Re Winex Property Pty Ltd (in liquidation) [2025] VSC 167 (3 April 2025)

1. The first plaintiff, Andrew William Poulter (Liquidator) is the liquidator of the second plaintiff, Winex Property Pty Ltd (Company).
2. The Company was the trustee of three unit trusts:

(a) the 96 Williamsons Unit Trust (ABN 55 209 061 207) (Williamsons Unit Trust);

(b) the 1 Pleasant Unit Trust (ABN 49 517 267 654) (Pleasant Unit Trust); and

(c) the 399 Manningham Unit Trust (ABN 93 670 668 406) (Manningham Unit Trust),

1. By originating process filed 14 March 2025, the plaintiffs seek various forms of relief. In summary, the plaintiffs seek:

(a) Pursuant to s 37 of the Supreme Court Act 1986 (Vic) (the SC Act), orders appointing the Liquidator as receiver and manager of the assets and undertaking of the Williamsons Unit Trust, and ancillary orders thereto; and

(b) judicial advice and directions, pursuant to ss 90-15 and 90-20 of Schedule 2 Insolvency Practice Schedule (Corporations) (Schedule 2) to the Corporations Act 2001 (Cth) (the Act), that the Company remains trustee of the Pleasant Unit Trust and has the trustee's powers under the trust deed for the Pleasant Unit Trust, and ancillary orders thereto.

1. No relief is sought in respect of the Manningham Unit Trust.
2. In support of their application, the plaintiffs rely on:

(a) the Liquidator's affidavit affirmed 13 March 2025 (Poulter Affidavit);

(b) the affidavit of Charlie Lewis Beresford affirmed 1 April 2025 (Beresford Affidavit). Mr Beresford is a solicitor employed by Lewis Holdway Lawyers, solicitors for the plaintiffs; and

(c) a written outline of submissions from their counsel filed 1 April 2025 (Outline).

1. The Beresford Affidavit establishes that the plaintiffs served copies of the originating process and the Poulter Affidavit (without exhibits, but available on request by the recipient) on the following persons:

(a) the Australian Securities and Investments Commission (ASIC);

(b) National Australia Bank (NAB), a secured creditor of the Company, who holds a registered mortgage over the property at 1 Pleasant Avenue, Doncaster, Victoria (Pleasant Avenue Property);

(c) Prime Value Asset Management Pty Ltd (Prime Value), a secured creditor of the Company, who holds a registered mortgage over the property at 92‑96 Williamsons Road, Doncaster, Victoria (Williamsons Road Property);

(d) Andrew Beck, who is the receiver appointed by Prime Value over the Williamsons Road Property;

(e) Peng (Barry) Wang, sole director and shareholder of the Company; and

(f) Feng Hao, director of RYL Group Australia Pty Ltd (RYL).

1. According to the Beresford Affidavit, Prime Value's solicitors have informed the plaintiffs' solicitors that Prime Value would not oppose the orders sought by the Liquidator where those proposed orders were revised to take account of the interest of the receiver appointed by Prime Value over the Secured Property. As I understand it, the Liquidator has now formulated his proposed orders to accommodate that position.
2. The unitholders of the Williamsons Unit Trust are RYL and Winex Capital Pty Ltd as trustee for the Barry W Family Trust (Winex Capital). Mr Wang is the sole director, secretary and shareholder of Winex Capital. The sole unitholder of the Pleasant Unit Trust is Winex Capital. The Poulter Affidavit exhibits an email from Mr Feng, expressing support for the Liquidator's application to be appointed as receiver of the trust property of the Williamsons Unit Trust. Mr Poulter also deposes that Mr Wang has said that he is supportive of the application.
3. By reason of the matters referred to in paragraphs 6 to 8 above, I am satisfied that all persons with an interest in this application have been notified of it. None of those persons appeared on the return of the originating process or otherwise communicated with the Court or the plaintiffs in respect of the application, save to the extent referred to above.
4. At the hearing of the plaintiffs' application on 2 April 2025, I made orders granting most of the relief sought and indicated that I would publish short reasons for my decision as soon as practicable thereafter. These are my reasons for judgment.

