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Federal Court of Australia |
Last Updated: 7 February 2007
FEDERAL COURT OF AUSTRALIA
Australian Securities & Investments Commission; In the Matter of Richstar Enterprises Pty Ltd ACN 099 071 968 v Carey (No 13) [2007] FCA 57
CORPORATIONS - Receiver and Asset
Preservation Orders - Costs of Proceedings – conflict of interest - Court
appointed receiver
- privately appointed to same or related entities - legal
fees and disbursements incurred by defendants - whether several or joint
and
several - separate retainers - presumption - presumption displaced - orders
approving release of legal fees and disbursements
approved
AUSTRALIAN SECURITIES AND
INVESTMENTS COMMISSION v NORMAN PHILLIP CAREY, GRAEME JOHN RUNDLE, CEDRIC
RICHARD PALMER BECK, JOHN NORMAN
DIXON, RICHSTAR ENTERPRISES PTY LTD ACN 099 071
968, WESTPOINT REALTY PTY LTD ACN 050 218 954, BOWESCO PTY LTD ACN 008 915 357,
REDCHIME
PTY LTD ACN 117 947 805, KEYPOINT DEVELOPMENTS PTY LTD ACN 115 507 232,
SILKCHIME PTY LTD ACN 066 849 429, ROLD CORPORATION ACN 009
358 276 AND
HEALTHCARE PROPERTIES PTY LTD ACN 075 401 955
WAD83 OF
2006
FRENCH J
5 FEBRUARY
2007
PERTH
IN THE MATTER OF RICHSTAR
ENTERPRISES PTY LTD (ACN 099 071 968)
WESTPOINT REALTY PTY LTD (ACN
050 218 954)
BOWESCO PTY LTD (ACN 008 915 357)
REDCHIME PTY
LTD (ACN 117 947 805)
KEYPOINT DEVELOPMENTS PTY LTD (ACN 115 507
232)
In respect of the First Defendant THE
COURT ORDERS THAT:
1. Orders 2 to 23 made in these proceedings before the Honourable Justice French on 30 June 2006 as amended from time to time in relation to the First Defendant (Individual Defendant) are as at the date of these Orders replaced by the Orders below.
The Individual Receiver orders
2. Until 30 June 2007 or further order, Brian McMaster and Mark Korda of KordaMentha, Chartered Accountants, of Level 11, 37 St Georges Terrace, Perth be appointed jointly and severally as receivers (the Individual Receivers) to all property (the Individual Property) whether within Australia or overseas, of the Individual Defendant.
3. For the purpose of these orders, "Individual Property" includes property which falls within any of the following categories:
3.1 property held in the name of the Individual Defendant;
3.2 property held by the Individual Defendant as trustee for a trust or on behalf of or on account of another person;
3.3 property held jointly in the name of the Individual Defendant and one or more persons or entities not named as a defendant in these proceedings (Third Party);
3.4 property held jointly in the name of the Individual Defendant and a Third Party for the express purpose of a joint venture;
3.5 property held by the Individual Defendant jointly with a Third Party, where both the Individual Defendant and the Third Party hold the property in their capacity as trustees for a trust or on behalf of or on account of another person;
3.6 property held by a Third Party as trustee of a trust, where the Individual Defendant agrees that he is or the Court directs that he is to be treated as the effective controller or owner of the trust property; and
3.7 rights to operate the Individual Bank Accounts (as that term is defined in Order 4 below) and any chose in action in relation to such account;
but does not include:
3.8 such rights or choses in action in relation to any Excluded Individual Bank Accounts (as that term is defined in Order 4 below).
4. For the purpose of these orders, "Individual Bank Accounts" means accounts which fall within any of the following categories:
4.1 accounts held in the name of the Individual Defendant;
4.2 accounts held by the Individual Defendant as trustee for a trust or on behalf of or on account of another person;
4.3 accounts held jointly in the name of the Individual Defendant and a Third Party;
4.4 accounts held jointly in the name of the Individual Defendant and a Third Party for the express purpose of a joint venture; and
4.5 accounts held by the Individual Defendant jointly with a Third Party, where both the Individual Defendant and the Third Party hold the property in their capacity as trustees for a trust or on behalf of or on account of another person; and
but does not include the following (collectively the "Excluded Individual Bank Accounts"):
4.6 such other accounts as notified to the relevant Bank by the Plaintiff or Individual Receivers.
5. The Individual Defendant shall provide the Individual Receivers with monthly bank statements in respect of the Excluded Individual Bank Accounts within seven (7) days of receipt of such bank statements.
6. The Individual Receivers have, in respect of the Individual Property, the following powers:
6.1 the power to do all things necessary or convenient to be done for or in connection with, or as incidental to, the identification, preservation and securing of all of the Individual Property for the benefit of potential creditors;
6.2 without limiting the generality of the power in the preceding subparagraph:
6.2.1 the power to enter into possession and take control of the Individual Property to the extent that the exercise of the power is reasonably necessary to achieve the purposes set out in the preceding sub-paragraph; and
6.2.2 the power to appoint a lawyer, accountant or other professionally qualified person to assist the Individual Receivers.
6.3 The preceding powers shall not extend to the sale, letting or encumbering of such property without prior leave of the Court or the consent of the Individual Defendant.
7. The power referred to in paragraph 5.1 above shall not prevent:
7.1 the Individual Defendant or any other person or entity affected by this order carrying on any business or otherwise impeding their ability to carry on a business in an effective and efficient manner PROVIDED HOWEVER that the said limitation on the power of the Individual Receivers shall not apply to the extent that the exercise of the said power is necessary to do the things referred to in paragraph 6.1; or
7.2 the Individual Defendant and any persons or entities affected this order, with the prior written approval of the Individual Receivers (or any of them) from:
7.2.1 selling Individual Property; or
7.2.2 acquiring property with funds held in an Individual Defendant Account; or
7.2.3 applying for new advances from any Bank; or
7.2.4 granting new security in favour of any Bank over Individual Property (acquired prior to or after the date of this Order);
7.3 any Bank from:
7.3.1 exercising any right of set-off which it may have in respect of a facility afforded by it to the Individual Defendant prior to or after the date of this Order; or
7.3.2 subject to paragraph 10 below, processing any Automatic Bank Debits or Automatic Third Party Debits otherwise permitted by these orders; or
7.3.3 enforcing or exercising any security right or interest existing now or in the future in relation to the Individual Property; or
7.3.4 debiting Individual Bank Accounts with any interest, fees, costs and charges in accordance with the terms and conditions set out in the relevant Bank’s security and facility documentation.
8. The Individual Receivers (or any one of them) must be appointed a required signatory to all the Individual Bank Accounts.
9. Subject to paragraphs 6.3.2, 9, 10 and 14 herein, all electronic banking facilities, to the extent they allow the Individual Defendant to conduct transactions on that account, in relation to the Individual Bank Accounts, will be cancelled and only reinstated upon the written request of the Individual Receivers and at the relevant Bank’s discretion.
10. For the purposes of these orders:
"Automatic Bank Debit" means an automatic debit from an Individual Bank Account, which debit is established by an authority provided by the account holder in favour of the Bank which holds the Individual Bank Account.
"Automatic Third Party Debits" means an automatic debit from an Individual Bank Account, which debit is established by an authority provided by the account holder in favour of a third party who receives the proceeds of the debit.
10.1 Automatic Bank Debits existing before 30 March 2006 may continue, provided that the Individual Receivers may request the Bank to cancel any Automatic Bank Debit which is not otherwise permitted by these orders.
10.2 Automatic Third Party Debits existing before 30 March 2006 may continue, providing that the Individual Receivers may request the third party to cancel any such Automatic Third Party Debit which is not otherwise permitted by these orders.
10.3 For the avoidance of doubt, all of the relevant Bank’s rights are preserved under the relevant facility terms and conditions and any relevant authority.
11. Subject to the Individual Receivers’ satisfaction as to the solvency of the Individual Defendant, the Individual Receivers may, in relation to the Individual Defendant and any persons or entitles affected by this order, approve:
11.1 payments by the Individual Defendant to pay reasonable legal expenses incurred in these proceedings or legal costs that may be reasonably incurred in the future that are either incidental to these proceedings or in anticipation of, or in preparation for, the proceedings the Plaintiff or others may bring against the Individual Defendant, which includes the payment of monies on trust to solicitors on account of such expenses;
11.2 reasonable expenses required to maintain, realise or preserve assets;
11.3 Automatic Bank Debits from any Individual Bank Account otherwise not permitted by these orders; and
11.4 changes to security and facility arrangements with any Bank.
12. Upon receipt of confirmation of the approval of the Individual Receivers (or any one of them), no Bank need inquire as to:
12.1 the application or proposed application of any money withdrawn or automatically debited from the Individual Bank Accounts; or
12.2 whether a transaction or proposed transaction or any change to arrangements is in contravention of these Orders.
13. For the avoidance of doubt, all of the Banks’ rights are preserved and it remains at the Banks’ absolute discretion, subject to the terms and conditions set out in the Banks’ respective security and facility documentation, as to whether they will make further credit funds available or will permit any changes of facility or security arrangements at the request of the Individual Defendant and the Individual Receivers.
14. The Individual Receiver shall pay by a cheque payable to cash from the first defendant’s salary entitlements payable by the fifth and sixth defendants, a sum for living expenses in such sum as approved by the Individual Receiver, such payment being made on Monday of each week to the first defendant, subject to there being sufficient funds available in the accounts of the fifth and sixth defendants to make such payment.
15. Any balance payable by the fifth and sixth defendants with respect to the first defendant’s salary entitlements is to be deposited into and to accrue in a bank account to be opened by the Individual Receiver for the benefit of the first defendant.
16. The Individual Defendant by himself, his servants, agents or employees, must:
16.1 permit the Individual Receivers ongoing access to the books and records which relate to the Individual Property including any computer system of the Individual Defendant;
16.2 use his best endeavours to assist the Individual Receivers in the performance of their obligations.
16A.1 Any Bank which holds private and confidential information in relation to its customers which may assist in identifying the Individual Bank Accounts may be required by written notice from the Individual Receivers to provide such information to the Individual Receivers within a reasonable time after having received a written request for such information accompanied by a copy of this order.
16A.2 Any Bank which receives such a request from the
Individual Receivers may apply within 7 days from its receipt or such longer
period as may be agreed with the Individual Receivers to be relieved from the
obligation of complying with it.
16A.3 In the event that no such
application is made or that such application is refused, the Bank must comply
with the request within
a reasonable time or within such time as the Court
orders.
16A.4 The Individual Receivers may provide any information
obtained pursuant to this Order to the Plaintiff.
16A.5 The Bank,
before complying with any written request shall first give notice to the
relevant customers.
16B Any of the following Banks (Westpac Banking Corporation Limited, National Australia Bank Limited and HBOS Australia Limited) which:
16B.1 becomes aware of private and confidential information in relation to its customers (which may include, but is not intended to be limited to private and confidential information in relation to the Individual Defendant); and
16B.2 reasonably believes that the private and confidential information may assist the Plaintiff and/or the Individual Receivers in:
16B.2.1 identifying the Individual Bank Accounts to which these orders apply; or
16B2.2 identifying Individual Property in a bank account held by a Third Party; or
16B.2.3 recovering Individual Property from a Third Party,
may, within a reasonable time, inform the Plaintiff and the Individual Receivers that it holds information potentially relevant to the above and, after having receipt of a written request for information, must provide such information as may reasonably be required to the Plaintiff and the Individual, Receivers within a reasonable time, after first giving notice to the relevant customer.
16C Nothing in Order 16A requires a Bank to make inquiry or investigate any customer, transaction or bank account.
17. The Individual Receivers have leave to give to any Bank with which the Individual Defendant or Third Party operates any Individual Bank Accounts a copy of the affidavit filed and/or served by the Individual Defendant pursuant to Order 4 of the orders made by this Court on 20 April 2006 in relation to the Individual Defendant, so as to inform them of the Bank Accounts which are Individual Bank Accounts.
The ‘Travel
Restraint’ Orders
18. Until further order that the Individual Defendant is restrained from:
18.1 leaving Australia; and
18.2 from coming within one hundred (100) metres of an Australian point of overseas departure.
19. All documents produced to the Court’s Registry pursuant to paragraph 10 of the orders made before the Honourable Justice French in these proceedings on 20 April 2006 in relation to the Individual Defendant shall be held by the Court’s Registry until further order.
The
‘General’ Orders
20. The Plaintiff, the Individual Receivers and the Corporate Receivers have leave to give to:
20.1 the relevant authorities that record, control and regulate the ownership of real property;
20.2 the relevant authorities that record, control and regulate the ownership of motor vehicles;
20.3 the relevant authorities that record, control and regulate the ownership of maritime vessels and craft;
20.4 any Bank with which the Individual Defendant operates any Individual Bank Accounts;
20.5 any other person or entity holding or controlling property belonging to the Individual Defendant; and
20.6 any Third Party,
notice of these Orders by delivering a copy of these Orders to a person apparently in the employ of that entity or person.
21. The Individual Receivers may report (orally or in writing) to the Plaintiff and to the Court at any time during the course of their receivership regarding:
21.1 the nature of the Individual Property identified;
21.2 the assets and liabilities of the Individual Defendant and the solvency of the Individual Defendant;
21.3 the costs of the receivership, the future course of the receivership and the costs that may be incurred by the Individual Receivers in the future; and
21.4 any other information in relation to the Individual Property that the Individual Receivers think necessary to protect the interests of persons to whom the Individual Defendant is liable, or may become liable, to pay money, whether in respect of debt, by way of damages or compensation or otherwise, or to account for financial products or other property.
