Federal Court of Australia

QB4 Capital Pty Limited v Guardian Securities Limited [2026] FCA 704

ORDERS

THE COURT ORDERS THAT:

1.    Sean Wengel and Michael Brereton (Receivers) as receivers and managers of the property of Fundus Management Pty Limited (Fundus), including the property held by it as trustee of the Fundus Trust No 1 (FT1) and the Fundus Trust No 2 (FT2), are justified in:

(a)    directing QB4 Capital Pty Limited (QB4) to appropriate its liability to contribute the sum of $1,529,049 (which sum includes the amount of $865,686.55 held for the benefit of QB4 in the trust account of its solicitors, Law and Commerce Partners), plus post-judgment interest on that sum from 31 May 2022, to the Receivers of the assets of the Premium Income Fund (PIF) held in FT2, in partial satisfaction of QB4’s right to be paid amounts owing to it from the PIF held in FT2; and

(b)    netting off the liability of QB4 to the Receivers of the assets of the PIF held in FT2, as set out in (a) above, against the amount otherwise payable to QB4 from the assets of the PIF held in FT2,

for the purpose of the Receivers making a final distribution to unitholders of the PIF as required by Order 14(b) of the Orders dated 31 May 2022.

2.    The Receivers are justified in:

(a)    treating Rhodes Asset Management Ltd as the current unit holder of the units in the Enhanced Land Fund (ELF) held in FT1 with the number TGIF-17006; and

(b)    treating International Fund Services & Asset Management S.A. as the current unit holder of the units in the ELF held in FT1 with the number TGIF18012.

3.    The remuneration and expenses of the Receivers, in the period from 2 December 2023 to 28 February 2026, be approved and fixed in the sum of $407,296.78 (inclusive of GST) (Receivers’ Approved Remuneration and Expenses), comprised as follows:

(a)    remuneration in the amount of $304,914.28 (inclusive of GST); and

(b)    expenses inclusive of legal costs in the amount of $102,382.50 (inclusive of GST).

4.    The Receivers may pay any further legal costs, including Counsel’s fees, incurred in the course of preparing for and concluding this application at the normal commercial rates charged by each of the solicitors and counsel retained by the Receivers (but capped in the amount of $66,000 (inclusive of GST)), prior to making the distribution to unitholders and without the need for any further direction from the Court.

5.    The Receivers may be paid further remuneration for taking further steps in the receivership after 28 February 2026 to be calculated at their normal hourly rates (but capped in the amount of $66,000 (inclusive of GST)), prior to making the distribution to unitholders and without the need for any further direction from the Court.

6.    The Receivers’ Approved Remuneration and Expenses and any further costs or remuneration referred to in Orders 4 and 5 above be paid out of the assets of FT1 and FT2 prior to any distribution to unitholders of the ELF and PIF respectively.

7.    In calculating a final dividend to the unit holders, the Receivers shall apply post judgment interest as follows:

(a)    in relation to Order 11 of the Orders dated 31 May 2022 only, post judgment interest is to be applied at the rate of $152.14 per day from the date of judgment; and

(b)    as to the balance of the remaining judgments, the Federal Court of Australia Post Judgment Interest Rate is to be applied in accordance with s 52 of the Federal Court of Australia Act 1976 (Cth), calculated from the date of each relevant judgment.

8.    Upon completion of the final distribution in accordance with Order 7 above:

(a)    the Receivers are to notify Guardian Securities Limited (Guardian) for the purpose of Guardian taking steps to cancel the units in the ELF and the PIF in accordance with Orders 14(d) and 15 of the Orders dated 31 May 2022;

(b)    the receivership be brought to an end;

(c)    the Receivers are discharged as receivers and managers of the property of Fundus, including the property held by it as trustee of FT1 and FT2; and

(d)    the Receivers, together with their employees and agents, are released from any liability whatsoever and however arising out of or in connection with their appointment as receivers and managers of the property of Fundus, including the property held by it as trustee of FT1 and FT2 with such release to take effect from the date of the final distribution of the assets of FT1 and FT2.

9.    The two interlocutory applications which were circulated by the first applicant on 22 May 2026, being the ‘Referee Application’ and the ‘Retention Application’, be dismissed.

10.    To finalise the remaining issues in respect of any extant interlocutory application in the proceedings, including the interlocutory application filed by the Receivers dated 18 March 2026 (Receivers’ Application):

(a)    on or before 4:00 pm on 5 June 2026, the Receivers are to provide to the Court and the parties a proposed direction, formulating how the Receivers say Order 6 of the 15 February 2024 orders (Order 6) should be rectified;

(b)    on or before 4:00 pm on 12 June 2026, the Parties are to exchange submissions and any additional evidentiary material upon which the parties rely on in relation to Order 6;

(c)    on or before 4:00 pm on 19 June 2026, the Parties are to file any responsive submissions with the intention that, by 19 June 2026, there be only one set of submissions relied upon by both parties in relation to Order 6; and

(d)    the Receivers’ Application be listed for final determination at 10:15 am on 14 July 2026.

