In the matter of Banksia Securities Limited (in liquidation)

[2025] NSWSC 697

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Banksia Securities Limited (in liquidation) [2025] NSWSC 697

Hearing dates:

26 June 2025

Date of orders:

2 July 2025

Decision date:

02 July 2025

Jurisdiction:

Equity - Corporations List

Before:

Black J

Decision:

The special purpose receiver, after consulting with the contradictor, to bring in orders to give effect to this judgment within seven days.

Catchwords:

CORPORATIONS — application by special purpose receiver for directions — where applicant was appointed by the Court as special purpose receiver under s 283HB of the Corporations Act — whether Court has jurisdiction under s 283HB of the Corporations Act to give such directions — whether the directions sought are within the class of questions on which the special purpose receiver may properly seek directions — whether directions sought by the special purpose receiver should be given

Legislation Cited:

- Civil Procedure Act 2010 (Vic), s 29

- Corporations Act 2001 (Cth), ss 9, 283BB, 283F, 283HB, Pt 9.7

- Supreme Court Act 1970 (NSW), s 67

Cases Cited:

- Australian Executor Trustees Ltd v Provident Capital Ltd (2012) 90 ACSR 650; [2012] FCA 728

- Australian Securities and Investments Commission v Bridgecorp Finance Ltd (2006) 58 ACSR 499; [2006] NSWSC 836

- Australian Securities and Investments Commission v Piggott Wood & Baker (a firm) (No 7) (2023) 166 ACSR 17; [2023] FCA 193

- Bolitho v Banksia Securities Ltd (No 18) (remitter) [2021] VSC 666

- Botsman v Bolitho [2018] VSCA 278

- Equititrust Ltd (In Liq) (Receiver Appointed) (Receivers and Managers Appointed) (No 4) [2017] FCA 1133

- Naaman v Jaken Properties Australia Pty Ltd (2025) 421 ALR 227; [2025] HCA 1

- Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) [2015] NSWSC 1378

- Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) [2016] NSWSC 357

- Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) (Supreme Court (NSW), Black J, 21 August 2017, unrep)

- Re Banksia Securities Ltd (recs and mgrs apptd) [2017] VSC 148

- Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) [2017] NSWSC 540

- Re Banksia Securities Limited (in liq) (recs and mgrs apptd) [2018] NSWSC 229

- Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) (2018) 336 FLR 97; [2018] NSWSC 629

- Re Banksia Securities Ltd (recs and mgrs apptd) (in liq) (No 2) [2018] VSC 47

- Re Banksia Securities Ltd (recs and mgrs apptd) (in liq) [2022] NSWSC 1106

- Re Cannuli Holdings Pty Ltd (in liq) (Court-appointed receiver acting) [2017] NSWSC 1562

- Re McDermott and Potts (in their capacities as a joint and several liquidators of Lonnex Pty Ltd (in liq)) [2019] VSCA 23

- Re Metal Storm Ltd (subject to Deed of Company Arrangement) (2014) 100 ACSR 637; [2014] NSWSC 813

- Re Wine National Pty Ltd [2016] NSWSC 4

- Trust Company (Nominees) Ltd v Angas Securities Ltd (2015) 107 ACSR 464; [2015] FCA 772

Category:

Procedural rulings

Parties:

The Trust Company (Nominees) Limited (Plaintiff)

Representation:

Counsel:
J Redwood SC/M Grady (Special Purpose Receivers)
M Izzo SC/C Trahanas (Contradictor)

Solicitors:
Maddocks (Special Purpose Receivers)

File Number(s):

2015/252832 (016)

JUDGMENT

Nature of the application

1. Before turning to the background to the proceedings and the affidavit evidence, I should address procedural aspects of this application. The application was commenced by Mr Lindholm in his capacity as special purpose receiver (“SPR”) of Banksia Securities Ltd (recs and mgrs apptd) (in liq) (“BSL”) by Interlocutory Process filed on 24 October 2024 and, on 27 May 2025, I made orders setting down specified paragraphs of that application for a substantive hearing on 26 June 2025. I will deal sequentially below with the matters then set down for hearing today. Additional relief was sought by the SPR’s Further Amended Interlocutory Process filed, by leave, on 26 June 2025 but has not proceeded to hearing today.

2. Before turning to the background to the proceedings and the affidavit evidence, I should address other procedural aspects of this application. First, the Court appointed a contradictor (“Contradictor”) in the application, Mr Izzo SC with who Ms Trahanas appeared. Mr Izzo and Ms Trahanas made helpful submissions as to relevant issues, outlining the Contradictor’s reasoning process, although the Contradictor was largely supportive of the position taken by the SPR. I address those submissions below.

3. Second, Mr Christopher Botsman, who is the son of a debenture holder, Mrs Botsman, has informed the SPR that he and certain debenture holders of Banksia intend to commence proceedings (“Section 29 Application”) in the Supreme Court of Victoria against the SPR and many other persons under s 29 of the Civil Procedure Act 2010 (Vic), which allows a court to make orders if a person has contravened an overarching obligation. It appears that Mr Botsman has since retained solicitors and may be in the process of obtaining Counsel’s advice as to the Section 29 Application. Relevant documents in this application have been served on Mr Botsman. In previous correspondence with the SPR’s solicitors, Mr Botsman has also advised them of the reasons why he considers that matters relating to BSL should be determined in the Supreme Court of Victoria rather than in this Court, and the SPR’s solicitors have responded to that correspondence, pointing out, inter alia, that the SPR was appointed by this Court. On 25 June 2025, a solicitor acting for Mr Botsman advised the solicitors acting for the SPR that the hearing listed in this matter was “for the purpose of timetabling orders only” and that “substantive issues will not be decided”; that proposition was plainly contrary to the orders made by the Court on 27 May 2025, to which I referred above. She also advised that Mr Botsman would not be appearing at the hearing and that Mr Botsman was formulating his position in respect of orders other than in respect of the SPL’s remuneration and wished to be heard as to whether Court was the appropriate forum for this application. The solicitors for the SPL fairly provided this communication to the Court. In order to avoid any misunderstanding on Mr Botsman’s (or Mrs Botsman’s) part, my Associate, at my request, then drew Mr Botsman’s solicitor’s attention to the fact that she could not make any assumption as to what the Court would or would not determine at the hearing today, and provided information as to how she could join the hearing virtually if she wished to be heard as to the scope of the matters to be addressed or as to the substance of those matters. Mr Botsman (and Mrs Botsman) did not appear or seek to be heard at the hearing.