22. The Individual Receivers may by written notice to the Individual Defendant require within seven (7) days of the date of such notice, the Individual Defendant to identify in writing any trusts of which the Individual Defendant is a beneficiary (including a general beneficiary of a discretionary trust), whether named or otherwise, and to provide the following information concerning such trust:
22.1 the name and address of the trustee;
22.2 a copy of the relevant trust deed (if it has possession, custody or control of the same); and
22.3 any further information or documentation regarding the trust and the management of the trust as requested by the Individual Receivers and to which the Individual Defendant is entitled, including, but not limited to, the distribution history of the trust.
23. The Individual Defendant shall authorise the Individual Receivers to, and the Individual Receivers shall be entitled to, obtain information regarding the trusts referred to in the preceding paragraph from the trustees of such trusts, including the terms of such trusts, the classes of its beneficiaries and its distribution history, and the Individual Defendant shall sign all such documents and do all such things necessary to give effect to the granting of such authority.
24. If within ten (10) days of the Receivers or their legal advisers becoming aware of any matter or issue that may give rise to a conflict of interest, they shall seek the advice of counsel in respect of the possible conflict.
25. If counsel is of the view that the matter or issue gives rise to a possible conflict of interest, then the Receivers shall make an application to the Court for appropriate directions.
26. The costs of the Plaintiff’s application for these Orders is to be paid by the first defendant.
27. The Parties and any third party affected by these orders have liberty to apply to the Court on the giving of reasonable notice.
In
respect of the FIFTH DEFENDANT THE COURT ORDERS THAT:
1. Orders 2 to 23 made in these proceedings before the Honourable Justice French on 30 June 2006 as amended from time to time in relation to the Fifth Defendant (Corporate Defendant) are as at the date of these orders replaced by the orders below.
The Corporate Receiver orders
2. Until 30 June 2007 or further order, Brian McMaster and Mark Korda of KordaMentha, Chartered Accountants, of Level 11, 37 St Georges Terrace, Perth, be appointed jointly and severally as receivers and managers (the Corporate Receivers) to property (the Corporate Property), whether within Australia or overseas, of the Corporate Defendant.
3. For the purpose of these orders, "Corporate Property" includes property which falls within any of the following categories:
3.1 property
held in the name of the Corporate Defendant;
3.2 property held by the Corporate Defendant as trustee for a trust or on behalf of or on account of another person;
3.3 property held jointly in the name of the Corporate Defendant and one or more persons or entities not named as a defendant in these proceedings (Third Party);
3.4 property held jointly in the name of the Corporate Defendant and a Third Party for the express purpose of a joint venture;
3.5 property held by the Corporate Defendant jointly with a Third Party, where both the Corporate Defendant and the Third Party hold the property in their capacity as joint trustees for a trust or on behalf of or on account of another person;
3.6 property held by a Third Party as trustee of a trust, where the Corporate Defendant agrees that it is or the Court directs that it is to be treated as the effective controller or owner of the trust property; and
3.7 right to operate any Corporate Bank Account (as that term is defined in Order 4 below) and any chose in action in relation to such account;
but does not include:
3.8 such rights or choses in action in relation to any Excluded Corporate Bank Accounts (as that term is defined in Order 4 below).
4. For the purpose of these orders, "Corporate Bank Accounts" means accounts which fall within any of the following categories:
4.1 accounts held in the name of the Corporate Defendant;
4.2 accounts held by the Corporate Defendant as trustee for a trust or on behalf of or on account of another person;
4.3 accounts held jointly in the name of the Corporate Defendant and a Third Party;
4.4 accounts held jointly in the name of the Corporate Defendant and a Third Party for the express purpose of a joint venture; and
4.5 accounts held by the Corporate Defendant jointly with a Third Party, where both the Corporate Defendant and the Third Party hold the property in their capacity as trustees for a trust or on behalf of or on account of another person,
but does not include the following
(collectively the "Excluded Corporate Accounts"):
4.6 such other accounts as notified to the relevant bank, building society or financial institution (Bank) by the Plaintiff or Corporate Receivers.
5. The Corporate Receivers have, in respect of the Corporate Property, the following powers:
5.1 the power to do all things necessary or convenient to be done for or in connection with, or as incidental to, the identification, preservation and securing of all of the Corporate Property for the benefit of potential creditors;
5.2 without limiting the generality of the power in the preceding subparagraph:
5.2.1 the power to enter into possession and take control of the Corporate Property to the extent that the exercise of the power is reasonably necessary to achieve the purposes set out in the preceding sub-paragraph; and
5.2.2 the power to appoint a lawyer, accountant or other professionally qualified person to assist the Corporate Receivers; and
5.3 The preceding powers shall not extend to the sale, letting or encumbering of such property without prior leave of the Court or the consent of the Corporate Defendant.
6. The Corporate Receivers (or any one of them) must be appointed a required signatory to all Corporate Defendant Accounts.
7. Subject to Orders 8, 9.3.3 and 10.3, all electronic banking facilities to the extent they allow the conducting of transactions on the Corporate Bank Accounts, will be cancelled and only reinstated upon the written request of the Corporate Receivers and at the relevant Bank’s discretion.
8. For
the purposes of these orders:
"Automatic Bank Debit" means an automatic debit from a Corporate Bank Account, which debit is established by an authority provided by the account holder in favour of the Bank which holds the Corporate Bank Account.
"Automatic Third Party Debits" means an automatic debit from a Corporate Bank Account, which debit is established by an authority provided by the account holder in favour of a third party who receives the proceeds of the debit.
8.1 Automatic Bank Debits existing before 30 March 2006 may continue, provided that the Corporate Receivers may request the Bank to cancel any Automatic Bank Debit which is not otherwise permitted by these orders.
8.2 Automatic Third Party Debits existing before 30 March 2006 may continue, providing that the Corporate Receivers may request the third party to cancel any such Automatic Third Party Debit which is not otherwise permitted by these orders.
8.3 For the avoidance of doubt, all of the relevant Bank’s rights are preserved under the relevant facility terms and conditions and any relevant authority.
9. These orders shall not
prevent:
9.1 the Corporate Defendant by its officers other than the Corporate Receivers from continuing to operate in the ordinary course of its business(es), provided that the said limitation on the power of the Corporate Receivers shall not apply to the extent that the exercise of the said power is necessary to do the things referred to in Order 5 and provided further that it must obtain the Corporate Receivers’ prior consent to any transaction that would result in the transfer or disposition of any part of the Corporate Property exceeding a value in excess of $5,000 or a series of transactions that would result in the transfer or disposition of any part of the Corporate Property totalling a value of in excess of $5,000 within any seven (7) day period; and
9.2 the Corporate Defendant, with the prior written approval of the Corporate Receivers (or any of them), from:
9.2.1 selling Corporate Property; or
9.2.2 applying for new advances from any Bank;
9.2.3 granting new security in favour of any Bank over Corporate Property (acquired prior to or after the date of this Order); or
9.2.4 paying any creditor;
9.3 any Bank from:
9.3.1 exercising any right of set-off which it may have in respect of a facility afforded by it to the Corporate Defendant prior to or after the date of this Order;
9.3.2 enforcing or exercising any security right or interest existing now or in the future in relation to the Corporate Property;
9.3.3 subject to Order 8 above, processing any Automatic Bank Debit or Automatic Third Party Debit otherwise permitted by these Orders; and
9.3.4 debiting Corporate Bank Accounts with any interest, fees, costs and charges in accordance with the terms and conditions set out in the relevant Bank’s security and facility documentation.
10. Subject to the Corporate Receivers’ satisfaction as to the solvency of the Corporate Defendant, the Corporate Receivers may, in relation to the Corporate Defendant, approve:
10.1 payments by the Corporate Defendant to pay reasonable legal expenses incurred in these proceedings or legal costs that may be reasonably incurred in the future that are either incidental to these proceedings or in anticipation of, or in preparation for the proceedings the Plaintiff or others may bring against the Corporate Defendant, which includes the payment of monies on trust to solicitors on account of such expenses;
10.2 reasonable expenses required to maintain, realise or preserve assets;
10.3 Automatic Bank Debits from any Corporate Bank Account required to effect a transaction otherwise permitted by these orders; and
10.4 changes to security and facility arrangements with any Bank.
11. Upon receipt of confirmation of the approval of the Corporate Receivers (or any one of them), no Bank need inquire as to:
11.1 the application or proposed application of any money withdrawn or automatically debited from the Corporate Bank Accounts; or
11.2 whether a transaction or proposed transaction or any change to arrangements is in contravention of these Orders.
12. For the avoidance of doubt, all of the Banks’ rights are preserved and it remains at the Banks’ absolute discretion, subject to the terms and conditions set out in the Banks’ respective security and facility documentation, as to whether they will make further credit funds available or will permit any changes of facility or security arrangements at the request of the Corporate Defendant and the Corporate Receivers.
13. In exercising the discretion to consent or not to any payment, transfer or disposition contemplated in these orders, the Corporate Receivers have the power to make all necessary and incidental inquiries into the affairs of the Corporate Defendant (including the power to make inquiries in the name of the Corporate Defendant), including inspecting the books and records and any other information held by the Corporate Defendant and or their agents relating to those affairs, and the Corporate Defendant must give the Corporate Receivers such assistance as is reasonably requested by them in the course of such inquiries.
14. The Corporate Defendant, by itself, its servants, agents or employees, must:
14.1 permit the Corporate Receivers ongoing access to the books and records which relate to the Corporate Property including any computer system of the Corporate Defendant; and
14.2 use its best endeavours to assist the Corporate Receivers in the performance of their obligations.
15. The Corporate Receivers have leave to give to any Bank with which the Corporate Defendant or Third Party operates any Corporate Bank Accounts a copy of the affidavit filed by the Corporate Defendant pursuant to Order 5 of the orders made by this Court on 20 April 2006 in relation to the Corporate Defendant, so as to inform them of the Bank Accounts which are Corporate Bank Accounts.
16.1 Any Bank which holds private and confidential information in relation to its customers which may assist in identifying the Corporate Bank Accounts may be required by written notice from the Corporate Receivers to provide such information to the Corporate Receivers within a reasonable time after having received a written request for such information accompanied by a copy of this Order.
16.2 Any Bank which receives such a request from the Corporate
Receivers may apply within seven (7) days from its receipt or such
longer
period as may be agreed with the Corporate Receivers to be relieved from the
obligation of complying with it.
16.3 In the event that no such
application is made or that such application is refused, the Bank must comply
with the request within
a reasonable time or such time as the Court
orders.
16.4 The Corporate Receivers may provide any information obtained pursuant to this Order to the Plaintiff.
16.5 The Bank, before complying
with any written request shall first give notice to the relevant
customers.
17. Any of the following Banks (Westpac Banking Corporation Limited, National Australia Bank Limited and HBOS Australia Limited) which:
17.1 becomes aware of private and confidential information in relation to its customers (which may include, but is not intended to be limited to private and confidential information in relation to the Corporate Defendant); and
17.2 reasonably believes that the private and confidential information may assist the Plaintiff and/or the Corporate Receivers in:
17.2.1 identifying the Corporate Bank Accounts to which these orders apply; or
17.2.2 identifying Corporate Property in a bank account held by a Third Party; or
17.2.3 recovering Corporate Property from a Third Party,
may, within a reasonable time, inform the Plaintiff and the Corporate Receivers that it holds information potentially relevant to the above and, after having receipt of a written request for information, must provide such information as may reasonably be required to the Plaintiff and the Corporate Receivers within a reasonable time, after first giving notice to the relevant customer."
18. Nothing in Order 17 requires a Bank to make inquiry of or investigate any customer, transaction or bank account.
The
‘general’ orders
19. The Plaintiff, the Individual
Receivers and the Corporate Receivers have leave to give
to:
19.1 the relevant authorities that record, control and regulate the ownership of real property;
19.2 the relevant authorities that record, control and
regulate the ownership of motor vehicles;
19.3 the relevant authorities that record, control and regulate the ownership of maritime vessels and craft;
19.4 any Bank with which the Corporate Defendant operates any Corporate Bank Accounts;
19.5 any other person or entity holding or controlling property belonging to the Corporate Defendant; and
19.6 any Third Party,
notice of these Orders by delivering a copy of these Orders to a person apparently in the employ of that entity or person.
20. The
Corporate Receivers may report (orally or in writing) to the Plaintiff and to
the Court at any time during the course of
their receivership
regarding:
20.1 the nature of the Corporate Property
identified;
20.2 the assets and liabilities of the Corporate Defendant and
the solvency of the Corporate Defendant;
20.3 the costs of the
receivership, the future course of the receivership and the costs
that may be incurred by the Corporate
Receivers in the future;
and
20.4 any other information in relation to the Corporate Property that the Corporate Receivers think necessary to protect the interests of persons to whom the Corporate Defendant is liable, or may become liable, to pay money, whether in respect of debt, by way of damages or compensation or otherwise, or to account for financial products or other property.
21. The Corporate Receivers may by written notice
to the Corporate Defendant require within seven (7) days of the date of such
notice,
the Corporate Defendant to identify in writing any trusts of which the
Corporate Defendant is a beneficiary (including a general
beneficiary of a
discretionary trust), whether named or otherwise, and to provide the following
information concerning such trust:
21.1 the name and address of the trustee;
21.2 a copy of the
relevant trust deed (if it has possession, custody or control of the
same); and
21.3 any further information or documentation regarding the
trust and the management of the trust as requested by the Corporate
Receivers
and to which the Corporate Defendant is entitled including, but not
limited to, the distribution
history of the trust.
