Federal Court of Australia

Wake, in the matter of Wake (Bankrupt) [2025] FCA 1481

ORDERS

THE COURT ORDERS THAT:

1. Pursuant to s 206G(1)(c) of the Corporations Act 2001 (Cth), the plaintiff have leave to manage Agric Pty Ltd (ACN 137 462 152) (Agric), subject to the condition that, until such time as the plaintiff ceases to be a director of Agric, or is no longer disqualified from managing corporations under Part 2D.6 of the Corporations Act, Agric not engage in any activities other than acting as trustee of the Wake Family Superannuation Fund (Fund) and doing things that are reasonably incidental to so acting.

2. Pursuant to s 126J(1)(b) of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act), the plaintiff not be a disqualified person for the purposes of the SIS Act, subject to the condition that, until such time as the plaintiff is discharged from bankruptcy, he not be, or act as, trustee, investment manager or custodian of any superannuation entity other than the Fund.

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

REASONS FOR JUDGMENT

MCDONALD J:

Introduction

1 The plaintiff, Michael Wake, became a bankrupt on 1 April 2025. On 30 September 2025, he filed an originating process seeking orders that would permit him to manage Agric Pty Ltd (ACN 137 462 152) (Agric), which is the trustee of the Wake Family Superannuation Fund (Fund), a self managed superannuation fund of which Mr Wake is a member. In particular, he seeks orders to the effect that:

(a) pursuant to s 206G(1)(c) of the Corporations Act 2001 (Cth), and subject to the condition in paragraph (b) below, Mr Wake have leave to manage Agric;

(b) until such time as Mr Wake is no longer disqualified from managing corporations under Part 2D.6 of the Corporations Act, Agric must not engage in any activity other than acting as trustee of the Fund and doing things that are reasonably incidental to so acting; and

(c) pursuant to s 126J(1)(b) of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act), Mr Wake not be a disqualified person in relation to Agric and the Fund.

2 For the reasons that follow, I am satisfied that it is appropriate to make orders which will have essentially the same effect as those which are sought by Mr Wake.

Factual background

3 The following summary of relevant facts is based on the affidavit evidence of Mr Wake and Ms Wake.

4 Mr Wake is a former farmer and businessman. He has a long history of owning and managing agricultural properties. In 1979, Mr Wake established the Fund as a self managed superannuation fund. The members of the Fund are Mr Wake and his wife, Tessa Wake. Mr Wake is aged 75 and Ms Wake is 73.

5 Agric became the corporate trustee of the Fund in 2009. Until 1 April 2025, Mr Wake and Ms Wake were the directors of Agric, as required by s 17A(3) of the SIS Act. On 1 April 2025, by reason of his becoming a bankrupt, Mr Wake became disqualified from managing corporations by operation of s 206B(3) of the Corporations Act, and automatically ceased to be a director of Agric by operation of s 206A(2)(a). Ms Wake continues to act as the sole director of Agric.

6 The principal assets of the Fund are two farms, known as Taraview and Clevelands, both of which are located near Cleve on the Eyre Peninsula in South Australia. Taraview comprises about 851ha and Clevelands comprises about 760ha. There is a homestead on each farm. Both farms are used to grow crops – mainly wheat, barley and canola. The two farms are contiguous and, between them, are situated on eight titles. In April 2025, the farms were independently professionally valued at close to $7 million in total.

7 The properties on which the farms are located are held by Premium Custody Services Pty Ltd (ACN 132 716 431) (Premium) on trust for Agric in its capacity as trustee for the Fund. This arrangement was established by Mr Wake to enable Premium to obtain finance for the purchase of the farms. Premium entered into a limited-recourse borrowing agreement with the Commonwealth Bank of Australia, pursuant to which funding for the acquisition of the properties comprising the farms was advanced (CBA Loan). Premium granted security over the properties by way of registered mortgages to the Commonwealth Bank. In July 2024, the term of the CBA Loan expired, with the consequence that the CBA Loan became immediately repayable in full, but it was not repaid at that time. The CBA Loan is the only significant liability of the Fund. Recent developments in relation to the CBA Loan are discussed further below.

8 The Fund’s income for the financial year ended 30 June 2025 comprised around $250,000 in rent from the two farms, and $200 in dividends from shareholdings in two unlisted companies. The audited accounts and audit reports for each of the financial years ending 30 June 2022, 2023 and 2024 record that the Fund was compliant with the requirements of the SIS Act. It is also now expected that the Fund will be able to demonstrate compliance with those requirements in respect of the year ending 30 June 2024.

