Australian Securities and Investments Commission v ALAMMC Developments Pty Ltd (No 2) [2024] FCA 1505

Australian Securities and Investments Commission v ALAMMC Developments Pty Ltd (No 2) [2024] FCA 1505

Court held that receivers are justified in refusing consent to pay legal costs from property of a defendant where those costs are not truly costs of that defendant or where there is insufficient property of that defendant, and further, that receivers do not adjudicate rights but must not withhold consent unreasonably; provision made for referral to registrar to resolve disputes over reasonableness of withholding consent.

Parties
Plaintiff: Australian Securities and Investments Commission; First Defendant: ALAMMC Developments Pty Ltd; Second Defendant: ALAMMC Developments 2 Pty Ltd; Third Defendant: ALAMMC Developments 3 Pty Ltd; Fourth Defendant: ALAMMC Developments 4 Pty Ltd; Fifth Defendant: ALAMMC Developments 5 Pty Ltd; Sixth Defendant: ALAMMC Developments 6 Pty Ltd; Seventh Defendant: ALAMMC Developments 7 Pty Ltd; Eighth Defendant: Harvey Madison Capital Pty Ltd; Ninth Defendant: SDAMF 2 Pty Ltd; Tenth Defendant: SDAMF 3 Pty Ltd; Eleventh Defendant: SDAMF 4 Pty Ltd; Twelfth Defendant: Coral Coast Mutual Pty Ltd; Thirteenth Defendant: Mortgage Mutual Fund Pty Ltd; Fourteenth Defendant: David George McWilliams; Fifteenth Defendant: Laura Mary Fullarton; Receivers: Andrew Peter Fielding and Helen Newman
Jurisdiction
Australia
Judgment Date
20 December 2024
Procedural Posture
Interlocutory Application / Post Appointment of Receivers; Orders Regarding Payment of Legal Costs
Outcome
Application by receivers granted in part; court made directions approving receivers' justified refusal or consent to pay legal costs, subject to property and conditions; right of challenge preserved.
Legal Topics
Receivership, Asset Restraint, Payment of Legal Costs, Court Powers and Directions
Corporations Law Civil Procedure Receivership Asset Restraint Payment of Legal Costs Court Powers and Directions

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Parties

Australian Securities and Investments Commission

Plaintiff

ALAMMC Developments Pty Ltd

First Defendant

ALAMMC Developments 2 Pty Ltd

Second Defendant

ALAMMC Developments 3 Pty Ltd

Third Defendant

ALAMMC Developments 4 Pty Ltd

Fourth Defendant

ALAMMC Developments 5 Pty Ltd

Fifth Defendant

ALAMMC Developments 6 Pty Ltd

Sixth Defendant

ALAMMC Developments 7 Pty Ltd

Seventh Defendant

Harvey Madison Capital Pty Ltd

Eighth Defendant

SDAMF 2 Pty Ltd

Ninth Defendant

SDAMF 3 Pty Ltd

Tenth Defendant

SDAMF 4 Pty Ltd

Eleventh Defendant

Coral Coast Mutual Pty Ltd

Twelfth Defendant

Mortgage Mutual Fund Pty Ltd

Thirteenth Defendant

David George McWilliams

Fourteenth Defendant

Laura Mary Fullarton

Fifteenth Defendant

Andrew Peter Fielding and Helen Newman

Receivers

Procedural Posture

Interlocutory Application / Post Appointment of Receivers; Orders Regarding Payment of Legal Costs

Legal Issues

  1. 1 Whether receivers are justified in refusing consent to payment of legal costs from property of defendant where costs are not truly costs of that defendant or where insufficient property exists
  2. 2 Whether court should alter directions related to receivers' consent regarding reasonable legal costs

Ratio Decidendi

Court held that receivers are justified in refusing consent to pay legal costs from property of a defendant where those costs are not truly costs of that defendant or where there is insufficient property of that defendant, and further, that receivers do not adjudicate rights but must not withhold consent unreasonably; provision made for referral to registrar to resolve disputes over reasonableness of withholding consent.

Court Disposition

Application by receivers granted in part; court made directions approving receivers' justified refusal or consent to pay legal costs, subject to property and conditions; right of challenge preserved.

Orders

  • Receivers justified in consenting or refusing to pay reasonable legal costs from property of each defendant, subject to conditions.
  • Defendants may file application to challenge refusal deemed unreasonable within seven days.