22. The
Corporate Defendant shall authorise the Corporate Receivers to, and the
Corporate Receivers shall be entitled to, obtain
information regarding the
trusts referred to in the preceding paragraph from the trustees of such trusts,
including the terms of
such trusts, the classes of its beneficiaries and its
distribution history, and the Corporate Defendant shall sign all such documents
and do all such things necessary to give effect to the granting of such
authority.
23. If within 10 days of the Receivers or their legal advisers
becoming aware of any matter or issue that may give rise to a conflict
of
interest, they shall seek the advice of counsel in respect of the possible
conflict.
24. If counsel is of the view that the matter or issue
gives rise to a possible conflict of interest, then the Receivers shall
make an application to the Court for appropriate directions.
25. The costs of the Plaintiff’s application for these Orders is to be paid by the Fifth Defendant.
26. The Parties and any third
parties affected by these orders have liberty to apply to the Court on the
giving of reasonable notice.
27. The Fifth Defendant is hereby authorised to release the sum of $40,878.04 from its trust account with Mony de Kerloy to those solicitors in respect of their costs and disbursements incurred in connection with the interlocutory application together with the further sum of $500, being the costs of the application in relation to the release of that sum.
In respect
of the Sixth Defendant THE COURT ORDERS THAT:
1. Orders 2 to 23 made in these proceedings before the Honourable Justice French on 30 June 2006 as amended from time to time in relation to the Sixth Defendant (Corporate Defendant) are as at the date of these orders replaced by the orders below.
The Corporate Receiver orders
2. Until 30 June 2007 or further order, Brian McMaster and Mark Korda of KordaMentha, Chartered Accountants, of Level 11, 37 St Georges Terrace, Perth, be appointed jointly and severally as receivers and managers (‘the Corporate Receivers’) to property (the ‘Corporate Property’), whether within Australia or overseas, of the Corporate Defendant.
3. For the purpose of these orders, "Corporate Property" includes property which falls within any of the following categories:
3.1 property held in the name of the Corporate Defendant;
3.2 property held by the Corporate Defendant as trustee for a trust or on behalf of or on account of another person;
3.3 property held jointly in the name of the Corporate Defendant and one or more persons or entities not named as a defendant in these proceedings (Third Party);
3.4 property held jointly in the name of the Corporate Defendant and a Third Party for the express purpose of a joint venture;
3.5 property held by the Corporate Defendant jointly with a Third Party, where both the Corporate Defendant and the Third Party hold the property in their capacity as joint trustees for a trust or on behalf of or on account of another person;
3.6 property held by a Third Party as trustee of a trust, where the Corporate Defendant agrees that it is or the Court directs that it is to be treated as the effective controller or owner of the trust property; and
3.7 right to operate any Corporate Bank Account (as that term is defined in Order 4 below) and any chose in action in relation to such account;
but does not include:
3.8 such rights or choses in action in relation to any Excluded Corporate Bank Accounts (as that term is defined in Order 4 below).
4. For the purpose of these orders, "Corporate Bank Accounts" means accounts which fall within any of the following categories:
4.1 accounts held in the name of the Corporate Defendant;
4.2 accounts held by the Corporate Defendant as trustee for a trust or on behalf of or on account of another person;
4.3 accounts held jointly in the name of the Corporate Defendant and a Third Party;
4.4 accounts held jointly in the name of the Corporate Defendant and a Third Party for the express purpose of a joint venture; and
4.5 accounts held by the Corporate Defendant jointly with a Third Party, where both the Corporate Defendant and the Third Party hold the property in their capacity as trustees for a trust or on behalf of or on account of another person,
but does not include the following (collectively the ‘Excluded Corporate Accounts’):
4.6 such other accounts as notified to the relevant bank, building society or financial institution ("Bank") by the Plaintiff or Corporate Receivers.
5. The Corporate Receivers have, in respect of the Corporate Property, the following powers:
5.1 the power to do all things necessary or convenient to be done for or in connection with, or as incidental to, the identification, preservation and securing of all of the Corporate Property for the benefit of potential creditors;
5.2 without limiting the generality of the power in the preceding subparagraph:
5.2.1 the power to enter into possession and take control of the Corporate Property to the extent that the exercise of the power is reasonably necessary to achieve the purposes set out in the preceding sub-paragraph; and
5.2.2 the power to appoint a lawyer, accountant or other professionally qualified person to assist the Corporate Receivers; and
5.3 the preceding powers shall not extend to the sale, letting or encumbering of such property without prior leave of the Court or the consent of the Corporate Defendant.
6. The Corporate Receivers (or any one of them) must be appointed a required signatory to all Corporate Defendant Accounts.
7. Subject to Orders 8, 9.3.3 and 10.3, all electronic banking facilities to the extent they allow the conducting of transactions on the Corporate Bank Accounts, will be cancelled and only reinstated upon the written request of the Corporate Receivers and at the relevant Bank’s discretion.
8. For the purposes of these Orders:
"Automatic Bank Debit" means an automatic debit from a Corporate Bank Account, which debit is established by an authority provided by the account holder in favour of the Bank which holds the Corporate Bank Account.
"Automatic Third Party Debits" means an automatic debit from a Corporate Bank Account, which debit is established by an authority provided by the account holder in favour of a third party who receives the proceeds of the debit.
8.1 Automatic Bank Debits existing before 30 March 2006 may continue, provided that the Corporate Receivers may request the Bank to cancel any Automatic Bank Debit which is not otherwise permitted by these orders.
8.2 Automatic Third Party Debits existing before 30 March 2006 may continue, providing that the Corporate Receivers may request the third party to cancel any such Automatic Third Party Debit which is not otherwise permitted by these orders.
8.3 For the avoidance of doubt, all of the relevant Bank’s rights are preserved under the relevant facility terms and conditions and any relevant authority.
9. These orders shall not prevent:
9.1 the Corporate Defendant by its officers other than the Corporate Receivers from continuing to operate in the ordinary course of its business(es), provided that the said limitation on the power of the Corporate Receivers shall not apply to the extent that the exercise of the said power is necessary to do the things referred to in Order 5 and provided further that it must obtain the Corporate Receivers’ prior consent to any transaction that would result in the transfer or disposition of any part of the Corporate Property exceeding a value in excess of $5,000 or a series of transactions that would result in the transfer or disposition of any part of the Corporate Property totalling a value of in excess of $5,000 within any seven (7) day period; and
9.2 the Corporate Defendant, with the prior written approval of the Corporate Receivers (or any of them), from:
9.2.1 selling Corporate Property; or
9.2.2 applying for new advances from any Bank;
9.2.3 granting new security in favour of any Bank over Corporate Property (acquired prior to or after the date of this Order); or
9.2.4 paying any creditor;
9.3 any Bank from:
9.3.1 exercising any right of set-off which it may have in respect of a facility afforded by it to the Corporate Defendant prior to or after the date of this Order;
9.3.2 enforcing or exercising any security right or interest existing now or in the future in relation to the Corporate Property;
9.3.3 subject to Order 8 above, processing any Automatic Bank Debit or Automatic Third Party Debit otherwise permitted by these Orders; and
9.3.4 debiting Corporate Bank Accounts with any interest, fees, costs and charges in accordance with the terms and conditions set out in the relevant Bank’s security and facility documentation.
10. Subject to the Corporate Receivers’ satisfaction as to the solvency of the Corporate Defendant, the Corporate Receivers may, in relation to the Corporate Defendant, approve:
10.1 payments by the Corporate Defendant to pay reasonable legal expenses incurred in these proceedings or legal costs that may be reasonably incurred in the future that are either incidental to these proceedings or in anticipation of, or in preparation for the proceedings the Plaintiff or others may bring against the Corporate Defendant, which includes the payment of monies on trust to solicitors on account of such expenses;
10.2 reasonable expenses required to maintain, realise or preserve assets;
10.3 Automatic Bank Debits from any Corporate Bank Account required to effect a transaction otherwise permitted by these orders; and
10.4 changes to security and facility arrangements with any Bank.
11. Upon receipt of confirmation of the approval of the Corporate Receivers (or any one of them), no Bank need inquire as to:
11.1 the application or proposed application of any money withdrawn or automatically debited from the Corporate Bank Accounts; or
11.2 whether a transaction or proposed transaction or any change to arrangements is in contravention of these Orders.
12. For the avoidance of doubt, all of the Banks’ rights are preserved and it remains at the Banks’ absolute discretion, subject to the terms and conditions set out in the Banks’ respective security and facility documentation, as to whether they will make further credit funds available or will permit any changes of facility or security arrangements at the request of the Corporate Defendant and the Corporate Receivers.
13. In exercising the discretion to consent or not to any payment, transfer or disposition contemplated in these orders, the Corporate Receivers have the power to make all necessary and incidental inquiries into the affairs of the Corporate Defendant (including the power to make inquiries in the name of the Corporate Defendant), including inspecting the books and records and any other information held by the Corporate Defendant and or their agents relating to those affairs, and the Corporate Defendant must give the Corporate Receivers such assistance as is reasonably requested by them in the course of such inquiries.
14. The Corporate Defendant, by itself, its servants, agents or employees, must:
14.1 permit the Corporate Receivers ongoing access to the books and records which relate to the Corporate Property including any computer system of the Corporate Defendant; and
14.2 use its best endeavours to assist the Corporate Receivers in the performance of their obligations.
15. The Corporate Receivers have leave to give to any Bank with which the Corporate Defendant or Third Party operates any Corporate Bank Accounts a copy of the affidavit filed by the Corporate Defendant pursuant to Order 5 of the Orders made by this Court on 20 April 2006 in relation to the Corporate Defendant, so as to inform them of the Bank Accounts which are Corporate Bank Accounts.
16.1 Any Bank which holds private and confidential information in relation to its customers which may assist in identifying the Corporate Bank Accounts may be required by written notice from the Corporate Receivers to provide such information to the Corporate Receivers within a reasonable time after having received a written request for such information accompanied by a copy of this order.
16.2 Any Bank which receives such a request from the Corporate Receivers may apply within 7 days from its receipt or such longer period as may be agreed with the Corporate Receivers to be relieved from the obligation of complying with it.
16.3 In the event that no such application is made or that such application is refused, the Bank must comply with the request within a reasonable time or such time as the Court orders.
16.4 The Corporate Receivers may provide any information obtained pursuant to this Order to the Plaintiff.
16.5 The Bank, before complying with any written request shall first give notice to the relevant customers.
17. Any of the following Banks (Westpac Banking Corporation Limited, National Australia Bank Limited and HBOS Australia Limited) which:
17.1 becomes aware of private and confidential information in relation to its customers (which may include, but is not intended to be limited to private and confidential information in relation to the Corporate Defendant); and
17.2 reasonably believes that the private and confidential information may assist the Plaintiff and/or the Corporate Receivers in:
17.2.1 identifying the Corporate Bank Accounts to which these orders apply; or
17.2.2 identifying Corporate Property in a bank account held by a Third Party; or
17.2.3 recovering Corporate Property from a Third Party,
may, within a reasonable time, inform the Plaintiff and the Corporate Receivers that it holds information potentially relevant to the above and, after having receipt of a written request for information, must provide such information as may reasonably be required to the Plaintiff and the Corporate Receivers within a reasonable time, after first giving notice to the relevant customer.
18. Nothing in Order 17 requires a Bank to make inquiry of or investigate any customer, transaction or bank account.
The ‘general’ orders
19. The Plaintiff, the Individual Receivers and the Corporate Receivers have leave to give to:
19.1 the relevant authorities that record, control and regulate the ownership of real property;
19.2 the relevant authorities that record, control and regulate the ownership of motor vehicles;
19.3 the relevant authorities that record, control and regulate the ownership of maritime vessels and craft;
19.4 any Bank with which the Corporate Defendant operates any Corporate Bank Accounts;
19.5 any other person or entity holding or controlling property belonging to the Corporate Defendant; and
19.6 any Third Party,
notice of these Orders by delivering a copy of these Orders to a person apparently in the employ of that entity or person.
20. The Corporate Receivers may report (orally or in writing) to the Plaintiff and to the Court at any time during the course of their receivership regarding:
20.1 the nature of the Corporate Property identified;
20.2 the assets and liabilities of the Corporate Defendant and the solvency of the Corporate Defendant;
20.3 the costs of the receivership, the future course of the receivership and the costs that may be incurred by the Corporate Receivers in the future; and
20.4 any other information in relation to the Corporate Property that the Corporate Receivers think necessary to protect the interests of persons to whom the Corporate Defendant is liable, or may become liable, to pay money, whether in respect of debt, by way of damages or compensation or otherwise, or to account for financial products or other property.
21. The Corporate Receivers may by written notice to the Corporate Defendant require within seven (7) days of the date of such notice, the Corporate Defendant to identify in writing any trusts of which the Corporate Defendant is a beneficiary (including a general beneficiary of a discretionary trust), whether named or otherwise, and to provide the following information concerning such trust:
21.1 the name and address of the trustee;
21.2 a copy of the relevant trust deed (if it has possession, custody or control of the same); and
21.3 any further information or documentation regarding the trust and the management of the trust as requested by the Corporate Receivers and to which the Corporate Defendant is entitled including, but not limited to, the distribution history of the trust.
22. The Corporate Defendant shall authorise the Corporate Receivers to, and the Corporate Receivers shall be entitled to, obtain information regarding the trusts referred to in the preceding paragraph from the trustees of such trusts, including the terms of such trusts, the classes of its beneficiaries and its distribution history, and the Corporate Defendant shall sign all such documents and do all such things necessary to give effect to the granting of such authority.
23. If within ten (10) days of the Receivers or their legal advisers becoming aware of any matter or issue that may give rise to a conflict of interest, they shall seek the advice of counsel in respect of the possible conflict.
24. If counsel is of the view that the matter or issue gives rise to a possible conflict of interest, then the Receivers shall make an application to the Court for appropriate directions.
