Federal Court of Australia

Australian Securities and Investments Commission v Brite Advisors Pty Ltd (Receivers and Managers Appointed) (in liq) (No 5) [2026] FCA 1282

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory process filed by Mr Adam Hillier dated 23 February 2026 is dismissed.

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

REASONS FOR JUDGMENT

O’SULLIVAN J

1    These reasons should be read in conjunction with:

(a)    Australian Securities and Investments Commission v Brite Advisors Pty Ltd [2024] FCA 69;

(b)    Australian Securities and Investments Commission v Brite Advisors Pty Ltd (Receivers and Managers Appointed) (in liq) [2025] FCA 1242;

(c)    Australian Securities and Investments Commission v Brite Advisors Pty Ltd (Receivers and Managers Appointed) (in liq) (No 3) [2025] FCA 1635; and

(d)    Australian Securities and Investments Commission v Brite Advisors Pty Ltd (Receivers and Managers Appointed) (in liq) (No 4) [2025] FCA 1698.

2    In Brite Advisors, the Court appointed Linda Smith and Robert Kirman of McGrathNicol as Receivers over the property, assets and undertakings held by Brite Advisors Pty Ltd on trust for others (Trust Assets) and authorised them to take possession of, preserve, maintain and sell the Trust Assets.

3    By orders dated 10 February 2026, the Court granted one of the beneficiaries with an interest in the Trust Assets, Adam Carl Hillier, leave to file an application and supporting material in this matter without becoming a party to the proceeding: Federal Court (Corporations) Rules 2000 (Cth) r 2.13(1).

4    On 23 February 2026, Mr Hillier applied to the Court for an order pursuant to s 1321 of the Corporations Act 2001 (Cth) that a decision of the Receivers dated 17 October 2025 to reject Mr Hillier’s claim for payment in the sum of GBP £575,380.92 and USD $352,623.37, referred to as the “Tranche 2 Deposits”, be set aside.

5    Section 1321 of the Act was repealed in 2016. The Receivers (who oppose the orders) request that the Court instead make its determination by way of directions under s 1323 of the Act or alternatively ss 23 and 57 of the Federal Court of Australia Act 1976 (Cth).

6    It is not entirely clear why s 1323 of the Act would operate in the circumstances but s 23 of the FCA Act clearly does. Accordingly, I proceed on the basis that Mr Hillier makes his application under s 23 of the FCA Act.

7    In support of his application, Mr Hillier relies upon his affidavit affirmed 10 March 2026 (Hillier affidavit).

8    The Receivers rely on the forty-fourth affidavit of Linda Methven Smith affirmed 27 March 2026 (Smith affidavit).

Background

9    In or about 2010, Mr Hillier began receiving financial advice from Mr Mark Donnelly (then the Chief Executive Officer of Brite) in relation to Mr Hillier’s investments and pension assets.

10    In or about 2014, Mr Donnelly advised Mr Hillier to transfer his pension assets to a pension scheme based in Hong Kong.

11    On that advice, Mr Hillier became a member of the GFS Superannuation Scheme in January 2015 and transferred his existing pension, which at that stage was valued at approximately GBP £1,054,000, into the Utmost Plan PF792446 within the GFS. Soon after, the GFS was renamed to GFS Superannuation Scheme 2.

12    During 2018, all GFS2 investments were frozen in cash pending the resolution of a dispute between the trustees as to which of the two corporate trustees was the correct trustee. Those investments included Mr Hillier’s investments in the Utmost Plan.

13    It seems that in response, Mr Donnelly arranged for the sum of GBP £200,000 to be transferred from Mr Hillier’s Utmost Plan to Brite (Tranche 1 Deposit). The Tranche 1 Deposit was made and received by Brite on or around 12 April 2018 and was used to purchase Minerva Notes.

