor Parties clarify in their submissions that the Baker Deed Relief and the Alternative Appointment Relief are sought in the event that the Plaintiffs fail in respect of their Primary Relief and Secondary Relief. This path is consistent with the way in which the Investor Parties' IP was expressed; they seek the relief described at paragraph 64 above in the event that the Court does not grant the Plaintiffs' FAOP.
3. The Investor Parties seek that one aspect of the determination of the Alternative Appointment Relief be stood over until the determination of the Plaintiffs' Primary and Secondary Relief. The person nominated by the Investor Parties to be appointed as trustee and/or receiver of the Trust is, as the Plaintiffs point out, not able to be appointed to the role of receiver as he is not a registered liquidator.[18] The Investor Parties accept this and say that if the Court decides not to grant any of the Primary, Secondary or Facilitative Relief, then the question of who would be appointed receiver under the Investor Parties' IP would be determined later. The Plaintiffs do not cavil with this.

1. The questions before me can be distilled as follows:

(a) Should the Primary Relief be granted?

(b) If yes to (a), should the Facilitative Relief be granted?

(c) If no to (a), should the Secondary Relief be granted?

(d) If yes to (c), should the Facilitative Relief be granted?

(e) If no to (a) and (c), should the Facilitative Relief be granted?

(f) If no to (a), (c), (d) and (e), should the Baker Deed Relief and the Alternative Appointment Relief be granted?

1. Depending on the answers, some of these questions may not need to be addressed.

1. The evidence before me in this proceeding was aptly described by counsel for the Plaintiffs as a 'thicket'. In total, 28 affidavits were filed by the parties. Thirteen of those affidavits were filed in respect of the Original Application.
2. In the proceeding, the Plaintiffs filed the following affidavits:

(a) twelve affidavits of Gollant, namely:

(i) an affidavit of sworn on 17 January 2022 (First Gollant Affidavit);

(ii) a confidential affidavit sworn on 17 January 2022;[19]

(iii) affidavits sworn on 26 July 2022, 9 September 2022 (Fourth Gollant Affidavit), 18 October 2022 (Fifth Gollant Affidavit), 8 November 2022, 31 May 2023 (Seventh Gollant Affidavit), 31 May 2023 (Eighth Gollant Affidavit), 6 December 2023, 25 January 2024 and 3 February 2024 (11th Gollant Affidavit);[20] and

(iv) the confidential Advice Affidavit, sworn on 6 February 2024.

(b) three affidavits of Cassie Ann O'Bryan (a solicitor at Gadens acting for the Plaintiffs), sworn on 23 February 2022, 7 June 2022, and 1 February 2024.[21]

1. In respect of the Secondary Relief, the Plaintiffs rely on the evidence adduced before Elliott J at the hearing in November 2022, in addition to the Advice Affidavit. This evidence is also relied upon in respect of the Primary Relief, insofar as it provides relevant background information (such as to the qualifications and experience of the Liquidator and investigation conducted into the affairs of the Company) and additionally because the Liquidator considered the advice as to the Proposed 2023 Agreement in the context of the Baker Agreement. Accordingly, the materials relied on in respect of the Secondary Relief may also be relevant to the application for the Primary Relief. The materials before Elliott J are also relied on for the Facilitative Relief.
2. In the proceeding, Reindel filed:

(a) confidential affidavits of Reindel affirmed on 14 April 2022 and 28 September 2022; and

(b) an affidavit of David Leslie Jaffe (an accountant who was engaged by Reindel to provide accountancy services to the Company and is the director and principal of Jaffe Lee) affirmed on 14 April 2022.

1. While Reindel opposed the Original Application, he has subsequently changed his position and no longer opposes the Secondary Relief. In his support of the Primary Relief, Reindel relies on his written submissions dated 27 October 2023, reply submissions dated 11 December 2023, and submissions in opposition to the Investor Parties' IP dated 2 February 2024.
2. Baker filed an affidavit sworn by him on 13 May 2022.
3. The Investor Parties filed the following affidavits:

(a) an affidavit of Vincent Murone sworn on 9 September 2022;

(b) affidavits sworn by Matthew Thomsen (a solicitor at Dominic Esposito Solicitors acting for the Investor Parties), on 14 June 2023 and 6 July 2023;

(c) affidavits sworn by Dominic Esposito (principal solicitor at Dominic Esposito Solicitors), on 19 September 2023, 27 September 2023, 30 November 2023 (Third Esposito Affidavit), and 17 January 2024;

(d) an affidavit of John McKenzie (an accountant for the Investor Parties) sworn on 19 September 2023; and

(e) an affidavit of Michael Pianta (a solicitor at Dominic Esposito Solicitors) sworn on 18 January 2024.

1. The parties also rely on documentary evidence received by Justice Elliott and contained within the application book prepared for the hearing before his Honour, as well as oral evidence given during that hearing, from Reindel and the Liquidator. Transcripts of that evidence are included in the application book.
2. At the trial in February 2024, the Liquidator was cross-examined.
3. I found the Liquidator to be an honest witness. He answered questions openly and directly, and consistently with the contemporaneous documentary material.
4. As will be appreciated from the list of affidavits, the evidence is voluminous. I do not intend to summarise it here. The key background facts, much of which are not in dispute, are set out earlier in these reasons. Where necessary, I will refer to other or more detailed aspects of the evidence below.

F Relevant law in respect of the Primary Relief

1. Section 90-15 of the IPS provides:

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.

Examples of orders that may be made

(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;

(b) an order that a person cease to be the external administrator of the company;

(c) an order that another registered liquidator be appointed as the external administrator of the company;

(d) an order in relation to the costs of an action (including court action) taken by the external administrator of the company or another person in relation to the external administration of the company;

(e) an order in relation to any loss that the company has sustained because of a breach of duty by the external administrator;

(f) an order in relation to remuneration, including an order requiring a person to repay to a company, or the creditors of a company, remuneration paid to the person as external administrator of the company.

Matters that may be taken into account

(4) Without limiting the matters which the Court may take into account when making orders, the Court may take into account:

(a) whether the liquidator has faithfully performed, or is faithfully performing, the liquidator's duties; and

(b) whether an action or failure to act by the liquidator is in compliance with this Act and the Insolvency Practice Rules; and

(c) whether an action or failure to act by the liquidator is in compliance with an order of the Court; and

(d) whether the company or any other person has suffered, or is likely to suffer, loss or damage because of an action or failure to act by the liquidator; and

(e) the seriousness of the consequences of any action or failure to act by the liquidator, including the effect of that action or failure to act on public confidence in registered liquidators as a group.

Costs orders

(5) Without limiting subsection (1), an order mentioned in paragraph (3)(d) in relation to the costs of an action may include an order that:

(a) the external administrator or another person is personally liable for some or all of those costs; and

(b) the external administrator or another person is not entitled to be reimbursed by the company or its creditors in relation to some or all of those costs.

Orders to make good loss sustained because of a breach of duty

(6) Without limiting subsection (1), an order mentioned in paragraph (3)(e) in relation to a loss may include an order that:

(a) the external administrator is personally liable to make good some or all of the loss; and

(b) the external administrator is not entitled to be reimbursed by the company or creditors in relation to the amount made good.

Section does not limit Court's powers

(7) This section does not limit the Court's powers under any other provision of this Act, or under any other law.

1. Section 90-20 of the IPS clarifies which persons may apply for an order under s 90-15. The Liquidator is such a person.

1. The principles with respect to judicial directions have been expounded in a number of decisions and are summarised in brief below.
2. The power conferred on the Court by s 90-15 of the IPS is broad and is indeed more extensive than the powers which were formerly available under ss 479(3) and 511 of the Corporations Act.[22] The principles which applied to the exercise of the powers under those prior provisions inform the exercise of the power under s 90-15, at least insofar as it concerns a direction sought by an external administrator.[23]
3. A liquidator is clearly a person who may apply for directions under s 90-15.[24]
4. The authorities require that judicial directions sought under s 90-15 of the IPS 'must be just and beneficial to the liquidation or administration',[25] in other words, the directions must be of advantage in the liquidation.[26]
5. Courts will not make orders merely because a liquidator 'wants reassurance about a commercial decision; some such issue as a question of law or procedure, of power, propriety or reasonableness, is required to justify approaching the court for directions'.[27]
6. There must be something more at stake than the making of a business or commercial decision before a court will give directions in relation to a liquidator's decision.[28] As noted by the Court of Appeal in Re McDermott and Potts (in their capacities as joint and several liquidators of Lonnex Pty Ltd (in liq)) (ACN 097 786 751):[29]

Courts recognise that they are generally unqualified and ill-equipped to make or approve of business and commercial decisions. Thus, courts are loath to interfere with the commercial judgment of liquidators on matters within their powers, and will not give directions to liquidators on such matters where no issue arises in relation to a legal matter or in relation to the propriety or reasonableness of the decision. This does not inhibit courts from giving directions to liquidators in relation to the compromise of legal proceedings. The compromise of legal proceedings invariably raises legal issues, although it also usually requires the exercise of commercial judgment. As will be seen, liquidators often seek directions concerning the compromise of legal proceedings, and the courts give such directions when persuaded it is appropriate to do so.

1. The courts have also found applications by a liquidator to be justified where there are two competing offers before a liquidator and the liquidator seeks the direction to avoid a subsequent allegation that they have acted improperly in choosing one option over the other.[30] It is sufficient that there is a mere prospect of an attack on the propriety of the decision.[31]
2. The court's function is not to reconsider every factor that has informed a liquidator's decision, to develop alternatives, or to decide whether it would have made the same decision.[32] However, before making a direction, the court must be satisfied that the decision is proper and reasonable.[33] This will usually require consideration of the liquidator's reasons and the process by which they reached their decision.[34] The liquidator seeking directions under s 90-15 bears the onus of proof in relation to the matters said to justify the making of the direction sought.[35]
3. Directions are not given in respect of a liquidator's past acts.[36] The jurisdiction is concerned with affording protection in connection with proposed future action, not with ratifying action already taken.[37] Retrospective exoneration must be sought via alternative remedies.[38]
4. Because a direction will have the effect of exonerating a liquidator from personal liability, the cases suggest the court will require positive persuasion that the decision of the liquidator is a proper one before making a direction.[39] It is expected that the liquidator will make full and fair disclosure of the material facts when seeking an order in the nature of judicial advice.[40]
5. It would ordinarily be expected that a liquidator would have obtained appropriate legal advice, and the nature and content of that legal opinion is a relevant consideration.[41]
6. From a review of the cases, it is clear that the legal advice must be appropriate to the nature and value of the claims the subject of the proposed compromise.[42] The legal advice should cover why the amount of the proposed compromise was reasonable, identify the strengths and weaknesses of a legal position and ascribe degrees of risk accordingly, assess the overall strengths and weaknesses of claims and the damages which might be available should the claims be successful, including any offsetting claims, evaluate the overall prospects of success of claims in light of their strengths and weaknesses, and advise as to whether it would be proper for the liquidator to enter into the compromise proposed.[43]
7. In the context of a judicial advice application under s 63 of the Trustee Act 1925 (NSW), the NSW Supreme Court stated in Re Estate Late Chow Co-Poon:[44]

The procedural objectives of speed and efficiency served by judicial advice proceedings cannot, in many cases, be achieved unless the Court is presented with the assistance of a memorandum of opinion by an independently-minded lawyer who, out of court, has studied the problem to be solved, examined the factual context critically, analysed competing contentions in a comprehensive legal context, and worked out a solution that commends itself to his or her professional judgement, a judgement upon which the Court can responsibly be invited to rely.

1. The Court of Appeal considered deficiencies in a legal opinion in Re McDermott and Potts. Deficiencies in a legal opinion are not of themselves a reason to refuse to approve a compromise, however, deficiencies may mean that a legal opinion does not support a conclusion that a liquidator's proposed course is a proper one.[45]
2. The court always pays due regard to the commercial judgment of the liquidator and the attitudes of creditors are also important.[46] As noted by the Court of Appeal in Re McDermott and Potts at [93]:

...The liquidator is ordinarily best placed to determine what course the liquidation should take, in the interests of creditors, any contributories and the proper recovery of the costs and expenses of the liquidation. The court will generally not enter into the merits of that determination, confining itself to the question whether the proposed course is a proper one for the liquidator to take. At the same time, the interests and wishes of creditors are highly influential and the creditors are, if properly informed, in the best position to evaluate what is in their own interests. As such, the views of the creditors as to the merits of the present proposal are a highly material consideration.

