Supreme Court New South Wales Medium Neutral Citation: Honey & Smith v Amazing Loans Limited (Receivers And Managers Appointed) [2012] NSWSC 1631 Hearing dates: 18 December 2012 Decision date: 18 December 2012 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Proceedings adjourned to 21 December 2012 Category: Interlocutory applications Parties: Christopher John Honey - First Plaintiff Murray Smith - Second Plaintiff Amazing Home Loans Limited (Receivers and Managers Appointed) - First Defendant Amazing Loans (SPV) Pty Ltd (Receivers and Managers Appointed) - Second Defendant IEG SPV Pty Ltd (Receivers and Managers Appointed) - Third Defendant Representation: Counsel: Ms JK Taylor - Plaintiffs Mr G Sirtes SC - First to Third Defendants Solicitors: Corrs Chambers Westgarth - Plaintiffs Clarke Kann Lawyers - First to Third Defendants File Number(s): 2012/ 393662 Judgment (ex tempore) 1HIS HONOUR: Yesterday the plaintiffs were appointed receivers and managers of the defendants, and sought to obtain access to the defendants' business premises at Liverpool. When they returned today, the premises were closed, with a sign indicating that they would be closed until after Christmas. The plaintiffs seek leave to file a summons claiming interim relief until Friday, 21 December, in aid of their appointment, with a view to a further interlocutory hearing and further interlocutory relief that day. The application was made on notice to the defendants, who have appeared at first by their solicitor and subsequently by senior counsel today. 2The urgency of the application is not in doubt, and if the receivers and manager have been validly appointed, then they are entitled to relief to the effect claimed. However, the timeframe has been very short, and there has been practically no opportunity for the defendants to consider, and thus to impugn the validity of, the appointment. 3The defendants in the meantime offer undertakings to the Court until 21 December to the following effect: 1. Until 5pm Friday December 2012, the Defendants undertake to the Court that their officers, employees, servants and/or agents will not: i) take any steps to deal with the "Collections Account" held with the Westpac Bank; ii) subject to 2(i), deal with any of the Defendant's assets; iii) interfere with, in any way, the documentation and electronic data located both at the Defendants' Liverpool premises or elsewhere. 2. Until 5pm Friday 21 December 2012, the Defendants undertake to the Court that their officers, employees, servants and/or agents will: i) pay any monies received from debtors into the Collections Account with Westpac Bank; ii) continue to manage and service their loan portfolios and keep open the Liverpool shopfront of the business during ordinary business hours. 4Although the plaintiffs profess concerns as to the risk of dissipation of assets and jeopardy to their security, it seems to me that the jeopardy to the business, even if it were closed for three days, at this time of year would be very slight, and in any event is addressed by the undertaking to continue to manage and service the portfolios and keep the shop front open. So far as the risk of dissipation is concerned, while there is evidence that some funds were removed from the collection account, there is also evidence that that account is now frozen, and that the funds that were initially removed from it have been repaid to it. Otherwise, any risk of dissipation is dealt with by the undertaking to pay any moneys received from debtors into the collections account, and otherwise not to deal with any of the defendants' assets. 5Concerns are also expressed as to the preservation of documents, electronic and otherwise. Those concerns are, in the short term, addressed by the undertaking not to interfere in any way with the documentation and electronic data located at the Liverpool premises or elsewhere. Given the ease with which interference to electronic data can nowadays be demonstrated, a defendant who sought to do so despite that undertaking would place itself in serious jeopardy. 6It seems to me in those circumstances, bearing in mind that the plaintiffs are seeking the Court's aid, and the defendants have had practically no notice of the application, that upon the undertakings they proffer, the proceedings should be adjourned until Friday, when whether there is any, or any viable, challenge to the appointment of receivers should be clearer. Orders 7Upon the plaintiffs by their counsel giving to the Court the usual undertaking as to damages, I note the following undertaking of the defendants: 1. Until 5pm Friday December 2012, the Defendants undertake to the Court that their officers, employees, servants and/or agents will not: i) take any steps to deal with the "Collections Account" held with the Westpac Bank; ii) subject to 2(i), deal with any of the Defendant's assets; iii) interfere with, in any way, the documentation and electronic data located both at the Defendants' Liverpool premises or elsewhere. 2. Until 5pm Friday 21 December 2012, the Defendants undertake to the Court that their officers, employees, servants and/or agents will: i) pay any moneys received from debtors into the Collections Account with Westpac Bank; ii) continue to manage and service their loan portfolios and keep open the Liverpool shopfront of the business during ordinary business hours. 8I adjourn the proceedings to 21 December 2012, at 10am, before me. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 May 2013