Australian Securities & Investments Commission In the Matter of Richstar Enterprises Pty Ltd ACN 099 071 968 v Carey (No 15) [2007] FCA 544

Australian Securities & Investments Commission In the Matter of Richstar Enterprises Pty Ltd ACN 099 071 968 v Carey (No 15) [2007] FCA 544

The proposed release of $50,000 from Richstar was refused because the Supreme Court action was considered entirely without merit: it was brought by companies controlled by the same director against another company controlled by her, involved an alleged loan initially made by Allan Frank Carey effectively with himself as sole director of the relevant companies, raised obvious conflict and non-arm's-length concerns, involved evidence casting doubt on the genuineness and timing of the loan transaction, and the receivers appeared to have acted within their duties under the Court orders. The proposed release of $300,000 from Healthcare Properties was refused because the amount was far too...

Jurisdiction
Australia
Judgment Date
17 April 2007
Procedural Posture
Corporations Matter Concerning Receiver Orders and Asset Preservation Orders Under Corporations Act 2001 (cth) S 1323 / Application for Variation of Receiver and Preservation Orders to Release Funds to Meet Legal Expenses
Outcome
The contested applications for variation and release of funds were refused.
Legal Topics
['asset Preservation Orders' 'release of Funds for Legal Expenses' 'court Appointed Receivers' 'third Party Notice' 'conflict of Interest' 'trust Property Controlled by Individual Defendant']
['corporations' 'receivership' 'civil Procedure'] ['asset Preservation Orders' 'release of Funds for Legal Expenses' 'court Appointed Receivers' 'third Party Notice' 'conflict of Interest' 'trust Property Controlled by Individual Defendant']

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Procedural Posture

Corporations Matter Concerning Receiver Orders and Asset Preservation Orders Under Corporations Act 2001 (cth) S 1323 / Application for Variation of Receiver and Preservation Orders to Release Funds to Meet Legal Expenses

Legal Issues

  1. 1 ["Whether $50,000 should be released to enable Richstar Enterprises Pty Ltd to defend Supreme Court of Western Australia proceedings brought by Keypoint Developments Pty Ltd and Keyworld Investments Pty Ltd and to issue a third party notice against Richstar's corporate receivers." 'Whether $300,000 should be released from funds of Healthcare Properties Pty Ltd to create a pool for legal services, accounting services and disbursements for matters including expenses of Mr Carey.' 'Whether the proposed variations were justified having regard to the receiver and asset preservation orders and the circumstances of the alleged Richstar loan transaction.']

Ratio Decidendi

The proposed release of $50,000 from Richstar was refused because the Supreme Court action was considered entirely without merit: it was brought by companies controlled by the same director against another company controlled by her, involved an alleged loan initially made by Allan Frank Carey effectively with himself as sole director of the relevant companies, raised obvious conflict and non-arm's-length concerns, involved evidence casting doubt on the genuineness and timing of the loan transaction, and the receivers appeared to have acted within their duties under the Court orders. The proposed release of $300,000 from Healthcare Properties was refused because the amount was far too...

Court Disposition

The contested applications for variation and release of funds were refused.

Orders

  • ['The orders proposed in [2], [3] and [4] of the amended minute of proposed orders filed on 3 April 2007 are refused.' 'ASIC and the receivers may recover the costs of resisting proposed orders 2 and 3 from Richstar.' 'No funds are to be made available to meet the costs of bringing the application for proposed...