Yeo, in the matter of Majestic Services Group Pty Ltd (in liq)

In Yeo, in the matter of Majestic Services Group Pty Ltd (in liq) [2026] FCA 166, the Federal Court appointed a liquidator as receiver and manager of trust property after the corporate trustee had gone into liquidation and, under the trust deed, had been removed as trustee. The company had operated a cleaning and laundry business for aged care facilities through a unit trust structure.

The immediate commercial problem was that trust assets needed to be preserved and potentially sold, employee entitlements were still being assessed, creditor claims existed, and third parties had already expressed interest in buying assets. But the company had been automatically removed as trustee, and no replacement trustee had been identified. The Court made orders so the liquidator could lawfully deal with the trust property.

Majestic Services Group Pty Ltd was incorporated on 7 June 2012. On the evidence before the Court, it was the corporate trustee of the Majestic Unit Trust, established on the same day. In that role, the business provided cleaning and laundry services to aged care facilities.

On 30 January 2026, the Federal Court appointed Andrew Reginald Yeo as liquidator of the company in separate proceedings brought by the Deputy Commissioner of Taxation. After becoming liquidator, Mr Yeo investigated the company's position and filed an affidavit in support of a further application to the Court.

The trust documents were central. The trust deed provided that the company was removed as trustee by operation of clause 13.2 once it entered liquidation. The Court also referred to a deed of variation dated 1 December 2025, which said that any trustee could be removed and any trustee appointed by unanimous resolution of the unit holders. The unit holders at that date were Alpha 50 Holdings Pty Ltd and MSK Services Pty Ltd. They were served with the application, but they did not appear at the hearing.

Mr Yeo said he was not aware of any replacement trustee having been appointed after the liquidation. That left a practical gap. The business assets and trust property still existed, but there was no identified active trustee in place to deal with them.

The evidence also dealt with how the business had actually been run. Mr Yeo attended a meeting on 2 February 2026 with, among others, a current director and a former director of the company. He was told that the company operated the business in its capacity as trustee of the trust and did not act in any other capacity. Based on that meeting and his review of the company's financial statements, he held the belief that the company operated only as trustee. That point mattered because the Court's reasoning depended in part on the company appearing not to have traded in any separate personal capacity.

As to assets and liabilities, land title searches showed the company did not own real property. It did own a number of motor vehicles subject to finance. There were also registered security interests on the Personal Property Securities Register in relation to the company and the trust. Mr Yeo had identified secured and unsecured creditor claims and proofs of debt. Upon his appointment, he terminated 277 employees and was still reviewing the books and records to calculate outstanding employee entitlements.

There was also urgency. Since his appointment, Mr Yeo had been contacted by a number of third parties interested in purchasing assets, plant and equipment owned by the company. He sought orders so he could take immediate steps to negotiate the sale of assets owned by the company in its capacity as former trustee of the trust.

The legal question was whether it was just and convenient for the Court to appoint the liquidator as receiver and manager of the property of the Majestic Unit Trust and any other property held by the company on trust. The application was made under section 57 of the Federal Court of Australia Act 1976 (Cth).

The problem was not simply that the company was insolvent. The problem was that the company had been removed as trustee by operation of the trust deed once it entered liquidation. If that was right, the company was no longer the acting trustee, yet trust property still needed to be protected, managed and potentially sold. The Court therefore had to decide whether a receiver appointment was needed to preserve and realise that property for those interested in it.

The Court also had to deal with notice issues. The reasons say that only the directors and unit holders were notified of the application before the hearing. The identified creditors were not notified in advance. That did not stop the Court making orders, but it was a factor the Court addressed expressly in the form of the orders.

Another important feature was the evidence about capacity. The Court did not treat this as a broad ruling about all trust insolvencies. Instead, it relied on the evidence that the company did not act or operate in any capacity other than as trustee of the trust. That made it easier for the Court to conclude that the trust property was the relevant property requiring protection and that the company held it as bare trustee after removal.

Justice Downes granted the application. The Court appointed Mr Yeo, in his capacity as liquidator, as receiver and manager, without security, of the property of the Majestic Unit Trust and any other property held by the company on trust.

The Court said it would ordinarily appoint a receiver for the protection or preservation of property for the benefit of persons who have an interest in it, and was satisfied that this was the purpose of the application. The Court was also satisfied that it was just and convenient to make the orders in circumstances where the company appeared to have acted only as trustee of the trust, had been automatically removed as trustee, held the trust property as bare trustee, and was not otherwise empowered to deal with the trust property. The trust property needed to be preserved and ultimately realised for the benefit of creditors, including employees.

The orders gave the receiver all of the powers that a receiver has in respect of the business and property of a company under section 420 of the Corporations Act 2001 (Cth), other than the excluded subsections listed in the orders, adapted so that references to the corporation were treated as references to the Majestic Unit Trust. The orders specifically included power to do all things necessary and convenient to effect the sale of trust property, enter into dealings including leases in relation to trust property, determine and make payment of claims against the trust property, and distribute any surplus thereafter to the beneficiaries of the trust.