25. The costs of the Plaintiff’s application for these Orders is to be paid by the sixth defendant.
26. The Parties and any third parties affected by these orders have liberty to apply to the Court on the giving of reasonable notice.
THE ADMINISTRATORS ORDERS
27. IN REGARDS TO THE APPOINTMENT OF MARTIN BRUCE JONES AND DARREN GORDON WEAVER ON 16 JANUARY 2007 AS ADMINISTRATORS OF THE CORPORATE DEFENDANT, THE RECEIVERS AND MANAGERS APPOINTED TO THE COMPANY BY THE COURT PURSUANT TO ORDER 2 CEASE TO PERFORM THEIR FUNCTIONS PURSUANT TO THAT ORDER UNTIL:
27.1 the creditors of the sixth defendant resolve that the administration of the sixth defendant should end under s439C(b) of the Corporations Act 2001 (Cth); or
27.2 further order,
27.3 whichever is the earlier.
28. Orders 3 - 23 of the Orders made by the Court on 30 June 2006 as amended from time to time, in respect to the sixth defendant, be stayed until:
28.1 the creditors of the sixth defendant resolve that the administration of the Sixth Defendant should end under s439C(b) of the Corporations Act 2001 (Cth); or
28.2 further order,
28.3 whichever is the earlier.
29. The administrators of the sixth defendant shall serve upon the Plaintiff and the Receivers and Managers of the sixth defendant:
29.1 copies of the written notice issued by them pursuant to s439A(3) of the Corporations Act 2001 (Cth); and
29.2 any accompaniments to such notice pursuant to s439A(4) of the Act,
with such service to be effected at the same time as such documents are served upon the creditors of the sixth defendant.
30. The administrators shall by notice in writing advise the Plaintiff and the Receivers and Managers of the sixth defendant within twenty four hours of the meeting of the creditors of the sixth defendant convened pursuant to s439A of the Corporations Law, of the terms of any resolution or decision made at such creditors meeting.
In respect of the SEVENTH DEFENDANT THE COURT ORDERS THAT:
1. Orders 2 to 13 made in these proceedings before the Honourable Justice French on 30 June 2006 as amended from time to time in relation to the Seventh Defendant (‘Bowesco’) are as at the date of these orders replaced by the orders below.
The Asset Preservation Orders
2. Bowesco, by itself, its servants agents and employees, is restrained until 30 June 2007 or further order, from removing, or causing or permitting to be removed from any State of Australia and from Australia, or selling, charging, mortgaging or otherwise dealing with or disposing of or causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of, all or any of its assets (the ‘Bowesco Property’), whether held legally or beneficially by it.
3. For the purpose of these orders, ‘Bowesco Property’ includes property which falls within any of the following categories:
3.1 property held in the name of Bowesco;
3.2 property held by Bowesco as trustee for a trust or on behalf of or on account of another person;
3.3 property held jointly in the name of Bowesco and one or more persons or entities not named as a defendant in these proceedings (‘Third Party’);
3.4 property held jointly in the name of Bowesco and a Third Party for the express purpose of a joint venture;
3.5 property held by Bowesco jointly with a Third Party, where both Bowesco and the Third Party hold the property in their capacity as trustees for a trust or on behalf of or on account of another person;
3.6 property held by a Third Party as trustee of a trust, where Bowesco agrees that it is or the Court directs that it is to be held as the effective controller or owner of the trust property; and
3.7 the rights to operate any Bowesco Bank Account (as that term is defined under Order 4A below) and any chose in action in association with such Bank Account,
but does not include:
3.8 such rights or choses in action in relation to any Excluded Bowesco Account (as that term is defined in Order 4A below).
4A For the purposes of these orders, ‘Bowesco Bank Accounts’ means accounts which fall within any of the following categories:
4A.1 accounts held in the name of Bowesco;
4A.2 accounts held by Bowesco as trustee for a trust or on behalf of or account of another person;
4A.3 accounts held jointly in the name of Bowesco and a Third Party;
4A.4 accounts held jointly in the name of Bowesco and a Third Party for the express purpose of a joint venture;
4A.5 accounts held by Bowesco jointly with a Third Party, where both Bowesco and the Third Party hold the property in their capacity as trustees for a trust or on behalf of or on account of another person,
but does not include the following (collectively, the "Excluded Bowesco Accounts"):
4A.6 such other accounts as notified to the relevant bank, building society or financial institution ("Bank") by the Plaintiff.
PROVIDED that these orders:
5. Shall not prevent John Patrick Cronin and Shaun Robert Fraser (the ‘Bowesco Receivers’) from exercising all rights, powers, privileges, benefits, discretions and authorities conferred upon them (either jointly or severally) by:
5.1 a Deed of Charge granted by Bowesco in favour of Suncorp-Metway Limited (‘Suncorp’), dated 8 October 2004, registered with the Plaintiff and having charge number 1093803;
5.2 a Mortgage granted by Bowesco in favour of Suncorp, dated 8 October 2004, and registered in the Land Titles Office of Western Australia on and having number J056734;
5.3 a Deed of Appointment of Receiver made 3 April 2006 between Suncorp and the Bowesco Receivers; and
5.4 section 420 of the Corporations
Act 2001Cth).
6. Shall not prevent Bowesco from paying costs
reasonably incurred in these proceedings from a Bowesco Bank Account nominated
in
writing to the Bowesco Receivers in amounts as approved in writing by the
Court from time to time.
7. Shall not prevent Mark Korda and David Winterbottom (the "Option Receivers") from exercising all rights, powers, privileges, benefits, discretions and authorities conferred upon them (either jointly or severally) by:
(a) a Deed of Charge granted by Westpoint Corporation Pty Ltd (Receivers and Managers Appointed) (In liquidation) in favour of Perpetual Nominees Limited as Custodian of The ING Mortgage Pool for ING Funds Management Limited ABN 21003 002 800 as the Responsible Entity of The ING Mortgage Pool ("ING"), dated 28 September 2005, registered with the Plaintiff and having charge number 1298375;
(b) a Deed of Appointment of Receiver made
19 July 2006 between ING and the Option Receivers; and
(c) section 420 of
the Corporations Act 2001.
8. Shall not prevent any Bank from:
8.1 exercising any right of set-off which it may have in respect of a facility afforded by it to Bowesco prior to or after the date of this Order;
8.2 enforcing or exercising any security right or interest, existing now or in the future in relation to Bowesco Property; and
8.3 debiting any Bowesco Bank Account with any interest, fees, costs and charges in accordance with the terms and conditions set out in the relevant Bank’s security and facility documentation.
9. For the avoidance of doubt, all of the Banks’ rights are preserved under the terms and conditions of the Banks’ respective security and facility documentation.
10.1 Any Bank which holds private and confidential information in relation to its customers which may assist in identifying the Bowesco Bank Accounts may be required by written notice from the Plaintiff to provide such information to the Plaintiff within a reasonable time after having received a written request for such information accompanied by a copy of this order.
10.2 Any Bank which receives such a request from the Plaintiff may apply within seven (7) days from its receipt or such longer period as may be agreed with the Plaintiff to be relieved from the obligation of complying with it.
10.3 In the event that no such application is made or that such application is refused, the Bank must comply with the request within a reasonable time or such time as the Court orders.
10.4 The Bank, before complying with any written request shall first give notice to the relevant customers.
11. Any of the following Banks (Westpac Banking Corporation Limited, National Australia Bank Limited and HBOS Australia Limited) which:
11.1 becomes aware of private and confidential information in relation to its customers (which may include, but is not intended to be limited to private and confidential information in relation to Bowesco); and
11.2 reasonably believes that the private and confidential information may assist the Plaintiff in:
11.2.1 identifying Bowesco Bank Accounts to which these orders apply; or
11.2.2 identifying Bowesco Property in a bank account held by a Third Party; or
11.2.3 recovering Bowesco Property from a Third Party,
may, within a reasonable time, inform the Plaintiff that it holds information potentially relevant to the above and, after having receipt of a written request for information, must provide such information as may reasonably be required to the Plaintiff within a reasonable time, after first giving notice to the relevant customer.
12. Nothing in Order 11 requires a Bank to make inquiry of or investigate any customer, transaction or bank account.
13. The Plaintiff has leave to give to any Bank with which Bowesco or any Third Party operates any Bowesco Bank Accounts a copy of the affidavit filed by Bowesco in these proceedings, so as to inform them of the bank accounts which are Bowesco Bank Accounts.
The ‘general’
orders
14. The Plaintiff has leave to give to:
14.1 the relevant authorities that record, control and regulate the ownership of real property;
14.2 the relevant authorities that record, control and regulate the ownership of motor vehicles;
14.3 the relevant authorities that record, control and regulate the ownership of maritime vessels and craft;
14.4 any Bank with which Bowesco
operates any Bank Accounts;
14.5 any other person or entity holding or
controlling property belonging to Bowesco; and
14.6 any Third Party,
notice of these Orders by delivering a copy of these Orders to a person apparently in the employ of that entity or person.
15. The costs of the Plaintiff’s application for these Orders is to be paid by the seventh defendant.
16. The Parties and any other third party affected by these Orders have liberty to apply to the Court on the giving of reasonable notice.
In respect of the EIGHTH DEFENDANT THE
COURT ORDERS THAT:
1. Orders 2 to 23 made in these proceedings before the Honourable Justice French on 30 June 2006 as amended from time to time in relation to the Eighth Defendant (Corporate Defendant) are as at the date of these Orders replaced the Orders below.
The Corporate Receiver orders
2. Until 30 June 2007 or further order, Brian McMaster and Mark Korda of KordaMentha, Chartered Accountants, of Level 11, 37 St Georges Terrace, Perth, be appointed jointly and severally as receivers and managers (the Corporate Receivers) to property (the Corporate Property), whether within Australia or overseas, of the Corporate Defendant.
3. For the purpose of these Orders, "Corporate Property" includes property which falls within any of the following categories:
3.1 property held in the name of the Corporate Defendant;
3.2 property held by the Corporate Defendant as trustee for a trust or on behalf of or on account of another person;
3.3 property held jointly in the name of the Corporate Defendant and one or more persons or entities not named as a defendant in these proceedings (‘Third Party’);
3.4 property held jointly in the name of the Corporate Defendant and a Third Party for the express purpose of a joint venture;
3.5 property held by the Corporate Defendant jointly with a Third Party, where both the Corporate Defendant and the Third Party hold the property in their capacity as joint trustees for a trust or on behalf of or on account of another person;
3.6 property held by a Third Party as trustee of a trust, where the Corporate Defendant agrees that it is or the Court directs that it is to be treated as the effective controller or owner of the trust property; and
3.7 right to operate any Corporate Bank Account (as that term is defined in Order 4 below) and any chose in action in relation to such account;
but does not include:
3.8 such rights or choses in action in relation to any Excluded Corporate Bank Accounts (as that term is defined in Order 4 below).
4. For the purpose of these orders, ‘Corporate Bank Accounts’ means accounts which fall within any of the following categories:
4.1 accounts held in the name of the Corporate Defendant;
4.2 accounts held by the Corporate Defendant as trustee for a trust or on behalf of or on account of another person;
4.3 accounts held jointly in the name of the Corporate Defendant and a Third Party;
4.4 accounts held jointly in the name of the Corporate Defendant and a Third Party for the express purpose of a joint venture; and
4.5 accounts held by the Corporate Defendant jointly with a Third Party, where both the Corporate Defendant and the Third Party hold the property in their capacity as trustees for a trust or on behalf of or on account of another person,
but does not include the following
(collectively the ‘Excluded Corporate Accounts’):
4.6 such other accounts as notified to the relevant bank, building society or financial institution ("Bank") by the Plaintiff or Corporate Receivers.
5. The Corporate Receivers have, in respect of the Corporate Property, the following powers:
5.1 the power to do all things necessary or convenient to be done for or in connection with, or as incidental to, the identification, preservation and securing of all of the Corporate Property for the benefit of potential creditors;
5.2 without limiting the generality of the power in the preceding subparagraph:
5.2.1 the power to enter into possession and take control of the Corporate Property to the extent that the exercise of the power is reasonably necessary to achieve the purposes set out in the preceding sub-paragraph; and
5.2.2 the power to appoint a lawyer, accountant or other professionally qualified person to assist the Corporate Receivers; and
5.3 the preceding powers shall not extend to the sale, letting or encumbering of such property without prior leave of the Court or the consent of the Corporate Defendant.
6. The Corporate Receivers (or any one of them) must be appointed a required signatory to all Corporate Defendant Accounts.
7. Subject to orders 8, 9.3.3 and 10.3, all electronic banking facilities to the extent they allow the conducting of transactions on the Corporate Bank Accounts, will be cancelled and only reinstated upon the written request of the Corporate Receivers and at the relevant Bank’s discretion.
8. For
the purposes of these Orders:
"Automatic Bank Debit" means an automatic debit from a Corporate Bank Account, which debit is established by an authority provided by the account holder in favour of the Bank which holds the Corporate Bank Account.
"Automatic Third Party Debits" means an automatic debit from a Corporate Bank Account, which debit is established by an authority provided by the account holder in favour of a third party who receives the proceeds of the debit.
8.1 Automatic Bank Debits existing before 30 March 2006 may continue, provided that the Corporate Receivers may request the Bank to cancel any Automatic Bank Debit which is not otherwise permitted by these orders.
8.2 Automatic Third Party Debits existing before 30 March 2006 may continue, providing that the Corporate Receivers may request the third party to cancel any such Automatic Third Party Debit which is not otherwise permitted by these orders.
8.3 For the avoidance of doubt, all of the relevant Bank’s rights are preserved under the relevant facility terms and conditions and any relevant authority.
