Australian Securities & Investments Commission v Exotic Timbers of Australia Ltd [2003] FCA 348

Australian Securities & Investments Commission v Exotic Timbers of Australia Ltd [2003] FCA 348

Because there were serious doubts about the first respondent's solvency, it appeared unable to meet a licence condition requiring net worth in excess of $50,000, and its conduct as responsible entity left investors exposed to unacceptable risk, there was no adequate alternative to appointing a receiver pending the hearing despite the potential cost and risk to the company.

Jurisdiction
Australia
Judgment Date
03 April 2003
Procedural Posture
Application for Winding Up Orders and Appointment of a Receiver in Relation to Managed Investment Schemes / Interim Application Pending Trial
Outcome
The Court indicated it was minded to appoint a receiver pending the hearing of the matter.
Legal Topics
['appointment of Receiver' 'responsible Entity' 'investor Protection' 'solvency' 'interim Relief Under S 1323']
['corporations Law' 'managed Investment Schemes' 'insolvency'] ['appointment of Receiver' 'responsible Entity' 'investor Protection' 'solvency' 'interim Relief Under S 1323']

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Procedural Posture

Application for Winding Up Orders and Appointment of a Receiver in Relation to Managed Investment Schemes / Interim Application Pending Trial

Legal Issues

  1. 1 ['Whether a receiver should be appointed under s 1323 of the Corporations Act 2001 (Cth) pending trial to protect investors in the schemes.' 'Whether alternatives to a receiver, including appointment of a new responsible entity, would adequately protect investors.' "Whether doubts about the first respondent's solvency and conduct as responsible entity justified interim intervention."]

Ratio Decidendi

Because there were serious doubts about the first respondent's solvency, it appeared unable to meet a licence condition requiring net worth in excess of $50,000, and its conduct as responsible entity left investors exposed to unacceptable risk, there was no adequate alternative to appointing a receiver pending the hearing despite the potential cost and risk to the company.

Court Disposition

The Court indicated it was minded to appoint a receiver pending the hearing of the matter.

Orders

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