11.    Following the hearing on 14 July 2026, no further interlocutory applications are to be entertained unless his Honour grants specific leave to do so.

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

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

LEE J:

A    INTRODUCTION

1    Three interlocutory applications fall to be determined against the backdrop of what can only fairly be described as unusually protracted, bitter and expensive litigation. The history of the matter has already been canvassed at length in QB4 Capital Pty Ltd v Guardian Securities Ltd [2022] FCA 262; (2022) 159 ACSR 289 and on appeal in QB4 Capital Pty Ltd v Guardian Securities Ltd [2023] FCAFC 72; (2023) 411 ALR 496.

2    Over six years ago, QB4 Capital Pty Ltd (QB4) commenced proceedings which, as it happened, were initially settled by deed in October 2020. On the day of settlement, Guardian Securities Ltd (Guardian), who was the trustee and responsible entity of The Guardian Investment Fund (TGIF), caused or permitted Fundus Management Pty Ltd (Fundus), a trustee of two sub-trusts of TGIF, being Fundus Trust No 1 (FT1) and Fundus Trust No 2 (FT2), to pay a series of amounts from the assets of FT2 to the trust account of QB4’s solicitors, as settlement payments, for the benefit of QB4.

3    On 2 October 2020, I made orders dismissing the proceedings, but a dispute subsequently arose concerning Guardian’s alleged default of the settlement deed. QB4 made an ex parte interlocutory application seeking, inter alia, to restrain Guardian and Fundus from having access to certain funds to remedy the default. Eventually, in December 2020, Messrs Sean Wengel and Michael Brereton were appointed, by consent, as receivers and trustees of the property of Fundus, including FT1 and FT2 (Receivers).

4    After a lengthy trial, I dealt with arguments concerning whether the Receivers’ outstanding remuneration and disbursements should be indemnified, together with disputes that later emerged as a result of QB4 seeking: (a) equitable compensation in respect of various invoices charged to the funds; (b) declaratory relief that Guardian was not entitled to payment in respect of those sums; and (c) orders for the appointment of QB4 and a related company as trustees of the sub-trusts.

5    Guardian cross-claimed, seeking an order that QB4 repay the settlement payments with interest. I found that Guardian had a right to be indemnified for most of the work charged in reviewing the operation and management of TGIF and the review of the various constituent and investment documents, but that the total amount of the invoices was not properly incurred and should be significantly discounted. I also found that legal costs were not properly incurred after the termination of the settlement deed, but were prior to that date. An appeal to the Full Court did not disturb the orders that I made: QB4 Capital Pty Ltd v Guardian Securities Ltd [2023] FCAFC 72; (2023) 411 ALR 496.

6    As I have noted, the present applications arise after more than six years of intensive litigation, prolonged interlocutory disputation, procedural complexity and consumption of both private resources and public judicial resources. The Court has repeatedly been required to intervene in questions concerning administration, indemnities, remuneration, costs and ancillary procedural controversies.

7    The matter has also been characterised by the late filing of submissions and an opaqueness as to what, in truth, is in dispute between the parties. A feature of the matter which cannot be ignored is that applications and subsidiary disputes have themselves generated further applications and subsidiary disputes. The Court’s task at this stage is therefore informed, in a very particular way, by the overarching purpose reflected in ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth) (FCA Act), being the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible.

8    As I predicted when the matter first came before me, one of the more dispiriting aspects of this litigation is that the costs and administrative burden it has generated have necessarily diminished the corpus ultimately available for distribution to investors. Indeed, the litigation has now reached the point where any further delay in finalising the receivership risks compounding that diminution through further costs of disputation about the distribution of the funds. In these circumstances, the Court must approach the remaining controversies with a firm eye to proportionality, finality, and acute regard for the public interest in ensuring that litigation does not become a self-sustaining enterprise.

9    Prior to coming onto the bench, I had thought that the controversy was much narrower and could be resolved today. While those initial expectations were quickly dispelled, it has become apparent that all remaining issues, save for one, can be resolved today.

B    THE ISSUES IN DISPUTE

10    It is agreed that the principal issues presently before the Court are: first, the treatment of the unsatisfied judgment debt owed by QB4 to the Receivers and the proposed set-off or netting exercise; secondly, whether post-judgment interest should be applied in the proposed distribution calculations; thirdly, the approval of the Receivers’ remuneration and expenses and the terms of their proposed discharge; fourthly, Guardian’s claim for reimbursement of legal expenses incurred in assisting the Receivers with the preparation and verification of the proposed distribution statements; fifthly, QB4’s so-called “retention application”; sixthly, QB4’s application for the appointment of a costs referee; and seventhly, an issue that has arisen concerning Order 6 made by the Court on 15 February 2024, which is said to reflect an agreement between the parties reached following a court-appointed mediation.