1. The creditors' views are highly influential but the Court is not bound to act in accordance with their wishes.[47] Where there is an alternative course of action, advocated by the creditors and which one of them has indicated a preparedness to fund, it will be necessary for the party seeking the direction to establish that, notwithstanding those matters, the compromise was a proper one.[48]

G Submissions in respect of the Primary Relief

1. The Plaintiffs submit that the jurisdiction of the Court to make a direction under s 90‑15 of the IPS was 'plainly enlivened', in circumstances where the Liquidator is making a choice between competing, mutually-exclusive offers involving the release or assignment of overlapping claims and the application is opposed by the Investor Parties. Entry into the Proposed 2023 Agreement is a future action about which the Liquidator has obtained legal advice, in the context of the competing Investor Parties' Proposal.
2. The Plaintiffs emphasise that the Court can make a direction under s 90-15 even if it would not have made the same decision as the Liquidator, as the Court need only be satisfied that the decision is proper and reasonable, having regard to the considerations taken into account and the process of reasoning that led to the decision.[49]
3. Counsel for the Plaintiffs noted that the test with regard to a direction under s 90-15 in this Court is drawn from the decision of Re McDermott and Potts, which sets out established principles from other judgments, notably the decision of Re One.Tel Ltd.[50] They submitted that, in line with the authorities, the underlying question is whether the Liquidator's decision is proper and reasonable.[51] The propriety or reasonableness of the decision might depend on matters such as whether there was a lack of good faith, or any error of law or principle. While the existence of competing offers (as here) is one justification for the Court making a direction, 'it is not part of the Court's function to develop alternatives to the course that the Liquidator proposes to take ... nor does the Court need to be satisfied that it would have made the same decision as the Liquidator.'
4. From the caselaw,[52] the Plaintiffs submit that:

(a) the Court needs to be positively persuaded that the decision is proper which necessarily involves broad consideration of all appropriate circumstances;

(b) the Court always pays due regard to the commercial judgment of the liquidator;

(c) the Court's role does not involve reconsideration of every factor informing the liquidator's decision or developing an alternative model; and

(d) the relief ought to be just and of utility to the administration of the Company.

1. It is submitted that the Court should not undertake a broad-ranging inquiry into the Liquidator's conduct and past negotiations.
2. The Plaintiffs submit that the factors set out in subsection 90-15(4) may, or may not, be relevant to an application under that section, and that this will depend on the nature or purpose of the application. The section itself covers a varied list of applications including judicial inquiries into conduct of liquidators and reviews of their remuneration, and the paragraphs can be viewed as ambulatory.

G.1.2 Legal advice and disclosure to the Court

1. The Plaintiffs highlight judicial pronouncements to the effect that legal advice in support of a direction should be appropriate to the value and nature of the claims in question and should explain why the amount of a compromise is reasonable by identifying strengths and weaknesses of a legal position and describing degrees of risk.[53]
2. The Plaintiffs note that the Primary Relief is only useful to the Liquidator to the extent that he makes full disclosure to the Court, such that it is crucial for him to put before the Court any legal advice he relies on, including the Legal Advice and the Supplemental Advice.[54]
3. The Legal Advice and Supplemental Advice, accordingly, is before the Court.
4. The Plaintiffs submit, without going into the content of the Legal Advice (and Supplemental Advice), that it is appropriate to the scope, complexity, and importance of the claims involved; it is a written advice by senior and junior counsel, who were provided with as much detail as could reasonably be obtained from the documents and relevant persons.
5. Regarding the Liquidator's obligation to make full disclosure to the Court in seeking a direction under the IPS, it is submitted that full disclosure was made of the entry into the Baker Agreement, including the reasons for entry into the Deed of Variation. It is also submitted that funding of public examinations by Baker was not concealed from the Court or other parties, though no reference to it was made in a sworn affidavit.

1. The Plaintiffs note that the value of the property transfer claims has not been ascertained by independent valuation or determined by a Court. The proofs of debt lodged in the liquidation have not been adjudicated.
2. The Plaintiffs submit that the existence of prima facie claims and the strength of those potential claims are not matters which have been established and this proceeding is not the forum for that to be done. Indeed, the Investor Parties' focus on the Liquidator's analysis by a form of 'mini trial' of the defences of the Baker and Reindel parties to the Company's claims is said to invite the Court to substitute its own judgment for that of the Liquidator or craft an alternative outcome, and that this is contrary to the caselaw.

1. The Company's right of indemnity as trustee of the Trust was heavily debated by the Plaintiffs and the Investor Parties. It was suggested by the Investor Parties that the Company was a defaulting former trustee, which therefore had lost the right of indemnity out of Trust assets, and had no power to grant the releases in the Baker Agreement. It is said to be relevant to the Liquidator's power to enter into the Baker Agreement. As a defaulting trustee, they say the Company could only avail itself of its right of indemnity it if had made good its defaults to the Trust estate. The alleged improper transactions involving the 'ransacking' of the Company by Baker and Reindel are also said by the Investor Parties to be actions of the Company in breach of Trust, such that the trustee's right of indemnity should be disregarded for the purposes of this application, and it is suggested that the receivership appointment sought by the Liquidator is a device by which he seeks to secure his fees, given difficulties faced by the Company's 'impaired' right of indemnity.
2. The Plaintiffs submit that any assertion that the Company's right of indemnity as trustee has been impaired or downgraded as a result of alleged breaches of trust is misconceived. This is because no relevant dishonesty or breach of trust or duty by the trustee or its former directors has been established and any allegation is denied; the trustee's right of indemnity to Trust assets now vested in the Liquidator is unimpaired until the relevant conduct has been established. Further detail regarding this submission is set out below.
3. The Plaintiffs summarise the Investor Parties' assertions on evidence of prima facie breaches of trust by the Company as follows:

(a) the prima facie finding of breaches of trust was reached in a decision handed down in satellite proceedings between the interested parties to this proceeding;[55]

(b) by operation of law and pursuant to the terms of the Trust Deed, those breaches 'impaired' the Company's right of indemnity out of the trust assets;[56] and

(c) that 'impaired' right of indemnity is what the Liquidator assumed control of upon his appointment.[57]

1. The Plaintiffs contend that the Investor Parties' assertion revives a submission made on behalf of the Investor Parties in the course of the Original Application in November 2022. The Plaintiffs say that it was misconceived then and remains so. This is because:

(a) In equity, a trustee is entitled to be indemnified for trust debts, liabilities and expenditure out of the underlying trust assets if such amounts are properly incurred and not incurred as a result of breach of trust or duty.[58]

(b) Clauses 36 and 37 of the Trust Deed broadly reflect the position in equity: the trustee is indemnified and has a right of exoneration from the Trust assets, except where the liability is attributable to the dishonesty or an act constituting a breach of trust by the trustee or (if applicable) its directors.

(c) For so long as the trustee is owed money under the indemnity, the beneficiaries are not entitled to call for a distribution of trust assets; the trustee's claim to the amount owing pursuant to the indemnity ranks in priority to the beneficiaries' entitlements.[59] This priority is protected by way of an equitable lien or charge.[60]

(d) In the event a trustee company is put into liquidation, its right of indemnity and accompanying equitable lien over the trust assets endures, notwithstanding that the company has been removed from its office as trustee of the trust and only holds the trust assets as bare trustee.[61]

(e) Provided that:

(i) the trustee has properly incurred the trust debts, liabilities or expenditure; and

(ii) the trustee has committed no breach of trust or duty (so as to give rise to an obligation in the trustee to restore the trust assets misappropriated),

the trustee company's right of indemnity, now vested in the Liquidator as 'property of the company',[62] remains unimpaired.[63]

(f) No relevant dishonesty or breach of trust or duty by the trustee or its former directors has been established; and to the extent that it is alleged, it has been denied. Until such time as such conduct is established, the trustee's right of indemnity from (and equitable lien over) the assets of the Trust - each of which is now vested in the Liquidator - remains unimpaired.

1. At the hearing of the Original Application, the Investor Parties contended that the property transfers the subject of claims referred to in the Baker Agreement (which are also the subject of claims referred to in the Proposed 2023 Agreement) were made without adequate consideration, and that it must follow that they were transferred in breach of trust or breach of duty.[64] In an exchange with the Investor Parties' then senior counsel, Elliott J queried how he could find relevant breaches of trust in a case where there were no specific allegations against the individuals in question, and concluded such findings would be inappropriate in the circumstances of the application before the Court at that time.[65]
2. The Plaintiffs submit that nothing has changed since that time. The decision to which the Investor Parties refer had been handed down at the time the submissions referred to above were made during the hearing of the Original Application.[66] In any event, the fact that Daly AsJ, seized of an application for an injunction, with which the Company was not served, in a proceeding to which the Liquidator was not a party, concluded that there was a prima facie case that certain transfers of property from the Company to Reindel and Blizzard Winds were in breach of trust,[67] (there was no finding in respect of Baker or his spouse), does not give rise to a res judicata or an issue estoppel establishing any breach of trust, among other things because her Honour's judgment was not relevantly a final decision,[68] and the Liquidator was not a party to it.[69] Accordingly, the Company's (and thus the Liquidator's) right of indemnity out of trust assets is currently unimpaired.
3. The Plaintiffs submit that in any event, as was the case at the time of the Original Application, this proceeding is not the proper vehicle to ventilate the Investor Parties' concerns as to the conduct of the Company in its capacity as trustee of the Trust.
4. It is the Plaintiffs' position - both at the hearing of the Original Application and now in relation to the present application - that the Company's right of indemnity is presently unimpaired, and that unimpaired right vested in the Liquidator upon his appointment.

1. The Liquidator had stated in his evidence that he considered the Proposed 2023 Agreement, the Baker Agreement, and the Investor Parties' Proposal on an equal footing and with the benefit of legal advice. In that context, the Plaintiffs submit that the Court should conclude that the Liquidator's decision to proceed with the Proposed 2023 Agreement was, in all the circumstances, a proper one. The Court can so conclude because it can review the Legal Advice to understand the Liquidator's reasons for pursuing that course and the process by which he reached that decision.
2. The Plaintiffs submit that the competing proposals were made in a context of 'competitive tension' assisted by the negotiations of the Liquidator. The position of the Liquidator on receiving the competing proposals of the Investor Parties and the Reindel and Baker parties was that he was functionally unfunded. The monies received from the deposit from Baker under the Baker Agreement and as part of the HOA were earmarked for use in the proceeding or otherwise in connection with the approval of the Primary Relief or Secondary Relief. There was no funding to continue the investigation and prosecution of the Plaintiffs' claims independently and attempts to find such funding had proven futile. The Company's records were in a poor state upon the Liquidator's appointment, with access to books that were unreliable and incomplete email records. The interested persons in the proceeding are 'at each other's throats' and their evidence as to the Company's affairs conflict. In that context, the Liquidator's actions are said to be not only prudent but optimal.
3. With respect to the submission set out at paragraph 104 above, it is submitted that the matters set out in s 90-15(4) have no work to do in this case. In particular, with regard to s 90-15(4)(a), the assertions that the Investor Parties have been ignored by the Liquidator or that the claims have not been pursued are denied.
4. The Plaintiffs point to various items of correspondence between the parties and other evidence of the Liquidator in support of the propriety of his process. They assert that the Liquidator's process was proper, transparent, and thorough, and involved reliance on advice of independent counsel which was appropriate to the circumstances of the case. The Liquidator took steps to ensure that the compromise of claims to which he agreed extracted the maximum value available, to put to all parties the need to address the benefits provided by the proposals of each, to put concerns regarding the Investor Parties' Proposal to the Investor Parties in an effort to have them address those concerns, and to obtain independent legal advice before seeking the Court's approval.
5. The Plaintiffs submit that the Liquidator's prior actions in relation to the Baker Agreement are relevant to the consideration of the Primary Relief only insofar as they impact on whether it is proper and reasonable to make the decision to enter into the Proposed 2023 Agreement.
6. In response to criticisms of the Liquidator's conduct by the Investor Parties, the Plaintiffs note that liquidators are fiduciaries in respect of the company in liquidation, its creditors and contributories, as well as having obligations to trust beneficiaries in respect of companies that are bare trustees. The Plaintiffs submit that the Liquidator acted prudently in taking into account the lack of an indemnity for breach of the Baker Agreement in the Investor Parties' Proposal and that there was no conflict which arose between the Liquidator's personal interests and his duties. It is emphasised that allegations that the Liquidator obtaining funding from Reindel and Baker meant his objectivity was compromised or he was involved in pressure put on the Investor Parties by Baker were not put to him in cross-examination, such that the Investor Parties are not able to submit that his independence is compromised in their closing submissions.[70] The Plaintiffs contend that this submission is contradicted by the correspondence in evidence before me.
7. With regard to the Investor Parties' assertion that there is no evidence before me of the Liquidator's exercise of his commercial judgment, the Plaintiffs submit that this does not mean that the absence of an indemnity was the only factor in the Liquidator's decision-making. They submit that the objective evidence shows that the Liquidator considered a number of factors and the lack of an enumerated list in a sworn affidavit does not mean those factors were not considered or that they detract from the reasonableness and propriety of the decision made. The proper question is not whether there is express evidence as to the factors considered, but whether it was proper and reasonable for the Liquidator to take the course that he did (pursuing the Proposed 2023 Agreement) having regard to all the circumstances, including the competing Investor Parties' Proposal and whether I am satisfied that those matters were taken into account in that decision. The Plaintiffs submit that the factors considered by the Liquidator are topics of correspondence with the competing parties and the correspondence shows the Liquidator's analysis and interrogation of those factors. Further, it was submitted that no challenge was made in cross-examination of the Liquidator with respect to the factors he considered, except in relation to the indemnity point.[71]
8. The Plaintiffs submit that the Liquidator had considered the merits of defences of Baker and Reindel to the Plaintiffs' claims and problems with the defences, and that this was evident in his testimony before the Court. It is submitted that there is no suggestion made that the Liquidator did not properly consider or weigh the strengths and weaknesses of defences to the Plaintiffs' claims, or that his decision to accept the Proposed 2023 Agreement did not take account of those matters. Further, it is said that this was not put to the Liquidator in cross-examination.
9. The Plaintiffs submit that what is more, the Liquidator's decision not to participate in the Investor Parties' Proceeding (which is inter partes litigation between effective joint venture partners raising serious allegations including fraud) or the Caveat Proceeding does not signify that he is unwilling to prosecute causes of action available to the Company. The decision was made before the Investor Parties sought to amend their pleadings to bring the claim on behalf of the trustee Company. The Liquidator should not be criticised for remaining above the fray and it should not be understood from this decision that he was unwilling or unable to participate in litigation regarding the various claims.
10. In addition to the absence of an indemnity in the Investor Parties' Proposal (discussed separately below), the Plaintiffs highlight some further matters which were said to be relevant to the Liquidator's assessment:

(a) The Investor Parties' Proposal that all of the Liquidator's professional fees (including legal costs) were to be taxed, which would incur further costs in the Liquidation. In particular, insistence on review of all remuneration and taxation of all fees will result in a long, laborious, and expensive process, which might even exceed the amount that was the additional cash component of the Investor Parties' Proposal of $300,000 when compared to the HOA.