4. I have no doubt as to the Court’s jurisdiction to hear the application, and no doubt that that jurisdiction should properly be exercised, where this Court appointed the SPR in the exercise of its jurisdiction under s 283HB of the Corporations Act 2001 (Cth) (“Act”) and, for that reason, has determined with multiple issues arising in the conduct of the special purpose receivership. I recognise, of course, that substantive proceedings to which the SPR was party were conducted and determined in the Supreme Court of Victoria. In fairness to the SPR, I should also recognise that the SPR has had little or no choice as to the jurisdiction in which these issues should be determined, where parallel applications were initially brought in this Court by the trustee for debenture holders and the then joint and several receivers and managers of SPL, in which this Court appointed the SPR. Subsequent proceedings in respect of the special purpose receivership have, properly, been conducted in this Court because it is the SPR’s appointing Court.

5. The application heard on 26 June 2025, and addressed by this judgment, did not address issues raising from the Section 29 Application or the SPR’s application for discharge and release as special purposes receiver appointed by the Court and I made directions dealing with evidence and the conduct of a further hearing directed to those matters.

Background facts

6. I now address aspects of the background to this application, partly drawn from earlier judgments of the Court dealing with the conduct of the special purpose receivership and partly from the evidence in this application, before turning to the affidavit evidence led in this application. BSL operated as a non-bank lender and raised monies from the public by issuing debentures to investors pursuant to prospectuses and product disclosure statements, and advanced funds raised from debenture holders to third party borrowers for property investment and development purposes. BSL failed following a merger with another non-bank lender.

7. Representative proceedings were subsequently brought by Mr Laurence Bolitho against, inter alia, BSL (“Bolitho Proceedings”) which, inter alia, claimed damages in respect of misleading statements and omissions in various prospectuses issued by BSL, and also claimed damages under s 283F of the Act for breach of BSL’s obligation, under s 283BB of the Act, to conduct its business in a proper and efficient manner in accordance with the trust deed. The receivers of BSL also brought proceedings (“BSL Proceedings”) against, inter alia, The Trust Company (Nominees) Limited in the Supreme Court of Victoria.

8. By orders made on 30 September 2015 and varied on 29 February 2016, this Court appointed Mr Lindholm and Mr McCluskey (who has since retired) as joint and several special purpose receivers of specified property of BSL, including BSL’s rights and entitlements in proceedings in the BSL Proceedings. Those orders were made pursuant to s 283HB of the Act, in the circumstances summarised in the judgments in Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) [2015] NSWSC 1378 and Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) [2016] NSWSC 357 (“BSL 2016”).

9. The BSL Proceedings and the Bolitho Proceedings were subsequently settled as against TrustCo, subject to Court approval, and later against other parties. An application to approve the settlement of those proceedings was heard on 30 January 2018 in the Supreme Court of Victoria where the Court made orders approving that settlement, for reasons set out in Re Banksia Securities Ltd (recs and mgrs apptd) (in liq) (No 2) [2018] VSC 47.

10. A debenture holder, Mrs Botsman, appealed against that decision in the Court of Appeal of the Supreme Court of Victoria. Mrs Botsman sought orders setting aside the approval of that settlement, including the approval for the SPRs to settle the BSL Proceedings. By its judgment in Botsman v Bolitho [2018] VSCA 278, the Court of Appeal of the Supreme Court of Victoria partly allowed Mrs Botsman’s appeal against the litigation funding commission payable to a company (“AFP”) associated with the late Mr Mark Elliott and the legal costs payable in the Bolitho Proceedings and remitted the proceedings as to that commission and legal costs and other matters (“Remitter”) to another judge of the Supreme Court of Victoria.

11. Two of the Counsel who appeared in the Bolitho Proceedings, Mr Norman O’Bryan and Mr Michael Symons; the solicitor who was representing Mr Bolitho and his firm, Mr Anthony Zita and Portfolio Law; Mr Alex Elliott, who is the late Mr Mark Elliott’s son; and a costs consultant, Mr Trimbos, were subsequently joined as defendants to the Remitter. By his judgment in Bolitho v Banksia Securities Ltd (No 18) (remitter) [2021] VSC 666 (“Remitter Judgment”), Dixon J held that the defendants to the Remitter (“Defendants”) must jointly and severally pay compensation of $11,700,127, as to which post judgment interest of $713,625.65 had accrued as at 27 July 2022 and continues to accrue to the SPR for the benefit of BSL debenture holders and costs under various indemnity costs orders made in favour of the SPR. Those costs have not been taxed and therefore are not quantified (“Costs Component”). An appeal from that decision by one party was subsequently dismissed for want of prosecution.

12. In Re Banksia Securities Ltd (recs and mgrs apptd) (in liq) [2022] NSWSC 1106 (“BSL 2022”), I directed the SPR that he was justified in not then accepting a global settlement proposal put by the judgment debtors in respect of the Remitter Judgment. This application revisits the question of whether settlement is now justified, where the SPR has now obtained substantially more information, including as to the financial position and the legal structure of companies and trust associated with the late Mr Mark Elliott and his family (“Elliott Entities”) than was then available to him.

13. Subsequently, in February 2023, the parties to the initial global settlement offer disclosed their respective contributions to that global settlement offer to the SPR and repeated that offer. The SPR then obtained a detailed opinion of Counsel as to whether that offer was fair and reasonable in all the circumstances to which I have had regard. The SPR subsequently rejected that second global settlement offer, progressed a claim for third party costs orders in respect of the Remitter and negotiated separately with the several judgment debtors in the Remitter Proceedings. The SPR has since recovered further amounts from the Legal Practitioners' Liability Committee (“LPLC”) under insurance policies applicable to practitioners involved in the Bolitho Proceedings and a payment from Portfolio Law, a firm associated with Mr Zita, increasing its recoveries from the amount of approximately $3 million as at the date BSL 2022 to in excess of $6.5 million in respect of the Remitter Judgment.

14. On 22 December 2023, the SPR executed a conditional deed of settlement (“Elliott Settlement Deed”) with the Elliott Entities (other than AFP, which was placed in liquidation shortly after the Remitter Judgment was delivered) with no assets available for distribution to its creditors. Broadly, the Elliott Settlement Deed provides for them to pay a substantial amount to the SPR from their own financial resources and to guarantee the payment of a further sum by the LPLC to the SPR, on terms that the parties will then release each other and related parties’ probable claims. That settlement deed was subject to conditions precedent, including a process by which an independent financial accountant selected by the SPR to investigate the Elliott entities’ financial position and the Court’s approval. The reports prepared by Mr Mellos, to which I referred above, now identify known assets and liabilities of the Elliott Entities and their related parties. The SPR also entered into a conditional Deeds of Settlement with Mr Zita on 27 February 2024 and with Mr Symons and his trustee in bankruptcy on 4 March 2024.

