Gleeson Trustee v Eades - Receiver Manager Appointed Self-Managed Super Fund

Original Word Document (104.5 KB) Federal Court of Australia

Gleeson (Trustee) v Eades, in the matter of Eades (Bankrupt) [2026] FCA 477

| File number(s): | NSD 2385 of 2025 |

| Judgment of: | STELLIOS J |

| Date of judgment: | 22 April 2026 |

| Catchwords: | BANKRUPTCY AND INSOLVENCY – application for trustee in bankruptcy to be appointed receiver and manager over asset of self-managed superannuation fund – trustees of fund are undischarged bankrupts and therefore disqualified persons within the meaning of s 19 of the Superannuation Industry (Supervision) Act 1993 (Cth) – application granted |

| Legislation: | Bankruptcy Act 1966 (Cth) ss 30, 58(1), 110, 116(2)(a), 116(2)(d)(iii)(A)

Federal Court of Australia Act 1976 (Cth) s 57(1)

Superannuation Industry (Supervision) Act 1993 (Cth) ss 17A(2), 19, 19(1), 19(2), 19(3), 19(4), 120(1)(b), 126K(1)(c), 126K(2)(c)

Federal Court Rules 2011 (Cth) rr 14.21, 14.22 |

| Cases cited: | Amirbeaggi, in the matter of Simpkiss Pty Ltd (in liq) [2018] FCA 2121

Australian Securities and Investments Commission In the Matter of Richstar Enterprises Pty Ltd (ACN 099 071 968) v Carey (No 6) [2006] FCA 814; 153 FCR 509

Boensch v Pascoe [2019] HCA 49; 268 CLR 593

Espasia Pty Ltd (ABN 74 057 517 825), In the matter of Farm By Nature Pty Ltd (ABN 13 107 299 730) [2009] FCA 1559; 181 FCR 555

Hosking, in the matter of Business Aptitude Pty Ltd (in liquidation) [2016] FCA 1438

Octavo Investments Pty Ltd v Knight [1979] HCA 61; 144 CLR 360

Re Coram; Ex parte Official Trustee in Bankruptcy v Inglis (1992) 36 FCR 250 |

| Division: | General Division |

| Registry: | New South Wales |

| National Practice Area: | Commercial and Corporations |

| Sub-area: | General and Personal Insolvency |

| Number of paragraphs: | 30 |

| Date of hearing: | 14 April 2026 |

| Counsel for the Applicant: | Ms M Meares |

| Solicitor for the Applicant: | Kerrs Law |

| Counsel for the First Respondent: | The First Respondent appeared in person |

| Counsel for the Second Respondent: | The Second Respondent appeared in person |

| Counsel for the Third Respondent: | The Third Respondent appeared in person |
ORDERS

| NSD 2385 of 2025 |
| IN THE MATTER OF STEPHEN PHILIP EADES AND DIANNE EADES, BANKRUPTS |
| BETWEEN: | BRUCE GLEESON, AS TRUSTEE OF THE PROPERTY OF STEPHEN PHILIP EADES AND DIANNE EADES, BANKRUPTS

Applicant | |
| AND: | STEPHEN PHILIP EADES

First Respondent

DIANNE EADES

Second Respondent

EADES SUPERANNUATION FUND (ABN 73 813 825 934)

Third Respondent | |

| order made by: | STELLIOS J |
| DATE OF ORDER: | 22 april 2026 |
BY CONSENT, THE COURT ORDERS THAT:

1. Pursuant to s 57(1) of the Federal Court of Australia Act 1976 (Cth) and s 30 of the Bankruptcy Act 1966 (Cth), the applicant of Suite 3.03, Level 3, 45 Clarence Street, Sydney NSW 2000 shall be appointed as receiver and manager (Receiver), without security, over the property located at 2/26 William Street, Brookvale NSW 2100 being the land contained in folio identifier 2/SP13928 (Property), held by Stephen Philip Eades and Dianne Eades on trust for the Eades Superannuation Fund (ABN 73 813 825 934) (Super Fund).

2. The Receiver shall have powers, with respect to the Property, referred to in s 420 of the Corporations Act 2001 (Cth) (other than in s 420(2)(s), (t), (u) and (w)), as if the reference in that section to “the corporation” were a reference to “the Super Fund”.