1. The Company was incorporated on 12 November 2013. Mr Wang has been the sole director of the Company since its inception.
2. Mr Poulter deposes that from his investigations, he has ascertained that since its incorporation:

(a) the Company has not traded in its own right;

(b) the Company holds no assets in its own right;

(c) all debts of the Company are debts incurred in its capacity as trustee of the Trusts;

(d) the Company has acted as trustee of the Trusts, and only of those Trusts, and functions in no capacity other than as trustee of those Trusts; and

(e) the purpose of each of the Trusts was to purchase residential land and develop it.

1. The Company is no longer the trustee of the Manningham Unit Trust, having been removed as trustee in 2022. Mr Poulter deposes that he has not identified any exposure to, or monies owed by the Manningham Unit Trust to the Company in respect of the Company's former role as trustee of that trust.
2. Mr Poulter was appointed as liquidator of the Company on 28 January 2025 by special resolution of the sole member of the Company.

1. The trust deed for the Williamsons Unit Trust contains a standard ipso facto clause, rendering the Company a bare trustee upon, relevantly, the appointment of a liquidator. No new trustee has been appointed.
2. As noted above, the unit holders in the Williamsons Unit Trust are Winex Capital and RYL, both of whom support this application.
3. The Williamsons Road Property was purchased for the Williamsons Unit Trust in about 2016, with the intention to redevelop the property by building and selling 79 apartment units. Funding for the purchase and development of the land was initially sourced by the Company obtaining loans from NAB and unitholders. During the 2023 financial year, the Williamsons Unit Trust refinanced the NAB debt and repaid part of the unitholders' loans with a new borrowing from Prime Value. The unitholder loans are unsecured. In addition to Prime Value and the unitholders, there are other creditors of the Williamsons Unit Trust, such as Manningham City Council, Yarra Valley Water, and the Commissioner for State Revenue.
4. By deed of appointment dated 12 February 2025, Prime Value appointed Mr Beck as receiver and manager of the Williamsons Road Property.
5. The Liquidator considers that Mr Beck's appointment is limited to the Williamsons Road Property. He deposes that there remains the need for the Williamsons Unit Trust to have a trustee empowered to deal with any surplus funds available to that trust and deal with the unsecured creditors, although it is possible that there will be a shortfall to Prime Value in respect of a sale of the Williamsons Road Property.

1. The trust deed for the Pleasant Unit Trust does not contain an ipso facto clause. Hence the appointment of the Liquidator does not result in the Company being removed as trustee of that trust.
2. Despite this, the Liquidator considers it prudent to seek directions from the Court as to how he can or should exercise the Company's powers and duties as trustee of the Pleasant Unit Trust.
3. The sole unitholder of this trust is Winex Capital, which supports the application.
4. The Pleasant Avenue Property was purchased for the Pleasant Unit Trust in 2017, with the sale contract settling in 2018, with the intention to develop the property by subdividing and building three residential townhouses. Funding for the purchase and development was obtained from NAB and Winex Capital. However, because of delays with the project, a lack of funding, and claims for land tax which the Company could not meet, the project is no longer commercially viable for the trust.
5. The Company has sold the Pleasant Avenue Property by contract dated 24 January 2025, with settlement due on 23 April 2025. The Liquidator anticipates that there will be a surplus for distribution to unsecured creditors from the sale of the Pleasant Avenue Property, after the discharge of costs of sale, outgoings, and the secured debt.

1. In respect of the Williamsons Unit Trust, the plaintiffs primarily seek the following relief:
   1. Pursuant to s 37 of the SC Act, the Liquidator be appointed nunc pro tunc without security as receiver and manager (Receiver) of the assets and undertaking of the Williamsons Unit Trust.
   2. The requirements of rr 39.04, 39.05 and 39.07 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) be dispensed with.
   3. The Receiver be authorised to have possession of, call in, preserve, maintain and sell the assets comprising the property of the Williamsons Unit Trust, subject to the rights of Prime Value and its duly appointed receiver Mr Beck and repayment of all amounts owed Prime Value and Mr Beck (Williamsons Trust Property).

