CORPORATIONS — receivers and managers — appointment by court — where order made appointing provisional liquidators as receivers and managers over assets held by Sixth Defendant as trustee of Deckchair Trust — where order made in circumstances where sole director of Sixth Defendant gave false evidence that this entity was trustee — where sole director had in fact replaced Sixth Defendant as trustee of Deckchair Trust prior to hearing — whether order should be made appointing provisional liquidators as receivers and managers of assets of Deckchair Trust — whether appointment would prejudice third party lenders who have security over assets of the trust
Quick Take
1Where a trustee has deliberately misled the court as to the identity of the trustee of a trust, refused to give undertakings to maintain the status quo, and indicated an intention to deal imminently with trust assets, these matters strongly support the appointment of receivers and managers under s 67 of the Supreme Court Act 1970 (NSW) on the basis of lack of confidence in the conduct and management of the trust and risk to the public interest.
2The general principle that a court will not appoint a receiver without notice to a prior mortgagee in possession does not apply with the same force where the appointment is made to protect the public interest and address misconduct by a trustee, rather than in a contest between competing mortgagees, particularly where the appointment order expressly preserves the rights of prior encumbrancers.
3Where urgency arising from a trustee's demonstrated willingness to act contrary to the interests of investors makes adjournment to notify all secured creditors impracticable, the court may proceed to make receivership orders with a direction to serve and liberty to apply to vary or set aside on short notice.