Affidavit evidence

15. The SPR reads detailed affidavit evidence and tenders several exhibits in the application, with some of those affidavits and some of those exhibits being read or tendered subject to orders made under the Court Suppression and Non-Publication Orders Act 2010 (NSW). I will now refer to those affidavits and relevant exhibits, although I will only deal with the affidavits and exhibits that are the subject of suppression orders in relatively general terms.

16. By his affidavit dated 22 October 2024, the SPR, Mr Lindholm, addressed his background and experience and referred to conditional settlements which had not been reached with several parties involved in the Remitter, namely the Elliott Entities, Mr Zita and Mr Symons. The SPR referred to the Remitter Judgment which, as I noted above, required several defendants to pay compensation of $11,700,127 and costs on an indemnity basis which the SPR quantifies as in the order of $10.6 million, of which he estimates in excess of $9.5 million would be recoverable on assessment. Mr Lindholm noted that he had, as at October 2024, made recoveries against the Remitter Judgment in excess of $6.5 million, including insurance amounts received from the LPLC and amounts received from settlements with several parties to the Remitter. His evidence was that the settlements now reached with the Elliott Entities, Mr Zita and Mr Symons, if approved, would result in total recoveries exceeding $16.8 million in respect of the Remitter, although there would still be a substantial shortfall of approximately $6.8 million on the total amount potentially recoverable under the Remitter Judgment as at 30 September 2024, excluding any interest on the Costs Component. Mr Lindholm also referred to other costs orders which had been obtained against the Elliott Entities and not paid by them.

17. Mr Lindholm also there addressed other developments in the Remitter and subsequent proceedings and in the special purpose receivership since late 2021, including correspondence received from Mr Botsman in that period. He also addressed (Lindholm 22.10.24 [106]–[109]) the position in respect of unpresented payments of amounts owing to debenture holders (“Unpresented Payments”) and referred to his suggested treatment of the Unpresented Payments, namely to apply that amount first to further expenses and remuneration of the receivership and pay the balance to a charity with a view to benefiting the community in Kyabram, Victoria and the surrounding area, where BSL primarily conducted its business. I address the direction sought by the SPL as to this matter below. Mr Lindholm also addressed the position in respect of the funding of the special purpose receivership, a proposed final distribution to debenture holders in the order of $19.8 million (if the settlements are approved) and his claim for relatively modest remuneration for work done since his remuneration was last approved. An exhibit that affidavit includes Settlement Deeds with the Elliott Entities, Mr Zita and Mr Symons; Mr Lindholm’s remuneration reports to the committee of debenture holders for the periods 1 March 2022 to 30 April 2023, 1 May 2023 to 30 November 2023 and 1 December 2023 to 30 July 2024; and minutes of meetings of that committee which had provided informal approval to payment of that remuneration.

18. By his confidential affidavit dated 22 October 2024, Mr Lindholm set out his reasons for entry into the settlements with the Elliott Entities, Mr Zita and Mr Symons also addressed the view he had formed as to potential claims against other parties including Portfolio Law and the LPLC. I do not address the detail of that affidavit in this judgment where a non-publication order has been made, although I have had regard to the entirety of that affidavit. Broadly, Mr Lindholm there rightly recognises that many debenture holders will be disappointed in settlement that leads to recovery of less than the total amount of the Remitter Judgment and costs, particularly where at least one entity associated with the Elliott Parties (“Decoland”) has substantial assets, although it now appears that they are held on trust for members of the Elliott family. However, Mr Lindholm has also, rightly, had regard to the practical prospects of recovery of a judgment against the Elliott Entities and other parties, which are affected by legal issues as to which he has taken detailed advice, and he has also rightly been conscious of the real benefit to debenture holders, many of whom are now elderly, of receiving a further distribution sooner rather than later, where further proceedings would require that monies be held back for costs and against the risk of adverse costs orders. By a confidential affidavit also dated 22 October 2024, Mr Mellos, a registered trustee in bankruptcy and partner in the firm of Grant Thornton, refers to a report and supplementary report which he prepared as to the assets of the Elliott Entities and I have had regard to those reports.

19. The SPR also read an affidavit dated 22 October 2024 of his solicitor, Mr Kingston, which referred to the substantial legal costs which had been incurred by the SPR since the delivery of the Remitter Judgment. By a further affidavit dated 4 December 2024, Mr Kingston exhibited correspondence with the Australian Securities and Investments Commission (“ASIC”), with the Elliott Entities, Mr Zita, Mr Symons and the LPLC; and correspondence with Mr Botsman in respect of his proposed Section 29 Proceedings.

15. By his affidavit dated 18 December 2024, Mr Lindholm in turn referred to a circular to debenture holders relating to the issues raised in this application and there exhibited responses received from debenture holders in respect of the application. By his further affidavit also dated 18 December 2024, Mr Kingston addressed further correspondence with Mr Botsman, which included Mr Botsman’s contention that this aspect of the proceedings should be addressed in the Supreme Court of Victoria rather than in this Court, which I noted above, and with ASIC.

16. By his further affidavit dated 9 April 2025, Mr Lindholm elaborated on the position in respect of the Unpresented Payments and also addressed further correspondence with debenture holders and the committee of debenture holders and, by his confidential affidavit dated 9 April 2025, Mr Lindholm gave a further update as to information concerning the Elliott Entities and particularly Decoland. By his affidavit dated 11 April 2025, Mr Kingston addressed further correspondence with Mr Botsman and his solicitor.

17. By a further affidavit dated 5 June 2025, Mr Lindholm referred to discussions with debenture holders and the committee of debenture holders and to suggestions which had been made by them as to charities to which the balance of the Unpresented Payments could be distributed. By a further affidavit dated 25 June 2024, Mr Kingston issues relating to notices which had been given to the Attorney-Generals in respect of a possible constitutional issue arising in respect of the treatment of the Unpresented Payments and to further correspondence with ASIC and with Mr Botsman’s solicitor. That constitutional issue no longer arises, by reason of the view I have formed and developments in the position taken by the SPR in respect of the Unpresented Payments.

Whether this is an appropriate case for directions to the SPR

23. I have addressed the principles in respect of an application by a receiver for directions in several earlier judgments. The SPR was here appointed under Ch 2L of the Act as a Court-appointed receiver and that his role is analogous to, but not coterminous with, that of a Court-appointed receiver under the Court's general equitable jurisdiction or under s 67 of the Supreme Court Act 1970 (NSW). I recognise that s 283HB of the Act, which authorised the appointment of the SPR, also provides the source of the Court's jurisdiction to make the directions sought in this application, and that the broad remedial and protective jurisdiction conferred on the Court by s 238HB of the Act includes a power to give directions to the SPR.