Events leading to Mr Wake’s Bankruptcy

9 As at 2018, Mr Wake operated seven farms totalling over 10,000ha of arable land and 8,000ha of grazing land. Each of the farms was operated by Mr Wake through a company called Romley Pty Ltd (of which Mr Wake was director) in its capacity as trustee for the Somerset Unit Trust (Romley). Two of the farms were leased by Romley from third parties, three were beneficially owned by Ms Wake and Mr Wake and their family through certain trust structures, and the remaining two farms were Clevelands and Taraview, which were operated by Romley under lease agreements between Romley and Agric.

10 In addition to the farming businesses, Mr Wake also operated two vineyard businesses. One, located near Waikerie, was operated through a company called Ramco Vineyards Pty Ltd (Ramco Vineyards). The other, near Clare, was operated through a company called Hill River Estate Wines Pty Ltd (Hill River Estate).

11 Following the completion of the 2020/2021 harvest in early 2021, Romley had accrued liabilities to Nutrien Ag Solutions Ltd (Nutrien), an agricultural supplier, for payment in respect of fertilisers and pesticides used in connection with the 2019 and 2020 crops. Also in early 2021, Mr Wake’s existing lender for the farming businesses was unwilling to provide finance for future crops.

12 As a result of the financial impact of poor harvests and the costs required to maintain the vineyard businesses, Mr Wake required ongoing finance to continue with the 2021/2022 crop and harvest. Mr Wake, on behalf of Romley, obtained finance from a specialist agricultural lender, Thera Capital Management (Thera). Thera agreed to provide $3 million in funding to Romley to finance the 2021/2022 crop pursuant to the terms of two loan facility agreements: one between a corporation associated with Thera, Thera Agri Capital No 2 Pty Ltd (Thera Agri), and Romley, and one between Mr Wake, Mrs Wake and a different entity associated with Thera (Thera Loan Agreements). Thera Agri also provided finance to Mr Wake’s vineyard business through a facility agreement between Thera Agri and Hill River Estate, which was guaranteed by Ramco Vineyards and by Mr Wake in his personal capacity.

13 Mr Wake also agreed to personally guarantee the liability to Nutrien as a condition of Nutrien’s continuing to supply products to the farms.

14 The funding provided pursuant to the Thera Loan Agreements funded the 2021/2022 crop. In February 2022, Thera asserted that Romley was in default pursuant to the Thera Loan Agreements and refused to provide continuing funding. Mr Wake and Ms Wake used their personal resources to fund the 2022/2023 crop.

15 On 21 October 2022, Thera appointed receivers and managers (receivers) to Romley. The receivers took control of the operations at the farms operated by Romley, including completion of the harvest of the 2022/2023 crop. The receivers paid the rent on the Clevelands and Taraview farms to Agric for the duration of the 2022/2023 harvest, but stopped doing so, and disclaimed the leases, once the harvest was completed. Due to the relatively low yield from the crop harvested in 2023, together with the costs of the receivership, a significant liability remained payable to Thera. In late 2022, Thera commenced proceedings in the Supreme Court of South Australia, seeking judgment for the outstanding amounts jointly owed by Mr Wake and Ms Wake, and also sought orders for possession of their home in North Adelaide (Thera proceedings).

16 Around the same time as the receivers’ appointment, the farming businesses had a significant outstanding balance owing to Nutrien, which Mr Wake had personally guaranteed, as well as amounts payable to other suppliers, which he had intended to pay using funding from Thera. In 2022, Nutrien commenced proceedings against Mr Wake in the County Court of Victoria pursuant to the personal guarantees he had given in relation to the fertiliser and chemicals that Nutrien had supplied to Romley. On 3 February 2023, Nutrien obtained judgment against Mr Wake. On 2 September 2024, Nutrien caused a bankruptcy notice to be issued to Mr Wake. Mr Wake failed to comply with the requirements of the bankruptcy notice within the period specified for compliance, and on 15 January 2025, Nutrien filed a creditor’s petition against Mr Wake in the Federal Circuit and Family Court of Australia (Division 2) (FCFCOA).

17 On 1 April 2025 a registrar of the FCFCOA made sequestration orders in relation to Mr Wake’s estate. Robert Naudi of Rodgers Reidy was appointed as the trustee in bankruptcy of Mr Wake’s estate.

18 Mr Wake has provided a statement of affairs to Mr Naudi in accordance with s 54 of the Bankruptcy Act 1966 (Cth) and has sought to respond in a timely manner to all requests made by Mr Naudi. Mr Naudi has provided confirmation that Mr Wake has co-operated with him and complied with requests for information, and that he is not aware of any allegations of fraud or dishonest behaviour by Mr Wake, or of any matters that contradict anything said in the first affidavit made by Mr Wake in these proceedings. Mr Naudi has indicated that he does not wish to oppose or otherwise take any position in relation to this application.

