Federal Court of Australia

Deputy Commissioner of Taxation v Nararra Developments Pty Ltd (in liq), in the matter of Nararra Developments Pty Ltd (in liq) [2026] FCA 730

ORDERS

THE COURT ORDERS THAT:

1.    By 4:00 pm on 18 June 2026, the parties serve and provide by email to Chambers either:

(a)    agreed short minutes of order giving effect to the Reasons for Judgment; or

(b)    rival short minutes of order proposed by the relevant party to give effect to the Reasons for Judgment, together with a short submission of no more than 3 pages in support of the proposed orders.

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

REASONS FOR JUDGMENT

MOORE J

Introduction

1    This judgment concerns the latest instalment in a series of disputes concerning companies alleged by the Deputy Commission of Taxation (DCT) to be associated with Mr Sam Cassaniti (Mr Cassaniti) and said to be the recipients of monies diverted pursuant to tax avoidance schemes. There are several different proceedings in my docket connected with these disputes, and there is a high level of interlocutory disputation across the proceedings.

2    Ms Thi Linh Trinh (Ms Trinh) is the wife of Mr Cassaniti and is the sole shareholder of the defendant company in these proceedings, Nararra Developments Pty Ltd (Nararra). By this interlocutory process, she seeks that the first and second respondents, Mr Peter Krejci and Mr Jonathon Keenan (the Liquidators) be removed and replaced by alternative liquidators that she has nominated. It is submitted on behalf of Ms Trinh that the Liquidators have a conflict that is said to arise from their adversarial position towards Nararra, manifested (inter alia) by the fact that they are plaintiffs in related proceedings to which Nararra is joined as a defendant.

3    Mr Cassaniti is the appointor of the Narara Developments Trust, of which Nararra was the corporate trustee prior to being placed in liquidation. (The different spelling of Nararra and Narara is not an error in this judgment). Nararra is the owner of real property in Narara, New South Wales, which is in the course of being developed. It holds that property on trust in the Narara Developments Trust. Mr Cassaniti’s son is the general beneficiary of the Narara Developments Trust. Ms Trinh has not given any evidence in this proceeding, while Mr Cassaniti has given evidence, saying that he is authorised by Ms Trinh to give evidence on her behalf.

4    On 11 November 2025, an order was made by a Registrar of the Court that Nararra be wound up in insolvency, on the application of the DCT, as a result of Nararra’s failure to comply with a statutory demand based on asserted unpaid tax. The Liquidators were appointed as liquidators of Nararra

5    On 21 November 2025, by order of the Court (Markovic J), the Liquidators were also appointed as receivers and managers of the property, undertakings and assets of the Narara Developments Trust. Ms Trinh also seeks an order, on essentially the same grounds, removing the Liquidators as receivers and managers of the property of the Narara Developments Trust, and appointing alternative receivers and managers, as chosen by her, in their place.

6    Separately, Nararra is one of 57 defendants in proceeding NSD 194 of 2025 (NSD 194), which is also in my docket. In NSD 194, there are ten plaintiffs comprising:

(a)    the Liquidators; and

(b)    eight other companies in liquidation, of which the Liquidators are liquidators (NSD 194 Corporate Plaintiffs).

This proceeding is sometimes referred to as the “Richmond Proceeding” or “Richmond Lifts Proceeding”.

7    The plaintiffs in NSD 194 (i.e. the Liquidators and the NSD 194 Corporate Plaintiffs) allege the existence of significant tax avoidance schemes associated with Mr Cassaniti, and allege that monies owing by the NSD 194 Corporate Plaintiffs to the DCT were paid instead to various entities associated with Mr Cassaniti. In respect of some defendants, there are two claims pleaded in the Amended Statement of Claim dated 18 February 2026:

(a)    an action for monies had and received, in respect of payments received by those defendants said to be monies owed by the NSD 194 Corporate Plaintiffs to the DCT which have been improperly diverted; and

(b)    an action to recover loss caused to the NSD 194 Corporate Plaintiffs, including a claim against each of those defendants for the loss of the total of the amounts claimed to be owing to the DCT.

8    The case pleaded against Nararra is more limited, in the sense that it is primarily a claim for winding up on the just and equitable ground. In the course of the pleading, there are nevertheless some broader allegations. It is pleaded that:

(a)    Mr Panella was a director of Nararra and Mr Cassaniti “was the true and controlling mind of Nararra Developments”;

(b)    on dates identified in Annexure 41 to the pleading, Nararra received monies from the parties listed in Annexure 41.