3. Pursuant to s 30 of the Bankruptcy Act, within 28 days of the date of these Orders, the respondents shall:

(a) give vacant possession of the Property to the Receiver;

(b) deliver up to the Receiver the keys and access cards for any buildings and improvements on the Property (if any); and

(c) remove all personal property, being vehicles, rubbish and chattels (together Personal Effects) which are not vested in the Receiver (if any).

1. Pursuant to s 30 of the Bankruptcy Act, in the event any of the respondents fail to comply with paragraph 3(c) of these Orders, the Receiver be authorised and empowered to remove and/or dispose of any Personal Effects that remain on the Property at the cost of the respondents after 28 days have passed from the making of these Orders, without any obligation to account to the respondents for such Personal Effects.

2. Pursuant to s 30 of the Bankruptcy Act, a Writ of Possession in favour of the Receiver issue in respect of the Property, such Writ to lie in the Registry until the filing by the Receiver, not before 28 days from the date of the making of these Orders, of an affidavit sworn or affirmed by the Receiver or the Receiver's solicitor deposing that a respondent or respondents have not given up vacant possession of the Property whereupon after receipt of such an affidavit, the Registry shall forthwith release the Writ to the Receiver or the Receiver's solicitors.

3. The Receiver shall have the powers referred to in s 477(2)(b) and (c) of the Corporations Act, as may be necessary to give effect to these Orders, as if a reference in those paragraphs to “a liquidator of a company” were a reference to “the Receiver” and a reference to “the property of the company” were a reference to “the property of the Super Fund”.

4. The Receiver shall be authorised and empowered to offer the Property for sale and for those purposes the Receiver shall sell the Property by public auction with power to fix a reserve price or, alternatively, to sell the Property by private treaty.

5. The Receiver shall have the sole conduct of the sale of the Property and is authorised to instruct an agent, and/or auctioneer, and conveyancer or solicitor for that purpose and is empowered to do all acts and sign all documents necessary to effect the sale.

6. The Receiver shall be empowered and authorised to obtain a valuation of the Property by employing a registered valuer for the purposes of determining a fair and reasonable price of the Property for the purpose of the performance of his duty as the Receiver.

7. Following the sale provided for in Orders 7 to 9 above, the proceeds of the sale of the Property are to be paid in the following priority (subject to any priorities prescribed by law):

(a) in payment of all sale and transfer costs, including agent's fees and commission, advertising and marketing expenses, valuer's and auctioneer's fees, conveyancing and legal costs associated with the sale;

(b) in payment of any council rates, taxes, water rates, water usage and any other utility or statutory imposts or outgoings;

(c) repairs and any other reasonable expenses for the protection and maintenance of the Property;

(d) any amount necessary to discharge any mortgage or encumbrance registered on the title of the Property;

(e) the Receiver's remuneration, costs and expenses of acting on the sale of the Property and implementation of these Orders including but not limited to costs of preparing the Property for sale and any valuation costs;

(f) the applicant's remuneration, costs and expenses of this proceeding, including ancillary costs and expenses; and

(g) the balance of the proceeds of sale to be paid to the applicant, to be held on trust for the bankrupt estate of Stephen Philip Eades.

1. The need for the Receiver to file a guarantee under rr 14.21 and 14.22 of the Federal Court Rules 2011 (Cth) be dispensed with.

2. The applicant shall be at liberty to annul the bankrupt estate of Stephen Philip Eades, the bankrupt estate of Dianne Eades and the bankrupt estate of Stephen Philip Eades and Dianne Eades using the net proceeds of sale of the Property paid to the bankrupt estate of Stephen Philip Eades.

3. Subject to Order 12 above, following any annulment of the bankrupt estate of Stephen Philip Eades, the bankrupt estate of Dianne Eades and the bankrupt estate of Stephen Philip Eades and Dianne Eades, any surplus proceeds of sale of the Property be remitted by the applicant to Stephen Philip Eades and Dianne Eades in their capacity as trustees of the Super Fund.

4. Upon completion of effecting the Orders herein, the Receiver ceases their appointment over the Property.

5. Liberty to apply on three days' notice on any matters arising from these Orders.

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

REASONS FOR JUDGMENT

STELLIOS J:

1 On 6 May 2025, a Registrar of the Federal Circuit and Family Court of Australia (Division 2) ordered that the estates of the first and second respondents, Stephen Philip Eades and Dianne Eades, be sequestrated under the Bankruptcy Act 1966 (Cth). On the same day, the applicant, Bruce Gleeson, was appointed as trustee of their bankrupt estates.