11    Before turning to those issues, it is convenient to make four preliminary observations. First, the Court’s task today is not to revisit the merits of the underlying disputes already determined by the principal judgment and the Full Court. Secondly, the Court is not concerned with abstract forensic grievances accumulated over the life of litigation or in ascribing blame. Thirdly, the Court’s task is practical and supervisory in character, being to ensure that the Receivers may conclude the administration of the trusts consistently with the prior orders of the Court and equitable principle. Fourthly, the Court will not permit the finalisation of the receivership to be delayed by the commencement or continuation of collateral procedural contests. That conclusion follows in part from the dictates of Pt VB of the FCA Act.

12    The present relevant facts, arising following the delivery of my initial judgment, are uncontroversial, save as to those concerning the seventh issue identified above.

13    As noted above, the Receivers were appointed, by consent, on 2 December 2020. Orders made on 31 May 2022 reflected the substantive outcome of the principal judgment. The appeal was dismissed in May 2023. On 30 August 2023, I made orders not only approving certain remuneration and expenses for the Receivers, but also pursuant to s 53A of the FCA Act, referring the proceeding to mediation before a Registrar of the Court, with such mediation to be completed on or before 1 November 2023.

14    As it happened, it was not until 15 February 2024 that the parties provided proposed orders to my chambers, and I made orders following the mediation. Those orders dealt with, inter alia, Guardian’s entitlement to be indemnified, the discharge of the indemnity out of the assets of FT1 and FT2, and the approval of the Receivers’ remuneration and expenses for a certain period.

15    The Receivers’ interlocutory application dated 13 March 2026 seeks judicial directions concerning the final distribution exercise, approval of remuneration and expenses incurred since the previous approval period, and ultimately a discharge and release. In circumstances where the Receivers are officers of the Court and where the administration has been contentious, it is entirely orthodox that the Receivers seek directions before effecting final distributions.

B.1    The treatment of the unsatisfied judgment debt owed to the Receivers and netting off issue

16    The Receivers submit that QB4 remains indebted pursuant to Order 11 of the orders made on 31 May 2022. That order was as follows:

Within 28 days, the first applicant [QB4] is to pay the Receivers of FT2 the amount of $1,529,049, plus interest on the amount of $1,354,431.43 (being $1,529,049 less $174,617.57) in the amount of $86,211.64 (as at 31 May 2022 and continuing at the rate of $152.14 per day).

17    They submit that, because QB4 is entitled to receive amounts from the trust funds, the proper course is to apply the so-called rule in Cherry v Boultbee (1839) 4 My & Cr 442 (by netting off the amounts otherwise distributable to QB4 against the unsatisfied judgment debt).

18    The Receivers’ submission is plainly correct. The rule provides for a simple technique of netting off reciprocal monetary obligations. It is well-established and reflects elementary fairness in the administration of funds subject to equitable distribution. A person who seeks to participate in a fund administered under the supervision of the court cannot ordinarily insist upon receiving a distribution while simultaneously refusing to satisfy obligations owed to that same fund. The rule reflects the maxim that a person seeking equity must do equity.

19    QB4 contended that there is an issue concerning the application of monies held in the trust account of its solicitors and an asserted lien over those funds. Nothing presently before the Court is sufficiently persuasive to conclude such matters operate to displace the ordinary application of the rule in Cherry v Boultbee. As it now seems to be appreciated, the relevant question is not whether some collateral claim or lien exists between QB4 and its solicitors, but whether amounts otherwise distributable from the trust fund should first be applied in satisfaction of QB4’s extant obligations to the Receivers.

20    The proposed netting off exercise is also consonant with the practical objective of bringing finality to the administration. It would be contrary to the efficient administration of the trusts to require the Receivers simultaneously to distribute monies to QB4 while separately pursuing enforcement processes for outstanding judgment debts.

21    The issue that ultimately persisted related to the accrual of interest on the sum the Court has directed to be set off. By orders 5(a) and 5(b) of the orders dated 15 February 2024, the Court fixed two liquidated sums in QB4’s favour ($217,485.42 and $490,800.83, together $708,286.25) and directed that they “be set off against Order 11 of the Orders dated 31 May 2022”. From the date of the direction, interest under Order 11 cannot accrue on the sum the Court has directed to be set off. Interest accruing after 15 February 2024 can therefore run only on the reduced balance of the interest-bearing principal ($646,145.18, being $1,354,431.43 less $708,286.25) and not on the full $1,354,431.43.