(b) The Investor Parties' Proposal required that their nominated acquiring entity (Roswind) have a right of first refusal to fund any other recovery proceedings that the Liquidator has standing to bring. This is criticised as shackling the Liquidator to that funder, without certainty as to the terms of that funding. It is said to open up a claim by the Investor Parties to recover the funds contributed to the prosecution of the claims from any recovery and potentially diminishing the return for the Company's creditors. It is also suggested that the funder's connection to the Investor Parties is problematic, as the Investor Parties benefited from some property transfers by the Company that might make them a target of litigation by the Liquidator.

(c) The sum of $1.4 million offered by the Investor Parties was not an offer to make good all creditors or reimburse the Liquidator for all his fees and costs. That is because the Investor Parties' Proposal was that this sum be applied towards the payment of certain named creditors, being the ATO and the SRO, and the Liquidator for his professional fees and costs. This purported restriction on the funds is said to be impermissible at law.

(d) The Plaintiffs do not accept that the Investor Parties' Proposal has the character of an offer which is still open or an offer which might provide more to the Liquidator than was set out in the correspondence between the parties.

1. The Plaintiffs submit that as a consequence of the arguments set out in section G.1.4 above, they were not without power to enter into the First Baker Deed or Deed of Variation and therefore the Baker Agreement is binding. As a result, the absence of an indemnity in the Investor Parties' Proposal was a relevant consideration for the Liquidator. The Plaintiffs submit that the releases in the Baker Agreement were unconditional. Further, the Liquidator should be entitled to consider and take into account risks associated with favouring the Investor Parties' Proposal and reneging on the Baker Agreement. It was prudent to seek an indemnity from the Investor Parties and to reject their proposal when an indemnity was not provided, notwithstanding that the offer of the Investor Parties included a larger monetary component.
2. The Plaintiffs submit that the concern that led to an indemnity being sought was well‑founded. There was a very real prospect of litigation ensuing from any breach of the Baker Agreement (indeed, Baker had threatened as much) and that any award of damages made may have reduced, if not exhausted, the amount available to creditors and beneficiaries from the liquidation. It is further suggested that the ensuing litigation would have exceeded the difference between monetary amounts that the Liquidator would receive under the competing offers he considered, even if Baker was unsuccessful in that litigation. The Plaintiffs also noted that accepting the Investor Parties' Proposal would have exposed the Liquidator to costs orders for the discontinuance of the Original Application, as had been threatened by Baker.
3. The Plaintiffs submit that I am not required to decide whether the releases were immediate under the Baker Agreement, but merely must be satisfied that the Liquidator is faced with uncertainty in the event that he reneges on the Baker Agreement, including a risk that Baker would commence further proceedings alleging breach, as Baker had foreshadowed that he would. That prospect necessarily involves incurring further cost, irrespective of the merits of any claim commenced, alongside the ongoing costs associated with other aspects of the litigation involving the Company.

1. With regard to s 90-15(4)(d), the Plaintiffs submit that the Investor Parties would not suffer loss or damage if the Plaintiffs are successful in this proceeding. The Investor Parties' Proceeding as currently expressed is an inter partes dispute which involves private rights, derivative of the initial breaches of trust allegedly perpetrated by Baker and Reindel.[72] The Plaintiffs say that there is no loss or damage for the Investor Parties arising out of the impact of the grant of the FAOP on the Investor Parties' Proceeding.
2. Further submissions were made as to difficulties with establishing loss, as well as issues as to liability, quantum of loss, and recovery of any judgment debt in the Investor Parties' Proceeding. Any adverse costs liability which the Investor Parties might face in their proceeding is said to be a risk that the Investor Parties took on themselves.
3. The Plaintiffs say that:

(a) the Investor Parties' Proceeding is not, at present, for the benefit of the Company or Trust; an application for leave to amend those pleadings to include claims on behalf of the Company (in its capacity as the former trustee of the Trust) was stayed pending the determination of the Original Application;

(b) the amendment to the pleadings would also require the Investor Parties to demonstrate special and exceptional circumstances justifying the beneficiaries' standing to sue on behalf of the Company.[73] In this instance, the fact that the Liquidator has investigated the claims and proposes to enter into the Proposed 2023 Agreement compromising those claims demonstrates that no special circumstances arise, as there is not an unwillingness or inability of the trustee to pursue the claims;

(c) the Liquidator's lack of engagement in the Investor Parties' Proceeding is unsurprising given that it relates to private rights regarding the joint venture and that he is not funded; and

(d) it is a natural consequence that directly overlapping claims cannot both proceed. There is no reason for the Court to conclude that the Investor Parties would obtain a better result for the themselves or the Company's creditors by their litigation than the Proposed 2023 Agreement offers.

1. Reindel adopts the Plaintiffs' submissions in relation to the Primary Relief.
2. Reindel's submissions also cover why the Primary Relief is to be preferred to the Secondary Relief. He says that the Primary Relief should be preferred because it promotes a final resolution of disputes between Baker, Reindel, the Company, and the Liquidator. By facilitating an end to litigation, the Proposed 2023 Agreement is said to have a characteristic that is endorsed by the authorities.

1. It is emphasised that a direction under s 90-15 to endorse a Liquidator's decision is available where it is a proper decision, including where there is more than one decision or course of action that is proper and open to the Liquidator.[74] The role of the Court is described as a 'constrained and confined' examination of the actions of the Liquidator in his decision-making process to pursue the Proposed 2023 Agreement. In this regard, Reindel emphasises that the question for the Court as stated in Re One.Tel is whether 'the liquidator's decision is in all the circumstances a proper one' (emphasis added), not whether it is the proper decision.[75]
2. Reindel submits that the Investor Parties, in their opposition to the Primary Relief, are asking for the Court to act contrary to the applicable legal principles. By challenging matters such as the value of the claims, the Investor Parties invite the Court to reconsider every factor that informed the Liquidator's decision and by the Investor Parties' IP, they invite the Court to consider or develop an alternative.[76]

1. Reindel also makes submissions bolstering those of the Plaintiffs with respect to the robustness of the process which was followed. In particular, he says there was no issue regarding a lack of transparency or opportunity to participate. The Proposed 2023 Agreement is said to be commercially sensible and the best outcome available.
2. Reindel submits that the circumstances that generated the Proposed 2023 Agreement are materially different from the circumstances surrounding the Baker Agreement, such that the entry into the Proposed 2023 Agreement can be described as prudent. The material differences are said to be:

(a) there was a robust process involving negotiation over three months, during which the Liquidator considered the competing Investor Parties' Proposal, there was input from counsel into the Liquidator's course of action and a direction has been sought from the Court that the Liquidator is acting reasonably and justified in entering into the Proposed 2023 Agreement;

(b) the negotiations behind the Proposed 2023 Agreement involved three represented parties and the negotiations are recorded in evidence before the Court, showing that the Liquidator's actions were prudent and appropriate, and factored into them the matters raised by Justice Elliott in respect of the Original Application; and

(c) the Liquidator has obtained counsel advice in relation to the Proposed 2023 Agreement which has been provided to the Court, and the Liquidator is not seeking Court approval retrospectively.

1. Further submissions are made for Reindel regarding the Investor Parties' attacks on the Liquidator's process. Allegations by the Investor Parties that the Liquidator acted in self-interest or unreasonably were said not to have been put to the Liquidator sufficiently or explored. The Liquidator's evidence on cross-examination was that he had considered the matters relating to defences to claims in his decision-making process. It was not put to him that his analysis or review of those matters was inadequate, or that his consideration of them were in error and his estimates of values of claims incorrect. The public examination funding arrangement involving Baker was known to all parties and disclosed to Justice Elliott; it is not a matter about which the Liquidator lacked honesty and candour. More fundamentally, the Investor Parties did not put to the Liquidator that his decision was unreasonable or imprudent. Their attack on the Liquidator's competence, independence and integrity is said to have been ineffective.

1. Reindel suggests that the Investor Parties' refusal to provide an indemnity to the Liquidator in respect of potential breach of the Baker Agreement is consistent with the view that the Baker Agreement has legal effect and that by providing an indemnity the Investor Parties would be exposed to potential liability.

1. Regarding the submission from the Investor Parties that they would suffer loss or damage from the grant of the Primary Relief, Reindel submits that there are potential claims against the Investor Parties for wrongdoing such that their ability to prove their debts may be set off and therefore extinguished.[77] Their status as creditors whose views are influential for the purposes of s 90-15(4)(d) is therefore attended by doubt, although the Court is not required or asked to make a finding with respect to such potential claims. However, the Investor Parties submit that this assertion is not supported by evidence before the Court and it should be disregarded. The Investor Parties note that they advance their claims with respect to s 90-15(4)(d), not as creditors of the Company, but as unit holders and beneficiaries of the Trust.

1. Baker did not make substantive written submissions in support of the Primary Relief, save to confirm that he did not oppose such relief. Baker's submissions centred on the enforceability of the Baker Agreement and his contention that aspects of it would remain in force if the Primary Relief was not granted.
2. On behalf of Baker and in the context of the Investor Parties' IP, it is submitted that, should the Court decline to grant the Primary Relief, the Baker Agreement would be in effect. Those provisions in the First Baker Deed that have a duration greater than three months would be unenforceable absent approval from the Court pursuant to s 477(2B) of the Corporations Act (ie absent the Secondary Relief being granted).
3. Baker submits that if the Court refuses the Secondary Relief, then that is not the end of the matter. If the Court refuses to approve entry into the Baker Agreement, it is submitted that the unenforceable clauses could be severed (either pursuant to the severance provisions at cl 15.2 of the First Baker Deed, which continued to operate after the execution of the Deed of Variation, or at common law), leaving the release provisions in effect.
4. With respect to cl 15.2, it is submitted that unenforceable or partly unenforceable provisions are to be severed where possible to the extent necessary to make the First Baker Deed enforceable, unless this will materially change the intended effect of that agreement. The intended effect of the First Baker Deed is described as bringing about a dual purpose; to release claims pursuant to cl 2.1 and to assign claims in cl 3.2, such that severance would not materially change the intended effect as the release purpose would still be achieved.
5. Baker submits that the release provisions in the First Baker Deed had immediate operative effect from the payment of the deposit under the terms of the First Baker Deed, with emphasis placed on the use of the words 'hereby release and discharge' as reflecting the parties' intention that it should so operate. My attention was directed to the consideration of the word 'hereby' in the decision of Justice Macaulay in De Simone v Legal Services Board.[78] Should the parties to the First Baker Deed have otherwise intended, it would have been expressly stated and the severance clause would not have been included.
6. Baker emphasises that the Deed of Variation was phrased as being operative from the payment of the initial deposit (being the sum of $200,000) rather than the amount of $700,000 to be paid following the grant of relief by the Court.
7. Baker submits that there is no merit to an argument that the Plaintiffs were without power to grant releases to him and his related entities because of the Company's status as a bare trustee and the fact that the sale was in breach of trust.
8. Counsel for Baker highlights the case of Break Fast Investments Pty Ltd v Sclavenitis,[79] in which Justice Riordan considered whether a purported assignment of choses in action by a bare trustee was effective. His Honour considered that the sale with notice was only voidable, not void or a nullity.[80] The same submission is made by the Plaintiffs in this case. Baker further submits that, in any event, the Liquidator did have power to release a sub-set of claims which involve an alleged breach of the Corporations Act.
9. Should I make orders appointing the Liquidator as trustee of the Trust, Baker submits that issues regarding the Liquidator's power to enter into the releases in the Baker Agreement fall away.

1. The Investor Parties' position is that the outcome sought by the Plaintiffs is 'wholly improper and would be an inappropriate exercise of the Court's power'. They submit that the Court cannot find that the Liquidator would be justified and acting reasonably in entering into the Proposed 2023 Agreement.

1. The Investor Parties submit that the exercise of the Court's power under s 90-15 of the IPS in respect of judicial advice should be by reference to principles applying to the exercise of discretion under the provisions previously contained in ss 479(3) and 511 of the Corporations Act.[81] They submit that the factors in s 90-15(4) are relevant to whether the Court should make a direction in this case.
2. The Investor Parties submit that their proposal is relevant to the determination of the Primary Relief, as the offer is comparable to that in Re McDermott and Potts, being an alternative course of action advocated by creditors which they were prepared to fund. As in that case, it was submitted that the Plaintiffs must establish that, notwithstanding this alternative course, the compromise was a proper one. The Investor Parties' Proposal is therefore a factor to be considered in respect of whether the Liquidator's proposed course is a proper one.[82]
3. Counsel for the Investor Parties noted in opening submissions that the text of the IPS does not contain the formulation of words 'is acting reasonably and is justified', but that this is the burden which the Liquidator has imposed on himself by seeking relief in the form which he has. They note that the need to demonstrate that he is acting reasonably and is justified in entering into the Proposed 2023 Agreement is consistent with the case law. It must also be beneficial or of advantage to the liquidation.

