Fraser v Australian Securities & Investments Commission, Inthe Matter of Bowesco Pty Ltd (Receivers and Managers Appointed) [2007] FCAFC 86 (8 June 2007)

Last Updated: 12 June 2007

FEDERAL COURT OF AUSTRALIA

Fraser v Australian Securities & Investments Commission, In the Matter of Bowesco Pty Ltd (Receivers and Managers Appointed) [2007] FCAFC 86

CORPORATIONS – duties of receivers and managers appointed by first mortgagee in possession of company’s assets – whether order can be made requiring receivers to disburse from likely surplus of funds under their control moneys to defray the legal costs of a related creditor company.








IN THE MATTER OF BOWESCO PTY LTD (Receivers and Managers Appointed) (ACN 008 915 357)

SHAUN ROBERT FRASER and JOHN PATRICK CRONIN as Receivers and Managers of LANEPOINT ENTERPRISES PTY LTD (Receivers and Managers Appointed) (ACN 111 693 251) and AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION and BOWESCO PTY LTD (Receivers and Managers Appointed) (ACN 008 915 357)

WAD 358 OF 2006




RYAN, FINKELSTEIN & GILMOUR JJ
8 JUNE 2007
PERTH (HEARD IN MELBOURNE)

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 358 OF 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

IN THE MATTER OF BOWESCO PTY LTD (Receivers and Managers Appointed) (ACN 008 915 357)

BETWEEN:	SHAUN ROBERT FRASER and JOHN PATRICK CRONIN as Receivers and Managers of LANEPOINT ENTERPRISES PTY LTD (Receivers and Managers Appointed) (ACN 111 693 251) Appellants
AND:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION First Respondent BOWESCO PTY LTD (Receivers and Managers Appointed) (ACN 008 915 357) Second Respondent
JUDGES:	RYAN, FINKELSTEIN & GILMOUR JJ
DATE OF ORDER:	8 JUNE 2007
WHERE MADE:	PERTH (HEARD IN MELBOURNE)

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. Paragraph 3 of the Orders made by Siopis J on 17 November 2006 be set aside.
3. The second respondent repay to the appellants the sum of $20,524 directed by paragraph 2 of the said Order of Siopis J to be paid on behalf of the second respondent.
4. There be no order as to the costs of the appeal or of the proceedings which led to the making of the said order of 17 November 2006.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 358 OF 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

IN THE MATTER OF BOWESCO PTY LTD (Receivers and Managers Appointed) (ACN 008 915 357)

BETWEEN:	SHAUN ROBERT FRASER and JOHN PATRICK CRONIN as Receivers and Managers of LANEPOINT ENTERPRISES PTY LTD (Receivers and Managers Appointed) (ACN 111 693 251) Appellants
AND:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION First Respondent BOWESCO PTY LTD (Receivers and Managers Appointed) (ACN 008 915 357) Second Respondent

JUDGES:	RYAN, FINKELSTEIN & GILMOUR JJ
DATE:	8 JUNE 2007
PLACE:	PERTH (HEARD IN MELBOURNE)

REASONS FOR JUDGMENT

THE COURT

1 As this Full Court has concluded that the substantive orders made by French J on 10 November 2006 should not have been made, it would ordinarily follow that the orders made by Siopis J on 17 November 2006 by way of implementing or enforcing the earlier orders should also be set aside. However, no stay of the later orders was sought or granted. Consequently, the payments contemplated by the orders of Siopis J as being made to the designated solicitors and to this Court have been made long ago. We therefore decline to set aside paragraph 2 of his Honour’s order which required those payments to be made. It is conceded that there is no prospect of Bowesco, from the assets presently under the control of its receivers, reimbursing the appellants for any part of those payments. There is, therefore, unlikely to be any utility in ordering that the second respondent repay to the appellants the sum of $20,524 paid pursuant to the orders of 17 November 2006. However, against the remote possibility that some assets may accrue to Bowesco in the future from which an order for the repayment could be satisfied, we shall make an order to that effect.

2 As explained in the reasons for judgment in the related appeal numbered WAD 345 of 2006, there is no basis on which Ms Carey-Hazell can be ordered to pay to the appellants from her personal assets any part of the sum of $20,524. Accordingly, although the appeal must be allowed, the only order of 17 November 2006 which can be set aside is that related to costs. As with the related appeal, we shall make no order either as to the costs of this appeal or of the proceedings which led to the making of the orders of 17 November 2006.

I certify that the preceding two (2) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Ryan, Finkelstein and Gilmour.

Associate:

Dated: 8 June 2007

Counsel for the Appellant:	Mr B O’Donnell QC
Solicitor for the Appellant:	Allens Arthur Robinson
Counsel for the First Respondent:	Mr C Slater
Solicitor for the First Respondent:	Mr T T Palmer, Australian Securities and Investment Commission
Counsel for the Second Respondent:	Mr J Hammond
Date of Hearing:	20 April 2007
Date of Judgment:	8 June 2007