22    In the end, there was no dispute that this course is appropriate (T8.1-27).

B.2    Whether post-judgment interest should be applied in the proposed distribution calculations

23    The Receivers have prepared alternative proposed distribution statements: one including post-judgment interest on the relevant judgment debts and one excluding such interest.

24    The entitlement to post-judgment interest ordinarily follows by operation of law unless displaced. The existence of a judgment debt carries with it consequences that usually follow by reason of a person who is entitled to the benefit of a judgment being out of funds and the person with the liability to pay enjoying the benefit of those funds. The Court is not persuaded that there is any principled basis to treat the relevant judgments as frozen in time as at the date of entry without accrual of interest thereafter.

25    There was only one complexity that arose in relation to the issue of post-judgment interest. Order 11 of the orders of 31 May 2022 (see [16]) fixes a continuing daily rate of $152.14. On appeal, the Full Court affirmed Order 11, describing it as an order requiring QB4 “to pay to the Receivers of FT2 the amount of $1,529,049 plus interest”: QB4 Capital Pty Limited v Guardian Securities Limited [2023] FCAFC 72; (2023) 411 ALR 496 (at 524–525 [120] per Moshinsky, Stewart and Jackman JJ).

26    Section 52(2) of the FCA Act provides that, for the post-judgment period, interest is payable at the rate fixed by the Rules of the Court; or, if the Court thinks that justice so requires, at such lower rate as the Court determines. Contrary to QB4’s submissions, it does not provide that, for the post-judgment period, interest is payable at the rate prescribed by r 39.06 of the Federal Court Rules 2011 (Cth) (FCR) “unless the Court otherwise orders”.

27    Order 11 is in terms which were provided to the Court by the parties, and it simply means what it says. Calculated at the daily rate fixed by Order 11, post-judgment interest to 28 February 2026 is $294,491, being the $86,211.64 fixed to 31 May 2022, plus $152.14 per day for the 1,369 days from 31 May 2022 to 28 February 2026 ($208,280). This amount was lower than the amount the Receivers calculated by reference to the variable rates prescribed by FCR 39.06 (ranging from 6.10% to 10.35% per annum).

B.3    The approval of the Receiver’s remuneration and expenses and the terms of their proposed discharge

28    The third issue concerns approval of the Receivers’ remuneration and expenses and the proposed release. As indicated above, the Court has approved remuneration and expenses on earlier occasions. The present application concerns remuneration from 2 December 2023 to 28 February 2026 in the amount of $304,914.28 (inclusive of GST), and expenses inclusive of legal costs in the amount of $102,382.50 (inclusive of GST), together with a capped future amount for completion of the administration.

29    The applicable principles are well-settled and do not require detailed exposition. Court-appointed receivers are entitled to reasonable remuneration for work properly undertaken in the administration of the estate. The Court’s supervisory role is protective of the estate, but it must also recognise the practical reality that lengthy and contentious administrations generate significant professional work.

30    Having reviewed the material referred to in the submissions and the affidavits of Mr Wengel, I am satisfied that the remuneration and expenses sought have been sufficiently explained and justified. Importantly, much of the additional work appears to have arisen because of the complexity of the distribution exercise and the need to engage with competing positions advanced.

31    The Court should not lose sight of the fact that the Receivers have been operating in an environment marked by sustained disputation and forensic scrutiny. In those circumstances, it is unsurprising that much work associated with the calculation processes was required.

32    I am also broadly satisfied that a capped future amount is appropriate. It is plainly preferable that the Receivers be permitted to conclude the administration in an orderly fashion without the disproportionate cost of further contested approval applications concerning relatively modest future work associated with final distributions and discharge. But the amount sought, in my view, is intuitively large. I will allow 75% of the capped amount of costs and expenses proposed.

33    The related issue concerns the terms of any release.

34    The distinction between an ordinary discharge and a release is important. Discharge marks the end of the Receivers’ appointment and recognises that, upon completion of the distribution and the performance of their remaining functions, they should no longer remain officers charged with active responsibilities in relation to the funds. A release, by contrast, is a more substantial protective order. It may have the effect of foreclosing or limiting claims that might otherwise be pursued. It is therefore not granted as of course.

35    None of this is to say that the issue of a release is in any way novel. It is clear that, at general law, a receiver may be discharged with the consent of the parties, or upon reasonable cause, such as ill-health, capacity or impossibility. The Court may protect a receiver from all liability for acts done in the course of the conduct of his duties, and such a release need not await the expiration of any applicable limitation period if there is adequate opportunity for a claimant to bring a claim, although this will not be granted without investigating claims of which the court has notice: Re Say Enterprises Pty Ltd [2018] NSWSC 396 (at [33]–[34] per Brereton J).