24. I reviewed the scope of the Court’s power to give directions to the SPR in BSL 2016 and again in Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) (2018) 336 FLR 97; [2018] NSWSC 629 (“BSL 2018”) at [17]–[20]. The Court has wide powers under s 283HB of the Act which relevantly provides:

“(1)    If the trustee or ASIC applies to the Court, the Court may make any or all of the following orders: …

(d)    an order appointing a receiver of any property constituting security for the debentures; …

(g)    any other order that the Court considers appropriate to protect the interests of existing or prospective debenture holders.

(2)    In deciding whether to make an order under subsection (1), the Court must have regard to:

(a)    the ability of the borrower and each guarantor to repay the amount deposited or lent as and when it becomes due; and

(b)    any contravention of section 283GA by the borrower; and

(c)    the interests of the borrower’s members and creditors; and

(d)    the interests of the members of each of the guarantors.”

25. In my unreported judgment in Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) (Supreme Court (NSW), Black J, 21 August 2017, unrep) (“BSL 2017”), I expressed the view that, where the Court had jurisdiction to appoint the SPR under s 283HB of the Act and to confer the power to prosecute and defend proceedings on them, then it also had jurisdiction to confer the power to settle the proceedings upon them, whether as incidental to its power to appoint the SPR under s 283HB of the Act or in its inherent jurisdiction. I also there observed that the circumstances in which the Court would exercise its directions power would be determined, by way of analogy, with its exercise of powers under s 424 of the Act, in respect of a controller, and former ss 479(3) and 511 of the Act in respect of Court-appointed liquidators and liquidators in a voluntary winding up, and I should also add a reference to s 90-15 of the Insolvency Practice Schedule (Corporations) in this regard. The Court’s jurisdiction to give a direction of this kind was also recognised by Robson J in Re Banksia Securities Ltd (recs and mgrs apptd) [2017] VSC 148.

26. In Equititrust Ltd (In Liq) (Receiver Appointed) (Receivers and Managers Appointed) (No 4) [2017] FCA 1133 at [7], in considering the analogous power to give judicial advice to a trustee under the trustee legislation of each State, Jagot J observed that:

“(a)    the jurisdiction or power to give judicial advice is not constrained by any implications or limitations not found in the express words of the section;

(b)    the Court’s discretion is confined only by the subject matter, scope and purpose of the legislation, and there are no implied limitations on the discretionary factors that may arise or rules governing the relative importance of such factors;

(c)    the judicial advice procedure is intended to be summary in character;

(d)    a judicial advice application is in the nature of ‘private advice’ and a departure from usual Court proceedings in which there are multiple, adversarial parties. Accordingly, a person served with documents in respect of a judicial advice application is not thereby a ‘party’ to the application;

(e)    the right to obtain judicial advice protects the trustee, but it thereby also protects the interests of the trust, by enabling the trustee to act in the interests of the trust without fear of being personally liable for costs;

(f)    the function of the Court in a judicial advice application is to determine what should be done in the best interests of the trust;

(g)    the usual form of order is that the trustee “would be justified” in taking the relevant course of action;

(h)    in order to ensure the protection of the trustee, it is necessary that the statement of facts fully discloses the relevant matters, but it is not necessary for the trustee to “prove” the facts to a certain standard of proof as would be the case in adversarial litigation; and

(i)    the practice of the Court has been to look for, and in appropriate cases, rely upon, a memorandum of opinion from counsel …” [citations omitted]

27. In BSL 2018 at [18], I also observed that s 283HB of the Act confers a broad remedial and protective jurisdiction on the Court, which extends (in s 283HB(1)(g)) to making any order that the Court considers appropriate to protect the interests of debenture holders and is to be exercised having regard to the matters set out in s 283HB(2): Australian Securities and Investments Commission v Bridgecorp Finance Ltd (2006) 58 ACSR 499; [2006] NSWSC 836 at [18]; Australian Executor Trustees Ltd v Provident Capital Ltd (2012) 90 ACSR 650; [2012] FCA 728 at [77]–[78]; Re Metal Storm Ltd (subject to Deed of Company Arrangement) (2014) 100 ACSR 637; [2014] NSWSC 813 (“Metal Storm”) at [83]; Trust Company (Nominees) Ltd v Angas Securities Ltd (2015) 107 ACSR 464; [2015] FCA 772 at [82]–[83]. I also noted in BSL 2018 at [20] that the desirability of a receiver’s seeking, and the Court giving, directions in such a setting is supported by authority, including the Court’s decision, in respect of a receiver, in Metal Storm and the earlier decisions in which the Supreme Court of Victoria and this Court have given directions to the special purpose receivers in this matter.

28. In Re McDermott and Potts (in their capacities as a joint and several liquidators of Lonnex Pty Ltd (in liq)) [2019] VSCA 23, the Court of Appeal of the Supreme Court of Victoria in turn described the role played by a court in applications by liquidators for authorisations or directions concerning compromises is as follows:

“Courts recognise that they are generally unqualified and ill-equipped to make or approve of business and commercial decisions. Thus, courts are loath to interfere with the commercial judgment of liquidators on matters within their powers, and will not give directions to liquidators on such matters were no issue arises in relation to a legal matter or in relation to the propriety or reasonableness of the decision. This does not inhibit courts from giving directions to liquidators in relation to the compromise of legal proceedings. The compromise of legal proceedings invariably raises legal issues, although it also usually requires the exercise of commercial judgment. As will be seen liquidators often seek directions concerning the compromise of legal proceedings, and the courts give such directions when persuaded it is appropriate to do so.”

29. I adopted the same view in BSL 2022 at [29]ff on which have drawn for this analysis, and also there observed that:

“Mr Redwood also accepts that a court will generally refrain from giving a direction in relation to a commercial or business judgment within the receiver’s discretion where no particular legal issue is raised for consideration and there is no attack on the propriety or reasonableness of the decision in respect of which the direction is sought. However, he submits, and I accept, that the circumstances that will justify the giving of a direction include where the insolvency practitioner is operating in an “acrimonious environment”, or the proposed decision risks being subject to criticism by a particular creditor, and there is a stronger reason for making such a direction where the view taken is likely to be contested, and that case is particularly strong where a decision may involve a balancing of interests, here of debenture holders, that are or may be opposed: Re Great Southern Managers Australia Ltd (in liq) [2014] WASC 312 at [61]; Re AE&E Australia Pty Ltd (in liq) [2017] NSWSC 950 at [4].

