Federal Court of Australia

Holland, in the matter of BCNCulinary Arts Pty Ltd (in liq) (No 2) [2025] FCA 932

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to rule 14.23 of the Federal Court Rules 2011, upon the filing of the final accounts by 4pm on 1 August 2025, Mark Alfred Holland, William James Harris and Anthony Norman Connelly will stand retired as receivers and managers of the assets of:

(a)    Kellace Trust No. 2 established pursuant to a deed dated 23 May 2019;

(b)    Kellace Trust No. 3 established pursuant to a deed dated 23 May 2019;

(c)    Kellace Trust No. 4 established pursuant to a deed dated 10 December 2019;

(d)    Kellace Trust No. 5 established pursuant to a deed dated 6 November 2019; and

(e)    QW Brasserie Trust established pursuant to a deed dated 25 January 2022.

(Trusts)

2.    The costs of this application be paid, jointly and severally, from the assets of the Trusts.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

WHEATLEY J:

INTRODUCTION

1    The application before the Court is one for the retirement of Messrs Holland, Harris and Connolly as court-appointed receivers and managers. Messrs Holland, Harris and Connolly, the Plaintiffs, are also the liquidators of the following five companies:

    BCNCulinary Arts Pty Ltd (in liquidation) (ACN 633 647 417);

    BCNBrasserie Pty Ltd (in liquidation) (ACN 633 647 300);

    BCNEvents QLD Pty Ltd (in liquidation) (ACN 637 938 946);

    BCN Express Pty Ltd (in liquidation) (ACN 645 696 797); and

    QW Brasserie Pty Ltd (in liquidation) (ACN 656 797 036).

(the Companies)

2    Much of the following introductory observations are taken from the judgment in Holland, in the matter of BCNCulinary Arts Pty Ltd (in liquidation) [2024] FCA 752 of his Honour Justice Derrington (2024 Holland). I gratefully adopt those observations from his Honour.

3    On 30 May 2025, an urgent application was made to this Court by the liquidators in relation to the Companies. The Plaintiffs had been appointed as the liquidators of the Companies on 28 May 2024. Each of the Companies formed part of a corporate group that traded food and hospitality businesses and was a corporate trustee of a separate trust.

4    Each of the Companies undertook the following in their capacity as trustee of the relevant trust as described below:

    BCNCulinary Arts Pty Ltd (in liquidation) traded the business Lumiere Events and Culinary Studio as trustee of the Kellace Trust No. 2, established pursuant to a deed dated 23 May 2019;

    BCNBrasserie Pty Ltd (in liquidation) traded the business Mica Brasserie as trustee of the Kellace Trust No. 3, established pursuant to a deed dated 23 May 2019;

    BCNEvents QLD Pty Ltd (in liquidation) traded the business, The Kneadery as trustee of the Kellace Trust No. 4, established pursuant to a deed dated 10 December 2019;

    BCN Express Pty Ltd (in liquidation) traded the business Mica Express as trustee of the Kellace Trust No. 5, established pursuant to a deed dated 6 November 2019; and

    QW Brasserie Pty Ltd (in liquidation) which did not trade but owned a business name as trustee of the QW Brasserie Trust, established pursuant to a deed dated 25 January 2022.

5    The urgent application, which was heard before Derrington J, was seeking orders that the liquidators also be appointed as receivers and managers of the assets of each of the above listed trusts (collectively the Trusts) so that they may proceed to sell those assets expeditiously. At the time of the application and the evidence upon which his Honour relied, it was said that the majority of the assets were perishable. The Companies were no longer, what might be described as, the active trustees of the Trusts. This was because as the Companies were in liquidation, that was an “Event of Disqualification” pursuant to each of the relevant trust deeds. However, as was observed by counsel for the Plaintiffs, each of the Companies remained as bare trustee of the assets, as no other trustee had been appointed. However, as a bare trustee was unable to continue with their duties or perform any acts in relation to the trust assets.

6    His Honour Justice Derrington, in 2024 Holland, made the orders which were sought appointing the Plaintiffs as receivers and managers.

7    The Plaintiffs, being the liquidators and the court-appointed receivers and managers, now seek orders from the Court for their retirement as court-appointed receivers and managers upon the filing of their final accounts.

