Federal Court of Australia

Baker v Baker Haulage (Queanbeyan) Pty Ltd (Trustee), in the matter of Baker Haulage (Queanbeyan) Pty Ltd [2026] FCA 942

ORDERS

THE COURT ORDERS THAT:

1.    Baker Haulage (Queanbeyan) Pty Ltd (the Company) be wound up pursuant to s 461(1)(k) of the Corporations Act 2001 (Cth) (the Act).

2.    Jonathon Colbran and Adam Cormack of RSM be appointed jointly and severally as liquidators of the Company (Liquidators).

3.    Jonathon Colbran and Adam Cormack of RSM be appointed jointly and severally as the receivers and managers (Receivers) over the assets, property and undertaking (the Trust Property) of the Baker Family Trust ABN 44 693 537 721 (the Trust).

4.    The Receivers be appointed with the powers provided under s 420 of the Act (except paras (s), (t), (u) and (w) in subs 420(2)) as if references in that section to “the corporation” were references to “the Trust”, together with the powers that a liquidator has in respect of a company pursuant to s 477 of the Act, including, without limitation, the power to do all things necessary or convenient to:

(a)    investigate transactions entered into by the Company;

(b)    demand the books and records of the Trust from any person;

(c)    determine and make payment of any claims against the assets of the Trust;

(d)    in accordance with the priorities set out in s 556 of the Act, distribute the proceeds of the realisation of the Trust Property (after payment of the costs, expenses and remuneration of the Receiver of the Trust and Liquidator of the Company, including the plaintiff’s costs of and incidental to this proceeding), to any creditors of the Trust; and

(e)    wind up the Trust, including taking all steps necessary or convenient to effect the winding-up, as if s 477(2)(m) of the Act applied to the Trust.

5.    The costs, expenses and remuneration of the Liquidators (calculated at the standard rates of RSM from time to time for work of an equivalent nature) in acting be paid from the Trust Property in an amount determined in accordance with Division 60 of Schedule 2 of the Act.

6.    The costs, expenses and remuneration of the Receivers (calculated at the standard rates of RSM from time to time for work of an equivalent nature) in acting be paid from the Trust Property and capped at $50,000 plus GST.

7.    The Plaintiff’s costs of and incidental to this proceeding be paid from the Trust Property.

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

REASONS FOR JUDGMENT

JACKMAN J:

1    By an amended originating process dated 2 July 2026, the plaintiff, Ms Toni-Jewel Baker, seeks orders that the defendant, Baker Haulage (Queanbeyan) Pty Ltd (the Company), be would up and that a liquidator be appointed to it, and that a receiver and manager be appointed over the property, assets and undertaking of Baker Family Trust (the Trust). The Company has been served at its registered office, and the Commissioner of Taxation has been notified in writing of these proceedings.

2    The Company was incorporated on 28 August 2000. Mr Ian James Baker was the Company’s sole director, secretary and shareholder.

3    The Trust was established by a trust deed and accompanying schedule on 21 July 2004 (the Trust Deed). Since that date, the Company has traded solely in its capacity as trustee of the Trust and operated, in that capacity, a haulage transportation business known as “Baker Haulage” (the Business).

4    Mr Baker was hospitalised on around 21 March 2025. From that time, the Business ceased trading. Mr Baker subsequently died on 21 April 2025. The plaintiff is Mr Baker’s step-daughter.

5    In relation to the plaintiff’s standing, s 462(2)(b) of the Corporations Act 2001 (Cth) (the Act) provides that a creditor may apply to the Court for an order to wind up a company. The Act does not define “creditor”. On 13 April 2026, Group & General Finance Pty Ltd (GGF) sent an email to the solicitors for the plaintiff demanding repayment of $11,980.99 due and owing under a chattel mortgage that it had entered into with the Company on 8 February 2023, with a security interest registered over the 1996 Chevrolet Silverado vehicle that the Company held as trustee of the Trust. On 28 April 2026 the plaintiff, after being correctly advised by her solicitor that paying the secured debt would assist her standing as a creditor in bringing this application, repaid the Company’s debt to GGF in full. In doing so, the plaintiff was a third party paying the debt of a debtor to a secured creditor and became subrogated in equity to GGF’s rights as a secured creditor: Bofinger v Kingsway Group Ltd [2009] HCA 44; (2009) 239 CLR 269 at [82] (Gummow, Hayne, Heydon, Kiefel and Bell JJ); Aged Care Services Pty Ltd v Kanning Services Pty Ltd [2013] NSWCA 393; (2013) 86 NSWLR 174 at [47]–[59] (Gleeson JA, with whom Meagher and Leeming JJA agreed). It follows that the plaintiff is a creditor within the meaning of s 462(2)(b) of the Act and has standing to bring this application.