Mr Redwood also submits, and I accept, that the Court's function in giving a direction of the kind sought by the SPR does not require it to reconsider all of the factors that the SPR has considered, and, as Brereton J observed in Re One.Tel Networks Ltd (2014) 99 ASCR 247, requires the Court to be satisfied, before making a direction, that the decision is proper and reasonable; and, at least usually, this will necessitate consideration of the liquidator's reasons, and the process by which the decision has been reached.”

30. I am satisfied that the Court has the necessary jurisdiction to make the directions which the SPR seeks and which I address below.

Settlement with the Elliott Entities

31. By paragraphs 1–2 of the Further Amended Interlocutory Process, the SPR seeks an order that he has power to settle claims against the Elliott Entities on behalf of debenture holders in the terms set out in the Elliott Settlement Deed and a direction that he is justified in doing so, including by taking no further steps to enforce the Remitter Judgment on behalf of debenture holders against the Elliott Entities on the terms set out in the Elliott Settlement Deed.

32. Mr Redwood SC, with whom Mr Grady appears for the SPR, rightly addresses this settlement in the context of the several settlements which would allow a further distribution of $20 million to debenture holders, taking their overall recovery following the collapse of BSL to almost 95 cents in the dollar of outstanding principal and about $100 million in total recoveries. Mr Redwood recognises that debenture holders have not been compensated for interest where they have been out of their funds for many years, and that this is nonetheless a substantial recovery in a receivership. Mr Redwood also points out that the Remitter Proceedings will have increased the proceeds available to debenture holders by approximately $20 million, being the amount commission and costs which are no longer payable to APF and will bring about additional recoveries of approximately $17 million, although part of this reflects costs incurred in the Remitter. I recognise that this is beneficial to debenture holders in a limited sense, although the SPR rightly recognises the significance of the misconduct of the Elliott Entities and other third parties disclosed by the Remitter, and debenture holders should not have been put to the need for the Remitter or recovery from it. The SPR, and Mr Redwood in submissions, also recognises that if the settlements including the settlement with the Elliott Entities are approved, there is still a substantial shortfall in recoveries under the Remitter Judgment of at least $6.8 million, plus the costs orders against the Elliott Entities in favour of the SPR that remain unpaid.

33. Mr Redwood in turn submits, and I accept that:

“It must be acknowledged that any shortfall would be rightly regarded by many debenture holders as unacceptable, if not galling. At the same time, the SPR is required to act prudently in doing his best to get as much of the amount owing into the hands of debenture holders as soon as reasonably possible. This calls for difficult judgments where the judgment debtors have taken various steps to structure their affairs in a way that seeks to insulate them from financial accountability for their misconduct.”

34. Mr Redwood addresses the nature of the rights that would be compromised by the Elliott Settlement Deed, which include existing rights arising out of the Remitter Judgment against Alex Elliott and non-party costs orders against other Elliott Entities, claims which could be but have not yet been brought by the SPR against the Elliott Entities to seek to extend liability to them and unsatisfied costs orders. Mr Lindholm in turn addresses, in his evidence, and Mr Redwood addresses in submissions, the financial position of the Elliott Entities, by reference to the reports prepared by Mr Mellos to which I have referred above.

35. Mr Redwood also addresses the consideration given by the SPR, and the advice obtained by the SPR, as to the validity of the trusts on which Decoland claims to hold its property and further investigations made and further evidence obtained by the SPR to verify the existence of the trusts. Mr Redwood also referred to a contention advanced by the Elliott Entities that substantial assets owned by Decoland, against which at least costs orders could be enforced, were held on trust and that the SPR would not be able to obtain access, by way of subrogation, to trust assets because any liabilities of Decoland were improperly incurred by reason of the misconduct exposed in the Remitter Judgment. The SPR has in turn obtained Counsel’s opinion which addresses that contention, and Mr Redwood also points to potential criticisms of the Australian law of trusts in this context but also rightly accepts that the SPR and this Court must each take the law of trusts as they find it. These issues are complex, and the difficulties with enforcement against Decoland are (perversely) greater, because of the egregious and likely fraudulent character of the conduct of the Elliott Entities including Decoland. Mr Redwood also addresses issues which exist in respect of the recovery of assets held by the Elliott Entities other than in a trust environment.

36. The Contradictor did not take issue with the SPR’s proposed orders 1 – 2, concerning settlement with the Elliott Entities and accepted that the SPR had acted reasonably, had followed a proper process, had been guided by relevant considerations and had reached a decision that was rational and open to him in respect of that settlement. The Contradictor also elaborated on the issues in respect of access to trust assets, by reference to the recent decision of the High Court of Australia in Naaman v Jaken Properties Australia Pty Ltd (2025) 421 ALR 227; [2025] HCA 1, and recognised that that decision did not exclude the real doubt as to whether Decoland would have an indemnity over trust assets to meet a liability to debenture holders, where its conduct involved egregious wrongdoing and was fraudulent in character. By submissions in reply to the Contradictor’s submissions the SPR addressed aspects of the Contradictor’s analysis of the availability of claims against the Elliott Entities, so far as assets are held on trust, while recognising that the Contradictor does not contest the SPR’s analysis of the position in respect of claims against, relevantly, the Elliott Entities.

37. As I noted above, Mr Lindholm in turn sets out his reasoning in concluding that he should proceed with the Elliott Settlement Deed in his first confidential affidavit dated 22 October 2024, to which I have had regard. He addresses the advice which he has obtained from Counsel in that regard and the considerations which he has taken into account, and I accept that his reasoning in that regard is cogent and logical and has had regard to relevant considerations. Mr Lindholm also refers to the unanimous support of the committee of debenture holders for the settlement with the Elliott Entities, and also rightly gives weight to the age of debenture holders and the risk that further delays in their receipt of any final distribution will have the result that some debenture holders will not receive a final distribution in their lifetimes. I accept that that matter is a significant consideration, particularly where there are significant legal risks in further proceedings against the Elliott Entities, and those proceedings would likely take a considerable time, and issues as to access to trust assets might well not be resolved until the last available appeal was concluded.

38. It seems to me that the SPR may properly seek the relevant direction here, where he contemplates settling a substantial claim against the Elliott Parties in the Remitter for less than his entitlement under the Remitter Judgment and less than the value of the assets legally (as distinct from beneficially) owned by Decoland. For the reasons noted above, I am satisfied that the Court has jurisdiction to give the direction sought under s 283HB of the Act or in its inherent jurisdiction, where it appointed the SPR to office, and that jurisdiction should be exercised here. The SPR is here faced with a difficult decision in a legal context; that decision has substantial risk whatever course is taken; the SPR cannot avoid the need to determine whether to proceed with the settlement, where his taking no action would risk the potential loss of the settlement and being about a further delay in the remaining distribution to debenture holders; and the SPR should not fairly be left without the Court’s guidance and protection in those circumstances. I am also comfortably satisfied that this is a proper case for a direction where the issue does not involve merely a business decision or a matter of commercial judgment, but a difficult decision arising in the settlement of highly contentious litigation; and debenture holders could reasonably take different views as to issues that arise in respect of any settlement, particularly against the Elliott Entities given the nature of their past conduct.