8    This matter was originally returnable on 25 July 2025 in the Corporations List. However, on that occasion, given Mr Holland’s first and second affidavit, there were some matters which required further explanation and evidence.

9    The matter was adjourned until 29 July 2025. Directions were made for the Plaintiffs to file additional material addressing the matters of concern. A short third affidavit of Mr Holland was filed pursuant to those directions. Counsel has also appeared on the return of the matter to Court which has been of assistance.

Applicable principles

10    The liquidators were also appointed as receivers and managers without security of the assets of the Trusts pursuant to Order 2 made by Derrington J on 31 May 2024 (May 2024 Orders). It is clear that the “receivers”, as defined in the May 2024 Orders, were court-appointed receivers and managers. Furthermore, it is also clear that the Plaintiffs were appointed to the assets of the Trusts. This is apparent by the terms of the May 2024 Orders, in Order 2 and by Order 4, which stated:

…

2.    Mark Alfred Holland, William James Harris and Anthony Norman Connelly (Receivers) be appointed as receivers and managers, without security, of the assets of:

(a)    Kellace Trust No.2 established pursuant to a deed dated 23 May 2019;

(b)    Kellace Trust No. 3 established pursuant to a deed dated 23 May 2019;

(c)    Kellace Trust No. 4 established pursuant to a deed dated 10 December 2019;

(d)    Kellace Trust No. 5 established pursuant to a deed dated 6 November 2019; and

(e)    QW Brasserie Trust established pursuant to a deed dated 25 January 2022.

(Trusts and each a Trust).

…

4.     The Receivers are granted all the powers provided for by s 420 of the Corporations Act 2001 (Cth) (Corporations Act) as if “"the corporation” were a reference to each Trust.

(emphasis in original)

11    In Michael, in the matter of Scenic Hinterland Day Tours Pty Ltd (in liq) (2023) 170 ACSR 500; [2023] FCA 1277, Derrington J summarised at [94]-[98] the relevant applicable legal principles concerning the retirement of a court-appointed receiver and manager as follows, which I gratefully adopt:

94    A Court-appointed receiver and manager has no statutory power to resign or retire. An application must ordinarily be made to the Court for an order that he or she be discharged from the office. Such an order will not be made for the asking; on the contrary, courts have historically been reluctant to discharge a receiver in the absence of some good reason to do so. The position was explained as follows by Young CJ in Re Botar-Tatham Pty Ltd (2001) 52 NSWLR 680, 681 – 682 [7] – [8] (Re Botar-Tatham):

7    Ordinarily, a receiver who has been appointed by the court, will only be discharged if the task committed to him has finalised and ordinarily he will not be discharged on his own application unless he shows a reasonable cause for discharge such as failing health or other incapacity, or unless all parties interested consent; see Halsbury’s Laws of England, 4th ed, vol 39(2), par 470 at 268–269 and the authorities there cited particularly Smith v Vaughan (1744) Ridg T H 251; 27 ER 820. However, the court is able to discharge the receiver if it considers that in all the circumstances it is proper to do so. However, as I understand it, the receiver has no right in the present application to a discharge. The persons interested have been consulted but they have just shown no interest rather than doing anything which could be called consent.

8    The commercial problem is that if the receiver is discharged the company will no longer have any controller. The company is insolvent. The general policy of this court is that no insolvent company must be enabled to go out into the market place and trade. Furthermore, although I have not consulted the memorandum and articles of association, the great probabilities must be that there are no directors or officers of the company who can deal with it. Accordingly, in the public interest, the receiver’s discharge must be linked in some way or other with putting the company to death.

95    Despite what was said in Re Botar-Tatham, more recent authorities have not set an especially high bar for receivers to meet before they will be discharged on their own initiative. The Court may show little hesitation to grant a discharge, in particular, where an adequate justification is provided for the receiver’s departure and he or she is only one of multiple receivers in place in respect of the property, or is proposed to be replaced immediately by another receiver, such that the “commercial problem” referred to by Young CJ does not arise.

