Federal Court of Australia

Lu, in the matter of Lu [2026] FCA 841

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 206G(1)(c) of the Corporations Act 2001 (Cth), and subject to the conditions in Order 2 of these orders, leave be granted to George Lu to manage Active Super No. 1 Pty Ltd.

2.    Until such time as George Lu is no longer disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001 (Cth), Active Super must not engage in any activity other than to act as trustee of the Active Super No. 1 Fund and to do things that are reasonably incidental to so acting.

3.    Pursuant to s 126J(1)(b) of the Superannuation Industry (Supervision) Act 1993 (Cth), George Lu is not a disqualified person in relation to Active Super and the Fund.

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

REASONS FOR JUDGMENT

HALLEY J:

A.    Introduction

1    The plaintiff, George Lu, is an undischarged bankrupt. He seeks an order in this proceeding pursuant to s 206G(1) of the Corporations Act 2001 (Cth) (Corporations Act) that he be permitted to manage and direct Active Super No. 1 Pty Ltd, the trustee of his self managed superannuation fund, Active Super No. 1 Fund, and an order pursuant to s 126J(1)(b) of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act) that he is not a disqualified person.

2    The two principal issues that arise on Mr Lu’s application are first, whether the Court has power to make the order pursuant to s 126J(1)(b) of the SIS Act, given the Australian Prudential Regulatory Authority (APRA) is not the regulator of the Fund, and second, assuming the Court does have power, should the Court exercise its discretion to make the orders sought by Mr Lu under the Corporations Act and the SIS Act.

3    Mr Lu relies on an affidavit that he has prepared in support of his application and four affidavits regarding service of his originating process on his trustees in bankruptcy, the Commissioner of Taxation and the Australian Securities and Investments Commission (ASIC) and notification of the hearing of his application.

4    For the reasons that follow, I am satisfied that the Court does have power to make the order sought by Mr Lu pursuant to s 126J(1)(b) of the SIS Act and the Court should exercise its discretion to make orders substantially in the form sought by Mr Lu under the Corporations Act and the SIS Act to permit him to manage and direct Active Super as the trustee of the Fund.

B.    Background

5    The following salient facts are taken from the affidavit of Mr Lu sworn on 10 April 2026.

B.1.    Mr Lu

6    In 1985, Mr Lu came to Australia. He became an Australian citizen on 17 November 1988. He is married, with three children. His family are financially and generally dependent on him.

7    Mr Lu and his wife, Jennifer Diep, established the Fund on 12 November 2012. Active Super has always been the trustee of the Fund. Mr Lu has always been a director of Active Super.

8    In the period between approximately 7 April 2010 and 16 April 2025, Mr Lu was employed as the general manager of:

(a)    Foxville Projects Group (NSW) Pty Ltd ACN 142 981 593 (in Liquidation); and

(b)    Global Projects Pty Ltd ACN 136 534 891 (in Liquidation).

9    Mr Lu was never appointed as a director of either Foxville or Global Projects, but he played a significant role as the general manager of those companies in their day-to-day operations and management.

B.2.    Financial collapse of Foxville and Global Projects

10    Foxville and Global Projects operated within a larger group of companies known as the Foxville Group, which had been involved in over 150 construction projects since it commenced operations in Australia in 2004.

11    By 2024, the Foxville and Global Projects were experiencing significant financial difficulties. Mr Lu gives evidence that these financial difficulties were attributable to the after effects of Government-imposed lockdowns during the COVID-19 pandemic, a greater than 60% increase in labour costs because of a demand in or about October 2023 by the Construction Forestry and Maritime Employees Union (CFMEU) that all contractors engaged by Foxville and Global Projects be immediately transferred to full time employment contracts that were subject to the terms of the CFMEU’s enterprise bargaining agreement, and the significant losses incurred in delivering metro projects for the New South Wales Government.

12    On 16 October 2024, the Deputy Commissioner of Taxation commenced winding up proceedings against Global Projects in relation to unpaid PAYG and fringe benefits taxation.

13    On 15 January 2025, Richard Stone and Brett Lord of RSM Australia Partners were appointed as the joint and several administrators of Foxville pursuant to s 436A of the Corporations Act.

