Supreme Court New South Wales Medium Neutral Citation: Gandangara Local Aboriginal Land Council & Anor v Gandangara Services Limited & Ors [2015] NSWSC 2011 Hearing dates: 11 December 2015 Decision date: 11 December 2015 Jurisdiction: Equity - Corporations List Before: Black J Decision: Orders in accordance with the short minutes of order initialled by His Honour and placed in the file. Catchwords: CORPORATIONS - receivers, controllers and managers - termination of receivership – where receiver and manager of companies sought to be discharged from that role – where receiver and manager of companies sought dispensation from requirement to file accounts – where object of the receiver's appointment has been implemented. Legislation Cited: - Aboriginal Land Rights Act 1983 (Cth), s 222 - Corporations Act 2001 (Cth), s 601AA Uniform Civil Procedure Rules 2005 (NSW), rr 26.5, 26.6. Cases Cited: - Ide v Ide [2004] NSWSC 751; (2004) 50 ACSR 324 - Kerr; Re Angel's Castle Preschool Pty Limited (in liq) (No 2) [2012] FCA 57 - Lunn v Savage [2006] NSWSC 240 - Refund Property Fees Pty Limited v Prime Project Development (Cairns) Pty Limited [2015] FCA 613 Category: Procedural and other rulings Parties: Gandangara Local Aboriginal Land Council (First Plaintiff) GLALC Development Services Limited (Second Plaintiff) Gandangara Management Services Limited (Nominal Third Plaintiff) Gandangara Services Limited (First Defendant) Gandangara Health Limited (Second Defendant) Cinderella Cronan (Third Defendant) George Bloomfield (Fourth Defendant) Carolyne Joy Brown (Fifth Defendant) John Thomas Dickson (Sixth Defendant) Mervyn Gregory Donovan (Seventh Defendant) Denis Thorne (Eighth Defendant) Rohan Tobler (Ninth Defendant) Mark (Jack) Johnson (Tenth Defendant) Gandangara 101 Limited (Eleventh Defendant) Gandangara Employment & Training Limited (Twelfth Defendant) Gandangara Future Fund Limited (Thirteenth Defendant) Gandangara Health Services Limited (Fourteenth Defendant) Gandangara Housing Services Limited (Fifteenth Defendant) Gandangara Transport Services Limited (Sixteenth Defendant) Lot 3 (South) Barden Ridge Limited (Seventeenth Defendant) Marumali Limited (Eighteenth Defendant) Sproule Road Limited (Nineteenth Defendant) Statewise Aboriginal Services Limited (Twentieth Defendant) Sydney Aboriginal Services Limited (Twenty-First Defendant) Representation: Counsel: J Baird (Receiver) Solicitors: Watson Mangioni (Receiver) File Number(s): 2014/100748 Judgment- ex tempore 1. Pursuant to the liberty to apply previously granted to Mr Peter Hillig, in his capacity as court appointed receiver and manager of the assets and undertakings of certain entities, Mr Hillig now applies for orders that he be discharged as receiver and manager of four of those entities. He also asks the Court to note that he intends to file an application with the Australian Securities and Investments Commission pursuant to s 601AA of the Corporation Act 2001 (Cth) for the voluntary deregistration of several other entities and that liberty be reserved for him to apply, once those entities have been deregistered, for his discharge as receiver and manager of those other entities. He also proposes that an application for dispensation from the requirement to file accounts, and any necessary application for approval of his remuneration, be stood over to a date in early February 2016, by which time he anticipates placing his remuneration before the directors of the continuing entities and seeking approval for that remuneration. Any such approval would, of course, be a matter of considerable weight so far as any remaining requirement for any approval by the Court of that remuneration would be concerned. 2. The background to the application is set out in Mr Hillig's affidavit sworn 7 December 2015, and I have also been provided with helpful submissions by Mr Baird, who appears for Mr Hillig in the application. Mr Hillig was appointed as receiver and manager of several entities on 23 May 2014 by order of this Court. That appointment followed his appointment as administrator of Gandangara Local Aboriginal Land Council ("GLALC") by the Minister for Aboriginal Affairs on 20 March 2014, made pursuant to s 222 of the Aboriginal Land Rights Act 1983 (Cth). 3. The orders appointing Mr Hillig as receiver and manager of the relevant entities make clear that the object of the appointment was, first, to preserve the assets and undertakings of those entities so far as may be practicable pending the conclusion of the administration of GLALC by Mr Hillig. There were also ancillary purposes of his appointment, namely to take steps that may be necessary and convenient to put the affairs of those companies upon a sound financial footing and to prevent occurrence of unsustainable ongoing losses from their operations; to allow the affairs of those companies to be carried out in a manner not contrary to law; and to execute an agreement which has been formed between the parties to the proceedings, in a mediation on the previous day, including giving control and ownership of the relevant companies to GLALC. 4. Mr Hillig gives evidence of the steps which he has taken as administrator of GLALC and as receiver and manager of the relevant entities since his appointment, including attending to the day to day management of GLALC and those entities' affairs; causing audited financial statements of GLALC and those entities to be prepared and attending to their financial affairs; considering causes of action available to GLALC and those entities and causing proceedings to be commenced by several of those entities to which I will refer below. Mr Hillig also partly implemented a restructuring of GLALC and those entities to which he refers in his affidavit. That restructuring involved a change in shareholding of the entities such that GLALC is now a sole shareholder in several operating entities and contemplated that other entities which had ceased to have relevant functions and were unlikely to have causes of actions or claims against third parties would be deregistered. Mr Hillig outlines in his affidavit the logic of that structure, which seems to me to be consistent with the object of his appointment of, inter alia, taking steps to put the relevant companies on a sound financial footing and giving GLALC control and ownership of those companies. 