36    Unlike the cases to which I was taken by counsel for the Receivers where a release had been granted, the present case involves the identification of matters said to put the Receiver “on notice” of certain claims. I was referred to correspondence that apparently provided such notice, specifically, a letter to the Receivers from QB4 dated 17 December 2025. In that letter, QB4 sought to “formally register [its] complaint” concerning the conduct of the receivership, and raised issues of excessive costs, unconscionable delay, and a failure to finalise distribution statements.

37    Those matters have been canvassed in the context of disputes over the Receivers’ remuneration and in relation to distributions to unitholders. These will be addressed by directions. In addition, however, there is an allegation of a premature sale of a property known as the “Lawnton property”. It was sold for $1,430,000 in December 2022 and resold for $1,925,000 eleven months later. This was said to represent “a loss to unitholders of $495,000”. It is unnecessary for the purposes of these reasons to comment upon the complexity of making claims against either a mortgagee or a receiver for sale at an undervalue, let alone whether or not a common law action for damages of this type exists (or whether it is a matter that arises upon an account in equity).

38    Be that as it may, if there is a reasonable basis for such a claim, and given that it was articulated as long ago as December 2025, it should be well known to QB4 by this time.

39    Accordingly, I propose to adopt a course somewhat similar to the course adopted by Brereton J in Re Say Enterprises, notwithstanding that here there has been some sort of claim alleged (although its strength has not been articulated).

40    I am conscious that this receivership has not been an easy one, and that this matter is bedevilled by collateral disputation and, at the end of the day, the Receivers have performed their role as officers of the Court.

41    It seems to me that in all the circumstances, a release should be provided. I will allow such a release, but I will make it only operative at a time coterminous with the distribution of payments to the unitholders. That is, the release will become operative only upon the Receivers finally distributing funds and discharging their responsibilities. If proceedings are commenced prior to that time, then those bringing the then extant claim can exercise a liberty to apply (and I will then reconsider the issue of the release). I am not encouraging any further disputation in this matter. That said, I will not peremptorily shut out the possibility of a claim being agitated if it is commenced prior to distribution (notwithstanding my preliminary concerns about the cogency of the foreshadowed claim).

B.4    Guardian’s claim for reimbursement of legal expenses

42    The fourth issue concerns Guardian’s claim for reimbursement of legal expenses incurred in assisting the Receivers with the preparation and verification of the proposed distribution statements. Guardian seeks a declaration that the Receivers would be justified in crediting to Guardian an aggregate amount of $34,690.70 from the trust funds.

43    Guardian relies upon the indemnity provisions in the TGIF Constitution, including clauses 22.1 and 23.7, together with the analysis in the principal judgment concerning the scope of the responsible entity’s indemnity rights. It also relies upon the High Court’s recent observations in Naaman v Jaken Properties Australia Pty Ltd [2025] HCA 1; (2025) 281 CLR 635 concerning the continuing character of a trustee’s right of indemnity and associated lien.

44    The evidence demonstrates that the Receivers sought Guardian’s assistance in reviewing and verifying the proposed distribution calculations. The chronology described in the submissions indicates that Guardian’s solicitors reviewed several iterations of the proposed distribution statements and identified errors subsequently accepted by the Receivers as material.

45    In those circumstances, I am satisfied that the relevant expenses were reasonably incurred in connexion with the winding up and final administration of the trusts. It follows that the claimed amounts fall within the scope of the indemnity provisions previously considered in the principal judgment and affirmed on appeal.

46    No party appears to now substantively oppose the claim, and there is no need to make the declaration sought by Guardian. The recognition of Guardian’s entitlement does not require any separate or premature payment divorced from the final distribution process. The proper course is to recognise the entitlement within the single final accounting exercise, taking into account any applicable priority, lien or indemnity. That approach both gives effect to Guardian’s substantive right and avoids the needless creation of another procedural track.

B.5    QB4’s so-called “Retention Application”

47    I turn fifthly to QB4’s so-called “Retention Application”. Guardian submits the application was misconceived because the amount identified by QB4 is not, in truth, to be paid by Guardian, but rather reflected through set-off calculations, and because Guardian’s claimed entitlement was secured by lien.

48    But, as the Receivers explained, this is put too highly in respect of the PIF.

49    There will be, on the current calculations, an amount of approximately $40,000 paid. I do not propose to make the retention orders sought. They risk introducing yet another layer of satellite disputation or proceeding that has already consumed a disproportionate and unjustifiable amount of court time. The Court’s present objective is the orderly completion of the administration, not the creation of a new provisional holding arrangement that is unsupported by sufficiently clear entitlement.

