Mercator Property Consultants Pty Ltd v Christmas Island Resort Pty Ltd & Ors [1998] FCA 896

FEDERAL COURT OF AUSTRALIA PROCEDURE - discretion to appoint receiver and manager - whether just or convenient to make appointment - whether security required - whether undertaking required

Federal Court of Australia Act 1976 (Cth), s57(1) Federal Court Rules, O 26 r 3(2), form 40

Beach Petroleum NL v Johnson (1993) 11 ACLC 75, considered National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 8 ACLC 365, applied MERCATOR PROPERTY CONSULTANTS PTY LTD (ACN 008 737 022) v CHRISTMAS ISLAND RESORT PTY LTD (ACN 009 160 123) AND ORS WG 3017 of 1998 R D NICHOLSON J PERTH 29 JULY 1998

GENERAL DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA

Western Australia DISTRICT REGISTRY WG 3017 of 1998

BETWEEN: mercator property consultants pty ltd

(acn 008 737 022)

Applicant

AND: chriStmas island resort pty ltd

(acn 009 160 123)

First Respondent

ROBBY SUMAMPOW, JOKKY HIDAYAT,

KWIK SOEN HOEK and HERMAN TJAHAJDI GANI

Second Respondents

JUDGE: r d nicholson j

DATE OF ORDER: 29 july 1998

WHERE MADE: PERTH

Upon the undertaking of the applicant in its own right and as trustee of the Christmas Island Trust, the applicant undertakes to the Court that it will pay to any party adversely affected by the interlocutory appointment of a receiver and manager in this action such compensation (if any) as the Court thinks just, in such manner as the Court directs,

THE COURT ORDERS THAT: 1. Mr Jeffrey Herbert be appointed receiver and manager of the property of Christmas Island Resort Pty Ltd ("CIR") until further order. 2. The receiver and manager shall have the unfettered power to conduct the business and management of CIR in such manner as he thinks most beneficial to the interests of the members of CIR as a whole. 3. Without in any way limiting the powers, duties and rights conferred on the receiver and manager by Pt 5.2 of the Corporations Law, the receiver and manager is hereby empowered and ordered to investigate or cause to be investigated: (a) the solvency of CIR; (b) the position CIR should take in these proceedings. 4. Within two months of the date of this order and on such other occasions as may be ordered the receiver and manager shall prepare a statement showing the assets and liabilities of CIR as at the last day of the period and a report containing such other information as he thinks necessary to enable the members of CIR to assess the financial position of CIR as at the last day of the period. 5. Save for the provisions of par 7 hereof, the directors of CIR shall cease to hold office with effect from the date hereof. During the period of the receivership and management: (a) the receiver and manager shall assume the management of CIR and, subject to Order 6, shall perform the duties, and may perform any of the functions and exercise any of the powers, of the directors of CIR, including but not limited to having the power to: (i) hire and/or lease the assets of CIR; and (ii) pay creditors of CIR; (b) the provisions of the Corporations Law relating to the keeping of accounts, the appointment and re‑appointment of auditors and the rights and duties of auditors shall continue to apply in relation to CIR, and in the application of those provisions to and in relation to CIR a reference to the directors of CIR shall be read as a reference to the receiver and manager of CIR. 6. The receiver and manager shall not have the power to sell or otherwise dispose of the assets of CIR, except with the leave of this Court being first obtained. 7. The power of the directors to appeal to the Full Court of the Federal Court of Australia in the name of CIR be preserved upon their agreeing to indemnify CIR for any costs which it may incur in respect of such proceedings and appropriately securing such costs. 8. The following additional orders shall apply in relation to the receiver and manager; (a) the receiver and manager shall be entitled to reasonable remuneration and reasonable costs and expenses properly incurred in the performance of his duties and the exercise of his powers as receiver and manager to be calculated on the basis of the time reasonably spent by the receiver and manager, his partners and staff in accordance with the Insolvency Practitioners Association scale of fees, such fees to be paid out of the assets of CIR; (b) the receiver and manager shall deliver an account for all amounts drawn by him for his remuneration; costs and expenses to the Court every three months until the termination of the period of the receivership and management or until further order and pay any balances as may be due to him or by him in such manner as the Court may direct. 9. Pursuant to O 26 r 3(2) of the Federal Court Rules the requirement for the receiver and manager to file security, be dispensed with. 10. The costs of the applicant's notice of motion dated 3 July 1998 be reserved. 11. The parties hereto and the receiver and manager have liberty to apply generally. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.