Benton, in the matter of Mackay Rural Pty Ltd (Receivers and Managers Appointed) [2014] FCA 1285

Benton, in the matter of Mackay Rural Pty Ltd (Receivers and Managers Appointed) [2014] FCA 1285

The alleged 2010 oral agreements and related estoppel or unconscionability contentions did not bar enforcement of the Bank's securities. Although the Debenture did not directly cover the Property because the Property was excluded by the covering clause and was trust property, the Debenture did cover Mackay's personal right of indemnity as trustee, which supported steps to possession and sale through the trust deed and related equitable lien. In any event, the Receivers' appointment under the Mortgage gave them power to enter into possession and, with s 420 of the Corporations Act 2001 (Cth), power to sell the Property. The plaintiffs were therefore entitled to substantive relief.

Jurisdiction
Australia
Judgment Date
25 November 2014
Procedural Posture
Originating Application for Declaratory Orders, Directions, Possession and Restraint Orders Concerning Receivers' Powers to Sell Property / Final Determination After Urgent Hearing
Outcome
Application granted; declarations, directions, possession order, restraint order and costs order made in favour of the plaintiffs.
Legal Topics
["validity of Receivers and Managers' Appointment" 'scope of Debenture Over Trust Property' 'trustee Right of Indemnity' 'power to Enter Possession and Sell Property' 'mortgagee and Receiver Powers of Sale' 'declarations Under Ss 418 a and 424 of the Corporations Act 2001 (cth)']
['corporations' 'insolvency' 'receivership' 'mortgages' 'trusts'] ["validity of Receivers and Managers' Appointment" 'scope of Debenture Over Trust Property' 'trustee Right of Indemnity' 'power to Enter Possession and Sell Property' 'mortgagee and Receiver Powers of Sale' 'declarations Under Ss 418 a and 424 of the Corporations Act 2001 (cth)']

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Procedural Posture

Originating Application for Declaratory Orders, Directions, Possession and Restraint Orders Concerning Receivers' Powers to Sell Property / Final Determination After Urgent Hearing

Legal Issues

  1. 1 ['Whether the Receivers were validly appointed to the assets and undertaking of Mackay, including the Property.' 'Whether alleged oral agreements, estoppel, misleading or deceptive conduct or unconscionable conduct prevented the Bank from enforcing its securities.' 'Whether the Debenture extended directly to the Property.' "Whether the Debenture covered trust assets or Mackay's right of indemnity as trustee of the Amourgis Unit Trust." 'Whether the Receivers were entitled to possession of the Property and to conduct its sale under the Debenture, the Mortgage, the trust deed or statute.']

Ratio Decidendi

The alleged 2010 oral agreements and related estoppel or unconscionability contentions did not bar enforcement of the Bank's securities. Although the Debenture did not directly cover the Property because the Property was excluded by the covering clause and was trust property, the Debenture did cover Mackay's personal right of indemnity as trustee, which supported steps to possession and sale through the trust deed and related equitable lien. In any event, the Receivers' appointment under the Mortgage gave them power to enter into possession and, with s 420 of the Corporations Act 2001 (Cth), power to sell the Property. The plaintiffs were therefore entitled to substantive relief.

Court Disposition

Application granted; declarations, directions, possession order, restraint order and costs order made in favour of the plaintiffs.

Orders

  • ["The Court declared pursuant to s 418A(1) of the Corporations Act 2001 (Cth) that the Receivers' appointment under the Debenture and the Mortgage, including in respect of Mackay's right of indemnity over assets of the Amourgis Unit Trust, was not invalid nor ineffective because of the alleged agreements, estoppel,...