9    Annexure 41 takes a slightly complicated form of identifying payments from identified NSD 194 Corporate Plaintiffs to other NSD 194 defendants, and then (different) payments from those defendants to Nararra. The suggestion appears to be that money from the relevant NSD 194 Corporate Plaintiffs was distributed to Nararra through other NSD 194 defendants. However, that is not entirely clear because the amounts do not match in any way, and in the case of the fifth defendant, Marginata Securities Pty Ltd (Marginata), there are payments identified from Marginata to Nararra totalling $269,300, but no payments identified from any NSD 194 Corporate Plaintiff to Marginata. Indeed, the payments to Marginata are identified as “Nil”. It is therefore wholly unclear what proposition is advanced in relation to the payments from Marginata to Nararra.

10    It is further pleaded that each of the payments identified in Annexure 41 was:

a.        a payment from funds of one or more of the plaintiffs to which Nararra Developments:

i.    had no right to receive; and

ii.    provided no consideration for;

such that Nararra Developments is liable to [various of the NSD 194 Corporate Plaintiffs] for monies had and received, or alternatively, in restitution;

b.        further or alternatively, a loan made by one or more of the plaintiffs to Nararra Developments;

c.        further or alternatively, a payment received by Nararra Developments by reason of Mr Panella’s and / or Mr Cassaniti’s breaches of the Directors’ Duties…

d.     further or alternatively, a payment received by Nararra Developments in connection with one or both of the Schemes.

11    Given that the amount that Marginata received from the NSD 194 Corporate Plaintiffs is identified as “Nil”, the pleading in these sub-paragraphs is opaque to say the least.

12    It is alleged that the affairs of Nararra have been conducted in an improper manner and have been carried on casually, in neglect of statutory duties and otherwise than in accordance with accepted standards of corporate management, and that it is just and equitable that Nararra be wound up.

13    It is also pleaded that the NSD 194 Corporate Plaintiffs have standing to seek “this order” (without identifying which order):

… because the Richmond Payments [and/or payments from five other NSD 194 Corporate Plaintiffs] were paid directly or indirectly to Nararra Developments and each of [six relevant NSD 194 Corporate Plaintiffs] are creditors of Nararra Developments.

14    The relief sought against Nararra in the Amended Originating Process dated 18 February 2026 includes:

(a)    declaratory relief that Nararra was involved in contraventions by Mr Cassaniti and /or Mr Teddy Panella of their duties as director of various corporate plaintiffs;

(b)    an order pursuant to s 1317H of the Corporations Act 2001 (Cth) (Corporations Act) that Nararra pay compensation for damages as a result of these breaches of directors’ duties; and

(c)    an order that Nararra pay equitable compensation or equitable damages.

To the extent that the matters pleaded in the Amended Statement of Claim are said to relate to this relief, the pleading does not plead sufficient facts in sufficient detail to support the relief. The basis of the claim for relief is unclear. I will not give any weight to any claim except the claim for winding up on the just and equitable ground. In any event, I note that the Liquidators have given an undertaking to discontinue the proceedings against Nararra in NSD 194 (if the Court does not order the replacement of the Liquidators).

15    It should be noted that the asserted tax debt which founded the statutory demand against Nararra, and upon which Nararra was ordered to be wound up, is a tax debt said to be owed by Nararra directly to the DCT, and is different from any amounts said to be owed as a result of the matters the subject of NSD 194 (i.e. from Nararra’s receipt of monies diverted to entities associated with Mr Cassaniti as a result of the alleged tax schemes). Ms Trinh does not dispute that Nararra owes an amount to the DCT in respect of its direct tax liability, and says that upon payment of this amount Nararra should emerge from liquidation.

16    The present application is part of a broader interlocutory process by Ms Trinh, which took some time to crystallise. Ms Trinh initially sought a stay of the liquidation. This is no longer pursued. In relation to Ms Trinh’s stay application, the Liquidators sought a form of prophylactic relief that any application by Ms Trinh in these proceedings be heard by a different judge, so as to prevent any findings by me on Ms Trinh’s application preventing me from hearing NSD 194. I did not accede to that application by the Liquidators. Ms Trinh also seeks to terminate the winding up of Nararra, and to set aside the appointment of receivers to the Narara Developments Trust. Ultimately, it was determined that the question of whether the Liquidators have a conflict and should be removed should be heard in advance of the balance of the application. The specific application the subject of these reasons therefore took a little time to emerge, and the evidence and submissions that have been filed deal with a range of different topics, not just the matters the subject of these reasons.