14    As the GFS2 dispute persisted, Mr Hillier contends that in mid-2021 he and Mr Donnelly entered a ‘Swap Agreement’ whereby:

(1)    Mr Hillier transferred his beneficial interest in the Utmost Plan to Brite;

(2)    on 21 October 2021, Brite opened a new investment account for Mr Hillier and deposited amounts (GBP £256,360.14, GBP £455,936.76, GBP £119,444.16 and USD $352,623.37) on his behalf which were equivalent to the original purchase price of the Utmost Plan (Tranche 2 Deposits); and

(3)    Brite assumed the risk and benefits associated with the Utmost Plan: Hillier affidavit at Tab 2-3 of annexure ACH-1.

15    Of the Tranche 2 Deposits, the sums of GBP £455,936.76 and GBP £119,444.16 were combined with the sum of GBP £221,360.76 (the latter being the Tranche 1 Deposit balance, as increased by coupons paid on the Minerva Notes) to purchase a portfolio of Exchange Traded Fund securities.

16    From November 2021, Mr Hillier and officers of Brite exchanged communications regarding Mr Hillier’s portfolio of ETF securities which had been established on 21 October 2021. By way of example, on 8 July 2022, Brite sent to Mr Hillier a valuation report showing that his account balance stood at GBP £1,085,572: Hillier affidavit at Tab 4 of annexure ACH-1.

17    Mr Hillier deposes that three other valuation reports were issued to him on 31 January 2022, 25 October 2023 and 12 June 2023. Mr Hillier annexes the reports dated 31 January 2022 and 25 October 2022 to his affidavit. There is no report dated 12 June 2023 annexed to the Hillier affidavit.

18    In 2022, Mr Hillier transferred additional amounts to Brite in the sum of GBP £291,188 (Tranche 3 Deposits) which was again used to purchase ETF securities.

19    On 2 September 2024, the Court made programming orders in relation to a framework for distribution of Brite Assets Under Management (AuM), following which the Receivers conducted investigations into the books and records of Brite for the purposes of calculating beneficiaries’ entitlements: Smith affidavit at [8].

20    As a result of those investigations, the Receivers identified three categories of deposits relating to Mr Hillier — designated by the Receivers as “Tranche 1”, “Tranche 2” and “Tranche 3”.

21    The subject of this dispute concerns Tranche 2.

22    By way of background Ms Smith explained what the Receivers determined in relation to Tranches 1 and 3: at [10]-[15] of the Smith affidavit:

Tranche 1

10.    In conducting the investigations referred to at paragraph 8 above, the Receivers identified that, on or around 12 April 2018, the sum of GBP 199,881.60 (Tranche 1 Deposit) was received into Brite Advisors' Westpac bank account. The Receivers identified (i) a deposit for GBP 200,000 was recorded in Mr Hillier's portfolio around 12 April 2018, and (ii) correspondence between Mr Mark Donnelly, Mr Gordon Couch and other Brite Advisors' representatives which outlined that these funds related to a partial withdrawal from Mr Hillier's “GFS” fund.

11.    The Receivers' investigations have identified that it appears that the Tranche 1 Deposit was used by Brite Advisors to purchase Minerva Notes on Mr Hillier's behalf in the amount of GBP 200,000. Based on these investigations, I formed the view that Mr Hillier's funds had been transferred to the Brite Advisors' Westpac client account such that Mr Hillier was entitled to a claim in respect of the Client AuM for the Tranche 1 Deposit.

12.    The Receivers determined to value Mr Hillier's Tranche 1 Deposit for the purposes of his Valuation Notice as GBP 217,143, which factored in (i) the amount of the Tranche 1 Deposit, and (ii) coupons which were paid on Minerva Notes. This is consistent with the approach taken to value the entitlements of other Beneficiaries invested in Minerva.

13.    “GFS” was recorded as Mr Hillier's Corporate Trustee in Brite Advisors' books and records. GFS Superannuation No. 2 (GFS2) was a registered occupational retirement scheme in Hong Kong. GFS2 is no longer a registered scheme, and the proper scheme administrator of GFS2 has been subject of a lengthy legal dispute in Hong Kong (as set out at paragraph 33 below). The Receivers will prepare an application to the Court to seek payment orders to pay an interim distribution in relation to Tranche 1 to Mr Hillier directly.

