In the matter of Fellmane Pty Ltd (in liq) [2020] NSWSC 595

In the matter of Fellmane Pty Ltd (in liq) [2020] NSWSC 595

Directions sought were refused because the receiver had not demonstrated sufficient consideration of the disadvantages of the proposed sale, failed to negotiate for better terms with Batfamt or NAB or seek alternatives, the structure of the transaction would preclude indemnity and subrogation rights without adequate justification, and the receiver's process did not meet the standard required for Court approval; thus, the Court declined to authorise the transaction or vary relevant orders.

Jurisdiction
Australia
Judgment Date
21 May 2020
Procedural Posture
Application for Directions and Motions in Receivership/liquidation / Principal Judgment; Direction and Interlocutory Process Orders
Outcome
Court declines to give directions to receiver and liquidator; application and motions dismissed; costs ordered as specified.
Legal Topics
['court Appointed Receivers—directions' 'liquidation—company as Former Trustee' 'trust Assets—sale of Property' 'guarantor Rights—subrogation and Indemnity' 'approval Under Corporations Act S 477(2 B)']
['corporations Law' 'equity'] ['court Appointed Receivers—directions' 'liquidation—company as Former Trustee' 'trust Assets—sale of Property' 'guarantor Rights—subrogation and Indemnity' 'approval Under Corporations Act S 477(2 B)']

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Procedural Posture

Application for Directions and Motions in Receivership/liquidation / Principal Judgment; Direction and Interlocutory Process Orders

Legal Issues

  1. 1 ['Whether receiver is justified in selling trust property on terms of deed of sale and release' "Whether guarantor's right of subrogation depends on payment of principal debt in full and/or is excluded by contract" 'Whether proposed deed involves right of indemnity against principal debtor under its terms' "Effect of deed on former trustee's right of indemnity against trust assets"]

Ratio Decidendi

Directions sought were refused because the receiver had not demonstrated sufficient consideration of the disadvantages of the proposed sale, failed to negotiate for better terms with Batfamt or NAB or seek alternatives, the structure of the transaction would preclude indemnity and subrogation rights without adequate justification, and the receiver's process did not meet the standard required for Court approval; thus, the Court declined to authorise the transaction or vary relevant orders.

Court Disposition

Court declines to give directions to receiver and liquidator; application and motions dismissed; costs ordered as specified.

Orders

  • ['Court declines to give directions to Brendan James Copeland in his capacity as receiver and liquidator to justify entering into and performing the deed of proposed sale and release in the form of MFI 2.' 'Interlocutory process filed 3 October 2019 dismissed.' "Applicants' costs of interlocutory process filed 3...