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Selected cases

Federal Court of Australia · [2026] FCA 17

Kanevsky, in the matter of MA Services Property Group

A Federal Court insolvency case about a corporate trustee, trust property, administration and receiver appointment.

Federal Court of Australia23 Jan 2026

Plain-English explainers, not legal advice. Check the linked official source before you rely on a specific section, and get advice for your situation.

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Quick read

  • Trading through a trust can become complicated fast when the corporate trustee enters administration.
  • A Federal Court insolvency case about a corporate trustee, trust property, administration and receiver appointment.

Use this to check

  • A trust deed may remove a corporate trustee when it enters administration.
  • Administrators may need appointment as receivers of trust property before selling assets.
  • The trustee's right of indemnity can be central to creditor recovery.

Decision snapshot

  1. 1

    What happened

    • MA Services Property Group Pty Ltd had entered administration.
    • It had operated as trustee of the MA Services Property Group Trust, and the trust deed contained a vacation of office clause.
    • That kind of clause can cause a corporate trustee to lose its office when it enters external administration.
    • The administrators were concerned that the company now held the trust assets only as bare trustee and needed clear authority to deal with them.
  2. 2

    What the court had to decide

    • The Federal Court had to decide whether the administrators of a corporate trustee should be appointed as receivers of trust property under section 57 of the Federal Court of Australia Act, and whether ancillary powers should be given under the Insolvency Practice Schedule so the receivers could control and realise the trust property.
  3. 3

    What the court decided

    • The Court appointed the administrators as joint and several receivers without security over the trust property.
    • The orders gave them powers to control and sell trust property as if it were property of a company in liquidation, with affected creditors or beneficiaries able to apply to vary or discharge the orders.

Practical impact

Practical read

  • Trading through a trust can become complicated fast when the corporate trustee enters administration.
  • Directors, creditors and administrators need to know whether the company still has trustee powers, whether a receiver appointment is needed and how trust assets can be realised for creditors.

Useful next steps

  • A trust deed may remove a corporate trustee when it enters administration.
  • Administrators may need appointment as receivers of trust property before selling assets.
  • The trustee's right of indemnity can be central to creditor recovery.
  • Trust property, company property and related-entity debts should be mapped separately.
  • Business owners using trusts should keep the deed and variation history easy to find.

Practical read

This case is a very practical trust insolvency lesson. Many small businesses use a company as trustee of a family trust, unit trust or trading trust. That structure can work commercially, but when the company becomes insolvent the trust deed may strip the company of its trustee role. The company may then be left holding trust assets without the normal trustee powers needed to sell, manage or realise them.

The Court made the administrators receivers of the trust property so they could deal with the assets and enforce the company's indemnity. That is important because the trustee's right of indemnity against trust assets is often the pathway by which creditors can be paid from trust property. Without clear authority, sales and creditor outcomes can become uncertain.

For business owners, the lesson is to review the trust deed before trouble arrives. Vacation of office clauses, appointor powers, trustee replacement mechanics, lender rights and indemnity wording all matter. If the business is distressed, directors should get advice before appointing administrators so they understand whether a separate receiver application may be needed.

Checks to run

Key points

  • Check whether the trust deed has a vacation of office clause.
  • Identify trust assets, company assets, lender security and related-entity debts separately.
  • Keep appointor, trustee replacement and indemnity documents together.
  • Tell administrators early if the business trades through a trust.
  • Get legal help before trying to sell trust assets after external administration starts.

Key takeaways

  • A trust deed may remove a corporate trustee when it enters administration.
  • Administrators may need appointment as receivers of trust property before selling assets.
  • The trustee's right of indemnity can be central to creditor recovery.
  • Trust property, company property and related-entity debts should be mapped separately.
  • Business owners using trusts should keep the deed and variation history easy to find.

Related topics

Companies & StartupsInsolvency & RestructuringCommercial Leases & Property

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