Federal Court of Australia

Pracilio (Liquidator), in the matter of RFK Enterprises Pty Ltd [2026] FCA 1087

ORDERS

THE COURT ORDERS THAT:

Appointment as a receiver

1.    Pursuant to s 57 of the Federal Court of Australia Act 1976 (Cth), Paul Joseph Pracilio is appointed, nunc pro tunc, as receiver and manager (Receiver) of the property of the RFK Investment Trust (ABN 79 875 456 615) and any other property held by RFK Enterprises Pty Ltd ACN 167 753 577 (in liq) (the Company) on trust (the RFK Trust Property).

2.    Pursuant to s 90-15 of Sch 2 of the Corporations Act 2001 (Cth) (the IPS), the Receiver shall have, in respect of the RFK Trust Property, all of the powers that a receiver and manager in respect of the business and property of a company has under s 420 of the Corporations Act (other than those in subs 420(2)(s) to (w)), as if reference in that section to 'the corporation' was a reference to the 'RFK Trust', including, without limitation:

(a)    collect in and realise the RFK Trust Property;

(b)    pay the creditors of the RFK Trust from the RFK Trust Property, pursuant to the priorities prescribed under the provisions of the Corporations Act;

(c)    compromise any claim made against the Liquidator or the Company in its capacity as trustee of the RFK Trust or against any of the RFK Trust Property on any terms the Liquidator sees fit;

(d)    bring any claim against any party on behalf of the RFK Trust;

(e)    execute any tax returns, financial statements or other documents relating to the RFK Trust; and

(f)    distribute any surplus in the winding up.

3.    Pursuant to r 1.34 of the Federal Court Rules 2011 (Cth), the requirement for the Receiver, to file a guarantee under rr 14.21 and 14.22 of the Rules is dispensed with.

Ancillary orders

4.    Pursuant to s 90-15 of the IPS that the costs, expenses and remuneration incurred by the first plaintiff, in his capacity as either as the liquidator of the Company or as the Receiver, including the costs of this application, is paid in priority from the RFK Trust Property.

5.    It is declared that the Liquidator is entitled to be indemnified out of the trustee's right of exoneration over the RFK Trust Property in respect of any debts owing by the Company incurred in its capacity as trustee of the RFK Trust, together with the costs and expenses of the winding up of the Company.

6.    Any creditor of the Company, or other person with sufficient interest in the RFK Trust, or who can otherwise demonstrate sufficient interest to vary these orders, have liberty to apply to vary these orders on three business days' notice to the plaintiffs.

7.    Within three business days of the making of these orders, the plaintiffs are to:

(a)    provide notice to the Australian Securities and Investments Commission by sending a copy of these orders to rl.legal@asic.gov.au; and

(b)    provide notice to creditors of the Company, by:

(i)    sending an email to the creditors of the Company with a copy of these orders or a link to access a copy of these orders, to the extent the Company's books and records contain an email address for the creditor, or the creditor has previously nominated an email address for the purposes of receiving communications; and

(ii)    publishing a copy of these orders on the website they maintain at: https://kordamentha.com/creditors/rfk-enterprises-pty-ltd/.

8.    The costs of this application are costs in the winding up of the Company.

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

REASONS FOR JUDGMENT

VANDONGEN J:

1    RFK Enterprises Pty Ltd (RFK) was the trustee of the RFK Investment Trust (RFK Trust), which, since July 2021, carried on a plumbing services business under the name 'Plumbing Bros Mandurah'. That business was conducted under a franchise agreement between RFK, in its capacity as trustee of the RFK Trust, and Plumbing Bros. Franchising Pty Ltd. Over time RFK accrued significant tax liabilities in carrying on the business. Eventually, the Deputy Commissioner of Taxation served a statutory demand on RFK, but the demand went unpaid. Eventually orders were made by a registrar of this Court that RFK be wound up in insolvency.

2    Paul Joseph Pracilio was appointed as liquidator of RFK on 30 June 2026. The business formerly operated by RFK has ceased to operate and Mr Pracilio has indicated that he does not intend to recommence trading the business. Based on Mr Pracilio's investigations to date, RFK never carried on any other business or acted as trustee of any other trust. Mr Pracilio is of the view, which I accept, that all of RFK's debts were incurred by it as trustee for the RFK Trust and that the assets of RFK are the assets of the RFK Trust.

3    By operation of cl 7.6(2) of the trust deed by which the RFK Trust was established, upon entering into liquidation, the office of trustee that was then occupied by RFK was 'determined and vacated'. Since then, RFK held the property of the RFK Trust as a bare trustee: Krejci (liquidator) v Panella, in the matter of Richmond Lifts Pty Ltd (in liq) (No 2) [2025] FCA 248 at [12]; Cremin, in the matter of Brimson Pty Ltd (in liq) [2019] FCA 1023 at [48].