96    By way of example, in Australian Executor Trustees Ltd v Provident Capital Ltd (No 3) [2020] FCA 1840, Rares J ordered that a Court-appointed liquidator be retired and two other persons be appointed as joint and several receivers of the company in his place. His Honour explained the basis for these orders at paragraphs [4] – [5], as follows:

4    … On 31 October 2020, Mr Hill retired as a partner of PricewaterhouseCoopers to take up partnership at another firm but, pending the Court’s determination of this application, he remains an employee of his old firm. He did not intend that his appointment continue with him at his new firm and has said, quite properly, that if Mr Walley and Mr Scott, who are current partners of PricewaterhouseCoopers, are appointed in his place, he intends to ensure a steady transition of receivership duties between him and them.

5    Both Mr Scott and Mr Walley are official and registered liquidators. They are appropriate persons to be appointed in Mr Hill’s stead as joint and several receivers of Provident, hopefully, to finalise, as appears to be the case, the receivership in the not too distant future. They have said that they intend to continue charging on the original and still continuing scale of fees that I approved when I first appointed receivers to Provident on 29 June 2012: Australian Executor Trustees Ltd v Provident Capital Ltd (2012) 203 FCR 461. I am satisfied that it is appropriate to allow Mr Hill to be retired as the sole receiver and manager of Provident and for him to be replaced by Mr Scott and Mr Walley as joint and several receivers and will so order.

97    Where an adequate reason for the receiver to be discharged is established, the necessary order may, depending on the circumstances, be made under statute, under the rules of the Court, or in the exercise of the Court’s inherent jurisdiction.

98    In Re Wily, Palmer J found (at 96 [9]) that the Supreme Court of New South Wales had power to accept the resignation of a receiver and to appoint another receiver in his or her place pursuant to Pt 29 r 5(1)(c) and (d) of the Supreme Court Rules 1970 (NSW). That decision was followed by Barrett J in Re Vouris, where his Honour stated as follows at 548 [20]:

… Mr Vouris has been appointed a receiver by the court in respect of the assets of two partnerships. His appointment is sole. In this instance, as Palmer J observed in the Wily case, appropriate jurisdiction of the court is to be found in Pt 29 r 5 of the Supreme Court Rules. There is no power for a receiver to resign, but the court has jurisdiction, whether under Pt 29 or as an element of its inherent jurisdiction, to discharge a receiver. There is no reason why a receiver should not be discharged at his own request, in circumstances of the kind that prevail here. The power to discharge is in Pt 29 r 5(1)(c). There is also a power to appoint another receiver. This is in Pt 29, r 5(1)(d). A combination of those paragraphs allows the court to make an order that with effect on and from 6 May 2004 Mr Vouris be discharged as receiver in each relevant case and that the person proposed for appointment in his place be appointed to be receiver.

12    His Honour in Scenic Hinterland made orders pursuant to s 1323(5) of the Corporations Act 2001 (Cth), permitting Mr Michael to retire from the relevant companies as a court-appointed receiver. This was in part because Mr Michael had been appointed as a joint and several receiver and/or receiver and manager, pursuant to ss 1323(1)(h) and (3) of the Corporations Act. Therefore, he was entitled to make that application pursuant to s 1323(5) of the Corporations Act: see Scenic Hinterland at [101].

13    However, this case is different. Although the May 2024 Orders do not expressly refer to the relevant statutory provision pursuant to which the order was made, it is clear that the application was based on s 57 of the Federal Court of Australia Act 1976 (Cth) (FCA): see Scenic Hinterland at [17]. As such, it is apparent that the May 2024 Orders were made on the basis of s 57 of the FCA and that s 1323(5) of the Corporations Act can not apply.

14    The Plaintiffs in this case seek retirement as court-appointed receivers and managers pursuant to r 14.23 of the Federal Court Rules 2011 (Cth). The Plaintiffs also rely on the liberty to apply order, from the May 2024 Orders.

15    Rule 14.23 of the Federal Court Rules provides as follows:

14.23    Powers

A receiver may apply to the Court for authority to do any act or thing in a proceeding in the receiver’s name or in the name of another party.