19 The Thera proceedings were stayed against Mr Wake in his personal capacity once he became a bankrupt, but not against Mr Wake in his capacity as bare trustee. The Thera proceedings have now been resolved by agreement, on the basis that the proceeds of the sale of the Wakes’ residence in North Adelaide (North Adelaide residence) are to be paid to Thera in full and final settlement of its claim.

Current operation of the Fund and the intentions of Mr Wake

20 After the receivers forfeited the lease over Clevelands and Taraview in 2023, Mr Wake and Ms Wake leased the titles comprising the farms (but not the homesteads) to a distant relative who, Mr Wake deposes, is not a “relative” within the meaning of s 10 of the SIS Act. While these leases generate some revenue for the Fund, the amount generated is insufficient to service the interest payable on the CBA Loan and the pension payments that are required to be made to Mr Wake and Ms Wake. In order to pay the interest and other amounts required to be paid by the Fund, Ms Wake has redirected her pension payments back into the Fund by way of contributions. Mr Wake commuted his pension payable by the Fund prior to 30 June 2025, and no longer receives any income from the Fund, although he still has a member balance.

21 Mr Wake has provided the following evidence about Clevelands and Taraview and his future aspirations with respect to them:

I believe the Clevelands and Taraview farms are ideally located to take advantage of the development of solar and wind renewable energy projects in South Australia. Not only are both properties located on sites with favourable wind and solar conditions, there is a major electricity interconnector between Port Lincoln and Port Augusta which passes very close to the corner of the property. An electricity sub-station is located 3 kilometres from the corner of the property. This means that the necessary infrastructure to transport renewable energy to the grid is not an impediment to the development of a wind and solar project on the farms, as it is with many other possible sites.

My preference for the future utilisation of the assets of the Fund would be to secure a lease of the properties, or the applicable titles of the properties, to a solar or wind generator. I would anticipate significant rental income may be available from such a project.

In the short term, it is necessary for the Fund to be managed appropriately while endeavouring, so far as possible, not to take steps which would undermine the availability of such an investment at the right time. For this reason I believe it is important to be careful about when and how the homesteads are leased, or the smaller titles sub-divided, so as not to create a situation where objections may be taken to future development.

The CBA Loan

22 As mentioned above, the loan between Premium and the Commonwealth Bank, which financed the purchase of the Clevelands and Taraview farms, expired in July 2024 and became due to be repaid in full in accordance with the terms of the CBA Loan. The Fund does not hold sufficient cash to discharge the CBA Loan and has been unable to generate sufficient income to pay the interest which regularly accrues on the CBA Loan. As at 25 September 2025, the total outstanding balance of the CBA Loan, including unpaid interest accrued since July 2024, was $761,807.60.

23 On 16 October 2025, a mediation under the Farm Debt Mediation Act 2018 (SA) was held between Agric (represented by Ms Wake) and the Commonwealth Bank. An agreement was reached, under which Agric is to have until 30 June 2026 to repay the CBA Loan in full. Ms Wake has deposed that she proposes to repay the CBA Loan by refinancing the loan or, if Agric is unable to refund the loan, by making preparations for the sale of assets of the Fund sufficient to repay the loan. Ms Wake has taken steps to explore the refinancing of the CBA Loan or the sale of some of the real property held by Agric as trustee of the Fund. She has discussed this strategy with Mr Wake and anticipates that, if he is permitted to be reappointed as a director, they would work together to implement it.

24 The Commonwealth Bank has been provided with a copy of the first affidavit filed by Mr Wake in these proceedings, and has confirmed that it does not oppose or wish to be heard in relation to the present application.

Relevant convictions

25 Mr Wake has made disclosure of convictions which are relevant to the exercise of the discretion to make the orders sought by Mr Wake in these proceedings.

26 In 2023, Mr Wake failed to provide Reports on Company Affairs and Property to the liquidator of Romley and the receiver of another trustee company, Wishford Nominees Pty Ltd (Wishford). Mr Wake deposes that the reason for his failure to provide the reports within the required time period was that the books and records of the companies were in the possession of the receivers and managers appointed by Thera. Mr Wake accepts, however, that this was not a reasonable excuse for failing to comply with his obligations (see, eg, s 475(11) of the Corporations Act).

27 On 5 September 2024, Mr Wake complied with the obligations under the Corporations Act (though outside of the time by which he had been required by law to do so) and provided a Report on Company Affairs and Property in respect of Romley to the liquidator, and a Report on Company Affairs and Property in respect of Wishford to ASIC.

