FEDERAL COURT OF AUSTRALIA Park, in the matter of Queensland Nickel Pty Ltd (in liq) (No 3) [2022] FCA 1301 File number(s): QUD 235 of 2021 Judgment of: DOWNES J Date of judgment: 2 November 2022 Catchwords: BANKRUPTCY AND INSOLVENCY – application for directions under s 90-15 of Schedule 2 of the Corporations Act 2001 (Cth) (Insolvency Practice Schedule) – debts incurred by corporate trustee while manager of joint venture – trustee went into administration and was replaced by new trustee – former trustee obtained funding pursuant to litigation funding agreement and brought successful proceeding to recover debt from related company – entry into funding agreement approved by committee of inspection – new trustee demanded payment of judgment sum – liquidators of former trustee seek advice that they would be justified in paying trust creditors from judgment sum along with expenses associated with recovery of debt and their remuneration before transferring any surplus to new trustee – new trustee and beneficiaries challenge payment to creditors on basis that debts were not properly incurred in the performance of the trust – new trustee and beneficiaries challenge payment of expenses associated with recovery of debt and remuneration on basis were improperly incurred – direction opposed on basis that former trustee failed to obtain court approval of litigation funding agreement prior to entering into it – direction opposed on basis of incomplete information – orders made TRUSTS AND TRUSTEES – application for judicial advice under s 96 of the Trusts Act 1973 (Qld) – whether trust property confined to funds held in bank account or to joint venture property as defined in joint venture agreement – whether trust creditors should be paid from proceeds of judgment sum following successful recovery of debt – whether former trustee has obligation to get in trust property after being replaced – whether former trustee acted in breach of trust by bringing proceeding to get in trust property – whether former trustee was required to transfer trust property to new trustee – where any such transfer would place trust property at risk – advice given Legislation: Bankruptcy Act 1966 (Cth) ss 178, 179 Corporations Act 2001 (Cth) ss 436A, 436E, 439A, 477(2B), Sch 2 s 90-15, Sch 2 Pt 3 Evidence Act 1995 (Cth) ss 76, 79 Fair Entitlements Guarantee Act 2012 (Cth) s 28 Limitation of Actions Act 1974 (Qld) s 10(1) Property Law Act 1974 (Qld) s 199 Trusts Act 1973 (Qld) ss 15, 72, 96, 97 Cases cited: Apostolou v VA Corporation Aust Pty Ltd (2010) 77 ACSR 84; [2010] FCA 64 ASIC v Groundhog Developments Pty Ltd & Ors [2011] QSC 263 Australian Competition and Consumer Commission v Swishette Pty Ltd [2018] FCA 55 Australian Securities and Investments Commission v Letten (No 17) (2011) 87 ACSR 155; [2011] FCA 1420 Ban v The Public Trustee of Queensland [2015] QCA 18 Break Fast Investments Pty Ltd v Sclavenitis [2022] VSC 288 Bruton Holdings Pty Ltd (in liq) v Federal Commissioner of Taxation (2011) 193 FCR 442; [2011] FCAFC 79 Bruton Holdings Pty Ltd (in liquidation) v Commissioner of Taxation of the Commonwealth of Australia (2009) 239 CLR 346; [2009] HCA 32 Carter Holt Harvey Woodproducts Australia Pty Limited v The Commonwealth (2019) 268 CLR 524; [2019] HCA 20 CGU Insurance Limited v One.Tel Limited (in liquidation) (2010) 242 CLR 174; [2010] HCA 26 Chief Commissioner of Stamp Duties v Buckle (1998) 192 CLR 226; [1998] HCA 4 Clairs Keeley (a firm) v Treacy (2003) 28 WAR 139; [2003] WASCA 299 Clairs Keeley (a firm) v Treacy (2004) 29 WAR 479; [2004] WASCA 277 Cremin, in the matter of Brimson Pty Ltd (in liq) (2019) 136 ACSR 649; [2019] FCA 1023 Elfic Ltd v Macks [2003] 2 Qd R 125; [2001] QCA 219 IMF (Australia) Limited v Meadow Springs Fairway Resort Limited (in Liquidation) (2009) 69 ACSR 507; [2009] FCAFC 9 In Re Suco Gold Pty Ltd (in liquidation) (1983) 33 SASR 99 Innovateq Australia Pty Ltd v Barnes & Ors [2017] VSC 16 Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (in liq) (2018) 260 FCR 310; [2018] FCAFC 40 Kelly, in the matter of Halifax Investment Services Pty Ltd (in liquidation) (No 8) (2020) 144 ACSR 292; [2020] FCA 533 Kemtron Industries Pty Ltd v Commissioner of Stamp Duties [1984] 1 Qd R 576 Lemery Holdings Pty Ltd v Reliance Financial Services Pty Ltd (2008) 74 NSWLR 550; [2008] NSWSC 1344 Lewis (liquidator), in the matter of Concrete Supply Pty Ltd (in liq) (2020) 145 ACSR 459; [2020] FCA 841 Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42 Marley v Mutual Security Merchant Bank and Trust Co Ltd [1991] 3 All ER 198 Nolan v Collie (2003) 7 VR 287; [2003] VSCA 39 Parbery & Ors v QNI Metals Pty Ltd & Ors [2019] QSC 207 Parbery & Ors v QNI Metals Pty Ltd & Ors [2020] QSC 143 Park v Whyte (No 3) [2018] 2 Qd R 475; [2017] QSC 230 Park, in the matter of Queensland Nickel Pty Ltd (in liq) [2022] FCA 667 Preston, in the matter of Sandalwood Properties Ltd [2018] FCA 547 QB4 Capital Pty Limited v Guardian Securities Limited (2022) 159 ACSR 289; [2022] FCA 262 QNI Resources Pty Ltd & Ors v Park & Ors (2016) 116 ACSR 321; [2016] QSC 222 QNI Resources Pty Ltd & Ors v Queensland Nickel Pty Ltd (in liq) [2017] QCA 167 Queensland Nickel Pty Ltd (in liq) v QNI Metals Ltd & Ors [2021] QCA 138 Queensland Nickel Sales Pty Ltd v Queensland Nickel Pty Ltd (in liq) (No 3) [2022] FCA 564 Re Ansett Australia Ltd (No 3) (2002) 115 FCR 409; [2002] FCA 90 Re Octaviar Ltd [2020] QSC 353 Re Queensland Nickel (in liq) [2017] QSC 258 Robinson, in the matter of Reed Constructions Australia Pty Ltd (in liq) [2017] FCA 594 Seaman v Silvia [2018] FCA 97 Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455 Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 7) [2020] FCA 1182 WLD Practice Holdings Pty Ltd, in respect of the WLD Practice Holdings Trust v Sara Stockham [2020] NSWSC 395 Young v Thomson (2017) 253 FCR 191; [2017] FCAFC 140 Division: General Division Registry: Queensland National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 418 Date of last submission/s: 1 August 2022 Date of hearing: 26–29 July 2022 Counsel for the Plaintiffs: Mr A Pomerenke KC w/ Mr N Derrington and Mr S Walpole Solicitor for the Plaintiffs: HWL Ebsworth Lawyers Counsel for the First Interested Person: The First Interested Person did not appear Counsel for the Second, Third and Fourth Interested Person: Mr P Zappia KC w/ Mr G Gee, Mr K Byrne and Ms S Gaussen Solicitor for the Second, Third and Fourth Interested Person: Robinson Nielsen Legal Counsel for the Fifth Interested Person: Mr M Hodge KC w/ Ms F Lubett and Mr P Kucharski Solicitor for the Fifth Interested Person: Corrs Chambers Westgarth Table of Corrections 7 November 2022 In paragraph 125, "plaintiff fails" has been replaced by "plaintiffs fail". 7 November 2022 In paragraph 376, "is" has been inserted after "Third, it". ORDERS QUD 235 of 2021 IN THE MATTER OF QUEENSLAND NICKEL PTY LTD (IN LIQUIDATION) ACN 009 842 068 BETWEEN: JOHN PARK AND KELLY-ANNE TRENFIELD IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF QUEENSLAND NICKEL PTY LTD (IN LIQUIDATION) ACN 009 842 068 First Plaintiff QUEENSLAND NICKEL PTY LTD (IN LIQUIDATION) ACN 009 842 068 Second Plaintiff AND: MINERALOGY PTY LTD First Interested Person QNI METALS PTY LTD Second Interested Person QNI RESOURCES PTY LTD Third Interested Person QUEENSLAND NICKEL SALES PTY LTD Fourth Interested Person VANNIN CAPITAL OPERATIONS LIMITED Fifth Interested Person order made by: DOWNES J DATE OF ORDER: 2 November 2022 In this Order, the following terms have these meanings: Judgment Sum means the sum of $102,884,346.26 paid by the first interested person to the second plaintiff in satisfaction of the judgment of the Queensland Court of Appeal delivered on 25 June 2021, any further payment made in respect of interest on that sum, and any interest earned by the second plaintiff on that sum. Trust Assets means the Judgment Sum and all other assets of the second plaintiff held by it as trustee for the second interested person and the third interested person. THE COURT ORDERS THAT: 1. The claims by the second, third and fourth interested persons for the relief in the Amended Statement of Claim filed on 8 June 2022 are dismissed. 2. The plaintiffs are justified in refusing to pay to the fourth interested person the Judgment Sum, or any part thereof, until at least such time as it is established (if ever), during or following the completion of the steps contemplated in order 3 below and any further steps in the winding up of the second plaintiff, that the second plaintiff holds a surplus of Trust Assets over: (a) liabilities (both present and future) for which it claims a right of indemnity or exoneration out of the Trust Assets; and (b) the first plaintiffs' costs, expenses and remuneration approved under Part 3 of Schedule 2 of the Corporations Act 2001 (Cth) (Insolvency Practice Schedule). 3. The first plaintiffs are justified in paying the following amounts from the Trust Assets: (a) the liabilities that the second plaintiff has incurred under the Litigation Funding Agreement made between the plaintiffs and the fifth interested person dated 13 September 2016, being a priority debt within the meaning of s 556(1) of the Corporations Act 2001 (Cth); (b) remuneration to themselves which is approved under Part 3 of the Insolvency Practice Schedule, being a priority expense within the meaning of s 556(1) of the Corporations Act 2001 (Cth); (c) in respect of any proof of debt of a creditor which they have admitted (or where the decision has been varied by way of appeal so as to admit the claim), such amount as is admitted, following the expiry of any relevant time allowed for an appeal against that adjudication. 4. By 4.00pm (AEST) 4 November 2022, the plaintiffs shall file and serve any submissions (limited to three pages) and any affidavit material in relation to the issue of costs. 5. By 4.00pm (AEST) 4 November 2022, the fifth interested person shall file and serve any submissions (limited to three pages) and any affidavit material in relation to the issue of costs. 6. By 4.00pm (AEST) 8 November 2022, the second, third and fourth interested persons shall together file and serve any submissions (limited to five pages in total) and any affidavit material in relation to the issue of costs. 7. By 4.00pm (AEST) 10 November 2022, the plaintiffs and the fifth interested person shall each file and serve any submissions in reply (limited to two pages) and any affidavit material in reply. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT DOWNES J: OVERVIEW [1] RELIEF SOUGHT BY PLAINTIFFS [33] RELIEF SOUGHT BY PALMER PARTIES [38] ISSUES [49] CHRONOLOGY [50] LEGAL PRINCIPLES CONCERNING DIRECTIONS SOUGHT BY PLAINTIFFS [118] Section 90-15 Insolvency Practice Schedule [118] Section 96 Trusts Act [120] PROPER CHARACTERISATION OF TRUST [129] WHETHER EXPENSES AND LIABILITIES WERE PROPERLY AND REASONABLY INCURRED [152] Whether QNI had power to bring Mineralogy proceeding [159] Whether improper for QNI to bring Mineralogy proceeding [183] Whether Mineralogy proceeding could and should have been pursued by special purpose liquidators [207] Proper construction of appointment order [209] Extension of powers under appointment order [228] Fundamental problems with the case advanced by Palmer Parties [253] Conclusion [264] Whether improper to enter into Vannin LFA [268] WHETHER BREACH OF TRUST BY QNI [310] The first alleged breach of trust [311] The second alleged breach of trust [330] The third alleged breach of trust [336] IMPACT OF SETTLEMENT DEED ON RELIEF SOUGHT [355] Whether claims by Palmer Parties have been released [358] Whether settlement deed prevents plaintiffs from obtaining relief [369] WHETHER PALMER PARTIES ENTITLED TO RELIEF SOUGHT [378] First declaration sought [378] Second declaration sought [384] Order sought that trust property be transferred to QNS [389] WHETHER DIRECTIONS SOUGHT BY PLAINTIFFS SHOULD BE MADE [394] Proposed order 2 [394] Proposed orders 3(a) and 3(b) [396] Proposed order 3(d) [412] DISPOSITION [416] OVERVIEW 1 The second plaintiff, Queensland Nickel Pty Ltd (in liq) (QNI) is the former Manager of a joint venture between QNI Resources Pty Ltd and QNI Metals Pty Ltd (together, the JVCs). 2 Mr Clive Palmer was a director of QNI during various periods between 2009 and 2017, along with Mr Clive Mensink. Mr Palmer remains one of the secretaries of QNI. Mr Mensink is a former director and secretary of the JVCs. The sole shareholder of Resources is Palmer Resources Holdings Pty Ltd, and the sole shareholder of Metals is Palmer Metals Holdings Pty Ltd. 3 Along with two other agreements which are not presently relevant, the joint venture was governed by a joint venture agreement dated 17 September 1992 (JVA). 4 As Manager, QNI operated a business of importing, sourcing and processing nickel ore which was used to produce nickel and cobalt products for export overseas for sale to metal traders and industrial consumers. QNI received money from these sales which it deposited into bank accounts maintained by it as Manager. 5 QNI had employees and otherwise incurred debts in the course of operating its business. 6 Under the JVA, QNI was able to issue call notices to the JVCs for funds to meet all costs, liabilities and expenses of the joint venture. 7 QNI did not operate any other business. 8 On 18 January 2016, Mr Richard Park and Ms Kelly Trenfield were appointed as joint and several administrators of QNI pursuant to s 436A of the Corporations Act 2001 (Cth) together with Mr Quentin Olde and Mr Stefan Dopking (together, Administrators). 9 On 7 March 2016, the Administrators were served with notices which stated that on 3 March 2016, it had been resolved by the JVCs to appoint Queensland Nickel Sales Pty Ltd (QNS) as Manager of the joint venture. 10 The shareholders of QNS are the JVCs. 11 QNS, Metals and Resources have been referred to as the Palmer Parties in this proceeding, and that description will be used in these reasons. 12 On 22 April 2016, the creditors of QNI resolved at a creditor's meeting that QNI be wound up and that Mr Park and Ms Trenfield (described as the general purpose liquidators or GPLs), together with Mr Olde and Mr Dopking, be appointed as liquidators of QNI. 13 On 18 May 2016, Mr Stephen Parbery, Mr Marcus Ayres and Mr Michael Owen were appointed special purpose liquidators (or SPLs, as they were described by the parties) of QNI by Dowsett J. The appointment order identified the particular tasks to be undertaken by the SPLs, who received funding from the Commonwealth to perform those tasks pursuant to a litigation funding agreement (Commonwealth LFA). 14 On 29 March 2017, proceedings were commenced by QNI (by the GPLs) against Mineralogy Pty Ltd in the Supreme Court of Queensland, which were described by the parties as the Mineralogy proceeding or Mineralogy claim. Mr Palmer is also a director of Mineralogy. 15 The foundation of the Mineralogy claim was that QNI had made payments to, for or at the request of Mineralogy, from funds held in a joint venture bank account by way of loans. The total amount of these payments was $102,884,346.26. The first payments were made on 25 February 2011. These proceedings were brought to recover those funds in circumstances where there were potential issues concerning the expiry of limitation periods by reason of s 10(1) Limitation of Actions Act 1974 (Qld). 16 Litigation funding to conduct the Mineralogy proceeding was obtained by QNI from Vannin Capital Operations Limited pursuant to a litigation funding agreement made on 13 September 2016 (Vannin LFA). Funding was also provided pursuant to that agreement to pursue what were described by the parties as the Voidable Transactions proceeding and the Martino proceeding. 17 The committee of inspection of QNI approved the entry into the Vannin LFA. 18 Following a trial in the Supreme Court of Queensland before Mullins J (as her Honour then was), the Mineralogy proceeding concluded when the Queensland Court of Appeal determined that QNI as trustee had made loans to Mineralogy, and QNI was entitled to have them repaid: Queensland Nickel Pty Ltd (in liq) v QNI Metals Ltd & Ors [2021] QCA 138 (Fraser and Morrison JJA and Burns J) at [173] (QCA decision). 19 An application for special leave to appeal from the QCA decision to the High Court was dismissed on 17 March 2022. 20 On 5 July 2021, the sum of $102,884,346.26 was paid to QNI by Mineralogy as a consequence of the QCA decision, with interest and costs yet to be determined. Interest on the judgment sum is estimated to be in the range of $13.915 million to $48.8 million and recoverable costs are estimated to be in the order of $3–4 million. 21 The term judgment sum will be used in these reasons to mean the sum of $102,884,346.26 which was paid to QNI by Mineralogy, any further payment made in respect of interest on that sum and any interest earned by QNI on that sum. 22 Vannin submitted, and it was not disputed by the Palmer Parties, that the objective benefit to the estate as a result of the Mineralogy proceeding was between approximately $74 million and $97 million after the payment of a funding premium to Vannin which is payable under the Vannin LFA but not costs. 23 On the same day that the sum of $102,884,346.26 was paid by Mineralogy, QNS demanded that the entire amount be paid to it, without deduction. 24 That demand was not complied with for the reasons explained by senior counsel for the plaintiffs: [On] any view, the debt owed by Mineralogy to QNI was a just debt [which] was owing to QNI as at the date the administrators were appointed, that is, 18 January 2016. It should have been paid by then at the very latest. [Yet] the plaintiffs are being criticised for getting in that just debt. … The short point is that Mr Palmer and his companies really made us work for it yet he's now complaining that too many resources were devoted to overcoming his scheming. The wrongdoer is complaining about the resources devoted to overcoming the wrongdoing in circumstances where the wrongdoer made it as hard and as expensive as possible. [There is] obvious injustice in what the Palmer parties are seeking to perpetrate. They seek all the spoils of the judgment sum, but only on the basis that the liabilities incurred in order to secure those spoils should go unpaid. They say the new trustee, Queensland Nickel Sales, should be left to decide whether to pay outstanding joint venture expenses even though they're liabilities of Queensland Nickel and even though Queensland Nickel has a right of indemnity in respect of them. 25 The plaintiffs submit that they are entitled to use the judgment sum to discharge the liabilities which have been incurred to Vannin under the Vannin LFA, the remuneration and costs of the GPLs and the admitted proof of debt of any creditor of QNI. 26 The plaintiffs accept that, in due course, any surplus proceeds will be transferred to the replacement trustee, but say that such transfer should not occur until after these liabilities have been discharged and these costs and expenses have been paid from the judgment sum. 27 The Palmer Parties described the claim by the GPLs for remuneration and for disbursements such as legal fees, valuation fees and accounting fees as GPL Liabilities and, when combined with the funding premium as the Mineralogy Claim Expenses and Liabilities. 28 The Palmer Parties oppose the payment of these amounts from the judgment sum on the basis that they were not properly and reasonably incurred. This opposition is made on numerous bases, some pleaded and some not; some which contradict other arguments advanced in this or other proceedings; and some which have already been heard and determined elsewhere (but all are run without discrimination). 29 To the extent that arguments were advanced by the Palmer Parties in their written submissions which fell outside the scope of their pleaded case, these were often not developed orally and insufficient particulars were provided of these contentions. For these reasons, these arguments will be addressed briefly. 30 The overarching position of the Palmer Parties was and remains that, notwithstanding that the judgment sum has been recovered by QNI, QNI is not entitled to deduct any amount from the judgment sum in payment of its expenses associated with its recovery. 31 The Palmer Parties also challenge the ability of the plaintiffs to pay creditors in circumstances where those creditors claim payment for debts incurred by QNI when it was Manager of the joint venture. This challenge is made in circumstances where the JVCs did not answer calls by the Manager to make payments to enable those creditors to be paid. 32 The GPLs estimate that QNI's liabilities, including to trade creditors, is in the range of approximately $137 million to approximately $215 million. RELIEF SOUGHT BY PLAINTIFFS 33 On 15 July 2021, the plaintiffs commenced these proceedings by way of originating process and sought directions under s 90-15 of Schedule 2 of the Corporations Act (Insolvency Practice Schedule), and further or alternatively, s 96 of the Trusts Act 1973 (Qld). 34 By order dated 11 May 2022, a direction was made that the GPLs would be justified in taking steps to ascertain the outstanding claims by creditors in the liquidation of QNI, obtaining proofs of debt in respect of such claims, and adjudicating those claims. This had been the order originally sought in [3(c)] of the originating process. Orders were also made by consent that the GPLs be permitted to pay certain costs and expenses from the judgment sum, including their reasonable costs and expenses incurred in relation to the prosecution of this proceeding. 35 By the time of the hearing in this matter, the relief which continued to be sought by the plaintiffs was in these terms: 1. In this order, the following words have the following meaning: Judgment Sum means the sum of $102,884,346.26 paid by Mineralogy Pty Ltd to Queensland Nickel Pty Ltd (in liq) (QNI) in satisfaction of the judgment of the Queensland Court of Appeal delivered on 25 June 2021, any further payment made in respect of interest on that sum, and any interest earned by QNI on that sum. Trust Assets means the Judgment Sum and all other assets of QNI held by it as trustee for QNI Metals Pty Ltd and QNI Resources Pty Ltd. … 2. A direction that the Plaintiffs are justified in refusing to pay to Queensland Nickel Sales Pty Ltd (QNS) the Judgment Sum, or any part thereof, until at least such time as it is established (if ever), during or following the completion of the steps contemplated in orders 3a to 3d below and any further steps in the winding up of QNI, that QNI holds a surplus of Trust Assets over: a. liabilities (both present and future) for which it claims a right of indemnity or exoneration out of the Trust Assets; and b. the First Plaintiffs' costs, expenses and remuneration approved under Part 3 of the Insolvency Practice Schedule. 3. A direction that …: a. the First Plaintiffs would be justified, in paying from the funds of QNI, the liabilities that QNI has incurred under the Litigation Funding Agreement made between the Plaintiffs and Vannin Capital Operations Limited dated 13 September 2016, being a priority debt within the meaning of s 556(1) of the Corporations Act; b. the First Plaintiffs would be justified in paying to themselves, from the funds of QNI, the remuneration approved under Part 3 of the Insolvency Practice Schedule, being a priority expense within the meaning of s 556(1) of the Corporations Act; … d. the First Plaintiffs would be justified in paying from the funds held by QNI in respect of any proof of debt of a creditor which they have admitted (or where the decision has been varied by way of appeal so as to admit the claim), such amount as is admitted, following the expiry of any relevant time allowed for an appeal against that adjudication. 36 Other than the Palmer Parties, no person appeared at the hearing to oppose the relief sought by the plaintiffs. Vannin appeared and supported the relief sought by the plaintiffs. 37 For the reasons set out below, the orders sought by the plaintiffs will be made. RELIEF SOUGHT BY PALMER PARTIES 38 In the interval between the filing of the originating process which commenced this proceeding and the dismissal of the special leave application, the Palmer Parties commenced two satellite proceedings in the Federal Court: (1) QUD257/2021 – in which, in the final form of that proceeding, the Palmer Parties sought to contend that QNI had no right of indemnity or exoneration from the trust assets in respect of the expenses incurred in relation to pursuing the Mineralogy claim, on the basis that these were not properly or reasonably incurred, and also sought an order for the transfer of the trust assets to QNS; and (2) QUD15/2022 – in which the Palmer Parties made allegations of accessorial liability against the GPLs, their instructing solicitors and Vannin. 39 On 17 May 2022, I refused to grant the Palmer Parties leave to proceed against QNI in QUD257/2021, and dismissed that proceeding. 40 Instead, directions were made in this proceeding for the proposed statement of claim of the Palmer Parties in QUD257/2021 to be treated as the Palmer Parties' grounds of opposition to the directions sought by the plaintiffs in this proceeding, and as their own claims for relief: Queensland Nickel Sales Pty Ltd v Queensland Nickel Pty Ltd (in liq) (No 3) [2022] FCA 564. 41 On 27 May 2022, I made orders which stayed QUD15/2022 until the determination of this proceeding. 42 This matter was listed for hearing for four days to commence on 26 July 2022, being dates which suited the parties, as advised to chambers. As the parties had already filed and served affidavits in this proceeding and QUD257/2021, directions were made on 16 May 2022 about the filing and service of any further affidavit material upon which the parties intended to rely at the hearing. As part of these orders, the parties were permitted to rely upon affidavits filed in QUD257/2021. The end result is that the affidavit material relied upon by the parties exceeded 13,000 pages. 