14    On 21 February 2025, this Court made orders winding up Global Projects in insolvency and appointing Brendan Copeland as the liquidator of the company (Global Projects liquidator).

15    On 16 April 2025, at an adjourned meeting of creditors, it was resolved that Foxville be wound up and that the administrators be appointed as liquidators (Foxville liquidators).

16    In their statutory report to creditors dated 16 July 2025, the Foxville liquidators stated:

We note that Mr Lu, who considers himself to be the General Manager, has mainly been assisting us with the day-to-day operations of the Company’s business. Mr Lu has attributed the Company’s financial difficulties to the following factors:

•    The Covid-19 pandemic restricting the ability for the Company to properly trade on.

•    Increasing material and shipping costs for projects under fixed price contracts.

•    Pressures from the Metro station NSW projects, which were losing [sic] making.

•    Impact of Construction, Forestry and Maritime Union Enterprise Bargaining Agreement.

Based on our investigations, the Company’s financial difficulties may be attributed to the factors identified by Mr Lu. Additionally, we have identified the following factors:

•    Declining margins for various projects.

•    Increasing wages and external contractor costs.

•    Losses suffered on specific jobs in New South Wales.

•    Annual trading losses.

17    The Foxville liquidators also stated in the statutory report that they had identified possible recovery actions for unfair preferences, related party transactions and insolvent trading, with estimated values of claims ranging of $10 million for insolvent trading, $11.8 million for unfair preferences and $15 million for related party transactions. The Foxville liquidators noted in relation to potential insolvent trading claims that:

Our investigations have identified that Mr George Lu may be deemed to have acted as a shadow director and as such may be held liable if a successful insolvent trading claim is taken.

18    There was no suggestion in the material before me that any insolvent trading claim had been commenced against Mr Lu as a shadow director or Foxville or that any other proceeding had been commenced, or had contemplated being commenced, against him by the Foxville liquidators or by the Global Projects liquidator.

B.3.    Guarantees given by Mr Lu

19    During his term as general manager of Foxville and Global Projects, Mr Lu provided a number of personal guarantees in relation to the contractual obligations of those companies, including to Assetinsure Pty Ltd, acting as the agent of Swiss RE International SE, Judo Bank and Cavan Glass and Aluminium Pty Ltd.

20    On 16 May 2025, Assetinsure issued a letter to arrange a meeting with Mr Lu and other persons with respect to previously issued letters of demand to Mr Lu, and other persons, demanding payment of the sum of $4,972,354.34 to protect its position in relation to insurance bonds that it had issued on behalf of the Foxtel Group.

21    On 21 May 2025, Judo Bank commenced proceedings against Mr Lu to enforce a guarantee that Mr Lu had provided to Judo Bank. It sought payment from Mr Lu of the sum of $5,758,437.17, together with costs and interest (Judo Bank proceeding).

22    On 21 July 2025, Mr Lu filed a defence in the Judo Bank proceeding but following service of an amended statement of claim on 15 September 2025, Mr Lu’s solicitors filed a notice of ceasing to act.

23    On 21 October 2025, Cavan commenced proceedings against Mr Lu, seeking to enforce a personal guarantee given by Mr Lu to Cavan.

24    On or about 10 November 2025, Cavan served a statement of claim on Mr Lu seeking payment of the sum of $91,580.76 together with costs and interest.

25    Mr Lu did not have the cash or assets to meet the claims made by Assetinsure, Judo Bank and Cavan in an aggregate amount of $10,822,372.27, together with interest and costs.

B.4.    Steps taken by Mr Lu to seek to avoid bankruptcy

26    Mr Lu gives evidence that the steps that he took to seek to avoid bankruptcy included taking steps to ensure that Foxville and Global Projects were operated and managed diligently and professionally, consistently and frequently consulting with and relying on advice from solicitors in relation to the solvency of Foxville and Global Projects and his own solvency position, and defending claims brought against Foxville, Global Projects and himself when he considered, on advice, that there were reasonable grounds to defend those claims.

