Australian Securities and Investments Commission v Caddick (No 2)

This case involves an application made by receivers and liquidators, appointed in relation to Ms Caddick, for various directions concerning the distribution of assets. The case was heard in the Federal Court of Australia. The legal issues that the court had to decide included whether the receivers would be justified in making certain distributions, whether the receivers would be justified in distributing to out-of-pocket investors on a pari passu basis, and whether the liquidators would be justified in providing certain releases and not further investigating, assigning or commencing claims that the company may have.

The court found that the receivers would be justified in making an interim distribution of up to $3,000,000 of the Receivership Property to the Out-of-Pocket Investors on a pari passu basis, and in making a payment of $950,000 to Edward and Barbara Grimley upon them providing vacant possession of the Edgecliff Property. The court also found that the liquidators would be justified in providing certain releases and in not further investigating, assigning or commencing claims that the company may have. The court granted the orders sought by the Receivers, the Liquidators and Investor A in their respective applications.

The ratio of this case is that silence coupled with surrounding circumstances may be tantamount to assent, but in this case, creditors were not informed of the basis on which the court might make a pooling order or the considerations that might influence its decision making. The court found that in the circumstances of this case, the receivers and liquidators were justified in making certain distributions and providing certain releases. The court also found that Investor A was justified in stepping forward to take on a more active role as a representative defendant on behalf of the group of Out-of-Pocket Investors.