Background
Nararra Developments Pty Ltd was wound up in insolvency on 11 November 2025 on the application of the Deputy Commissioner of Taxation (DCT), following Nararra’s failure to comply with a statutory demand based on an unpaid tax debt owed directly by the company. Peter Krejci and Jonathon Keenan were appointed joint and several liquidators. Days later, the same liquidators were also appointed receivers and managers of the Narara Developments Trust, of which Nararra was the corporate trustee. The sole shareholder of Nararra is Ms Thi Linh Trinh, wife of Mr Sam Cassaniti, who is the appointor of the Narara Developments Trust.
Separately, Krejci and Keenan — acting as liquidators of eight other companies in the so-called “Richmond Group” — commenced proceeding NSD 194 of 2025, a related action against 57 defendants including Nararra. That proceeding alleges significant tax avoidance schemes associated with Mr Cassaniti, whereby funds owed to the DCT by various corporate plaintiffs were diverted, directly or indirectly, to entities associated with him. The liquidators’ own statutory report described Nararra as part of the Richmond Group and stated that the purpose of the Richmond proceeding was to “trace the flow of funds between entities” and investigate suspected fraudulent conduct.
Ms Trinh applied by interlocutory process to have Krejci and Keenan removed and replaced with an alternative liquidator of her choosing, both as liquidators of Nararra and as receivers and managers of the Trust. She argued two heads of conflict: first, that by being plaintiffs in NSD 194 while Nararra is a defendant in the same proceeding, the liquidators were effectively on both sides of the record; second, that as liquidators of the NSD 194 corporate plaintiffs, they would inevitably face the task of adjudicating proofs of debt that they themselves had lodged against Nararra, creating an intolerable procedural conflict. The DCT opposed removal, arguing that unified appointments were efficient and that Ms Trinh’s application was a vehicle for Mr Cassaniti to fragment the investigation into the alleged schemes.
The Court’s Holding
Moore J declined to remove the liquidators at this stage, holding that the alleged conflict was premature on the evidence before the Court. In response to the first conflict (being on both sides of the record in NSD 194), the liquidators tendered an undertaking to discontinue the NSD 194 proceedings against Nararra if the Court declined to remove them, and noted that leave under s 471B of the Corporations Act 2001 (Cth) — which they had not sought — would in any event be required before those proceedings could advance against Nararra as a company in liquidation. His Honour accepted that this undertaking effectively neutralised the litigation conflict as it presently stood.
On the second conflict — adjudicating proofs lodged by the liquidators themselves on behalf of the NSD 194 corporate plaintiffs — the Court found that whether any real conflict would arise depended entirely on the nature and content of the proofs of debt ultimately lodged. Ms Trinh did not dispute that the major creditors of Nararra (Marginata, Reliance, and Accolade) were genuine creditors in amounts recorded in Nararra’s own accounts. It remained wholly unclear whether any proof reflecting a “NSD 194 Tax Scheme Direct Claim” would be lodged at all, or whether there would be genuine dispute about it. Accordingly, the conflict was contingent and had not yet crystallised. The liquidators also undertook not to lodge, or cause to be lodged, any such proofs of debt until after determination of the related proceeding.
The Court noted, however, that a conflict of the kind alleged may arise subsequently, depending on what claims are eventually made and pursued in the liquidation. Moore J reserved consideration of the precise orders to be made, directing the parties to file agreed or rival short minutes of order by 18 June 2026.
Key Takeaways
- A liquidator’s participation as plaintiff in related proceedings against a company in the same liquidator’s charge can constitute a disqualifying conflict, but targeted undertakings — here, to discontinue proceedings and to refrain from lodging proofs of debt — may be sufficient to defuse the conflict where it has not yet concretely materialised.
- The existence of a conflict arising from a liquidator adjudicating proofs of debt lodged by entities the liquidator also controls depends on the specific claims actually made; a court will not remove a liquidator on a purely hypothetical or speculative conflict.
- Section 90-15 of the Insolvency Practice Schedule (Corporations) (Corporations Act 2001 (Cth), sch 2) empowers the Court to act on its own initiative to remove or replace an external administrator where a clear and unavoidable conflict is established, without strictly requiring the applicant to satisfy the standing requirements of s 90-20 if the Court would act in any event.
- A shareholder in a court-ordered (as opposed to members’ voluntary) winding up lacks standing as a “person with a financial interest” under s 5-30 of the Insolvency Practice Schedule, but may nonetheless obtain relief via the Court’s own-initiative power or through standing derived from a concurrent role (e.g., as beneficiary of a trust in receivership).
Why It Matters
This decision reinforces that Australian courts will scrutinise liquidator appointments carefully where the same insolvency practitioners act across multiple related entities in adversarial litigation. The case is one episode in a sprawling multi-proceeding dispute involving alleged tax avoidance schemes and a network of associated companies, and Moore J’s treatment of litigation-side conflicts and proof-of-debt conflicts — grounded in his earlier decision in Krejci (liquidator) v Panella, in the matter of Richmond Lifts Pty Ltd (in liq) (No 3) [2025] FCA 1114 — provides useful practical guidance on when and how undertakings can contain, rather than eliminate, such conflicts.
The decision also highlights the tension between the DCT’s legitimate interest in unified, efficient administrations that facilitate comprehensive investigations into alleged tax schemes, and the rights of shareholders and related parties to insist on an impartial liquidator. By leaving the door open to a future removal application if the conflict later crystallises through actual proof-of-debt adjudication, the Court signals that undertakings are a provisional — not permanent — answer to the problem.