Ernst & Young (Reg) v Tynski Pty Limited [2003] FCAFC 233

Ernst & Young (Reg) v Tynski Pty Limited [2003] FCAFC 233

The directors of companies in receivership may institute proceedings in their name to challenge the validity of receivers’ appointment and related claims, and, absent objection or requirement of indemnity from the receivers or debenture holder, a third party defendant (such as the appellants) has no standing to challenge the authority of the directors or require prior indemnity. The appellant's application was rightly dismissed.

Jurisdiction
Australia
Judgment Date
21 October 2003
Procedural Posture
Appeal / Interlocutory Appeal From Federal Court of Australia
Outcome
Appeal dismissed.
Legal Topics
['appointment of Receivers and Managers' 'authority of Company Directors' 'institution of Proceedings in Company Name' 'indemnity for Costs in Receivership' "validity of Solicitor's Retainer"]
['corporations Law'] ['appointment of Receivers and Managers' 'authority of Company Directors' 'institution of Proceedings in Company Name' 'indemnity for Costs in Receivership' "validity of Solicitor's Retainer"]

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Procedural Posture

Appeal / Interlocutory Appeal From Federal Court of Australia

Legal Issues

  1. 1 ['Whether directors have authority to institute proceedings in the name of companies after appointment of receivers and managers' "Whether prior consent or indemnity from receivers/managers is necessary before proceedings may be brought in the company's name during receivership" "Validity of solicitor's retainer instructed by directors in such circumstances"]

Ratio Decidendi

The directors of companies in receivership may institute proceedings in their name to challenge the validity of receivers’ appointment and related claims, and, absent objection or requirement of indemnity from the receivers or debenture holder, a third party defendant (such as the appellants) has no standing to challenge the authority of the directors or require prior indemnity. The appellant's application was rightly dismissed.

Court Disposition

Appeal dismissed.

Orders

  • ['The appeal be dismissed.' "The appellants pay the respondents' costs."]