9. These orders shall not prevent:
9.1 the Corporate Defendant by its officers other than the Corporate Receivers from continuing to operate in the ordinary course of its business(es), provided that the said limitation on the power of the Corporate Receivers shall not apply to the extent that the exercise of the said power is necessary to do the things referred to in Order 5 and provided further that it must obtain the Corporate Receivers’ prior consent to any transaction that would result in the transfer or disposition of any part of the Corporate Property exceeding a value in excess of $5,000 or a series of transactions that would result in the transfer or disposition of any part of the Corporate Property totalling a value of in excess of $5,000 within any seven (7) day period; and
9.2 the Corporate Defendant, with the prior written approval of the Corporate Receivers (or any of them), from:
9.2.1 selling Corporate Property; or
9.2.2 applying for new advances from any Bank;
9.2.3 granting new security in favour of any Bank over Corporate Property (acquired prior to or after the date of this Order); or
9.2.4 paying any creditor;
9.3 any Bank from:
9.3.1 exercising any right of set-off which it may have in respect of a facility afforded by it to the Corporate Defendant prior to or after the date of this Order;
9.3.2 enforcing or exercising any security right or interest existing now or in the future in relation to the Corporate Property;
9.3.3 subject to Order 8 above, processing any Automatic Bank Debit or Automatic Third Party Debit otherwise permitted by these Orders; and
9.3.4 debiting Corporate Bank Accounts with any interest, fees, costs and charges in accordance with the terms and conditions set out in the relevant Bank’s security and facility documentation.
10. Subject to the Corporate Receivers’ satisfaction as to the solvency of the Corporate Defendant, the Corporate Receivers may, in relation to the Corporate Defendant, approve:
10.1 payments by the Corporate Defendant to pay reasonable legal expenses incurred in these proceedings or legal costs that may be reasonably incurred in the future that are either incidental to these proceedings or in anticipation of, or in preparation for the proceedings the Plaintiff or others may bring against the Corporate Defendant, which includes the payment of monies on trust to solicitors on account of such expenses;
10.2 reasonable expenses required to maintain, realise or preserve assets;
10.3 Automatic Bank Debits from any Corporate Bank Account required to effect a transaction otherwise permitted by these orders; and
10.4 changes to security and facility arrangements with any Bank.
11. Upon receipt of confirmation of the approval of the Corporate Receivers (or any one of them), no Bank need inquire as to:
11.1 the application or proposed application of any money withdrawn or automatically debited from the Corporate Bank Accounts; or
11.2 whether a transaction or proposed transaction or any change to arrangements is in contravention of these Orders.
12. For the avoidance of doubt, all of the Banks’ rights are preserved and it remains at the Banks’ absolute discretion, subject to the terms and conditions set out in the Banks’ respective security and facility documentation, as to whether they will make further credit funds available or will permit any changes of facility or security arrangements at the request of the Corporate Defendant and the Corporate Receivers.
13. In exercising the discretion to consent or not to any payment, transfer or disposition contemplated in these orders, the Corporate Receivers have the power to make all necessary and incidental inquiries into the affairs of the Corporate Defendant (including the power to make inquiries in the name of the Corporate Defendant), including inspecting the books and records and any other information held by the Corporate Defendant and or their agents relating to those affairs, and the Corporate Defendant must give the Corporate Receivers such assistance as is reasonably requested by them in the course of such inquiries.
14. The Corporate Defendant, by itself, its servants, agents or employees, must:
14.1 permit the Corporate Receivers ongoing access to the books and records which relate to the Corporate Property including any computer system of the Corporate Defendant; and
14.2 use its best endeavours to assist the Corporate Receivers in the performance of their obligations.
15. The
Corporate Receivers have leave to give to any Bank with which the Corporate
Defendant or Third Party operates any Corporate
Bank Accounts a copy of the
affidavit filed by the Corporate Defendant pursuant to Order 5 of the orders
made by this Court on
20 April 2006 in relation to the Corporate Defendant, so
as to inform them of the Bank Accounts which are Corporate Bank Accounts.
16.1 Any Bank which holds private and confidential information in relation to its customers which may assist in identifying the Corporate Bank Accounts may be required by written notice from the Corporate Receivers to provide such information to the Corporate Receivers within a reasonable time after having received a written request for such information accompanied by a copy of this Order.
16.2 Any Bank which receives such a request from the Corporate
Receivers may apply within 7 days from its receipt or such longer
period as may
be agreed with the Corporate Receivers to be relieved from the obligation of
complying with it.
16.3 In the event that no such application is made or
that such application is refused, the Bank must comply with the request within
a
reasonable time or such time as the Court orders.
16.4 The Corporate
Receivers may provide any information obtained pursuant to this Order to the
Plaintiff.
16.5 The Bank, before complying with any written request shall
first give notice to the relevant customers.
17. Any of the following
Banks (Westpac Banking Corporation Limited, National Australia
Bank
Limited and HBOS Australia Limited) which:
17.1 becomes aware of private and confidential information in relation to its customers (which may include, but is not intended to be limited to private and confidential information in relation to the Corporate Defendant); and
17.2 reasonably believes that the private and confidential information may assist the Plaintiff and/or the Corporate Receivers in:
17.2.1 identifying the Corporate Bank Accounts to which these orders apply; or
17.2.2 identifying Corporate Property in a bank account held by a Third Party; or
17.2.3 recovering Corporate Property from a Third Party,
may, within a reasonable time, inform the Plaintiff and the Corporate Receivers that it holds information potentially relevant to the above and, after having receipt of a written request for information, must provide such information as may reasonably be required to the Plaintiff and the Corporate Receivers within a reasonable time, after first giving notice to the relevant customer."
18. Nothing in Order 17 requires a Bank to make inquiry of or investigate any customer, transaction or bank account.
The
‘general’ orders
19. The Plaintiff, the Individual
Receivers and the Corporate Receivers have leave to give to:
19.1 the
relevant authorities that record, control and regulate the ownership
of real property;
19.2 the relevant authorities that record, control and regulate the ownership of motor vehicles;
19.3 the relevant authorities that record,
control and regulate the ownership of maritime vessels and
craft;
19.4 any Bank with which the Corporate Defendant operates any
Corporate Bank Accounts;
19.5 any other person or entity holding
or controlling property belonging to the Corporate Defendant; and
19.6 any Third Party,
notice of these Orders by delivering a copy of these Orders to a person apparently in the employ of that entity or person.
20. The Corporate Receivers may report (orally or in writing) to the Plaintiff and to the Court at any time during the course of their receivership regarding:
20.1 the nature of the Corporate Property identified;
20.2 the assets and liabilities of the Corporate Defendant and the solvency of the Corporate Defendant;
20.3 the costs of the receivership, the future course of the receivership and the costs that may be incurred by the Corporate Receivers in the future; and
20.4 any other information in relation to the Corporate Property that the Corporate Receivers think necessary to protect the interests of persons to whom the Corporate Defendant is liable, or may become liable, to pay money, whether in respect of debt, by way of damages or compensation or otherwise, or to account for financial products or other property.
21. The Corporate Receivers may by written notice to the Corporate Defendant require within seven (7) days of the date of such notice, the Corporate Defendant to identify in writing any trusts of which the Corporate Defendant is a beneficiary (including a general beneficiary of a discretionary trust), whether named or otherwise, and to provide the following information concerning such trust:
21.1 the name and address of the
trustee;
21.2 a copy of the relevant trust deed (if it has possession,
custody or control of the same); and
21.3 any further information or documentation regarding the trust and the management of the trust as requested by the Corporate Receivers and to which the Corporate Defendant is entitled including, but not limited to, the distribution history of the trust.
22. The Corporate
Defendant shall authorise the Corporate Receivers to, and the Corporate
Receivers shall be entitled to, obtain
information regarding the trusts
referred to in the preceding paragraph from the trustees of such trusts,
including the terms of
such trusts, the classes of its beneficiaries and its
distribution history, and the Corporate Defendant shall sign all such documents
and do all such things necessary to give effect to the granting of such
authority.
23. If within ten (10) days of the Receivers or their legal
advisers becoming aware of any matter or issue that may give rise to
a conflict
of interest, they shall seek the advice of counsel in respect of the
possible conflict.
24. If counsel is of the view that the matter or
issue gives rise to a possible conflict of interest, then the
Receivers shall
make an application to the Court for appropriate
directions.
25. The costs of the Plaintiff’s application for these Orders is to be paid by the eighth defendant.
26. The Parties and any third
parties affected by these orders have liberty to apply to the Court on the
giving of reasonable notice.
In respect of the NINTH DEFENDANT THE
COURT ORDERS THAT:
1. Orders 2 to 23 made in these proceedings before the Honourable Justice French on 30 June 2006 as amended from time to time in relation to the Ninth Defendant (‘Corporate Defendant’) are as at the date of these Orders replaced by the Orders below.
The Corporate Receiver
orders
2. Until 30 June 2007 or further Order, Brian McMaster and Mark Korda of KordaMentha, Chartered Accountants, of Level 11, 37 St Georges Terrace, Perth, be appointed jointly and severally as receivers and managers (‘the Corporate Receivers’) to property (the ‘Corporate Property’), whether within Australia or overseas, of the Corporate Defendant.
3. For the purpose of these orders, ‘Corporate Property’ includes property which falls within any of the following categories:
3.1 property held in the name of the Corporate Defendant;
3.2 property held by the Corporate Defendant as trustee for a trust or on behalf of or on account of another person;
3.3 property held jointly in the name of the Corporate Defendant and one or more persons or entities not named as a defendant in these proceedings (‘Third Party’);
3.4 property held jointly in the name of the Corporate Defendant and a Third Party for the express purpose of a joint venture;
3.5 property held by the Corporate Defendant jointly with a Third Party, where both the Corporate Defendant and the Third Party hold the property in their capacity as joint trustees for a trust or on behalf of or on account of another person;
3.6 property held by a Third Party as trustee of a trust, where the Corporate Defendant agrees that it is or the Court directs that it is to be treated as the effective controller or owner of the trust property; and
3.7 right to operate any Corporate Bank Account (as that term is defined in Order 4 below) and any chose in action in relation to such account;
but does not include:
3.8 such rights or choses in action in relation to any Excluded Corporate Bank Accounts (as that term is defined in Order 4).
4. For the purpose of these orders, ‘Corporate Bank Accounts’ means accounts which fall within any of the following categories:
4.1 accounts held in the name of the Corporate Defendant;
4.2 accounts held by the Corporate Defendant as trustee for a trust or on behalf of or on account of another person;
4.3 accounts held jointly in the name of the Corporate Defendant and a Third Party;
4.4 accounts held jointly in the name of the Corporate Defendant and a Third Party for the express purpose of a joint venture; and
4.5 accounts held by the Corporate Defendant jointly with a Third Party, where both the Corporate Defendant and the Third Party hold the property in their capacity as trustees for a trust or on behalf of or on account of another person,
but does not include the following (collectively the ‘Excluded Corporate Accounts’):
4.6 such other accounts as notified to the relevant bank, building society or financial institution ("Bank") by the Plaintiff or Corporate Receivers.
5. The Corporate Receivers have, in respect of the Corporate Property, the following powers:
5.1 the power to do all things necessary or convenient to be done for or in connection with, or as incidental to, the identification, preservation and securing of all of the Corporate Property for the benefit of potential creditors;
5.2 without limiting the generality of the power in the preceding subparagraph:
5.2.1 the power to enter into possession and take control of the Corporate Property to the extent that the exercise of the power is reasonably necessary to achieve the purposes set out in the preceding sub-paragraph; and
5.2.2 the power to appoint a lawyer, accountant or other professionally qualified person to assist the Corporate Receivers; and
5.3 the preceding powers shall not extend to the sale, letting or encumbering of such property without prior leave of the Court or the consent of the Corporate Defendant.
6. The Corporate Receivers (or any one of them) must be appointed a required signatory to all Corporate Defendant Accounts.
7. Subject to Orders 8, 9.3.3 and 10.3, all electronic banking facilities to the extent they allow the conducting of transactions on the Corporate Bank Accounts, will be cancelled and only reinstated upon the written request of the Corporate Receivers and at the relevant Bank’s discretion.
8. For the purposes of these Orders:
"Automatic Bank Debit" means an automatic debit from a Corporate Bank Account, which debit is established by an authority provided by the account holder in favour of the Bank which holds the Corporate Bank Account.
"Automatic Third Party Debits" means an automatic debit from a Corporate Bank Account, which debit is established by an authority provided by the account holder in favour of a third party who receives the proceeds of the debit.
8.1 Automatic Bank Debits existing before 30 March 2006 may continue, provided that the Corporate Receivers may request the Bank to cancel any Automatic Bank Debit which is not otherwise permitted by these orders.
8.2 Automatic Third Party Debits existing before 30 March 2006 may continue, providing that the Corporate Receivers may request the third party to cancel any such Automatic Third Party Debit which is not otherwise permitted by these orders.
8.3 For the avoidance of doubt, all of the relevant Bank’s rights are preserved under the relevant facility terms and conditions and any relevant authority.
