Spandri v Deme Pty Ltd [2021] NSWSC 899

Supreme Court New South Wales

Medium Neutral Citation: Spandri v Deme Pty Ltd [2021] NSWSC 899 Hearing dates: 21 July 2021 Date of orders: 22 July 2021 Decision date: 22 July 2021 Jurisdiction: Equity - Duty List Before: Henry J Decision: See [14]. Catchwords: CORPORATIONS – Receivers and managers – Appointment, removal and disqualification – Appointment where no winding up – where sole director and shareholder of company died intestate – no issue of principle Legislation Cited: Supreme Court Act 1970 (NSW), s 67 Cases Cited: Nil Texts Cited: Nil Category: Principal judgment Parties: Mariangela Spandri (Plaintiff) Deme Pty Ltd (First Defendant) AnnaMarie Di Michelis (Second Defendant) Leonardo Di Michelis (Third Defendant) Dario Di Michelis (Fourth Defendant) Milto Ceccattini (Fifth Defendant) Marco Ceccattini (Sixth Defendant) Danny Ceccattini (Seventh Defendant) Sue Ellen Ceccattini (Eight Defendant) Representation: Counsel: J Cook (Plaintiff) P Newton (Second to Eighth Defendants)

Solicitors: JAS Legal (Plaintiff) Hunt & Hunt Lawyers (Defendants) File Number(s): 2021/201164 Publication restriction: Nil