G.4.2 Legal advice and disclosure to the Court

1. The Investor Parties contend that the Liquidator has not given evidence as to his decision-making process. They submit that the Liquidator seeks to rely on the Legal Advice for this evidentiary purpose, cloaked in privilege, such that the Investor Parties are said to be denied procedural fairness. It is submitted that, to the extent such material appears in the Legal Advice, it should not be able to be relied on for an evidentiary purpose. In respect of the Supplemental Advice, it was submitted by the Investor Parties at the time I gave leave to the Plaintiffs to provide it to the Court that insofar as it is responsive to submissions of the Investor Parties, it would be argumentative and effectively is in substance a document setting out submissions in reply, which should not be considered independent legal advice to assist the Court in providing judicial advice. At that time, I indicated that I would review it upon receipt and decide whether that concern was justified. Later during the trial I informed the parties that I had reviewed the Supplemental Advice and did not consider that the Investor Parties' concern arose, as it was not in any way submissions in reply.
2. The Investor Parties query whether the Legal Advice covered matters such as the entry into the First Baker Deed and Deed of Variation without power and as a breach of trust, the principles in Break Fast, or that exoneration from breaches should be the subject of an application under s 1318 of the Corporations Act.
3. The Investor Parties say that the legal practitioners responsible for the Legal Advice, the Supplemental Advice and for providing the Liquidator with the advice set out in the Advice Affidavit are said not to be wholly disinterested,[83] given their involvement in prior advocacy for the Original Application, and that their advice should disclose the conflict and inconsistencies between the position in the Original Application and FAOP.
4. The Investor Parties also submit that the Liquidator has not provided a fulsome explanation of why he entered into the First Baker Deed and Deed of Variation without power, which is said to be contrary to a need to give full and fair disclosure of material facts with respect to the subject of the judicial advice sought. It is submitted that the Liquidator has not provided the Court with information as to the costs of the proceedings, anticipated recoverable costs or the Liquidator's professional costs to date, to enable the Court to assess the return to creditors, beneficiaries and unit holders.

1. The Investor Parties do not agree with the characterisation of the claims from which the Liquidator seeks to release Baker and Reindel (and their associated entities) under the Proposed 2023 Agreement. The Investor Parties urge the Court to find that the claims against the Baker and Reindel parties are strong prima facie claims. While they note that the Court's role does not extend to the final determination of the claims, they submit that the Court must consider the basis of the claims and their overall strength and prospects, as part of its assessment of the Proposed 2023 Agreement.

1. The Investor Parties submit that the Company's right of indemnity as trustee should be disregarded for the purpose of the present applications, because transactions involving the alleged 'ransacking' of the assets of the Company by Reindel and/or Baker prior to its liquidation involved a prima facie breach of trust by the Company. However, it is submitted that this is not a significant point of disputation because the Investor Parties have agreed to pay creditors and the properly-incurred costs of the Liquidator, if the Investor Parties' Proposal was accepted.

1. The Investor Parties submit that the Liquidator's proposed course of action is not proper, reasonable, just and beneficial, or of advantage to the liquidation, as the authorities require it to be.[84]
2. The Investor Parties say that it does not advance the liquidation because it seeks the earliest possible termination of the liquidation and the defeat of the beneficiaries' claims for recovery of Trust property. This is said to be because the Liquidator seeks to compromise strong prima facie claims estimated to be worth around $11 million for a maximum return of $900,000, subject to deductions for the Liquidator's costs, in circumstances where the Investor Parties are willing to prosecute those claims without cost to the Liquidator and concede that the Liquidator has a right of indemnity for payment of Trust creditors and properly-incurred remuneration.
3. The Investor Parties submit that the value of the offer contained in the Proposed 2023 Agreement is simply inferior on a monetary basis to the Investor Parties' Proposal which, it is submitted, would provide for an efficient and effective liquidation and for the winding up of the Trust.
4. The Investor Parties submit that the Liquidator undertook a 'flawed' process. In connection with this submission, the Investor Parties note that they are willing to fund the recovery of Trust assets through the Investor Parties' Proceeding which is already on foot, and where the Court has found that there is a prima facie claim. Further, the Investor Parties submit that here, there is a Liquidator who seeks to release wrongdoers, and this is relevant to the factor at s 90-15(4)(e); whether people will maintain a confidence in liquidators.
5. With respect to criticisms of the taxation of costs in the Investor Parties' Proposal (see paragraph 129 above), it was submitted that this is no real impediment and that this treatment of costs is in a context where the Liquidator will require approval of his fees and costs in any event. Taxation would, at any rate, not be required depending on the level of costs.
6. The Investor Parties submit that the Liquidator has not put on any evidence as to his process in assessing Baker's and Reindel's defences and the commerciality of the competing proposals, in particular, in respect of the assessment of the Investor Parties' rights in their capacity as unit holders in the Trust rather than as creditors.[85]
7. The Investor Parties submit that nevertheless, even in the absence of evidence as to the Liquidator's process, his process was flawed. This is said to be demonstrated by the numbers; the Proposed 2023 Agreement contemplates the release of all claims worth at least $6,465,964 for an increase of $400,000 from the quantum of consideration in the Baker Agreement (which concerned the release of only a sub-set of claims). It is said to be 'highly unreasonable' to reject an offer for more consideration (ie the Investor Parties' Proposal) and through which the Plaintiffs' claims would be prosecuted, in circumstances where the Liquidator is 'refusing to act' to prosecute those claims.
8. In one criticism of the Liquidator's process, the Investor Parties submit that the Liquidator appeared to favour Baker above other creditors and discounted payments to AB Property on the basis that he could not be certain that it, or Baker, received the funds, despite evidence to the contrary. The Liquidator based the view in part on Baker's inability to transact on the Company bank account, but Reindel's evidence was that Baker was able to direct the bookkeeper to effect transactions. The Liquidator's failure to accept this evidence or seek advice in relation to it is highlighted by the Investor Parties. They also note that the Liquidator accepted Baker had not received payments unless there was a bank statement showing that he had, in contrast with the position adopted for Reindel, in circumstances where the Liquidator was not provided with bank statements by either Baker or AB Property.
9. Insofar as the Liquidator offset claims the Company has against Baker relating to funds against apparent proof of debts that Baker's entities might have, it is noted that it was conceded in cross-examination that there would still be a claim of around $500,000 in respect of funds. The Investor Parties say this is compromise that is undervalue. Baker also claimed that he had agreed with Reindel, in effect, a discount in respect of the purchase of apartments in the development at Windsor, in respect of the balance of the 2016 debt facility agreement. Similarly, under cross examination, the Liquidator agreed he was not aware of any justification for the provision of such a discount.
10. What is more, the Investor Parties also dispute whether Baker or AB Property can be creditors in the liquidation. AB Property's proof of debt related to an invoice that was issued to obtain part payment of a 2016 facility agreement between Baker and Reindel. The facility agreement concerned a debt Reindel owed to Baker dating back to 2008 and unrelated to the Company. Under cross-examination, the Liquidator agreed that as a matter of practice, he would be unlikely to accept that proof of debt and that it would be 'difficult' to provide such proof of debt as a defence to any claim the Liquidator might have against Baker. Baker further claims that he is owed funds by Blizzard Winds with respect to failure to pay his employee entitlements, which is not a direct claim against the Company but may disclose a defence insofar as Baker worked at the development in a project manager role. The acceptance of AB Property's proof of debt also is undermined by Reindel's sworn evidence that he did not authorise or sign the advisory agreement on which AB Property asserts that it is a creditor, and the fact that it was not in the Company's books or records, but rather was provided to the Liquidator by Baker in March 2021.
11. Once the above points are accepted, the Investor Parties say that it is inherently unreasonable and unjust for the Liquidator to continue with the Proposed 2023 Agreement and that it is an extraordinary proposition that this was intended to be the sort of arrangement approved under s 90-15 of the IPS.
12. It was submitted orally that the Liquidator had compromised himself by commencing a proceeding to obtain Court approval of a compromise of claims as against the very persons funding the proceeding.
13. The Investor Parties submit that rather than acting in the interests of creditors, the Liquidator acted to protect his own position by prioritising the indemnity to address the risks posed to him by the ill-advised deeds with Baker. In so doing, he preferred his own interests to those of creditors and Trust beneficiaries. This is said to be improper. With reference to the Liquidator's fiduciary and statutory obligations, it is asserted that the Liquidator is ignoring the Investor Parties, which represent around 50% of the creditors in the liquidation.
14. As to whether the Liquidator's so-called self-interested or improper actions or considerations were put to him adequately in cross-examination the Investor Parties say they do not have the burden of showing that conditions exist to exonerate him for actions in breach of trust and this burden has not been discharged. The Liquidator did not seek to be excused from his breach of duty arising from dealing with Trust assets as a bare trustee under s 1318 of the Corporations Act.

1. The lack of an indemnity to the Liquidator in the Investor Parties' Proposal (in respect of potential breach of the Baker Agreement) is said to be the only answer of the Plaintiffs as to why the former's proposal is not preferred. However, the Investor Parties submit that the value of the indemnity is irrelevant to the consideration of the competing proposals.
2. In connection with the indemnity, various points are made concerning the releases in the Baker Agreement and the conduct of the Liquidator in entering into it.
3. The Investor Parties argue that the releases of Baker must have been contingent upon the granting of relief by the Court. The First Baker Deed plainly did not provide for immediate releases of claims against Baker and his entities, as it required the payment of a deposit part of which was only to be paid upon receiving the relief sought in the Original Application. By the Deed of Variation, the parties to the deed sought to make the releases immediate and the question that follows is whether as a matter of construction, this was achieved. The Plaintiffs had no power to grant the releases or assign claims under the Baker Agreement. As a bare trustee, the Company was not empowered to release or assign Trust assets, absent the relief sought in the Original Application being granted by the Court.
4. The Investor Parties do acknowledge that the Liquidator might have been able to deal with statutory causes of action, as opposed to those claims which were Trust assets. However, the Investor Parties do not engage with the release of those matters and the question of the Liquidator wanting to be indemnified in relation to him reneging on them if he was to accept the Investor Parties' Proposal.
5. The Investor Parties argue that Baker and the Liquidator knew that the Plaintiffs were not empowered to deal with Trust assets, and that this can be seen in how the parties were described in the first deed. This fact must have been understood by the parties to the First Baker Deed. Noting that the First Baker Deed contemplated the Liquidator seeking orders from the Court appointing him as receiver of the Trust, the Court should not accept that the parties contemplated a breach of trust and, accordingly, any releases must have been contingent upon the granting of relief by the Court. It is submitted that the releases were not immediate as they were subject to the payment of the deposit (as a defined term) and the terms of the deed. The deposit in the First Baker Deed is defined as a payment of $700,000 which has not yet been paid in full. It is suggested that the intention of the parties to the First Baker Deed is evinced by the deed itself, including the fact that the recitals include an agreement to assign claims but not to release claims, and which clearly identifies the Company as a former, and bare trustee. Further, the requirement for Court approval was expressly included in the First Baker Deed.
6. The Investor Parties say that the Plaintiffs' submission is wrong about the application of the principles in Break Fast to the effectiveness of the releases of claims against Baker and his related entities.
7. Even if it is found that the releases were immediate in effect, the transaction is voidable where it relates to dealings with Trust assets in breach of trust, on application by a beneficiary.[86] Alternatively, the Investor Parties submit that the releases can be set aside by s 90-15 of the IPS or by reason of the fact that they emanate from an agreement that required approval under s 477(2B) and where no approval has been given. The releases under the Baker Agreement are therefore voidable and liable to be set aside, and the lack of an indemnity in the Investor Parties' Proposal should be viewed in that context. Should I decline to grant the Primary Relief and decline to make an order approving the entry into the Baker Agreement nunc pro tunc, the Investor Parties submit that I will also decide to invalidate the Baker Agreement, as it would have been found in those circumstances not to be proper, reasonable, or just.
8. The Investor Parties submit that the releases set out in the Baker Agreement do not include claims against Baker and/or his related entities said to be worth around $1.5 million, which are listed in the schedule to the 2023 Deed, and for which it is submitted that there is no defence.
9. The Investor Parties consider that the Liquidator should bear the risk of litigation arising from his actions taken without power and with knowledge that the actions were in breach of trust. He should not be able to avoid that risk through an indemnity from the Investor Parties.

1. The Investor Parties submit that the Proposed 2023 Agreement would effectively extinguish the claims made in the Investor Parties' Proceeding.
2. The Investor Parties say that they would suffer loss if the Court awards the Primary Relief, being the lack of recovery as creditors of the Company and unitholders in the Trust, costs liability in the Investor Parties' Proceeding, and potential liability arising from their undertaking as to damages given to obtain injunctions in that proceeding. This is said to be particularly unjust when it was found when granting interlocutory relief that the Investor Parties' claims are strong prima facie claims. Whether the Company or any other person has suffered or is likely to suffer loss or damage because of an action by the Liquidator or his failure to act is one of a non-exhaustive list of considerations relevant to the making of a direction pursuant to s 90-15 (see s 90‑15(4)(d) of the IPS). The Investor Parties submit that this consideration should be at the forefront of my deliberation in respect of the Primary Relief. The Investor Parties submit that the Liquidator is not dealing with the claims; he is seeking to compromise them. It is said that the Liquidator does not want to pursue the claims.
3. The Investor Parties argue that the present stay of their proceeding cannot count against their intention to prosecute; they commenced proceedings at their own expense and effort, in circumstances where there was no active trustee and the Liquidator had not yet sought to be trustee or receiver. The circumstances are said to support a grant of leave to amend the pleadings and the Liquidator cannot point to a deficiency in the action because of a lack of special or exceptional circumstances as a reason that their proceeding should not proceed, where he could choose to be joined to the proceeding and avoid the need for such special or exceptional circumstances.