2 In short, Mr Gleeson seeks an order to be appointed as receiver and manager over property located in Brookvale NSW (Brookvale property), along with various incidental and consequential orders in relation to the sale of that property and the annulment of the bankruptcies. The application is supported by Mr Gleeson’s affidavit sworn on 18 December 2025. Mr and Mrs Eades consent to the making of those orders.

3 I indicated to the parties that I wanted to hear from them on the proposed consent orders and a hearing was held on 14 April 2026. Mr Gleeson was represented by counsel, and Mr and Mrs Eades appeared in person with the assistance of family members. Counsel for Mr Gleeson made submissions in support of the orders. Mr and Mrs Eades consented to the making of the orders and, when provided with opportunities to comment on the proposed orders, expressed support for the making of the orders and for the sale of the Brookvale property to occur. It was confirmed during the hearing that the Brookvale property is a commercial property, and the sale of that property would likely allow Mr and Mrs Eades to retain ownership of their residential property.

4 For the following reasons, I am prepared to make the orders in substantially the same terms as agreed by the parties subject to one exception.

The Brookvale property and the Eades Superannuation Fund

5 Mr and Mrs Eades are joint registered proprietors of the Brookvale property. The evidence shows that the Brookvale property was purchased by Mr and Mrs Eades “as Trustees for the Eades Superannuation Fund ”, a self-managed superannuation fund. The anticipated sale of this property is likely to produce sufficient funds to satisfy outstanding debts and lead to the annulment of the bankruptcies.

6 Mr and Mrs Eades are the trustees of the Fund—there is no corporate trustee. The last known tax return shows Mr Eades as the sole member of the Fund. Australian Taxation Office records indicate that Mrs Eades is not a member of the Fund. Given that there is no evidence to the contrary, and that there was no disagreement by Mr Eades during the hearing, I infer that he remains the sole member of the Fund.

Appointment of Mr Gleeson as receiver and manager of the Brookvale property

7 I accept that the sale of the Brookvale property would assist Mr Gleeson to fulfil his duties under the Bankruptcy Act. That is also Mr and Mrs Eades’ preferred course of action. However, Mr Gleeson’s capacity to sell the Brookvale property is beset with complications.

8 First, property held by a bankrupt in trust for another person is not property divisible amongst the creditors of the bankrupt: Bankruptcy Act s 116(2)(a). By contrast, a trustee who becomes bankrupt has an entitlement in equity to be indemnified out of the trust property for liabilities incurred in the performance of the trust, and this falls outside the exclusion in s 116(2)(a): Boensch v Pascoe [2019] HCA 49; 268 CLR 593 at 2, citing Octavo Investments Pty Ltd v Knight [1979] HCA 61; 144 CLR 360 at 369–370 (Stephen, Mason, Aickin and Wilson JJ).

9 Counsel for Mr Gleeson submitted that “Mr Eades and potentially Mrs Eades have a right of indemnity sufficient to establish a beneficial interest in the trust property”, although the “potential quantum … is not currently known”. Two important consequences follow from the concession that such an entitlement in equity exists. The first is that such an entitlement vests in the trustee of the bankrupt estate under s 58(1) of the Bankruptcy Act (Boensch at 2) and, as indicated, falls outside the exclusion in s 116(2)(a). The second is that, at least in relation to Mr Eades, the beneficial interest held in the trust assets from which the right to indemnification might be vindicated, also vests in the trustee in bankruptcy. As Bell, Nettle, Gordon and Edelman JJ said in Boensch (at [15]):

… provided the bankrupt has a valid beneficial interest in the trust property, the trust property will vest in the trustee in bankruptcy subject to the equities to which it is subject in the hands of the bankrupt.

A “valid beneficial interest” can include “the bankrupt trustee’s right to be indemnified out of the trust property for obligations incurred in the bankrupt’s capacity as trustee”: Boe nsch at 92; see also at 10. Furthermore, the trust property vests in equity: Boensch at 116.

10 The upshot is that, because Mr Eades and (potentially) Mrs Eades have a right of indemnity sufficient to establish a beneficial interest in the trust property, the trust property vested in equity in Mr Gleeson (subject to relevant equities). On the other hand, although the indemnity falls outside the exclusion in s 116(2)(a) of the Bankruptcy Act, the trust property falls within the exclusion and is unavailable to meet the creditors’ debts.