Tranche 3

14.    Between 18 January 2022 and 26 October 2022, five deposits were made to Brite Advisors' Westpac client account in respect of Mr Hillier, in the amounts of GBP 24,988, GBP 187,776, GBP 7,697, USD 21,001 and USD 75,117 (Tranche 3 Deposits).

15.    Based on the investigations that my staff conducted regarding the Tranche 3 Deposits, I formed the view that Mr Hillier was entitled to a claim against the Client AuM in respect of those deposits. Following completion of the entitlement verification process as set out at order 10 of the Framework Distribution Orders, the Receivers sought and obtained payment orders in respect of that entitlement (being those orders made by the Court on 26 February 2026) (Tranche 6 Payment Orders). The Receivers have made payment to Mr Hillier directly on 6 March 2026 in accordance with the Tranche 6 Payment Orders.

23    By a revised Valuation Notice dated 7 August 2025, the Receivers valued Mr Hillier’s entitlement to amounts from the AuM attributable to the Tranche 1 Deposit and Tranche 3 Deposits, being GBP £213,888 and GBP £291,188 respectively, but not the amount attributable to the Tranche 2 Deposits.

24    There is a difference between the Receivers definition of Tranche 2 payments and that of Mr Hillier.

25    Ms Smith explains: Smith affidavit at [22], [24] that the investigations conducted by the Receivers identified three deposits having been received by Brite Advisors on or about 22 October 2021 in Mr Hillier’s portfolio comprising:

(a)    GBP £455,936.76;

(b)    GBP £119,444.16; and

(c)    USD $352,623.37,

but that the Receivers were unable to reconcile those deposits with the bank account statements of Brite Advisors.

26    Ms Smith deposes: at [25] of the Smith affidavit that:

The Receivers’ definition of “Tranche 2 Deposits” differs slightly from Mr Hillier’s definition (see paragraph [22]-[23] of Mr Hillier's affidavit affirmed on 10 March 2026). Mr Hillier considers the Tranche 2 Deposits comprise the following amounts:

(a)    GBP £575,380.92, which reconciles to the total of the deposits outlined at section 22(a) and 22(b) above;

(b)    USD $352,623.37, which reconciles to the deposit at section 22(c) above; and

(c)    GBP £256,360.14, which is not included in the Receivers' definition of Tranche 2 Deposits, noting there is no record of such a deposit in Mr Hillier's current Brite Advisors' portfolio data (nor any record of such a deposit having been paid to Brite Advisors' bank accounts).

27    Mr Hillier disputed his revised Valuation Notice and on 17 October 2025 the Receivers informed Mr Hillier that he was not entitled to claim the Tranche 2 Deposits from the AuM because they considered that the Tranche 2 Deposits were not ‘contributed’ by him or by a third party on his behalf: Smith affidavit at [16]-[34].

28    Mr Hillier now disputes the Receivers’ decision.

Application to the Court

29    By his interlocutory application dated 23 February 2026, Mr Hillier seeks a direction from the Court that:

… the decision of the Receivers dated 17 October 2025 rejecting the Interlocutory Applicant’s claim in respect of the Tranche 2 ETF portfolio and associated cash allocated to his account be set aside.

1.    The Court determine that the Tranche2 ETF portfolio and associated cash in the Interlocutory Applicant’s account were held and managed in trust for the Interlocutory Applicant and do not form part of the general assets of Brite Advisors Pty Ltd (in liquidation).

2.    The Liquidators give effect to that determination.

3.    Alternatively, if the Court considers it appropriate, the matter be remitted to the Liquidators for reconsideration according to law.