43 On 7 June 2022, following a contested application, leave was granted to the Palmer Parties to file an amended statement of claim (with some proposed amendments disallowed): Park, in the matter of Queensland Nickel Pty Ltd (in liq) [2022] FCA 667. The amended statement of claim was ordered to be treated as a concise statement of the grounds of opposition by the Palmer Parties to the orders sought in the originating process filed in this proceeding, as well as an application for the relief claimed in the prayer for relief in that document. 44 The amended statement of claim was filed on 8 June 2022. 45 During the course of the hearing, the Palmer Parties abandoned their complaint contained in [26]–[31] of the amended statement of claim, which related to an alleged failure by the GPLs to provide an account. 46 The Palmer Parties also abandoned their claim for the declaration in [2(c)] of the prayer for relief in the amended statement of claim. 47 The remaining substantive relief claimed by the Palmer Parties is as follows: 1. A declaration that QNI holds the Trust Property, including the Judgment Sum, on constructive trust for QNI Metals and QNI Resources according to their respective interests under the JVA and subject to the right of QNI to indemnity or exoneration from the Trust Property for expenses properly and reasonably incurred in capacity as trustee, such trust having arisen on or with effect from 3 March 2016. 2. A declaration that the right of QNI to indemnity or exoneration from Trust Property does not attach, on the basis that they were not properly or reasonably incurred as trustee and/or were incurred in breach of trust, in respect of: (a) the GPL Liabilities; (b) the Funding Premium; … 3. An order that, subject to Queensland Nickel Sales not taking steps which would destroy, diminish or otherwise jeopardise any residual right of security held by QNI in the Trust Property, QNI transfer the Trust Property, including the Judgment Sum, to Queensland Nickel Sales forthwith, to be held on trust by Queensland Nickel Sales for QNI Metals and QNI Resources according to their respective interests under the JVA. 48 For the following reasons, the claims by the Palmer Parties for the relief in the prayer for relief will be dismissed. ISSUES 49 The central questions which arise in this proceeding are as follows: (1) whether QNI was trustee of the Joint Venture Property (as defined in the JVA and which property included the funds held in the joint venture bank account) or whether QNI was only the trustee of the funds held in the joint venture bank account (or the chose in action against the bank in relation to those funds); (2) whether QNI was empowered to bring the Mineralogy proceeding; (3) whether it was improper for QNI to bring the Mineralogy proceeding; (4) whether QNI could have, or ought to have, brought the Mineralogy proceeding through the SPLs instead of the GPLs; (5) whether it was improper for QNI to enter into the Vannin LFA; (6) whether QNI was and is required to transfer the trust property to QNS; (7) whether QNI committed the breaches of trust alleged in the amended statement of claim; (8) the impact of the settlement deed on the application by the plaintiffs and the claims by the Palmer Parties; (9) whether the Palmer Parties are entitled to the relief in the prayer for relief; (10) whether the directions sought by the plaintiffs should be made. CHRONOLOGY 50 Waratah Coal Pty Ltd had Mineralogy as its ultimate holding company and, prior to the issue of shares in China First Pty Ltd to QNI on 13 January 2016, China First was a wholly owned subsidiary of Waratah Coal. These entities are companies ultimately owned by Mr Palmer. 51 On 13 January 2016, QNI executed documents which effected a series of related transactions that purported to take effect that day (that is, five days before QNI was placed into voluntary administration). The parties to those transactions were QNI, Metals, Resources, Waratah Coal and China First. 52 Upon the appointment of the Administrators on 18 January 2016, the apparent effect of the transactions entered on 13 January 2016 was to crystallise a right of Waratah Coal and China First as secured creditors to be paid the amount of $235 million by QNI. Each lodged a proof of debt to this effect and thereby claimed an entitlement to $235 million in preference to the unsecured creditors of QNI. 53 On 29 January 2016, at the first meeting of creditors of QNI held pursuant to s 436E(1) Corporations Act, a Committee of Inspection was elected which was comprised of eleven creditors. 54 On 24 February 2016, the Administrators issued a call notice to the JVCs in the amount of $16,441,186 for the amount which QNI had incurred in relation to operational costs during the administration period. On the same day, the Administrators received an email from Mr Mensink requesting further details. 55 On 29 February 2016, the Administrators responded to Mr Mensink's email; however, no amounts were subsequently paid by the JVCs in response to the 24 February 2016 call notice. 56 On 1 March 2016, the Administrators wrote to the JVCs about the call notice, to which a response was received on 3 March 2016 from Mr Mensink disputing the JVCs' liability to pay. The letter stated, amongst other things, that "there is no budget that has been approved by the Joint Venture and the Joint Venture does not recognize the liability". 57 On 7 March 2016, the Administrators were served with notices which stated that on 3 March 2016, it had been resolved by the JVCs to appoint QNS as Manager of the joint venture. 58 Minutes of a meeting of the "Joint Venture Owners Committee" which was held at 11.00am on 3 March 2016 were also provided to the Administrators which, in addition to referring to the appointment of QNS, referred to a resolution that all calls made by QNI in its former role as Manager be withdrawn. 59 The Administrators had received no notice of this meeting and did not consent to the resolutions. 60 On or about 30 March 2016, the Administrators issued a call notice in the sum of $73,903,271 to the JVCs for the employee entitlement obligations which QNI had incurred in the period up to and including 18 January 2016 (being the date of their appointment) and which were payable. 61 No amounts were received in respect of the 30 March 2016 call notice. 62 On or about 6 April 2016, the Administrators issued a further call notice in the sum of $116,181,175.46 to the JVCs for the balance of the pre-appointment liabilities which QNI had incurred prior to the administration period. The amount of the call notice was calculated on the basis of QNI's records and the proofs of debt lodged with the Administrators following their appointment. 63 No amounts were received in respect of the 6 April 2016 call notice. 64 On or around 11 April 2016, the Administrators provided the creditors of QNI with their s 439A report. In that report, the Administrators estimated QNI's liabilities to be in the range of $233.5 million to $622.1 million. Potential recovery actions which could be brought by QNI were identified, which included related party transactions. 65 As part of identified payments made by QNI to related parties totalling more than $224 million, an amount of more than $122 million was referred to in the s 439A report as having been transferred to Mineralogy, with the net position recorded in its loan account of more than $101 million. 66 On 14 April 2016, the Commonwealth Department of Employment wrote to the Administrators advising, amongst other things, that: (1) the Department was likely to become the largest creditor of QNI once it made payments to the former employees of QNI pursuant to the Fair Entitlements Guarantee Scheme (FEG Scheme); and (2) the Department was considering whether it would be appropriate for it to make an application to the Court that a special purpose liquidator be appointed to QNI should the company enter liquidation. 67 The Commonwealth subsequently became one of the largest creditors of QNI as it discharged most of QNI's liabilities to its former employees under the FEG Scheme. A total of $66,862,313.99 was advanced pursuant to s 28 of the Fair Entitlements Guarantee Act 2012 (Cth). 68 On 15 April 2016, Resources, Metals and QNS commenced proceedings against the plaintiffs in the Supreme Court of Queensland. This became a proceeding in which various claims were pursued against QNI and the GPLs in relation to their alleged refusal to transfer assets to QNS. An application for leave to proceed against QNI was dismissed: see QNI Resources Pty Ltd & Ors v Park & Ors (2016) 116 ACSR 321; [2016] QSC 222 (leave to proceed decision). 69 On 22 April 2016, the creditors of QNI resolved to wind up QNI and appoint the Administrators as liquidators. 70 On 29 April 2016, the Commonwealth and others commenced a proceeding in the Federal Court seeking the appointment of the SPLs to QNI. 71 On 3 May 2016, a meeting of the Committee of Inspection was held to provide the Committee with an opportunity to receive information from the Department regarding the application to appoint the SPLs. The Department's solicitors noted, amongst other things, that: (1) a court appoints a special purpose liquidator over specific issues rather than general tasks and the GPLs remain in place and are responsible for the remaining issues and general administration of the liquidation; (2) the reason for the Department's application to appoint the SPLs is based on various issues, including a perceived conflict of interest with the GPLs; (3) the Department had prepared a schedule of claims to submit to the Court detailing which claims will be pursued by the SPLs and the GPLs; (4) the Department's objective was to recover the $65 million of funds expected to be distributed under the FEG Scheme and that upon full repayment, the FEG Scheme would not advance any further funding, which may result in the SPLs being in a position to use residual funds held or seek funding from another source; (5) a duplication might be the public examinations, however the SPLs and the GPLs were investigating different issues and would therefore be focusing on different aspects of their respective investigations. 72 The chairperson of the meeting, Mr Park, advised the Committee that the GPLs did not share the Department's view with respect to the conflict issue. 73 On 9 May 2016, the GPLs lodged an application for funding with the Department, including for proceedings for debt recovery in relation to related party transactions and debt forgiveness. 74 On 16 May 2016, the Department declined the GPLs' application for funding, on the stated basis that the Department: (1) considered that the GPLs had an actual or perceived conflict of interest with performing a number of the tasks the subject of the application; and (2) had sought the appointment of the SPLs to QNI and, if appointed, proposed to enter into a funding agreement with the proposed SPLs. 75 On 17 May 2016, the GPLs sent a letter to the Department which, amongst other things, disputed the Department's assertion about perceived or actual conflict. The content of the letter was as follows: I refer to the FEG Recovery Programme Funding Application dated 9 May 2016 (the Application) and your letter dated 16 May 2016. I confirm the Application has been denied because the Department of Employment (the Department) considers [the GPLs have] an actual or perceived conflict of interest, and consequentially has sought the appointment of the Special Purpose Liquidators (SPLs). As you are aware, we consider that [the GPLs do] not have a conflict of interest. This issue, and the Department's application for the appointment of the SPLs, is to be determined before the Court this week. Please let us know whether, in the event the Court does not make orders for the appointment of SPLs, the Department will enter into a funding agreement on similar terms with this office as the General Purpose Liquidators and, if not, why not. 76 On the same day, the Department replied to the GPLs' letter: The Department is presently not minded to fund [the GPLs] in relation to any aspect of this administration. The Department will however, consider any further applications for funding, that you may choose to make, on their merits. 77 On 18 May 2016, the SPLs were appointed to QNI pursuant to the appointment order. 78 In support of the application to appoint the SPLs, the Commonwealth of Australia agreed to fund both the appointment and activities to be conducted by the SPLs. The Commonwealth LFA was entered on 24 June 2016. That funding agreement was expressly confined to the limited purpose for which the SPLs were appointed. 79 In addition to seeking funding from the Commonwealth, the GPLs made a general approach to several of the larger creditors of QNI to ascertain whether any of those creditors would be willing to provide funding to the GPLs to further investigate and prosecute the claims identified in the s 439A report. No proposals for funding were forthcoming other than some interest being expressed by Aurizon Operations Limited, but from which nothing substantial eventuated. 80 There was no proposal for funding provided by the Commonwealth to the GPLs, other than limited funding for the verification and distribution of FEG payments to employees. 81 On 5 July 2016, QNI and the GPLs commenced the Voidable Transactions proceeding (being a proceeding to set aside the transactions entered on 13 January 2016). Without these transactions being set aside, the Mineralogy claim would not have been of benefit to the unsecured creditors of QNI. 82 Also on that date, the Committee of Inspection of QNI was provided with information summarising expressions of interest received from litigation funders. 83 After a period of negotiation and exchanges, the GPLs ultimately received offers for funding from: (1) Vannin; (2) IMF Bentham Limited; and (3) International Litigation Partners Pte Ltd (ILP). 84 The offer from IMF was rejected as it was confined to funding public examinations only, whereas the GPLs were looking to fund recovery actions. 85 On 22 August 2016, the GPLs provided a confidential report to the Committee of Inspection in relation to the final proposals from Vannin and ILP. They recommended acceptance of the Vannin offer. 86 On 30 August 2016, a meeting of the Committee of Inspection was convened which discussed the litigation funding options available to the GPLs to pursue recovery actions and which sought the approval of the Committee to enter into the proposed funding agreement. 87 In this meeting, Mr Park noted that eight expressions of interests were received but only three formal proposals had been submitted by the various litigation funders. Mr Park recommended Vannin's offer over that of ILP's offer. It was resolved that the meeting be adjourned to a later date. 88 On 5 September 2016, the meeting of the Committee of Inspection was reconvened. The proxy for the Department suggested that the Commonwealth might be in a position to consider a further proposition from the GPLs for a funding agreement after the conclusion of the public examinations. Mr Park responded that while this was a prospect, there was no guarantee that funding would be approved by the Commonwealth and, for the benefit of the other creditors, there was a proposal from Vannin that was ready to be signed which would provide immediate funding to the GPLs in circumstances where, until an agreement was entered into, the GPLs were unable to proceed with any claims. 89 During the meeting it was resolved by majority vote that the liquidators had approval to enter into the proposed funding agreement with Vannin in their capacity as liquidators of QNI. 90 On 13 September 2016, QNI (by the GPLs) and the GPLs entered into the Vannin LFA. 91 In substance, the Vannin LFA contemplated that Vannin would pay the GPLs' and QNI's "Action Costs" (as defined, being solicitor and counsel fees and disbursements, expert fees and expenses, court filing fees etc), provide any security for costs ordered in the litigation and indemnify them in respect of adverse costs. To the extent that the litigation generated "Proceeds", Vannin would be repaid the amount of Action Costs it funded, together with the funding premium. Depending on the circumstances, the funding premium would be an amount equal to the greater of between 15% to 35% of the proceeds or an amount calculated by reference to certain costs. 92 Under the Vannin LFA, Vannin funded multiple claims in addition to the Mineralogy claim, including the pre-existing Voidable Transactions proceeding. To date, Vannin has advanced funds totalling approximately $13,150,426 to the GPLs in connection with the Mineralogy claim. It has not yet been repaid $11.4 million of that sum. 93 On 27 February 2017, the liquidation of QNI was converted to a winding up in insolvency by the Supreme Court of Queensland. 94 On 29 March 2017, the Mineralogy proceeding was commenced by the GPLs in the Supreme Court of Queensland. 95 On 3 May 2017, Mr Palmer, on behalf of China First, signed a deed appointing Mr Domenic Martino as the agent of QNI pursuant to the China First charge. On the same day, Mr Martino, ostensibly on behalf of QNI, then entered into a deed dated 3 May 2017 with China First. 96 Under that deed, China First agreed to reduce the debt owed by QNI from $135m to $125m, in consideration for certain releases. On the following day, a substitute deed was prepared to similar effect but, on this occasion, Mineralogy was a party, and the reduction of the debt owed by QNI to China First was specifically said to be in consideration for QNI discontinuing the Mineralogy claim. 97 Mr Martino then filed a notice of discontinuance of the Mineralogy claim on behalf of QNI, so as to prevent the GPLs from causing QNI to continue to prosecute that claim. 98 QNI commenced the Martino proceeding in the Supreme Court of Queensland on 9 May 2017 and sought declaratory relief that Mr Martino's appointment, and his subsequent conduct, was void and of no effect. 99 On 30 June 2017, the SPLs commenced proceedings in the Supreme Court of Queensland (SPL proceeding). That proceeding had 21 defendants (including Resources, Metals, Mr Palmer, Mr Mensink, Waratah Coal, China First and Mineralogy). 100 Contrary to the position taken in this proceeding by the Palmer Parties, Mr Palmer and entities associated with him (including Mineralogy) challenged the SPLs' ability to bring claims against Mineralogy and attempted to have the SPLs removed from office. For example, in August 2017, in response to a freezing order sought by the SPLs, Mr Palmer submitted that the SPLs "do not have the authority to pursue their claims against the Non-JV Defendants and have therefore improperly commenced (and caused the second plaintiff to commence) this proceeding against them". The 'Non-JV Defendants' included Mineralogy. 101 The SPLs and the Commonwealth did not at any point offer to pay out the liabilities that had accrued under the Vannin LFA and take over the Mineralogy claim and the Voidable Transactions proceeding. 102 On 19 April 2018, the Mineralogy proceeding, the Voidable Transactions proceeding, the Martino proceeding and the SPL proceeding were consolidated (consolidated proceeding). 103 In the two years between the commencement of the Mineralogy proceeding in March 2017 and the commencement of the trial of the consolidated proceeding in July 2019, the parties engaged in protracted interlocutory disputes, appeals and satellite proceedings. 104 By a settlement deed entered on 3 August 2019 during the course of the trial of the consolidated proceeding, QNI, the SPLs, and the Palmer Parties (together with other defendants), agreed to terms of settlement by which Metals and Resources agreed to pay certain amounts (including the sum of approximately $68.5 million to the Commonwealth), the SPL proceeding was to be discontinued and, other than in respect of the GPLs' claims, there were mutual releases between the parties. 105 The settlement deed did not settle the remaining claims being pursued by the GPLs, including the Mineralogy claim. 106 After the settlement deed was entered, an application was brought by Metals, Resources, Mineralogy, Waratah Coal, China First and Martino to stay the consolidated proceeding, which application failed: see Parbery & Ors v QNI Metals Pty Ltd & Ors [2019] QSC 207 (stay decision). 107 Following the trial of the remainder of the consolidated proceeding, judgment was delivered on 3 June 2020 in which the Mineralogy claim was dismissed and judgment was otherwise given in favour of QNI and the GPLs in relation to the Voidable Transactions proceeding. It was also determined that Mr Martino did not have authority to act in the manner in which he did: Parbery & Ors v QNI Metals Pty Ltd & Ors [2020] QSC 143 (trial decision) at [316]. 108 QNI (by the GPLs) appealed the dismissal of the Mineralogy claim, which resulted in the QCA decision dated 25 June 2021. 109 On 5 July 2021, the sum of $102,884,346.26 was paid to QNI by Mineralogy. 110 On 5 July 2021, QNS demanded that this sum be paid to it in its capacity as replacement trustee, without deduction. 111 On 15 July 2021, the plaintiffs commenced these proceedings. 112 The hearing of this proceeding commenced on 26 July 2022. On the day before the hearing was due to commence, a solicitor for the Palmer Parties was provided with a copy of a document which was entitled "Deed of Variation of the QN Cl 6.4(f) Trust and Replacement of Trustee". 113 By that document, a company called "ACN 119 455 284 Pty Ltd", defined as the New Trustee, was appointed as trustee of the "bank account trust" and QNS acknowledged that its appointment as trustee was "discharged". 114 Mr Palmer is the sole director of the New Trustee and appears to have signed this document in his capacity as director. The document bore the date of 25 July 2022. 115 Another copy of a document was admitted into evidence which bore the date of 27 July 2022 which purported to be a deed of termination of the first deed ab initio. 116 A further document was admitted into evidence which purported to be a deed of variation made between the JVCs and QNS. That document contained clauses which "varied" the "terms of the trust" by terminating and removing the following powers: (1) to use the funds (including the return on investing) to meet all costs, liabilities and expenses of the joint venture properly incurred, whether already payable or accrued, or to become accrued and be payable in the future; and (2) to meet the costs, liabilities and expenses of the joint venture promptly. 117 The third purported deed also contained a direction by the JVCs to QNS to "forthwith get in all Trust property and upon receipt of the Trust property pay to Metals and Resources as beneficiaries in their respective proportions all property so obtained" which direction QNS "acknowledges and accepts". LEGAL PRINCIPLES CONCERNING DIRECTIONS SOUGHT BY PLAINTIFFS Section 90-15 Insolvency Practice Schedule 118 Section 90-15 of the Insolvency Practice Schedule relevantly provides that the Court may make such orders as it thinks fit in relation to the external administration of a company. 119 The principles applicable to an application for directions under pursuant to s 90-15 of the Insolvency Practice Schedule were not in dispute, being as follows: (1) the power to give directions is intended to facilitate the performance of the liquidator's functions and should be interpreted widely to give effect to that intention: Lewis (liquidator), in the matter of Concrete Supply Pty Ltd (in liq) (2020) 145 ACSR 459; [2020] FCA 841 at [31] (White J); (2) the power is available to give a liquidator advice as to the proper course of action to be taken in the liquidation: Concrete Supply at [31]; (3) the Court may give directions that provide guidance on matters of law and the reasonableness of a contemplated exercise of discretion but will usually not do so when the subject of the directions sought relates to the making and implementation of a business or commercial decision and when there is no particular legal issue raised and no attack on the proprietary or reasonableness of the decision: Concrete Supply at [31]; (4) the Court must be positively persuaded of the propriety of the course for which the liquidator seeks the Court's sanction, before the Court will give the liquidator the protection of its sanction: Re Octaviar Ltd [2020] QSC 353 at [18]; (5) the effect of a direction is to sanction a course of conduct on the part of the liquidators so that, provided full disclosure has been made to the Court, the liquidator may adopt the course free from the risk of personal liability for breach of duty: Concrete Supply at [31]; and (6) the directions do not bind third parties, and do not determine substantive matters in dispute between the liquidator and third parties: Concrete Supply at [31]. Section 96 Trusts Act 120 Section 96 of the Trusts Act relevantly provides that: Any trustee may apply upon a written statement of facts to the court for directions concerning any property subject to a trust, or respecting the management or administration of that property, or respecting the exercise of any power or discretion vested in the trustee. 