6    Section 461(1)(k) of the Act gives the Court the power to wind up a company if the Court is of the opinion that it is just and equitable to do so. If so satisfied, the Court’s power to wind up the company is enlivened and it then exercises a discretion as to whether to do so: Mercantile Credits Ltd v Foster Clark (Australia) Ltd [1964] HCA 66; (1964) 112 CLR 169 at 173 (per Kitto, Taylor and Windeyer JJ). It is well-established that it may be just and equitable to wind up a company where, relevantly:

(a)    “there is no prospect of the Company continuing to operate its business”: Re Vision Image (Aust) Pty Ltd; Cheng v Yeo [1998] WASC 38 at [12] (White J); or

(b)    the company is in a state of “corporate paralysis”: CIC Insurance Ltd (prov liq apptd) v Hannan & Co Pty Ltd [2001] NSWSC 437; (2001) 38 ACSR 245 at 248 at [13] (Barrett J).

7    These principles were applied recently in Re Sun Sign Oty Ltd [2025] VSC 431; (2025) 78 VR 41 at [37], where the company’s sole director and shareholder had died. Hetyey AsJ ordered that the company be wound up since it was in a state of corporate paralysis and no longer carried on any business or performed any function.

8    In the present case, no documents of the Company make provision for the death of a director or shareholder or appointment of a replacement director. Further, each named executor in Mr Baker’s last will and testament has renounced all rights to probate, and no persons have applied for or been granted probate or letters of administration in relation to Mr Baker’s estate. There is no prospect of the Company continuing to operate, and the Company is in a state of paralysis.

9    Messrs Jonathon Colbran and Adam Cormack of RSM Australia have consented to being appointed as joint and several liquidators of the Company for the purposes of s 532(9) of the Act.

10    Accordingly, I accept the plaintiff’s submission that it is just and equitable to wind up the Company under s 461(1)(k) of the Act, and I appoint Messrs Colbran and Cormack as joint and several liquidators pursuant to s 472 of the Act.

11    Section 57(1) of the Federal Court of Australia Act 1976 (Cth) empowers the Court to appoint a receiver by interlocutory order at any stage of a proceeding in any case in which it appears to the Court to be just or convenient to do so.

12    As the Company is no longer able to act, neither can the Business or Trust. Clause 21 of the Trust Deed relevantly disqualifies the trustee from acting if it is a company that has entered liquidation. Pursuant to cl 22 of the Trust Deed, the power under the trust deed to appoint a new Trustee can only be conferred by the personal or legal representative of the appointor, namely the late Ian Baker. It is well established that a corporate trustee which is thus disqualified holds the trust assets as bare trustee: Xu, in the matter of Sydney Carlingford Pty Ltd (Administrators Appointed) [2024] FCA 799 at [8]–[10].

13    It is also well established that, although a trustee has an equitable charge or lien over the trust property to secure its right of indemnity, that does not confer a power of sale, and a court order or the appointment of a receiver to sell trust assets is necessary if a sale of trust assets is sought: Jones v Matrix Partners Pty Ltd [2018] FCAFC 40; (2018) 260 FCR 310 at [44] (Allsop CJ). The usual course where the trustee company has been wound up is to appoint the liquidator(s) as receiver(s) of the trust assets in order that they can be sold, and the net proceeds distributed to creditors.

14    Messrs Colbran and Cormack have also consented to being appointed as receivers and managers of the assets, property and undertaking of the Trust. Accordingly, it is appropriate to appoint Messrs Colbran and Cormack as joint and several receivers pursuant to s 57(1).

15    Accordingly, I make the above orders.

Associate:

Dated:    17 July 2026