White (Liquidator), in the matter of Profounder Turfmaster Pty Ltd (in liq) [2026] FCA 470

This case was an insolvency administration application, not a final trial about whether someone owed money to the company. The liquidators of Profounder Turfmaster Pty Ltd asked the Federal Court to approve two arrangements they said were needed to continue investigating the company’s affairs and to pursue possible recoveries for creditors.

Profounder had been set up to acquire the business and assets of Turf Master Pty Ltd, a turf management and maintenance business servicing clients such as golf clubs and universities. The acquisition settled in November 2020. The company was later wound up by the Federal Court on 15 April 2025 on the application of the Commissioner of State Revenue, and joint and several liquidators were appointed.

The liquidators said they were trying to administer the winding up with very limited records. Despite requests, they had not received the company’s books and records, including the required Report on Company Affairs and Property. They had instead been relying on third-party information and certain management accounts. On that material, they estimated secured and unsecured creditor claims at about $3.67 million. They had recovered about $85,437 from pre-appointment debtors, while any stock and equipment that might still exist had an unknown location and unknown market value.

Mr White said the liquidators’ preliminary investigations had identified matters warranting further inquiry, including possible voidable transaction claims and insolvent trading claims. To move those investigations forward, the liquidators considered it necessary to seek public examination orders against certain persons. They expected those examinations to help them work out the merits, quantum and scope of any recovery proceedings that might later be brought for creditors.

The practical problem was funding. Investigations, examinations and possible litigation cost money, and insolvent companies often do not have enough cash left to support that work. The liquidators therefore investigated external funding options, discussed funding structures with a recognised litigation funder and decided to engage Ashurst Australia as specialist lawyers. The funding agreement was executed on 17 December 2025 and the engagement agreement on 24 February 2026. Because both arrangements would operate for more than three months, the liquidators sought approval under s 477(2B) of the Corporations Act, with retrospective effect.

They also asked the Court to keep certain material confidential. Their concern was that if prospective defendants could see the funding terms, legal strategy or details of the proposed investigations too early, that could prejudice future proceedings and reduce the prospects of recovery for creditors.

The Court had to decide four practical questions. First, should it approve the litigation funding agreement under s 477(2B) of the Corporations Act? Second, should it also approve the engagement agreement with Ashurst Australia? Third, if approval was required, should that approval operate retrospectively because the documents had already been signed? Fourth, should confidential affidavits, exhibits and submissions be suppressed from public access until the end of any related litigation?

The judgment explains that s 477(2B) is a supervision provision. A liquidator has broad power to do what is necessary to wind up the company’s affairs and distribute its property, but agreements extending beyond three months require approval from the Court, a committee of inspection or creditors if they are entered into on the company’s behalf. The reason is that long-running agreements can cut across the expectation that a winding up should proceed expeditiously, so some oversight is required.

At the same time, the Court’s role is not to take over the liquidator’s commercial decision-making. The Court does not simply ask whether it would have made the same commercial choice. Instead, it looks for reasons to intervene, such as a lack of good faith, an error of law or principle, or some other good reason to doubt the liquidator’s judgment.

For litigation funding agreements, the authorities referred to by the Court identify a range of potentially relevant factors. These include how funding will be provided, the prospects and risks of the proposed litigation, the interests of creditors, possible oppression, the nature and complexity of the claims, whether other funding options were explored, the level of the funder’s premium and the extent of creditor consultation.

The legal retainer raised a separate issue that often matters in practice. Not every retainer between a liquidator and solicitors needs approval under s 477(2B). The distinction is between agreements entered into by the liquidator personally and agreements entered into by the liquidator as agent for or representative of the company, or in the company’s name. The Court said substance matters. Relevant considerations include whether the company is a party or appears to have the status of a party, and who receives the benefit of the services. Here, the Court found that the engagement agreement was entered into by the liquidators as agents for or representatives of Profounder and in the company’s name, so approval was required.

The Court also had to consider retrospective approval. The authorities accept that approval can be granted nunc pro tunc in appropriate circumstances. Relevant factors include the explanation for the delay, whether there is prejudice to the company or creditors, the length of the delay and whether the liquidator acted honestly. The fact that an agreement is expressly conditional on approval can also support retrospective relief.

Banks-Smith J allowed the application. The Court granted approval nunc pro tunc under s 477(2B) for the liquidators to enter into, and cause the company to enter into, the funding agreement. The Court also granted approval, to the extent required, for the liquidators to enter into the Ashurst engagement letter nunc pro tunc.

On the funding agreement, the Court said it was unsurprising, given the scope of the liquidation, that the arrangement would extend beyond three months. The judge was satisfied that the key terms were clear, that the liquidators would remain responsible for the day-to-day conduct of any proceedings subject to certain reporting and other requirements involving the funder, and that the agreement covered the essential matters one would expect in that kind of arrangement. Its terms appeared fair and reasonable in the circumstances.

The Court also took into account that the liquidators had considered and obtained legal advice about the terms of the funding agreement and the matters it was intended to cover. Mr White, an experienced insolvency practitioner, gave evidence that the key commercial terms were broadly consistent with and no less favourable than those commonly offered in comparable insolvency litigation matters. The Court accepted that evidence. There was nothing in the material suggesting bad faith or any other reason to refuse approval.

On creditor consultation, the Court accepted the liquidators’ explanation for not seeking creditor approval. There was no committee of creditors. The liquidators considered that convening a meeting would involve delay and cost, there was uncertainty about whether a quorum could be obtained, and there was a real tension between informing creditors and avoiding disclosure of confidential information that could prejudice future proceedings.