17    The Liquidators say that they adopt a neutral position in respect of Ms Trinh’s removal application. However, they have pointed out various matters tending against the application that they say should be taken into account. They have also provided relevant undertakings in an effort to avoid or remove any conflict.

18    The DCT is an active opponent to the application.

19    I have somewhat limited information as to the creditors of Nararra (and the terms on which they are creditors), which is of some significance on this application, including because I must have regard to the interests of the creditors of Nararra. At the hearing, I was not taken to any specific information as to the quantum of Nararra’s debts or the identity of the creditors.

20    However, the Liquidators have provided the Court with a Form 507 Report on Company Activities and Property that Mr Panella (a director of Nararra) provided to them. I propose to have regard to that report. It contains a list of creditors, with amounts said to be owing. This reveals that:

(a)    the major creditor is Marginata, said to be owed $1,341,909.64;

(b)    the second largest creditor is Reliance Financial Services Pty Ltd (Reliance), said to be owed $657,160.13;

(c)    the third largest creditor is Capital Financial Advisory Pty Ltd (formerly known as Accolade Advisory Pty Ltd) (Accolade), said to be owed $248,825;

(d)    the fourth largest creditor is Apex Project Management Pty Ltd (Apex), said to be owed $186,404.40; and

(e)    the fifth largest creditor is the DCT, said to be owed $50,000.

I understand that there may be an issue as to whether some of these debts are only repayable upon completion of the development in Narara. However, apart from the question of timing, I was informed by counsel for Ms Trinh that there was no issue about the repayment of the monies recorded in the intercompany receivables and the accounts of Narrara, including the amounts recorded as owing to Marginata, Reliance and Accolade. I was told that the real issue concerns the claims made in NSD 194.

21    Ms Trinh filed a forensic accountant’s report as to the solvency of Nararra prepared by Mariano Rossetto and dated 27 March 2026. That report contains a revised balance sheet of Nararra as at 31 January 2026, which records the amounts owing to Marginata and Reliance as set out above, but records that the amount of indebtedness to Accolade is $127,000 rather than $248,825. Nothing turns on this latter difference for present purposes. That balance sheet also records the loans from Marginata, Reliance and Accolade as non-current liabilities.

22    Put another way, there is no dispute that Marginata, Reliance and Accolade are creditors of Nararra, and are owed amounts recorded in the accounts of Nararra. It appears that the matter which concerns Ms Trinh is not these debts, but the potential for the Liquidators to receive a proof of debt directly from one of the NSD 194 Corporate Plaintiffs (arising out of alleged tax schemes the subject of NSD 194) and purport to assess that proof whilst also being the liquidators of the company lodging the proof. I will describe such a potential claim as a NSD 194 Tax Scheme Direct Claim.

23    Apart from amounts owing for land tax and council rates, the other creditors of Nararra are owed smaller amounts, and appear to be companies associated with Mr Cassaniti or his family. Mr Cassaniti is the sole director of most of these companies, and the other companies are under the control of the family of Mr David Cassaniti, who is Mr Cassaniti’s cousin. With one exception, these entities are also defendants in NSD 194.

24    There is evidence in the proceedings from Mr David Cassiniti, who is the sole director of Apex, to the effect that Apex is a construction company that has provided construction and project management services for the development undertaken by Nararra at Narara, and is owed the amount referred to above.

25    As Ms Trinh’s application asserts a conflict based on the position adopted by the Liquidators in connection with NSD 194, and the issues in that proceeding, I have had regard to the Amended Statement of Claim and Originating Process in NSD 194 in considering the present application.

Standing

26    While the Liquidators take a neutral position on the interlocutory process, they make the preliminary contention that Ms Trinh does not have standing to apply for the relief sought. The Liquidators suggest that Ms Trinh’s application requires the Court to exercise the powers provided by s 90-15 of the Insolvency Practice Schedule (Corporations) (IPS-Corps), at schedule 2 of the Corporations Act, and given effect by s 600K of the Corporations Act, which is in the following terms:

90‑15 Court may make orders in relation to external administration

Court may make orders

(1)    The Court may make such orders as it thinks fit in relation to the external administration of a company.

Orders on own initiative or on application

(2)    The Court may exercise the power under subsection (1):

(a)    on its own initiative, during proceedings before the Court; or

(b)    on application under section 90‑20.

Examples of orders that may be made

(3)    Without limiting subsection (1), those orders may include any one or more of the following:

(a)    an order determining any question arising in the external administration of the company;

(b)    an order that a person cease to be the external administrator of the company;

(c)    an order that another registered liquidator be appointed as the external administrator of the company;

(d)    an order in relation to the costs of an action (including court action) taken by the external administrator of the company or another person in relation to the external administration of the company;

(e)    an order in relation to any loss that the company has sustained because of a breach of duty by the external administrator;

(f)    an order in relation to remuneration, including an order requiring a person to repay to a company, or the creditors of a company, remuneration paid to the person as external administrator of the company.

