BRI Ferrier WA.
West Australia insolvency veteran Giovanni “John” Carrello has emerged much scathed from an attempt to gain control of one half of a self managed super fund (SMSF), with a judge excoriating the BRI Ferrier WA principal for inadequate disclosures and a reluctance to address concerns expressed by the court. Read on, all ye who would covet a dead man’s super.
“This lack of disclosure and unaddressed concerns about the proposed use of the funds, together with the history of the Court’s inquiries about the matter, mean that it is appropriate to dismiss the application”. Justice Darren Jackson.
As is revealed in Carrello (Trustee), in the matter of the Bankrupt Estate of Jones (deceased) [2026] FCA 468 Carrello applied to the Federal Court in July last year for orders appointing himself as receiver of the assets of a self managed superannuation fund (SMSF) associated with the late Gregory Harold Norman Jones and his widow Susan Elisabeth Jones.
Carrello, who was the trustee of Ms Jones and Mr Jones’ bankrupt estates, needed a receiver’s powers to deal with the assets of the SMSF, which included real property in Brunswick, WA.
His application came about in circumstances where Ms Jones wanted to wind up the fund and roll her share into a retail fund but as a bankrupt was disqualified from acting as trustee of the SMSF, and the assets included needed to be sold so an in-specie transfer to her new fund could be effected.
In affidavit Ms filed in support of Carrello’s application Ms Jones indicated that Carrello had asserted a right to her late husband’s interest in the SMSF.
She also said she was prepared to relinquish any interest she might have in her late husband’s share of the SMSF to insulate her share from any claims that Carrello might bring in respect of remuneration and the like.
The court heard Ms Jones obtained legal advice that informed her decision, but that legal advice was never provided.
All this came out in the months after Carrello filed his initial application, which was so devoid of what his honour considered essential detail that he notified the parties’ counsel ahead of the first case management hearing asking that they address various outstanding matters.
These included disclosing what if any position the Jones’ three children might take on the application given their status as potential beneficiaries; why Ms Jones didn’t apply for leave under s 126J of the SIS Act to manage the Superannuation Fund for the purpose of winding up it; the nature of the legal advice she claimed she received; and why it was appropriate for the costs, expenses and remuneration of Carrello as Receiver to be borne by the late Mr Jones’s interest in the SMSF.
Justice Jackson said that when Carrello first filed his application, “it did not disclose that the intention is that whatever remains of half of the Fund after the Receiver’s remuneration and expenses will be treated as an asset divisible among the creditors of the deceased estate”.
Further, and only after inquiries from the judge, it was revealed that “it was Mr Carrello who had asserted an entitlement to Mr Jones’s portion of the Superannuation Fund – apparently all of it. No more information is given of, say, the basis of the claim and whether it is asserted on behalf of creditors”.
“There is no information as to whether Mr Carrello in his capacity as trustee in bankruptcy of the deceased estate is one of those creditors in respect of remuneration and expenses. No figures have been provided by way of estimates as to whether there will be any surplus remaining after those claims are met,” the judge said.
In refusing the application the judge lamented the unsatisfactory disclosure demonstrated by an officer of the court.
“There has been a lack of candour as to the ultimate use contemplated for half of the Superannuation Fund,” he said.
“As recounted above, the nature and extent of that use only emerged bit by bit, in response to questions from the Court.
“It is axiomatic that in applications such as these, where the assistance of the Court is being sought and there is no contradictor, the applicants must disclose fully and frankly all relevant matters. That requirement is all the more acute when the applicants are officers of the Court. They have not met that requirement here.
“This lack of disclosure and unaddressed concerns about the proposed use of the funds, together with the history of the Court’s inquiries about the matter, mean that it is appropriate to dismiss the application,” he concluded.
Taking mercy on Carrello, his honour granted to the parties liberty to apply. Carrello did not respond to iNO’s request for comment.
This needs to be compared with subsequent FCA judgment in Re Eades