121 The following principles stated by Gummow ACJ, Kirby, Hayne and Heydon JJ in Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42, in respect of the cognate provision of the New South Wales legislation, are relevant to such an application: (1) in order to engage the jurisdiction under s 96, "the applicant must point to the existence of a question respecting the management or administration of the trust property": at [58]; (2) once this jurisdictional fact is established, the Court has a discretion as to whether to give the advice sought – with such discretion "confined only by the subject matter, scope and purpose of the legislation": at [59]; (3) s 96 is not limited in its "application to 'non-adversarial' proceedings" – s 96 "does not provide that the adversarial nature of the proceedings about which the advice is sought, the tendency of the advice to foreclose an issue in those proceedings, or the fact that the trustees seeking the advice are being sued for breach of trust are of special significance": at [59]; (4) accordingly, "the discretion of the court to consider applications brought under [s 96] should not be yoked to a general first principle that, where there is a contest or where there are adversaries, it is not appropriate to give advice": at [60]; (5) an application under s 96 is "summary" in character: at [61]; (6) an application under s 96 "affords a facility for giving 'private advice'" and "operates as 'an exception to the Court's ordinary function of deciding disputes between litigants'": at [64]; and (7) consequently, it is an error to treat interested parties as "being in a position of parity" with the trustee in such an application – and to conclude, from the fact that the trustee and such parties are adversaries in other proceedings, that judicial advice should generally not be given in such a context: at [66]. 122 By s 97(1) Trusts Act, a trustee who acts in accordance with a direction of the Court is deemed to have discharged the trustee's duty in respect of the subject matter of the direction. However, pursuant to s 97(2), this protection is not extended to a trustee who "has been guilty of any fraud or wilful concealment or misrepresentation in obtaining the direction or in acquiescing in the court making the order giving the direction." There was no submission by the Palmer Parties that s 97(2) applied in this case. 123 In terms of the manner in which objections to judicial advice should be considered by the Court, it was stated by the Privy Council in Marley v Mutual Security Merchant Bank and Trust Co Ltd [1991] 3 All ER 198 at 201: A trustee who is in genuine doubt about the propriety of any contemplated course of action in the exercise of his fiduciary duties and discretions is always entitled to seek proper professional advice and, if so advised, to protect his position by seeking the guidance of the court. … it should be borne in mind that in exercising its jurisdiction to give directions on a trustee's application the court is essentially engaged solely in determining what ought to be done in the best interests of the trust estate and not in determining the rights of adversarial parties. That is not always easy, particularly where, as in this case, the application has been conducted as if it were hostile litigation; but it is essential that the primary purpose of the application – indeed, its only legitimate purpose – be not lost sight of in academic discussion regarding the discharge of burdens of proof. Where beneficiaries oppose a proposal of a trustee with a host of objections of more or less weight, the court is, of course, inevitably concerned to see whether these objections are or are not well founded, but that must not be permitted to obscure the real questions at issue which are what directions ought to be given in the interests of the beneficiaries and whether the court has before it all the material appropriate to enable it to give those directions. 124 This decision was cited with approval by the Queensland Court of Appeal in Ban v The Public Trustee of Queensland [2015] QCA 18 at [56] (Morrison JA, with whom Holmes and Gotterson JJA agreed) and by Gleeson J in Kelly, in the matter of Halifax Investment Services Pty Ltd (in liquidation) (No 8) (2020) 144 ACSR 292; [2020] FCA 533 at [44]–[46]. 125 The Palmer Parties submit that they can raise any fact or matter in opposition to judicial advice being given, that the onus is then on the plaintiffs to disprove those facts or matters and that if the plaintiffs fail to do so, then the judicial advice should not be given. 126 No authority was cited for this submission and it is not found in the legislation, which is expressed in broad terms. What authority there is does not support the stance taken by the Palmer Parties. 127 In Halifax at [46], Gleeson J observed that, "the application for judicial advice invokes a procedure for private advice to trustees … Thus, although the Court sought to hear any objection from the defendants concerning the liquidators' decision … it was not obliged to give objections particular weight: Marley at 201." 128 In circumstances where objections are taken on the basis, as in this case, that expenses were not properly incurred, it has also been said that trustees should not be deprived of their right of reimbursement unless they have clearly been shown to have acted improperly, with the onus resting on those who seek to deny the right: see Nolan v Collie (2003) 7 VR 287; [2003] VSCA 39 at [50] (Ormiston JA, with whom the Court agreed); QB4 Capital Pty Limited v Guardian Securities Limited (2022) 159 ACSR 289; [2022] FCA 262 at [130] (Lee J). PROPER CHARACTERISATION OF TRUST 129 The first issue is whether QNI was trustee of the Joint Venture Property (of which the funds held in the bank account were one part) (as contended by the plaintiffs) or whether QNI was only the trustee of the funds held in the joint venture bank account (or the chose in action against the bank in relation to those funds) (as contended by the Palmer Parties). 130 Both parties relied upon the QCA decision to support their position. The plaintiffs also relied upon the terms of the JVA. 131 In that decision at [41], the Court of Appeal referred to the general process of the joint venture as described at the trial below, and which had not been challenged on appeal, as follows: The Yabulu refinery was operated by QNI by sourcing ore from overseas third parties to be used at the refinery. The ore was unloaded at QNI's material handling facility at the Port of Townsville and then delivered by rail to the refinery. The joint venture also sourced ore from its own mine in central Queensland. The domestic ore and coal were also transported by rail to the refinery. The ore was processed at the refinery where nickel was separated from cobalt and nickel products and cobalt produced by the refinery were transported by rail to Townsville or Brisbane for export. QNI operated the bank accounts in its name into which it deposited the revenues generated by the refinery business and met the liabilities incurred in operating the refinery business from the revenues deposited into its bank accounts. During the period from the acquisition of the refinery by the Palmer interests until 18 January 2016, it was common ground that QNI did not receive any income for the services it provided as general manager to the joint venture … (emphasis added) 132 Pursuant to clause 6.4(a) of the JVA, QNI as Manager was entitled to make calls on the JVCs for funds to meet Joint Venture Expenses (being all costs, liabilities and expenses of the joint venture properly incurred). In that respect, QNI was the "Calling Manager". 133 Clause 6.4(f) of the JVA relevantly provided that: The Calling Manager shall deposit Called Sums and other moneys received from or for the account of the Joint Venturers in a working capital bank account and shall not deposit any other moneys in such account. Such account shall be in the name of the Calling Manager but the moneys standing to the credit of the account shall belong to the Joint Venturers in proportion to the amounts respectively paid to such account by or on behalf of them and the Calling Manager shall keep sufficient records as will enable the respective entitlements of the Joint Venturers to such moneys (and to any interest or income accrued on those moneys) from time to time to be determined. Payments shall be made from such account to meet Joint Venture Expenses payable or accrued or to become payable or to be accrued in respect of the Joint Venturer concerned. Moneys standing to the credit of the account may be invested by the Calling Manager in a prudent manner for a term not exceeding one week (in the case of moneys paid pursuant to a weekly call and any interest thereon) or one month (in the case of moneys paid pursuant to a monthly call and any interest thereon). All bank interest and other income derived from the investment of the moneys paid by or attributable to a Joint Venturer shall be for the account of that Joint Venturer. Such moneys, bank interest and other income shall be applied promptly to meet Joint Venture Expenses to the intent that calls made under paragraphs (b) or (d) of this Clause 6.4 be reduced to the maximum extent possible. (emphasis added) 134 At [42]–[44] of the QCA decision, the Court of Appeal stated that: It was common ground at the trial that the money held in the QNI bank account did not come from calls made on the JVCs under clause 6.4(a). Rather, it came from QNI's selling the product it made and collecting the proceeds. As with many joint venture arrangements, though the JVCs had the right to sell the products themselves and collect the revenue thus generated, they did not do so, and left that to the Manager, in this case QNI. Once the money was deposited into the bank account QNI used it for joint venture purposes. … The learned primary judge held that the entitlement to the funds in the QNI bank account fell to be determined by applying clause 6.4(f) of the JVA. There was no challenge to that finding on appeal. 135 One of the issues before the Court of Appeal was whether QNI held the money in the bank account on a bare trust. QNI contended that the powers and duties conferred on it by clause 6.4(f) meant that the money held pursuant to that clause was held on trust, and that the JVA similarly intended to create an express or inferred trust in respect of the Joint Venture Property, being the balance of the property of the JVCs held in the name of QNI: see [9]. 136 This contention had formed part of QNI's pleaded case below. In their reply, it was pleaded that QNI, as part of acting as General Manager of the joint venture, acted as trustee of the Joint Venture Property for the purpose of carrying on the joint venture: [31A] and [31B] Second Further Amended Reply and Answer. It was also pleaded that the intention to create that trust is expressed in and was manifested by certain clauses of the JVA, including clauses 3.1, 3.2, 5.2 and 6.4(f): [31D] Second Further Amended Reply and Answer. 137 Mullins J addressed the issue of whether QNI was trustee of the Joint Venture Property, as claimed by QNI, at [44]–[60] of the trial decision. Her Honour did not accept that QNI was trustee of the Joint Venture Property, finding in particular at [58] that, "It defies the clear language and purpose of the JVA and the structure and mode of operation of the joint venture under the JVA to strain to find that the JVA created the express trust of the joint venture property asserted by the plaintiffs". 138 On appeal, the first error which was the subject of complaint by QNI was identified in the following way in the QCA decision at [9]: The first error (reflected in Ground 1 of the appeal) was her Honour's finding that the money held in the bank account pursuant to clause 6.4(f) of the JVA was held on a bare trust, such that payment by QNI out to Mineralogy collapsed the trust. The essential contention was that the powers and duties conferred on QNI by clause 6.4(f) meant that finding was not open. Her Honour should have found that the money held pursuant to that clause was held on trust, and that the JVA similarly intended to create an express or inferred trust in respect of the "Joint Venture Property", being the balance of the property of the JVCs held in the name of QNI. (emphasis added; footnotes omitted) 139 In the context of considering the first error, the Court of Appeal referred to the definition of Joint Venture Property at [19] in these terms: Clause 1.1 of the JVA sets out a comprehensive definition of "Joint Venture Property". It includes specified mining leases and other rights and titles pursuant to the Agreement Act or the Mineral Resources Act 1989 (Qld), specified land, the Yabulu treatment facilities, all technology and know-how developed or to be developed on behalf of the joint venture, and all other rights, titles, interests or property of whatsoever kind held, constructed or acquired for the purpose of the joint venture. 140 The Court then analysed the clauses of the JVA which related to the Joint Venture Property and the issue of whether there was a trust in relation to that property. As part of this analysis, the funds in the bank account were identified as being one part of the Joint Venture Property. The relevant extract of the reasons is as follows: [49] The learned primary judge found that QNI held the money in the bank account on a "bare trust". That was the position urged below by the corporate defendants, and again before this court. … [57] Ultimately the parties before this court accepted that the question of whether QNI was a "bare trustee" depended upon the proper construction of the JVA. [58] Clauses 3.1 and 3.2 of the JVA has an impact on this issue. In our view, the language used in them is that of trustee and beneficiary. [59] Clause 3.1 relevantly provides: "All the Joint Venture Property shall at all times be made available for the purpose and duration of the Joint Venture and during such duration shall not be used for any other purpose. All the Joint Venture Property and, subject to Clause 3.3, all estate and interest in Products produced at the Treatment Facilities shall be beneficially owned by the Joint Venturers as tenants in common and all liabilities of the Joint Venture shall be severally borne by such Joint Venturers, in the following percentages (such percentages being the parties' respective Participating interests as at the Effective Date) …" [60] There are a number of features about clause 3.1 that should be noted. [61] First, the term "Joint Venture Property" includes the chose in action constituted by the rights against the bank holding the Manager's account: clause 1.1. Broadly put the money in the bank account is Joint Venture Property. … [64] Thirdly, the Joint Venture Property is not to be used for any other purpose. As holder of the funds in the bank the Manager was therefore obliged to resist any effort to use the funds for a purpose which was not a joint venture purpose. [65] Fourthly, the Joint Venture Property is stipulated to be "beneficially owned by the Joint Venturers as tenants in common … in the following percentages (such percentages being the parties' respective Participating Interests …)". On its face that has the effect that Joint Venture Property is held for the JVCs in proportion to their interest in the joint venture (Resources, 80: Metals, 20). [66] In so far as the legal title to Joint Venture Property was held in the name of QNI as Manager, this part of clause 3.1 points plainly to the relationship between QNI and the JVCs. In our view, it makes it clear that there is a trust relationship in that case. The legal title is held by QNI, but the beneficial ownership lies with the JVCs. [67] However, other provisions in the JVA stipulate that those percentages do not apply to all Joint Venture Property. The funds in the Manager's bank account is the prime example for present purposes. [68] Where the Manager is required to establish and maintain a bank account into which funds from the joint venture are deposited, the rights against the bank are a chose in action that comes within paragraph (h) of the definition of Joint Venture Property, which relevantly provides: "all other property of whatsoever kind and wheresoever situate (including, without limitation, … choses in action … from time to time hereafter held, … or acquired for the purposes of the Joint Venture …" [69] In the case of the funds held in the bank account required to be brought into existence and maintained under clause 6.4(f) the chose in action constituting the rights as between the Manager and the bank is held by the Manager, who has legal title. The beneficial ownership, however, rests with the JVCs, according to the proportion of the amounts paid into the account. That proportionate beneficial ownership may not reflect the percentages of the Participating Interests in the joint venture overall. [70] In our view, the use of language distinguishing between the legal title on the one hand, and the beneficial title on the other, points clearly to an intention on the JVCs' part that the relationship is one of trustee and beneficiary. [71] Clause 3.2 deals with how Joint Venture property was to be held, providing that if the JVCs requested it, title to any of the Joint Venture property may be solely in the name of the Manager. It then relevantly provides: "If at any time any of the Joint Venture Property is not vested at law in the names of the Joint Venturers in proportion to their Participating Interests, the Joint Venturer or Joint Venturers in whose names such Joint Venture Property is vested shall hold such Joint Venture Property for the use and benefit of the Joint Venturers." [72] The highlighted words are the language of trusts, distinguishing between legal title which is vested in one party while beneficial title resides with someone else. [73] One of the factors taken into account by her Honour in reaching the conclusion that the JVA did not create the trust for which the appellants contended, under which QNI had the powers and duties conferred upon it by clause 6.4(f), was that the word "trust" is not used in the JVA. However, as her Honour recognised, the absence of such a term is not decisive. Rather, what is called for is the construction of the document (here, the JVA) in order to discern if the parties' intention was to create a trust. In our respectful view, the absence of the term "trust" is not determinative when one has regard to the use of words making a distinction between legal ownership and beneficial ownership of Joint Venture Property, particularly in clause 3.1 and 3.2. … [76] Her Honour also considered that clauses 3.1 and 3.2 were equally consistent with there being no express trust, because clause 3.2 contemplated that one JVC might hold property for the other JVC. However, that concerns the relationship between the JVCs and says nothing as to the position of the Manager, particularly in light of clauses 3.1 and 6.4(f). [77] Clause 5.2 does not, in our view, alter the position. … [78] As to that, whilst the words [in clause 5.2] say "management and control of the Joint Venture Property and all operations hereunder as agent", the clause also stipulates that in doing so the Manager "shall act subject to … the provisions of this Deed". If the JVA provides that in respect of certain Joint Venture Property the Manager shall be trustee, there is no inconsistency. Further, "management and control" applies no matter who holds legal title to the Joint Venture Property. In other words, even where the legal title is vested in the Manager as trustee the management and control is assigned to the Manager. It is thus a different concept to the question of whether certain property is held on trust. And, finally, there are specific provisions of clause 3.1 and 3.2 which resolve the question of title to property. (emphasis original, footnotes omitted) 141 Following that analysis, the Court of Appeal then turned its attention to the funds in the bank account, stating that: [96] In our view, there can be no doubt that the legal title to the funds in the QNI bank account was held by QNI as Manager, and that the chose in action against the bank in respect of the funds was held by QNI. But, equally clear is the fact that those interests were held beneficially by the JVCs. [97] Under clause 6.4(f) the obligations on QNI as holder of the bank account were: (a) to maintain the account; (b) to deposit sums into the account which came from the JVCs or were paid to the account of the JVCs; (c) not to deposit any other funds in the account; (d) hold those funds for the JVCs in proportion to the amount paid by the particular JVC, whether by the JVCs themselves or on their behalf; (e) to invest the funds in the bank account in a prudential manner; (f) to hold the returns on investment of the funds paid by or attributable to a particular JVC to the account of that JVC; (g) keep sufficient records to enable the JVCs' respective entitlements to be determined; (h) use the funds (including the returns on investing) to meet all costs, liabilities and expenses of the Joint Venture properly incurred, whether already payable or accrued, or to become accrued and be payable in the future; and (i) to meet the costs, liabilities and expenses of the Joint Venture promptly. [98] Once that is understood it becomes evident, in our view, that QNI holds the funds in the bank account on trust for the JVCs. Legal title remains with QNI but the beneficial interest remains with the JVCs. 142 The Court of Appeal continued at [103]: Further, it cannot be said that QNI is in a position where it holds the funds without any interest therein, other than that existing by reason of the office of Manager and the legal title as trustee, and without any duty or further duty to perform, except to convey it upon demand to the JVCs or as directed by them. QNI's duties included: (i) investing the funds; (ii) determining for that purpose what moneys were call moneys, and what were not; (iii) determining which investment returns belonged to which JVC; (iv) determining where the differential interests of the JVCs lay; (v) promptly applying the accrued funds in the account to meet all costs, liabilities and expenses of the Joint Venture, both currently accrued and to accrue in the future; and (vi) maintaining records that would permit the JVCs' differential interests to be determined. 143 The Court of Appeal relevantly concluded that: (1) QNI had a duty to hold the funds to meet properly incurred joint venture expenses: at [104]; (2) accordingly, QNI was obliged to resist any effort by the JVCs to direct payment of the funds to meet expenses which were not properly incurred joint venture expenses: at [104]; (3) the fact that the bank account funds were impressed with the trust to pay the (present and future) expenses of the joint venture necessarily meant that, whilst those expenses remained unpaid, the trust could not be defeated or collapsed by the JVCs, as the beneficiaries, calling the money back to them or by directing it to another party such as Mineralogy: at [108]; (4) the loans were made to Mineralogy by QNI as trustee and QNI was entitled to have them repaid, together with interest: at [173]–[174]. 144 By their amended statement of claim in this proceeding, the Palmer Parties describe the trust of which QNI was trustee as the Bank Account Trust or the Chose in Action Trust. As to this, they submitted that: Accordingly, the trustee's right to repayment of the Mineralogy Loan, and the Mineralogy Claim (ie, the trustee's claim against Mineralogy) were necessarily choses in action held by QNI on trust for the JVCs. They may be viewed as the traceable proceeds of the original trust property bound with trust obligations. In this way the Mineralogy Claim can be regarded as property of the Bank Account trust found by the Court of Appeal or as a separate Chose in Action Trust. (footnotes omitted) 145 However, as submitted by senior counsel for Vannin, the flaw in this submission is that there is no basis for the suggestion that the so-called Bank Account Trust or Chose in Action Trust are separate and distinct from the trust constituted by QNI's joint venture activities. Nor is there any suggestion that QNI traded or had assets or liabilities in a personal capacity. Rather, all of its trading, assets and liabilities were in furtherance of the joint venture and as trustee. And by cl 5.5(b) of the JVA, QNI agreed not to "directly or indirectly carry on or be interested in any other business or activity or other operation". There was therefore only one trust and one pool of creditors. 146 Further, the attempt to characterise the trust of which QNI was trustee as being a trust confined to the funds held in the joint venture bank account is contrary to (rather than in accordance with) the findings of the Court of Appeal in the QCA decision as well as the proper construction of the JVA itself, which did not create a separate trust confined to the funds held in the bank account. 147 Rather, the funds held in the bank account formed part of the Joint Venture Property, and the Joint Venture Property (which included but was not confined to these funds) was stipulated to be beneficially owned by the JVCs with the legal title held by QNI. The Court of Appeal considered that the language of clause 3.1 of the JVA "makes it clear that there is a trust relationship" in relation to the Joint Venture Property. The existence of that trust relationship was recognised by the Court of Appeal in [58]–[61], [65], [66], [68]–[73] of the QCA decision, and, with respect, these findings accord with the proper interpretation of the JVA in any event. 148 Further, Metals and Resources were parties to the proceeding resulting in the QCA decision. Not only did they not advance submissions to the Court of Appeal of the kind which are now sought to be made, they are bound by the findings of the Court of Appeal in relation to the proper construction of the JVA and the manner in which the trust operated, including the finding that the bank account funds were impressed with the trust to pay the Joint Venture Expenses (the payment of which they now seek to challenge). 