Matters that may be taken into account

(4)    Without limiting the matters which the Court may take into account when making orders, the Court may take into account:

(a)    whether the liquidator has faithfully performed, or is faithfully performing, the liquidator’s duties; and

(b)    whether an action or failure to act by the liquidator is in compliance with this Act and the Insolvency Practice Rules; and

(c)    whether an action or failure to act by the liquidator is in compliance with an order of the Court; and

(d)    whether the company or any other person has suffered, or is likely to suffer, loss or damage because of an action or failure to act by the liquidator; and

(e)    the seriousness of the consequences of any action or failure to act by the liquidator, including the effect of that action or failure to act on public confidence in registered liquidators as a group.

…

27    Section 90-15(2)(b) of the IPS-Corps limits standing to bring an application seeking relief under that provision to the persons identified in s 90-20, which relevantly provides as follows:

90-20    Application for Court order

(1)    Each of the following persons may apply for an order under section 90-15:

(a)    a person with a financial interest in the external administration of the company;

(b)    if the committee of inspection (if any) so resolves—a creditor, on behalf of the committee;

(c)    ASIC;

(d)    an officer of the company;

(e)    if the application is in relation to a company that is a friendly society within the meaning of the Life Insurance Act 1995 and which may be wound up voluntarily under subsection 180(2) of that Act—APRA.

(2)    Paragraph (1)(d) has effect despite section 198G.

Note: Section 198G deals with powers of officers etc. while a company is under external administration.

(3)    ...

28    Section 5-30 of the IPS-Corps stipulates which persons are taken to have a financial interest in the external administration for the purposes of s 90-20(1):

5-30    Persons with a financial interest in the external administration of a company

A person has a financial interest in the external administration of a company:

(a)    if the person is one of the following:

(i)    the company;

(ii)    a creditor of the company;

(iii)    an external administrator of the company;

(iv)    in a members’ voluntary winding up—a member of the company; or

(b)    in any other circumstances prescribed.

29    The Liquidators suggest that Ms Trinh lacks standing to bring an application under s 90-15 as a member of Nararra, in circumstances where the winding up was ordered by a Registrar of this Court rather than through a members’ voluntary winding up. Ms Trinh’s application is therefore cast by the Liquidators as an invitation for the Court to grant relief in the form sought on its own initiative as provided for s 90-15(2)(a).

30    Ms Trinh does not dispute this analysis as far as it goes. However, Ms Trinh puts her submission on the issue of standing on three bases. First, Ms Trinh says that the Court can act on its own account in relation to the supervision of liquidators when a conflict is identified.

31    Secondly, Ms Trinh observes that her interlocutory process also seeks the removal and replacement of the Liquidators from their concurrent role as receivers and managers of the Narara Developments Trust, of which Narrara is the trustee and Ms Trinh the beneficiary. In that capacity, Ms Trinh has standing at least to bring her application in respect of the Liquidators’ role as receivers and administrators of the Narara Developments Trust. Ms Trinh says that if that relief were to be granted, it would be absurd to confine the relief ordered to the receivership over the Trust only, and it would follow as a natural consequence that the Court should, on its own motion, also remove and replace the Liquidators as liquidators of Nararra.

32    Thirdly, Ms Trinh contends the appointment of the replacement liquidators is an exercise of the Court’s general power to appoint an official liquidator to a company upon an order being made for the winding up of a company, as provided by s 472 of the Corporations Act, and that the specific power under s 90-15 of the IPS-Corps, and the standing requirements it impose, do not limit that general power: s 90-15(7) of the IPS-Corps. It is also said that Ms Trinh has standing at a minimum to contend for the appointment of Mr Taylor (the alternative liquidator Ms Trinh has nominated) in addition to the Liquidators currently appointed.

33    There is no need to explore these matters further. If there is a clear and unavoidable conflict as Ms Trinh asserts, the Court would act to prevent the Liquidators from continuing in those circumstances.

The conflict alleged by Ms Trinh and the response of the other parties

34    The first basis for a conflict raised by Ms Trinh is that the Liquidators are effectively on both sides of the record in NSD 194. I dealt with a conflict of this sort in Krejci (liquidator) v Panella, in the matter of Richmond Lifts Pty Ltd (in liq) (No 3) [2025] FCA 1114 at [37] – [43] (Krejci No 3). It can be a basis for replacing liquidators.