H Consideration in relation to Primary Relief

1. Here, the Liquidator is justified in making his application for a direction pursuant to s 90-15 of the IPS. There are two mutually-exclusive, competing offers. The Liquidator's choice can fairly be described as contentious (which is evidenced by the Investor Parties' opposition to the Liquidator's application for directions) and attacks have been made on the propriety of the Liquidator's decision (in addition to other aspects of his conduct in the liquidation).[87]
2. When making a direction under s 90-15 of the IPS (being one form of order the Court can make under that section), I may take into account the non-exhaustive list of matters set out in s 90-15(4). There is no mandatory requirement in the wording of the statute that I take into account any or all of those matters in deciding whether to make an order under s 90-15. In this regard, I accept the submission of the Plaintiffs that, depending on the type of orders, it is possible that those matters may not be taken into account and I do not consider that a failure to take into account those matters would mean that my decision would be affected by error. The relevance and importance of those factors will vary according to the circumstances of the particular case and the orders sought.
3. Contrary to submissions made by the Investor Parties, the present situation is not one in which the Liquidator is refusing to act or deal with the Plaintiffs' claims. The Liquidator is able to compromise claims for valuable consideration and in doing so, he is dealing with those claims. Emotive submissions embellished with rhetorical flourishes that the Liquidator is not pursuing the claims but is instead seeking to release them are of no assistance in determining this application. Rather, the issue comes down to this: the Proposed 2023 Agreement would compromise the Plaintiffs' claims and the appropriate question is whether that compromise proposed, for the consideration proffered, is proper and reasonable in the circumstances (which include the existence of the competing Investor Parties' Proposal). For these reasons, I do not accept the Investor Parties' submission that the public will lose confidence in liquidators by reason of the Liquidator's conduct, as I do not accept that the Liquidator is merely seeking to release claims against wrongdoers, as the Investor Parties would have it.
4. Further, I do not accept the Investor Parties' submission that the Liquidator's proposed course of action does not advance the liquidation because it seeks the earliest possible termination of the liquidation and the defeat of the beneficiaries' claims for recovery of Trust Property. Advancing a liquidation does not mean it must be prolonged: it means that a liquidator does what they can to get in the company's property and distribute it in accordance with the law. Here, the Liquidator isn't seeking to defeat beneficiaries' claims, he is seeking approval for his realisation of them by compromising those claims and obtaining value for them.
5. For the reasons that follow, I am persuaded that the Liquidator's decision to pursue the Proposed 2023 Agreement is, in all the circumstances, a proper one and that it is therefore appropriate to make orders under s 90-15 of the IPS to the effect that the Liquidator would be justified and acting reasonably in entering into the Proposed 2023 Agreement.
6. The Liquidator's decision in this regard requires consideration of three inter-related matters: the process he employed to obtain offers; his decision-making process; and the decision itself.
7. I consider that the process the Liquidator followed to reach his decision was reasonable and proper. I do not accept the Investor Parties' submission that the Liquidator improperly favoured Baker over the other creditors.
8. In particular, the Liquidator:

(a) used the competitive tension created by having two competing offers to seek to elicit better offers from each of the competing parties. Although none were ultimately forthcoming, this was clearly a sensible attempt to negotiate the best outcome for creditors and investors. The Investor Parties were critical of the Plaintiffs' evidence in this regard, complaining that these matters came out in cross-examination rather than being led. I do not accept this criticism: what matters is the evidence before me. I can, and should, have regard to all of it;

(b) gave evidence that he had considered each of the Baker Agreement, the Proposed 2023 Agreement, and the Investor Parties' Proposal on an equal footing to one another and with the benefit of the Legal Advice;[88]

(c) assessed what he considered to be the best estimate of the claims available to the Plaintiffs as against the Baker and Reindel parties.[89] He sought further information from those parties as to their defences to the claims, and gave evidence that he assessed and discussed the Plaintiffs' claims with his legal advisors, including the strength of those claims and defences to the claims.[90] This was amply demonstrated during cross-examination where Mr Horgan KC took the Liquidator to a number of the potential claims and to Baker's and Reindel's likely defences (as contained in their respective solicitors' letters of 4 April 2023). Mr Horgan KC quizzed the Liquidator about the value of the potential claims and probed him Baker and Reindel's likely defences. The Liquidator's responses showed that he had considered all of these matters, both with his staff and his legal advisers;

(d) entered into the HOA on a non-binding basis, and his execution of the various agreements contemplated by the HOA and subsequently contained in the Proposed 2023 Agreement were expressly contingent on him obtaining legal advice to confirm the propriety of his approach, along with Court sanction of the Proposed 2023 Agreement through a direction under the IPS; and

(e) gave careful consideration to the Investor Parties' Proposal, raised his concerns about it with the Investor Parties, and sought changes to address these concerns.

1. Thus, there is ample evidence as to the Liquidator's negotiation and decision-making processes.
2. While I may have been assisted by a fulsome explanation of the Liquidator's process of reasoning in affidavit form, there is sufficient evidence here for me to accept that the Liquidator's decision-making process and his ultimate decision were proper and reasonable. Further, I do not accept the contention that his processes or his decision were improper or unreasonable. My reasons for this conclusion follow.
3. The Liquidator obtained legal advice from experienced senior and junior counsel. I do not accept the Investor Parties' insinuation that the legal advice obtained by the Liquidator was somehow tainted or flawed because the solicitors and counsel who provided the advice were involved in the Original Application and advocated its acceptance before Justice Elliott, or that they were not wholly disinterested. There is no basis for such a submission. It is not uncommon for counsel briefed in a matter such as this to provide the advice, and this is what occurred with the Legal Advice and the Supplemental Advice, which concerns the Proposed 2023 Agreement. Such counsel are usually well aware of the background, the causes of action, the factual matrices, and the strengths and weaknesses of the case. They are also usually well aware that the legal opinion they will provide will be used by the liquidator and be provided to the court, and well aware of their overriding duties to the court. There is no basis in this instance to think that senior and junior counsel who provided the Legal Advice and the Supplemental Advice were not aware of these matters or that they did not abide by them. In respect of the Liquidator's legal advice concerning the Baker Agreement, this was provided by his solicitors. The Advice Affidavit sets out the advice he obtained verbally, via email and by way of amendments or comments on draft documents which were in the nature of legal advice. He did not obtain formal written advices from his solicitors. While the advice obtained from his solicitors is not in the same form as a formal written opinion from counsel prepared with a view of it being provided to the court, it is still the advice which the Liquidator obtained at the time. It would be relevant to my determination of the Secondary Relief for me to see the legal advice which the Liquidator obtained, so that I can factor it into the assessment of the processes he employed, including his reasoning process, but it would not be a legal opinion proffered for the benefit of the Court. In any event, the Advice Affidavit is not relevant to my consideration of the Primary Relief: it is relevant only to the Secondary Relief and is not relied on by the Liquidator in his application for the Primary Relief or the Facilitative Relief. Further, there is no basis in the evidence for the insinuations made about it by the Investor Parties.
4. I have had regard to the Legal Advice on which the Liquidator relied. I am somewhat constrained in what I am able to say in these reasons about the Legal Advice given its confidential and privileged status. However, I am satisfied that the Legal Advice covers the matters which it ought to cover and that its analysis was appropriately detailed, having regard to the circumstances. The Legal Advice is appropriate to the nature and value of the claims that are to be compromised by the Proposed 2023 Agreement. The claims to be compromised are numerous and significant in quantum. Appropriately, the Legal Advice is lengthy and considered, authored by experienced legal counsel, and supportive of the outcome sought by the Liquidator in all the circumstances in this proceeding.
5. Importantly, I am satisfied that the Legal Advice is thorough, detailed and persuasive advice as to prospects and identifies all of the presently relevant considerations underpinning a reasonable commercial settlement of the Plaintiffs' claims. I am also satisfied that the Liquidator has paid proper and due regard to the content of the Legal Advice, as the proposed compromise is countenanced by the Legal Advice.
6. The same can be said for the Supplemental Advice.
7. At the hearing in December 2023, I decided that the Investor Parties were not entitled to inspect the Legal Advice. My reasons for doing so were given ex tempore and are recorded in the transcript of that hearing. At the final hearing, counsel for the Investor Parties sought to re-agitate this point. I refer him to my earlier ruling and note that nothing had changed between then and now so as to cause me any reason to revisit it, even assuming that were a proper or available course. It is entirely appropriate for me to consider, on a confidential basis, the Legal Advice on which the Liquidator has relied in reaching his decision when I have been asked to provide a direction concerning the propriety of that decision. There has been no waiver of privilege in the provision of the Legal Advice which was in accordance with established legal principles.
8. I do not consider that the Liquidator has acted improperly or in a compromised way. Rather, the evidence before me suggests that the Liquidator has afforded fairness to the Investor Parties and other interested persons, by informing them of offers and proposals to compromise claims and providing them with opportunities to counter those offers. He is an experienced liquidator who has had, at all times, access to legal advice, and it is his evidence that he has relied on this legal advice in his decision‑making. I do not accept that there is any lack of good faith on the part of the Liquidator or lack of neutrality on his part. While I do not necessarily agree with all of the Plaintiffs' submissions as to whether or not certain matters were put to the Liquidator in cross-examination, that is of little moment since I do not consider that any of the submissions made by the Investor Parties about the Liquidator's independence, his consideration of the strengths and weaknesses of the claims against Reindel and Baker, his analysis of the competing offers, or his alleged self-interest are justified.
9. The Liquidator was not in funds on his appointment to the position of liquidator and was unable to obtain funding to investigate further the Plaintiffs' claims or prosecute those claims.[91] True it is that the absence of funding to conduct litigation is not an overriding or determinative factor in consideration of whether a liquidator's proposed compromise is a proper course of action.[92] However, in this case, the lack of available funding on terms which he considered acceptable was clearly an important factor in the Liquidator's decision to proceed with the Proposed 2023 Agreement. As noted above, in all the circumstances (including the existence of the Investor Parties' Proposal and in light of concerns held by the Liquidator regarding the same which were put to the Investor Parties and not addressed to the Liquidator's satisfaction), that decision was reasonable and proper.
10. A discernible theme running through the Investor Parties' submissions was that the amount to be paid by Baker and Reindel under the Proposed 2023 Agreement was small compared to the purported value of the claims against them. The Investor Parties seemed to take the view that this was a reason for refusing the Liquidator's application. This was said to be particularly the case when the Investor Parties' Proposal involved a higher payment and the prospect of further recovery if the Investor Parties pursued the assigned claims or funded further recovery proceedings by the Liquidator.
11. What the Liquidator was faced with then was a decision as to whether to accept the Proposed 2023 Agreement, or revert to the Baker Agreement, or accept the Investor Parties' Proposal, or accept none of them. He weighed the advantages and disadvantages of each, with the benefit of the Legal Advice, and decided to proceed with the Proposed 2023 Agreement.
12. On the one hand, the Liquidator had the $200,000 initial deposit from the Baker Agreement (which was not refundable), along with the $200,000 funding deposit and $900,000 settlement sum from the Proposed 2023 Agreement. On the other hand, he had the offer of $1.4 million from the Investor Parties. Leaving aside the initial deposit under the Baker Agreement, the difference between the Proposed 2023 Agreement and the Investor Parties' Proposal in purely monetary terms was $300,000, with the Investor Parties' Proposal being the higher one. That is not the only consideration, however: the terms associated with each offer must come into play.
13. The Liquidator, with the benefit of his investigations, his negotiations, and the Legal Advice, is better placed than me to assess the commerciality of the proposed settlement. I accept that the Investor Parties may consider that they are even better placed and, as creditors, their views are highly influential. I have taken their opposition to the Proposed 2023 Agreement into account. However, their opposition does not mean that I am bound to decline to grant the Primary Relief. In this case, I am also satisfied that the Liquidator has established that, notwithstanding the Investor Parties' willingness to fund prosecution of claims of the Company, the compromise he proposes is a proper one. In any event, it was unclear how this was said to be of benefit to the Company.
14. The Court can grant approval of a decision where the Court is satisfied that the decision is proper and reasonable. The Court approval process is not meant to involve me substituting or preferring my commercial judgment to that of the liquidator. This process does not require me to adjudicate the Company's potential claims and I agree with the plaintiffs' submission that the process should not descend into a 'mini trial' of the defences to the Company's potential claims. I have considered the claims and their defences, along with how these are treated in the Legal Advice, in my assessment of the reasonableness and propriety of the Liquidator's decision insofar as I consider it necessary, without reaching findings as to each claim and defence. I note that the claims against Baker and Reindel, their defences, and the strengths and weaknesses of each are considered in great detail in the Legal Advice.
15. While the settlement sum to be paid by Baker and Reindel under the Proposed 2023 Agreement is a low amount compared to the potential claims against them, a proper analysis requires evaluating the strengths and weaknesses of the claims. The Liquidator did that, and the Legal Advice also does that. It is not for me to conduct a mini-trial or a quasi-trial of the claims and the defences to them as part of the application which is before me.
16. In this regard, the Investor Parties repeatedly referred to the Court having found that there were strong prima facie claims against Baker and Reindel. I accept that they must have satisfied the Court as to there being prima facie claims against Baker and Reindel in order to be granted interlocutory injunctions, but one must be very cautious about reading too much into that. The threshold for establishing a prima facie claim in the context of interlocutory injunctive relief is not high: as was stated in Australian Broadcasting Corporation v O'Neill,[93] establishing a prima facie case does not signify:

that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.[94]

In any event, it cannot be said that the claims against Baker, Reindel and their related parties have already been established or that they are certain to succeed.