27    On 4 February 2026, after numerous meetings with his solicitors, Mr Lu on his own debtor’s petition appointed Gavin David King and Diana Marie Talevski to act as his joint and several trustees in bankruptcy (Bankruptcy Trustees).

B.5.    Steps taken by Mr Lu after bankruptcy

28    Mr Lu remains an undischarged bankrupt.

29    At the time that Mr Lu was declared a bankrupt, he was a director of Active Super, George & George Pty Ltd ATF Foxville Unit Trust, Global Joinery Pty Ltd and Newfield Co Pty Ltd. Since his bankruptcy Mr Lu has not acted as a director of any of these companies.

30    Mr Lu gives evidence that he has cooperated with the Bankruptcy Trustees and there was no evidence before me to suggest that was not the case.

B.6.    Active Super and the Fund

31    On 12 November 2012, Active Super was incorporated, and the Fund was established pursuant to a trust deed executed by Active Super as the trustee of the Fund. The Fund was established for the sole purpose of operating a self managed superannuation fund for the benefit of the family of Mr Lu and Ms Diep.

32    On 30 November 2012, the Fund adopted a strategy to invest in direct equities and stocks, property trusts and associated investments, direct property investments, and bank operating accounts and associated products. Since that time, the Fund has invested in a manner consistent with that strategy and has been and remains a compliant self managed superannuation fund.

33    As at 31 March 2026, the Fund had a CommSec portfolio with an approximate share value of $358,765.02 and a portfolio with Vanguard with an approximate value of $75,000.

34    As at the date of the incorporation of Active Super, its directors were Mr Lu, Ms Diep and Qui Son Le.

35    On 22 August 2016, Qui Son Le ceased to be a director of Active Super.

36    As at the date of Mr Lu’s bankruptcy, Mr Lu and Ms Diep were the sole directors and shareholders of Active Super. The company has no employees and no assets other than the assets that it holds on trust for the Fund. Moreover, the company has no external creditors, no subsidiary or controlling entities, and the sole beneficiaries and members of the Fund are Mr Lu and Ms Diep.

B.7.    Notifications of the application

37    The affidavits of service relied upon by Mr Lu establish that the Bankruptcy Trustees, the Commissioner and ASIC have been notified of the application. Both the Bankruptcy Trustees and ASIC have confirmed that they do not intend to file a notice of appearance or otherwise appear in the proceeding. The Commissioner has not filed a notice of appearance or sought to be heard at the hearing of the application on 11 June 2026.

38    Further, given that the Commissioner, and not APRA, is the relevant regulator of the Fund, there was no requirement for Mr Lu to provide notice to APRA within 21 days of commencing the proceeding pursuant to s 126J(3)(a) of the SIS Act.

C.    Legal principles

C.1.    Leave under the Corporations Act to manage a self managed superannuation fund

39    Section 206A(2) 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.

40    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.

41    Section 206G(1)(c) of the Corporations Act confers power on the Court to grant leave to a person to manage a particular corporation if the person was not disqualified by ASIC.

42    Section 206G(2) provides that a person seeking leave to manage a corporation pursuant to s 206G(1) must lodge a notice with ASIC at least 21 days before commencing the proceedings, and s 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”.

43    Section 206G(5) provides that the grant of leave may later be revoked on an application made by ASIC.

C.2.    Relevant provisions of the SIS Act

44    The relevant provisions of the SIS Act, in an analogous application by a bankrupt for leave to manage a self managed superannuation fund, were recently the subject of specific consideration by McDonald J in Wake, in the matter of Wake (Bankrupt) [2025] FCA 1481. For present purposes, the following distillation of those provisions is sufficient.

45    The principal objects of the SIS Act are stated in s 3(1) to include “to make provision for the prudent management of certain superannuation funds” and for their supervision by regulators.

46    Section 4 of the SIS Act provides that the Commissioner is generally responsible for the supervision of self managed superannuation funds.

47    Section 17A(1) of the SIS Act provides that 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. These relevantly include that each director of the corporate trustee of the superannuation fund must be a member of the fund, and each member of the fund must be a director of the corporate trustee.