4    Since his appointment as liquidator Mr Pracilio has purported to exercise the power in s 568(1) of the Corporations Act 2001 (Cth) to disclaim certain property that, upon reflection, was RFK Trust Property. That property consists of a motor vehicle, a pump and a 'mini reel' that were security for a loan from Westpac, as well as the premises from which Plumbing Bros Mandurah was operating under a lease. In his evidence, Mr Pracilio explained that he disclaimed the motor vehicle, the pump and the 'mini reel' after taking into account independent valuations of that property and the likely selling fees. Having regard to the minimal equity in that property, it is understandable why Mr Pracilio thought that disclaimer was appropriate. His purported disclaimer of the leased premises was also appropriate.

5    In those circumstances the plaintiffs sought orders pursuant to s 57 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and s 90-15 in Sch 2 of the Corporations Act (the Insolvency Practice Schedule), appointing him, nunc pro tunc, as receiver and manager of the property of the RFK Trust and, with some exceptions, conferring on him the powers that a receiver and manager has under s 420 of the Corporations Act. Those orders were sought to regularise the disclaimers made by Mr Pracilio.

6    Mr Pracilio explained that he will need to carry out further work to finalise and fully determine the RFK Trust and to make distributions to creditors. According to Mr Pracilio, that work includes obtaining access to cash in a bank account, selling unencumbered vehicles, ascertaining whether there is any other property of the RFK Trust, making distributions of that property and determining the RFK Trust in accordance with its terms. However, he said that because RFK has been removed as the trustee of the RFK Trust under the terms of the trust deed, he does not have the powers to attend to those tasks unless he has the powers of a receiver and manager.

7    Mr Pracilio also sought various ancillary orders, including orders relating to the payment of his costs, expenses and remuneration.

8    Mr Pracilio deposed that he believes that the orders that were sought were in the best interests of the creditors of RFK because they will allow the property of the RFK Trust to be distributed to creditors in accordance with the relevant provisions of the Corporations Act, in circumstances in which that property would not otherwise be available and will allow him to finally determine the RFK Trust.

9    After briefly hearing this morning from counsel for the plaintiffs, I made several orders that were essentially in the terms sought. The following are my reasons for making those orders.

10    Before identifying the relevant principles that I was required to apply in dealing with the plaintiffs' application, it is necessary to first say something about the procedural requirements that were required to be satisfied before the orders sought in this case can be made.

Relevant procedural requirements

11    In his capacity as liquidator, Mr Pracilio is entitled to apply under s 90-20(1)(d) of the Insolvency Practice Schedule as an officer of RFK for an order under s 90-15.

12    I was satisfied that the plaintiffs had served a copy of the originating process, and the supporting affidavit affirmed by Mr Pracilio in support of that application, on the Australian Securities and Investments Commission (ASIC) a reasonable time before the hearing of this application, as required by r 2.8 of the Federal Court (Corporations) Rules 2000 (Cth). I noted, in that regard, that on 24 July 2026 ASIC formally confirmed that it had received copies of those documents earlier that day. Further, shortly before ASIC accepted receipt of those documents it advised Mr Pracilio that it only provides formal correspondence in response to certain court applications made under Ch 5 and Sch 2 of the Corporations Act. Based on the advice provided by ASIC it appears that an application of the sort made by Mr Pracilio in these proceedings would not be the subject of formal correspondence. The advice from ASIC also indicated that, unless it has made contact with an applicant within 10 days and the application is not of a type to which formal correspondence can expect to be provided, it may be assumed that ASIC does not intend to intervene in the proceedings.

13    In all of the circumstances I was satisfied that ASIC does not intend to intervene in these proceedings.

14    I was also satisfied that the creditors of RFK have been given notice of this application by the publication of two circulars to creditors on 23 July 2026 and 30 July 2026, respectively. Notwithstanding the publication of those circulars Mr Pracilio has not received notice from any creditor in support of, or in opposition to, this application.

15    Mr Pracilio submitted that as he seeks an order under s 57 of the FCA Act, he is required by r 14.21(b) to file a guarantee that satisfies the requirements of r 14.22 of the Federal Court Rules 2011 (Cth) (Rules). Although I was not entirely convinced that r 14.21(b) does in fact impose an obligation on a person who seeks to be appointed as a receiver to file such a guarantee, I accepted that the usual approach is to make an order under r 1.34 of the Rules that the 'requirements' of rr 14.21 and 14.22 be dispensed with where a registered liquidator, who is subject to the supervisory powers of the Court, seeks appointment as a receiver of trust property held by the company in liquidation: Calvisi (Liquidator) v GRL Pty Ltd (in liq), in the matter of GRL Pty Ltd [2026] FCA 1030 at [17].

16    Having concluded that the necessary procedural steps were taken in this case, I will now briefly summarise the relevant principles to be applied.

Principles to be applied

17    As Jackson J explained in Donnelly (Liquidator), in the matter of Dunjey Property Pty Ltd (in liq) [2023] FCA 1254 at [14]:

The need for orders appointing the plaintiffs as receivers relates to the right of indemnity out of trust assets which the Company has when it incurs liabilities in its capacity as trustee. One aspect of that right of indemnity is the right of exoneration, being the ability of the trustee to apply trust assets to satisfy trust liabilities without having to pay those liabilities out of its own pocket. That right is protected by an equitable lien over trust property, but the trustee needs an order of the Court before it may sell that property in fulfilment of the right.