4.    Such further or other orders as the Court considers appropriate.

30    By his submissions in reply dated 22 April 2026, Mr Hillier seeks a further order that:

[Mr] Hillier be paid the Tranche 2 Deposits out of the Deficient Mix Fund (such sum to be borne by the remaining beneficiaries on a pro rata basis) – and direct that the receivers obtain [Mr] Hillier’s “frozen” balance of the GFS2 Utmost/Generali fund prior to making the Tranche 2 distribution.

31    As I have noted, the Receivers oppose Mr Hillier’s application. They seek a direction from the Court that:

The Receivers would be acting properly and are justified in assessing Mr Hillier’s dispute to his Valuation Notice dated 7 August 2025 as not well-founded and proceed to distribution on the basis of the value of the entitlement as set out in that Valuation Notice.

Principles

32    In this Receivership, the vast majority of the AuM comprises a deficient mixed fund.

33    I set out the applicable principles in relation to a deficient mixed fund in Brite Advisors (No 4) at [15]-[20]:

15.    The entitlement of a person to be paid from funds or other assets held on trust is determined according to general principles of trust law subject to the statutory requirements: Re MF Global Australia Ltd (in liq) [2012] NSWSC 994 at [100]-[102].

16.    The Court may permit two or more funds to be pooled with a view to their proportionate distribution where two or more funds are mixed. In Georges v Seaborn International (Trustee), in the matter of Sonray Capital Markets Pty Ltd (in liq) [2012] FCA 75 at [82]-[86], Gordon J (as a member of this Court) observed:

[82]    In the present case, applying these provisions of the Corporations Act and the Regulations is not straight forward. First, the words “entitled” and “entitlement” are not defined in the Corporations Act or the Regulations. Given the statutory trust imposed by s 981H(1) of the Corporations Act, the Liquidators submitted (and I accept) that these words import the principles applicable to trusts and, in particular, to deficient mixed trust accounts: cf re Lehman Brothers at [67]-[72] and [181].

[83]    Those principles provide that all contributors to a deficient mixed fund hold an equitable charge over the entire fund and its traceable proceeds to the value of their contributions, subject to any dealings and costs (Sutherland Re; French Caledonia Travel Services Pty Ltd (in liq) (2003) 59 NSWLR 361 and Australian Securities and Investments Commission v Letten (No 7) (2010) 80 ACSR 401) or are equitable tenants in common of the mixed fund as a whole, including its traceable proceeds, and subject to such deductions: Goode, Royston Miles, Goode on Legal Problems of Credit and Security (4th ed, 2008, Sweet & Maxwell/Thomson Reuters) [6-11 to 6-14].

[84]    Next, the Corporations Act and the Regulations do not deal with the situation where it is not possible to work out precisely who is entitled to what moneys in particular segregated accounts. It was common ground that all the Court can do in such circumstances is to permit the moneys in the segregated accounts to be pooled with a view to their proportionate distribution. The basis for the rateable distribution is the mixing of the funds: Re French Caledonia at [127] and [187].

[85]    Such a course of action is consistent with the purpose of the statutory regime, namely the achievement of a fair outcome between clients by a pragmatic and even-handed distribution amongst them: see, by way of example, s 983E of the Corporations Act which provides that where the money received is insufficient to pay all proved claims, the Court may “despite any rule of law or equity to the contrary, apportion the money among the claimants in proportion to their proved claims and show in the scheme how the money is so apportioned” and the second reading speeches in relation to the Financial Services Reform Bill 2001 (Cth) which indicate that the legislation was designed to produce a harmonised regulatory regime for market integrity and consumer protection across the financial services industry.

[86]    Of course, rateable distribution is subject to an important qualification – it does not apply if the claimants do not have equal claims: Re French Caledonia at [176] and [185]. Put another way, it is necessary to determine whether there should be differential treatment of claimants. That question is determined on available evidence. Thus, if a claimant can establish a remedy founded on tracing, the Court will grant relief founded on that evidence because it permits it to reach a different conclusion in respect of that claimant: Re French Caledonia at [178], [187] and [189].