48    Section 10(1) of the SIS Act expressly excludes a self managed superannuation fund from the definition of a “registrable superannuation entity”. It follows that one of the consequences of a superannuation fund ceasing to meet the definition of a self managed superannuation fund set out in s 17A(1) is that the fund may become a registrable superannuation entity. 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 granted pursuant to s 29D of the SIS Act: s 29J(1) of the SIS Act. If a superannuation fund ceases to meet the requirements to be a self managed superannuation fund, it would no longer be eligible for the concessional tax treatment referred to in s 3(2) of the SIS Act, unless the fund were to become a registrable superannuation entity.

49    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 a disqualified person, so that the fund ceases to meet the definitional 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 – instead, it remains a self managed superannuation fund for six months after the date of the disqualification.

50    Section 120(1)(b) of the SIS Act defines a “disqualified person” as a person that is an insolvent under administration. Section 10(1) defines “insolvent under administration” to include a person who, under the Bankruptcy Act 1966 (Cth) or the law of an external Territory, is a bankrupt in respect of a bankruptcy from which the person has not been discharged.

51    Section 126K of the SIS Act relevantly provides that a disqualified person commits an offence if they act as a trustee, investment manager or custodian of a superannuation entity, or if they act as a responsible officer of a body corporate that is a trustee, investment manager or custodian of a superannuation entity.

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

(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.

…

C.3.    Can the Court make an order under s 126J with respect to a self managed superannuation fund?

53    The power of the Court to make an order under s 126J of the SIS Act with respect to a self managed superannuation fund was the subject of specific consideration by McDonald J in Wake.

54    Section 126J is contained in Subdiv B of Div 3 of Pt 15 of the SIS Act. The first provision of Subdiv B is s 126G, which provides as follows:

126G Application of this Subdivision

This Subdivision applies to the extent that the Regulator is APRA.

55    The Commissioner, however, is the relevant regulator of self managed superannuation funds. Hence, s 126G of the SIS Act would appear on its natural meaning to preclude any reliance on s 126J to make an order that a person, including an undischarged bankrupt, is not a disqualified person.

56    The above construction appears to be supported by the explanatory memorandum to the Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2008, which introduced, among other things, a court-based process for disqualifying individuals from operating an APRA-regulated entities into the SIS Act, contained in Subdiv B of Div 3 of Pt 15, which includes s 126J. The explanatory memorandum stated on page 5 that “[t]he new disqualification regime will not apply to responsible persons relating to self managed superannuation funds (SMSFs), regulated” by the Commissioner. The same statement was replicated on page 7, which stated that the new disqualification regime extended to a director, secretary or executive officer of a body corporate that was a trustee, investment manager or custodian of a regulated superannuation authority, other than a self managed superannuation fund. Moreover, at [13] on page 11 of the explanatory memorandum, it was stated that:

The court-based disqualification regime will not apply to responsible persons in relation to SMSFs which are regulated by the ATO. Items 54 (section 126A), 62 and 63 retain the current power of the Commissioner of Taxation to disqualify an individual from being or acting as a responsible person relating to a SMSF. In addition, the amendments also extend the disqualification power of the Commissioner of Taxation to included actuaries of a SMSF.

57    By contrast, s 126 of the SIS Act provides that Subdiv A of Div 3 of Pt 15 of the SIS Act applies where the regulator is the Commissioner. That subdivision, however, does not contain any equivalent provision to s 126J, permitting a “disqualified person” to seek an order from the Court that they are not a disqualified person, despite s 120 of the SIS Act.

58    Therefore, if s 126J of the SIS Act were construed as applicable only to entities regulated by APRA, then it would follow that there is no mechanism under the SIS Act for a bankrupt to seek an order from the Court that they were not a “disqualified person” in order to enable them to act as a director of their own self managed superannuation fund, without committing an offence under s 126K of the SIS Act.

59    Justice McDonald concluded in Wake at [59]-[61] that the better view is that such a construction should not be accepted, and the Court does have power under s 126J of the SIS Act to make an order that a bankrupt is not a disqualified person irrespectively of whether the relevant regulator is APRA. His Honour reached that conclusion for the following reasons that he set out at [55]-[58]:

… First, the combination of consequences outlined above would be surprising, and would not seem to serve any sensible and consistent legislative policy.