50    The same point can be put another way. The application would introduce a new provisional holding mechanism into a proceeding already burdened by successive layers of interlocutory controversy. The asserted justification for retention does not outweigh the need for practical finality, particularly where the amounts in question are being dealt with in the final distribution exercise.

B.6    QB4’s “Referee Application”

51    The sixth issue concerns QB4’s application for the appointment of a referee in relation to outstanding costs assessments. QB4 contends that those costs comprise three categories: (a) the costs incurred by QB4 after 13 November 2020 (which are to be paid by Guardian pursuant to Order 6 of the orders made on 15 February 2024) (Guardian costs); (b) the costs to which QB4 says it is entitled to be paid in relation to the appeal proceedings (NSD 582 of 2022) in the amount of $407,505.47 (appeal costs); and (c) the costs of a collateral proceeding (NSD 99 of 2021) in the amount of $117,740.62, being in respect of which an order was made on 31 May 2022 that each party bear its own costs (Order 11) (collateral proceeding costs).

52    I will deal with the question of a referee, even though, as I explain below, there remains a live controversy about QB4’s entitlement in relation to the appeal costs and the collateral proceeding costs. This is because my view concerning the appointment of a referee is the same irrespective of whether or not I am simply dealing with the Guardian costs or one or both of the additional cost amounts in respect of which QB4 makes a claim.

53    I have written several judgments in which I have encouraged the extensive use of referees in this Court. In my view, the referral of questions to a special jury is a useful and flexible mechanism that is often appropriate for determining factual questions. That said, I do not consider the appointment of a referee in the present case to be appropriate. The FCR already provide a structured mechanism for the taxation of costs. While I have appointed a costs referee in the past, nothing in the present circumstances of this case persuades me that the ordinary procedures are inadequate.

54    Moreover, I am conscious of the reality that everything that happens in this case seems to involve the creation of further disputation; I am not going to appoint a referee and have them prepare a report with the seemingly inevitable consequence that there will be further disputation in relation to the adoption or rejection of that report and the consumption of more of a judge’s time. Indeed, a referee may simply replicate, rather than alleviate, the difficulties with costs and court time previously encountered in this matter.

55    In these circumstances, the more appropriate course is that any remaining costs disputes proceed in accordance with the ordinary mechanisms under the FCR, including the preparation of bills and the process of taxation or assessment before a Registrar.

C    Ancillary matters and the seventh issue in dispute

56    The Receivers also seek directions concerning the identity of certain Enhanced Land Fund unitholders. Nothing in the material before me suggests there is any substantial controversy incapable of practical resolution by the Receivers in accordance with the register and prior orders. To the extent directions are required, they should be made consistent with the approach proposed by the Receivers.

57    That leaves the seventh and final issue of controversy. It is necessary to explain it in a little detail and then indicate the course I propose to take.

58    The issue arises out of an order I made (Order 6) on 15 February 2024. Before turning to that order, it is necessary to provide some important context. It will be recalled the appeal was dismissed on 19 May 2023, with the Full Court ordering QB4 to pay adverse costs (Order 3 and 4 of the orders made on 19 May 2023). As I have observed above, I made an order on 30 August 2023 approving certain remuneration and expenses by the Receivers, but also referring outstanding costs issues to mediation before a Registrar.

59    That mediation occurred, and I was presented with orders to be made following the conclusion of the mediation (being the orders I made on 15 February 2024). Order 6 was as follows:

Subject to the Guardian Indemnity having been discharged in full, the legal costs and expenses the subject of paragraph [3] of the QB4 Claim, (including any appeal that arose from this proceeding) (except for the costs of these proceedings in the period from 13 November 2020 onward) are to be paid to the first applicant and second applicants by the Receivers from the assets of FT1 and FT2 on a lump sum basis.

60    So that this order may be properly understood, the “QB4 Claim” was defined as the points of claim filed by QB4 on 17 July 2023. Paragraph [3] of the QB4 Claim was in the following terms:

The legal costs and outlays incurred by the Claimant in the QB4/Guardian litigation being Federal Court of Australia proceedings Nos. NSD415/2020, NSD470/20[20], NSD99/2021 and NSD582/2022.

61    The orders of 15 February 2024 were made following various communications to my chambers. On 12 February 2024, my chambers received an email from the Registrar following the conclusion of the mediation in person on 30 October 2023. For reasons not explained before me, the mediation was adjourned to short Microsoft Teams meetings with the parties on 13 November 2023, 27 November 2023, 4 December 2023, 20 December 2023 and 2 February 2024. The Registrar also informed my chambers that:

I am pleased to report the parties have agreed to many of the issues in dispute and note that they sent you proposed short minutes of order this morning for your consideration.