11 Secondly, “[u]ntil the happening of a prescribed event that will crystallise his [or her] right into an actual entitlement, a member of a superannuation fund is neither the legal nor the beneficial owner of the amount that stands to the credit of his [or her] account”: Re Coram; Ex parte Official Trustee in Bankruptcy v Inglis (1992) 36 FCR 250 at 253 (O’Loughlin J); see also Espasia Pty Ltd (ABN 74 057 517 825), In the matter of Farm B y Nature Pty Ltd (ABN 13 107 299 730) [2009] FCA 1559; 181 FCR 555 at 45. Counsel for Mr Gleeson suggested that the position might be qualified where the beneficiary effectively controls the trustee of a fund: see Australian Securities and Investments Commission In the Matter of Richstar Enterprises Pty Ltd (ACN 099 071 968) v Carey (No 6) [2006] FCA 814; 153 FCR 509 at 29. However, since there were two trustees of the Fund, that is not this case.

12 Thirdly, because of Mr and Mrs Eades’ bankruptcies, they are “disqualified persons” within the meaning of that expression set out in s 120(1)(b) of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act). Three consequences for the operation of the Fund follow from the bankruptcy of a trustee of the Fund under the Superannuation Trust Deed executed on 26 June 2006:

(1) The office of a trustee of the Fund becomes vacant if the trustee becomes a disqualified person within the meaning of the SIS Act: cl 9.8(a)(iv).

(2) A member who, in the opinion of the trustees of the Fund, is insolvent or commits an act of bankruptcy, “ceases to be presently or presumptively entitled to his or her benefit or such part of that benefit as the Trustees in their absolute discretion determine”: cl 27.1(c). I accept the thrust of Mr Gleeson’s submission that, given that there is no trustee of the Fund, unless a new trustee is appointed, the clause is incapable of effective operation.

(3) The Fund can only be wound up by the trustees of the Fund including for the reason that there are no beneficiaries: cl 33.1. However, with no active trustees of the Fund, I accept Mr Gleeson’s submission that this provision is frustrated in the present circumstances.

13 Fo u r thly, it is not possible for Mr Gleeson to be substituted as a trustee of the Fund. Even if it might be possible under the terms of the Superannuation Trust Deed for Mr Gleeson to be appointed a trustee of the Fund (a question that I have not considered), the terms of s 17A(2) of the SIS Act would in effect preclude the appointment of Mr Gleeson as a trustee of the Fund. Under that provision, a superannuation fund with only one member is a self-managed superannuation fund, amongst other conditions, if and only if:

(b) if the trustees of the fund are individuals:

(i) the member is one of only 2 trustees, of whom one is the member and the other is a relative of the member; or

(ii) the member is one of only 2 trustees, and the member is not an employee of the other trustee; …

14 Because Mr Eades’ position as trustee of the Fund has been rendered vacant under the Superannuation Trust Deed, by reason of being a disqualified person under s 120(1)(b) of the SIS Act, the deficiency in meeting the trustee requirements under s 17A(2) cannot be cured by Mr Gleeson’s appointment as trustee of the Fund. As the sole member of the Fund, Mr Eades must also be a trustee of the Fund.

15 It follows that Mr and Mrs Eades’ bankruptcies have had the effect of (a) quarantining the trust asset, which was owned by them, and was held on trust for Mr Eades’ future benefit as the sole member of the Fund, from being used to meet their creditor’s debts and to allow for the ready annulment of their bankruptcies; and (b) frustrating the effective and practical operation of the Superannuation Trust Deed.

16 In the particular circumstances of this case, I consider that the approach of the parties, reached by consent, to appoint Mr Gleeson as receiver and manager of the Brookvale property, for the confined purpose of selling the Brookvale property and applying the sale proceeds in a way that satisfies the creditors’ debts, produces an annulment of the bankruptcies and preserves Mr and Mrs Eades’ residential property, is a sensible and practical solution to allow Mr Gleeson to execute his duties as trustee in bankruptcy. At the very least, the appointment will “secure the trustee’s right of indemnity out of the assets of the trust”: see Hosking, in the matter of Business Aptitude Pty Ltd (in liquidation) [2016] FCA 1438 at 21.