149 For these reasons, the proposition advanced by the Palmer Parties that the property of the trust of which QNI was trustee was confined to the funds held in the joint venture bank account was not established. There was no Bank Account Trust or Chose in Action Trust as alleged. 150 To the extent that the objections by the Palmer Parties are premised on the existence of the Bank Account Trust or Chose in Action Trust, these objections must fail for this reason alone. 151 Further, the claims for breach of trust advanced by the Palmer Parties in this proceeding were premised or relied upon the existence of the so-called Bank Account Trust or the Chose in Action Trust. This encompasses the claims pleaded in [46]–[61] of the amended statement of claim. That such a trust does not exist as alleged provides the first basis to dismiss these claims and to refuse to make the declaration sought in [2] of the prayer for relief. WHETHER EXPENSES AND LIABILITIES WERE PROPERLY AND REASONABLY INCURRED 152 The primary submission by the Palmer Parties is to the effect that the Mineralogy Claim Expenses and Liabilities were not properly and reasonably incurred. This submission underlies their assertions that QNI did not have the power, or that it was improper for QNI, to bring the Mineralogy proceeding; that QNI ought to have brought the Mineralogy proceeding through the SPLs so as to avoid incurring the Mineralogy Claim Expenses and Liabilities; and that QNI ought not to have entered into the Vannin LFA with the result that it became liable to pay the funding premium. 153 It is therefore necessary to consider what it means for an expense to be properly and reasonably incurred. 154 Section 72 of the Trusts Act provides that a "trustee may reimburse himself or herself for or pay or discharge out of the trust property all expenses reasonably incurred in or about the execution of the trusts or powers." 155 In Park v Whyte (No 3) [2018] 2 Qd R 475; [2017] QSC 230, Jackson J observed at [24]: However, having regard to the equivalence of meaning of the expressions expense "properly" incurred and "reasonably and honestly" incurred in this field of discourse, no different operation should be given to the requirement that an expense be "reasonably" incurred for a trustee to be entitled to indemnity under s 72 to that recognised in the cases decided under the unwritten law or other comparable statutory provisions, as to expenses "properly" incurred. 156 In Nolan, Ormiston JA, with whom the Court agreed, stated: 46. To my way of thinking the conventionally stated test as to expenses "properly incurred" is merely a convenient shorthand to describe those restraints applicable to trustees who would seek to look to trust funds for the payment of their expenses and other trust liabilities. It also has the advantage of succinctly expressing the notion of propriety as underpinning a trustee's relationship with the trust estate and the beneficiaries. One must not forget, moreover, that in Re Beddoe, seen as one of the leading authorities, Lindley, LJ explained that in cases of doubt the trust estate should bear the trustee's costs, and that: "The words 'properly incurred' in the ordinary form of order are equivalent to 'not improperly incurred'". The proposition was converted by another respected judge, Bowen LJ, who was perhaps more familiar with courts of common law, into "a proposition in which the word 'properly' means reasonably as well as honestly incurred". His Lordship added that, while trustees ought not to bear expenses and liabilities personally "on account of mere errors in judgment which fall short of negligence or unreasonableness", nevertheless "mere bona fides is not the test". A L Smith LJ concurred with the other members of the Court. 47. Re Beddoe or the principles stated therein have been cited and applied in Australia on numerous occasions. In the High Court it was used in National Trustees Executors & Agency Co of Australasia Ltd v Barnes as the basis for Rich ACJ and Williams J to support the proposition that a trustee is entitled to be indemnified out of the trust estate "against all his proper costs charges and expenses incident to the execution of the trust". Starke J, who approached the matter slightly differently, nevertheless espoused a proposition that a trustee had a right to be recouped as of right all that he had "expended properly" in that role. Subsequently, in a judgment in which Dixon J formed part of the majority, his Honour said in Vacuum Oil Co that, where an executor has acted under appropriate authority, the executor had a "right to be indemnified out of the assets in respect of liabilities he has incurred in the proper performance of his duties or exercise of his powers". (emphasis added; footnotes omitted) 157 These passages in Nolan were cited with approval by Lee J in QB4. 158 In Australian Securities and Investments Commission v Letten (No 17) (2011) 87 ACSR 155; [2011] FCA 1420, Gordon J observed at [16]–[18]: 16. To determine what is "improperly incurred" it is necessary to consider whether the conduct of the trustee was (Nolan at [53]): 1. done in bad faith; 2. outside the relevant power (that is, outside the terms of the trust deed); and/or 3. exercised with an absence of the care and diligence that a person of ordinary prudence should exercise. If it concerns the management of trust property, the equitable standard applies: Speight v Gaunt (1883) 9 App Cas 1; 48 JP 84. If it concerns investment of trust property, the statutory standard applies, namely the duties under the relevant provisions of the Trustee Act of each State and Territory. 17. Of course, not all breaches of duty result in a trustee losing the right of indemnity. Duties that require strict adherence, if breached, will result in loss of the right of indemnity: Nolan at [51]. In Nolan, the following examples were given at [52]: 1. duty to keep and render accounts; 2. the duty not to allow a conflict between duty and interest; 3. the duty not to obtain an unauthorised benefit from the trust; and 4. the duty to adhere and carry out the terms of the trust deed. The list is, of course, not exhaustive. On the other hand, duties that concern the day-to-day management of the trust, if breached, will not result in a loss of the right of indemnity: Nolan at [51]. 18. At a practical level, a breach of certain "core" duties will as a matter of course result in a loss of the right of indemnity. For all other breaches, the answer will depend on the terms of the trust deed and whether that breach was in bad faith, outside the relevant power and exercised with an absence of care and diligence that a person or ordinary prudence should exercise. See also Australian Competition and Consumer Commission v Swishette Pty Ltd [2018] FCA 55 at [207] (Moshinsky J), which adopted the approach in Letten. Whether QNI had power to bring Mineralogy proceeding 159 The Palmer Parties advanced two arguments as to why QNI was not empowered to bring the Mineralogy claim. 160 The first argument is that the Mineralogy Claim Expenses and Liabilities were not properly incurred in the execution of the Bank Account Trust or Chose in Action Trust and cannot therefore be the subject of any indemnity. They submit that, as trustee of the Bank Account Trust or the Chose in Action Trust, QNI was entitled to indemnify itself out of the assets of those trusts only for liabilities properly incurred in the performance of those trusts (emphasis in submissions). 161 A submission is made in various permutations that, because QNI was only trustee of the Bank Account Trust or Chose in Action Trust, the bringing of the Mineralogy proceeding for the purpose of paying creditors of the joint venture (who were not trust creditors) meant that it was not entitled to bring the proceeding. For example, it is submitted that: Pursuant to its right of indemnity, QNI was entitled to reimburse itself for liabilities already incurred and discharged in the execution of the Bank Account Trust or Chose in Action Trust (the right of reimbursement or recoupment); and to call in and apply trust property of the Bank Account Trust or Chose in Action Trust to discharge trust liabilities that it had incurred but not already discharged (the right of exoneration). That is, liabilities properly incurred to third parties in the course of administering the Bank Account Trust or the Chose in Action Trust. It could not institute proceedings to call in trust property (ie institute proceedings to recover the Mineralogy Loan) for the purpose of paying non-trust creditors. QNI instituted and prosecuted the Mineralogy Claim to pay creditors incurred by QNI acting as General Manager of the Joint Venture. Those creditors were not creditors of the Bank Account Trust or Chose in Action Trust. QNI had no right to use the assets of the Bank Account Trust to exonerate itself against such creditors. Accordingly, it could not institute and prosecute the Mineralogy Claim for that purpose and the liabilities and expenses it incurred in doing so were thus incurred by conduct in excess of its rights and were thus not properly incurred. 162 The Palmer Parties also submitted to the effect that, because QNI pursued the Mineralogy claim for the purpose of exonerating itself in respect of non-trust creditors (being creditors of the joint venture rather than the Bank Account Trust or Chose in Action Trust), it has no right to be indemnified with respect to the Mineralogy Claim Expenses and Liabilities. 163 However, this first argument fails for the reasons already given, as there was no such trust of the kind alleged (that is, the Bank Account Trust or Chose in Action Trust). 164 The second argument is that QNI was not entitled to pursue the Mineralogy claim and incur the Mineralogy Claim Expenses and Liabilities in order to call in trust assets. This argument is itself based upon two submissions. 165 The first submission is that, as QNI was only the trustee of the Bank Account Trust or Chose in Action Trust, QNI pursued the Mineralogy claim for the purpose of paying the liabilities of non-trust creditors and so did not institute the Mineralogy claim for the purpose of calling in and protecting trust assets. However, for the reasons already given, this argument fails as there was no such trust of the kind alleged (that is, the Bank Account Trust or Chose in Action Trust). 166 The second submission is that QNI ceased acting as trustee from no later than 7 March 2016 when it was notified that it had been replaced as trustee by QNS and that, from that point onwards, QNI no longer had any further function as Manager of the JVA or as trustee of the Bank Account Trust. 167 The Palmer Parties submit that, as it had been replaced, QNI was not permitted to undertake any duties as trustee including getting in the trust property as these duties now fell to the new Manager and trustee. They submit that, in issuing the Mineralogy claim and purporting to get in trust property, QNI was acting outside of its capacity and powers as trustee and accordingly the Mineralogy Claim Expenses and Liabilities were incurred as a result of conduct being in excess of power such they were not properly incurred and could not be the subject of any right of indemnity. 168 However, this submission is contrary to the established legal principles. 169 A trustee's right of indemnity out of the trust estate was explained by the High Court in Carter Holt Harvey Woodproducts Australia Pty Limited v The Commonwealth (2019) 268 CLR 524; [2019] HCA 20 at [29]–[31] (Kiefel CJ, Keane and Edelman JJ) as follows: Whether sourced in statute, or as an express term or equitable implication in the trust instrument, the trustee has two rights to obtain indemnity. In Chief Commissioner of Stamp Duties (NSW) v Buckle, this Court approved the following passage from Scott on Trusts, which described the general characteristics of the two rights of indemnity: "Where the trustee acting within his powers makes a contract with a third person in the course of the administration of the trust, although the trustee is ordinarily personally liable to the third person on the contract, he is entitled to indemnity out of the trust estate. If he has discharged the liability out of his individual property, he is entitled to reimbursement; if he has not discharged it, he is entitled to apply the trust property in discharging it, that is, he is entitled to exoneration." Although both of these rights of indemnity might strictly be described as powers of indemnity, their description as "rights" emphasises that they do not exist independently of the rights that the trustee holds on trust. The powers of indemnity are concerned with a means by which trust rights can be used. They are thus part and parcel of the trust "rights" in a broad sense. For instance, a trustee's rights concerning "cash at bank" include both the right to be paid money on request and the power to direct that those funds be used to discharge debts owed to trust creditors. The trustee's power to be reimbursed from the trust fund for the entirety of a payment that has been made by the trustee personally, sometimes also described as "recoupment", is not in issue in this appeal. This appeal is concerned with the trustee's power of exoneration, which is a power to use trust funds to discharge debts that were properly incurred by the trustee in the course of trust business. By the exercise of the power of exoneration, equity ensures that the trustee "need not pay and perhaps ruin himself before seeking relief". Hover, the value of the power of exoneration, like the value of the power of reimbursement, may decrease by "netting-off reciprocal monetary obligations" to the extent to which the trustee has incurred a duty to increase the trust funds or, more loosely, a "liability which the trustee owes to the trust estate". (footnotes omitted) See also [80], [83] (Bell, Gageler and Nettle JJ) and [130]–[132] (Gordon J); Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (in liq) (2018) 260 FCR 310; [2018] FCAFC 40 at [35] (Allsop CJ). 170 The trustee's right of indemnity confers on the trustee a proprietary interest in the nature of an equitable lien or charge: Carter Holt at [32], [83], [132]. 171 A trustee's accrued right of indemnity (including the right of exoneration), and the accompanying equitable lien, in respect of liabilities incurred whilst acting as trustee, survives removal as trustee (and, indeed, the appointment of a new trustee): Bruton Holdings Pty Ltd (in liquidation) v Commissioner of Taxation of the Commonwealth of Australia (2009) 239 CLR 346; [2009] HCA 32 at [43] (French CJ, Gummow, Hayne, Heydon and Bell JJ); Matrix Partners at [142]; Cremin, in the matter of Brimson Pty Ltd (in liq) (2019) 136 ACSR 649; [2019] FCA 1023 at [48] (Moshinsky J); Break Fast Investments Pty Ltd v Sclavenitis [2022] VSC 288 at [51(c)] (Riordan J). 172 A trustee may exercise its right of indemnity without judicial intervention where property is not required to be sold: Matrix Partners at [44]. 173 Where a corporate trustee is placed into liquidation, control of the right of indemnity passes to the liquidator: Carter Holt at [34]; Matrix Partners at [78]–[79], [197]; In Re Suco Gold Pty Ltd (in liquidation) (1983) 33 SASR 99 at 107–108. 174 The proceeds from an exercise of a corporate trustee's right of exoneration (as distinct from the right of reimbursement or recoupment) may only be applied in satisfaction of the trust liabilities to which the right of exoneration relates: Carter Holt at [40]–[42], [92]; Matrix Partners at [100]–[101]. Where the corporate trustee is in liquidation, the liabilities to which the proceeds may be applied include the costs of the liquidation and the liquidator's remuneration, because they are to be regarded as debts incurred by the company in discharging trust obligations: Suco Gold at 110; Matrix Partners at [105]–[107]; Brimson at [51]. 175 In Brimson at [51], Moshinsky J also relevantly observed that: In circumstances where a company has only ever acted as a trustee of one trust and that has been the totality of its affairs, no issue arises as to the application of trust assets to general creditors because all of the company's creditors are trust creditors. In this situation, the proceeds from the exercise of the right of exoneration are to be distributed to the trust creditors in accordance with the order of priority prescribed by the Corporations Act: … (citations omitted) 176 Where a former trustee continues to hold trust assets, it will do so as bare trustee: Matrix Partners at [142]; Brimson at [48]; Break Fast at [51]. 177 As bare trustee, the former trustee will retain the obligations which exist by virtue of the office, including those described by the High Court in CGU Insurance Limited v One.Tel Limited (in liquidation) (2010) 242 CLR 174; [2010] HCA 26 (French CJ, Heydon, Crennan, Kiefel and Bell JJ) at [36] ("to get the trust property in, protect it, and vindicate the rights attaching to it") and [37] (which can include protecting and vindicating the rights attaching to trust property in the form of a chose in action, by prosecuting or continuing legal proceedings); see also Bruton Holdings Pty Ltd (in liq) v Federal Commissioner of Taxation (2011) 193 FCR 442; [2011] FCAFC 79 at [12], [15], [16] and [23] (Stone, Jacobson and Edmonds JJ). 178 It therefore follows that, when QNI was replaced as Manager and trustee, QNI's accrued right of indemnity and the accompanying equitable lien survived its removal and QNI retained the obligation "to get the trust property in, protect it, and vindicate the rights attaching to it" as bare trustee. 179 It follows that the fact that QNI was replaced did not have the consequence contended by the Palmer Parties, being that it acted beyond power in issuing the Mineralogy claim and getting in the trust property. 180 This has the consequence that the claim by the Palmer Parties that QNI acted beyond power and that therefore the Mineralogy Claim Expenses and Liabilities are not expenses properly or reasonably incurred by QNI, and are not permitted to be indemnified out of trust property, also fails. 181 In terms of this claim being an objection to the orders sought by the plaintiffs, it is rejected. 182 For these reasons, the declaration sought by the Palmer Parties in [2] of the prayer for relief, insofar as it is premised on this claim, will not be made. Whether improper for QNI to bring Mineralogy proceeding 183 This aspect of the case advanced by the Palmer Parties repeats the complaint that QNI had no right to prosecute the Mineralogy claim because it had been replaced as trustee (which failed for the reasons already given). They then advance a series of cascading arguments stemming from this premise: (1) as a consequence of its replacement as Manager and trustee, QNI was obliged to transfer the trust property to QNS, provided QNS did not take steps to destroy, diminish or jeopardise QNI's right of security; (2) from 7 March 2016, QNI had no entitlement or right to retain the Mineralogy claim, as against QNS, as security for an accrued right of indemnity. Rather, its entitlement was relevantly limited to an entitlement to ensure that the new trustee did not take steps to destroy, diminish or jeopardise the former trustee's right of security, which subsists in the trust assets after their transfer to the new trustee; (3) upon the appointment of QNS as trustee, any chose in action formerly held by QNI vested in QNS which alone could pursue the chose in action; (4) alternatively, if a formal assignment in compliance with s 199 of the Property Law Act 1974 (Qld) was necessary, the proper course for QNI as of 7 March 2016 was to sign all necessary documents to vest the Mineralogy claim, the Bank Account Trust and the Chose in Action Trust in QNS; (5) the effect of QNI's failure to sign all necessary documents to vest the Mineralogy Claim, the Bank Account Trust and the Chose in Action Trust in QNS was that, from 7 March 2016, QNI prosecuted the Mineralogy claim in breach of its obligations under clause 5.6(d) of the JVA which relevantly required QNI, when it ceased to be Manager, to deliver to the "Successor Manager" all Joint Venture Property and that, if title to any Joint Venture Property was held in its name, it shall promptly transfer such title to the "Successor Manager". 184 In support of these submissions, the Palmer Parties placed heavy reliance during their written and oral submissions on the single judge decision of Lemery Holdings Pty Ltd v Reliance Financial Services Pty Ltd (2008) 74 NSWLR 550; [2008] NSWSC 1344 (Brereton J). In that decision, it was stated at [50]: … a former trustee does not have a right to retain, as against a new trustee, the trust assets as security for an accrued right of indemnity, though the former trustee is entitled to ensure the new trustee does not take steps which will destroy, diminish or jeopardise the old trustee's right of security, which subsists in the trust assets after their transfer to the new trustee. 185 However, this proposition is contrary to observations made in at least two intermediate appellate court decisions. 186 In Suco Gold at 109, King CJ (with whom Jacobs and Matheson JJ agreed) stated: The trustee's lien is an equitable lien which confers on him a charge over the trust property, whether in his possession or not, for the purpose of protecting and enforcing the right of indemnity. It also confers on the trustee a right to possession of the trust property for the purpose of protecting and enforcing the right of indemnity … The right of possession of the trustee, until his right of indemnity is exercised, is superior to those of a new trustee or the cestuis que trust. The rights conferred by the lien passed to the liquidator. They would enable him to obtain and retain possession of the trust property until the right of indemnity has been exercised, and to realize the trust property in the course of exercising it. The lien is ancillary to the right of indemnity. When the right of indemnity has been exercised by recoupment of any amounts which the trustee has paid in connection with the trust and by payment out of the trust fund of any outstanding liabilities, the lien ceases and the balance of the trust property becomes available to a new trustee or the cestuis que trust as the case may be. (footnotes omitted) 187 In QNI Resources Pty Ltd & Ors v Queensland Nickel Pty Ltd (in liq) [2017] QCA 167 at [59], Gotterson JA (with whom Douglas and Applegarth JJ agreed) stated, in respect of an almost identical submission by the Palmer Parties: … the appellants ventured that if Queensland Nickel held Joint Venture Property as a bare trustee, then it would not be entitled to retain it as against the new trustee, Queensland Nickel Sales Pty Ltd, as security for an accrued right to indemnity. That may be doubted as a correct proposition of law. To the contrary, Finkelstein J observed in Apostolou v VA Corporation of Aust Pty Ltd that there is no doubt that a retiring trustee can hold trust property to secure his right of reimbursement against both the beneficiaries and a new trustee. (footnotes omitted) 188 In Apostolou v VA Corporation Aust Pty Ltd (2010) 77 ACSR 84; [2010] FCA 64, the proposition in Lemery was not accepted by Finkelstein J at [50]–[51]: I acknowledge that Lemery Holdings Pty Ltd v Reliance Financial Services Pty Ltd [2008] NSWSC 1344 … holds that a retiring trustee cannot retain possession of trust property as against a new trustee. With respect, in my opinion there is no doubt that a retiring trustee can hold trust property to secure his right of reimbursement against both the beneficiaries and a new trustee. Stott v Milne (1884) 25 Ch D 710, a decision of a powerful Court of Appeal presided over by the Lord Chancellor, states the rule in unqualified terms. So also does G Bogert, Trust and Trustees (2nd ed, rev 1982) s 718 in the following passage: If a successor trustee has been appointed, he cannot recover possession of the trust property from the retiring trustee until the latter is paid from the trust property for all advances from his own funds properly made for the benefit of the trust. If there is a duty on the part of the trustee to convey the property to a beneficiary at the termination of the trust, the trustee can insist on reimbursement for expenses incurred by him for the benefit of the trust before he is obliged tot [sic] execute a conveyance. The trustee may assert this right of retention against principal or income of the trust. That the right of indemnity is not lost if possession is given up is not, contrary to what is said in Lemery Holdings, to the point. Nor, also contrary to what is said in Lemery Holdings, is there a principled distinction between a claim for possession by a beneficiary (whose claim is said to be defeated by the lien) and a claim for possession by a new trustee (whose claim is said to defeat the lien). Lemery Holdings bases the distinction on the potential for the destruction of the security interest, considering it less likely if the property passes to a new trustee. In the end, the risk depends upon the honesty of the individual, not the legal capacity in which the individual holds the property. This is not to suggest that in an appropriate case, a court does not have power to order that trust property be delivered into the hands of the new trustee on terms by which the old trustee's indemnity is fully protected: see for example Global Funds Management v Burns Philp Trustee Co Ltd (1990) 3 ACSR 183. 