35    The Liquidators sought to deal with this conflict by undertaking to the Court to discontinue the proceedings against Nararra in NSD 194 in the event that the Court does not remove the Liquidators as the liquidators of Nararra. The Liquidators also point to the circumstance that, pursuant to s 471B of the Corporations Act, leave is required to proceed against Nararra as a company in liquidation, and the Liquidators have not obtained leave and nor do they intend to.

36    Ms Trinh submits that the mere existence of proceedings by the Liquidators against Nararra means that there is a conflict that cannot be overcome by the device suggested by the Liquidators.

37    Ms Trinh also submits that, in any event, it is clear that the strategy being pursued by the Liquidators is to achieve the winding up of Nararra so that the claims of the DCT are dealt with by the Liquidators as proofs of debt in the winding up of Nararra.

38    The second conflict relied upon by Ms Trinh is a conflict said to arise from the Liquidators of the NSD 194 Corporate Plaintiffs acting as liquidators of Nararra, including in approving proofs of debt. Ms Trinh submits that it is intolerable that the Liquidators are both pursuing claims against Nararra, being alleged debts due to the DCT and losses caused to the NSD 194 Corporate Plaintiffs by the indebtedness of those entities to the DCT, and adjudicating on those very claims in their role as liquidators of Nararra.

39    This concern by Ms Trinh seems to relate to the potential for a NSD 194 Tax Scheme Direct Claim to be considered by the Liquidators.

40    Ms Trinh relies on the following passage from the Liquidators’ statutory report to creditors of Nararra of 11 February 2026:

As advised in our Initial Report, the Company [i.e. Nararra] is part of the Richmond Group, a group of entities that were subject to a series of audits conducted by the Australian Taxation Office (ATO). Principals of BRI Ferrier have been appointed to act as external administrators of these companies.

Andrew Cummins, David Coyne, Mr Keenan and I filed an application with the Court to join the Company as a plaintiff [sic: defendant] in the Richmond Federal Court proceedings commenced by us in our capacity as liquidators of Richmond and other related entities.

As liquidators of the Richmond Group, we have commenced legal proceedings against various related entities that we believe were involved in a scheme which has resulted in the ATO becoming a major creditor of the Group for many millions of dollars. The purpose of the Richmond proceedings is to facilitate our appointment to relevant entities so that we may conduct investigations into the suspected fraudulent conduct, trace the flow of funds between entities, identify and preserve any assets, and report on the involvement of the directors or any other persons not recorded with ASIC, including any potential misconduct or breaches of the Act.

41    This passage tends to support Ms Trinh’s contention that the Liquidators will approach the adjudication of proofs of debt in the liquidation of Nararra in a manner likely to be influenced by their perception that:

(a)    Nararra is part of a group of companies (described by the Liquidators as the “Richmond Group”) which include the NSD 194 Corporate Plaintiffs; and

(b)    Nararra has received monies diverted from the NSD 194 Corporate Plaintiffs pursuant to a tax avoidance scheme.

The report does not say that Nararra itself is a participant in the tax scheme.

42    Importantly, what is not clear from the evidence on this application is the extent to which relevant proofs of debt in the liquidation of Nararra will be the subject of genuine dispute. As set out earlier, Ms Trinh does not dispute that companies identified by the Liquidators as major creditors of Nararra, being Marginata, Reliance and Accolade, are in fact creditors of Nararra, in respect of amounts recorded in the accounts of Nararra.

43    Further, neither Mr Cassaniti nor anyone else gave evidence about the underlying position on intercompany debts, and no alternative explanation for the matters the subject of the claims in NSD 194 have been advanced in the present proceedings. In the defences filed in NSD 194, relevant defendants have denied the allegations made in those proceedings, but without providing any particularised alternative explanation for the payment of monies from the NSD 194 Corporate Plaintiffs to defendants in those proceedings.

44    In the Amended Statement of Claim in NSD 194, it is asserted (in Annexure 41) that the payments made to Nararra were indirect, in that:

(a)    it is asserted that the third plaintiff, Richmond Lifts Pty Ltd, made payments to the third defendant, Armstrong Scalisi Holding Pty Ltd (trading as CAP Accounting) (CAP Accounting), which in turn made payments to Narrara;

(b)    it is asserted that the third plaintiff, Richmond Lifts Pty Ltd, made payments to the sixth defendant, Reliance, which in turn made payments to Nararra;

(c)    it is asserted that the third plaintiff, Richmond Lifts Pty Ltd, made payments to the fourth defendant, Accolade, which in turn made payments to Nararra;

(d)    it is asserted that the fifth defendant, Marginata, made payments to Nararra, but no source of corresponding payments to Marginata is identified. As noted above, the nature of the plaintiffs’ case in relation to these payments from Marginata is wholly obscure. Annexure 41 does not match the language of the pleading.

