Australian Securities & Investments Commission; In the Matter of Richstar Enterprises Pty Ltd ACN 099 071 968 v Carey (No 11) [2007] FCA 21

Australian Securities & Investments Commission; In the Matter of Richstar Enterprises Pty Ltd ACN 099 071 968 v Carey (No 11) [2007] FCA 21

The Court would not authorise the proposed course of entering into a commercial loan facility when the receiver was informed that Westpoint Realty was insolvent and the facility would create a further liability. However, because relevant insurances were about to expire and property owners might be prejudiced without notice, the Court authorised the Corporate Receivers to effect short-term insurance as agent of the sixth defendant, reimburse themselves from the sixth defendant's bank account for the cost incurred, and notify insured persons of expiry of that short-term cover.

Jurisdiction
Australia
Judgment Date
12 January 2007
Procedural Posture
Corporations Matter Concerning Court Appointed Receivers and Restrictions on Disposition of Corporate Assets / Reasons for Judgment on Variation of Receiver Orders
Outcome
Receiver orders varied to authorise short-term insurance, reimbursement, notice of expiry, and liberty to apply.
Legal Topics
['variation of Receiver Orders' 'short Term Insurance for Managed Commercial Properties' 'insolvency Concerns' 'reimbursement From Company Bank Account' 'urgent Application']
['corporations' 'receivership' 'insurance'] ['variation of Receiver Orders' 'short Term Insurance for Managed Commercial Properties' 'insolvency Concerns' 'reimbursement From Company Bank Account' 'urgent Application']

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Procedural Posture

Corporations Matter Concerning Court Appointed Receivers and Restrictions on Disposition of Corporate Assets / Reasons for Judgment on Variation of Receiver Orders

Legal Issues

  1. 1 ['Whether the Corporate Receivers appointed to Westpoint Realty Pty Ltd should be empowered to effect short-term insurance for properties managed by Westpoint Realty despite existing orders restricting dispositions.' 'Whether the Court should authorise the receivers to cause Westpoint Realty to incur a commercial loan liability to finance renewal of insurance when the receiver was not satisfied of solvency and had been informed Westpoint Realty was insolvent.' 'Whether short-term insurance and notice to commercial property owners should be authorised to avoid prejudice from imminent expiry of existing insurance cover.']

Ratio Decidendi

The Court would not authorise the proposed course of entering into a commercial loan facility when the receiver was informed that Westpoint Realty was insolvent and the facility would create a further liability. However, because relevant insurances were about to expire and property owners might be prejudiced without notice, the Court authorised the Corporate Receivers to effect short-term insurance as agent of the sixth defendant, reimburse themselves from the sixth defendant's bank account for the cost incurred, and notify insured persons of expiry of that short-term cover.

Court Disposition

Receiver orders varied to authorise short-term insurance, reimbursement, notice of expiry, and liberty to apply.

Orders

  • ['Notwithstanding anything contained in the Orders made on 20 April 2006, as amended on 30 June 2006 and extended on 22 December 2006, the Corporate Receivers shall be empowered and entitled in their discretion to effect, as agent of the Sixth Defendant, such short-term insurances, including property damage and...