KERRY LOWE MANAGEMENT PTY LTD v ISHERWOOD and SHERLOCK [1989] NSWCA 122

KERRY LOWE MANAGEMENT PTY LID v ISHERWOOD and SHERLOCK

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

SAMUELS, PRIESTLEY and CLARKE JJA 24 April 1989, 21 June 1989 [1989] NSWCA 122

APPOINTMENT OF RECEIVERS AND MANAGERS — whether deed of charge authorised appointment of joint and several receivers and managers, or joint receivers and managers only — if the latter, whether appointment of joint and several receivers and managers invalid, completely or pro tanto — on construction of documents in the case, Court holds the joint appointment valid: Wrights Hardware Pty Ltd v Evans (1988) 13 ACLR 631 and RJ Ward Pty Ltd v Sherlock (Davies J, Federal Court, 18/3/88, not reported) distinguished.

Kerry Lowe Management Pty Ltd ("KLM") and two others as plaintiffs commenced proceedings against various defendants including two who had been appointed joint and several receivers and managers of property of KLM. In the proceedings the plaintiffs claimed the appointment of the receivers and managers was invalid. Brownie J decided this question as a preliminary issue, in favour of the defendants. KLM applied for leave to appeal, and, as the point was very short, the Court heard full argument on it.

The question arose in the following circumstances. A Deed of Charge dated 13 October 1986 between KLM and the companies collectively called the Second Defendants contained the following provisions: "6. At any time after the Moneys Hereby Secured become payable the Mortgagee may appoint in writing any person to be a Receiver of the Mortgaged Property or any part thereof and may remove any such Receiver and in case of the removal retirement or death of any such Receiver may appoint another in his place and may fix the remuneration of any such receiver at such rate as the Mortgagee may from time to time determine but not exceeding whichever is the greater of the standard hourly rate from time to time charged for work of this type by the firm of accountants of which such Receiver is a member of five percentum (5%) of the gross amount of all moneys collected by such Receiver PROVIDED ALWAYS that every such Receiver shall be the agent of the Mortgagor and the Mortgagor alone shall be responsible for his acts and defaults and such Receiver so appointed shall without any consent on the part of the Mortgagor have power..."