4. The Receiver to have the following powers:

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

(b) to compromise any claim made against the second plaintiff in its capacity as trustee of the Williamsons Unit Trust or against any of its property on any terms the first plaintiff sees fit;

(c) to bring any claim against any party on behalf of the Williamsons Unit Trust;

(d) to apply the proceeds from the sale or realisation of the Williamsons 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 Act;

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

5. Pursuant to ss 90-15 and 90-20 of Schedule 2, the Liquidator may:

(a) rely on their statutory powers as liquidators of the second plaintiff pursuant to s 477 of the Corporations Act to take all necessary steps to wind up the Williamsons Unit Trust pursuant to orders4; and

(b) be justified in paying the following from the Williamsons Trust Property:

(i) the remuneration costs and expenses of the first plaintiff and second plaintiff properly incurred in preserving, realising or getting in and/or distributing the Williamsons Trust Property or conducting the administration and winding up the Williamsons Unit Trust and the Company; and

(ii) the creditors of the Williamsons Unit Trust; and

(c) any such distribution under proposed order 5.b. include the remuneration, costs and expenses of and incidental to this application, and are to be paid in accordance with the priority specified in s 556(1) of the Corporations Act.

1. The remuneration, costs and expenses of the Liquidator as liquidator of the Company and as the Receiver of the Williamsons Unit Trust be paid in priority from the Williamsons Trust Property and otherwise in accordance with the priority specified in s 556(1) of the Act.

1. Alternatively, the plaintiffs seek orders pursuant to s 63 of the Trustee Act 1958 (Vic) (Trustee Act) conferring on the Company nunc pro tunc the necessary powers to enable the Company to wind up the Williamsons Unit Trust, including to do the actions referred to in proposed order 3 above.
2. In respect of the Pleasant Unit Trust, the plaintiffs primarily seek the following relief:

1. Confirmation of the Company's appointment as the trustee of the Pleasant Unit Trust (Pleasant Trustee). 2. The Liquidator, while he remains the controller of the Company, is entitled to and can act as the Pleasant Trustee. 3. The Pleasant Trustee's powers under the trust deed for the Pleasant Unit Trust are confirmed, including, without limitation:

(a) the power to do all things necessary and convenient to effect and complete the sale of the assets and undertaking of the Pleasant Unit Trust; > > (b) to complete the contract of sale of the Pleasant Avenue Property; and > > (c) to deal with the net proceeds of sale of the Pleasant Avenue Property in accordance with the trust deed, subject to the orders made by the Court.

1. The remuneration, costs and expenses of the first plaintiff as liquidator of the Company and as the Pleasant Trustee be paid in priority from the assets of the Pleasant Unit Trust, and otherwise in accordance with the priority specified in s 556(1) of the Act.
2. In addition to these two sets of orders specific to each of the Williamsons Unit Trust and the Pleasant Unit Trust respectively, the plaintiffs seek the following relief:
   1. Pursuant to s 1318(2) of the Act and/or s 67 of the Trustee Act that the first plaintiff as Receiver, liquidator and/or Pleasant Trustee, is granted relief from any liability for any action taken by him in that capacity from the date of his appointment as liquidator and the date of this order.
   2. The first and second plaintiffs have liberty to apply, including for approval of the first plaintiff's remuneration in acting as Receiver.
   3. The costs, expenses and remuneration incurred by the first plaintiff in acting as Receiver and those of and incidental to this application be costs and expenses in the liquidation of the second plaintiff and paid in priority from the Williamsons Trust Property and the property of the Pleasant Unit Trust.
   4. There be liberty to apply to any person who can demonstrate sufficient interest to modify any directions, orders and/or declarations made on not less than five (5) business days' written notice to the plaintiffs.