1. As far as I am aware, no proceeding had yet been commenced by the Liquidator against Baker, Reindel and their related parties. Absent an agreement with them such as the Proposed 2023 Agreement, the Liquidator was a long way off achieving a resolution of the Plaintiffs' claims against them, and he was without funding to do so. A long and uncertain path therefore awaited him. Now the Investor Parties argue that he had an alternative in the Investor Parties' Proposal. However, that too involved a long and uncertain path, and was not worth a great deal more in dollar terms (unless further recovery action subsequently ensued). More importantly, the Investor Parties' Proposal carried increased levels of risk for the Liquidator given he would have had to renege on the Baker Agreement in order to accept it. This risk was manifest, in that Baker had already threatened to sue the Liquidator if he did so. Accepting the Investor Parties' Proposal in those circumstances was also potentially costly, given that the Liquidator would incur legal costs defending Baker's proceeding, together with a risk of an adverse costs order and a damages award if Baker was successful. Even if Baker was not successful in the long run, it would still be a significant cost for the Liquidator and in the liquidation, which could result in a possible diminution of amounts available to creditors and investors.
2. In my view, in those circumstances the Liquidator was acting properly and reasonably when he ascribed considerable weight to the Investor Parties' refusal to indemnify him in respect of those risks when comparing the offers. Much time before me was spent in argument about whether the releases in the Baker Agreement were operative, along with a trustee's right of indemnity for actions taken without power as a bare trustee, including the matters discussed in Break Fast. These matters all go to whether or not the Liquidator was justified in placing the emphasis he did on an indemnity from the Investor Parties should he accept their proposal. None of these matters were straightforward or productive of a simple answer. Ironically, the argument before me on this topic is illustrative of the risks this issue posed for the Liquidator, suggesting that he was justified in concentrating on it. For the sake of completeness, I should note that while the evidence before me shows that the Liquidator regarded the lack of an indemnity as particularly important, I do not accept the Investor Parties' contention that this was all he took into account. It is readily apparent from the correspondence between the Liquidator and the Investor Parties that several matters concerning the Investor Parties' Proposal were taken into account.[95] The Liquidator had a great deal of certainty about the terms of the deal with Reindel and Baker, given the existence of the HOA and the drafting of HOA Deeds A and B. The Liquidator sought greater certainty as to the terms of the Investor Parties' Proposal, but was left unsatisfied as to those, both in terms of clarification and whether they were acceptable to him.
3. Accordingly, the compromise of the Plaintiffs' claims against Baker and Reindel, and their related parties, for the settlement sum to be paid by them (together with the deposit) via entry into the Proposed 2023 Agreement, is a course that is proper and justifiable for the Liquidator to take.
4. There are two further matters I should address before turning to the Facilitative Relief, being:

(a) the question of the effect of granting the Primary Relief on the Investor Parties' Proceeding; and

(b) the impact of an 'open offer' by the Investor Parties.

1. The relevance of the Investor Parties' Proposal to the application before me appeared to be twofold. First, it was said to be an action capable of producing a better result for creditors and investors than the Proposed 2023 Agreement, which relates to the question of the appropriateness of that agreement being entered into and approved by the Court. Secondly, it was said that granting the Primary Relief would have a deleterious effect on the Investor Parties as it would extinguish their proceeding. The issues raised by the first of these have been considered and dealt with above, by considering whether the Liquidator is justified in entering into the Proposed 2023 Agreement rather than accepting the Investor Parties' Proposal.
2. Much of the discussion of the principles regarding instances where beneficiaries of a trust have rights of action against the trustee, in particular instances where beneficiaries can institute proceedings against a trust debtor or to recover trust property in the beneficiaries' own names or in the name of the trustee, seemed to concern whether the Investor Parties were justified in initiating their proceeding, or whether they were likely to obtain leave to bring the action in the name of the trustee, or whether their proceeding would ultimately succeed. There can be no doubt that, in the Investor Parties' Proceeding, the Investor Parties would have to establish that the trustee was refusing or was unable to take action and that there were special or exceptional circumstances. The test they would be required to meet has two elements: the trustee's refusal or inability to take action; and the presence of special or exceptional circumstances.[96] Whatever may have been the case at the time the Investor Parties' Proceeding was commenced, there can be no sensible suggestion now that the Liquidator is refusing or is unable to take steps to recover Trust property, since he seeks the Primary and Facilitative Relief so as to enable him to realise the assets of the Trust through entry into the Proposed 2023 Agreement. Whether special or exceptional circumstances existed then, or exist now, is not a matter for me to determine but, where the Liquidator is actively seeking to deal with the trustee's claims, it may not be easy for the Investor Parties to pass the required threshold.
3. I accept that granting the Primary Relief may impact substantially upon the claims the Investor Parties can successfully make in the Investor Parties' Proceeding. It may also leave the Investor Parties exposed in respect of their undertaking as to damages. I have taken these matters into account, whether they are covered by s 90-15(4)(d) of the IPS or not. I am not particularly persuaded that these circumstances fall within s 90-15(4)(d), as the notion that the alleged loss or damage the Investor Parties may suffer was caused by an action or failure to act by the Liquidator was under-developed. On this point, I accept the Plaintiffs' submissions as to how s 90-15(4) is to be regarded: it lists matters I may take into account when making orders or directions under s 90-15, but it does not mandate consideration of one or all of those matters or fetter my discretion. Nonetheless, I consider this matter to be validly raised by the Investor Parties and I have given due consideration to it.
4. However, I do not consider this to be a sufficient reason to refuse the Primary Relief. The Liquidator has a duty to realise the assets of the Company and to conduct the liquidation of the Company, which may include pursuing statutory recovery actions. Where the Company is a trustee, this may also involve recovering Trust property, even if the Company has been reduced to the status of bare trustee and a new trustee has not been appointed. The Liquidator taking the steps that he has, including initiating the current application for Primary and Facilitative Relief, is part of that process. A compromise of the Company's (ie the trustee's) claims against Baker, Reindel and their related entities for valuable consideration is one way of recovering Trust property. Approving the Liquidator's entry into that compromise (ie the Primary Relief) and making orders providing the machinery for him to do so (ie the Facilitative Relief) would mean that the trustee's claims against Baker, Reindel and their related entities would be released. That may well have the effect of meaning that other persons are unable to pursue those claims, but there is nothing surprising or unorthodox about that.
5. The Investor Parties chose to initiate their proceeding, seek interlocutory injunctive relief, and give an undertaking as to damages. The outcome of that process is not certain and involves risks and the potential for loss. While granting the Primary Relief and the Facilitative Relief may leave the Investor Parties exposed to potential loss or damage in this regard, I am not persuaded that I should refuse that relief.
6. I turn now to the second matter referred to above, being the impact of an open offer made by the Investor Parties.
7. The Investor Parties submitted that the question before the Court is not a contest between the offers in front of the Liquidator. They said that the evidence about the offer of the Investor Parties is just to show what was available in February/March 2023 when the Liquidator was deciding which course to adopt and that the offer that's been made to the Court is to show what is available now. This latter offer was said to be referred to in the Third Esposito Affidavit and written submissions, and repeated by senior counsel in Court on behalf of the Investor Parties. The Third Esposito Affidavit states that Mr Esposito is instructed by Monson and Murone and believes that the Investor Parties are willing and able to progress the Investor Parties' Proceeding for the benefit of the trust estate, including Trust creditors. That offer was described by senior counsel as a standing offer that the Investor Parties would pay the Company's creditors, pay the Liquidator's properly incurred fees and costs (to be taxed), and prosecute the claims against Reindel and Baker in the Investor Parties' Proceeding for the benefit of the Trust at the Investor Parties' cost.
8. It was said that since the Court is being asked to approve the Liquidator's future conduct, that conduct being to enter into the Proposed 2023 Agreement, the Court must assess the situation based on what is available now. Senior counsel submitted that it was not proper and reasonable for the Liquidator to enter into the Proposed 2023 Agreement because the Investor Parties' Proposal was a better offer, and because a better offer is made to the Court.
9. In response, senior counsel for the Plaintiffs disputed that this 'standing offer' was an offer capable of acceptance, and submitted that it has always been open to the Investor Parties to make such an offer in a form capable of acceptance, but they have not.
10. I was taken to all of the materials relied on by the Investor Parties for the conveying of this 'standing offer', and in my view none of those materials amount to an offer in the form described by senior counsel for the Investor Parties that is capable of acceptance. It is not evident what the proposed terms are.
11. Further, I consider it very odd that this is being described as an offer made to the Court, which is how senior counsel for the Investor Parties put it. Despite this oddity, I do not consider this 'standing offer' to be a proper basis for me to refuse the Primary Relief sought by the Liquidator. Even if it were an offer to the Liquidator, it is insufficiently clear as to what the Liquidator would be agreeing if he accepted this 'standing offer', and therefore this potential 'standing offer' does not mean that the Liquidator is not acting reasonably and is not justified in pursuing the Proposed 2023 Agreement.
12. For all of these reasons, the Primary Relief will be granted. Thus, the answer to question (a) in paragraph 68 above is 'yes'. That being the case, the next question which must be answered is whether the Facilitative Relief should be granted.

I Relevant law regarding the Facilitative Relief

1. Section 63 of the Trustee Act provides as follows:

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.

(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 of the SCA relevantly provides:

(1) The Court may by order, whether interlocutory or final, ... appoint a receiver if it is just and convenient to do so.

(2) An order made under subsection (1) may be made either unconditionally or on such terms and conditions as the Court thinks just...

(1) The Court may appoint a receiver at any stage of a proceeding or, in the circumstances referred to in Rule 4.08, before the commencement of a proceeding.

(2) In an urgent case, the Court may appoint a receiver on application made without notice.

1. Orders to confer upon a company the power of sale of the assets of a trust, pursuant to s 63 of the Trustee Act, have been found to be appropriate in circumstances where:[97]

(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, and 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

(c) no new trustee has been appointed.

1. These criteria have been applied on numerous occasions.[98]
2. The power under s 63 depends on what the Court determines is expedient to the trust. The cases emphasise that this is a wide and flexible term.[99] Expediency has been said to mean advantageous, desirable, and suitable to the circumstances of the case.[100] In this context, expediency relates to what is expedient in the interests of the trust, meaning the beneficiaries.[101]
3. The courts have used the power in s 90-15 of the IPS to authorise or confirm a liquidator's reliance on their statutory powers as liquidator of a company to deal in assets held by that company in its capacity as trustee.[102]
4. When considering whether to appoint the liquidator as receiver and manager of the assets of the trust under the SCA and/or the SCR, the 'general ground upon which the Court appoints a receiver is the protection or preservation of property for the benefit of persons with an interest in it'.[103] The Court may appoint a receiver if trust property is in jeopardy, and that is the basis for the jurisdiction.[104]
5. Receivers may be appointed including in circumstances where a liquidator holds such property on bare trust as a result of an ipso facto clause that has removed the company in liquidation from its role as trustee.[105] Where a trustee company is removed from its role in those circumstances, 'the outgoing trustee retains a right of indemnity from the trust assets, secured by an equitable charge over them, for its liabilities incurred by reason of acting as trustee'.[106] The right of indemnity continues to exist even after the trustee company has been removed from its trustee role.[107] The right can be secured by appointing a receiver and manager over the underlying trust property.[108] The receiver and manager appointed is often the liquidator of the company.[109]
6. In circumstances such as those before me, where the trustee company has been removed from its role because it has been put into liquidation, the appointment of the liquidator as receiver of trust assets may pre-empt potential difficulties arising. As noted by Delany J in Re Waratah Group Pty Ltd (in liq):[110]
   1. Pursuant to s 37 of the Supreme Court Act, the Court may by order, appoint a receiver and manager where it is 'just and convenient' to do so. The principles to be applied on an application under the section were discussed by Warren J (as her Honour then was) in Yunghanns v Candoora No 19 Pty Ltd (No 2). The circumstances in which an appointment might be made include where to do so is necessary for the protection or preservation of trust property for the benefit of persons who have an interest in that property. It seems to me that both of those considerations are either present, or potentially present in this case.
   2. As identified by Rees J in Parkway One, the appointment of the liquidator now, as receiver and manager of the trust assets, serves to address in advance difficulties that may arise if a replacement trustee were to be appointed to the Trust at an unknown time in the future.
   3. Counsel for the liquidators has made clear in her submissions that there is no suggestion of any of steps being taken by the unit holders to appoint a replacement trustee. Nevertheless, there are a number of unit holders. On a practical level, those persons who stand behind the unit holders may be the target of recovery actions instituted by the liquidators for insolvent trading or for breaches of directors duties, whether as director or as a de facto director. Should such events come to pass, those who are the target of action on the part of the liquidators may be motivated to take steps to appoint a new trustee.
   4. It is by no means clear that sufficient funds will be recovered by the liquidators to cover the priority creditors and their own costs and expenses. If a new trustee were to be appointed the liquidators would be faced with a very real problem, due to conflicting authority, as to whether they would have power to retain trust property as against the new trustee in order to enforce their right to be indemnified.
   5. The competing authorities were carefully reviewed by McDonald J in Pitard Consortium ...