(emphasis provided)

17.    … A deficient mixed fund results from:

(a)    the mixing of funds from more than one source, such that it is practically difficult or not economically feasible to trace or identify individual investor entitlements: In the matter of BBY Limited (Receivers and Managers appointed) (in liquidation) (No 2) [2018] NSWSC 346 (Brereton J) at [38]-[57], [83(4)] and [400]; or

(b)    the application of funds from one trust being applied to meet the obligations of another: BBY (No 2) at [83(4)].

18.    As Gordon J noted in Sonray, all contributors to the deficient mixed fund hold an equitable charge over the entire fund and its traceable proceeds to the value of their contributions: at [83].

19.    The Court must also decide how to determine the distribution to be made from the deficient mixed fund. A simple pari passu approach by reference to each Beneficiary’s entitlement as at a particular date has been treated as appropriate in analogous circumstances, where:

(a)    the nature of the investment involves investors knowing that their funds will be pooled with those of other investors for investment purposes: Caron v Jahani (No 2) [2020] NSWCA 117 at [89] referring to In re Australian Home Finance Pty Ltd [1956] VLR 1;

(b)    money has been misappropriated from a trust account but not debited against the ledger of any particular client or clients: Re Magarey Farlam Lawyers Trust Accounts (No 3) (2007) 96 SASR 337 at [123]; and/or

(c)    records were not adequately maintained so that it is impossible or not economically feasible to identify the money/assets belonging to each person who has contributed to a mixed fund: ASIC v Letten (No 7) (2010) 190 FCR 59 (Gordon J as a member of this Court) at [332]-[336].

20.    There is no prescribed statutory methodology for assessing each Beneficiary’s entitlement: Sonray at [116]. Courts select a methodology by reference to the circumstances of the case. Under those circumstances, the Court can only work with the evidence it has available to it. That may involve some “rough justice”: BBY (No 2) at [40]-[41] and [61].

Parties’ submissions and consideration

34    The parties agreed for this matter to be determined on the papers.

35    Mr Hillier submits that the Swap Agreement is an enforceable contract because:

(1)    Brite made a binding offer to Mr Hillier to exchange his interest in the Utmost Plan for the Tranche 2 Deposits;

(2)    Mr Hillier accepted Brite’s offer, following which the Tranche 2 Deposits were made;

(3)    consideration was provided by Mr Hillier to Brite in the form of his beneficial interest in the Utmost Plan, notwithstanding that the amount in the Utmost Plan remains under his name;

(4)    on the basis of the matters deposed to by Mr Hillier, Mr Hillier and Brite intended to create legal relations;

(5)    Mr Donnelly, as the CEO of Brite, could make business decisions on behalf of Brite at the time the Swap Agreement was entered into, with the result that Brite had capacity to enter the Swap Agreement; and

(6)    the Swap Agreement was sufficiently certain.

36    The Receivers submit that even if the Swap Agreement is a contract, Mr Hillier has no entitlement against the AuM in relation to the Tranche 2 Deposits for the following reasons.

37    First, the Tranche 2 Deposits did not involve Mr Hillier himself ‘contributing’ to the AuM but were rather a funded investment by way of a margin loan from Brite.

38    Mr Hillier disputes that submission, noting that the Receivers accept he is entitled to payments from the AuM relating to the Tranche 1 Deposits and Tranche 3 Deposits despite the Tranche 1 Deposits having been a made from the GFS2 and the Tranche 3 Deposits having been made from different policies that he held.

39    Mr Hillier submits further that the Tranche 2 Deposits followed the same process as the Tranche 1 Deposits and Tranche 3 Deposits in that Brite moved Mr Hillier’s capital according to his instructions and on his behalf, with the only difference being that Brite had not yet accessed the capital the subject of the Tranche 2 Deposits.

40    Second, the Receivers submit that even if Mr Hillier ‘contributed’ to the AuM in the sense that whereas Brite might have made contributions on his behalf, those contributions occurred either through the misappropriation of cash from Brite’s omnibus account or the draw down of a margin loan secured against the assets held on trust by Brite for other beneficiaries.