189 Finally, the proposition in Lemery cannot be reconciled with the fundamental principle that the trust property is confined to so much of the assets as are available after the liabilities the subject of the trustee's right of indemnity have been discharged or for which there has been provision. This principle was stated by McPherson J (with whom Andrews SPJ agreed) in Kemtron Industries Pty Ltd v Commissioner of Stamp Duties [1984] 1 Qd R 576 at 587 in a passage which was cited with approval by the High Court in Chief Commissioner of Stamp Duties v Buckle (1998) 192 CLR 226; [1998] HCA 4 at [48]: Until the right to reimbursement or exoneration has been satisfied, "it is impossible to say what the trust fund is". The entitlement of the beneficiaries in respect of the assets held by the trustee which constitutes the "property" to which the beneficiaries are entitled in equity is to be distinguished from the assets themselves. The entitlement of the beneficiaries is confined to so much of those assets as is available after the liabilities in question have been discharged or provision has been made for them. To the extent that the assets held by the trustee are subject to their application to reimburse or exonerate the trustee, they are not "trust assets" or "trust property" in the sense that they are held solely upon trusts imposing fiduciary duties which bind the trustee in favour of the beneficiaries. (footnotes omitted) 190 At [57]–[58] of the leave to proceed decision, Bond J (as his Honour then was) observed by reference to the reasons of the High Court in Buckle: Relevantly, the following propositions may be advanced: … (c) In aid of [its] right to reimbursement or exoneration, the trustee cannot be compelled to surrender the trust assets to the beneficiaries until the claim has been satisfied: [47], [49]. The trustee has an equitable charge or lien over the trust assets which may be enforced in the same way as any other equitable charge or lien: [50]. (d) The trustee's right to reimbursement or exoneration confers upon the trustee a proprietary or beneficial interest in the trust assets to the extent of its right to be indemnified out of those assets against personal liabilities incurred in the performance of the trust: [50], [51]. (e) Until the right to reimbursement or exoneration has been satisfied, it is impossible to say what the trust fund is: [48]. The entitlement of the beneficiaries is confined to so much of the trust assets as is available after the liabilities in question have been discharged or provision has been made for them: [48]. A trustee's right of indemnity out of trust property for expenses reasonably incurred in or about the execution of the trusts or powers conferred under the trust is enshrined in statute in Queensland: see s 72 of the Trusts Act 1973 (Qld). Moreover, that express statement of the right to indemnity applies whether or not a contrary intention is expressed in the instrument (if any) creating the trust: see s 65 of the Trusts Act. 191 Having regard to these authorities and, in particular, the reasons of Finkelstein J in Apostolou, with which I respectfully agree, I am unable to adopt the statement of principle in Lemery especially in circumstances where, as in this case, there is a likely prospect there will be no trust assets available to transfer to QNS or any replacement Manager once the winding up of QNI has been completed. 192 Accordingly, QNI is not required to transfer any part of the judgment sum (or any trust property) to QNS, as the replacement trustee, until such time as it is established that the liabilities properly incurred by it as trustee, including in the course of its winding up, will be satisfied out of the trust property. 193 Further, in the circumstances of this case as addressed in further detail below, retention of possession of the trust assets by QNI will enable it to ensure that any new trustee, whether QNS or another trustee appointed by the JVCs, does not take steps which will destroy, diminish or jeopardise its right of security. That QNI has an entitlement to ensure that the new trustee does not take such steps was recognised in Lemery at [50]. 194 The next submission by the Palmer Parties is that the Mineralogy claim "vested" in QNS such that only QNS could pursue that claim. 195 However, although s 15 of the Trusts Act provides that trust property vests in the new trustee upon the replacement of a trustee, the provision is "subject to the provisions of any other Act". A chose in action, which the Mineralogy claim was, does not vest unless the retiring trustee assigns the cause of action in writing in accordance with s 199 of the Property Law Act: Seaman v Silvia [2018] FCA 97 at [15]–[21], following Innovateq Australia Pty Ltd v Barnes & Ors [2017] VSC 16. 196 The next submission by the Palmer Parties is that QNI was contractually obliged to transfer the chose in action to QNS (including by assigning it if necessary). The obligation relied upon is contained in clause 5.6(d) of the JVA, which (in effect) obliges the Manager to transfer the Joint Venture Property to its successor in the event that its appointment ceased. 197 Reliance on this clause was the foundation of the argument by the Palmer Parties in the leave to proceed decision: see [91] of that decision. In that case, as in this case, the Palmer Parties contended that: (1) after 7 March 2016, QNI was obliged to comply with the demand which had been given to it to return all Joint Venture Property (including any cash at bank) but it had wrongly refused so to do; (2) QNI was not entitled to use any part of the Joint Venture Property to discharge any of the debts which it had incurred whilst Manager of the joint venture. 198 After addressing other legal issues which arose in the application for leave to proceed, and analysing the statement of claim proffered by the Palmer Parties, Bond J determined that the Palmer Parties had not shown a case of sufficient merit to warrant the grant of leave. His Honour reasoned that: [130] On the material presently before me, the applicants' case seems to involve the Court accepting the following propositions: (a) the Joint Venturers could place a General Manager in charge of the management, operation and administration of their Joint Venture and of the management and control of the Joint Venture Property, which they had agreed to make available to the General Manager for the purpose and duration of the Joint Venture (and solely for that purpose); (b) the Joint Venturers could knowingly allow their General Manager to incur tens of millions of dollars of liability in relation to Joint Venture Expenses for matters as apparently proper and fundamental to the conduct of the Joint Venture business by the General Manager as its employees, its freight handler and its ore supplier; (c) the Joint Venturers could knowingly allow their General Manager not to follow the formal mechanisms for financial reporting and budgeting set out in the Joint Venture Agreement as the means by which they could be required to provide funds to the General Manager, expecting that the General Manager would be able to generate sufficient funds to meet the Joint Venture Expenses by the use of Joint Venture Property to conduct the Joint Venture business; and (d) by the simple expedient of terminating the relationship and appointing a new General Manager, the Joint Venturers could, without making any provision for the discharge of the former General Manager's liabilities for Joint Venture Expenses properly incurred, establish an entitlement to compel the former General Manager to transfer all the Joint Venture Property to the new General Manager, but to keep all of the liability. [131] Acceptance of such a case would be a startling affront to justice. [132] … Thus it could be concluded that the General Manager had a right of indemnity which would be regarded as secured by a lien over the Joint Venture Property because – (a) … to the extent that the Joint Venturers had permitted the General Manager to hold legal title to the Joint Venture Property such that the General Manager must be regarded as holding it as trustee for the Joint Venturers, the General Manager would have a trustee's right to indemnity in respect of such liabilities, which right would be regarded as secured by an equitable charge or lien over the Joint Venture Property; and (b) … to the extent that the General Manager held Joint Venture Property but legal title to the Joint Venture Property remained in the Joint Venturers, the General Manager would have an indemnity in respect of the Joint Venture Expenses properly incurred, which right would be regarded as secured by an equitable lien over the Joint Venture Property, such a lien being created by the court, regardless of the intent of the parties, as a remedial device to protect the General Manager against inequitable loss. [133] Either way, the implications would then include: (a) Queensland Nickel would be regarded as having a proprietary or beneficial interest in the Joint Venture Property to the extent of its right to be indemnified for Joint Venture Expenses properly incurred; (b) Queensland Nickel could not be compelled to surrender the Joint Venture Property to the Joint Venturers until its indemnity claim had been satisfied or provision made for its satisfaction; and (c) the entitlement of Joint Venturers to the Joint Venture Property would be confined to so much of the Joint Venture Property as was available after the liabilities in question had been discharged or provision had been made for them. Until that occurred, it would be impossible to say what the Joint Venturers' entitlement was. [134] If Queensland Nickel did acquire a beneficial interest in the Joint Venture Property in one of those ways described at [132] with the result referred to at [133], then it would follow that … the contractual and equitable claims against Queensland Nickel and the Administrators which rely on Queensland Nickel having an unconditioned obligation to return the Joint Venture Property would all fail because Queensland Nickel's rights would have justified retention of the property in the circumstances … (footnotes omitted) 199 In this proceeding, the Palmer Parties have not demonstrated that QNI does not have a right of indemnity of the kind described in [132] of the leave to proceed decision. 200 To the contrary, QNI has demonstrated that it has such a right of indemnity. That is because: (1) the Court of Appeal determined that QNI held the funds in the joint venture bank account to meet properly incurred Joint Venture Expenses: at [103]–[104] QCA decision; (2) Mullins J determined that, as at 13 January 2016, QNI was insolvent: trial decision at [249]. A necessary step in that reasoning was that QNI was liable to pay the Joint Venture Expenses, and the evidence adduced by the plaintiffs demonstrates that most of the pre-administration liabilities (which led to the conclusion of insolvency) were still owing as at the date of the commencement of the Mineralogy proceeding. It follows therefore that these liabilities were still owing as at the date that QNS was appointed as the new Manager in March 2016. 201 In circumstances where QNI has demonstrated in this proceeding that it has a right of indemnity and applying the reasoning in the leave to proceed decision, with which I respectfully agree, QNI was not (upon replacement as trustee) and is not (now) required to transfer any part of the trust property to QNS, as replacement trustee, by reason of clause 5.6(d) of the JVA until such time as it is established that the liabilities properly incurred by QNI as trustee, including in the course of its winding up, will be satisfied out of the trust property. 202 Further, as there was no Bank Account Trust or Chose in Action Trust for the reasons already given, the submission that QNI ought to have taken steps to "vest" these trusts in QNS must also fail. 203 For these reasons, the Palmer Parties have failed to establish that it was improper for QNI to bring the Mineralogy proceeding. 204 Insofar as this claim is relied upon to assert that the Mineralogy Claim Expenses and Liabilities are not expenses properly or reasonably incurred by QNI, and are not permitted to be indemnified out of trust property, this assertion also fails. 205 In terms of this claim being an objection to the orders sought by the plaintiffs, it is rejected. 206 For these reasons, the declaration sought by the Palmer Parties in [2] of the prayer for relief, insofar as it is premised on this claim, will not be made. Whether Mineralogy proceeding could and should have been pursued by special purpose liquidators 207 The next contention of the Palmer Parties is that the Mineralogy claim "could have and should have been prosecuted by the" SPLs and that, had this been done, the Mineralogy Claim Expenses and Liabilities could have reasonably been avoided and so were not properly incurred. 208 They relevantly submit that: [S]hould the Court find that if QNI had a right of exoneration and therefore an interest in the Mineralogy Claim, notwithstanding that position, the beneficiaries of the relevant trust (ie QNI Resources and QNI Metals) also retained an interest in that trust asset and QNI continued to owe those beneficiaries as trustee demanding fiduciary duties to act in their interest and duties to execute the trust with due care and skill. … The duties owed by QNI required it to act reasonably in mitigating the costs and expenses it incurred. It failed to do this because acting in the interests of those beneficiaries and acting with due care and skill it could have and should have utilised the SPLs to bring the Mineralogy Claim. Had it done so, it would not have incurred the Mineralogy Claim Expenses and Liabilities. It would have incurred much lesser expenses, to the benefit of the trust estate. (footnotes omitted) Proper construction of appointment order 209 The appointment order was made on 18 May 2016 by Dowsett J. The Palmer Parties contend that, having regard to the terms of the order, the Mineralogy proceeding could have been prosecuted by the SPLs. 210 The appointment order, which was made by consent, relevantly stated as follows: 3. Pursuant to sections 511 and 472(1) of the Corporations Act 2001 (Cth) (Corporations Act) that the Third, Fourth and Fifth Plaintiffs be appointed as additional liquidators to the First Defendant (Company) for the limited purposes specified in order 2 [sic] below (Special Purpose Liquidators). 4. Pursuant to sections 511 and 473(8) of the Corporations Act, that: (a) the appointment of the Special Purpose Liquidator is limited to the matters set out in paragraphs 4(b) to (d) below; (b) the following things may be done by the Special Purpose Liquidators on behalf of the company: (i) conducting investigations into any of the matters set out in the Schedule to these orders (the Special Purpose Liquidator's Tasks), including by: (A) inspecting the books and records of the Company; (B) conducting examinations pursuant to sections 596A or 596B of the Corporations Act or obtaining orders for production pursuant to section 597(9) of the Corporations Act; and (C) requiring statements to be provided pursuant to section 475(2) of the Corporations Act; (ii) pursuing any claim, including by commencing legal proceedings, that may be available to the company or the Special Purpose Liquidators in relation to any of the matters identified in the Special Purpose Liquidators' Tasks, including considering and obtaining legal advice in respect of pursuing any such claim; (c) in relation to only those matters set out in the Special Purpose Liquidator's Tasks, the Special Purpose Liquidators may take steps, including by commencing legal proceedings, to preserve or protect the assets of the Company, whether or not in the possession of the Company; (d) in relation to only those matters set out in the Special Purpose Liquidator's Tasks, the Special Purpose Liquidators, as additional liquidators of the Company, are entitled to exercise all powers conferred on a liquidator by section 506 of the Corporations Act, except for the powers contained in section 477(1)(a); … (emphasis omitted) 211 The Schedule to the appointment order identified the matters which formed the scope of the Special Purpose Liquidator's Tasks as identified in the body of the orders (SPL Tasks). The Schedule relevantly stated as follows: 1. All dealings or transactions between [QNI], its directors and officers and any of: (a) QNI Metals Pty Ltd ACN 066 656 175 (QNI Metals); (b) QNI Resources Pty Ltd ACN 054 117 921 (QNI Resources); and/or (c) the directors or officers of QNI Metals and QNI Resources, including but not limited to dealings or transactions arising under the Joint Venture Agreement dated 17 September 1992 (Joint Venture Agreement). 2. All potential claims or claims arising against: (a) QNI Metals; (b) QNI Resources; and/or (c) the directors or officers of QNI Metals and QNI Resources, including but not limited to potential claims or claims arising under the Joint Venture Agreement. (emphasis omitted) 212 The Palmer Parties assert that the appointment order authorised the SPLs to "institute and/or following its institution conduct" the Mineralogy proceeding. 213 However, the Schedule did not refer to Mineralogy, or to any dealings or transactions between QNI, its directors and officers on the one hand, and Mineralogy on the other, such as in relation to the loans which formed the basis for the Mineralogy claim. 214 For that reason and applying the plain words of the Schedule, the appointment orders did not authorise the SPLs to institute the Mineralogy proceeding. 215 This conclusion accords with submissions filed by Mineralogy in the SPL proceeding on 23 August 2017. 216 An alternative submission by the Palmer Parties was that the Mineralogy claim was captured by the Schedule because it was a legal proceeding in relation to a dealing between QNI and the JVCs or, alternatively, a dealing under the JVA. The Palmer Parties submit that this is because the claim involved or was in relation to a claim by QNI as trustee under the JVA to recover trust assets for the benefit of the beneficiaries, Resources and Metals, and that the "Mineralogy Loan" was entered into by QNI as trustee of a trust created under the JVA. 217 However, the loans made by QNI to Mineralogy did not constitute a dealing or transaction between QNI and either or both Metals and Resources. Further, the proper construction of paragraph 1 of the Schedule is that it captures (1) all dealings or transactions between QNI, its directors and officers and any of the persons or entities described in (a), (b) and/or (c) which (2) includes but is not limited to dealings or transactions arising under the JVA. One does not get to (2) without also satisfying (1). In other words, and contrary to the construction contended for by the Palmer Parties, paragraph 1 of the Schedule does not capture all dealings or transactions arising under the JVA regardless of the parties to those dealings or transactions. 218 The Palmer Parties then submit that the Mineralogy claim was "captured by 2(b)" of the Schedule. However, that submission fails because the Mineralogy claim was a claim against Mineralogy and was not a claim against Resources. 219 The Palmer Parties then make submissions by reference to the pleadings and the parties in the Mineralogy proceeding after it had been instituted, in support of its pleaded contention that, after the Mineralogy proceeding was commenced, QNI through the GPLs should have caused the SPLs to take it over because it had become a proceeding which fell within the scope of the Schedule. 220 The Palmer Parties submit that: the [Mineralogy] claim properly characterised, concerned whether the loan to Mineralogy was a trust asset in which QNI Metals and QNI Resources had a beneficial interest as beneficiaries of the Bank Account Trust but in which QNI had a beneficial interest by way of its rights of exoneration. QNI Metals and QNI Resources were properly defendants to the proceeding, including after consolidation. The defence to the claim included an allegation denying that QNI had a beneficial interest in the asset (paragraph 133(e) to the consolidated defence). Further, they alleged that they had made the loan not QNI (paragraph 133(aa)) and also that they had forgiven the loan or released Mineralogy (paragraph 177 to 180A). There was also a pleaded dispute as to whether QNI had been replaced by the Joint Venturers by QNS. The defences were raised because of the objective apprehension that the Mineralogy Claim concerned whether QNI was entitled to the proceeds to exercise a right of exoneration. (footnotes omitted) 221 However, the Mineralogy claim was a claim for the repayment of loans made by QNI to Mineralogy. The transactions or dealings were between QNI and Mineralogy, and the claim was as against Mineralogy. So much is made clear by the QCA decision. 222 That a defence was ultimately advanced to the Mineralogy claim that the loans to Mineralogy were made by the JVCs instead of QNI, and that the loans had been forgiven or released by the JVCs, does not transform the Mineralogy claim into a dealing or transaction between QNI and either or both Metals and Resources within paragraph 1 of the Schedule. 223 Nor does the fact that Metals and Resources became defendants in the consolidated proceeding transform the Mineralogy claim into one which falls within paragraph 2 of the Schedule. And the fact that Bond J observed in Re Queensland Nickel (in liq) [2017] QSC 258 at [129] that the question of the basis on which QNI held monies in its accounts was relevant both in the Mineralogy proceeding and in the SPL proceeding, being observations made in the context of his Honour deciding whether to consolidate those proceedings, does not affect these conclusions. 224 The Palmer Parties next submit that the Mineralogy claim was a proceeding necessary to preserve or protect the assets of QNI in relation to matters set out in the SPL Tasks and rely upon submissions made by the SPLs about this (but with no indication as to whether these submissions were accepted by any court). They submit that the Mineralogy claim was in relation to claims by QNI for exoneration or indemnity under the JVA and that the Mineralogy claim sought to recover alleged trust funds over which QNI could then exercise the lien propounded by the SPLs. It is said that it was in that sense in relation to or connected with conduct of the SPLs and their tasks. However, these submissions mischaracterise the Mineralogy proceeding and are contrary to the proper construction of the appointment order. 225 Accordingly, the prosecution of the Mineralogy claim was not within the scope of the SPL Tasks. Nor was it "in relation to" the SPL Tasks within the meaning of orders 4(b)–(d) of the appointment order. 226 For these reasons, the SPLs were not empowered by the appointment order to institute or, following its institution, conduct the Mineralogy proceeding. 227 The Palmer Parties also contended that the prosecution of the Voidable Transactions proceeding fell within the scope of the appointment order. However, the Schedule did not refer to China First or Waratah Coal, or to any dealings or transactions between QNI, its directors and officers on the one hand, and China First or Waratah Coal on the other. It follows that this submission must also fail. Extension of powers under appointment order 228 The Palmer Parties submit that, in the alternative, if the SPLs were not empowered by the appointment order to cause QNI to advance the Mineralogy claim, QNI and the GPLs could have made an application to extend the powers of the SPLs, and they ought to have done so. 229 They submit that "it would have been a relatively easy step for QNI to ensure that the tasks [in the appointment order] could have been amended and the funding [from the Commonwealth] extended". 230 The Palmer Parties did not explain how QNI itself, as distinct from the GPLs, would have made such an application or caused the funding to be extended, or why obtaining an extension of the funding from the Commonwealth would have been a "relatively easy" or "basic" step. 231 Having regard to the absence of any evidence to support this submission, the proposition that the Commonwealth would have agreed to fund the prosecution of the Mineralogy claim by the SPLs (and to the expansion of the SPL Tasks) is a matter of speculation, and cannot be assumed. 232 Indeed, what evidence there is (being the rejection by the Commonwealth of the funding application by the GPLs), and the lack of any proposal by the Commonwealth to fund the Mineralogy claim after the proceedings were consolidated, tends to support the opposite inference. 233 Further, prior to the appointment of the SPLs, the Commonwealth had made clear that its objective was to recover the sum of $65 million that was likely to be paid pursuant to the FEG Scheme, and no more. 234 Finally and critically, under the Vannin LFA, QNI had obligations to pursue the Mineralogy claim. That agreement did not permit QNI to terminate that agreement unilaterally, and obtain funding elsewhere. 235 The Palmer Parties also advanced various submissions as to why the GPLs should have applied to extend the powers of the SPLs (even if their funding could have been extended). 236 The Palmer Parties identify that the appointment order expressly provided that: Leave be granted to apply in these proceedings to extend or limit the purposes for which the Special Purpose Liquidators are appointed and generally. 237 They submit that "QNI failed to take this basic step". 238 However, the fact that there was liberty to apply in the appointment order does not mean that an application should have been made to extend the powers of the SPLs. All that this means is that an application could have been brought which therefore does not advance the position of the Palmer Parties very far, if at all. 239 The Palmer Parties also rely on the fact that there was overlap between the SPL proceeding and the Mineralogy claim. They submit that "the factual matters underlying the actual claims brought by the SPL significantly overlapped with the factual matters underlying proof of the Mineralogy claim". 