9. These orders shall not prevent:
9.1 the Corporate Defendant by its officers other than the Corporate Receivers from continuing to operate in the ordinary course of its business(es), provided that the said limitation on the power of the Corporate Receivers shall not apply to the extent that the exercise of the said power is necessary to do the things referred to in Order 5 and provided further that it must obtain the Corporate Receivers’ prior consent to any transaction that would result in the transfer or disposition of any part of the Corporate Property exceeding a value in excess of $5,000 or a series of transactions that would result in the transfer or disposition of any part of the Corporate Property totalling a value of in excess of $5,000 within any seven (7) day period; and
9.2 the Corporate Defendant, with the prior written approval of the Corporate Receivers (or any of them), from:
9.2.1 selling Corporate Property; or
9.2.2 applying for new advances from any Bank;
9.2.3 granting new security in favour of any Bank over Corporate Property (acquired prior to or after the date of this Order); or
9.2.4 paying any creditor;
9.3 any Bank from:
9.3.1 exercising any right of set-off which it may have in respect of a facility afforded by it to the Corporate Defendant prior to or after the date of this Order;
9.3.2 enforcing or exercising any security right or interest existing now or in the future in relation to the Corporate Property;
9.3.3 subject to Order 8 above, processing any Automatic Bank Debit or Automatic Third Party Debit otherwise permitted by these Orders; and
9.3.4 debiting Corporate Bank Accounts with any interest, fees, costs and charges in accordance with the terms and conditions set out in the relevant Bank’s security and facility documentation.
10. Subject to the Corporate Receivers’ satisfaction as to the solvency of the Corporate Defendant, the Corporate Receivers may, in relation to the Corporate Defendant, approve:
10.1 payments by the Corporate Defendant to pay reasonable legal expenses incurred in these proceedings or legal costs that may be reasonably incurred in the future that are either incidental to these proceedings or in anticipation of, or in preparation for the proceedings the Plaintiff or others may bring against the Corporate Defendant, which includes the payment of monies on trust to solicitors on account of such expenses;
10.2 reasonable expenses required to maintain, realise or preserve assets;
10.3 Automatic Bank Debits from any Corporate Bank Account required to effect a transaction otherwise permitted by these orders; and
10.4 changes to security and facility arrangements with any Bank.
11. Upon receipt of confirmation of the approval of the Corporate Receivers (or any one of them), no Bank need inquire as to:
11.1 the application or proposed application of any money withdrawn or automatically debited from the Corporate Bank Accounts; or
11.2 whether a transaction or proposed transaction or any change to arrangements is in contravention of these Orders.
12. For the avoidance of doubt, all of the Banks’ rights are preserved and it remains at the Banks’ absolute discretion, subject to the terms and conditions set out in the Banks’ respective security and facility documentation, as to whether they will make further credit funds available or will permit any changes of facility or security arrangements at the request of the Corporate Defendant and the Corporate Receivers.
13. In exercising the discretion to consent or not to any payment, transfer or disposition contemplated in these orders, the Corporate Receivers have the power to make all necessary and incidental inquiries into the affairs of the Corporate Defendant (including the power to make inquiries in the name of the Corporate Defendant), including inspecting the books and records and any other information held by the Corporate Defendant and or their agents relating to those affairs, and the Corporate Defendant must give the Corporate Receivers such assistance as is reasonably requested by them in the course of such inquiries.
14. The Corporate Defendant, by itself, its servants, agents or employees, must:
14.1 permit the Corporate Receivers ongoing access to the books and records which relate to the Corporate Property including any computer system of the Corporate Defendant; and
14.2 use its best endeavours to assist the Corporate Receivers in the performance of their obligations.
15. The Corporate Receivers have leave to give to any Bank with which the Corporate Defendant or Third Party operates any Corporate Bank Accounts a copy of the affidavit filed by the Corporate Defendant pursuant to Order 5 of the orders made by this Court on 20 April 2006 in relation to the Corporate Defendant, so as to inform them of the Bank Accounts which are Corporate Bank Accounts.
16.1 Any Bank which holds private and confidential information in relation to its customers which may assist in identifying the Corporate Bank Accounts may be required by written notice from the Corporate Receivers to provide such information to the Corporate Receivers within a reasonable time after having received a written request for such information accompanied by a copy of this order.
16.2 Any Bank which receives such a request from the Corporate Receivers may apply within seven (7) days from its receipt or such longer period as may be agreed with the Corporate Receivers to be relieved from the obligation of complying with it.
16.3 In the event that no such application is made or that such application is refused, the Bank must comply with the request within a reasonable time or such time as the Court orders.
16.4 The Corporate Receivers may provide any information obtained pursuant to this Order to the Plaintiff.
16.5 The Bank, before complying with any written request shall first give notice to the relevant customers.
17. Any of the following Banks (Westpac Banking Corporation Limited, National Australia Bank Limited and HBOS Australia Limited) which:
17.1 becomes aware of private and confidential information in relation to its customers (which may include, but is not intended to be limited to private and confidential information in relation to the Corporate Defendant); and
17.2 reasonably believes that the private and confidential information may assist the Plaintiff and/or the Corporate Receivers in:
17.2.1 identifying the Corporate Bank Accounts to which these orders apply; or
17.2.2 identifying Corporate Property in a bank account held by a Third Party; or
17.2.3 recovering Corporate Property from a Third Party,
may, within a reasonable time, inform the Plaintiff and the Corporate Receivers that it holds information potentially relevant to the above and, after having receipt of a written request for information, must provide such information as may reasonably be required to the Plaintiff and the Corporate Receivers within a reasonable time, after first giving notice to the relevant customer.
18. Nothing in Order 17 requires a Bank to make inquiry of or investigate any customer, transaction or bank account.
The
‘general’ orders
19. The Plaintiff, the Individual Receivers and the Corporate Receivers have leave to give to:
19.1 the relevant authorities that record, control and regulate the ownership of real property;
19.2 the relevant authorities that record, control and regulate the ownership of motor vehicles;
19.3 the relevant authorities that record, control and regulate the ownership of maritime vessels and craft;
19.4 any Bank with which the Corporate Defendant operates any Corporate Bank Accounts;
19.5 any other person or entity holding or controlling property belonging to the Corporate Defendant; and
19.6 any Third Party,
notice of these Orders by delivering a copy of these Orders to a person apparently in the employ of that entity or person.
20. The Corporate Receivers may report (orally or in writing) to the Plaintiff and to the Court at any time during the course of their receivership regarding:
20.1 the nature of the Corporate Property identified;
20.2 the assets and liabilities of the Corporate Defendant and the solvency of the Corporate Defendant;
20.3 the costs of the receivership, the future course of the receivership and the costs that may be incurred by the Corporate Receivers in the future; and
20.4 any other information in relation to the Corporate Property that the Corporate Receivers think necessary to protect the interests of persons to whom the Corporate Defendant is liable, or may become liable, to pay money, whether in respect of debt, by way of damages or compensation or otherwise, or to account for financial products or other property.
21. The Corporate Receivers may by written notice to the Corporate Defendant require within seven (7) days of the date of such notice, the Corporate Defendant to identify in writing any trusts of which the Corporate Defendant is a beneficiary (including a general beneficiary of a discretionary trust), whether named or otherwise, and to provide the following information concerning such trust:
21.1 the name and address of the trustee;
21.2 a copy of the relevant trust deed (if it has possession, custody or control of the same); and
21.3 any further information or documentation regarding the trust and the management of the trust as requested by the Corporate Receivers and to which the Corporate Defendant is entitled including, but not limited to, the distribution history of the trust.
22. The Corporate Defendant shall authorise the Corporate Receivers to, and the Corporate Receivers shall be entitled to, obtain information regarding the trusts referred to in the preceding paragraph from the trustees of such trusts, including the terms of such trusts, the classes of its beneficiaries and its distribution history, and the Corporate Defendant shall sign all such documents and do all such things necessary to give effect to the granting of such authority.
23. If within ten (10) days of the Receivers or their legal advisers becoming aware of any matter or issue that may give rise to a conflict of interest, they shall seek the advice of counsel in respect of the possible conflict.
24. If counsel is of the view that the matter or issue gives rise to a possible conflict of interest, then the Receivers shall make an application to the Court for appropriate directions.
25. The costs of the Plaintiff’s application for these orders is to be paid by the ninth defendant.
26. The Parties and any third
parties affected by these orders have liberty to apply to the Court on the
giving of reasonable notice.
In respect of the TENTH DEFENDANT THE COURT
ORDERS THAT:
1. Orders 2 to 19 made in these proceedings before the Honourable Justice French on 22 November 2006 as amended from time to time in relation to the Tenth Defendant (‘Corporate Defendant’) are as at the date of these orders replaced by the orders below.
The Corporate
Receiver orders
2. Until 30 June 2007 or further order, Brian McMaster and Mark Korda of KordaMentha, Chartered Accountants, of Level 11, 37 St Georges Terrace, Perth, be appointed jointly and severally as receivers and managers (‘the Corporate Receivers’) to property (the ‘Corporate Property’), whether within Australia or overseas, of the Corporate Defendant.
3. For the purpose of these orders, "Corporate Property" includes property which falls within any of the following categories:
3.1 property held in the name of the Corporate Defendant;
3.2 property held by the Corporate Defendant as trustee for a trust or on behalf of or on account of another person;
3.3 property held jointly in the name of the Corporate Defendant and one or more persons or entities not named as a defendant in these proceedings (Third Party);
3.4 property held jointly in the name of the Corporate Defendant and a Third Party for the express purpose of a joint venture;
3.5 property held by the Corporate Defendant jointly with a Third Party, where both the Corporate Defendant and the Third Party hold the property in their capacity as joint trustees for a trust or on behalf of or on account of another person;
3.6 property held by a Third Party as trustee of a trust, where the Corporate Defendant agrees that it is or the Court directs that it is to be treated as the effective controller or owner of the trust property; and
3.7 right to operate any Corporate Bank Account (as that term is defined in Order 4 below) and any chose in action in relation to such account;
but does not include:
3.8 such rights or choses in action in relation to any Excluded Corporate Bank Accounts (as that term is defined in Order 4 below).
4. For the purpose of these orders, "Corporate Bank Accounts" means accounts which fall within any of the following categories:
4.1 accounts held in the name of the Corporate Defendant;
4.2 accounts held by the Corporate Defendant as trustee for a trust or on behalf of or on account of another person;
4.3 accounts held jointly in the name of the Corporate Defendant and a Third Party;
4.4 accounts held jointly in the name of the Corporate Defendant and a Third Party for the express purpose of a joint venture; and
4.5 accounts held by the Corporate Defendant jointly with a Third Party, where both the Corporate Defendant and the Third Party hold the property in their capacity as trustees for a trust or on behalf of or on account of another person,
but does not include the following
(collectively the ‘Excluded Corporate Accounts’):
4.6 such other accounts as notified to the relevant bank, building society or financial institution ("Bank") by the Plaintiff or Corporate Receivers.
5. The Corporate Receivers have, in respect of the Corporate Property, the following powers:
5.1 the power to do all things necessary or convenient to be done for or in connection with, or as incidental to, the identification, preservation and securing of all of the Corporate Property for the benefit of potential creditors;
5.2 without limiting the generality of the power in the preceding subparagraph:
5.2.1 the power to enter into possession and take control of the Corporate Property to the extent that the exercise of the power is reasonably necessary to achieve the purposes set out in the preceding sub-paragraph; and
5.2.2 the power to appoint a lawyer, accountant or other professionally qualified person to assist the Corporate Receivers; and
5.3 the preceding powers shall not extend to the sale, letting or encumbering of such property without prior leave of the Court or the consent of the Corporate Defendant.
6. The Corporate Receivers (or any one of them) must be appointed a required signatory to all Corporate Defendant Accounts.
7. Subject to Orders 8, 9.3.3 and 10.3, all electronic banking facilities to the extent they allow the conducting of transactions on the Corporate Bank Accounts, will be cancelled and only reinstated upon the written request of the Corporate Receivers and at the relevant Bank’s discretion.
8. For the purposes of these Orders:
"Automatic Bank Debit" means an automatic debit from a Corporate Bank Account, which debit is established by an authority provided by the account holder in favour of the Bank which holds the Corporate Bank Account.
"Automatic Third Party Debits" means an automatic debit from a Corporate Bank Account, which debit is established by an authority provided by the account holder in favour of a third party who receives the proceeds of the debit.
8.1 Automatic Bank Debits existing before 30 March 2006 may continue, provided that the Corporate Receivers may request the Bank to cancel any Automatic Bank Debit which is not otherwise permitted by these Orders.
8.2 Automatic Third Party Debits existing before 30 March 2006 may continue, providing that the Corporate Receivers may request the third party to cancel any such Automatic Third Party Debit which is not otherwise permitted by these Orders.
8.3 For the avoidance of doubt, all of the relevant Bank’s rights are preserved under the relevant facility terms and conditions and any relevant authority.
9. These Orders shall not prevent:
9.1 the Corporate Defendant by its officers other than the Corporate Receivers from continuing to operate in the ordinary course of its business(es), provided that the said limitation on the power of the Corporate Receivers shall not apply to the extent that the exercise of the said power is necessary to do the things referred to in Order 5 and provided further that it must obtain the Corporate Receivers’ prior consent to any transaction that would result in the transfer or disposition of any part of the Corporate Property exceeding a value in excess of $5,000 or a series of transactions that would result in the transfer or disposition of any part of the Corporate Property totalling a value of in excess of $5,000 within any seven (7) day period; and
9.2 the Corporate Defendant, with the prior written approval of the Corporate Receivers (or any of them), from:
9.2.1 selling Corporate Property; or
9.2.2 applying for new advances from any Bank;
9.2.3 granting new security in favour of any Bank over Corporate Property (acquired prior to or after the date of this Order); or
9.2.4 paying any creditor;
9.3 any Bank
from:
9.3.1 exercising any right of set-off which it may have in respect of a facility afforded by it to the Corporate Defendant prior to or after the date of this Order;
9.3.2 enforcing or exercising any security right or interest existing now or in the future in relation to the Corporate Property;
9.3.3 subject to Order 8 above, processing any Automatic Bank Debit or Automatic Third Party Debit otherwise permitted by these Orders; and
9.3.4 debiting Corporate Bank Accounts with any interest, fees, costs and charges in accordance with the terms and conditions set out in the relevant Bank’s security and facility documentation.