(citations omitted)

18    Then, after referring to the regularly cited summary of the relevant principles by Moshinsky J in Cremin at [48] to [51], Jackson J said in Donnelly at [16] to [17] that:

a trustee company that is being wound up, as bare trustee, retains its right of exoneration out of trust assets for liabilities incurred in its capacity as trustee, and the accompanying equitable lien over the assets of the trust. But neither the company nor its liquidators have the power to sell the assets of the trusts without an order of the Court. Therefore the Court may be willing to make orders appointing the liquidators of the company as receivers of assets it holds in its capacity as trustee, as a convenient way to exercise the company's right of exoneration, that is, to realise trust assets in order to pay trust creditors.

The Court needs to be satisfied, though, that the appointment of receivers or the exercise of a power of sale for that purpose will not deprive persons who are not creditors of the trusts of their right to enforce liabilities against company assets. The right of exoneration only permits the Company to realise assets of a given trust to satisfy debts owed to creditors of that trust, and not to any other creditors. In practice, as reflected in Cremin, the Court is usually satisfied of that by evidence indicating that the Company did not carry on business in any capacity other than as trustee.

(citations omitted)

Should the orders sought by Mr Pracilio be made?

19    RFK, as a bare trustee of the RFK Trust, has a right of exoneration out of the RFK Trust Property with respect to debts it owes to creditors of the RFK Trust. In circumstances in which RFK did not carry on any business other than as trustee of the RFK Trust, and did not act as a trustee for any other trust, such that all of the creditors of RFK are also creditors of the RFK Trust, I concluded that it was appropriate to make orders appointing Mr Pracilio as receiver and manager of the RFK Trust Property for the purpose of realising that property for the benefit of RFK's creditors, and to finally determine the RFK Trust. As McElwaine J observed in Bad Wolf Purchasing Pty Ltd (as trustee for the Du Bray Property Trust) v Du Bray and Associates Pty Ltd [2025] FCA 814 at [87], the appointment of liquidators as receivers and managers of trust property is commonplace where the company in liquidation acts as a bare trustee in consequence of its removal as a trustee. The appointment of a liquidator as a receiver and manager is a common course which brings certainty to the process of liquidation: Xu, in the matter of Sydney Carlingford Pty Ltd (Administrators Appointed) [2024] FCA 799 at [10].

20    As I have already said, Mr Pracilio sought to be appointed as receiver and manager of the RFK Trust Property nunc pro tunc to regularise purported disclaimers of certain RFK Trust property under s 568(1) of the Corporations Act. Orders appointing a liquidator as a receiver for the purpose of selling trust assets and distributing the proceeds among trust creditors have been made nunc pro tunc to authorise sales of trust assets that have already occurred: see, for example, Cremin at [50]. In that regard, Mr Pracilio submitted that the same approach ought to be taken to regularise his purported disclaimers of certain RFK Trust Property. As the effect of the disclaimers of the RFK Trust Property that Mr Pracilio purported to make in this case is, by operation of s 568D(1) of the Corporations Act, the termination of RFK's 'rights, interests, liabilities, and property in or in respect of the disclaimer property', which is what would have been the effect of any purported sale of the same property, I accepted that it was appropriate to appoint Mr Pracilio as receiver and manager nunc pro tunc.

21    I also considered that it was appropriate for an order to be made under s 90-15 of the Insolvency Practice Schedule that Mr Pracilio shall have, in respect of the RFK Trust Property, all of the powers that a receiver in respect of the business and property of a company has under s 420 of the Corporations Act (other than paras (s) to (w) of s 420(2), which are unnecessary in circumstances in which RFK is in liquidation) as if the reference in that section to 'a corporation' were a reference to the RFK Trust. Those powers are to include the power to do all things necessary or convenient to:

(1)    collect in and realise the RFK Trust Property;

(2)    pay the creditors of the RFK Trust from the RFK Trust Property, pursuant to the priorities prescribed under the provisions of the Corporations Act;

(3)    compromise any claim made against Mr Pracilio as liquidator or the Company in its capacity as trustee of the RFK Trust or against any of the RFK Trust Property on any terms Mr Pracilio sees fit;

(4)    bring any claim against any party on behalf of the RFK Trust;

(5)    execute any tax returns, financial statements or other documents relating to the RFK Trust; and

(6)    distribute any surplus in the winding up.

22    Mr Pracilio also sought various ancillary orders, including orders that his costs, expenses and remuneration be paid in priority from the RFK Trust Property and a declaration that he is entitled to be indemnified out of RFK's right of exoneration in respect of any debts owing by RFK incurred in its capacity as trustee of the RFK Trust, together with the costs and expenses of the winding up of RFK. Orders of that nature have been described as of 'quotidian nature': Calvisi at [18]. I was satisfied that it was appropriate for those orders to be made.

23    Finally, I made several orders designed to bring the making of the orders to the attention of ASIC and RFK's creditors, and granted liberty to any such creditor, or other party with a demonstrated sufficient interest, to apply to vary the orders on notice to the plaintiffs.

Associate:

Dated:    6 August 2026