On the engagement agreement, the Court distinguished cases where a solicitor retainer is entered into personally by the liquidator. Here, the agreement was entered into by the liquidators as agents for or representatives of Profounder and in the company’s name. In those circumstances, approval was required. The Court was satisfied that the engagement agreement was likely to operate for more than three months, that its terms were clear on their face, and that its purpose was to assist the liquidators to take steps for the benefit of creditors in the liquidation.

The Court also granted retrospective approval. The judge said there was nothing in the liquidators’ conduct that weighed against such an order. The application had been made promptly in the circumstances, the Court had been given detailed evidence, and the need for approval had been recognised as a condition of the funding agreement. That combination of factors supported nunc pro tunc relief.

Finally, the Court made suppression orders under ss 37AF and 37AG(1)(a) of the Federal Court of Australia Act. The confidential affidavits, exhibits and written submissions were ordered to be kept confidential and suppressed until the conclusion of any litigation, including any appeal, arising out of the winding up and affairs of the company. The Court accepted that disclosure of strategy, funding information and investigation material could prejudice the proper administration of justice by giving prospective defendants an unfair advantage.

If you are a director, founder or manager, this case is a warning that liquidation can be the start of a second phase of scrutiny rather than the end of the story. Even where the company has little cash, records are missing and assets are uncertain, a liquidator may still be able to investigate past conduct by obtaining litigation funding and specialist legal support. That can include public examinations and later recovery proceedings if the evidence supports them.

The absence of books and records mattered here. The liquidators said they had not received the company’s records or the required Report on Company Affairs and Property, and had to proceed using third-party information and management accounts. For business owners, that is a practical reminder that poor record-keeping can make a liquidation more difficult, increase suspicion and lead to more intensive investigation.

If you are a creditor, the case shows that the Court may support funding structures designed to preserve and maximise recoveries where the company itself cannot afford the work. It also shows that the Court understands the practical difficulty of consulting creditors in every case. A liquidator may be able to explain why a creditor meeting is not appropriate, especially where there is no committee of creditors, a meeting would be costly or delayed, a quorum is uncertain, or disclosure of sensitive material could damage future claims.

If you are a business that may later face a claim from a liquidator, the case is a reminder that confidentiality orders can be made to protect the liquidator’s strategy and funding arrangements. That means you may not know the full detail of the liquidator’s funding or legal advice while investigations are underway. The Court accepted that this can be necessary to avoid giving prospective defendants an unfair advantage.

The decision is also useful because it clarifies the retainer issue. Businesses and advisers sometimes assume every legal engagement by a liquidator needs approval. That is not what the judgment says. The key question is who entered the agreement and in what capacity. If the liquidator contracts personally, approval may not be required. If the liquidator contracts as agent for or representative of the company, or in the company’s name, approval may be required if the arrangement extends beyond three months.

For insolvency practitioners and advisers, the judgment gives a practical picture of the evidence that helped the application succeed. The liquidators explained the company’s background, the winding up, the absence of books and records, the estimated creditor position, the limited recoveries made so far, the possible areas for further inquiry and the need for public examinations. They also explained why external funding was necessary to progress the investigations consistently with their statutory duties and to preserve and maximise potential recoveries for creditors.

The Court was assisted by evidence that the liquidators had investigated the availability of external funding and considered different funding structures. Mr White also gave evidence, accepted by the Court, that he understood prevailing market conditions for this kind of funding and that the key commercial terms were broadly consistent with comparable insolvency litigation matters. That kind of evidence matters because the Court is not conducting a full merits review of the future claims, but it still needs to be satisfied that the arrangement appears commercially sensible and fair.

The judgment also shows the importance of being clear about the legal retainer. If approval may be needed, the agreement should make the contracting capacity clear. Here, the Court found that the engagement agreement was entered into by the liquidators as agents for or representatives of the company and in the company’s name. That finding was central to the conclusion that approval was required.

Another practical point is promptness. The funding agreement had been executed before the application, but it was expressed to be conditional on approval being granted. The engagement agreement was then executed so Ashurst could progress the application. The Court treated those matters as supporting retrospective approval, together with the fact that the application was made promptly in the circumstances and there was nothing in the liquidators’ conduct weighing against relief.

Where creditor consultation is not practical, the judgment suggests that liquidators should explain that directly and specifically. In this case, the accepted reasons were that there was no committee of creditors, a meeting would involve delay and cost, a quorum might not be obtained, and disclosure of confidential material could prejudice future proceedings. A bare statement that consultation was inconvenient would not carry the same weight as a concrete explanation tied to the circumstances of the liquidation.

The winding up order was made on 15 April 2025. The funding agreement was executed on 17 December 2025. The engagement agreement with Ashurst Australia was executed on 24 February 2026. Banks-Smith J made the approval and suppression orders on 16 April 2026, and the reasons were published on 20 April 2026.

This was not a final decision on the merits of any recovery claim. It was a procedural approval decision about whether the liquidators could enter into long-term funding and legal arrangements, and whether confidential material should be protected from public access while any related litigation remained on foot.

This page is based on the Federal Court’s published reasons and orders in White (Liquidator), in the matter of Profounder Turfmaster Pty Ltd (in liq) [2026] FCA 470. The public reasons clearly support the background facts about the liquidation, the absence of books and records, the estimated creditor position, the possible areas for further inquiry, the need for funding and specialist legal representation, the distinction between personal and company-side retainers, the grant of retrospective approval and the making of suppression orders.

The public reasons do not disclose the confidential terms of the funding arrangement, the detailed legal advice obtained by the liquidators, the identity of any prospective defendants or the detailed factual basis of any future claim. This page should therefore be read as a practical explainer about court approval of insolvency funding, legal retainers and confidentiality orders, not as a final ruling on any substantive recovery action.