Background
GRL Pty Ltd had been the sole trustee of the Ludtke Family Trust since 2004. It acquired two mortgaged properties while acting as trustee: a property in Lyons, Northern Territory, and an office suite in Melbourne. GRL was placed into liquidation on 25 February 2026, which terminated its trusteeship under the trust deed, although it remained a bare trustee of the trust assets.
The liquidator, Dino Calvisi, found that GRL’s records did not clearly separate its own assets and liabilities from those of the trust. The evidence clearly identified the Northern Territory property as trust property; the Court accepted that the Melbourne property could also reasonably be treated as trust property, particularly given the terms of NAB’s mortgage. NAB supported the proposed receivership to facilitate a sale of the Northern Territory property, while indicating it intended to sell the Melbourne property as mortgagee in possession.
The Court’s Holding
Derrington J granted the liquidator’s application. Under s 90-15 of the Insolvency Practice Schedule (Corporations), the Court held that Mr Calvisi was justified and acting reasonably in proceeding on the basis that GRL had acted as trustee of the Ludtke Family Trust and that both identified properties were trust assets.
The Court appointed Mr Calvisi, nunc pro tunc and without security, as receiver and manager of the trust business and assets under s 57(1) of the Federal Court of Australia Act 1976 (Cth). The appointment gave him powers to sell trust assets, pursue or compromise claims, and pay trust creditors from sale proceeds in the statutory order of priority. The orders confined the use of trust assets to trust liabilities and trust-administration costs, protecting against their application to GRL’s personal liabilities.
Key Takeaways
- A liquidator of a former corporate trustee needs court authority or a receivership to sell trust assets.
- Unclear company records did not prevent relief where the available evidence supported treating the properties as trust assets.
- Trust-sale proceeds may satisfy trust debts and proper trust-administration costs, but not liabilities incurred by the company in its own right.
Why It Matters
The decision illustrates the practical route available when an insolvent corporate trustee has ceased to hold office but retains trust property as a bare trustee. A receivership can permit an orderly sale and distribution while preserving the separate character of the trust estate.
It also underscores the importance of tracing the capacity in which assets and liabilities were acquired. That distinction determines both the scope of a liquidator’s right of exoneration and which creditors may benefit from trust assets.