39. I am satisfied that the approach taken by the SPR, in respect of the settlement deed with the Elliott Entities is reasonably open to him and properly recognises the interests of debenture holders and the adverse effect of continuing delay in any remaining recovery, and that the directions the SPL seeks in respect of the Elliott Settlement Deed should be made.

Settlements with Mr Zita and Mr Symons

40. By paragraphs 3–6 of the Further Amended Interlocutory Process, the SPR seeks corresponding directions in respect of settlements with Mr Zita and Mr Symons. The Contradictor did not take issue with the SPR’s proposed orders 3 – 6, concerning settlement with Mr Zita and Mr Symons and also accepted that the SPR had acted reasonably, had followed a proper process, had been guided by relevant considerations and had reached a decision that was rational and open to him in respect of the settlement with those persons. Each of these settlements involve modest recoveries, against the very substantial amount of the judgment debts against them, but I am satisfied that the SPR has made a proper assessment of the prospects of any recoveries against Mr Zita and Mr Symons, given the limits of their available assets. The directions sought by the SPR concerning those settlements should be made on that basis.

Additional claims

41. By paragraphs 7–8 of the Further Amended Interlocutory Process, the SPR also seeks directions that he is justified in not commencing any proceeding or bringing any claims on behalf of debenture holders against the LPLC in relation to policies of insurance held by several of the legal practitioners and firms involved in the Bolitho Proceedings and the Remitter and a direction that he is justified in taking no further steps on behalf of debenture holders to recover a judgment debt owed by Portfolio Law under the Remitter Judgment. The SPR again approaches that issue on the basis that, if such steps were taken, a final distribution to debenture holders would likely be further delayed, and I have noted the issue as to the age of debenture holders, of which the SPR is rightly conscious, above. The Contradictor did not take issue with the SPR’s proposed orders 7 – 8, concerning not pursuing additional claims.

42. Mr Redwood points to the substantial amount paid out by the LPLC to the SPR to date in respect of claims under insurance policies relating to the relevant legal practitioners and notes that a further amount would be either paid out by the LPLC on the settlement with the Elliott Entities or will be paid out by the Elliott Entities under their guarantee of that payment. Mr Redwood identifies arguments which have been identified by the SPR and his legal advisers which might support additional claims against the LPLC, relating to questions such as whether the events addressed in the Remitter constituted a single “claim” for the purposes of the policies or would support multiple claims, and whether defence costs incurred by several parties in the Remitter were unreasonably incurred and did not reduce the amounts payable under the policies to the SPR. The SPR has again obtained detailed legal advice in respect of those matters; has considered that advice as set out in his confidential affidavits; and has formed the view that the delay and costs in further proceedings against the LPLC, which are likely to be fully defended, are not warranted by the prospects of such proceedings. The Contradictor noted that the SPR had received advice from Counsel concerning the possible conduct of public examinations in respect of claims against the LPLC and did not conduct such examinations. I have regard to that matter, but I also recognise that this was a very complex receivership; the SPR has plainly had to make choices as to where to devote costs and resources; and it is by no means apparent that the conduct of such examinations would have advanced the matter, as the position now stands.

43. Again, it seems to me that the SPR has had regard to relevant considerations in forming that view, and the view that he has taken is a reasonable and rational one, and again in the interests of debenture holders in avoiding the risk of significant delays in recovery which are not warranted by the prospects of additional recovery against the LPLC. I am satisfied that the directions sought should be given in respect of claims against the LPLC.

44. The position in relation to Portfolio Law is straightforward, where the evidence indicates that it does not have sufficient assets available to meet a judgment against it, and any further costs in pursuing the Remittal Judgment against it would likely be wasted. I am satisfied that the directions sought should be given in respect of claims against Portfolio Law.

Funding of the receivership

45. By paragraph 9 of the Further Amended Interlocutory Process, the SPR seeks a direction that he was justified and acting reasonably in making specified payments from funds that they held in respect of the SPR’s remuneration and costs and expenses of the receivership, in the period since 11 April 2023 when funding provided to the SPRs pursuant to earlier orders made by the Court was exhausted. This application relates to the mechanism of those payments rather than the amount of the payments, where the SPR does not require the Court’s approval for the payment of proper costs and disbursements and the remuneration that he claims remains subject to the Court’s approval. In supplementary submissions, Mr Redwood draws attention to a Court-appointed receiver’s entitlement to indemnity out of receivership assets, which is analogous to a trustee’s right of indemnity, in respect of liabilities that were properly and reasonably incurred; and the Contradictor accepts that the receiver has a right to indemnity in respect of its remuneration, costs and expenses, analogous to a trustee’s right of indemnity: Re Wine National Pty Ltd [2016] NSWSC 4 at [12]; Re Cannuli Holdings Pty Ltd (in liq) (Court-appointed receiver acting) [2017] NSWSC 1562 at [8]. I am satisfied that these payments were consistent with the SPR’s entitlement to an indemnity against funds recovered and that the direction that is sought should be made in that respect.

46. Paragraph 10 of the Further Amended Interlocutory Process also sought a direction as to how future remuneration, costs and expenses in respect of the conduct of the special purpose receivership should be paid. Mr Redwood rightly recognises that that question depends, in part, on whether the SPR will be required to incur potentially substantial costs in defending, or participating in, the Section 29 Application that may be brought by Mr Botsman or his associates, or whether the Court now discharges the SPR and releases him in respect of the conduct of the special purpose receivership, pursuant to an application for release orders which has yet to be determined. The SPR rightly accepts that the direction as to payment of future remuneration, costs and expenses should be deferred until those questions are determined.

SPR’s remuneration

47. By paragraphs 11–13 of the Further Amended Interlocutory Process, the SPR seeks approval of his remuneration, in relatively modest amounts, for the for the periods 1 March 2022 to 30 April 2023, 1 May 2023 to 30 November 2023 and 1 December 2023 to 31 July 2024. The Contradictor did not take issue with the SPR’s proposed orders 11 – 13, concerning approval of remuneration from 1 March 2022 to 31 July 2024. It rightly notes, and the SPR rightly acknowledges, that the orders appointing the SPR contemplated approval of his remuneration at six monthly intervals, and the SPR has not applied for such approval at those intervals in the recent past; however, the Contradictor also rightly accepts, and I accept, that that is not reason to decline approval for remuneration that was properly incurred.