28 Mr Wake was charged with, and later pleaded guilty to, offences against ss 475(1) and 530A(1) of the Corporations Act in respect of Romley, and s 429(2)(b) of the Corporations Act in respect of Wishford. On 18 October 2024, Mr Wake was convicted of each offence in the Magistrates Court of South Australia and was released under s 20(1)(a) of the Crimes Act 1914 (Cth) without the Court passing sentence, on the basis that he enter a $1,000 bond to be of good behaviour for two years.

The reasons for the present application

29 Mr Wake’s reasons for making the present application, based on legal advice that he has received, are expressed as follows in [84]-[85] of his first affidavit:

If I am not granted leave to be reappointed as a director of Agric and a relevant person for the Fund, the Fund will cease to be a self-managed superannuation fund for the purposes of section 17A of the SIS Act and will, after the expiration of the 6 month grace period contained in section 17A(4), be required to appoint a trustee that holds a Registrable Superannuation Entity (RSE) licence issued by the Australian Prudential Regulation Authority (APRA) pursuant to the SIS Act or commence winding up the Fund. Via my solicitors I have made enquiries with Equity Trustees Superannuation Limited, which is an authorised trustee. I am informed by my solicitors and verily believe that, based on my solicitors’ enquiries, such trust companies are typically unable to take appointment as trustee of a fund which holds limited recourse financing of the type described above. This is due to the relevant RSE licensing conditions.

If action is not taken urgently, the Commissioner of Taxation may issue a notice of noncompliance to the Fund. A significant consequence for the Fund if it becomes noncompliant will be that it loses the concessional tax treatment which is available to superannuation funds. In addition, the Fund will be required to pay tax at the highest marginal tax rate on the market value of all assets of the Fund (less any contributions not previously included in the Fund's assessable income) under section 295-325 of the Income Tax Assessment Act 1997.

30 Ms Wake supports the application made by Mr Wake. She has deposed that she understands the basis on which the application is made and believes that it is in the best interest of Agric for Mr Wake to be reappointed as a director.

The position of the regulators

31 There is no contradictor to this application. On 13 August 2025, Mr Wake, by his solicitors, gave notice of the application to each of the Commissioner of Taxation (Commissioner), the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC), in accordance with s 126J(3) of the SIS Act.

32 On 22 October 2025, I made orders requiring that any third party that wished to be heard in the proceedings, including the Commissioner or ASIC, file a notice of appearance and any affidavit evidence on which it would seek to rely. Those orders were served on the Commissioner and ASIC. On 4 November 2025, the Australian Taxation Office wrote to Mr Wake, confirming that the Commissioner does not wish to be heard, and neither consents nor opposes the orders sought in the present application. On 14 November 2025, ASIC wrote to Mr Wake’s solicitor, advising that it neither opposes nor consents to the present application. No response has been received from APRA.

33 I am satisfied that each of the Commissioner, ASIC and APRA is on notice of the proceedings and none of them has sought to oppose the application by Mr Wake.

Relevant legislative provisions

34 Section 206A(2)(a) of the Corporations Act provides:

(2)    A person ceases to be a director, alternate director or a secretary of a company if:

(a)    the person becomes disqualified from managing corporations under this Part; and

(b)    they are not given permission to manage the corporation under section 206GAB or 206G.

35 Section 206B(3) of the Corporations Act provides:

Bankruptcy or personal insolvency agreement

(3)     A person is disqualified from managing corporations if the person is an undischarged bankrupt under the law of Australia, its external territories or another country.

36 Section 206G(1)(c) of the Corporations Act confers power on the Court to grant leave to a person to manage a particular corporation. In full, s 206G(1) provides:

Court power to grant leave

(1)    A person who is disqualified from managing corporations may apply to the Court for leave to manage:

(a)    corporations; or

(b)    a particular class of corporations; or

(c)    a particular corporation;

if the person was not disqualified by ASIC.

37 Section 206G(3) provides that an order granting leave under s 206G(1) “may be expressed to be subject to exceptions and conditions determined by the Court”. The grant of leave may later be revoked on an application made by ASIC: s 206G(5).

38 Turning to the SIS Act, its principal objects include “to make provision for the prudent management of certain superannuation funds” and for their supervision by regulators: SIS Act, s 3(1). Superannuation funds which are regulated under the SIS Act “may become eligible for concessional taxation treatment”: s 3(2). Self managed superannuation funds are one kind of regulated superannuation entity. The Commissioner is generally responsible for the supervision of self managed superannuation funds: s 4.

