Background
RFK Enterprises Pty Ltd was trustee of the RFK Investment Trust, which operated a plumbing franchise business. The company incurred substantial tax liabilities, did not satisfy a statutory demand from the Deputy Commissioner of Taxation, and was wound up in insolvency. Paul Joseph Pracilio was appointed liquidator on 30 June 2026.
The trust deed terminated RFK’s office as trustee when it entered liquidation, leaving it as bare trustee of the trust property. The liquidator concluded that RFK had conducted no other business and acted as trustee for no other trust, so its assets and liabilities were those of the RFK Trust. He had purported to disclaim certain trust property, including secured equipment and a lease, and sought orders to regularise those disclaimers and enable the trust to be finalised.
The Court’s Holding
Vandongen J granted the application. The Court appointed Mr Pracilio, nunc pro tunc, as receiver and manager of the RFK Trust property under s 57 of the Federal Court of Australia Act 1976 (Cth), with powers under s 420 of the Corporations Act 2001 (Cth), subject to specified exclusions.
The appointment was appropriate because RFK, as bare trustee, retained its right of exoneration and equitable lien over trust assets for trust debts, but neither it nor its liquidator could realise those assets without a court order. The retrospective appointment appropriately regularised the purported disclaimers, whose statutory effect was analogous to disposal of the property. The Court also authorised payment of the liquidator’s costs, expenses and remuneration in priority from trust property and declared his entitlement to indemnification through the trustee’s right of exoneration.
Key Takeaways
- A liquidator of a former corporate trustee may be appointed receiver to realise trust assets and pay trust creditors.
- Retrospective receiver orders can regularise earlier purported disclaimers of trust property.
- The appointment depended on evidence that the company had acted only for the one trust, protecting creditors of other possible businesses or trusts.
Why It Matters
The decision illustrates the usual mechanism for dealing with assets after an insolvent corporate trustee is removed by its trust deed: appointing the liquidator as receiver gives practical authority to collect, realise and distribute the trust property.
It also confirms that, where the relevant conditions are met, ancillary priority and indemnity orders may accompany the appointment so that the trust administration and liquidation can be completed efficiently.