Australian Securities and Investments Commission, in the Matter of Richstar Enterprises Pty Ltd ACN 099 071 968 v Carey (No 9)

The case involved the Australian Securities and Investments Commission and Richstar Enterprises Pty Ltd against Carey. The dispute centred on the validity and effect of a fixed charge on an option to acquire property, with the Option Receivers seeking a declaration that the Option was subject to the fixed charge component of the ING Charge at its creation, and the freezing order varied accordingly. The court was required to determine whether the Option was subject to the fixed charge component of the ING Charge at its creation and whether the evidence presented justified the variation of the freezing order and the making of the declaration sought by the Option Receivers.

The court considered the evidence presented by both parties, including the affidavits of Oren Zohar and Norman Carey, and the contentions made by Bowesco regarding the nature of the ING Charge. Bowesco argued that the ING Charge was a floating charge and that ING had waived its rights in relation to the Option. The court found that Bowesco's arguments, while not without merit, did not sufficiently justify the variation of the freezing order and the making of the declaration sought by the Option Receivers. The court concluded that the Option was subject to the fixed charge component of the ING Charge at its creation.

The court's decision was based on the evidence presented and the short life remaining in the Option. The court found that the documents sought by Bowesco would not advance its position and that their production would be unreasonable. The court also found that the alleged inconsistencies between the charge and the loan agreement and the letter of 8 September 2005 did not detract from the construction of the charge as a fixed charge.

The court made a declaration that the charge at the time it was created applied to the Option as a fixed charge. The court did not, however, determine the issue of the continuing validity of the Option, which was left as a matter between ING and Elderslie.