5. Mr Hillig refers to the steps which had been taken to implement that restructuring, which has taken effect from 19 November 2015. He refers to the fact that certain dormant entities are intended to be deregistered and those persons who are the current directors of GLALC, who it appears are also the directors of the continuing entities, have not consented to appointment as directors of those dormant entities. Mr Hillig notes that he can only complete the steps necessary to file an application for deregistration if the relevant companies are not a party to the legal proceedings. Accordingly, Mr Hillig seeks orders dismissing these proceedings, so far as they involve the receivership in respect of each of the dormant entities, to allow them to be deregistered. 6. Mr Hillig also refers to the existence of other proceedings, which have been brought in this Court which were commenced by GLALC and some of the continuing entities. He notes that those proceedings are to be continued by GLALC, under its new board. 7. Mr Hillig indicates that his appointment as administrator of GLALC has now come to an end, with effect from 20 November 2015, the day after the restructuring of the entities was completed. In these circumstances, as he recognises in his evidence, the primary purpose of his appointment, namely, to preserve the assets and undertakings of the entities for the purpose of that administration has also now been completed. There is also in evidence minutes of an annual general meeting of GLALC, attended by numerous members, on 30 September 2015, which indicates the appointment of new directors to the board of GLALC. 8. Mr Baird, in his submissions, refers to these matters and to the purposes of Mr Hillig's appointment, and submits that it is appropriate that Mr Hillig's appointment as receiver and manager of each of the relevant entities now be terminated and he be discharged, since the purpose of that appointment has been achieved, and he also refers to the proposal for deregistration of the entities, following which Mr Hillig will in turn seek his discharge as receiver and manager of those entities. 9. The circumstances in which the Court may make an order for the discharge of a Court appointed receiver are well established. Mr Baird rightly draws attention to r 26.6 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") which provides in subrule 2, for the discharge of the receiver. In Lunn v Savage [2006] NSWSC 240, Campbell J referred to earlier authority indicating that a court appointed receiver can be discharged when the object of his appointment has been fully implemented. That approach has also been followed in the Full Court of the Federal Court in Kerr; Re Angel's Castle Preschool Pty Limited (in liq) (No 2) [2012] FCA 57 and in Refund Property Fees Pty Limited v Prime Project Development (Cairns) Pty Limited [2015] FCA 613. 10. I am satisfied that the purposes for which Mr Hillig was appointed have been completed, so far as the relevant entities have been restructured, GLALC has been returned to the control of the new board, and the Minister has not continued Mr Hillig's appointment as administrator of GLALC. So far as the receivership was ancillary to the appointment of Mr Hillig as administrator, and directed to facilitating a restructuring which has now occurred, there is no reason to continue it. I am satisfied that, as Mr Hillig seeks, he should now be discharged as receiver and manager of each of the four named continuing entities, so that they may be returned to the full control of their directors, and so that they need not bear continued fees of a receiver and manager, once the need for his appointment no longer exists. 11. It seems to me that the approach proposed by Mr Hillig, of now proceeding to the deregistration of the dormant entities, and seeking a discharge as receiver once that deregistration has occurred, is a sensible one. That proposal properly recognises that Mr Hillig will need to remain in office as receiver in order to take the steps necessary to implement that deregistration. 12. Finally, I note that Mr Hillig seeks, or will seek in due course, an order that the requirement that he file accounts, as ordinarily required by the UCPR r 26.5 be dispensed with. The courts have readily made such orders including in Ide v Ide [2004] NSWSC 751; (2004) 50 ACSR 324 [34]ff and in Kerr; Re Angel's Castle Preschool Pty Limited (in liq) (No 2) [2012] FCA 57 at [5]ff. In the course of submissions, Mr Hillig has appropriately recognised that that order is best deferred until steps have been taken to approve his remuneration, whether by the companies or by the Court, to the extent that remuneration has been met out of the assets of the relevant companies. Once that remuneration has been approved, and where it appears that the accounts of the companies have been audited, it seems to me that there is likely to be a strong case for dispensing with a requirement for the filing and passing of such accounts, where that would simply duplicate the process of financial reporting which has already occurred in respect of the companies. However, that question is to be deferred until Mr Hillig has attended to the remaining steps in respect of the approval of his remuneration. 13. For these reasons, I make orders in accordance with the short minutes of order initialled by me and placed in the file. ********** 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: 12 February 2016