Fraser v Australian Securities & Investments Commission, In the Matter of Lanepoint Enterprises Pty Ltd (Receivers And Managers Appointed) (Corrigendum dated 13 June 2007)

(2007) 159 FCR 424; [2007] FCAFC 85

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Interrogate

Catchwords

1. Corporations
2. › Receivers and managers
3. › Duties of receivers appointed by mortgagee
4. › Application of surplus funds
5. › Whether receivers can be directed to disburse funds to related creditor company for its legal costs
6. › Effect of second mortgagee and subsequent encumbrancers
7. › Corporations Act 2001 (Cth), ss 1321, 423(1)(b)
1. Corporations
2. › Receivers and managers
3. › Appeal under s 1321 of Corporations Act
4. › Nature of decision Court can make on appeal
5. › Whether discretion extends to requiring receivers to act in breach of statute or mortgage instrument
6. › Corporations Act 2001 (Cth), s 1321
1. Real Property
2. › Mortgages
3. › Receivers appointed under real property mortgage
4. › Application of proceeds of sale of mortgaged land
5. › Priority of payments
6. › Transfer of Land Act 1893 (WA), s 109

Quick Take

Section 1321 of the Corporations Act cannot be used to order receivers to make payments that would breach the statute governing application of mortgage proceeds (here, s 109 Transfer of Land Act 1893 (WA)) or the mortgage instrument under which they were appointed. Receivers have no power to pay funds to the mortgagor company on condition that the funds be applied for a specified purpose, as this could cut down the rights of secured creditors or unsecured creditors. The question whether s 1321 applies to receivers appointed under a real property mortgage (as distinct from a debenture) was left open.