41    On that basis, the Receivers submit that if Mr Hillier is to receive funds consequent upon a misappropriation of assets being held on trust for others, then a claim for breach of fiduciary duties against Mr Hillier may be available to other beneficiaries.

42    As to this submission, Mr Hillier submits that the submission should not be accepted for two reasons.

43    First, by the Receivers’ own concession: at [27] of the Smith affidavit, they could not conclude whether the Tranche 2 Deposits were “funded by the ROW (Rest of World) Margin Loan Account … or with cash held in the Interactive Brokers accounts at the time.” On that basis, Mr Hillier submits that as the Receivers do not know from where the funds were appropriated, they cannot assert that those funds were misappropriated.

44    Second, Mr Hillier contends that the Court should be “flexible” to ensure that contracts are effectively carried out, and the Receivers should be “versatile” in allocating capital out of the AuM to beneficiaries, which “negate[s] any substance to the allegation that the beneficiaries would possess a legal claim against [Mr] Hillier.”

45    I accept the Receivers’ submissions and do not accept Mr Hillier’s submissions. The fundamental difference between the Tranche 1 and 3 Deposits and the Tranche 2 Deposits is that the Receivers’ staff were unable to reconcile the Tranche 2 Deposits with Brite’s bank account statement.

46    Further, I noted in Brite Advisors (No 4) that in this matter, the Court has adopted a claims-based approach, where each Beneficiary’s entitlement will be determined by reference to the position if Brite had properly performed its obligations: MF Global at [107]; Orders 8 of the Orders dated 5 June 2024; and Order 9 of the Orders dated 2 September 2024. There has been no challenge to this approach, nor has any party sought leave to be heard on this issue. In those circumstances, the previous orders of the Court adopting the claims-based approach should not be disturbed.

47    Still further, the unfortunate position is that such was the state of Brite’s records that in some cases it is not possible to ascertain a complete picture, meaning the Receivers were unable to identify any deposit by Mr Hillier which confirmed the Tranche 2 Deposits.

48    Yet, still further, the Receivers cannot be inconsistent in dealing with various Beneficiaries’ claims. Either the claims are made out or they are not.

49    In the alternative, Mr Hillier contends that if the Swap Agreement is not a contract, he is entitled to equitable relief under the principle of estoppel. He submits that he relied on representations from Brite that it was his money that had been invested in the ETF portfolio and that it was his interest in the ETF portfolio which exceeded GBP £1,000,000. The detriment alleged is that he could have invested his money elsewhere, either himself or through a different investment firm, and generated returns in the form of interest and/or capital appreciation. Mr Hillier also submits that he would have adjusted his other investments to accelerate his investment returns had he been aware that he was not entitled to the amount attributable to the Tranche 2 Deposits.

50    Mr Hillier submits that he does not advance a claim for breach of contract but rather claims that it is the Receivers’ responsibility to act in accordance with the terms of the Swap Agreement.

51    The Receivers submit that any successful claim in breach of contract or estoppel would at best be an unsecured claim against Brite in the liquidation, leaving Mr Hillier without recourse to the Trust Assets in respect of those claims.

52    I accept the Receivers’ submission and do not accept Mr Hillier’s submission. To the extent there is a responsibility to act in accordance with the terms of the Swap Agreement, that is not the responsibility of the Receivers.

53    So too, I accept that any claim based on estoppel would, at best, be an unsecured claim against Brite in the liquidation.

54    As I also noted in Brite Advisors (No 4), Courts select a methodology by reference to the circumstances of the case and can only work with the evidence it has available to it. That may involve some “rough justice”: BBY (No 2) at [40]-[41] and [61].

55    There is simply no evidence to allow the Receivers to trace the Tranche 2 deposits.

Conclusion

56    It is for these reasons that Mr Hillier’s interlocutory application is dismissed and there will be orders accordingly.

Associate:

Dated:    1 September 2026