48. The applicable principles have been summarised in earlier applications for approval of the SPR’s remuneration, and I adopt my summary of those principles in Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) [2019] NSWSC 136 at [9]ff as follows:

“… the Court has jurisdiction to make the further orders now sought under s 283HB(1) of the Corporations Act or r 26.4 of the Uniform Civil Procedure Rules 2005 (NSW) or in the Court’s inherent jurisdiction, and I note that Gleeson JA formed the same view in respect of the earlier remuneration application by the SPRs in Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) [2017] NSWSC 540 ([“BSL 2017”)) and I took that view in [Re Banksia Securities Limited (in liq) (recs and mgrs apptd) [2018] NSWSC 229].The principles relevant to an application of this kind were also summarised by Gleeson JA in [BSL 2017], which I applied in [[Re Banksia Securities Limited (in liq) (recs and mgrs apptd) [2018] NSWSC 229]. His Honour there noted that common bases for calculation of remuneration included time-based charging and a commission based on percentage of recoveries, and that the approach to be adopted is directed to securing reasonable remuneration in the circumstances. His Honour referred (in Banksia 3 at [39]) to the observations of Young CJ in Eq in Ide v Ide [2004] NSWSC 751; (2004) 184 FLR 44 as to the role of the Court in dealing with such an application, and to the further observations of Branson J in Wenkart v Pantzer [2005] FCA 1572 and of Barrett J in Mohamed v Hurstville Tower Medical Clinic Pty Ltd (in liq) [2006] NSWSC 4 at [9]. His Honour also noted the analogy with the factors specified in s 425 of the [Act] as relevant to the Court’s power to fix the remuneration of a person appointed as a receiver of a corporation’s property under a power contained in an instrument.

In [BSL 2017] above, Gleeson JA also referred to the Court of Appeal’s decision in Sanderson, as liquidator of Sakr Nominees Pty Ltd (in liq) v Sakr [2017] NSWCA 38; (2017) 93 NSWLR 459; (2017) 343 ALR 524; (2017) 118 ACSR 333 and summarised the principles which arose from Bathurst CJ’s judgment in that case (at [44]–[46]) as follows:

First, the onus is on the special purpose receivers to establish that the remuneration claimed is reasonable. It is the function of the Court, here under s 283HB of the [Act], to determine the remuneration by considering the material provided and bringing an independent mind to bear on the relevant issues: Sakr at [54].

Second, many of the factors in s 425(8), in particular, pars (d)-(e) and (g)-(h) can be seen to have as their unifying theme the concept of proportionality. The question of proportionality in terms of work done as compared with the size of the property the subject of the insolvency administration or the benefit to be obtained from the work, is an important consideration in determining reasonableness: Templeton v Australian Securities and Investments Commission (2015) 108 ACSR 545; (2015) FCAFC 137. The work done must be proportionate to the difficulty and importance of the task in the context in which it needs to be performed. This is what is encompassed in assessing the value of the services rendered: Sakr at [55].

Third, the mere fact that the work performed does not lead to augmentation of the funds available for distribution does not mean that the special purpose receivers are not entitled to be remunerated for it. In the present case, the Trustee fee application and the time spent consulting with the committee of creditors on various issues, including obtaining approval of the special purpose receivers’ remuneration will not result in the augmentation of the funds available for distribution. Provided it was reasonable to carry out the work and the amount charged is reasonable, there is no reason a liquidator should not recover remuneration for undertaking the work: Sakr at [57]–[58].

I also observed in Re Idylic Solutions Pty Ltd as trustee for Super Save Superannuation Fund [2016] NSWSC 1292 (Idylic Solutions) (at [58]) that it is not the role of the court, as constituted by a judge, to undertake a line by line review of the relevant narratives in an insolvency practitioner’s billing record, but I there reviewed the relevant narratives in a broad way in order to satisfy myself that they supported the other evidence led in respect of the claimed remuneration. Gleeson JA adopted the same approach in Banksia 3 above at [48] and I also adopted that approach in [Re Banksia Securities Limited (in liq) (recs and mgrs apptd) [2018] NSWSC 229]. I have also taken that approach in this case.

Mr Redwood also refers to the summary of the applicable principles for court approval of remuneration by Brereton J in Re Say Enterprises Pty Ltd [2018] NSWSC 396 at [6] as follows:

“The remuneration of court-appointed receivers is provided for by (NSW) Uniform Civil Procedure Rules 2005, r 26.4 but drawing on the qualifications expressed in later cases, the relevant principles may be restated as follows:

(1) A receiver is entitled to the costs, charges and expenses properly incurred in the discharge of the receiver’s ordinary duties, or in the performance of extraordinary services that have been sanctioned by the Court.

(2) The ultimate question is what amount of remuneration is ‘reasonable’, and this involves considering whether the work in respect of which remuneration is claimed was reasonably undertaken in the due course of the receivership, and whether the amount claimed for it is a fair and reasonable reward for it. The objective is to award a sum or devise a formula which will reasonably and fairly compensate the receiver for the time and trouble expended in the execution of his or her duties and the responsibility he or she has assumed.

(3) The receiver bears the onus of justifying the reasonableness and prudence of the tasks undertaken for which remuneration is sought, and the reasonableness of the remuneration claimed for them.

(4) Remuneration may be allowed on the basis of a fixed salary, a commission on receipts, or a quantum meruit having regard to the time, trouble and responsibility involved. It is a matter for the Court to determine what basis is appropriate in the particular case, having regard to the principle that the remuneration must be reasonable.

(5) If a time-based approach is adopted, the Court is guided by professional scales of charges, with emphasis on the broad average or general rate charged by persons of the relevant status and qualifications who carry out the relevant type of work. The Court will usually act on time sheets created in the receiver’s office, provided that they do significantly more than merely detail the total number of hours spent by the receiver and officers of particular grades on his or her staff.

(6) By analogy, the task involves consideration of the matters referred to in Corporations Act, s 425(8), which applies to receivers appointed under an instrument …

(7) Many of those factors … have as their unifying theme the concept of proportionality (being the relationship of the work done and the remuneration claimed to the value of the estate), which is an important consideration in determining reasonableness. …

(9) In respect of disbursements, no Court approval or specific order is necessary in the absence of a challenge, although receivers should scrutinise them to ensure that they are reasonable and properly payable, and the Court has an inherent jurisdiction to review receivers’ disbursements as they are officers of the Court. However, a receiver may seek a direction that he would be justified in paying certain disbursements in order to obtain prior protection in respect of such a disbursement. [footnotes omitted]”

49. The SPR here tenders remuneration reports for each of the relevant periods, and notes that the remuneration claimed has been considered by the committee of debenture holders and informally approved by that committee. Mr Lindholm also outlines and Mr Redwood refers to, the nature of the work which has been done by the SPR, for which remuneration is claimed. Mr Redwood submits, and I accept, that such remuneration is properly claimed on a time-costed basis and that the amount of the remuneration is reasonable, particularly having regard to the complexity of the relevant issues, although I recognise that the SPRs will here also have incurred significant legal and other costs in dealing with those issues.