...

1. Having carefully reviewed the relevant authorities, McDonald J determined that if a new trustee is appointed the former trustee does not have the right to retain trust assets as security for an accrued right of indemnity. Whilst unnecessary for me to decide on this application, it seems to me that the considered view expressed by his Honour is correct 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.
2. The appointment of the liquidators as receivers and managers pre-empts any such potential difficulties. In circumstances where the trustee is in liquidation and where there may be insufficient resources to meet the liquidator's remuneration and expenses all that can be done to minimise future costs and disputes and to aid the conduct of the administration in insolvency should be done. It is just and convenient that an order be made appointing the Liquidators as joint and several receivers and managers.

1. The appointment of a liquidator of a former corporate trustee to be appointed by the Court as receiver to enable it to sell trust assets has been described by Moshinsky J as the 'common course', including in circumstances where the insolvent former corporate trustee is a bare trustee.[111]
2. Receivers are ordinarily required to provide security unless the Court otherwise orders.[112] It is usual for the courts to dispense with this requirement in circumstances where the receiver to be appointed is a registered liquidator and so is subject to statutory obligations under the Corporations Act.[113]

J Submissions in respect of the Facilitative Relief

1. For completeness, I note that submissions with respect to the Facilitative Relief were also made before Elliott J, and I have read and taken into account those submissions. The below summary focuses on those submissions made in respect of relief to facilitate the Primary Relief.

1. The Plaintiffs submit that the criteria for appointing the Liquidator as trustee, as set out in paragraph 233 above, have been met. The Company is a bare trustee, it only acted in its capacity as trustee of the Trust, and no replacement trustee has been appointed.
2. It is also submitted that the Court can make orders pursuant to s 37 of the SCA or r 39.02 of the SCR to appoint the Liquidator as receiver and manager of the assets of the Trust. This is because it is 'just and convenient' to do so in circumstances where the Company has been removed from its office of trustee and the Liquidator cannot otherwise realise the Company's assets in the liquidation or secure the Company's right of indemnity from the assets of the Trust.
3. The Plaintiffs submit that the appointment of a receiver is required to protect the Trust assets, as the circumstances of the case are said to be analogous to those in Re Waratah. These circumstances are said to be that the Trust Deed allows for the appointment of a replacement trustee and some beneficiaries of the Trust or persons standing behind them are subjects of claims to be assigned. Those persons might be motivated to interfere by replacing the Company as trustee, such that Trust assets will not be preserved. Accordingly, it is said to be just and equitable, as well as practical, to appoint a receiver. The Liquidator is submitted to be the most appropriate candidate due to his familiarity with the affairs of the Company, which will assist in minimising expenses of the liquidation of dealing with Trust assets and administering the Trust.
4. The Plaintiffs submit that the Liquidator's past dealings with Trust assets, including the decision to vary the terms of the First Baker Deed, do not provide a basis to deny the Liquidator the Facilitative Relief.[114]
5. Lastly, in response to a criticism made during trial regarding the absence of a claim for relief under s 1318 of the Corporations Act (in respect of the Liquidator's involvement in the Baker Agreement), the Plaintiffs submit that the Liquidator's approach in seeking relief nunc pro tunc pursuant to the Trustee Act, should it be necessary, rather than relief under s 1318 is perfectly orthodox.[115]

1. Reindel submits that the Company, being a corporate trust in liquidation, warrants the Liquidator's appointment as trustee and receiver of the Trust. It is submitted that it is orthodox for such an appointment to be made on an appropriate application.[116] Reindel submits that liquidators have special qualities that make them particularly suitable to be appointed as trustees or receivers. It is said that the Liquidator's appointment would be simpler, aid with vindication of the Company's right of indemnity, reduce costs and potential for disputation, avoid frustrating the Liquidator's statutory obligations in the liquidation, and mean that the receiver and trustee is a person subject to a regulatory regime and who maintains professional indemnity insurance.[117]
2. In their oral submissions, counsel for Reindel referred to caselaw discussing functional problems which can arise where the roles of liquidator and receiver are split. Departure from this common course is said to require a strong basis that is not present in this case.

1. Baker's submissions before me did not extend to the Facilitative Relief for the facilitation of the Primary Relief.

1. The Investor Parties submit that the Liquidator is conflicted and in a compromised position. His appointment as receiver of Trust assets is opposed by the Investor Parties. They submit that the Liquidator's prior dealings with Trust assets (by entering into the Baker Agreement) suggests that the Liquidator was 'either acting in a cavalier manner... or simply was ignorant of the nature of his role, rights and obligations'. The Investor Parties submit that either of these is a strong basis to decline to grant the Facilitative Relief and that the Company does not have a 'special quality' which requires the Liquidator to become trustee.
2. The Investor Parties also submit that the Liquidator's refusal to provide his legal advice to Elliott J would preclude a finding that his actions with respect to the Baker Agreement were honest and reasonable. In choosing to compromise claims against Baker and Reindel, the Liquidator is said to have acted contrary to the interests of creditors and to the winding up as a whole, such that the Liquidator should not be given access to and control over Trust assets.
3. As discussed above, in their closing submissions, the Investor Parties assert that the Liquidator has been dishonest and failed in his obligations by not disclosing a payment from Baker of $80,000 in connection with the Liquidator's public examinations.
4. They say that there is no need for orders to be made appointing the Liquidator as receiver of Trust assets, as there is no jeopardy to the causes of action which are the Trust's only assets. They also suggest that the appointment of the Liquidator as receiver is a 'device' by which he seeks to secure his fees of costs, due to the difficulties faces in respect of the Company's right of indemnity (as discussed earlier in these reasons).

K Consideration in relation to the Facilitative Relief

1. In light of the findings made above in respect of the Primary Relief, it is appropriate and necessary that I make orders facilitating the entry into the Proposed 2023 Agreement and the further conduct of the Liquidator by granting the Facilitative Relief.
2. The Liquidator cannot give effect to all of his obligations under the Proposed 2023 Agreement without being granted the Facilitative Relief. It would be futile to grant the Primary Relief without also granting the Facilitative Relief.
3. Further, I do not accept the Investor Parties' submissions as to why I should not grant the Facilitative Relief. Their submissions in this regard were difficult to divorce from their opposition to the Primary Relief. As I have noted elsewhere, I have reviewed the submissions before Elliott J with respect to the Facilitative Relief, and I have taken those into account where relevant in reaching my decision.
4. With respect to the suggestion that the assets of the Trust are in jeopardy, and that a receiver cannot be appointed as a result, it is the case here that the assets cannot otherwise be recovered and so they are relevantly at risk.
5. The Investor Parties' submissions as to the conduct, honesty and propriety of the Liquidator cannot be accepted. In this regard:

(a) There is simply no basis in the evidence for them.

(b) The Liquidator did not seek to conceal his arrangement with Baker for some funding towards the public examinations, as alleged by the Investor Parties.

(c) It is misconceived to characterise the Liquidator as refusing to provide his legal advice to Elliott J, as the Investor Parties sought to do. True it is that he did not provide it at the time, stating a concern about waiving legal professional privilege, but this all happened at a time when he was giving oral evidence before his Honour. Even if he did refuse at the time, I do not accept the Investor Parties' submission that this precludes a finding that his actions regarding the Baker Agreement were honest and reasonable.

(d) I do not accept the Investor Parties' submission that the Liquidator had acted contrary to the interests of creditors and to the winding up such that he should not be given access to and control over Trust assets, or that his prior dealings with Trust assets by entering into the Baker Agreement evinced a basis to decline the Facilitative Relief. The Investor Parties might not like the Liquidator's actions or decisions, but that does not mean that he should not be appointed trustee or receiver.

(e) The Investor Parties' submission as to the Liquidator's failure to seek relief pursuant to s 1318 of the Corporations Act does not tell against granting the Facilitative Relief.

1. Most of the Investor Parties' submissions in this regard were made in the context of advocating for the Alternative Appointment Relief, rather than in respect of the Facilitative Relief per se. However, given the possible relevance of these submissions to the Facilitative Relief and in the interest of completeness, I have considered it necessary to address this here.
2. For these reasons, the answer to question (b) in paragraph 68 above is 'Yes'.

1. Since I have concluded that both the Primary Relief and the Facilitative Relief should be granted, the remaining questions in paragraph 68 above do not need to be answered. This also means that it is not necessary for me to consider the Advice Affidavit, since this arises only if I contemplate the grant of the Secondary Relief.
2. The parties are directed to confer regarding a form of orders to give effect to this judgment, including as to costs. By 1 July 2024, the parties are to either:

(a) provide an agreed form of orders to my Chambers; or

(b) if there is no agreement as to the form of orders, then each party should provide my Chambers with their proposed form of order and a short submission of no more than 5 pages in support of those orders (including as to costs).

Subject to any further order, I will then deal with the orders and costs on the papers.

MATHEW GOLLANT IN HIS CAPACITY AS LIQUIDATOR OF WINDSOR DEVELOPMENT COMPANY PTY LTD (IN LIQUIDATION)

[1] Pursuant to the trust deed, Nicholson Brunswick East Pty Ltd atf the NBE Trust (an entity associated with Reindel) held 65 units in the Trust, Confreight held 10 units in the Trust and SCL held 25 units in the Trust. On around 12 November 2020, Monson, Murone, and Reindel resigned their directorships and the abovementioned shareholdings were transferred to a third party (Mr Radau) who is a stranger to the earlier affairs of the Company and is not involved in this proceeding. Mr Radau was then the sole director, secretary, and shareholder of the Company.

[2] Re Windsor Development Co Pty Ltd (in liq) [2022] VSC 742, [6] (Elliott J) (Re Windsor Development Co).

[3] The principal and director of this company is Mr David Leslie Jaffe, an accountant engaged by Reindel with respect to the Company. A relatively small debt owed to this company as a result of that accountancy work was assigned to Reindel, such that Reindel is an interested person for the purposes of this proceeding: Re Windsor Development Co, [2]-[5] (Elliott J).

[4] I note that, as at the time of trial, the proofs of debt had not been subject of adjudication and the Liquidator's investigations into the affairs of the Company were ongoing.

[5] Not including Baker and his related parties.

[6] Reindel v Confreight Pty Ltd (No 2) [2022] VSC 442, [138] (Daly AsJ) (Reindel (No 2)).

[7] The First Baker Deed also provided for the release of claims against Murone, Monson, and the Investor Parties in consideration of payment of the deposit by Baker and subject to those persons withdrawing any claims they have as creditors of the Company, including proofs of debt.

[8] 'Assigned Claims' in the First Baker Deed was defined to mean 'any claims against any party relating to each of the transactions and payments identified in Annexure A. For the avoidance of doubt, any other claims against Glenn Reindel for trading whilst insolvent or breach of director's duties in respect of the Company will not be assigned and remain with the Liquidator': cl 1.1.

[9] Re Windsor Development Co, [2]-[5] (Elliott J).

[10] Orders made in this proceeding on 9 December 2022 by Elliott J. The Investor Parties argued that the proceeding was not adjourned part heard. I address this further below.

[11] The detail regarding HOA Deed C is set out at paragraphs 25 to 33 of the HOA. In brief, they outline payment from Reindel to Baker, mutual releases, and arrangements for releases, withdrawal of caveats, and consent orders with respect to the Reindel and Baker SCV Proceeding and the Caveat Proceeding.

[12] These claims are described as not limited to (a) property transfers for less than market value to Reindel, Baker or their related entities, (b) unauthorised payments from the Company account to Reindel and his related entities, (c) transactions which indicate that Baker or AB Property received over and above their entitled payments pursuant to agreements with the Company, and any other claims against Reindel, Baker, or their related entities that are uncovered in further forensic investigations to the extent that such claims can be assigned. The claims did not extend to any potential claims against the Investor Parties.

[13] The Legal Advice is that referred to in paragraph 6 of the Seventh Gollant Affidavit (defined below).

[14] [2011] FCA 1028; (2011) 196 FCR 479 (Gordon J) (Vickers v ASIC).

[15] All of these were provided following the procedure set out in Vickers v ASIC, [48].

[16] The Plaintiffs also sought in the FAOP that this application for Secondary Relief be stayed or adjourned pending determination of the application for Primary Relief, however, the filing of the Investor Parties' IP meant that this part of the application effectively fell away; in the event I did not grant the Primary Relief as sought by the Plaintiffs, the application for Secondary Relief was to be determined.

[17] Two additional matters were raised in the Investor Parties' IP. The first of those matters was that the Investor Parties had sought the production of letters over which Reindel and Baker claimed confidentiality. This matter was resolved between those interested parties. Secondly, the Investor Parties sought the production of the Legal Advice. I heard from the parties in respect of the production of the Legal Advice to the Investor Parties on 14 December 2023. At that time, I declined to order the production of the Legal Advice and ordered that the Investor Parties pay the Plaintiffs' costs of an incidental to this paragraph of the Investor Parties' IP (see Order of Matthews J in Re Windsor Development Co Pty Ltd (in liq) (Supreme Court of Victoria, S ECI 2022 00106, 14 December 2023) and Transcript of Proceedings, Re Windsor Development Co Pty Ltd (in liq) (Supreme Court of Victoria, S ECI 2022 00106, Matthews J, 14 December 2023).