45    It is unclear whether there would be a dispute that payments were made by plaintiff entities to relevant defendant entities (noting that the defences in NSD 194 assert that the payments had legitimate purposes). It appears very likely that it will be disputed that the payments made by the NSD 194 Corporate Plaintiffs were made pursuant to a scheme to avoid tax.

46    It is therefore unclear as to whether there will be any real dispute about claims that may be the subject of proofs of debt in the winding up of Nararra, particularly claims from the third, fourth, fifth and sixth defendants.

47    The position adopted by the DCT on this application may be summarised as follows. The DCT notes that Ms Trinh does not have a beneficial interest in the shares in Nararra. The DCT says that Mr Cassaniti stands behind Nararra and behind the Richmond Group, and that it is Mr Cassaniti who is involved in the alleged scheme which the Richmond Proceeding will consider. The DCT refers to cases that emphasis the desirability of common appointments where there are common issues. The following submission was made at the hearing:

So when we consider that Ms Trinh doesn’t really – or doesn’t have an interest at all, and what there really is, is Mr Cassaniti standing behind this seeking to fragment the appointments and seeking to fragment the investigations which might lead to a common, overall understanding of the scheme – then your Honour simply is not – should not intervene to undermine the efficient investigation of what is the overall picture here, because that is going to be to the detriment of the Deputy Commissioner, and that – and that’s why the Deputy Commissioner has sought to – has sought these appointments… [W]e’ve got Nararra in the position that we want, and we want it to stay there… precisely for this fact finding inquiry…

48    The reference to “the position we want” is a reference to Nararra being in liquidation and controlled by the Liquidators, being the same liquidators who are considering the alleged scheme the subject of the Richmond Proceeding.

49    The DCT also submits that any conflict is hypothetical at this stage, in circumstances where the withdrawal of the proceedings against Nararra in proceedings NSD 194 means that there will be no litigation conflict, and it remains to be seen whether there is any dispute about any debt that might be the subject of a proof of debt.

50    The Liquidators seek to deal with the second ground of alleged conflict by means of a further undertaking. The Liquidators undertake to the Court that they will not lodge, and nor will they cause any of the NSD 194 Corporate Plaintiffs to lodge, any proof of debt in the winding up of Nararra until the determination of NSD 194 or unless permitted by order of the Court.

51    Ms Trinh says that this undertaking is ineffective to cure the problem, for two reasons. First, Ms Trinh submits that the conflict will remain in the meantime and every step that the Liquidators take will be affected by the conflict. Secondly, Ms Trinh submits that, as a result of the operation of the first undertaking given by the Liquidators, Nararra will no longer be a party to NSD 194 and will not be bound by, or have the benefit of, any determination in that proceeding.

Consideration

52    In Krejci No 3 at [37] – [43] (being a decision in the very proceeding that Ms Trinh says gives rise to a conflict), I set out the general principles governing when the appointment of a liquidator or receiver should be set aside on the basis of a conflict. On that occasion, I concluded it was necessary for the liquidators to be replaced as the liquidators of several defendant companies due to the immediate conflict presented by the liquidators simultaneously being plaintiffs in proceedings brought against the defendant companies while remaining the liquidators of those companies: at [59] – [72].

53    As I discussed in Krejci No 3, it has been recognised that, notwithstanding there might be potential or theoretical conflicts of interest where there are claims between companies in a group of companies, it is common for a single liquidator to be appointed, leaving questions of potential conflicts to be dealt with if and when they arise. In Krejci No 3 at [41] – [42], I referred to observations in Australian Securities and Investments Commission v Westpoint Corporation Pty Ltd (2006) 227 ALR 623; [2006] FCA 135 at [31] – [34] (Siopis J) and Re Chilia Properties Pty Ltd (administrators appointed) (1997) 73 FCR 171 (Chilia) at 173 (Lehane J) that in the absence of any real, as opposed to theoretical, conflict of interest it is generally desirable to have common liquidators to a group of companies.

54    In Chilia at 173D, Lehane J observed that:

The reason is not far to seek. A principal task of a liquidator is to protect the interests of unsecured creditors. The fact that a liquidator is additionally an unsecured creditor, or a representative of one, merely means that the interests of the liquidator in that capacity, are the same as the interests of a substantial class of those whom the liquidator is obliged to protect.