62    That communication from the Registrar coincided with an email my chambers received from Colin Biggers & Paisley, the solicitors for the Receivers. That email was as follows:

Dear Associate

We act for the Receivers in the above matter. This email is sent on behalf of all parties and the legal representatives for each are copied to it. In addition, the legal representatives of CloudCapital (not a party but an entity who has put forward a points of claim) are copied to this email.

We refer to the orders made on 30 August 2023 (attached) referring the matter to mediation.

As directed by order 3 of those orders, the parties have attended a mediation before Judicial Registrar O’Connor, who is copied to this correspondence.

The parties have reached a consensus as to a form of orders to address the various points of claim that have been filed. We attach proposed orders in this regard. Please note the following:

1.    The Guardian parties consent to proposed orders 1 to 4 and seek the notation at 16(b). They neither consent to, nor oppose, the balance of the orders.

2.    The QB4 parties consent to these orders.

3.    The Receivers do not oppose these orders.

4.    CloudCapital (not a party) may or may not wish to be heard in relation to these orders.

The Receivers are also seeking Court approval for their remuneration to 1 December 2023 and legal expenses up to 7 February 2024. Those amounts have been included in the draft orders which are in the form approved by the Court on prior occasions.

In the circumstances, the Parties and the Receivers wish to enquire whether Justice Lee is minded to make these proposed orders without the need for an appearance, or would otherwise be assisted by hearing from the Parties and the Receivers in relation to the proposed orders.

…

63    In short, the present dispute relates to the fact that QB4 has indicated (and this certainly was not articulated with any precision or in any detail whatsoever in the written submissions filed prior to today) that it is entitled by reason of the terms of Order 6 to be paid the appeal costs and the collateral proceeding costs out of the trust assets.

64    I have been told by those acting on behalf of the Receivers that this position was not their understanding of the nature of any agreement struck between the parties. For its part, QB4 says that the agreement it contends is reflected in Order 6 amounted to a commercial compromise between the parties of a range of outstanding claims of QB4 that went beyond the appeal costs and the collateral proceeding costs.

65    The email sent to chambers, upon examination, is ambiguous in its terms. Colin Biggers & Paisley indicated that the parties had reached a “consensus” as to the form of orders to address the various points of claim that had been filed. On the other hand, the Receivers did not say they expressly consented to the orders, but they did “not oppose these orders”. Additionally, the Guardian parties neither consented to, nor opposed, Order 6.

66    As can be seen, the parties and the Receivers enquired of my chambers whether I was minded to make the proposed orders without the need for an appearance or if I would otherwise be assisted from hearing from the parties. I made the orders in chambers because, considering the outcome of the mediation, I assumed that the correspondence sent on behalf of all parties and their legal representatives reflected an agreement reached and that there would not be further controversy.

67    As it happens, I am now confronted, over two years later, with an argument at the heel of the hunt concerning Order 6.

68    One thing can be said with confidence: having regard to the underlying merits (and absent any agreement), I would not have made an order providing for QB4 to be paid its appeal costs and its costs of the collateral proceeding out of trust assets.

69    Leaving aside the issue of the initial justification for the commencement of the proceedings (which is a matter unnecessary to delve into for present purposes), I do not consider an order of the type now sought to be consistent with how the Full Court dealt with the issue of costs. It rejected the approach taken by QB4 in the appeal, and the appeal was wholly unnecessary. This is not the same area of legal discourse as a trustee’s indemnity for reasonable litigation costs incurred. The appeal costs should fall as they lay following their determination by the Full Court.

70    Similarly, in respect of the collateral proceeding, I made the order that each party bear its own costs with the understandable and unsurprising intention that each party actually bear its own costs.

71    Accordingly, having rejected the notion that I would, absent agreement, have made an order requiring QB4’s appeal costs and its collateral proceeding costs to be paid out of the trust assets, it is necessary to identify with some precision the true issue that remains for determination.

72    Although the matter was discussed during oral argument in terms of the construction of Order 6 and, potentially, the rectification of that order, those characterisations do not, in my view, fully capture the substance of the controversy. The real question is not one of form. It is whether QB4 has any entitlement to be paid the appeal costs and the collateral proceeding costs from the trust assets.

73    It follows from what I have already said that the only presently identified foundation for QB4’s asserted entitlement is the existence of an agreement reached at the mediation. To repeat, QB4’s position is that the payment of the appeal costs and the collateral proceeding costs formed part of a broader commercial compromise by which several outstanding claims were resolved and that Order 6 was intended to record that bargain.

74    Once the issue is viewed in that way, the dispute is revealed as being less a question of construction and more a question as to the existence and content of the agreement said to have been reached between the parties. The question is whether, as part of the compromise reached following the mediation, it was agreed that QB4 would receive payment of the appeal costs and the collateral proceeding costs from the trust assets.