[18] By operation of s 418 of the Corporations Act.

[19] As at the time of trial, a claim for confidentiality over this affidavit was no longer pressed except in relation to certain parts of the exhibit to that affidavit.

[20] Counsel for the Plaintiffs confirmed during the hearing that prior claims for confidentiality were not pressed in respect of the Fourth Gollant Affidavit, the Fifth Gollant Affidavit and the Eighth Gollant Affidavit.

[21] Confidentiality claims over the affidavit of Ms O'Bryan sworn on 23 February 2022 were not pressed by counsel for the Plaintiffs, however, confidentiality over certain of the exhibits to the other two affidavits of Ms O'Bryan Affidavit were maintained.

[22] See, for example, Re Mandeville Group Pty Ltd (In Liq) [2020] VSC 293, [140] (Sloss J) (Re Mandeville Group), One T Development Pty Ltd v Peter Krejci in his capacity as liquidator of ENA Development Pty Ltd [2023] NSWCA 120, [33]-[34] (Ward P, Leeming and Mitchelmore JJA) (One T Development), Re Murray & Roberts Pty Ltd (administrators appointed) [2022] FCA 1506, [81] (Banks-Smith J).

[23] See, for example, Re Hawden Property Group Pty Ltd (In Liq) (2018) 125 ACSR 355,[7]-[8] (Gleeson JA) (Re Hawden Property Group).

[24] See section 90-20(1)(d) of the IPS and the definition of 'officer' in s 9 of the Corporations Act.

[25] El-Saafin & Anor v Franek & Ors (No 2) [2018] VSC 683, [111] (Lyons J) (El-Saafin (No 2)).

[26] Lewis v LG Electronics Australia Pty Ltd (2016) VR 450, [70] (Sifris J) (Lewis).

[27] Re AWA Ltd (administrators appointed) (receivers and managers appointed) [2014] NSWSC 249, [14] (Brereton J) (Re AWA Ltd), citing Re Ansett Australia Limited and Korda (2002) 115 FCR 409, [65] (Goldberg J) (Re Ansett and Korda).

[29] [2019] VSCA 23, [65] (Whelan AP, McLeish and Hargrave JJA) (Re McDermott and Potts).

[30] Re AWA Ltd, [14]-[15] (Brereton J), citing Re Ansett and Korda, [65] (Goldberg J) and Sanderson v Classic Car Insurances Pty Ltd (1985) 10 ACLR 115, 117 (Young J).

[31] Re 7 Steel Distribution Pty Ltd (in liq) (recs and mgrs apptd) [2013] NSWSC 669, [20] (Black J) (Re 7 Steel Distribution).

[32] Re One.Tel Ltd and Others (2014) 99 ACSR 247, [36] (Brereton J) (Re One.Tel).

[33] Re One.Tel, [36] (Brereton J).

[34] Re One.Tel, [36] (Brereton J).

[35] In the matter of ACN 091 518 302 Pty Ltd (In Liquidation) (formerly Pinnacle Investments Pty Ltd) [2019] VSC 699, [185] (Connock J) (ACN 091 518 302), citing Re ACN 096 281 542 Ltd (In Liq) [2018] VSC 425, [6] (Randall AsJ).

[36] Re Octaviar Ltd (in liq) [2016] NSWSC 16, [14] (Brereton J).

[37] Re One.Tel, [55] (Brereton J).

[38] For example, via ss 1318(2) and 1322(4) of the Corporations Act.

[39] Re McDermott and Potts, [92] (Whelan AP, McLeish JA, and Hargrave JA).

[40] McCabe, in the matter of McCabe his capacity as deed administrator of Comlek Group Pty Ltd [2023] FCA 1415, [24] (Cheeseman J), citing Hill, in the matter of Autocare Services Pty Ltd (administrators appointed) [2021] FCA 167, [43] (Farrell J).

[41] Re McDermott and Potts, [92] (Whelan AP, McLeish JA, and Hargrave JA).

[42] Re Spedley Securities Ltd (in liq) (1992) 9 ACSR 83, 85-6 (Giles J); Re Great Southern-Jones (2014) 9 BFRA 555, [63]-[64] (Pritchard J).

[43] Re McDermott and Potts, [101] and [103].

[45] Re McDermott and Potts, [100].

[48] Re McDermott and Potts, [102].

[49] Re One.Tel, [35] (Brereton J), cited with approval in Re McDermott and Potts, [85] and [92(2)] (Whelan AP, McLeish and Hargrave JJA).

[51] Re One.Tel, [36] (Brereton J).

[52] Primarily, Re McDermott and Potts, Re One.Tel, and GDK Projects Pty Ltd v Umberto Pty Ltd (In Liq) [2018] FCA 541 (Farrell J) (GDK).

[53] Re McDermott and Potts, [101]-[102] (Whelan AP, McLeish and Hargrave JJA).

[54] Counsel note that the Court is undertaking a forward-looking exercise and must assess whether a direction should be made considering the facts as they exist at the time the order is made. Accordingly, it does not matter that the Supplemental Advice was given after the Liquidator made his decision to enter into the Proposed 2023 Agreement in the first half of 2023.

[55] Reindel (No 2), [116]-[122] (Daly AsJ).

[58] Relying on RWG Management Ltd v Commissioner for Corporate Affairs [1985] VR 385, 396 (Brooking J).

[59] Relying on Octavo Investments Ltd v Knight (1979) 144 CLR 360, 367 and 372 (Stephen, Mason, Aickin and Wilson JJ, Murphy J agreeing).

[60] Relying on Chief Commissioner of Stamp Duties v Buckle (1998) 192 CLR 226, 247 (Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ); Re Cremin (in his capacity as liquidator of Brimson Pty Ltd (in liq), Kane Retail Group Pty Ltd (in liq) and Teal Retail Group Pty Ltd (in liq)) (2019) 136 ACSR 649, [49] (Moshinsky J) (Re Cremin).

[61] Re Cremin, [48] (Moshinsky J), citing Jones v Matrix Partner Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (in liq) (2018) 260 FCR 310, [85] (Allsop CJ), [142] (Siopsis J) and [198] (Farrell J).

[62] See Corporations Act, s 477(2)(c).

[63] See generally, Nuncio D'Angelo, Commercial Trusts (LexisNexis, 2014), [4.66]-[4.80].

[64] Transcript of Proceedings, Re Windsor Development Co Pty Ltd (in liq) (Supreme Court of Victoria, S ECI 2022 00106, Elliott J, 28 November 2022) T310.25-311.2.

[66] Elliott J heard closing submissions in the Original Application on 28 November 2022. Daly AsJ handed down the decision to which reference is made (Reindel (No 2)) on 8 August 2022.

[67] Reindel (No 2), [122] (Daly AsJ).

[68] As to res judicata, see recently Millsom v North Melbourne College Aus Pty Ltd [2023] FCA 677, [34] (Hespe J). As to issue estoppel, see Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507, [90] (Nettle J).

[69] See Kuligowski v Metrobus (2004) 220 CLR 363, [21] (Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ).

[70] It is convenient for me to note here that the Investor Parties did question the Liquidator in connection with these matters.

[71] It is also convenient for me to note here that the Investor Parties did question the Liquidator regarding these matters.

[72] That submission was described by senior counsel for the Investor Parties as 'astonishing': Transcript of Proceedings, Re Windsor Development Co Pty Ltd (in liq) (Supreme Court of Victoria, S ECI 2022 00106, Matthews J, 7 February 2024), T.282.18.

[73] Deutsch v Deutsch (2012) 6 ASTLR 386, [40] (Hargrave J) (Deutsch).

[74] Re One.Tel, [35] (Brereton J).

[75] Re One.Tel, [35] (Brereton J).

[76] Re One.Tel, [36] (Brereton J).

[77] The existence of potential claims against the Investor Parties is said by Reindel to be referenced in the First Gollant Affidavit at [32]-[34].

[78] [2017] VSC 471, [233].

[79] [2022] VSC 288 (Break Fast).

[81] Re Hawden Property Group, [8], cited with approval recently by the NSW Court of Appeal in One T Development, 34, and cited with approval by Connock J, in ACN 091 518 302, [184] and Re Australian Property Custodian Holdings Ltd (in liq) (2021) 150 ACSR 565, [35] (Sloss J).

[82] Re McDermott and Potts, [102] (Whelan AP, McLeish and Hargrave JJA).

[83] The Investor Parties clarified that their submission that the Plaintiffs' legal practitioners were not wholly disinterested was not a submission that they had a personal interest in the outcome.

[84] Relying on Re McDermott and Potts, [92(2)] (Whelan AP, McLeish and Hargrave JJA), Re One.Tel, [36], Re RM Road Services Pty Ltd (in liq) & Ors [2023] VSC 794 at [67] citing GDK, [33] (Farrell J), El-Saafin No 2, [111] and Lewis, [70].

[85] While some evidence was given in respect of the analysis of defences to claims by his team on cross examination, the Investor Parties say that no primary evidence was adduced by the Liquidator in respect of this analysis.

[87] For the principles that the power may be exercised where a liquidator's decision to act in a particular way is likely to be contentious: Re One.Tel, [35] (Brereton J), citing Re Ansett and Korda, [65] (Goldberg J), Re 7 Steel Distribution, [20] (Black J), and Re S&D International Pty Ltd (in liq) (No 7) (2012) 92 ACSR 38, [58]-[59] (Robson J)

[88] Eighth Gollant Affidavit, [11]-[13].

[89] Transcript of Proceedings, Re Windsor Development Co Pty Ltd (in liq) (Supreme Court of Victoria, S ECI 2022 00106, Matthews J, 6 February 2024), T.156.6-16.

[90] Transcript of Proceedings, Re Windsor Development Co Pty Ltd (in liq) (Supreme Court of Victoria, S ECI 2022 00106, Matthews J, 6 February 2024), T.141.9-17.

[91] See First Gollant Affidavit at [41]-[43].

[92] Re McDermott and Potts, [95]-[96] (Whelan AP, McLeish and Hargrave JJA).

[93] (2006) 227 CLR 57.

[94] Ibid, [65] (Gummow and Hayne JJ). See also ibid at [19] (Gleeson CJ and Crennan J).

[95] This correspondence is set out in detail earlier in these reasons.

[97] Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd [2011] FCA 677, [35]-[36] (Gordon J) (Caterpillar Financial Australia Ltd).

[98] For example, see In the Matter of Urban Property Melbourne Pty Ltd [2021] VSC 847, [35] (M Osborne J); Re Windows on the World Steel Windows Pty Ltd (in administration) [2020] VSC 880, [89] (Sloss J).

[99] Royal Melbourne Hospital v Equity Trustees Ltd (2007) 18 VR 469, [154] (Bell AJA).

[102] See, for example, Re Mandeville Group (Sloss J).

[103] QBE Insurance (Australia) Ltd v WA Metals Recycling Pty Ltd, in the matter of WA Metal Recycling Pty Ltd [2016] FCA 238, [13] (Farrell J), citing Sapphire (SA) Pty Ltd v Ewens Glen Pty Ltd [2011] FCA 600, [15] (Besanko J) (Sapphire (SA) Pty Ltd). See also Martyniuk v King [2000] VSC 319, [14]-[15] (Warren J); Yunghanns v Candoora No 19 Pty Ltd (No 2) [2000] 35 ACSR 34, [64] (Warren J) (Yunghanns); University of Western Australia v Gray (No 6) [2006] FCA 1825, [71]-[72] (French J).

[105] See Re Empire Plant Hire Pty Ltd (in liq) (2021) 64 VR 1, [26] (Gardiner AsJ), citing Rohrt, in the matter of Rose Guerin and Partners Pty Ltd (in liq) (2021) 151 ACSR 270, [59]-[69] (Anderson J).

[106] Re Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FLR 17, [10] (Brereton J), citing, among others, Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226, 247 (Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ). See also Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth (2019) 268 CLR 524, [29]-[33] (Keifel CJ, Keane and Edelman JJ).

[107] Caterpillar Financial Australia Ltd, [18]-[27] (Gordon J).

[108] See, for example, Re Gramarker Pty Ltd [2014] NSWSC 243, [6]-[7] (Brereton J).

[110] [2020] VSC 523, [50]-[57] (Delany J) (Re Waratah). Citations have been omitted.

[113] Re Waratah, [59] (Delany J), citing Sapphire (SA) Pty Ltd, [4] (Besanko J) and Re Pires Consulting Holding Pty Ltd (in liq) [2019] VSC 384, [48]-[49] (Kennedy J).

[114] The Liquidator's evidence was that the variation of the terms of the deed with Baker compromised the dispute between the parties as to the effect of the releases (which Baker argued were unconditional and the Liquidator had believed were conditional), while providing the Liquidator with funds to continue with this proceeding (at that time, only in respect of the Original Application), which had become protracted.

[116] Re Mali Nominees Pty Ltd (in liq) [2022] VSC 28, [33], citing Re Cremin, [50].

[117] Re Waratah, [56]-[57]; Re Goldeagle Nominees Pty Ltd (in liq) [2023] WASC 7, [14]-[19].