55    In the present case, it is not common ground that all of the relevant entities are in a group of companies. However, these observations of Lehane J are nevertheless apposite.

56    In her submissions, Ms Trinh refers to the Liquidators taking “an adversarial stance against Nararra”. However, to speak of “Nararra” in this context tends to obscure the necessary analysis. Nararra is in liquidation. The interests of the creditors are in recovering sufficient funds for their debts to be paid.

57    In relation to the alleged litigation conflict, the Liquidators have undertaken to discontinue the proceeding against Nararra (unless they are not the Liquidators of Nararra, in which case there will be no litigation conflict). In those circumstances, I do not consider there to be any litigation conflict which requires the Liquidators to be replaced.

58    The question of whether the existence of the claim in the litigation evidences some general adversarial stance against Nararra is a matter for separate consideration in relation to the conflict in general.

59    In relation to a conflict more generally, in the absence of any claim (as evidenced by a proof of debt), it is difficult to know whether there will be any contested claims that might give rise to a conflict. The alleged “adversarial stance” against Nararra is somewhat devoid of content in the absence of a claim somehow manifesting or reflecting that adversarial position.

60    For example, if Marginata was to lodge a proof of debt consistent with the accounts of Nararra (noting that Ms Trinh accepts that there is a loan from Marginata to Nararra as recorded in the accounts of Nararra), it is not clear why the Liquidators would treat that claim any differently from how an alternative liquidator would treat it. Any liquidator of Nararra will have to consider reasonable steps that will maximise the return to creditors and, if any surplus is possible, the return to shareholders.

61    Even if the Liquidators were to pursue a case that, pursuant to a scheme to defraud the DCT of tax revenue, funds from the NSD 194 Corporate Plaintiffs were improperly transferred to entities associated with Mr Cassaniti, that does not necessarily mean that, in conducting the liquidation of Narrara, the Liquidators are likely to do anything other than what an alternative liquidator would do acting in the interests of creditors collectively. The alleged “adversarial stance” against Nararra is theoretical in the absence of any contested claim. Put another way, the so-called “adversarial stance” is consistent with a process whereby Nararra pays to Reliance, Marginata or Accolade funds recorded in the accounts of Nararra, and the relevant dispute is over the character of funds in the hands of Reliance, Marginata or Accolade. That does not raise any conflict. The “adversarial stance” is therefore not determinative of whether there is a conflict. It may give rise to a conflict, or it may not.

62    For example, if the Liquidators or any of the NSD 194 Corporate Plaintiffs were to make a NSD 194 Tax Scheme Direct Claim in the winding up of Nararra by lodging a proof of debt making such a claim, that is likely to give rise to a conflict. The Liquidators, acting properly, may need to take such steps as are required to remove the conflict, which might include approaching the Court for appropriate relief.

63    As expressed in submissions, the principal concern of Ms Trinh appears to be in relation to any NSD 194 Tax Scheme Direct Claim. However, it appears unlikely that the NSD 194 Corporate Plaintiffs will pursue any such claim. It appears far more likely that companies (such as Marginata, Reliance or Accolade) that have provided monies to Nararra would lodge proofs of debt in the winding up of Nararra in accordance with a conventional basis (i.e. based on debts recorded in the accounts of Nararra), and that the plaintiffs in NSD 194 would make any relevant claims to monies in the hands of, for example, Reliance or Accolade (or Marginata, if Marginata has, contrary to the “Nil” reference in Annexure 41 of the Amended Statement of Claim in NSD 194, received relevant funds from the NSD 194 Corporate Plaintiffs). Any claim against Reliance, Accolade or Marginata would not raise any conflict vis-à-vis Nararra.

64    For example, to take the position of Reliance, if the realisation of the development proceeds is sufficient for the repayment of the $657,160.13 loan from Reliance, then this dwarfs the amount of $3,000 that is particularised in Annexure 41 to the Amended Statement of Claim in NSD 194 as the amount that was paid from Reliance to Nararra. In those circumstances, the debate will likely be about the characterisation of the funds in the hands of Reliance, not about any further distribution to Nararra.

65    A faint suggestion is made in paragraph [454] of the Amended Statement of Claim in NSD 194 that Nararra has received money directly from the NSD 194 Corporate Plaintiffs (“directly or indirectly”), but this is inconsistent with Annexure 41 to the same pleading, and is wholly unparticularised. It appears to be an error, and I will treat it as such. It also appears liable to be struck out.

66    Likewise, no proper basis has been articulated for any form of damages claim against Nararra by the NSD 194 Corporate Plaintiffs.