10. Subject to the Corporate Receivers’ satisfaction as to the solvency of the Corporate Defendant, the Corporate Receivers may, in relation to the Corporate Defendant, approve:
10.1 payments by the Corporate Defendant to pay reasonable legal expenses incurred in these proceedings or legal costs that may be reasonably incurred in the future that are either incidental to these proceedings or in anticipation of, or in preparation for the proceedings the Plaintiff or others may bring against the Corporate Defendant, which includes the payment of monies on trust to solicitors on account of such expenses;
10.2 reasonable expenses required to maintain, realise or preserve assets;
10.3 Automatic Bank Debits from any Corporate Bank Account required to effect a transaction otherwise permitted by these orders; and
10.4 changes to security and facility arrangements with any Bank.
11. Upon receipt of confirmation of the approval of the Corporate Receivers (or any one of them), no Bank need inquire as to:
11.1 the application or proposed application of any money withdrawn or automatically debited from the Corporate Bank Accounts; or
11.2 whether a transaction or proposed transaction or any change to arrangements is in contravention of these Orders.
12. For the avoidance of doubt, all of the Banks’ rights are preserved and it remains at the Banks’ absolute discretion, subject to the terms and conditions set out in the Banks’ respective security and facility documentation, as to whether they will make further credit funds available or will permit any changes of facility or security arrangements at the request of the Corporate Defendant and the Corporate Receivers.
13. In exercising the discretion to consent or not to any payment, transfer or disposition contemplated in these orders, the Corporate Receivers have the power to make all necessary and incidental inquiries into the affairs of the Corporate Defendant (including the power to make inquiries in the name of the Corporate Defendant), including inspecting the books and records and any other information held by the Corporate Defendant and or their agents relating to those affairs, and the Corporate Defendant must give the Corporate Receivers such assistance as is reasonably requested by them in the course of such inquiries.
14. The Corporate Defendant, by itself, its servants, agents or employees, must:
14.1 permit the Corporate Receivers ongoing access to the books and records which relate to the Corporate Property including any computer system of the Corporate Defendant; and
14.2 use its best endeavours to assist the Corporate Receivers in the performance of their obligations.
15. The Corporate Receivers have leave to give to any Bank with which the Corporate Defendant or Third Party operates any Corporate Bank Accounts a copy of the affidavit filed by the Corporate Defendant pursuant to Order 5 of the orders made by this Court on 27 November 2006 in relation to the Corporate Defendant, so as to inform them of the Bank Accounts which are Corporate Bank Accounts.
16.1 Any Bank which holds private and confidential information in relation to its customers which may assist in identifying the Corporate Bank Accounts may be required by written notice from the Corporate Receivers to provide such information to the Corporate Receivers within a reasonable time after having received a written request for such information accompanied by a copy of this order.
16.2 Any Bank which receives such a request from the
Corporate Receivers may apply within 7 days from its receipt or such longer
period as may be agreed with the Corporate Receivers to be relieved from the
obligation of complying with it.
16.3 In the event that no such application
is made or that such application is refused, the Bank must comply with the
request within
a reasonable time or such time as the Court orders.
16.4 The Corporate Receivers may provide any information obtained pursuant to this Order to the Plaintiff.
16.5 The Bank, before complying
with any written request shall first give notice to the relevant
customers.
17. Any of the following Banks (Westpac Banking Corporation Limited, National Australia Bank Limited and HBOS Australia Limited) which:
17.1 becomes aware of private and confidential information in relation to its customers (which may include, but is not intended to be limited to private and confidential information in relation to the Corporate Defendant); and
17.2 reasonably believes that the private and confidential information may assist the Plaintiff and/or the Corporate Receivers in:
17.2.1 identifying the Corporate Bank Accounts to which these orders apply; or
17.2.2 identifying Corporate Property in a bank account held by a Third Party; or
17.2.3 recovering Corporate Property from a Third Party,
may, within a reasonable time, inform the Plaintiff and the Corporate Receivers that it holds information potentially relevant to the above and, after having receipt of a written request for information, must provide such information as may reasonably be required to the Plaintiff and the Corporate Receivers within a reasonable time, after first giving notice to the relevant customer."
18. Nothing in Order 17 requires a Bank to make inquiry of or investigate any customer, transaction or bank account.
The
‘general’ orders
19. The Plaintiff, the Individual
Receivers and the Corporate Receivers have leave to give
to:
19.1 the relevant authorities that record, control and regulate the
ownership of real property;
19.2 the relevant authorities that
record, control and regulate the ownership of motor vehicles;
19.3 the relevant authorities that record, control and regulate the ownership of maritime vessels and craft;
19.4 any Bank with which the Corporate Defendant operates any Corporate Bank Accounts;
19.5 any other person or entity holding or controlling property belonging to the Corporate Defendant; and
19.6 any Third Party,
notice of these Orders by delivering a copy of these Orders to a person apparently in the employ of that entity or person.
20. The Corporate Receivers may report (orally or in writing)
to the Plaintiff and to the Court at any time during the course of
their
receivership regarding:
20.1 the nature of the Corporate Property identified;
20.2 the
assets and liabilities of the Corporate Defendant and the solvency of the
Corporate Defendant;
20.3 the costs of the receivership, the future course
of the receivership and the costs that may be incurred by the
Corporate
Receivers in the future; and
20.4 any other information
in relation to the Corporate Property that the Corporate Receivers
think necessary to protect
the interests of persons to whom the
Corporate Defendant is liable, or may become liable, to pay money,
whether
in respect of debt, by way of damages or compensation or
otherwise, or to account for financial products or other property.
21.
The Corporate Receivers may by written notice to the Corporate Defendant
require within seven (7) days of the date of such notice,
the Corporate
Defendant to identify in writing any trusts of which the Corporate Defendant is
a beneficiary (including a general
beneficiary of a discretionary trust),
whether named or otherwise, and to provide the following information concerning
such trust:
21.1 the name and address of the trustee;
21.2 a copy
of the relevant trust deed (if it has possession, custody or control
of the same); and
21.3 any further information or documentation regarding
the trust and the management of the trust as requested by the Corporate
Receivers and to which the Corporate Defendant is entitled including,
but not limited to, the distribution
history of the trust.
22.
The Corporate Defendant shall authorise the Corporate Receivers to, and the
Corporate Receivers shall be entitled to, obtain
information regarding the
trusts referred to in the preceding paragraph from the trustees of such trusts,
including the terms of
such trusts, the classes of its beneficiaries and its
distribution history, and the Corporate Defendant shall sign all such documents
and do all such things necessary to give effect to the granting of such
authority.
23. If within ten (10) days of the Receivers or their legal
advisers becoming aware of any matter or issue that may give rise to
a conflict
of interest, they shall seek the advice of counsel in respect of the
possible conflict.
24. If counsel is of the view that the matter or
issue gives rise to a possible conflict of interest, then the
Receivers shall
make an application to the Court for appropriate
directions.
25. The costs of the Plaintiff’s application for these Orders is to be paid by the tenth defendant.
26. The Parties and any third
parties affected by these orders have liberty to apply to the Court on the
giving of reasonable notice.
In respect of the TWELFTH DEFENDANT THE COURT ORDERS THAT:
1. Orders 2 to 12 made in these proceedings before the Honourable Justice French on 27 November 2006 as amended from time to time in relation to the twelfth defendant are as at the date of these orders replaced by the orders below.
The Asset Preservation Orders
2. The twelfth defendant, by itself, its servants agents and employees, be restrained until 30 June 2007 or until further order, from removing, or causing or permitting to be removed from any State of Australia and from Australia, or selling, charging, mortgaging or otherwise dealing with or disposing of or causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of, all or any of its assets (the ‘Corporate Property’), whether held legally or beneficially by it.
3. For the purpose of these orders, the Corporate Property includes property which falls within any of the following categories:
3.1 property held in the name of the twelfth defendant;
3.2 property held by the twelfth defendant as trustee for a trust or on behalf of or on account of another person;
3.3 property held jointly in the name of the twelfth defendant and a third party;
3.4 property held jointly in the name of the twelfth defendant and a third party for the express purpose of a joint venture;
3.5 property held by the twelfth defendant jointly with a third party, where both the twelfth defendant and the third party hold the property in their capacity as trustees for a trust or on behalf of or on account of another person;
3.6 property held by a third party, as trustee for a trust, where the twelfth defendant agrees that it is or the Court directs that it is to be treated as the effective controller or owner of the trust property; and
3.7 rights to operate any "Corporate Bank Account" (as that term is defined in Order 4 below) and any chose in action in relation to any such account;
but does not include
3.8 such rights or choses in action in relation to any "Excluded Corporate Bank Account" (as that term is defined in Order 4 below).
4. For the purposes of these orders, ‘Corporate Bank Account’ means accounts which fall within any of the following categories:
4.1 accounts held in the name of the twelfth defendant;
4.2 accounts held by the twelfth defendant as trustee for a trust on behalf of or on account of another person;
4.3 accounts held jointly in the name of the twelfth defendant and a third party;
4.4 accounts held jointly in the name of the twelfth defendant and a third party for the express purpose of a joint venture;
4.5 accounts held by the twelfth defendant jointly with a third party, where both the twelfth defendant and the third party hold the property in their capacity as trustees for a trust or on behalf of or on account of another person;
but does not include the following (collectively, the ‘Excluded Corporate Bank Accounts’):
4.6 such other accounts as notified to the relevant bank, building society or financial institution (‘Bank’) notified by the plaintiff.
5. These orders shall not prevent the twelfth defendant from paying costs reasonably incurred in these proceedings from a Corporate Bank Account: nominated in writing to plaintiff in amounts as approved by the Court from time to time.
6. These Orders shall not prevent the twelfth defendant from paying reasonable fees and disbursements to the solicitors for twelfth defendant as agreed with the plaintiff, or absent agreement, as approved by the Court.
7. These Orders shall not prevent any Bank from:
7.1 exercising any right of set-off which it may have in respect of a facility afforded by it to the twelfth defendant prior to or after the date of this Order; and
7.2 enforcing or exercising any security right or interest, existing now or in the future in relation to the Corporate Property; and
7.3 debiting any Corporate Bank Account with any interest, fees, costs and charges in accordance with the terms and conditions set out in the relevant Bank’s security and facility documentation.
8. These Orders shall not prevent any person or entity from exercising all rights, powers, privileges, benefits, discretions and authorities conferred upon them (either jointly or severally) by, or arising out of, any fixed or floating charge granted by the twelfth defendant and/or
8.1 any deed of appointment arising out of such charge; and
8.2 section 420 of the Corporations Act 2001 (Cth).
9. For the avoidance of doubt, all of the Banks’ rights are preserved under the terms and conditions of the Banks’ respective security and facility documentation.
The ‘General’ Orders
10. The plaintiff has leave to give to:
10.1 the relevant authorities that record, control and regulate the ownership of real property;
10.2 the relevant authorities that record, control and regulate the ownership of motor vehicles;
10.3 the relevant authorities that record, control and regulate the ownership of maritime vessels and craft;
10.4 any bank, building society or other financial institution with which the twelfth defendant operates any Bank Accounts;
10.5 any other person or entity holding or controlling property belonging to the twelfth defendant; and
10.6 any third
party,
notice of these Orders by delivering a copy of these Orders to a person apparently in the employ of that entity or person.
11. The costs of the plaintiff’s application for these Orders is to be paid by the twelfth defendant.
12. The parties and any third parties affected by these Orders have liberty to apply to the Court on the giving of reasonable notice.
13. The twelfth defendant is hereby authorised to pay the sum of $68,362.09 to its solicitors Mony de Kerloy for legal fees and disbursements incurred in relation to these proceedings and the further sum of $500, being the costs incurred in relation to the release of that amount.
Note: Settlement and entry of orders is dealt with
in Order 36 of the Federal Court Rules.
IN THE MATTER OF RICHSTAR ENTERPRISES PTY LTD (ACN 099 071
968)
WESTPOINT REALTY PTY LTD (ACN 050 218 954)
BOWESCO PTY
LTD (ACN 008 915 357)
REDCHIME PTY LTD (ACN 117 947
805)
KEYPOINT DEVELOPMENTS PTY LTD (ACN 115 507 232)
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BETWEEN:
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AUSTRALIAN SECURITIES AND INVESTMENTS
COMMISSION
Plaintiff |
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AND:
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NORMAN PHILLIP CAREY
First Defendant GRAEME JOHN RUNDLE Second Defendant CEDRIC RICHARD PALMER BECK Third Defendant JOHN NORMAN DIXON Fourth Defendant RICHSTAR ENTERPRISES PTY LTD ACN 099 071 968 Fifth Defendant WESTPOINT REALTY PTY LTD ACN 050 218 954 Sixth Defendant BOWESCO PTY LTD ACN 008 915 357 Seventh Defendant REDCHIME PTY LTD ACN 117 947 805 Eighth Defendant KEYPOINT DEVELOPMENTS PTY LTD ACN 115 507 232 Ninth Defendant SILKCHIME PTY LTD ACN 066 849 429 Tenth Defendant ROLD CORPORATION ACN 009 358 276 Eleventh Defendant HEALTHCARE PROPERTIES PTY LTD ACN 075 401 955 Twelfth Defendant |
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JUDGE:
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FRENCH J
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DATE:
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5 FEBRUARY 2007
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PLACE:
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PERTH
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REASONS FOR DECISION ON EXTENSION AND COSTS ORDERS AND ORDERS RELATING TO PAYMENT OF LEGAL FEES
Introduction
1 On 29 January 2007 I made orders extending all current orders in these proceedings affecting the first, fifth to tenth and twelfth defendants to today. The plaintiff was required by close of business on 2 February 2007 to file and serve minutes of proposed orders to give effect to:
(i) the extension of the existing orders in relation to the first, fifth, seventh, eighth and ninth defendants;
(ii) the appointment of receivers pursuant to s 1323 of the Corporations Act 2001 (Cth) in relation to the tenth defendant and for associated orders along the lines applicable to other corporate defendants, the subject of Receiver Orders;
(iii) Asset Preservation Orders in respect of the twelfth defendant;
(iv) orders to give effect to the continuation of existing orders in respect of the sixth defendant, varied to take into account the appointment of administrators to the sixth defendant.