1. The plaintiffs submit that the relevant legal principles are uncontroversial. In particular, they submit that:

(a) the Company as corporate trustee retains a right of indemnity over the trust assets, relating to liabilities incurred by reason of acting as trustee;[1]

(b) this right of exoneration generates a supporting lien or charge, being a beneficial proprietary interest in the trust assets in favour of the former trustee of the trust;[2]

(c) where the former trustee holds title to the trust assets as bare trustee with limited powers to deal with those assets, but the ability to retain possession (as against beneficiaries) for the purpose of achieving its right of indemnity;[3]

(d) where the former trustee is a bare trustee, the liquidator may not sell trust assets without an order of the Court, or the appointment of a receiver and manager over the trust assets;[4] and

(e) 'courts are generally willing, upon an appropriate application, to make orders permitting the liquidator of a former trustee to sell trust assets.'[5]

(a) the conferral of statutory powers under each of s 37(1) of the SC Act and s 63(1) of the Trustee Act are broad;

(b) a liquidator's costs are payable out of the trustee's right of indemnity over the trust assets, especially where the company in liquidation acted solely as corporate trustee.[6] Orders being sought providing for the Liquidators' costs in line with s 556(1) of the Act are also now routinely sought and made;[7]

(c) the present circumstances involve orders being sought for the protection and preservation of trust property for the benefit of persons who have an interest in that property. This is a commonplace reason for relief of this nature being sought;

(d) the orders sought are in the interest of creditors of the Trusts;

(e) while this may be achieved by way of either avenue set out in the originating process, in the present circumstances, the most straightforward method to facilitate the winding up of the Company would be for the Court to appoint the Liquidator as receiver and manager to the assets and undertaking of the Williamsons Road Trust. Despite there being multiple unit trusts, no orders are sought in relation to the Manningham Unit Trust, declaratory relief is sought in relation to the Pleasant Unit Trust, and the Williamsons Unit Trust is not complicated; and

(f) this would facilitate the prompt and efficient finalisation of the liquidation of the Company, with orders enabling this to take place and associated costs and remuneration to be paid in accordance with s 556(1) of the Act.

1. I accept the plaintiffs' submissions as to the relevant principles and their application to this case.
2. I also accept that the plaintiffs' preferred form of relief in respect of the Williamsons Unit Trust, being the appointment of the Liquidator as receiver and manager of the assets and undertaking of that trust, is appropriate. The Company acted solely in its capacity as trustee of the Trusts, and given that it now has the status of bare trustee in respect of the Williamsons Road Trust, it is expedient for the conduct of the liquidation of the Company and the winding up of the Williamsons Road Trust that orders be made giving the Liquidator the power to perform any of the tasks referred to in the proposed orders.
3. With one exception, orders in the form of proposed orders 1 to 6 are appropriate. The exception is to proposed order 1: on the evidence before me, I do not see any need for proposed order 1 to be made on a nunc pro tunc basis, as there is no evidence that the Liquidator has performed any tasks for which he does not currently have power. I raised this issue with counsel for the plaintiffs at the hearing, and counsel confirmed that there was nothing specifically of concern to the plaintiffs in that regard. Accordingly, I do not consider it necessary to make proposed order 1 on a nunc pro tunc basis.
4. It is therefore not necessary for me to consider the alternative form of relief regarding the Williamsons Road Trust, being orders under the Trustee Act.
5. Most of the orders sought in respect of the Pleasant Unit Trust are, in truth, declarations and/or directions. I consider it appropriate to make those declarations and/or directions, so as to give comfort to the Liquidator in carrying out the role of the Pleasant Trustee, since those declarations and/or directions concern the nature and extent of his powers and duties and are therefore amenable to the giving of judicial advice.[8] That required some modification to the wording of proposed orders 7 and 9 so as to frame them as declarations.
6. It is clear from the trust deed for the Pleasant Unit Trust that the Company was not displaced as trustee of that trust by reason of the appointment of the first plaintiff as liquidator of the Company, and therefore the Company remains trustee of that trust. I accept that where relief was being sought regarding the Williamsons Unit Trust, in circumstances where the Company was displaced as trustee of that trust by the operation of the ipso facto clause in the trust deed for the Williamsons Unit Trust, it is expedient for the plaintiffs to seek, and for the Court to provide, the declarations and/or directions sought.
7. I note that the declarations and orders sought in relation to the Pleasant Unit Trust were sought pursuant to ss 90-15 and 90-20 of Schedule 2. I am satisfied that the Court has power under those provisions to make them. For the sake of completeness, I note that the Court also has power to make those declarations and orders pursuant to r 54.02 of the Rules, which permits a trustee to seek judicial advice.
8. The orders sought regarding the remuneration of the Liquidator in carrying out his roles as liquidator, Receiver, and Pleasant Trustee are orthodox and it is appropriate that they be made.
9. The Outline filed by the plaintiffs does not address the indemnity sought in proposed order 11 as set out above. I raised this at the hearing, stating that there was no evidence before me as to any specific concern held by the plaintiffs for which such an indemnity in respect of past conduct may be necessary. Since the indemnity is both for past and future acts, I consider it to be too broad when there is no evidence before me as to the likely scope and operation of such an indemnity. In those circumstances, I do not consider it necessary to grant an indemnity for past acts on a purely hypothetical basis. Insofar as the forward-looking aspect of proposed order 11 is concerned, given the orders and declarations which I have made, the need for and likely scope of that indemnity is unclear, and I do not consider it appropriate to make that order at this stage. Insofar as issues arise for which the first plaintiff seeks an indemnity, there is nothing to prevent him from making an application.

