Inkhorn Pty Ltd (Acn 009 236 337) (Subject to Deed of Company Arrangement) & Anor v Herbert & Anor

[2000] WASCA 333

Western Australia Court of Appeal

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Interrogate

Catchwords

1. Practice and Procedure
2. › Summary dismissal
3. › Strike-out of statement of claim
4. › Test to be applied
5. › Whether development of law would be stifled
6. › Need to distinguish case where law is clear from case where law is unsettled
1. Equity
2. › Mortgages
3. › Power of sale
4. › Duty of receiver/manager
5. › Whether duty limited to good faith or extends to reasonable care
6. › Relevance of s 420A of the Corporations Law
1. Equity
2. › Mortgages
3. › Power of sale
4. › Duty of mortgagee
5. › Whether common law altered by statutory enactment
6. › Whether developments in English law changed Australian common law
7. › Corporations Law, s 420A

Quick Take

The common law duty of a receiver/manager exercising a power of sale in Australia remains limited to acting in good faith (without fraud and without wilfully or recklessly sacrificing the mortgagor's interests), as established in Pendlebury (1912). Section 420A of the Corporations Law did not declare or alter this common law position. English authority imposing a higher duty of due diligence (Medforth v Blake) does not represent Australian law. For transactions predating s 420A, only the good faith standard applies.