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.

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.

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.)

60    I am satisfied for the reasons advanced by McDonald J in Wake at [55]-[58] that textually, as found by McDonald J in Wake at [59], s 126G should be construed as meaning that the provisions of Subdiv B, insofar as they refer to applications by “the Regulator”, apply only to the extent that the regulator is APRA. Hence for the purposes of s 126J(1), s 126G makes plain that the only regulator which can apply to the Court to revoke or vary a disqualification order is APRA, but a “disqualified person”, irrespective of the relevant regulator, may otherwise relevantly seek an order that they are not a disqualified person pursuant to s 126J(1)(b).

61    Further, I note that in each of Macalister, in the matter of an application by Macalister [2021] FCA 1455 (Banks-Smith J), Orel, in the matter of an application by Orel [2025] FCA 590 (Sarah C Derrington J) and Roberts, in the matter of an application by Roberts [2025] FCA 957, the Court made orders under s 126J(1)(b) of the SIS Act that a bankrupt was not a disqualified person for the purpose of managing their self managed superannuation fund without any consideration of the apparent restrictive words in s 126G that Subdiv B of Div 3 of Pt 15 of the SIS Act only applies in circumstances where APRA is the relevant regulator.

62    In Dessmann, in the matter of Dessmann [2023] FCA 1019, Hespe J declined to make an order under s 126J(1)(b) of the SIS Act that a bankrupt was not a disqualified person for the purpose of managing their self managed superannuation fund, but on grounds other than the Court’s lack of power to make such an order because Subdiv B of Div 3 of Pt 15 was limited to APRA-regulated funds.

63    Finally, I note that in Hunt, in the matter of Hunt (Bankrupt) [2026] FCA 389, McDonald J was satisfied that the Court had power to make an order under s 126J(1)(b) of the SIS Act where the relevant regulator was the Commissioner for “the reasons previously explained in” Wake at [49]-[61].

D.    Exercise of discretion

64    The relevant principles governing applications by disqualified persons for leave to manage corporations pursuant to s 206G were stated by Jackson J in Frigger, in the matter of an application by Frigger [2019] FCA 1730; (2019) 139 ACSR 329 at [8]-[12], which summary I respectfully adopt:

In Re Altim Pty Ltd [1968] 2 NSWR 762 at 764, Street J identified the fundamental principles which informed the court’s discretion under a statutory predecessor to s 206G as follows:

The section under which this application is made proceeds upon the basis that a person who is an undischarged bankrupt is prima facie not to be permitted to act as a director or to take part in the management of a company. The Court is given jurisdiction to grant leave for such activities to be carried on, but an applicant who comes to the Court seeking leave must bear the onus of establishing that the general policy of the Legislature laid down in this section ought to be made the subject of an exception in his case. It should be borne in mind that the section is not in any sense a punishment of the bankrupt. Nor should a refusal to grant leave under the section be regarded as punitive. The prohibition is entirely protective, and the power of the Court to grant leave is to be exercised with this consideration in the forefront.

Even in the absence of a contradictor it is for the applicants for leave to place before the court evidence in appropriate form that is capable of satisfying the court that, in the given case, an exception should be made to the legislative policy underlying the prohibition in the Act. ASIC’s absence is not necessarily to be given significant weight: Re Watts (2011) 284 ALR 403; 86 ACSR 221; [2011] FCA 1185 at [18] (Yates J).

Generally, before it can lift the disqualification the court needs to know what the applicants propose to do by way of corporate management, although this may not be necessary if the application is for leave to take part in the management of a specified corporation or corporations: Re Shneider (1996) 71 FCR 69 at 73; 142 ALR 129 at 133; 22 ACSR 497 at 501 (Drummond J). In those cases the court will consider the structure of the companies, the nature of their businesses and the interests of their shareholders, creditors and employees, and any risks to those persons or to the public which may be involved in the applicants assuming positions on the board or in management: Adams v Australian Securities and Investments Commission (2003) 46 ACSR 68; [2003] FCA 557 (Adams v ASIC) at [8] (Lindgren J).