The Court also dispensed with the requirement for the plaintiff as receiver to file a guarantee, and ordered that the costs of the application be paid out of the trust property on an indemnity basis.

The notice point was handled carefully. The Court recorded that creditors had not been notified before the hearing. Even so, the Court made the orders and built in a safeguard. Any creditor of the company, or other person with a sufficient interest in the trust, or who could demonstrate sufficient interest to vary the orders, was given liberty to apply to vary the orders on 3 days' notice to the plaintiff. The liquidator was also ordered to notify ASIC and creditors whose contact details were known to him within 3 business days.

Finally, the matter was referred to the National Operations Registrar for allocation to a docket judge. The reasons explain that this was added in case the liquidator later required further orders from the Court in connection with his own remuneration or the distribution of trust assets.

The Court also said it was appropriate to appoint the liquidator as receiver and manager without security for the same reasons given in Okara Pty Ltd, (Administrators Appointed), in the matter of Okara Proprietary Limited, (Administrators Appointed) [2025] FCA 818 at [20]. The judgment does not restate those reasons in detail, but it shows that Okara was treated as a relevant authority supporting this form of relief.

This case is a practical reminder that a trust structure can complicate insolvency, especially where the operating company is only a trustee. Many businesses use a company as trustee for tax, ownership or asset protection reasons. That can work well while the business is trading normally. But if the trustee company fails, the trust deed may automatically remove it as trustee, which can create a gap between who used to control the assets and who is legally authorised to deal with them after insolvency.

That gap matters commercially. In this case there were employees, financed vehicles, PPSR registrations, creditor claims and interested buyers. Delay could have reduced value or increased uncertainty. The Court's orders gave the liquidator a lawful pathway to preserve and realise trust property. Without that step, the liquidator's authority over trust assets may have been open to challenge.

Business owners should also pay attention to the Court's emphasis on evidence. The orders were made because the evidence showed the company acted only as trustee and not in any other capacity. That is not a minor detail. If a company has mixed roles, such as holding some assets personally, contracting in its own name for some activities, or running part of the business outside the trust, the position may be more complex. The same is true if a replacement trustee has already been appointed under the trust deed.

The decision also shows that urgent orders can be made before creditors are notified, but that does not mean creditor interests are ignored. Here, the Court balanced urgency against fairness by requiring post-order notification and giving creditors and other interested persons liberty to apply to vary the orders on short notice.

The judgment is short, but it highlights the documents and conduct that carried weight. First was the trust deed itself, especially the clause under which the company was removed as trustee on liquidation. Second was the deed of variation dated 1 December 2025, which set out how trustees could be removed and appointed by unanimous resolution of the unit holders. Third was the evidence about how the business actually operated, including what the current and former directors told the liquidator and what the financial statements suggested.

That combination mattered because courts dealing with trust insolvency issues often need to know not just what the documents say, but whether the business was in fact conducted in the way the documents describe. Here, the Court accepted evidence that the company operated the business only as trustee. That supported the conclusion that the trust property was the relevant asset pool requiring preservation and realisation.

The Court also took account of practical insolvency evidence. There were motor vehicles subject to finance, PPSR registrations, secured and unsecured creditor claims, proofs of debt, 277 terminated employees and expressions of interest from potential buyers. Those facts showed the application was not theoretical. There was a real need for someone with authority to act quickly in relation to trust property.

Business owners often ask whether a liquidator can simply step into the shoes of a trustee company and sell trust assets. This case shows the answer can be no, especially where the trust deed automatically removes the company as trustee on liquidation. In that situation, a further court appointment may be needed.

Another common question is whether creditors must always be notified before urgent orders are made. In this case they were not notified beforehand, but the Court still made the orders and protected fairness by allowing creditors and other interested persons to apply to vary them on 3 days' notice, while also requiring prompt notification after the orders were made.

The company was incorporated on 7 June 2012. The liquidator was appointed on 30 January 2026. The application for appointment as receiver and manager was heard and decided on 25 February 2026 by Downes J in the Federal Court of Australia.

The reasons are concise and directed to the immediate relief sought. They explain the basis for the appointment and the form of the orders, but they do not provide a full account of later steps in the liquidation or any later applications concerning remuneration or distribution.

This page is based on the Federal Court's published reasons and orders in Yeo, in the matter of Majestic Services Group Pty Ltd (in liq) [2026] FCA 166, delivered on 25 February 2026 by Downes J. The reasons are sufficient to explain the immediate dispute, the evidence relied on, the orders made and the practical significance of the decision.

Readers should keep in mind that the judgment is focused on the appointment application itself. It does not set out the full insolvency history, the final treatment of creditor claims, or any later orders that may have been sought after the matter was referred for allocation to a docket judge.