240 However, an examination of the respective cases advanced by the SPLs and the GPLs against Mineralogy reveal that the extent of the duplication was limited to proof of QNI's insolvency by 13 January 2016 and that a limited subset of the payments that comprised the Mineralogy claim (a debt claim) were the subject of alternative claims by the SPLs (premised on a lien). 241 It follows that, to the extent that there was any overlap, it was not significant and does not provide a cogent reason to conclude that the GPLs ought to have applied to extend the powers of the SPLs so as to enable them to conduct the Mineralogy claim, and that they acted improperly by failing to do so. 242 The Palmer Parties also rely on observations made by Bond J for his Honour's decision to consolidate the Mineralogy proceeding with the SPL proceeding (and others). However, by the time these observations were made, the Vannin LFA had been entered. That agreement did not permit the GPLs to pass over the control of the Mineralogy claim to the SPLs. And there is no evidence from which it could be inferred that Vannin would have agreed to terminate the Vannin LFA without being compensated in some way. The evidence demonstrates that QNI had no ability to pay any such compensation. 243 A further matter relied upon is that QNI had obligations as "trustee of the chose in action represented by the Mineralogy Claim". However, this does not add anything in support of the proposition sought to be advanced by the Palmer Parties. 244 The Palmer Parties then echo earlier submissions already made, submitting that: As a former trustee, QNI was under no duty to get in trust property or to carry out terms of the trust. It was not incumbent on QNI to commence proceedings and to enter into the Vannin Funding Agreement, and incur the GPL Liabilities and Funding Premium. QNI's obligation after being replaced by Queensland Nickel Sales was to transfer the trust property to the new trustee. It cannot rely on its failure to do so to justify incurring unnecessary costs. 245 However, for the reasons already given, these submissions must fail. 246 The Palmer Parties next make various attacks on the entry by the GPLs into the Vannin LFA. However, it must be recalled that the Vannin LFA did not cover just the Mineralogy claim, but other proceedings, such as the Voidable Transactions proceeding, and the general costs of QNI's winding up. 247 The transactions that were challenged by the Voidable Transactions proceeding are referred to above. As is obvious from the fact that China First and Waratah Coal maintained a claim as secured creditors for the sum of $235 million, it was necessary for these transactions to be set aside to avoid the first $235 million of any recoveries being paid to Waratah Coal and China First in preference to the unsecured creditors of QNI and the trust estate being $235 million worse off. 248 The claim to set aside these challenged transactions was on the basis that they were uncommercial transactions. Contrary to the submissions of the Palmer Parties, this claim was not within the scope of the SPL Tasks. That being the case, this claim needed to be funded (as QNI was otherwise without funds). 249 There were no other claims being pursued by QNI at the time, save for the Mineralogy claim, that had the potential to provide proceeds that would justify a funder funding the Voidable Transactions proceeding. Accordingly, the funding of the Mineralogy claim and the Voidable Transactions proceeding were necessarily connected. 250 Further, in the absence of funding from Vannin, QNI would not have had funds to allow its duly appointed liquidators to perform the remaining functions that fell outside the scope of the SPL Tasks. And the detailed evidence of Mr Park and Ms Trenfield provides a strong basis to reject the submission by the Palmer Parties that the funds required by the GPLs to perform their functions were de minimis and that the role which the GPLs had in the liquidation of QNI was not significant. 251 For these reasons, the funding obtained from Vannin was necessary for the liquidation of QNI as a whole, and not just for the purposes of conducting the Mineralogy claim. The contention that it was somehow superfluous, or not required, cannot be accepted. 252 For all of these reasons, the case advanced by the Palmer Parties that QNI and the GPLs ought to have made an application to extend the powers of the SPLs necessarily fails. Fundamental problems with the case advanced by Palmer Parties 253 There are further and more fundamental problems with the Palmer Parties' complaint that the Mineralogy claim should have been pursued by the SPLs instead of the GPLs, which problems prove fatal to this aspect of the case advanced by the Palmer Parties. 254 First, the SPLs did not consent to being liquidators for anything other than the tasks identified in the appointment order. This is critical because, without that consent, any application to extend the powers conferred on the SPLs (even if made) would not have succeeded. There is no evidence that the SPLs would have given their consent to such an extension of their powers, or that they would have agreed to prosecute the Mineralogy proceeding (including if the prosecution of that proceeding fell within their powers), and it cannot be assumed that they would have. 255 Second, the Palmer Parties submit that: … It may be accepted that the trust property has presently been augmented by the payment of the Judgment Sum. But this contention does not excuse a breach of trust. Nor was the pursuit of the Mineralogy Claim by QNI through the GPLs (as opposed to the SPLs) in the interests of the beneficiaries. Moreover, it is not objectively beneficial for a trustee to substantially deplete trust property by entering into unnecessary and duplicative funding arrangements. … 256 However, it is not possible to accept a submission that the pursuit of the Mineralogy claim was not objectively beneficial when that claim has resulted in a benefit to the trust estate of at least $74 million and potentially as much as $97 million (net of the funding premium, but not costs). 257 Third, the underlying premise to the case advanced by the Palmer Parties is that, had they taken it over, the SPLs would have achieved the same or a better result than the GPLs having "incurred much lesser expenses, to the benefit of the trust estate". 258 However, the evidence does not support this premise and it cannot be assumed that the SPLs would have achieved the same or better result as the GPLs achieved. 259 Nor did the evidence establish that the SPLs would have incurred "much lesser expenses" or what those expenses would have been. 260 Further, the evidence did not establish that the GPL Liabilities comprised expenditure for services which substantially duplicated services performed or obtained by the SPLs in the SPL proceeding. To the contrary, the evidence showed that steps were taken by the GPLs and the SPLs to keep potential duplication to a minimum. 261 Fourth, the Palmer Parties failed to articulate and identify what, if any, impact the settlement deed would have had on the Mineralogy claim, being something which they needed to do to establish their posited counterfactual. 262 Is it the case for the Palmer Parties that the settlement deed would have been entered by the parties to it on the same or similar terms such that the SPLs would have been permitted to continue with the Mineralogy claim? Or is the case for the Palmer Parties that the settlement deed would not have been entered at all if the SPLs had taken over the Mineralogy claim? If so, there is no evidence to support either of these findings. 263 Or is it the case for the Palmer Parties that the settlement deed would have been entered by the parties to it but which also contained a compromise of the Mineralogy claim? If so, there is no evidence to support a finding that this would have occurred, what the new terms of the settlement deed would have been or that such an outcome would have been the same or a better one than that achieved by the GPLs. Conclusion 264 For these reasons, the claims by the Palmer Parties which rely on the failure to "utilise" the SPLs to conduct the Mineralogy proceeding so as to avoid incurring the Mineralogy Claim Expenses and Liabilities must fail. 265 Insofar as these claims are relied upon to assert that the Mineralogy Claim Expenses and Liabilities are not expenses properly or reasonably incurred by QNI, and are not permitted to be indemnified out of trust property, this assertion also fails. 266 In terms of these claims being an objection to the orders sought by the plaintiffs, they are rejected. 267 For these reasons, the declaration sought by the Palmer Parties in [2] of the prayer for relief, insofar as it is premised on these claims, will not be made. Whether improper to enter into Vannin LFA 268 The amended statement of claim contains the allegation that the Vannin LFA was contrary to the best interests of the beneficiaries of the Bank Account Trust and the trust property because: (1) at the time of entering the Vannin LFA, the SPLs had already been appointed to QNI and funding from the Commonwealth of Australia had already been secured for the SPLs via the appointment order; (2) the Vannin LFA did not make available to QNI any claims that were not already permitted to be brought by the SPL under the appointment order; (3) the Vannin LFA subjected QNI to an obligation to pay a funding premium of between $35 million to $55 million; (4) the funding premium payable under the Vannin LFA: (a) would substantially deplete the trust property; (b) is and was unreasonable by ordinary commercial standards; (c) is and was disproportionate to the risk assumed by Vannin in funding the Mineralogy claim; and (d) is and was disproportionate to any benefit conferred on QNI, the beneficiaries and the trust property. 269 The premise of these allegations is that the trust is the Bank Account Trust, which premise was not established for the reasons already given. 270 Further, while the facts stated in (1) are correct in terms of the timing of entry into the Vannin LFA, the conclusion in (2) is incorrect, for the reasons already given. That is, the SPLs had no power under the appointment order to issue or pursue the Mineralogy claim. 271 The fact stated in (3) is not controversial in the sense that, by the Vannin LFA, QNI promised to pay a funding premium which was to be calculated by reference to a formula subject to certain events occurring. 272 However, it is incorrect to say that the funding premium will "substantially deplete" the trust property because, without QNI entering into the Vannin LFA, QNI would not have issued or pursued the Mineralogy claim, and the value of the claim would have been lost to the trust estate. 273 For the same reasons, the complaint that the funding premium is and was disproportionate to any benefit conferred on QNI, the beneficiaries and the trust property must also fail. 274 The Palmer Parties also complain that the funding premium was and is "unreasonable by ordinary commercial standards". 275 A similar challenge was made to the arrangement which was considered by the Full Court in IMF (Australia) Limited v Meadow Springs Fairway Resort Limited (in Liquidation) (2009) 69 ACSR 507; [2009] FCAFC 9 (North, Emmett and Rares JJ). That arrangement entitled the litigation funder in that case to be reimbursed legal costs as well as to be paid a fee of $115,000 and 35% of the proceeds. It was found by the Court at [75]–[80] of that decision that it was reasonable for the liquidators to have contracted on that basis. 276 By comparison, the funding premium promised to Vannin in this case was, depending on the circumstances, an amount equal to the greater of between 15% to 35% of the proceeds or an amount calculated by reference to certain costs. 277 In this case and notwithstanding their expressed complaint, the Palmer Parties adduced no evidence to establish that the funding premium was unreasonable by ordinary commercial standards. They instead tendered an affidavit of one of the GPLs, Ms Trenfield, which was filed in the consolidated proceeding and which expressed the opinion that the terms and conditions of the Vannin LFA were reasonable. In that affidavit, Ms Trenfield stated: On 13 September 2016 the Litigation Funding Agreement was entered into between the GPLs and Vannin (LFA). At the request of the GPLs, pursuant to its rights under the LFA, Vannin has nominated an increase in the funding limit under the LFA, but the terms and the funding premium entitlements of Vannin have not otherwise changed. I have read and am familiar with the terms of the LFA however have not exhibited that document to maintain its confidentiality. In my opinion, the terms and conditions of the LFA are reasonable and contain usual litigation funding terms and conditions including the extent of Vannin's funding premium entitlements and the indemnity made available to the GPLs and QNI. (emphasis original) 278 The opinion expressed by Ms Trenfield was supported by other evidence which established that: (1) prior to entry into the Vannin LFA, the GPLs had canvassed major creditors of QNI (including the Commonwealth) as well as the commercial litigation funding market for potential funding for various claims by QNI, including the Mineralogy claim. That is, the GPLs, who are very experienced insolvency practitioners, conducted what was effectively an arms-length tender process in the commercial litigation funder market; (2) after exchanges and negotiations, the GPLs ultimately received offers for funding from three litigation funders, including Vannin. In the circumstances, it may be inferred that the terms of these offers were consistent with ordinary commercial terms then available in the market; (3) the GPLs rejected one offer as it was confined to funding public examinations only, as the GPLs were looking to fund recovery actions in circumstances where, in the case of the Mineralogy claim, limitation periods were due to commence expiring, at least potentially, within the next six months; (4) the GPLs shortlisted the remaining two offers for presentation to the Committee of Inspection. In many respects, the terms of those two offers (which became a confidential exhibit) have many similarities including as to the premium payable to the litigation funder; (5) the GPLs' recommendation to the Committee of Inspection was to approve the Vannin offer. As to why the Vannin offer was preferred to the ILP offer, and why the Vannin LFA should be entered, Mr Park gave unchallenged evidence that: The fundamental problem with the ILP offer … was the funding required – that we would continue to roll from litigation to litigation, with the positive obligation to use the funding from ILP, which attracted a premium, as opposed to the Vannin offer, which was the possibility for us to discharge that in sub two years, through some funding solution or a settlement, which we then could fund without the requirement for litigation funding going forward. That was the major reason, from my perspective, on adopting the Vannin funding. … I considered it to be in the interests of the creditors of Queensland Nickel to enter into [the Vannin LFA and] to finalise the realisations of the trust assets for distribution, yes. 279 Having regard to this evidence, the complaint that the funding premium was and is "unreasonable by ordinary commercial standards" cannot be accepted. To the contrary, this evidence establishes that the funding premium was reasonable by ordinary commercial standards and that it was comparable to funding terms usually offered in the market at the relevant time. 280 In his fourth affidavit, Mr Park gave the following evidence: [63] In my professional experience as a liquidator, as referred to above, I considered that the terms of the LFA were reasonable, and within the range of ordinary funding premiums that would be offered by litigation funders when funding litigation to be run by companies that are insolvent. [64] Such premiums are, in my experience, necessary having regard to the complexity that often attends recovery proceedings brought by companies in liquidation. In deciding whether to recommend the LFA to the COI, I took into account this fact, as well as the particular nature of this proceeding, the other funding options that had been received, the likely return to creditors of QNI (which were at the time of entry into the litigation funding agreement, very substantial), the views of creditors on the COI, and the general risks of the potential claims. [65] In the context of this particular liquidation, I was also conscious of the fact that (having regard to the investigations already undertaken in the Report to Creditors) there was a high likelihood that there would be substantial litigation against Mr Palmer personally, or entities controlled by him (or associated with him). I regarded this fact alone as adding to the potential risks and complexity of recovery action in the liquidation. [66] Taking those matters into account, I considered it prudent to cause QNI to enter into the LFA. Without it, or the ILP arrangement (which I considered less preferable), I am not aware of another way in which QNI could have conducted: (a) the Mineralogy claim (which I considered to be within the scope of the GPLs obligations to pursue as liquidators, not the SPLs) and recovered the Mineralogy Loan; or (b) the Voidable Transactions proceeding. [67] In this regard, there were no claims being pursued at the time, other than the Mineralogy Claim, that had the potential to provide proceeds so as to justify a funder funding the Voidable Transactions proceeding (which, for the reasons explained above, was necessary in order for any claims for less than $235 million to be worthwhile). [68] It is for these reasons that I consider that entering into the LFA was in the best interests of the trust, as it got in the trust estate and increased the value of the trust property. 281 Objection was taken by the Palmer Parties to paragraphs 63, 64 and 68 of this affidavit on the basis that they infringed the opinion rule: s 76 Evidence Act 1995 (Cth). It was submitted that Mr Park had not established that he had the specialised knowledge required to express such opinions as required by s 79 Evidence Act. 282 After Mr Park gave oral evidence to supplement his affidavit evidence concerning his professional experience, including his exposure to litigation funding agreements, the Palmer Parties did not renew their objection, but instead submitted that no weight should be given to Mr Park's evidence "as to reasonableness in relation to entry into the Vannin [LFA]". 283 In the circumstances and having regard to the other evidence which is identified above, it is not necessary to place any weight on Mr Park's evidence to make the finding (as has been done) that the funding premium was reasonable by ordinary commercial standards and that it was comparable to funding terms usually offered in the market at the relevant time. 284 The Palmer Parties also complain that the funding premium is and was disproportionate to the risk assumed by Vannin in funding the Mineralogy claim. 285 However, the Vannin LFA did not apply only to the Mineralogy claim. Under that agreement, Vannin funded multiple claims in addition to the Mineralogy claim, including the Voidable Transactions proceeding. In respect of the latter, the GPLs' evidence (which I accept) was that setting aside the Voidable Transactions was necessary in order for any benefit to accrue to the trust estate as a result of a successful Mineralogy claim. That is, both proceedings had to succeed for Vannin to have any prospect of being repaid. 286 Further, the payment of a funding premium to Vannin was necessary having regard to the high likelihood that the litigation against Mr Palmer and his entities would not be straightforward (as turned out to be the case). Indeed, prior to the consolidation of various matters into the consolidated proceeding, there were at least six proceedings identified by the GPLs, including the Voidable Transactions proceeding and the Mineralogy claim, that were funded in whole or in part by Vannin. These proceedings gave rise to multiple interlocutory disputes and appeals (some leading to judgment, others not), which were also funded by Vannin to the extent they arose after the date of entry into the Vannin LFA. 287 In respect of each proceeding it funded, Vannin agreed not only to advance funds to cover the associated fees and disbursements of the GPLs, solicitors and counsel, but also to be liable for any adverse costs orders and security for costs orders. These obligations were taken on an 'all or nothing basis' as Vannin was entitled to payment only if a proceeding was successful and resulted in a recovery. Even then, Vannin might have suffered a loss if the recovery was insufficient. 288 In short, Vannin assumed all financial risk arising from the uncertainties and vicissitudes of litigation in respect of proceedings that it agreed to fund under the Vannin LFA. Given the complexity and duration of the various proceedings, in particular the Voidable Transactions proceeding and the Mineralogy claim and related appeals, Vannin's potential costs exposure was significant. 289 For these reasons, the complaint that the funding premium is and was disproportionate to the risk assumed by Vannin in funding the Mineralogy claim is not accepted. 290 Another objection by the Palmer Parties arises from the fact that at no time prior to this proceeding did the GPLs approach the Court to seek approval of entry into the Vannin LFA. They submit that this was the case "despite the requirement that such an agreement be approved by either the Court or the Committee of Inspection: s 477(2B) of the Corporations Act" and that the only rational inference is that the GPLs made a deliberate decision not to seek approval prior to entry into the Vannin LFA. 291 As to why an approach was not made to a court to seek approval before entering the Vannin LFA, Mr Park gave this evidence: [U]nder [477(2B)], an agreement longer than three months, you can seek approval of the creditors, the Committee of Inspection or the court. We had constituents on that committee that represented the Commonwealth, Aurizon, the employee group, major unsecured creditors who are fully engaged in the Queensland Nickel liquidation and were capable of proving that agreement. So there was no need from our perspective to actually go to court, but we did what was required under the Corporations Act. … It was prudent to engage with my legal counsel to confirm the course we were taking was what was available to be done under section [477(2B) and] we engaged and we recognised that and we debated it with the committee and put it to a vote. And it was voted on accordingly. 292 As the Committee of Inspection approved Vannin's offer and entry into the Vannin LFA, the consequence was that the GPLs did not need to seek the approval of the Court: see s 477(2B) Corporations Act. 293 Further, any suggestion that a direction should have been obtained by the GPLs from a court prior to entry into the Vannin LFA is misguided. There is a distinction between advice about making and implementing a business or commercial decision (which is not an appropriate matter for directions) and advice about a particular legal issue raised or where there is an attack on the propriety or reasonableness of the decision having regard to applicable legal obligations or standards (which is an appropriate matter for directions): see Preston, in the matter of Sandalwood Properties Ltd [2018] FCA 547 at [54] (Colvin J). 294 In Preston at [53], Colvin J referred to the following statement by Goldberg J in Re Ansett Australia Ltd (No 3) (2002) 115 FCR 409; [2002] FCA 90 as expressing the appropriate approach: [T]he prevailing principle adopted by the courts, when asked by liquidators and administrators to give directions, is to refrain from doing so where the direction sought relates to the making and implementation of a business or commercial decision, either committed specifically to the liquidator or administrator or well within his or her discretion, in circumstances where there is no particular legal issue raised for consideration or attack on the propriety or reasonableness of the decision in respect of which the directions are sought. There must be something more than the making of a business or commercial decision before a court will give directions in relation to, or approving of, the decision. It may be a legal issue of substance or procedure, it may be an issue of power, propriety or reasonableness, but some issue of this nature is required to be raised. It is insufficient to attract an order giving directions that the liquidator or administrator has a feeling of apprehension or unease about the business decision made and wants reassurance. There must be some issue which arises in relation to the decision. A court should not give its imprimatur to a business decision simply to alleviate a liquidator's or administrator's unease. There must be an issue calling for the exercise of legal judgment. 295 For these reasons, the submission that the relief sought by the plaintiffs in this proceeding should not be given because the GPLs did not approach the Court prior to entry into the Vannin LFA is not accepted. 296 The next submission by the Palmer Parties is that QNI breached its fiduciary duty and duty to execute the trust with due care and skill by entering into the Vannin LFA because, had court approval been required, a court would not have approved entry into the Vannin LFA as it gave too much control to Vannin. 