Bowesco Pty Ltd (Receiver and Manager Appointed) v Australian Securities and Investments Commission
[2006] FCA 1382
•17 OCTOBER 2006
FEDERAL COURT OF AUSTRALIA
Bowesco Pty Ltd (Receiver and Manager Appointed) v Australian Securities and Investments Commission [2006] FCA 1382
BOWESCO PTY LTD (RECEIVER AND MANAGER APPOINTED) (ACN 008 915 357) v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
WAD 298 OF 2006SIOPIS J
17 OCTOBER 2006
PERTH
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WAD 298 OF 2006
BETWEEN:
BOWESCO PTY LTD (RECEIVER AND MANAGER APPOINTED) (ACN 008 915 357)
ApplicantAND:
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Respondent
JUDGE:
SIOPIS J
DATE OF ORDER:
17 OCTOBER 2006
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.The notice of motion dated 16 October 2006 be adjourned to be heard by the Full Court.
2.The question of the Australian Securities and Investments Commission’s costs be adjourned to the next directions hearing before Justice French.
3.The question of the Applicant’s and the Options Receiver’s costs be reserved to the hearing before the Full Court.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WAD 298 OF 2006
BETWEEN:
BOWESCO PTY LTD (RECEIVER AND MANAGER APPOINTED) (ACN 008 915 357)
ApplicantAND:
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Respondent
JUDGE:
SIOPIS J
DATE:
17 OCTOBER 2006
PLACE:
PERTH
REASONS FOR JUDGMENT
This is an application by notice of motion for leave to extend the time for making an application for leave to appeal, and for leave to appeal from orders made by French J on 15 September 2006 declaring rights in relation to an option to purchase the Warnbro Fair Shopping Centre (‘the option’).
The background facts are set out fully in the judgment of French J of 15 September 2006 and I do not intend to repeat them. However, very briefly, the option was granted by Westpoint Management Pty Ltd to Westpoint Corporation Pty Ltd (‘Westpoint Corporation’). On 28 September 2005 Westpoint Corporation charged certain assets under a charge in favour of Perpetual Nominees Ltd (‘Perpetual’). Amongst the assets charged was ‘land’ and ‘the benefit of any contract to which the Chargor is a party…’ On 24 January 2006 receivers were appointed over the assets charged.
Westpoint Corporation and the applicant executed a deed of assignment of the option dated 7 October 2005. On 19 July 2006 the receivers appointed under the charge were also appointed as the receivers over the option (‘the option receivers’), and thereafter the option receivers entered into negotiations with a third party for the sale of the option to the third party.
In proceedings before French J on 13 and 14 September 2006, the option receivers sought a declaration that they could deal with the option. The applicant opposed the making of that declaration because the applicant said that the option was not covered by the terms of the charge, and that the option had been validly assigned to it by Westpoint Corporation by the deed dated 7 October 2005.
French J dealt with the matter on an urgent basis because he was conscious of the fact that the option was due to expire on 20 October 2006, and that the rights in respect of that asset needed to be determined expeditiously. By the time that the application was heard by French J, the applicant knew that the option receivers were in negotiations with a third party. French J handed down his decision on 15 September 2006. His Honour made a declaration that the option receivers were not restrained from exercising all rights, powers, privileges, discretions and authorities conferred on them by the deed of charge over the option. No action was taken by the applicant immediately after the handing down of that decision to enjoin the further negotiations with third parties by the option receivers, and there was no attempt by the applicant to seek an expedited appeal at that time.
I am informed by counsel that shortly after French J delivered his decision, the option receivers did assign the option to a third party, and that the third party has now exercised those rights under the option.
On 16 October 2006 the motion which is before me today was filed. In the supporting affidavit Ms Carey, a director of the applicant, deposed that the matter was urgent because the option was due to expire on 20 October 2006. As I understand it, the urgency is that the applicant wishes it to be established prior to 20 October 2006 that it is entitled to the option because it would want to be in a position to exercise the option. For that to happen, however, two proceedings would need to be concluded. Firstly, it would be necessary for an appeal to be heard and determined to set aside the declaration that French J has made. Secondly, it would be necessary for the applicant to commence a proceeding to which each third party which has now apparently acquired an interest in the shopping centre, would have to be joined. That proceeding would have to be served, the interlocutory processes completed, and the proceeding tried and determined in a manner which sets aside any third party interests. All of that would need to happen before Friday, 20 October 2006. In my view, that timetable is unrealistic. It is simply not possible for that to occur.
Further and in any event, there is no evidence before me today which seeks to demonstrate that the applicant is in a position to exercise the option even if it were to be declared that the applicant is entitled to exercise the option.
Accordingly, there is, in my view, no basis for attempting to have this application and any attendant appeal, heard and determined by 20 October 2006.
It, therefore, appears to me that if the applicant wishes to pursue any claim in relation to the option, it has by its own inactivity, confined itself to pursuing a claim which may be founded upon allegations that the fruits of the option are held on constructive trust, or for equitable or other compensation.
I accept, however, the submissions which have been made by Mr Thomson today on behalf of the option receivers, that, notwithstanding that the matter cannot be dealt with in a manner which would finally determine all rights, including third party rights by 20 October 2006, there are other reasons which, nevertheless, make it desirable that the applicant’s motion, and any attendant appeal, be dealt with on an expedited basis before a Full Court.
I will adjourn this notice of motion to the Full Court. I will ask the parties to consult with my associate in relation to the hearing of the motion and any attendant appeal, on an expedited basis.
I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. Associate:
Dated: 23 October 2006
Counsel for the Applicant: Ms M C Coulson Solicitor for the Applicant: Hammond Worthington Counsel for the Respondent: Mr S Owen‑Conway QC and Mr N Gvozdin Solicitor for the Respondent: Australian Government Solicitor Counsel for the Option Receivers: Mr J A Thomson Solicitor for the Option Receivers: Corrs Chambers Westgarth Date of Hearing: 17 October 2006 Date of Judgment: 17 October 2006
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