Each of the proposed
orders and extended orders referred to was to continue in effect until 30 June
2007. I reserved the costs of
the interlocutory process for submission by the
parties. The application for extension of the orders presently applicable in
relation
to the eleventh defendant, Rold Corporation Pty Ltd (Rold), which was
listed for hearing on 31 January 2007, is now listed for hearing
on 26 February
2007.
The new Receiver and Asset Preservation Orders
2 The minutes filed were generally in accordance with the orders contemplated by the reasons for judgment delivered on 29 January 2007. The definition of "individual property" and "corporate property" the subject of the Receiver Orders and the Asset Preservation Orders require variation as they included "Individual Bank Accounts and "Corporate Bank Accounts" respectively. These were terms used in the preceding orders but needed refinement as a bank account is not property.
3 In the orders relating to the first defendant I will vary that element of the definition of property in [3.7] and [3.8] to read:
‘3.7 rights to operate the Individual Bank Accounts (as that term is defined in Order 4 below) and any chose in action in relation to such account;
but does not include:
3.8 such rights or choses in action in relation to any excluded Individual Bank Accounts (as that term is defined in Order 4 below).’
4 In the Corporate Receiver Orders affecting the fifth, sixth, eighth, ninth and tenth defendants, [3.7] and [3.8] will be varied to read:
‘3.7 right to operate any Corporate Bank Accounts (as that term is defined in Order 4 below) and any chose in action in relation to such account;
but does not include:
3.8 such rights or choses in action in relation to any excluded Corporate Bank Accounts (as that term is defined in Order 4 below).’
5 The seventh and twelfth defendants, being the subject of private receiverships, do not have presently any Receiver Orders made in relation to them. They are, however, to be the subject of ongoing asset preservation orders. A similar problem arises with the definitions of "Bowesco Property" in relation to the seventh defendant and "Corporate Property" in relation to the twelfth defendant as arise in relation to like definitions in the Receiver Orders applicable to the other defendants.
6 In relation to the Bowesco order [3.7] and [3.8] will now read:
‘3.7 the rights to operate any Bowesco Bank Account (as that term is defined under Order 4A below) and any chose in action in association with such Bank Account;
but does not include:
3.8 such rights or choses in action in relation to any Excluded Bowesco Account (as that term is defined in Order 4A below).’
7 In the case of the twelfth defendant [3.7] and [3.8] will read:
‘3.7 rights to operate any "Corporate Bank Account" (as that term is defined in Order 4 below) and any chose in action in relation to any such account;
but does not include:
3.8 such rights or choses in action in relation to any "Excluded Corporate Bank Account" (as that term is defined in Order 4 below).’
8 In each of the orders, Order 1 in the minute will be revised to read:
‘Orders 2 to 23 made in these proceedings on [ ] as amended from time to time in relation to the [identified defendant] are as at the date of these orders replaced by the orders below.’
9 The term "mareva orders" which is used in relation to the seventh and twelfth defendants will be replaced by the term "Asset Preservation Orders".
10 In relation to the twelfth defendant, [6] will be amended to read:
‘These orders shall not prevent the twelfth defendant from paying reasonable fees and disbursements to the solicitors for the twelfth defendant as agreed with the plaintiff or, absent agreement, as approved by the Court.’
Costs of the extension proceedings
11 The extension proceedings were opposed by the defendants in respect of whom the preceding orders have been made. Submissions were invited on the question of costs. Nothing was said on behalf of the defendants to disclose any basis upon which there should be a departure from the usual exercise of discretion in accordance with the proposition that costs follow the event. Although the contest at the hearing was narrowed to a debate about whether or not receivers should be appointed, it does not seem that any prior notice of that narrowing of the debate was given by the defendants to the plaintiff. In respect of each of the defendants therefore I will make an order in the following terms:
‘That the costs of the plaintiff’s application for these orders is to be paid by the [identified defendant].’
Receiver conflicts
12 In the reasons for judgment delivered on 29 January 2007 reference was made to the possibility of conflicts of interest in the event that the Court appointed receivers or members of their firm were appointed by secured creditors, to the property of defendant companies or associated companies or to companies which might have claims against one or more of the defendants. The minute of orders submitted by ASIC following the judgment include a mechanism for ensuring that Court appointed receivers are alert to the difficulties which might arise in such cases and that they take appropriate advice so that if necessary an application can be made to the Court for directions.
13 In an affidavit filed following the judgment and sworn on 2 February 2007, Mr McMaster, one of the Court appointed receivers, disclosed that members of his firm, KordaMentha have been appointed as receivers to "two property assets" of the tenth defendant Silkchime. In his affidavit Mr McMaster set out the details of those two appointments. They are as follows:
(i) On 24 January 2006 Perpetual Nominees Ltd, as custodian of the ING Mortgage Pool for ING Fund Management Ltd as the Responsible Entity of the ING Mortgage Pool (ING) appointed Oren Zohar, Mark Korda and David Winterbottom as the joint and several receivers of Silkchime over six strata lots located at the Warwick Healthcare Centre only (ING Secured Property). The appointment is limited to the ING Secured Property and does not cover all of the assets of Silkchime. The ING Secured Property has now been sold and settled. There are no further steps to be taken in respect of its realisation. Mr McMaster has been informed by Mr Zohar and believes that Mr Zohar is unaware of any allegation or any act, matter or thing that may give rise to a claim against the receivers in respect of the sale of the asset. The receivers have not yet retired.
(ii) On 29 March 2006 St George Bank Ltd appointed Oren Zohar, David Winterbottom and Mark Korda to be the joint and several receivers and managers of Silkchime in respect of four vacant lots and one untenanted warehouse located at the property known as "Warwick Commercial Park" (St George Secured Property). Mr McMaster says he is informed by Mr Zohar and believes it to be true that:
(a) the appointment by St George in respect of the St George Secured Property was made on 29 March 2006 pursuant to a charge registered with ASIC and a registered mortgage;
(b) the appointment is limited to the St George Secured Property and is not over all of the assets of Silkchime;
(c) St George has realised assets other than the St George Secured Property sufficient to repay the debt secured by the security in full;
(d) St George has now instructed the receivers not to proceed with the sale of the St George Secured Property;
(e) Mr Zohar is unaware of any allegation or any act, matter or thing that may give rise to a claim against the receivers in respect of the St George Secured Property;
(f) the receivers have not yet retired.
14 Mr McMaster also stated that on 24 January 2006 ING appointed Messrs Zohar, Korda and Winterbottom as joint and several receivers and managers of Warwick Entertainment Centre Pty Ltd in its own capacity and as trustee for the Warwick Entertainment Centre Unit Trust. Schedule H of the Report as to Affairs of Silkchime dated 2 March 2006, verified by Mr Carey, a director of the Warwick Entertainment Centre Pty Ltd, identifies an unsecured debt owing by Silkchime to Warwick Entertainment Centre in the sum of $12,673,372.
15 No submission has been made by any party raising any difficulty in
respect of these appointments. The latter appointment is referred
to in the
affidavit of Mr Zohar sworn on 29 March 2006. At present there are no apparent
difficulties arising from it. If and when
a question arises relating to the
enforcement of the Silkchime loan it would be prudent for the Court appointed
receivers to take
advice in respect of their position.
Release of funds
for payment of legal fees
16 Richstar Enterprises Pty Ltd (Richstar) and Healthcare Properties Pty Ltd (Healthcare) seek orders approving the release to their solicitors, Mony De Kerloy of legal fees and disbursements in the sums of $40,878.04 and $68,362.09 respectively. The proposed orders are supported by affidavits of John Dury, a solicitor employed by Mony De Kerloy.
17 It appears that the sums claimed represent a total of $81,756.08 for work done for both Richstar and Healthcare together with an additional sum of $27,484.05 representing costs directly incurred by Healthcare. Mony de Kerloy had separate written retainer agreements with both Richstar and Healthcare. It appears from the affidavit material that the common work done also covered the costs of representing Mr Carey with whom Mony de Kerloy also had a separate retainer agreement. There were no retainer agreements in evidence with other defendants. The solicitors for the receivers referred in their submissions to a separate retainer agreement made with Redchime but there is no such written agreement exhibited to Mr Dury’s affidavit. Counsel who appeared for Mr Carey, Richstar and Healthcare announced his appearance on behalf of all other defendants, save for Rold. The solicitors on the record for Westpoint Realty Pty Ltd (Westpoint Realty), the sixth defendant, were then Clavey Legal. However, Mr Clavey had no instructions in respect of these proceedings, did not raise any fees in respect of them and did not instruct counsel to appear on behalf of Westpoint Realty. Hammond Worthington were the solicitors on the record for Silkchime, the tenth defendant, and instructed Ms Coulson. It appears that Mr Hammond has informed the solicitors for the receivers that his firm and Ms Coulson will issue separate fee notes in respect of Silkchime.
18 The solicitors for the receivers referred to the separate retainer arrangements between Mony de Kerloy and Richstar, Healthcare, Mr Carey and (albeit unwritten) with other defendants. The receiver’s submissions pointed out that where there are separate contracts, each client is liable for its own share of the solicitors’ costs, that is, a proportionate part of the general costs plus costs incurred exclusively for its benefit. They contended that there is a presumption of several liability and the fact that a number of clients authorise a solicitor to act and say they will pay the solicitor does not mean that each has agreed to pay the whole of the costs and does not create a joint liability. The solicitors for the receivers noted that ASIC had accepted the reasonableness of the fees raised by Mony de Kerloy and saw no reason to dispute that assessment.
19 Mony de Kerloy’s position was that the work performed by themselves and their counsel was necessary to be done for Richstar and Healthcare whether or not they were instructed by other defendants. The receivers, like ASIC, proposed that Mony de Kerloy seek an order that the Court receivers authorise the payment of the fees owing in respect of Richstar out of Richstar trust funds. The question of an authorisation by the receivers does not arise in relation to Healthcare as that company, having private receivers appointed under a security, is the subject of Asset Preservation Orders rather than Receiver Orders.
20 In their submissions to the Court the receivers repeated their position that Mony de Kerloy had entered into separate retainers with each of Mr Carey, Richstar and Healthcare, albeit there was no evidence of a separate written retainer agreement with Redchime. They pointed to the absence of evidence of retainer agreements with any of the other defendants. They pointed out that where a number of parties to an action enter into a single retainer with one solicitor each is presumed to be jointly liable for the costs incurred by that solicitor: Burridge v Bellew (1875) 32 LT (NS) 807. Where distinct parties enter into individual retainers with a solicitor the presumption is reversed and each client is liable for its own share of solicitor costs. The costs incurred are the amounts specifically in relation to that client and a proportionate share of general costs attributable to the other parties: Ellingsen v Det Shandinaskie Co [1919] 2 KB 567. They accepted that the presumption is rebuttable if evidence to the contrary is adduced. They submitted that the effect of making an order that Richstar and Healthcare pay the legal costs in effect on behalf of other defendants is that Richstar would bear those costs without any right of recovery from the other defendants. If Richstar were to pay more than its proportionate part of the common costs of the extension application it would be paying legal costs on behalf of the other defendants which it would have no right to recover from them.
21 In my opinion the work done by Mony de Kerloy for Richstar and Healthcare was inextricably linked to such work as it was necessary to do for all defendants in relation to the extension application. If it is accepted that the costs were reasonable, a position not disputed by either ASIC or the receivers, then the only question of principle is whether each of the defendants should bear severally a proportionate share of general costs. In my opinion, whether or not there were separate retainers, the various defendants represented by Mony de Kerloy were effectively jointly represented and the presumption in favour of several liabilities should be displaced.
22 The Court was assisted by counsel appearing for those defendants who had
separate retainer agreements with Mony de Kerloy and
for those who did not have
specific retainer agreements. The representation assisted the efficiency and
fairness of the hearing
process. The issues with which each had to deal were
substantially similar and substantially overlapping. It does not seem to be
disputed that the fees raised against Richstar and Healthcare would have
reasonably been raised against them if no other party had
been represented.
That is to say those fees were properly incurred to secure their legal
representation even though that representation
benefited other parties, whether
they were the subject of retainer agreements or not and whether they were paying
clients or not.
I do not consider that potential creditors of Richstar and
Healthcare are thereby unfairly prejudiced as the representation was
representation to which those two companies were entitled in any event. The
orders relevant to Richstar and Healthcare will be incorporated
in the general
orders relating to them. I do not propose, at present, to change the procedures
by which legal fees and disbursements
should be approved in relation to
Healthcare.
Associate:
Dated: 5
February 2007
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Solicitor for the Counsel for the Plaintiff:
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Counsel for the Court Appointed Receivers:
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Solicitor for the Court Appointed Receivers:
Counsel for First, Fifth, Eighth and Twelfth Defendants; Solicitors for the First, Fifth Eighth and Twelfth Defendants: Solicitors for the Tenth Defendants: |
Corrs Chambers Westgarth
Mr M de Kerloy Mony de Kerloy Hammond Worthington |
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Date of Hearing:
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Date of Judgment:
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