297 In support of this submission, the Palmer Parties cited the following cases: (1) Clairs Keeley (a firm) v Treacy (2003) 28 WAR 139; [2003] WASCA 299, which concerned an application for a stay of proceedings for abuse of process; (2) Clairs Keeley (a firm) v Treacy (2004) 29 WAR 479; [2004] WASCA 277, which concerned an application to lift a stay for an abuse of process; (3) Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455, which was a decision concerning applications to set aside notices to produce served on a funded party and subpoenas issued upon litigation funders in respect of their funding arrangement; (4) Elfic Ltd v Macks [2003] 2 Qd R 125; [2001] QCA 219, which was an appeal from a dismissal of an application for declaratory relief that a funding arrangement was void, an order for removal of liquidator, and an injunction restraining the performance of the funding arrangement on the grounds it was an abuse of process; and (5) Young v Thomson (2017) 253 FCR 191; [2017] FCAFC 140, which was an appeal from a dismissal of an application pursuant to s 178 Bankruptcy Act 1966 (Cth) to set aside the decision of a trustee in bankruptcy to enter into a funding agreement and an application under s 179 Bankruptcy Act to remove the trustee. 298 It can be seen that none of the authorities cited by the Palmer Parties were proceedings in which a court was considering whether to approve entry into a litigation funding agreement by a liquidator. 299 The principles relevant to a court's assessment of entry by a liquidator into a proposed litigation funding agreement were summarised by Gleeson J in Robinson, in the matter of Reed Constructions Australia Pty Ltd (in liq) [2017] FCA 594 at [33]–[39]. 300 However, the Palmer Parties have not directed any submissions to these principles. Where there has been no evidence or submissions directed to the factors relevant to a court's assessment of a proposed litigation funding agreement, I cannot be satisfied that the terms of the Vannin LFA would not have been approved (to the extent that this issue needs to be addressed having regard to the approval of the Committee of Inspection). 301 Further, for the reasons already given, the Palmer Parties failed to demonstrate that there was a need for QNI (or the GPLs) to obtain the approval of the Court prior to entry into the Vannin LFA in any event. 302 It follows that this submission must fail for these reasons. 303 Another submission made by the Palmer Parties is that the Vannin LFA is void insofar as it purported to transfer trust property. They submit that a promise to share the proceeds which may be realised through pending litigation is properly characterised as a sale or assignment of property, and cite Elfic at [84]–[88]. 304 The Palmer Parties submit that the Vannin LFA requires QNI to dispose of a share of the proceeds of the Mineralogy claim. They rely on the following statement by Moshinsky J in Brimson at [49]: There has, until recently, been a difference of opinion as to whether, in such circumstances, the liquidator's power to sell the "property of the company" in s 477(2)(c) of the Corporations Act permits him or her to sell trust assets: see Re Aced Kang Investments Pty Ltd (in liq) [2017] FCA 476 at [12]. It is now settled that the liquidator of an insolvent (former) corporate trustee cannot sell the trust's property without order of the Court, or by appointment of a receiver over the trust assets: see Jones v Matrix at [44] per Allsop CJ (Farrell J agreeing at [196]); Re Stansfield DIY Wealth Pty Ltd (in liq) (2014) 103 ACSR 401; 291 FLR 17; [2014] NSWSC 1484 at [10]; Apostolou v VA Corporation of Aust Pty Ltd [2011] FCAFC 103 at [45]. The rationale for this position is that, on a proper understanding, the trust assets are not the "property of the company", but are instead trust property in which the corporate trustee has a proprietary interest by way of lien or charge to secure its right of exoneration: see Jones v Matrix at [89]. Thus, to the extent that the subject of a sale is the whole of a trust asset, rather than merely the company's lien or charge in respect of that asset, it is not authorised by the power of sale in s 477(2)(c). 305 However, the Vannin LFA did not purport to transfer trust property to Vannin. Nor did it promise to share the proceeds of any litigation with Vannin. Instead, by the Vannin LFA, QNI promised to pay an amount to be calculated by reference to other factors. Depending on the circumstances, the funding premium would be an amount equal to the greater of between 15% to 35% of the proceeds or an amount calculated by reference to certain costs. 306 For these reasons, the claim by the Palmer Parties that it was improper for QNI and the GPLs to enter into the Vannin LFA fails. 307 Insofar as this claim is relied upon to assert that the liabilities arising under the Vannin LFA are not expenses properly or reasonably incurred by QNI and are not permitted to be indemnified out of trust property, this assertion fails for these reasons. 308 In terms of this claim being an objection to the orders sought by the plaintiffs, it is rejected. 309 It follows that the declaration sought by the Palmer Parties in [2] of the prayer for relief will not be made insofar as it is premised on this claim. WHETHER BREACH OF TRUST BY QNI 310 The alleged breaches of trust are premised on the trust being the Bank Account Trust or the Chose in Action Trust, which, for the reasons explained above, means that these claims fail. The first alleged breach of trust 311 Leaving to one side the issue of the characterisation of the trust, this claim is made in [50] and [51] of the amended statement of claim. 312 In reliance on facts pleaded in [35] to [41] of the amended statement of claim to assert a breach of trust, it is alleged that QNI failed to execute the Bank Account Trust or the Chose in Action Trust with reasonable care and diligence and, further and alternatively, failed to act in the best interests of the beneficiaries, Resources and Metals. 313 As to the facts relied upon to allege this breach of trust: (1) the allegation that the SPLs were authorised by the appointment order to institute or, following its institution, conduct the Mineralogy claim on behalf of QNI has not been established, for the reasons already given; (2) the allegation that "QNI and/or the GPLs" ought to have brought an application "to extend the powers of the SPLs so as to enable the SPLs to institute and/or conduct the Mineralogy [claim] on behalf of QNI" is rejected, for the reasons already given; (3) the allegation that QNI via the GPLs did not "avail itself of funding secured from the Commonwealth of Australia" also fails because no such funding was available. However, even if such funding could have been secured, this does not lead to the result that the GPL Liabilities would not have been incurred in any event and the evidence did not establish otherwise. 314 The amended statement of claim defines GPL Liabilities as being in the total amount of $15,413,286.94, by reference to a spreadsheet dated 15 September 2021. It asserts that these liabilities were incurred as a consequence of, in effect, the pursuit of the Mineralogy proceeding. 315 The Palmer Parties also claim a breach of trust on the basis that the GPL Liabilities comprised expenditure for services which substantially duplicated services performed or obtained by the SPLs in the SPL proceeding and were not necessary to recover the judgment sum. 316 However, in addition to the reasons already provided as to why the GPL Liabilities were necessary to recover the judgment sum, this claim must fail for the following reasons. 317 First, the Palmer Parties' assertion that $15.4 million was spent by the GPLs on advancing the Mineralogy claim is incorrect. The spreadsheet identifies all of the costs of the liquidation generally, and not costs spent on pursuing the Mineralogy claim. 318 Importantly, for the purposes of the claim for breach of trust: (1) out of the legal expenses incurred, only $4,169,749.71 is attributable to the Mineralogy claim; (2) approximately 25–50% of the work done by the GPLs (and so, the remuneration payable to the GPLs) is attributable to the Mineralogy claim, which equates to somewhere in the range of approximately $1.29 million to $2.58 million. 319 Second, had the SPLs conducted the Mineralogy proceeding, they would also have incurred expenditure in doing so. But there is no evidence that the overall costs of the SPLs in taking this course would have been less than those incurred by the GPLs in pursuing the Mineralogy claim, even assuming that the Commonwealth had been willing to fund the pursuit by the SPLs of the Mineralogy claim and the SPLs had been willing to do so. 320 Third, as addressed earlier in these reasons, there was not a significant overlap between the claims brought by QNI through the SPLs and the Mineralogy claim. This means that it is unlikely that the services performed or obtained by the GPLs to pursue the Mineralogy claim would have "substantially duplicated services performed or obtained by the SPLs" in the SPL proceeding. And the evidence did not demonstrate otherwise. 321 Fourth, duplication between the legal work at the trial of the consolidated proceeding was kept to a minimum. This was achieved through steps such as the following: (1) the GPLs and SPLs jointly instructing counsel, who appeared for both sets of liquidators during hearings; (2) after the settlement of the SPLs' claims, QNI continuing to retain senior counsel who had primarily been briefed by the SPLs in relation to the issue of insolvency, so as to not require senior counsel retained by the GPLs to become familiar with evidence in relation to insolvency; (3) the GPLs relying on the work done by the SPLs to show that QNI was insolvent and was a trustee, and did not duplicate that work. 322 The Palmer Parties also claim a breach of trust on the basis that the funding premium was agreed to secure funding for services which substantially duplicated services performed or obtained by the SPLs in the SPL proceeding and was not necessary to recover the judgment sum. 323 However, in addition to the reasons already provided as to why the entry into the Vannin LFA (and the promise to pay the funding premium) was necessary to recover the judgment sum, this claim must fail for the following reasons. 324 First, at the time that the Vannin LFA was entered and a promise made to pay the funding premium, the SPL proceeding was not on foot. The fact that the SPL proceeding was later commenced, and there was an overlap of claims and services performed or obtained by the SPLs in the SPL proceeding, does not mean that entry into the Vannin LFA is transformed into a breach of trust by QNI. 325 Second, for the reasons explained above, there was not a substantial duplication of services performed or obtained as between the two sets of proceedings in any event. 326 It is alleged by the Palmer Parties that Resources and Metals have suffered loss and damage by reason of the alleged breaches of the Bank Account Trust or alternatively the Chose in Action Trust, being the diminution in the value of the property of the Bank Account Trust or alternatively the Chose in Action Trust by reason of the Mineralogy Claim Expenses and Liabilities. 327 However, given that the pursuit of the Mineralogy claim has resulted in an objective benefit to the trust estate of potentially as much as $97 million (net of the funding premium, but not costs) and that the evidence demonstrates that, without the GPLs pursuing the Mineralogy claim with the benefit of the Vannin LFA, the loan to Mineralogy would never have been recovered, the alleged loss and damage was not established. As the same allegation is made in connection with the second and third alleged breach of trust, the same conclusion is reached in connection with those claims. 328 For these reasons, the claim by the Palmer Parties for the first alleged breach of trust, as referred to in [50]–[51] of the amended statement of claim, fails. 329 This has the consequence that the declaration sought by the Palmer Parties in [2] of the prayer for relief, to the extent that it is premised on this claimed breach of trust, will not be made. The second alleged breach of trust 330 The second alleged breach of trust is premised on three contentions in [52]–[54] of the amended statement of claim, namely that: (1) QNI issued and conducted the Mineralogy Claim for the purpose of exercising a right of exoneration as trustee; (2) the right of exoneration by QNI as trustee was exercisable only to pay creditors of the Bank Account Trust or Chose in Action Trust; and (3) the creditors in respect of whom QNI issued and pursued the Mineralogy claim for the purpose of exercising its right of exoneration were not creditors of the Bank Account Trust or Chose in Action Trust. 331 This claim must fail because, for the reasons already identified, the trust property over which QNI was trustee was not confined to the funds held in the joint venture bank account. There was no Bank Account Trust or Chose in Action Trust. 332 It follows that the allegation by the Palmer Parties that QNI had no trust creditors at the date of filing of the Mineralogy Claim necessarily fails. 333 Indeed, the evidence established that there were such trust creditors. In particular, the evidence established the existence of trust creditors whose debts arose prior to the administration of QNI, and whose debts remain unpaid. It was (and is) proper for QNI (by the GPLs) to exercise its right of indemnity (by way of exoneration) in relation to these trust creditors. Far from being a breach of trust, pursuit of the Mineralogy claim was the appropriate course for QNI to take, having regard to its ongoing obligations as former trustee. 334 For these reasons, the claim by the Palmer Parties for the second alleged breach of trust, as referred to in [52]–[57] of the amended statement of claim, fails. 335 This has the consequence that the declaration sought by the Palmer Parties in [2] of the prayer for relief, to the extent that it is premised on this claimed breach of trust, will not be made. The third alleged breach of trust 336 The third alleged breach of trust is premised on certain key contentions in [58(d)], [58(f)] and [59] of the amended statement of claim, namely (in summary) that: (1) in the consolidated proceeding, Resources and Metals pleaded and admitted that they were parties to contracts entered into by QNI with suppliers with the consequence that any such creditors could proceed directly against Resources and Metals; (2) pursuant to the settlement deed, provision was made for payment of all known creditors of QNI; (3) it was therefore imprudent for QNI through the GPLs to conduct, or continue to conduct, the Mineralogy claim and incur the Mineralogy Claim Expenses and Liabilities because the claims of QNI's creditors had been "adequately addressed" by the SPL proceeding and to the extent that they had not been, the monetary amount owing to them was "de minimis" because the value of any potential creditors was approximately $6.6 million. 337 As to this last contention, even if the amount of potential liabilities is $6.6 million, this is not, on any view, "de minimis". In any event, the true value of potential liabilities could be as much as $215 million. 338 Under the guise of advancing this claim for alleged breach of trust, the Palmer Parties made additional submissions and sought to adduce evidence in connection with particular creditors. 339 It was submitted by the Palmer Parties that, in relation to those creditors of the joint venture which have subsequently been identified or relied on by the GPLs to justify the Mineralogy claim, they ought not properly be regarded as creditors of QNI. They gave only one example, being that "Pipeliners" had made an election to sue the JVCs and the judgment in its favour had been paid. 340 The reference to "Pipeliners" is a reference to North Queensland Pipeline No 1 Pty Ltd and North Queensland Pipeline No 2 Pty Ltd which, on 7 July 2021, submitted an invoice to QNI in the amount of $54,334,797.17. 341 However, even if these companies are not creditors of QNI, the estimated liabilities of QNI exceed $137 million which is not, on any view, "de minimis". 342 In relation to potential debts owed by QNI to particular creditors, the Palmer Parties sought to adduce evidence in relation to certain debts of the following kind (for example): The Metallica debt was assigned to Closeridge Pty Ltd for a payment of $22,000.00 and QNI was released from further liability on or about 19 December 2018. There is no further amount owing to Metallica. 343 This style of evidence was given in relation to the debts identified in a series of paragraphs contained in the affidavit of Mr Daren Wolfe affirmed on 25 June 2022 (being those identified in items 6 and 9 of the plaintiffs' objections). Mr Wolfe was the Chief Financial Officer of QNI until 11 March 2016. This evidence was objected to by the plaintiffs, and counsel for the Palmer Parties were unable to explain its relevance. 344 On the assumption that this evidence is relevant, the assertions by Mr Wolfe that there had been an assignment and a release of particular debts were or included statements of opinion, expressed in the absence of any other evidence, and were inadmissible by reason of, at the least, s 76 Evidence Act. The additional expressed opinions that no further amount was owing to each identified creditor stemmed from the earlier inadmissible evidence that there had been an assignment and a release, with the consequence that this evidence was also inadmissible. These paragraphs were struck out. The Palmer Parties did not seek to adduce further evidence to demonstrate that there had been an assignment and release of each of these debts. 345 It was next submitted by the Palmer Parties that QNI could have, but did not, pursue alternative means of satisfying any remaining creditors (other than by litigating). The example given was that, by their defence in the consolidated proceeding, the JVCs conceded they were liable for the majority of Schedule E (pre-appointment) creditors. It was submitted that QNI could have sought and obtained an undertaking from the JVCs to pay any such creditors which replicated the concession in that defence. 346 However, dealing with the only example provided by the Palmer Parties, a concession by Resources and Metals that they were liable for the majority, but not all, creditors has the obvious consequence that there were debts for which they did not accept liability. And the fact that QNI could have sought an undertaking from Resources and Metals to pay the debts of those creditors for which they did accept responsibility does not mean that any such undertaking would have been given (and the evidence did not establish that it would have been) or that Resources and Metals would have been in a position to discharge those debts (of which, again, there was no evidence). 347 It was next submitted by the Palmer Parties that QNI continued with the Mineralogy claim thereby exposing the trust property to being significantly diminished by reason of the terms of the Vannin LFA, without, at that stage, taking proper steps to ascertain the true level of any remaining creditors that might be outstanding. 348 However, such a submission does not give proper attention to the situation in which QNI (and the GPLs) found themselves. The settlement deed was entered during the course of the trial of the claims being advanced by QNI through the GPLs. The settlement deed did not, of course, settle those claims. Yet somehow it is said that it is a breach of trust for QNI to continue with the trial instead of somehow pausing or abandoning it, so as to ascertain the "true level of [debts of] any remaining creditors", before forming a view as to whether to continue with the Mineralogy claim. Such a submission ignores the fact that a significant proportion of the Mineralogy Claim Expenses and Liabilities had been incurred by the date of the settlement deed. It fails to pay any regard to QNI's contractual obligations under the Vannin LFA. It also fails to have regard to the limitation periods which had arguably expired or were about to expire. It does not grapple with the need to persist with the Voidable Transactions proceeding and the Martino proceeding in any event. It also assumes that the Supreme Court would have permitted QNI to adjourn the trial part-heard to enable such an assessment to be made (which assumption I am not prepared to make having regard to the reasons in the stay decision, as set out below) or that, if the claims then being brought were discontinued, that would not prejudice them being brought again at a future date. 349 A similar submission was advanced in the stay application before Mullins J: see [12] of the stay decision. At [13] of the stay decision, her Honour stated that: The timing of the defendants' application for a stay is most relevant. It was made on day 14 of the trial and almost at the conclusion of the evidence in the plaintiffs' case, apart from the evidence of Mr Parbery and Mr Gothard which was deferred to the conclusion of the evidence in the defendants' case, when it was anticipated that the defendants' accounting expert would be in a position also to give evidence. Ms Trenfield deposes in paragraphs 5 and 6 of her affidavit that the GPLs have not made a further general call for proofs of debt, as that is only done when it is necessary for the liquidator to confirm the identity of all creditors or to enable a dividend to be declared. The GPLs have not adjudicated on any proofs of debt, other than for the purposes of deciding upon the eligibility of creditors to vote at the meeting of creditors or as requested by creditors. Ms Trenfield deposes in paragraph 16 of her affidavit that the GPLs are not presently funded to conduct any adjudication in respect of the proofs of debt lodged by any of the creditors. 350 At [21]–[22] of the stay decision, her Honour stated that: Even though the defendants are critical of the GPLs' conduct of this proceeding and the liquidation, the fact remains that it has been a complex administration and significant costs have been incurred in the course of the administration, including this proceeding and other litigation. The fact that the proceeding has been attenuated, because of the defendants' settlement with the SPL does not deny the GPLs the right to pursue their claims to recover loans from the seventh defendant alleged to belong to QNI to enable their costs and expenses, any outstanding creditors and the funding premium payable to Vannin to be met. The fact that the potential maximum recovery is greater than the likely payments to be made to meet all the costs and expenses and claims payable by the GPLs is due to the quantum of the transactions between QNI and the seventh defendant that are challenged by the GPLs. The defendants do not argue that the GPLs' claims in respect of the Minerology loans are unarguable. The effect of the defendants' submission that there should be a stay of the proceeding, so that the GPLs should quantify all the outstanding claims to be met in the liquidation, in order to justify seeking to recover the Minerology loans, amounts to the defendants' dictating to the GPLs as to how and when they should perform their duty as liquidators. The logical consequence of the defendants' approach is that if the potential recovery of assets far exceeds the outstanding claims in the liquidation, the GPLs should not continue with the proceeding to recover the Minerology loans. There is no suggestion by the defendants, however, as to how all the costs and expenses of and claims in the liquidation should then be met. … 351 It was next submitted by the Palmer Parties that the beneficiaries of the trust did not wish to pursue the Mineralogy claim and QNI failed to have regard to this position. However, the fact that the beneficiaries did not wish QNI to pursue this claim did not abrogate QNI's entitlement to be indemnified from the trust property in relation to liabilities which it incurred while it was Manager of the joint venture, which property included the chose in action against Mineralogy. This conclusion is consistent with the reasoning in Matrix Partners at [35] (Allsop CJ): Subject to the terms of the trust, the trustee is entitled to be indemnified against debts and liabilities incurred in the proper execution of its duties and powers under the trust out of the assets of the trust. Subject to the terms of the trust, such right of indemnity has priority over the claims of the beneficiaries, and is secured by a lien. Such indemnity may arise for satisfaction before or after the trustee has paid the debt or liability in question. If the trustee has used its own funds to pay the debt or meet the liability, the entitlement of access to the trust assets is a personal asset of the trustee, unattended by equitable obligation arising from the trust. If the trustee has not paid the debt, it has a right of exoneration from the trust assets; that is a right to use the trust assets to exonerate itself from liability for the debt or liability that has been incurred in carrying out the duties or functions of trustee. In either case, the trustee has a lien over the trust assets for the right of indemnity. The right of indemnity is a beneficial interest in the trust property that will be preferred to any beneficial interest of the cestuis que trust in the trust assets. 