39 Under s 17A(1) of the SIS Act, a superannuation fund which has more than one member is a self managed superannuation fund if, and only if, it meets the requirements set out in that subsection. Relevantly to the circumstances of the present case, the fund must have no more than six members; each director of the corporate trustee must be a member of the fund; and each member of the fund must be a director of the corporate trustee. If a superannuation fund ceases to meet the definition of a self managed superannuation fund then it may become a registrable superannuation entity (which is defined to exclude self managed superannuation funds: SIS Act, s 10(1)). A person can only be a trustee of a registrable superannuation entity if they hold (or a group of which they are a member holds) an RSE licence: s 29J(1).

40 The effect of s 17A(4) of the SIS Act is that, if a person who is one of several directors of a corporate trustee of a self managed superannuation fund becomes disqualified, so that the fund ceases to meet the basic requirements for self managed superannuation funds set out in s 17A(1), the fund does not immediately cease to be a self managed superannuation fund. Rather, it remains a self managed superannuation fund for six months after the date of the disqualification. Section 17A(4) provides:

Circumstances in which entity that does not satisfy basic conditions remains a self managed superannuation fund

(4)    Subject to subsection (5), if a superannuation fund that is a self managed superannuation fund would, apart from this subsection, cease to be a self managed superannuation fund, it does not so cease until the earlier of the following times:

(a)     the time an RSE licensee of the fund is appointed;

(b)     6 months after it would so cease to be a self managed superannuation fund.

41 It would appear that the Fund ceased to be a self managed superannuation fund with effect from 1 October 2025, by operation of s 17A(4)(b) of the SIS Act. That is because Ms Wake has been the sole director of Agric, the trustee of the Fund (of which Mr Wake remains a member), since 1 April 2025, due to Mr Wake’s having ceased to be a director of Agric by operation of s 206A(2)(a) of the Corporations Act.

42 An individual may become a disqualified person if they are disqualified by a decision made by the Commissioner under s 126A of the SIS Act or by the Federal Court under s 126H: see s 120(1)(c). An individual also automatically becomes a disqualified person if, relevantly, “the person is an insolvent under administration”: s 120(1)(b). That is defined in s 10(1) of the SIS Act to include, relevantly, an undischarged bankrupt under the Bankruptcy Act.

43 It is an offence for a disqualified person, knowing that they are a disqualified person, to act as a trustee, investment manager or custodian of a superannuation entity: SIS Act, s 126K.

44 Section 126J of the SIS Act, insofar as it is relevant, provides:

126J Court power to revoke or vary a disqualification etc.

(1)    A disqualified person … may apply to the Federal Court of Australia for:

…

(b)    … an order that the person is not a disqualified person.

(2)    If the Court … makes an order under paragraph (1)(b), then, despite section 120, the person is not a disqualified person.

(3)    At least 21 days before commencing the proceedings, written notice of the application must be lodged:

(a)     if the disqualified person makes the application—by the person with the Regulator; or

…

(4)    An order under paragraph (1)(b) may be expressed to be subject to exceptions and conditions determined by the Court.

45 Section 40(1) of the SIS Act relevantly provides that the regulator may give a written notice to a trustee of an entity, stating whether the entity is or is not a complying superannuation fund, in relation to a year of income specified in the notice. Where an entity has been a self managed superannuation fund for any time during a year of income (as will be the case for Agric in the present year of income), s 42A(2) provides that the entity may nevertheless be a complying superannuation fund if certain conditions – relevantly defined by reference to ss 42A(5) and 42(1A) – are satisfied. Moreover, s 41(1) of the SIS Act provides that, except in the circumstances identified in s 41(2) (which would not apply to Agric), the regulator (relevantly, the Commissioner) is not required to give an entity a notice under s 40.

46 It is not necessary to give more detailed consideration to these provisions for the purposes of deciding the present application by Mr Wake. It will be a decision for the Commissioner whether a notice can or should be issued to Agric under s 40(1) of the SIS Act, and nothing in these reasons should be understood as intended to influence that decision. For present purposes, it is sufficient to note that it is much more probable that the Fund will become a non-complying superannuation fund if Mr Wake is not able to resume acting as a director of Agric.

47 Unless and until the Commissioner issues a notice under s 40 of the SIS Act, the Fund will remain a “complying superannuation fund”, as provided for in s 45(1)(b) of the SIS Act. If the Commissioner does issue a notice under s 40(1), the Fund will be a “non-complying superannuation fund” for tax purposes: see the definitions of “complying superannuation fund” and “non-complying superannuation fund” in s 995-1 of the Income Tax Assessment Act 1997 (Cth) (ITA Act).

