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Australian Securities Commission v As Nominees Ltd

Australian Securities Commission v As Nominees Ltd

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Case Copied 1 September 1995 14 min read

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CATCHWORDS

CORPORATIONS - Companies - corporate trustees - receivers and managers - interim motion for the appointment of a receiver and manager - evidence in principal application near completion - appearance of prejudgment - holding orders in lieu.

TRUSTS AND TRUSTEES - Trustee Company - interim motion for the appointment of a receiver and manager under the Corporations Law - holding orders - best protection for trust property - interests of investor-beneficiaries.

.Corporations Law s1323(1)

.Corporations Law s1323(3)

.Beach Petroleum N L v Johnson (1992) 9 ACSR 404 applied

.Corporate Affairs Commission (South Australia) v Lone Star Exploration N L No2 (1988) 14 ACLR 499 applied

.Corporate Affairs Commission (NSW) v Walker (1987) 11 ACLR 884 applied

.Corporate Affairs Commission (NSW) v Lombard Nash International Pty Ltd (No 3) 1987 5 ACLC 1020 applied

AUSTRALIAN SECURITIES COMMISSION v AS NOMINEES LIMITED and OTHERS
No ACT AG 3295 of 1995
No ACT AG 3002 of 1995

FINN J
CANBERRA
1 SEPTEMBER 1995

IN THE FEDERAL COURT OF AUSTRALIA    )
  )
AUSTRALIAN CAPITAL TERRITORY        )
)No. ACT AG 3295 of 1995 DISTRICT REGISTRY                  )    No. ACT AG 3002 of 1995

)
GENERAL DIVISION )
BETWEEN: AUSTRALIAN SECURITIES COMMISSION

Applicant

AND: AS NOMINEES LIMITED and OTHERS

Respondents

COURT:    FINN J.
PLACE:     CANBERRA
DATE:      1 SEPTEMBER 1995
MINUTES OF ORDERS

Motion dismissed.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA    )
  )
AUSTRALIAN CAPITAL TERRITORY        )
)No. ACT AG 3295 of 1995 DISTRICT REGISTRY                  )    No. ACT AG 3002 of 1995

)
GENERAL DIVISION  )
BETWEEN:   AUSTRALIAN SECURITIES COMMISSION

Applicant

AND: AS NOMINEES LIMITED and OTHERS

Respondents

COURT:    FINN J.
PLACE:     CANBERRA
DATE:      1 SEPTEMBER 1995
REASONS FOR JUDGMENT

Given the need for a speedy determination of this particular matter, I will deliver oral reasons for judgment and I will limit, as far as possible, reference to the now voluminous evidence relating to this matter. The documentary evidence alone runs into thousands of pages. The primary facts of the particular transactions in question between the parties are, in any event, the subject of almost complete agreement between them.
The motion before me is for an interim order for the appointment of a receiver and manager of the property of the first, second and third respondents under the Corporations Law,
s1323(3) (the "motion") - an application seeking such an appointment under s1323(1) having been filed on 16 June 1995 -(the "principal application"). The latter provision, insofar as is relevant for present purposes is in the terms that, and I quote:
Where:

(a)an investigation is being carried out under the ASC Law or this Law in relation to an act or omission by a person, being an act or omission that constitutes or may constitute a contravention of this Law;

...
and the Court considers it necessary or desirable to do so for the purpose of protecting the interests of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1995] FCA 811
Decision Date: 1 Sep 1995

CaseChat Overview and Summary

In the Federal Court of Australia, the Australian Securities Commission sought an interim order for the appointment of a receiver and manager of the property of the respondents, AS Nominees Limited, Ample Nominees Limited, and Securities Nominees Limited, under the Corporations Law s1323(3). This application followed a principal application filed on 16 June 1995, which alleged significant breaches of trust and fiduciary duty by the respondents in their roles as trustees and managers of various superannuation and unit trusts. The court was tasked with determining whether the appointment of a receiver and manager was desirable under the circumstances, considering the evidence and the existing holding orders.

The primary issue before the court was whether the interim appointment of a receiver and manager was necessary to protect the interests of the investor-beneficiaries, given the extensive evidence already presented and the existing holding orders. The court considered the potential benefits of such an appointment against the possible negative consequences on the ongoing proceedings and the respondents. The court noted that while there was credible evidence supporting the allegations, the absence of actual or apprehended fraud was a factor to consider. The court also highlighted the need to balance the protection of the investor-beneficiaries with the potential disruption to the proceedings and the rights of the respondents to defend themselves.

Justice Finn concluded that the existing holding orders, with appropriate variations, provided sufficient protection to the investor-beneficiaries. The court was concerned about the potential destabilizing effects of appointing a receiver and manager, particularly in relation to a secured loan transaction involving Ample Nominees Limited and Vania Pty Ltd. The court determined that appointing a receiver at this stage would not be desirable and declined to make the interim appointment. Instead, the court invited submissions on modifying the existing holding orders to ensure they provided the best protection for the trust property.

The court's decision was based on a detailed assessment of the evidence and the need to protect the interests of all parties involved, including the investor-beneficiaries, the respondents, and the broader proceedings. By refusing the motion for the interim appointment of a receiver and manager, the court aimed to maintain the status quo and allow the respondents to continue defending the principal applications. The court's reasoning underscored the importance of balancing the need for interim relief with the potential collateral effects on the ongoing litigation.

Orders