NIDAMON PTY LTD and ANOR v WAYLAND and ORS [1994] NSWCA 234

NIDAMON PTY LTD v WAYLAND SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

PRIESTLEY, MEAGHER and POWELL JJA 8 February 1994, 15 April 1994

[1994] NSWCA 234 RECEIVER — whether Receiver should take steps to procure discharge.

COURT APPOINTED RECEIVER — Receiver delaying discharge in order to safeguard position re costs and fees — whether costs proper receivership costs — whether Receiver substantial cause of unnecessary continuation of receivership.

RECEIVER — work outside scope of receivership — on what basis fees and expenses recoverable and from whom.

In order to carry out a settlement as part of the winding up of Nidamon Pty Ltd (the company) the three shareholders of that company (B, C and H) agreed that Mr Wayland, an accountant, should be appointed as Receiver so that he could determine the price of its shares (being bought from him by B and C as part of the settlement) and any amounts owing by the company to H.

The appointment was achieved by a consent order by the court. An Agreement, which was noted in a second consent order but which did not form part of that order, provided that the Receiver would retire from office on completion of the settlement between shareholders. The settlement was effected on 10 June 1982 but due to a dispute between B and C and the Receiver the Receiver's costs were still unpaid as at 19 July 1982. On this day the Receiver informed the shareholders that he intended to remain Receiver until his costs were paid in full. Hodgson J held that the Receiver could not be criticised for not having taken any steps towards having himself discharged before July 1982 and that the Receiver was entitled to fees and costs for activities reasonably necessary for protecting his remuneration and involving the obtaining of security in connection with fees chargeable for what he did in connection with ratification of the sale arranged by B and C of the company's land. In relation to the non receivership work done by the Receiver Hodgson J ordered his fees and expenses to be paid by B, C and H.