50. The amount of remuneration sought by the SPR in this application is relatively modest, having regard to the significance of the responsibilities that the SPR had assumed in a complex receivership and the approval of the remuneration sought in this application by the committee of inspection is a relevant matter, although not conclusive. I am also satisfied that it is appropriate that the SPRs’ remuneration be determined on a time-charging basis and in the amount claimed and I will make the orders sought in respect of remuneration.

Unpresented Payments

51. By paragraph 17 of the Further Amended Interlocutory Process, the SPR seeks an order that he would be justified in distributing the remaining amount of any Unpresented Payments to a registered charitable organisation at his discretion, or such other direction as the Court thinks appropriate.

52. As at November 2024, the SPR held in excess of $4 million in respect of Unpresented Payments from previous distributions, representing about 0.7% of the total funds that had been distributed to debenture holders. The very large majority of accounts as to which there are Unpresented Payments held relatively small amounts. The SPR has since taken further steps to identify current contact details of debenture holders who have not presented such payments while seeking to avoid incurring unreasonable or disproportionate costs in doing so. A significant number of debenture holders have been identified in that manner, and the amount of Unpresented Payments is now estimated to be about $1.5 million, although that amount may increase following a final distribution to debenture holders.

53. The SPR initially identified several possible options to deal with Unpresented Payments, including a rateable distribution of the remaining funds to identified debenture holders; payment into a statutory unclaimed monies scheme; use of the Unpresented Payments to meet remaining remuneration or expenses incurred by the SPR, potentially increasing the distribution to other debenture holders’ or payment of any balance to a charitable organisation. Prior to the hearing, ASIC communicated its view that it would be preferable that the remaining amount of any Unrepresented Payments be paid into the unclaimed monies fund maintained by ASIC under Pt 9.7 of the Act, preserving the ability of debenture holders who have not presented payment to them to date to claim the relevant funds, even if it is less likely that they will do so with the passage of time.

54. Mr Redwood points out that the payment of the SPR’s costs and remuneration from the balance of the Unpresented Payments and the payment of the balance to a charitable organisation has the support of at least some debenture holders and, as Mr Redwood points out, also has something in common with a cy-pres scheme. On the other hand, Mr Redwood also rightly acknowledges that the distribution of the Unpresented Payments to debenture holders would potentially divert funds from some debenture holders (who admittedly have not presented cheques sent to them) to other debenture holders and that, it seems to me, is a fundamental difficulty with that approach although that the amount involved is not substantial and that the those other debenture holders have also not recovered their entire entitlements. Mr Redwood also acknowledges that the payment of the funds to an unclaimed monies scheme has the virtue of ensuring that the funds remain held for the benefit of debenture holders who are entitled to those funds; and that seems to me to be a very significant matter, where those debenture holders’ entitlement to those funds should not be lightly disregarded.

55. By supplementary submissions, Mr Redwood acknowledged the concerns raised by ASIC with the treatment of Unpresented Payments in a manner that would result in debenture holders who have not made claims to date losing their rights to their Unpresented Payments and noted ASIC’s view that the payment of those funds to the unclaimed monies fund administered by ASIC would preserve debenture holder’s rights to make such claims. Mr Redwood rightly points out that the SPR had identified three options, including payment to an unclaimed monies fund, although the SPR had expressed a preference for the alternative option of payment to a charitable organisation and that the SPR recognises there are competing considerations and seeks the Court’s direction in this regard. Mr Redwood also rightly accepts that the matters raised by ASIC are fairly raised and are important considerations in respect of the direction sought. Mr Redwood again points to the SPR’s view that it is unlikely that debenture holders with Unpresented Payments will ultimately claim those funds and I accept that may be unlikely, given the time that has passed, although that does not seem to me sufficient justification for not leaving open the possibility that they will do so. In supplementary submissions, Mr Redwood also addressed a question as to the potential application of s 544 of the Act to unclaimed monies held by a liquidator and pointed to the fact that the relevant funds were held by Mr Lindholm in his capacity as SPR and not in his capacity as liquidator of BSL. It is not necessary to address any application of that section, given the conclusion that I have reached on other grounds and the common ground that has developed between the SPR and the Contradictor as to this issue.

51. The Contradictor indicated that it was neutral as to the option to be taken in respect of Undistributed Funds although it made helpful submissions as to the relevant options and their legal bases, including detailed submissions as to the potential application of unpresented monies legislation in Victoria or New South Wales, and the SPR accepted the correctness of those submissions in reply. It is now not necessary to address those submissions, where common ground has developed that the more appropriate course will be to pay the relevant funds into the unpresented monies fund maintained by ASIC under Pt 9.7 of the Act. Both the Contradictor and the SPR, in reply, accept an order made under s 283HB of the Act would, to the extent necessary, override the operation of state unpresented monies legislation and I accept that submission.

52. I am satisfied that the SPR has power to seek a direction as to how those monies should be paid, as he has done, for the reasons set out in my judgments in BSL 2016 at [17]–[18] and BSL 2018 at [16]ff , and I will direct that they be paid into ASIC’s unclaimed monies fund under Pt 9.7 of the Act. I consider that is the preferable course here, where it is consistent with the right of each debenture holder in the funds due to it, and the fact that the Unpresented Payments may ultimately not be claimed is not a sufficiently good reason not to preserve the entitlements of those who have rights to them. Where the Court has power to make that direction under s 283HB(1)(g) of the Act and makes that direction, then ASIC has power to receive and deal with those funds under Pt 9.7 of the Act as “unclaimed property” within the definition of that term in s 9 of the Act, notwithstanding that there is no specific statutory provision in the Act that provides for payment of that money to ASIC: Australian Securities and Investments Commission v Piggott Wood & Baker (a firm) (No 7) (2023) 166 ACSR 17; [2023] FCA 193 at [18]. This approach is consistent with that which ASIC has supported in correspondence; the Contradictor also accepts that it is consistent with the statutory structure and open in the circumstances; and ASIC is aware that such orders are likely to be made and has raised no difficulty with them. The SPR and Contradictor each fairly indicated they do not oppose this approach.

Orders

58. I direct the SPR, after consulting with the Contradictor, to submit orders to give effect to this judgment within seven days.

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Decision last updated: 02 July 2025