352 At [48]–[49] of Matrix Partners, Allsop CJ continued: … The right of the trustee to reach into the trust assets is not a personal right devoid of connection with the purposes and working of the trust; it inheres in, and arises out of, the trust relationship that exists for a purpose – to pay the creditors and thus to exonerate the trustee. It is without doubt a right of the trustee (and in that sense personal), but one that is constrained in its content by its purpose – the payment of trust creditors. In Re Johnson at 552, Sir George Jessel MR with his customary clarity and unequivocality expressed the character of the right with its attendant obligation in equity to use the funds produced by the exercise of the right of exoneration to pay the creditors of the trust. His Lordship said: I understand the doctrine to be this that where a trustee is authorised by a testator, or by a settlor … to carry on a business with certain funds which he gives to the trustee for that purpose, the creditor who trusts the executor has a right to say, "I had the personal liability of the man I trusted, and I have also a right to be put in his place against the assets; that is, I have a right to the benefit of indemnity or lien which he has against the assets devoted to the purposes of the trade." The first right is his general right by contract, because he trusted the trustee or executor: he has a personal right to sue him and to get judgment and make him a bankrupt. The second right is a mere corollary to those numerous cases in Equity in which persons are allowed to follow trust assets. The trust assets having been devoted to carrying on the trade, it would not be right that the cestui que trust should get the benefit of the trade without paying the liabilities; therefore the Court says to him, You shall not set up a trustee who may be a man of straw, and make him a bankrupt to avoid the responsibility of the assets for carrying on the trade: the Court puts the creditor, so to speak, as I understand it, in the place of the trustee…. At the core of what Jessel MR said was the proposition that the right (in a sense personal in that it was distinct from and superior to the interests of cestuis que trust) of the trustee to use trust assets to exonerate itself arises to meet a trust liability, and can be exercised only for that purpose. The property in the hands of the trustee remains trust property, but subject to the trustee's proprietary interest that exists for the purpose of paying the creditors. The property is not held on trust for the beneficiaries alone; the proprietary interest of the trustee is preferential to the interests of the beneficiaries, but that interest of the trustee is shaped by its purpose and origins in the trust relationship – to pay trust creditors in order to exonerate itself from those debts. The character and limits of the interest are shaped by its purpose and origins. The obligation of the trustee to use the trust assets to pay trust creditors is reflected by, and provides the foundation for, the creditors' right of subrogation. 353 For these reasons, the claim by the Palmer Parties for the third alleged breach of trust, as referred to in [58]–[61] of the amended statement of claim, fails. 354 This has the consequence that the declaration sought by the Palmer Parties in [2] of the prayer for relief, to the extent that it is premised on this claimed breach of trust, will not be made. IMPACT OF SETTLEMENT DEED ON RELIEF SOUGHT 355 Each side relies upon the settlement deed. 356 The plaintiffs rely upon the settlement deed to contend that the Palmer Parties released QNI from claims premised upon the proposition that the expenses incurred in advancing the Mineralogy claim were not properly or reasonably incurred. For the reasons given below, the plaintiffs' contention is accepted. 357 The Palmer Parties rely upon the settlement deed to contend that QNI released the Palmer Parties from all SPL Claims, which they say included any claim advanced by QNI premised on a right of indemnity or exoneration. They contend that the relief sought by the plaintiffs in this proceeding is premised on the Mineralogy Claim Expenses and Liabilities having been properly incurred in exercise of a right of indemnity and exoneration by QNI and that the grant of the relief sought on any such basis is barred by clause 4.1 of the settlement deed. However, for the reasons given below, the settlement deed does not prevent the plaintiffs from seeking the relief which is sought by them in this proceeding. Whether claims by Palmer Parties have been released 358 By cl 6.1 of the settlement deed, QNI was released from "the QN Party Claims". In the settlement deed, QNI was described as "QN". 359 QN Party Claims were defined in the settlement deed to mean: a claim by a QN Party [which relevantly included each of the Palmer Parties] against or in respect of QN, the SPL and the Commonwealth (whether all or any of them and for the avoidance of doubt includes any Claim in respect of the Mareva Undertaking). 360 Claims was in turn relevantly defined to mean: all existing or future claims, counter claims, actions or demands, rights to claim, appeals or reviews, claims for interest or claims for costs (including any costs orders) whether arising at equity or law or through subrogation or any other means and whether known or unknown at the time this Deed was entered into and includes any proceeding in a court and any action, subpoena, warrant, summons, investigation or legal process of any kind or type whatsoever and which arise out of or in relation to the QN Proceeding. … (emphasis added) 361 The QN Proceeding was defined to mean Supreme Court of Queensland Proceeding BS6593/17 – being the consolidated proceeding, the trial of which was part heard at the time of entry into the settlement deed. 362 The contention that the expenses incurred by QNI in bringing, and continuing, the consolidated proceeding were not reasonably incurred is a claim in relation to that proceeding. It therefore falls within the scope of the definition of Claims within the settlement deed. 363 As the QN Parties included the Palmer Parties, the Palmer Parties thereby released QNI from claims premised upon the proposition that the expenses incurred in advancing the Mineralogy proceeding were not properly or reasonably incurred. 364 Such a release was granted in circumstances where the relevant background facts, as known to the Palmer Parties when they executed the settlement deed, were that: (1) QNI by the GPLs had brought the Mineralogy proceeding, and continued to prosecute it, notwithstanding the appointment of the SPLs; (2) QNI had engaged separate legal representation to the SPLs; (3) QNI had entered the Vannin LFA and obtained litigation funding to pursue the Mineralogy claim; (4) the pursuit of the Mineralogy claim had been the subject of complex and protracted litigation; (5) QNI and the GPLs were therefore likely to have incurred significant expenses to bring the Mineralogy claim to trial. 365 For these reasons, the settlement deed provides a complete answer and an additional reason to refuse the claim by the Palmer Parties for the declaration sought in [2] of the prayer for relief in the amended statement of claim, which relief is premised on acceptance of its claim that QNI is not entitled to indemnity from the judgment sum for the Mineralogy Claim Expenses and Liabilities, including the claims by the Palmer Parties of breach of trust: see [23], [24(d)], [40], [41], [45], [51], [55], [57] and [61] amended statement of claim. 366 Further, by way of counterclaim in the consolidated proceeding (which was brought also by QNS), Metals and Resources alleged that: (1) QNI had an obligation to transfer all property (including funds from the sale of nickel products) to QNS upon the appointment of QNS as manager under the JVA; (2) QNI had no right to assert a lien or charge over that property, because such a right was excluded by the terms of the JVA and because of various challenges as to whether liabilities were properly incurred; (3) in breach of trust, QNI retained the property and did not transfer it to QNS, or in the alternative, QNI retained property without quantifying the right of indemnity that it had; and (4) they were entitled to orders requiring QNI to transfer the property that it had to QNS. 367 Accordingly, the claims in this proceeding for the transfer of the trust property to QNS, or premised upon a failure to comply with that alleged obligation, are claims that were either expressly advanced in, or arise out of, or are in relation to, the consolidated proceeding. Having regard to the terms of the settlement deed set out above, those claims have been released such that the claim for the order in [3] of the prayer for relief in the amended statement of claim is barred. 368 For these reasons, the settlement deed provides a complete answer and an additional reason to refuse the claim by the Palmer Parties for the order sought in [3] of the prayer for relief in the amended statement of claim. Whether settlement deed prevents plaintiffs from obtaining relief 369 The Palmer Parties submit that, in executing the settlement deed, QNI released the Palmer Parties from all "SPL Claims", which were defined by the settlement deed in a manner which included claims by QNI to the trust property premised on a right of indemnity or exoneration. 370 The Palmer Parties submit that: By cl 4.1, QNI: (a) released the QN Parties (being the Palmer Parties) from the "SPL Claims"; (b) undertook not to commence or maintain any Claim or action against the QN Parties relating to the QN Party Claims, and (c) undertook to ensure that any person over whom they had responsibility or control did not commence or maintain any Claim or action against the QN Parties or their Associates relating to the SPL Claims. The "SPL Claims" were defined to mean a Claim by QN, the SPL either by himself or on behalf of QN (whether jointly or alone) against or in respect of a QN Party, other than the GPL Claims. 371 The Palmer Parties submit that the SPL Claims as defined in the settlement deed which were the subject of the explicit release in clause 4.1 included those claims being prosecuted by the SPLs on behalf of QNI in the QN Proceeding (as defined). They submit that those claims included claims by QNI that it had rights of indemnity and exoneration as trustee over assets held by it (including monies in the joint venture bank account). 372 For the following reasons, the settlement deed does not prevent the plaintiffs from bringing this proceeding. 373 First, the application brought by the plaintiffs in this proceeding (including by the GPLs, who were not parties to the settlement deed) is not a claim against the Palmer Parties within the meaning of clause 4.1(b) and 4.1(c) of the settlement deed. It is an application for judicial advice, and is a proceeding in which the Palmer Parties are being heard as interested persons but against whom no relief is sought or claim is made. 374 Second, the orders sought by the plaintiffs in this proceeding do not fall within the SPL Claims, as defined in the settlement deed. SPL Claims was defined to include a Claim by QNI against or in respect of a QN Party, other than the GPL Claims. 375 The particular SPL Claims which are relied upon by the Palmer Parties to assert that the plaintiffs cannot bring this proceeding are contained in the second further amended statement of claim filed in the consolidated proceeding as follows: (1) Part J – in this section, QNI claimed that it was contractually entitled to indemnity or exoneration from the JVCs in relation to the debt claimed by the Commonwealth in the amount of $66,862,313.99. No such claim is made by the plaintiffs in this proceeding; (2) Part K – in this section, QNI pleaded, as a material fact, that it was entitled to an indemnity and exoneration out of all of the trust assets QNI held on trust in respect of all of the unpaid liabilities reasonably incurred by QNI in acting as trustee. It also pleaded that the JVCs were indebted to QNI for the "Expenditure Amount" which totalled $204,007,832.07. By the prayer for relief, QNI claimed payment of that debt from each of Resources and Metals, and also sought a declaration that the Expenditure Amount is secured by an equitable lien over the trust assets. No such claims are made by the plaintiffs in this proceeding whether against or in respect of the Palmer Parties. Further, the fact that a material fact was pleaded by QNI in the SPL proceeding which refers to QNI's entitlement to indemnity or exoneration from the trust assets does not mean that, by bringing an application for judicial advice in connection with different expenditure, and which is also premised on an entitlement to indemnity, this proceeding is an SPL Claim within the meaning of the settlement deed; (3) Part L – in this section, QNI pleaded as a material fact that it had a right of indemnity or exoneration arising from its position as trustee which was secured in the form of an equitable lien over the trust assets. It then pleaded that this lien secured particular employment entitlements which QNI had incurred and particular contractual obligations which QNI had incurred. Declarations were sought in the prayer for relief that identified debts and amounts were secured by an equitable lien. No such claims are made by the plaintiffs in this proceeding whether against or in respect of the Palmer Parties. Further, the fact that a material fact was pleaded by QNI in the SPL proceeding which refers to QNI's entitlement to indemnity or exoneration from the trust assets does not mean that, by bringing an application for judicial advice in connection with different debts and amounts, and which is also premised on an entitlement to indemnity, this proceeding is an SPL Claim within the meaning of the settlement deed. 376 Third, it is likely to be contrary to public policy for clause 4.1 to preclude a trustee from approaching a court for judicial advice, even if, contrary to the above reasons, that clause has that effect: see WLD Practice Holdings Pty Ltd, in respect of the WLD Practice Holdings Trust v Sara Stockham [2020] NSWSC 395 at [24]–[31] (Sackar J). 377 It follows that, even if QNI released the Palmer Parties from any claim which was premised on its entitlement to indemnity as trustee over the trust assets, this was ineffective to preclude QNI from approaching this Court for judicial advice. WHETHER PALMER PARTIES ENTITLED TO RELIEF SOUGHT First declaration sought 378 The first declaration sought is that QNI holds the Trust Property, including the judgment sum, on constructive trust for Resources and Metals according to their respective interests under the JVA and subject to the right of QNI to indemnity or exoneration from the Trust Property for expenses properly and reasonably incurred in its capacity as trustee, such trust having arisen on or with effect from 3 March 2016. 379 Trust Property is not defined in the proposed orders but it was defined in the amended statement of claim as being "the chose in action against each bank and the funds comprising the JV Bank Accounts [which] were held on trust for the benefit of the JVCs", that is, the Bank Account Trust or Chose in Action Trust. 380 For the reasons already given, a declaration would not be made by reference to such a trust. 381 Further, neither QNI nor the GPLs dispute that the moneys held by QNI constitutes trust property (in the sense that they do not dispute that, subject to the payments which they propose to make as identified in their application, any surplus is trust property and should be paid to the new trustee). They also agree with the Palmer Parties that QNI has a right to indemnity or exoneration from that trust property for expenses properly and reasonably incurred in its capacity as trustee. 382 The real issues in dispute between the parties are whether the expenses sought to be paid by the plaintiffs from the trust property were properly and reasonably incurred, and whether the trust property should be transferred to QNS as replacement trustee prior to the payment of those expenses. However, those disputes are relevant to other relief sought by the Palmer Parties and have no bearing on the declaration sought in [1] of the prayer for relief. 383 It follows then that the first declaration sought by the Palmer Parties has no utility and will not be made for this reason. Second declaration sought 384 The second declaration sought is to the effect that the right of QNI to indemnity or exoneration from Trust Property does not attach to the GPL Liabilities and the funding premium on the basis that they were not properly or reasonably incurred as trustee and/or were incurred in breach of trust. 385 As already observed, Trust Property was defined in the amended statement of claim as being, in effect, the Bank Account Trust or Chose in Action Trust. 386 For the reasons already given, a declaration would not be made by reference to such a trust. 387 Further, for the reasons already given, the claims made by the Palmer Parties in support of this claimed declaration have failed and therefore there is no basis for this declaration to be made. 388 Finally, an additional reason to refuse to make this declaration is because the claim for this relief was released by the settlement deed. Order sought that trust property be transferred to QNS 389 The Palmer Parties also seek an order in these terms: [Subject] to [QNS] not taking steps which would destroy, diminish or otherwise jeopardise any residual right of security held by QNI in the [trust property], QNI transfer the [trust property, including the judgment sum] to [QNS] forthwith, to be held on trust by [QNS] for [Metals] and [Resources] according to their respective interests under the JVA. 390 The order sought will not be made because, for the reasons given above, QNI is not obliged to transfer the trust property to QNS at present. 391 An additional reason that the order will not be made is that, having regard to the apparent (although not certain) execution of a deed which contained provisions removing QNS as trustee and then the reversal of that purported removal by the apparent (although not certain) execution of a further deed, QNS might not be the current Manager and trustee. 392 Further, even if QNS is the current trustee, such conduct demonstrates that, even if an order is made against QNS in the terms sought, there is a strong prospect that steps will be taken by the JVCs and Mr Palmer to undermine the order, whether that be by replacing QNS as trustee or causing QNS to distribute the trust property in accordance with the third purported deed notwithstanding the terms of the order. 393 Finally, an additional reason to refuse to make this order is because the claim for the transfer of the trust property to QNS was released by the settlement deed. WHETHER DIRECTIONS SOUGHT BY PLAINTIFFS SHOULD BE MADE Proposed order 2 394 The first direction sought is that the GPLs are justified in causing QNI to refuse to pay the judgment sum to QNS until such time as it is established that QNI holds a surplus of trust assets over trust liabilities (both present and future), including the GPLs' costs, expenses and remuneration: proposed order 2. 395 For the reasons given above and in circumstances where the Palmer Parties contend that QNS is entitled to have the whole of the judgment sum (and other trust property) paid to it immediately, I am satisfied that that this is an appropriate case for the direction in proposed order 2 to be made as sought by the plaintiffs. That is, I am persuaded of the propriety of the course of action which is contained in proposed order 2 and that advice should be given to the GPLs and to QNI to the effect that they are justified in proceeding with that course of action. Proposed orders 3(a) and 3(b) 396 The next direction sought is that the GPLs would be justified, in paying from the funds of QNI, the liabilities that it has incurred under the Vannin LFA: proposed order 3(a). 397 A further direction which is sought is that the GPLs would be justified in paying their approved remuneration from the funds of QNI: proposed order 3(b). 398 In this case, the uncontested evidence is that QNI did not carry on any business other than the business under the JVA. This means that its only expenses were Joint Venture Expenses, being trust liabilities. 399 Accordingly, the remuneration and expenses, including the liabilities to Vannin under the Vannin LFA, are able to be paid from the trust property. 400 There is no suggestion that there are any expenses which have been incurred that are not in fact related to the winding up. 401 Further, Ms Trenfield gave unchallenged evidence that she is not aware of any reason why the directions should not be given. 402 As to the proposed order 3(a) and for the reasons already given, the liabilities incurred by QNI under the Vannin LFA were properly and reasonably incurred in relation to the winding up. 403 As to the proposed order 3(b), which relates to the remuneration payable to the GPLs, it is relevant to observe that: (1) the remuneration which is the subject of the direction either has been or will be approved by the Committee of Inspection in accordance with Part 3 of the Insolvency Practice Schedule; (2) although the Palmer Parties seek to challenge the GPL Liabilities in their entirety on the basis that they are associated with the Mineralogy proceeding, the quantum of the GPL Liabilities which related to the conduct of the Mineralogy proceeding is only a proportion of the GPL Liabilities. 404 Further and for the reasons already given, the GPL Liabilities were properly and reasonably incurred in relation to the winding up. 405 In addition to their various objections dealt with earlier these reasons, the Palmer Parties also oppose advice being given as sought on the basis that the plaintiffs have provided the Court with "incomplete information, including inadequate and incomplete evidence regarding the cost of funding obtained and available to [QNI] through the SPLs". 406 Having regard to the only example which is provided in the written submissions, it was not explained by the Palmer Parties how the failure by the plaintiffs to adduce such evidence has the consequence, if it is the case, that there has not been full and fair disclosure of all relevant facts and circumstances, which is the relevant question in relation to an application brought under s 90-15 Insolvency Practice Schedule: see Re Ansett at [44], which was cited with approval by Middleton J in Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 7) [2020] FCA 1182 at [29]. 407 During the hearing, senior counsel for the Palmer Parties sought to identify other documents which were not in evidence, but without developing a submission that the documents were both relevant (and why that was) and required to be disclosed to achieve full and fair disclosure. 408 The plaintiffs relied upon three affidavits of Mr Park and five affidavits of Ms Trenfield. Those affidavits were detailed and comprehensive, and the content of these affidavits was not, for the most part, the subject of any challenge under cross-examination (with both liquidators being made available for cross-examination). 409 The requirement that there be full and fair disclosure does not require the plaintiffs to adduce every document in their possession or control in connection with the advice sought, however remote the relevance to the advice being sought: see generally ASIC v Groundhog Developments Pty Ltd & Ors [2011] QSC 263 at [27] (Dalton J, as her Honour then was). 410 For these reasons and where the propriety of the proposed payment to Vannin and of remuneration to the GPLs has been challenged by the Palmer Parties, I am satisfied that this is an appropriate case for the direction in proposed orders 3(a) and 3(b) to be made as sought by the plaintiffs. 411 That is, I am persuaded of the propriety of the course of action which is contained in proposed orders 3(a) and 3(b) and that advice should be given to the GPLs and to QNI to the effect that they are justified in proceeding with the course of action referred to in those proposed orders. Proposed order 3(d) 412 The final direction sought is that the GPLs would be justified in paying from the funds of QNI in respect of any proof of debt of a creditor which has been admitted in the circumstances identified in the originating process: proposed order 3(d). 413 A direction has already been made that the GPLs would be justified in taking steps to ascertain the outstanding claims by creditors in the liquidation of QNI, obtaining proofs of debt in respect of such claims and adjudicating those claims. While the Palmer Parties consented to that direction being made, they oppose a direction that the GPLs would be justified in making the payments to the creditors as a consequence of the adjudication process. This is in circumstances where all of the presently known claims outlined in Ms Trenfield's affidavits appear to relate to the operation of the joint venture. Further, for the reasons given above, the objections by the Palmer Parties to the payment of trust creditors have been rejected. 414 For these reasons and where the propriety of the proposed payment of admitted proofs of debt of creditors by the GPLs has been challenged by the Palmer Parties, I am satisfied that this is an appropriate case for the direction in proposed order 3(d) to be made as sought by the plaintiffs. 415 That is, I am persuaded of the propriety of the course of action which is contained in proposed order 3(d) and that advice should be given to the GPLs and to QNI to the effect that they are justified in proceeding with that course of action. DISPOSITION 416 The claims by the Palmer Parties for the relief identified in the prayer for relief contained in the amended statement of claim will be dismissed. 417 The remaining orders sought by the plaintiffs in paragraphs 2 and 3 of the originating process (with minor modifications) will be made. 418 The parties will be invited to make submissions as to costs and the issue of costs will be determined on the papers. I certify that the preceding four hundred and eighteen (418) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Downes. Associate: Dated: 2 November 2022