17 I note that counsel for Mr Gleeson also submitted that other complications arose because the Fund was no longer a “regulated superannuation fund” under the SIS Act. To be characterised as a regulated superannuation fund under s 19 of the SIS Act, the conditions in s 19(2)–(4) must be satisfied: s 19(1). While it is clear that (a) the Fund had trustees (until their office was vacated upon bankruptcy by force of cl 9.8(a)(iv) of the Superannuation Trust Deed) and (b) the sole or primary purpose of the Fund is the provision of old-age pensions (see Superannuation Trust Deed cl 3.2), thereby satisfying the requirements of s 19(2) and (3), there is no evidence before the Court that the trustees had given the Commissioner of Taxation a written notice electing that the SIS Act apply in relation to the Fund (as required by s 19(4)). If the Fund is a regulated superannuation fund, further complications would arise, including that (a) Mr Eades’ interest in the Fund would not be property divisible amongst the creditors (see Bankruptcy Act s 116(2)(d)(iii)(A)); (b) the requirement under s 19(2) of the SIS Act that the Fund have a trustee would not be satisfied; and (c) as disqualified persons, Mr and Mrs Eades would be committing offences by acting as trustees: SIS Act s 126K(1)(c) or 126K(2)(c).

18 It is not necessary to delve further into these issues. I am satisfied on the basis of what has been set out above that an order should be made appointing Mr Gleeson as a receiver and manager of the Brookvale property.

The terms of the orders to be made

19 Except for one of the proposed orders, I am satisfied that the orders agreed between the parties should be made in substantially the same terms as the orders sought.

20 Dealing first with the exception, the following order was proposed:

A declaration pursuant to section 90-15 of the Insolvency Practice Schedule (Bankruptcy) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act), that the Applicant, is justified, and would be otherwise acting reasonably in being appointed as receiver and manager over the property located at 2/26 William Street, Brookvale, NSW, being the land contained in folio identifier 2/SP13928 (Property), held by Stephen Philip Eades and Diane Eades on trust for the Eades Superannuation Fund (ABN 73 813 825 934) (Super Fund).

21 Counsel for Mr Gleeson submitted that this proposed order should be made because of the unusual and complex circumstances of this case, to make it clear that Mr Gleeson is justified in the exercise of his duties as trustee in bankruptcy, and would otherwise be acting reasonably, in being appointed as receiver and manager. However, counsel ultimately accepted that if I were not minded to make the order, then Mr Gleeson would not press for it to be made.

22 In my view, there is no utility in making the declaration sought and, accordingly, the Court would be acting beyond power if it were made. The Court’s order to appoint Mr Gleeson as receiver and manager over the Brookvale property is sufficient authority and justification for Mr Gleeson to act in that capacity. The parties are otherwise in agreement for the appointment to be made. I am not persuaded that the proposed declaration will produce any consequences beyond the orders that will be made.

23 Order 1 appoints Mr Gleeson as the receiver and manager over the Brookvale property. This Court has in the past made a similar order without security over the property: see Hosking, order 1; Amirbeaggi, in the matter of Simpkiss Pty Ltd (in liq) [2018] FCA 2121 (Markovic J), order 3. I consider it appropriate that the order should be made in the terms agreed by the parties in the circumstances of this case.

24 Order 2 provides Mr Gleeson as receiver and manager with powers referred to in the text of s 420 of the Corporations Act (other than in s 420(2)(s), (t), (u) and (w)). The order does not operate to deem the Fund to be a corporation for the purposes of s 420. Instead, it picks up the text of the relevant paragraphs in s 420 as a shorthand for identifying the powers that Mr Gleeson can exercise.

25 Orders 3 to 5 require Mr and Mrs Eades to give vacant possession of the Brookvale property to Mr Gleeson and deal with the consequences of failing to do so. At the hearing, Mr and Mrs Eades indicated that work to clear the property was well advanced, and they understood the consequences of not providing vacant possession in the time prescribed in Order 3.

26 Order 6 provides Mr Gleeson, as receiver and manager, with powers referred to in the text of s 477(2)(b) and (c) of the Corporations Act. The intention is the same as for Order 2.

27 Orders 7 to 10 deal with Mr Gleeson’s authority as receiver and manager to sell the property and how the sale proceeds are to be applied.

28 Order 11 dispenses with the requirement under rr 14.21 and 14.22 of the Rules for the need to file a guarantee: see above at [23].

29 Orders 12 and 13 deal with the annulment by Mr Gleeson of the respective bankruptcies and the return of any surplus money to Mr and Mrs Eades in their capacities as trustees of the Fund. Order 12 is not inconsistent with the requirements of s 110 of the Bankruptcy Act and is made with the consent of the parties.

30 Orders 14 and 15 deal, respectively, with the cessation of Mr Gleeson’s authority as receiver and manager and liberty to apply.

| I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stellios. |
Associate:

Dated: 22 April 2026