75    The practical consequence is that the dispute is more appropriately framed by reference to the directions sought by the Receivers. The Receivers contend they should be authorised to proceed on the basis that no agreement of the type asserted by QB4 was reached and that they are therefore not required to make any additional payment in respect of the appeal costs or the collateral proceeding costs. QB4 resists that position and contends, in substance, that the agreement for which it contends was reached and should be given effect.

76    As I have said, Order 6 was made because I understood that the parties had reached agreement following the mediation and that the proposed orders reflected that agreement. If that understanding was incorrect, and the order does not accurately reflect what was agreed, then it seems to me, subject to any further argument, that the order should be varied notwithstanding that it has been entered.

77    In this regard, FCR 39.05 provides that the Court may vary or set aside an order after it has been entered if, relevantly, “it does not reflect the intention of the Court”. If QB4 is correct in contending that Order 6 provides for the payment of the appeal costs and the collateral proceeding costs out of the trust assets, then the only basis for such an outcome would be that it reflected an agreement reached between the parties as part of the mediated compromise. As I have already explained, absent such an agreement, I would not have made an order producing that costs outcome. It follows that if the agreement for which QB4 now contends was not in fact reached, then Order 6 would not reflect the intention of the Court. Critically, the intention of the Court was not independently to determine that those costs should be borne by the trust assets, but rather to give effect to what I understood was a consensus reached between the parties as to the disposition of the outstanding costs issues. In those circumstances, my preliminary view is that the present case would provide a paradigm example of a situation in which the Court’s power under r 39.05 may be engaged.

78    Conversely, if the agreement contended for by QB4 was in fact reached, then the order should remain in place, although my preliminary view is that if this was determined to be the true nature of the agreement, there is force in the view that a more explicit form of wording would have avoided the present controversy (and the obligation to pay the relevant costs out of trust assets should be made clearer in by a supplementary, explanatory order).

79    The outstanding issue therefore comes down to a single question: was it agreed, as part of the compromise reached following the mediation, that QB4’s appeal costs and collateral proceeding costs would be paid out of the trust assets?

D    CONCLUSION AND ORDERS

80    Drawing the threads together, I am satisfied that the Receivers should receive substantially the directions and approvals they seek, subject to the qualifications identified above. The proposed distribution methodology is appropriate. The netting off exercise involving QB4 should proceed. Post-judgment interest should be included. The remuneration and expenses should be approved, although the capped future amount should be reduced to 75% of that proposed. Guardian’s entitlement to reimbursement should be recognised within the final distribution process. QB4’s retention application should be dismissed. The referee application should also be dismissed. The Receivers should be discharged and released upon completion of the distribution exercise, subject to the qualification identified.

81    Before leaving the matter today, I wish to record that the Court is conscious that many investors have now waited a very considerable period for finality. Litigation of this character can sometimes develop a momentum detached from commercial reality, where procedural and forensic contests consume resources in a manner disproportionate to the legitimate interests ultimately at stake. The history of this matter regrettably provides some illustration of that phenomenon.

82    After discussion with the parties, I have determined to list the matter for hearing at 10:15am on Tuesday, 14 July 2026. The terms of proposed directions and any order should be filed by the Receivers, together with their submissions. I will make orders to finalise the remaining issue, including for: (a) the provision of a proposed direction in relation to Order 6 of the orders made on 15 February 2024; (b) the exchange of submissions and any additional evidentiary material upon which the parties rely; and (c) the provision of any responsive submissions, with the intention that there be only one set of submissions relied upon by each party in relation to the Order 6 issue.

83    I direct the parties to provide to my Associate a precise form of orders reflecting these reasons. Subject to any issue of drafting, the Court proposes to make orders substantially in accordance with the Receivers’ proposed minute.

84    After the delivery of these reasons ex tempore, but prior to their revision, the parties provided a draft minute of proposed orders. Alas, the proposed orders did not reflect the intention of the Court. I directed my Associate to inform the parties that all issues in controversy have been resolved save for the seventh and final issue identified in these reasons. I do not propose to entertain new arguments raised for the first time in submissions, nor do I propose to deal with further collateral or peripheral matters. This litigation has already consumed a disproportionate amount of private and public resources and must now be brought to an end.

85    The outstanding issue is confined to the question identified. The further hearing does not provide an opportunity to reopen matters already determined or to advance fresh controversies. Those entitled ultimately to participate in the distribution of the trust assets have already been kept out of money to which they may be entitled for far too long. It is the responsibility of all involved in this litigation to ensure that the remaining issue is dealt with efficiently and that the distribution process occurs promptly in accordance with the directions and orders to be made by the Court.

86    Subject to the determination of the final issue relating to Order 6, it is my intention that this matter be brought finally to an end.

Associate:

Dated:    5 June 2026

SCHEDULE OF PARTIES