67    Further, pursuant to the undertaking now provided by the Liquidators (that they will not lodge, and nor will they cause any of the NSD 194 Corporate Plaintiffs to lodge, any proof of debt in the winding up of Nararra until the determination of NSD 194 or unless permitted by order of the Court), there is no imminent risk of a claim of the sort that Ms Trinh alleges may give rise to a conflict.

68    In relation to Ms Trinh’s point that the determination of NSD 194 will not bind Nararra if the proceedings against Nararra are discontinued, whilst that is so, the proceeding will nevertheless bind the parties who are likely to have any conflicting interests in relation to Nararra. It will bind Mr Cassaniti and Ms Trinh (who are defendants to NSD 194), as well as the plaintiffs to NSD 194 and the only creditors of Nararra (such as Marginata, Reliance and Accolade) who are likely to have any claims relevant to the issues that Ms Trinh asserts give rise to a conflict. It is therefore likely that the determination of NSD 194 will provide clarity in relation to the issues that could be said to give rise to a conflict, including clarity as to the position of Mr Cassaniti and those persons and entities associated with him (including Ms Trinh) in connection with any impugned intercompany transfers, and bring that clarity prior to any relevant proof in the winding up of Nararra (of the type that Ms Trinh is concerned about) being lodged. The determination of NSD 194 is certainly likely to reduce the scope of any relevant disputes between the parties with an interest in Nararra.

69    The Liquidators’ undertaking to postpone any proofs of debt is not necessarily a complete answer to any conflict. The Liquidators could, for example, conduct examinations or exercise their powers for the purpose of investigating a NSD 194 Tax Scheme Direct Claim against Nararra. Such conduct is likely to give rise to a conflict of interest. However, it is not clear at present whether such conduct will be pursued. For the reasons discussed above, there seems little incentive to pursue it.

70    Likewise, in the event that the Liquidators sought to bring an application for pooling, that may give rise to a conflict, because that may seek to predetermine a contested issue as to the extent to which various companies form part of a group of companies, including as to whether they are under common control. However, no such pooling application has been brought, and neither of these events will happen soon in any event, in light of the Liquidators’ undertaking to postpone the lodgement of proofs of debt.

71    The above analysis indicates that any conclusion that there is a conflict is premature in the current circumstances. It is not clear whether the Liquidators will pursue any NSD 194 Tax Scheme Direct Claim against Nararra, including because it would not appear necessary to do so. That is not to say that a conflict may not arise. However, it depends on the actions of the Liquidators and the NSD 194 Corporation Plaintiffs.

72    If, notwithstanding these observations, any actual conflict arises, the Liquidators may need to deal with that conflict, including by application to the Court if necessary. Likewise, if any claim is made that gives rise to a conflict, any other party may wish to raise the existence of that alleged conflict with the Court. In relation to the standing of Ms Trinh, there will be at least one pathway by which she could raise the general issue with the Court. However, I do not consider that any conflict has crystallised at present.

73    By contrast to the hypothetical nature of the alleged conflict, the detriment caused by the removal of the Liquidators will be immediate and real. The benefit of work performed to date may be lost, as will the accumulated knowledge of the Liquidators in relation to the affairs of Nararra. There is likely to be inefficiency caused by having different liquidators.

Conclusion

74    Taking all of these matters into account. I am not persuaded that sufficient grounds have been demonstrated for the removal at this stage of the Liquidators as liquidators of Nararra, or as receivers and managers of the Narara Developments Trust. It is premature to assess whether there is a conflict that prevents the Liquidators for acting as the liquidators of Nararra.

75    Ms Trinh has not succeeded in obtaining the relief which she seeks and should pay costs.

76    The refusal of that relief will, however, be conditional upon the Liquidators providing the two undertakings to the Court which have been proffered. Further, I propose to stand over Ms Trinh’s application so that it can be reagitated if circumstances arise which indicate the existence of a conflict.

77    If the Liquidators were to conduct examinations or otherwise exercise powers in a manner consistent with the pursuit of a claim by the plaintiffs in NSD 194 against Nararra (rather than the pursuit of a claim by the identified creditors of Nararra), or if the Liquidators were to pursue a pooling application, then that may give rise to a conflict of interest justifying the reagitation of Ms Trinh’s application.

78    As this application formed part of a broader interlocutory process, I shall request the parties to propose orders, including as to costs, to give effect to these reasons whilst preserving for further consideration what remains to be determined. Those orders should include the undertakings from the Liquidators.

Associate:

Dated:    12 June 2026