48 Should the Fund become a non-complying superannuation fund, the consequences would be that:

(a) the tax rate applicable to the taxable income of the Fund will be 45%, rather than the 15% rate which applies to complying superannuation funds (Income Tax Rates Act 1986 (Cth), s 26);

(b) the Fund would not be entitled to the 33⅓% discount on capital gains that is available for complying superannuation funds (ITA Act, s 115-100(b)(i)); and

(c) the income for the Fund for the year in which it becomes a non-complying superannuation fund will be taken to include an amount of “Ordinary income and statutory income from previous years”, worked out in accordance with the formula set out in s 295-325 of the ITA Act (ITA Act, s 295-320, item 2).

The power of the Court to make the order sought under s 126J(1)(b) of the SIS Act

49 Mr Wake properly points out that a potential issue arises as to whether the power of the Court to make an order under s 126J(1)(b) of the SIS Act is available in a situation such as the present, where the relevant regulator in respect of the Fund is the Commissioner.

50 The issue arises because s 126J appears in Subdivision B of Division 3 of Part 15 of the SIS Act. The first provision of Subdivision B, s 126G, states that Subdivision B “applies to the extent that the Regulator is APRA”. This may be juxtaposed with the first provision of Subdivision A, s 126, which states that Subdivision A “applies to the extent that the Regulator is the Commissioner of Taxation”.

51 The provisions of subdivision A confer power on “the Regulator” (ie, the Commissioner) to disqualify individuals in certain circumstances (s 126A) and to receive and determine applications by certain individuals for waiver of disqualification (ss 126B and 126D). However, as is clear from the terms of s 126B(1)(a), an application for the Commissioner to waive the disqualification of an individual may only be made where the individual has been disqualified by operation of s 120(1)(a)(i) – that is, where “the individual was convicted of an offence against or arising out of a law of the Commonwealth, a State, a Territory or a foreign country, being an offence in respect of dishonest conduct”. The power conferred on the Commissioner is not available in relation to individuals who are disqualified person for other reasons.

52 The second provision in Subdivision B, s 126H, empowers this Court, on application by “the Regulator”, to make an order disqualifying an individual from acting as the trustee or a responsible officer of a particular superannuation entity, a class of superannuation entities, or any superannuation entity, for a period that the Court considers appropriate. In light of s 126G, the reference to “the Regulator” in s 126H should evidently be read as limited to APRA. At least on one view, the reference to an individual in s 126H should, presumably, also be read as referring to an individual “to the extent that” APRA is the regulator in respect of that individual by reason of their conduct or position in connection with a regulated superannuation fund.

53 Section 126J, which is set out at [44] above, contemplates an application to the Court made by a disqualified person or by the Regulator. Presumably, again, in light of s 126G, the reference to “the Regulator” in s 126J should be understood as a reference to APRA, only. The power conferred by s 126J(1)(a) relates to a disqualification that arises by reason of an order made under s 126H. However, the power in s 126J(1)(b) is general, and relates to a disqualification that arises in any way, including by operation of s 120(1)(b).

54 One possible reading of s 126J, in the light of s 126G – and perhaps on one view the most natural reading – is that it only permits an application to be made by a disqualified person where the relevant regulator for that person is APRA (putting aside the difficulty in identifying precisely what that would mean – as to which, see [56] below). On that construction of ss 126G and 126J, the overall effect of subdivisions A and B of Division 3 of Part 15 of the SIS Act would seem to be that:

(a) a disqualified person for whom the regulator is the Commissioner may apply under s 126B to have the disqualification lifted by the Commissioner under 126D, but only if the disqualification arose only because of the person’s conviction for an offence of dishonesty;

(b) a person for whom the regulator is the Commissioner may apply (whether to the Commissioner or the Court) for the lifting of a disqualification if the person is disqualified for any other reason (including because they are an insolvent under administration – which would ordinarily be a less serious basis for disqualification than conviction of an offence of dishonesty); and

(c) a disqualified person for whom the regulator is APRA may apply for the disqualification to be lifted, whether it was imposed by the Court under s 126H or by operation of any other provision (including because they are an insolvent under administration).

55 However, there are considerations that point away from that interpretation of ss 126G and 126J. First, the combination of consequences outlined above would be surprising, and would not seem to serve any sensible and consistent legislative policy.

56 Secondly, while it makes sense for APRA to be able to apply for an order disqualifying person involved in the management of regulated superannuation funds over which APRA has regulatory responsibility (as provided for in s 126B), it is not easy to understand how it can be said that APRA is “the Regulator” in respect of a person who has become a disqualified person because a provision of the SIS Act operated by reference to some fact external to the SIS Act itself (such as the person’s becoming a bankrupt). It is not clear what it would mean to say that “the Regulator” in respect of a particular disqualified person is (or is not) APRA, because the administration of the SIS Act between the three regulators is generally divided by reference to particular provisions of the SIS Act, rather than by reference to individuals: see SIS Act, ss 5 and 6.