As one would expect, the attitude of the shareholders to the application can be a relevant factor: see eg Jansen v Australian Securities and Investments Commission [2003] FCA 1564 at [12], [14] (Mansfield J).

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: GRD v BJD [2018] WASC 374 at [12] (Master Sanderson), applying Chye v Australian Securities and Investments Commission [2012] FCA 1405 (Bromberg J).

65    It is well established that in applying s 126J of the SIS Act, the Court is entitled to have regard to the principles relevant to s 206G of the Corporations Act and the principal object of the SIS Act, as set out in s 3 of the SIS Act, to make provision for the prudent management and supervision of superannuation entities: Porter, Application under the Superannuation Industry (Supervision) Act 1993 [2012] FCA 1431 at [29]-[31] (Foster J).

66    The principal considerations in applications under s 206G(1)(c) of the Corporations Act and s 126J(1)(b) of the SIS Act are the interests of the shareholders, creditors and employees of the relevant company, and the public at large. Other considerations that might be relevant include the protection of the public, the nature and reasons for the disqualification, the potential for the conduct giving rising to the disqualification to be repeated, the risk for the survival of the company, and, insofar as bankruptcy is involved, the circumstances in which the debts arose and the extent to which the bankrupt has co-operated with their trustee: Macalister at [21], citing Frigger at [34] and GFD v BJD [2019] WASC 374 at [11]-[12].

67    I am satisfied for the following reasons that the orders sought by Mr Lu (a) for leave to manage Active Super, and (b) that he not be a disqualified person pursuant to s 126J(1)(b) of the SIS Act, should be made.

68    First, the substantive cause of the bankruptcy of Mr Lu was the demands made on personal guarantees that he had provided of corporate indebtedness of Foxville and Global Projects, following their financial collapse due largely to factors beyond their control, including the impact of the COVID 19 pandemic, loss making State infrastructure projects and CFMEU demands. Mr Lu gives evidence that supports a finding that he acted responsibly in relation to the financial difficulties encountered by Foxville and Global Projects, including engaging advisers to assist with cashflow challenges and defending claims brought against Foxville and Global Projects.

69    As a consequence of the calls on his personal guarantees, Mr Lu was faced with large claims well beyond his ability to meet, and obtained professional advice and became a bankrupt on his own petition.

70    Second, on the material before me, there was no suggestion that Mr Lu’s bankruptcy was incurred by reason of any fraud, dishonesty or intentional misconduct, and I have no reason to believe that Mr Lu was not of good character.

71    Third, given the previous two considerations, the risk of any repetition of the circumstances giving rise to his bankruptcy would appear to be remote.

72    Fourth, Active Super was established and has exclusively operated as the trustee of the Fund for the benefit of Mr Lu and his family. The company has no external creditors, employees, subsidiaries or controlling entities, and the sole beneficiaries of the Fund are Mr Lu and Ms Diep.

73    Fifth, there is no reason to believe that Mr Lu will not comply with his obligations under the Corporations Act and the SIS Act if he is permitted to remain a director of Active Super. Further, he has given evidence that he has at all times cooperated with the Bankruptcy Trustees, and there is no reason on the material before me to believe that is not the case.

74    Sixth, the compliant nature of the Fund is subject to and conditional upon Mr Lu remaining a director of Active Super. If leave is not granted to Mr Lu to remain a director of Active Super, the Fund would cease to comply with s 17A of the SIS Act and would lose its status as a self managed superannuation fund by operation of s 17A(4)(b) of the SIS Act, and unless the Fund were to become a registrable superannuation entity, this would give rise to significant adverse tax consequences: Hunt at [27] and [39].

75    Seventh, each of the Commissioner, ASIC and the Bankruptcy Trustees have been notified of Mr Lu’s application for orders under the Corporations Act and the SIS Act to enable him to continue to act as a director of Active Super, and none has raised any objection or concern to the Court granting that relief.

76    I am satisfied for the foregoing reasons that the protection of the public does not militate against making the orders sought by Mr Lu.

E.    Disposition

77    Orders will be made under the Corporations Act and the SIS Act in substantially the form sought by Mr Lu.

Associate:

Dated:    30 June 2026