Judgment 1. These are my reasons for making orders and directions today appointing a Receiver and Manager (Receiver) to the assets and business of the first defendant, Deme Pty Ltd (Deme), a construction company. 2. Emilio De Michelis (deceased) was, until his death on 8 June 2021, the sole director and shareholder of Deme. 3. The plaintiff in these proceedings, Mariangela Spandri, claims to have been the deceased's de facto partner since 1994. 4. The second to eighth defendants are the siblings and nieces and nephews of the deceased (relative defendants). 5. The plaintiff and the relative defendants believe that the deceased died intestate leaving an estate comprising, amongst other things, real property and company shares, including his share in Deme. They also have competing claims for letters of administration to be granted to them and for beneficial entitlement to the deceased's estate. 6. As a consequence of the deceased's death, Deme has no director. Deme is, however, a party to a number of contracts concerning ongoing projects in Smithfield, Fairfield and Campbelltown and a joint venture agreement and contract for sale in relation to land comprising folio reference 01/1267546 (Lasso Road property). 7. The proceedings were commenced by the plaintiff on an urgent basis on 14 July 2021 seeking the appointment of Schon Gregory Condon as a Receiver to the assets of Deme or, alternatively, for Mr Condon, to be appointed as a liquidator. The urgency of the application arises because the Lasso Road property contract for sale is due to complete within the next few weeks. The proceedings were stood over for a week to enable the plaintiff and the relative defendants to discuss whether some accommodation could be reached pending the determination of their competing claims. 8. At the hearing on 21 July 2021, the parties proposed consent orders that provided for Mr Condon to be appointed as the Receiver of Deme's existing business and its interest in the Lasso Road property joint venture and contract for sale. 9. The application is made pursuant to s 67 of the Supreme Court Act which provides that the Court may, at any stage of the proceedings, on terms, appoint a receiver by interlocutory order in any case in which it appears to the Court to be just and convenient so to do. I am satisfied that this is a case where it is just and convenient to appoint Mr Condon as the Receiver on the terms proposed by the revised short minutes of order received by my chambers on 21 July 2021. 10. The evidence before the Court makes clear that there is no governing mechanism of Deme which means that it is currently unable to function. The circumstances are such that Deme's property and assets need to be taken into the control and put into the hands of an appropriate person who can deal with the immediate issue of Deme's interest in the Lasso Road property joint venture and contract for sale until the other issues in the proceedings can be determined. The orders provide for the Receiver to have a supervisory role in carrying on Deme's existing business and the powers to do what is necessary and convenient to avoid Deme breaching its obligations under the Lasso Road property joint venture and contract for sale, including the power to transfer, sell or assign its interest in the joint venture and contract for sale or, alternatively, complete Deme's obligations under it. 11. The appointment of a Receiver will go towards ensuring that Deme is not subjected to the costs of any breach of contract in relation to the Lasso Road property and that the company is properly managed until the issue of who is granted letters of administration is resolved, if only on an interim basis. 12. There is evidence that Mr Condon consents to being appointed to act as Receiver of Deme and is not aware of any conflict of interest or duty. He is a registered liquidator and his costs and expenses will be paid from the assets of Deme, which I was informed includes some real property assets. The plaintiff has also proffered the usual undertaking as to damages in relation to Mr Condon's appointment. 13. At the hearing, I raised with the parties that the plaintiff would need to amend her originating process to incorporate her claim for letters of administration as the application for the appointment of Mr Condon as a Receiver was an interlocutory measure to facilitate the determination of some claim for final relief. The parties have dealt with this issue by amending the orders sought to provide for the plaintiff to file and serve an amended Summons seeking a grant of letters of administration and orders in relation to the beneficial entitlement to deceased's estate by 13 August 2021. The amended orders also provide for the relative defendants to file and serve a Cross Summons by 7 September 2021. 14. For these reasons, I made the following orders. 1. NOTES: 1. Emilio De Michelis (the deceased) was, until his death on 8 June 2021, the sole director and shareholder of first defendant, Deme Pty Ltd (the Company). 2. The parties believe the deceased died intestate leaving an estate including real property and company shares (the Estate). 3. The plaintiff on the one hand and the second to eighth defendants on the other have competing claims for grants of letters of administration and beneficial entitlement to the Estate. 4. The plaintiff undertakes to prosecute her claim for a grant of letters of administration in relation to the Estate expeditiously. 5. The Company is a party to: 1. an Unincorporated Joint Venture Agreement dated 26 March 2021 for the purchase, construction and partitioning of 11 commercial strata lots (Lasso Road Joint Venture) at the land comprising folio reference 01/1267546 (Lasso Road); 2. a Contract for Sale and Purchase of Land for the purchase of a 10.5% interest in Lasso Road (Lasso Road Contract for Sale); 3. an Unincorporated Joint Venture Agreement dated 21 February 2021 (Digitaria Drive Joint Venture) for the purchase, construction and partition of 12 lots at the land comprising lot 6 in deposited plan 1262720 (Digitaria Drive); 4. a Contract for Sale and Purchase of Land for the purchase of a 5.45% interest in Digitaria Drive (Digitaria Road Contract for Sale); 5. various contracts concerning ongoing projects in Smithfield, Fairfield and Campbelltown (Projects). 1. On the plaintiff, by her solicitor John Sheather, giving the usual undertaking as to damages ORDER that Schon Gregory Condon registered company auditor, registered tax agent, licensed real estate agent, registered trustee in bankruptcy and an official liquidator of Level 6/87 Marsden St, Parramatta NSW 2150 be appointed as receiver and manager (Receiver) of the Company's existing business and interest in the Lasso Road Joint Venture and the Lasso Road Contract for Sale (Assets). 2. ORDER that the Receiver be appointed commencing on the date of this order and continuing until the first to occur of: 1. the issuance of a grant of probate or letters of administration of the Deceased's estate; 2. 8 weeks from the date of this order; or 3. further order of the Court. 1. ORDER that as Receiver of the Assets, the Receiver have, with respect to the Assets, the powers to do all things necessary or convenient to: 1. supervise the carrying on of the Company's existing business, including the payment of the Company's liabilities incurred in the ordinary course of business; 2. avoid the Company breaching its obligations under the Lasso Road Joint Venture and the Lasso Road Contract for Sale; 3. transfer, sell, novate, assign the Company's interest in the Lasso Road Joint Venture on terms deemed suitable to the Receiver; 4. transfer, sell, novate, assign the Company's interest in the Lasso Road Contract for Sale on terms deemed suitable to the Receiver; 5. alternatively to (c) and (d) above, completing the Company's obligations under the Lasso Road Contract for Sale; 6. subject to (c) to (e) above and giving the plaintiff and defendants 5 days written notice of the names of the proposed parties to and terms of any proposed finance, cause the Company to borrow funds on an unsecured basis for the purposes of facilitating the settlement of the Lasso Road Contract for Sale; 7. insure the property of the Company; 8. appoint a solicitor, accountant or other professional qualified person to assist with any step taken in respect of subparagraphs (b) to (f) above as required; 9. appoint an agent to do any business that the receiver is unable to do, or that it is unreasonable to expect the receiver to do, in person; 10. take any step or perform any function reasonably necessary for the purposes of discharging his functions in accordance with these powers. 1. ORDERS that the Receiver disclose to the parties: 1. all information reasonably requested by them; 2. all information concerning the matters and powers referred to in orders 4(b) to (f). 1. ORDERS that the reasonable costs and expenses properly incurred by the Receiver in the performance of his duties and the exercise of his powers and any matters arising from, relating to, incidental to and in connection with the performance of his duties and the exercise of his powers under these orders be paid from the assets of the Company. 2. Liberty be reserved to all parties and the Receiver to apply to the Court to vary or discharge these orders or for directions generally. 3. ORDER the plaintiff to file and serve an amended Summons seeking a grant of letters of administration and orders in relation to the beneficial entitlement to deceased's estate by 13 August 2021. 4. ORDER that the second to eighth defendants have leave to file and serve a Cross Summons seeking a grant of letters of administration to one or some of the second to eighth defendants by 7 September 2021. 5. Relist the matter for further directions before the Equity Registrar on 15 September 2021. 6. These orders be entered forthwith. 7. Costs reserved.