57 Thirdly, assuming it is possible to say of a particular individual who is a disqualified person that “the Regulator is APRA”, the possible construction identified above would have the further anomalous consequence that a person for whom the regulator is APRA could apply to lift the disqualification to enable them to be the director of a self managed superannuation fund (ie, a fund for which the relevant regulator would be the Commissioner), whereas a person for whom the regulator is the Commissioner could not so apply: cf Wright v Australian Prudential Regulation Authority [2024] FCA 183, where the plaintiff, who was disqualified by reason of a decision made by APRA pursuant to the since-repealed s 120A of the SIS Act, sought an order that he not be a disqualified person, so that he could become the director of a trustee of a self managed superannuation fund.

58 Fourthly, to read the expression “disqualified person” in s 126J(1) of the SIS Act as meaning only a disqualified person whose conduct was regulated by APRA, rather than ASIC or the Commissioner, would be in tension with the specific provision made in s 120(1), which states that, for the purposes of Part 3 of the SIS Act (which includes s 126J), an individual is a “disqualified person” if any of the conditions referred to in pars (a), (b) or (c) of s 120(1) is satisfied. Insofar as ss 120(1) and 126G might each appear to identify different referents for the expression “a disqualified person” as it is used in s 126J(1), the following well-known statement of McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at 382 [70] is apposite:

Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court “to determine which is the leading provision and which the subordinate provision, and which must give way to the other”. Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.

(Footnotes omitted.)

59 I consider that s 126J can, and should, be read so as to permit a disqualified person to apply for the lifting of the disqualification, whether or not APRA is the regulator in respect of that person or particular conduct of that person. Textually, this is achieved by effectively construing s 126G as meaning that the provisions of Subdivision B, insofar as they refer to applications by “the Regulator”, apply (only) to the extent that the regulator is APRA.

60 The effect of this construction is that the expression “disqualified person” in s 126J(1) is given the full meaning which s 120(1) says it is to have for the purposes of Part 3 of the SIS Act, and that any person who is a disqualified person by operation of the SIS Act is able to apply to the Court for an order that they not be a disqualified person. This gives Division 3 of Part 15 of the SIS Act a harmonious operation and avoids the creation of arbitrary distinctions that serve no evident legislative policy.

61 For these reasons, the better view is that the Court does have power to determine Mr Wake’s application. Although this issue does not appear to have been addressed specifically in previous judgments of this Court, this conclusion is consistent with the way in which the Court has proceeded in those similar cases: see Frigger; Re Frigger [2019] FCA 1730; Macalister; Re Macalister [2021] FCA 1455 (Macalister); Dessmann; Re Dessmann [2023] FCA 1019 (Dessmann); Barry; Re Barry [2024] FCA 13; Orel; Re Orel [2025] FCA 590; Roberts; Re Roberts [2025] FCA 957.

Principles applicable to the exercise of the discretion

62 The discretion conferred on the Court by s 126J(1)(b) of the SIS Act and the discretion to grant leave under s 206G(1) of the Corporations Act have been considered together in several judgments, which provide some guidance as to the scope of the discretion and the manner in which it should be exercised. These were recently reviewed by Hespe J in Dessmann at [13]-[17]. Further factors relevant to the exercise of the discretion were also identified by Banks-Smith J in Macalister at [19]-[21].

63 In Re Porter, Application under the Superannuation Industry (Supervision) Act 1993 [2012] FCA 1431 (Re Porter), Foster J explained the power conferred by s 126J(1)(b) as follows (at [29] and [31]):

… I think that s 126J(1)(b) should be interpreted as conferring a broad discretion upon the Court to decide whether to make the order contemplated by the subsection and, if so, on what terms. In considering whether to exercise the discretion and, if so, how, the Court must take into account the purpose or object of the SIS Act and, in particular, the purpose or object of Pt 15 of that Act. The object of the SIS Act is set out in s 3. The object of Pt 15 is specified in s 119. Therefore, in any given case, when the Court’s jurisdiction under s 126J(1)(b) is engaged, the Court is obliged to determine the application by paying due regard to the fact that:

(a)    Part 15 of the SIS Act is intended to set out rules governing the eligibility of persons to take up positions of responsibility with superannuation entities; and

(b)    The principal object of the SIS Act generally insofar as superannuation entities are concerned is to make provision for the prudent management and supervision of such entities.

64 In Dessmann, Hespe J summarised the applicable principles as follows (at [15]-[17]):

Consistent with the principles that have developed in relation to s 206G of the Corporations Act, the applicant bears the onus of establishing that the Court should make an exception to the legislative policy underlying the prohibition in the Act: Re Porter at [32]-[33], citing Duffy; Re Westgate Ports Ltd (2010) 79 ACSR 267 at [19] (Gordon J).