1. For these reasons, I granted the application by the plaintiffs, by making orders in the form of proposed orders 2 to 10 and 12 to 13. Proposed order 1 was modified so that it was not made on a nunc pro tunc basis, and proposed order 11 was not made.
2. I also ordered that the plaintiffs provide a copy of the orders as made to the interested persons referred to in paragraph 6 above.

[1] Jones (Liquidator) v Matrix Partners Pty Ltd, in the matter of Killarnee Civil & Concrete Contractors Pty Ltd (in liq) [2018] FCAFC 40; (2018) 260 FCR 310, 320 [35] (Allsop CJ), 344 [142] (Siopis J), 352 [198] (Farrell J) (Killarnee); Re Cremin, in the matter of Brimson Pty Ltd (in liq) [2019] FCA 1023; (2019) 136 ACSR 649, 655-6 [48]-[51] (Moshinsky J) (Brimson).

[2] Killarnee [2018] FCAFC 40; (2018) 260 FCR 310, 324-5 [49] and 332 [87] (Allsop CJ), cited with approval in Carter Holt Harvey Wood Products Australia Pty Ltd v Commonwealth [2019] HCA 20; (2019) 268 CLR 524, 578-9 [133]-[134] (Gordon J) (Carter Holt).

[3] Octavo Investments Pty Ltd v Knight [1979] HCA 61; (1979) 144 CLR 360, 369-370 (Stephen, Mason, Aickin and Wilson JJ).

[4] Killarnee [2018] FCAFC 40; (2018) 260 FCR 310, 323 [44] and 333-4 [91] (Allsop CJ), 343 [139] (Siopis J), 351 [196] (Farrell J); see also Brimson [2019] FCA 1023; (2019) 136 ACSR 649, 655-6, [48]-[49] (Moshinsky J).

[5] Brimson [2019] FCA 1023; (2019) 136 ACSR 649, 656 [50] (Moshinsky J), cited with approval in Re Glenvine Pty Ltd (in liq) [2020] NSWSC 866, [45] (Black J).

[6] Carter Holt [2019] HCA 20; (2019) 268 CLR 524, 588-9 [169]-[171] (Gordon J).

[7] See, eg, In the matter of Pires Consulting Holding Pty Ltd (in liquidation) [2019] VSC 384, [55] (Kennedy J); In the matter of KPD Knight Pty Ltd (subject to DOCA) [2020] VSC 253, [46] (Connock J).

[8] Re One.Tel Network Holdings Pty Ltd [2001] NSWSC 1065; (2001) 40 ACSR 83, 90-1 [29] (Austin J).