16    Counsel for the Plaintiffs was unable to provide any direct authority wherein this rule had been applied to permit retirement of a court-appointed receiver and manager. However, submissions were made regarding the breadth of the Court’s power, both pursuant to s 57 of the FCA and pursuant to r 14.23 of the Federal Court Rules. I accept those submissions on the following basis. Rule 14.23 is within Part 14 of the Federal Court Rules, which is headed “Part 14 Interlocutory Orders for Preservation of Rights and Properties”. Further, Division 14.3, which includes r 14.23, is headed “Receivers”. Division 14.3 provides rules relating to receivers regarding their appointment, powers, remuneration, accounts, default and if the receiver dies. In this context, it is relevant to observe that the terms of r 14.23 are broad. It expressly includes that the receiver may apply to the Court for authority, “…to any act or thing” in a proceeding in the receiver’s name or in the name of another party.

17    The submission was made that given the terms of the rule and the ability to appoint a receiver, there must necessarily be an ability to be able to permit retirement of the court-appointed receiver. It is not necessary to explore or state the full width or breadth of r 14.23 of the Federal Court Rules. It is sufficient to accept that the terms of this rule are adequate to include a power to permit the Court on an application by a court-appointed receiver, to resign or retire. This is particularly so because a court-appointed receiver has no statutory power to resign or retire but must make an application to the Court to resign or retire from that office.

18    Mr Holland, on behalf of himself and Messrs Harris and Connolly, has provided to the Court three affidavits, which are relied on to support this application. Relevantly, he deposes to the following matters:

(a)    that it is necessary and appropriate for them to be permitted to retire from their position as receivers and managers in circumstances where they no longer hold any assets of the Trusts and the tasks that were assigned to them, as receiver and managers, have been completed;

(b)    more particularly, tasks were completed which secured and realised all of the property held on trust by each of the Trusts, disposed of all perishable stock that was unable to be sold and realised all intellectual property, including business names held on trust by the Trusts;

(c)    finally, that there are no further actions to be undertaken by the receivers and managers in relation to any of the Trusts.

19    Further, and by Mr Holland’s third affidavit, he has also given evidence of the following:

(a)    he has made the necessary corrections to his second affidavit which were brought to the Plaintiffs’ attention on the first return date of this application;

(b)    he has explained the printouts of the receipts and payments summaries. On the face of these documents, it appeared that these summaries were to be attributable to the Companies only. Of course, such summaries should have been in relation to the Trusts (or more particularly each of the Companies as trustee of the relevant trust). However, it was explained that the documents were simply how the printouts are presented, once printed by the corporate insolvency case management software that is used by the Plaintiffs’ firm. That being how the case management software presents some of the information. The receipts and payment summaries were properly of each of the trustees of the Trusts;

(c)    he has explained the entries in the receipts and payments summaries in relation to the “stock”. Exhibited to Mr Holland’s first Affidavit was a detailed stocktake which sought to attribute items of stock to one or more of the Trusts. Of course, the initial application for appointment as receivers and managers was on the basis of the perishable nature of much of the assets of the Trusts, being stock. Those entries in the stocktake did not correlate to the entries in the receipts and payments summaries. Mr Holland has explained this apparent inconsistency in his third Affidavit. The item in the receipts and payments summary for “The Kneadery”, described as pre-appointment debtors, relates to stock which had been committed to customer orders because of the just-in-time inventory management system which was undertaken by The Kneadery. The sale of that stock was by way of the realisation of pre-appointment orders but post-appointment sales. Although it related to “stock” and was perishable, it was described as pre-appointment debtors in the receipts and payment summaries. The entry in the receipts and payments summaries which was described as “stock” was the remainder of the stock on hand which had not been committed to orders and was sold. Once explained, it was clear there was no inconsistency;

(d)    the final matter explained was in relation to the plant and equipment.

20    The concerns regarding the material filed in support of the retirement application, which were raised with the receivers and managers on the first return date, have been satisfactorily explained by the third Affidavit of Mr Holland.

21    The commercial problem as identified by Young CJ in the Re Botar-Tatham decision, referred to by Derrington J at [94] of Scenic Hinterland, is one which will not arise in the circumstances of this case. Messrs Holland, Harris and Connolly will remain as liquidators of the Companies and as such, there will be no vacancy left in relation to these entities on the retirement of the Plaintiffs as the receivers and managers.

22    As such, in all of the circumstances of this case, I am satisfied that it is appropriate to make the orders as sought, with one amendment to provide for the particular date upon which the accounts will be filed in the Court.

Associate:    

Dated:    8 August 2025