Before lifting a disqualification, the Court generally has regard to the interests of affected persons. In the Corporations Act context, the Court has regard to those persons who would be affected if the applicant assumes positions on the board or in management and those affected persons will include shareholders, creditors and employees, and the public: Adams v Australian Securities & Investments Commission [2003] FCA 557; (2003) 46 ACSR 68 at [8] (Lindgren J). In the context of a SMSF and the SIS Act, affected persons may include creditors, existing trustees and the members of the fund.

The Court will also look to the circumstances in which the debts giving rise to the bankruptcy were not paid, and the extent to which an applicant has cooperated with the trustee in bankruptcy: Frigger, in the matter of an application by Frigger [2019] FCA 1730 at [12] (Jackson J); GRD v BJD [2018] WASC 374 at [12] (Master Sanderson), applying Chye v Australian Securities & Investments Commission [2012] FCA 1405 (Bromberg J).

Determination

65 Mr Wake’s bankruptcy and his convictions for contraventions of the Corporations Act provide some basis for concern as to whether he will prudently manage the financial affairs of Agric, if permitted to be its director. An important consideration is the potential for an adverse effect on the interests of creditors. Presently the main creditor of Agric is the Commonwealth Bank and it has entered into arrangements for the effective extension of the CBA Loan in the knowledge that Mr Wake has made the present application, and has not sought to take a position in opposition to the present application. The evidence indicates that the value of the assets of the Fund comfortably exceed the outstanding balance of the CBA Loan. There appears to be no real risk that the CBA Loan will be unable to be repaid in the future, even if the loan cannot be refinanced and some of the assets of the Fund are required to be sold.

66 Because she is a member of the Fund, it can be confidently assumed that Ms Wake will remain a director of Agric, and I am satisfied that the strategic direction Agric will adopt if Mr Wake becomes a director is likely to be similar to that which Ms Wake has identified. Ms Wake, as the current director of the Fund, has taken steps to prepare to refinance or otherwise repay the CBA Loan, and to ensure the future solvency of the Fund.

67 I accept that, given the nature of the financing arrangements that presently exist in relation to the Fund, it is not feasible to appoint an entity that holds an RSE licence as trustee of the Fund.

68 I accept that it would be in the interests of the members of the Fund – and, in particular, in the interests of Ms Wake – for Mr Wake to be permitted to resume acting as a director of Agric. If that cannot occur, there would be a likelihood of the Commissioner issuing a notice under s 40(1) of the SIS Act that would have serious adverse tax consequences for both Mr Wake and Ms Wake. In that event, assets of the Fund would need to be sold and the Fund would not be entitled to concessional capital gains tax treatment in respect of the sale of assets. The Fund would also be required to pay additional income tax in the present financial year, by reference to the value of the assets of the Fund, as provided for in s 295-320 of the ITA Act.

69 There is nothing in the material before me to suggest that Mr Wake has acted dishonestly in the past. I have had regard to the circumstances that gave rise to Mr Wake’s bankruptcy. I do not consider that the circumstances in which the debts that led to Mr Wake’s bankruptcy arose are such as to preclude the making of the orders he seeks. I note that Mr Wake has cooperated satisfactorily with Mr Naudi as his trustee in bankruptcy. I accept that Mr Wake intends to, and will, comply with his obligations under the Corporations Act and the SIS Act if the relief he seeks is granted.

70 The present application is made for a confined purpose, and the orders excepting Mr Wake from the legislative consequences of bankruptcy should be tailored to that purpose. The grant of leave to Mr Wake to manage a corporation should be limited so as to apply only to Agric. I do not consider it appropriate to make an order purporting directly to prohibit Agric from engaging in conduct, because Agric is not a party to these proceedings. Rather, the leave to be granted to Mr Wake under s 206G(1)(c) of the Corporations Act should be made subject to a condition that Agric not engage in any activities other than acting as trustee of the Fund and doing things that are reasonably incidental to so acting.

71 Similarly, the order that Mr Wake not be a disqualified person for the purposes of the SIS Act should be limited so as to permit him to act only in respect of Agric and the Fund. That can appropriately be achieved by exercising the power in s 126J(4) to make the order subject to a condition that, until Mr Wake is discharged from bankruptcy, he not be or act as a trustee, investment manager or custodian of any superannuation entity other than the Fund.

72 For these reasons, I am satisfied that it is appropriate to make the two orders set out at the beginning of these reasons.

Associate:

Dated:    27 November 2025