Hayes (Deed Administrator), in the matter of The Cambria Management Corporation Pty Ltd (subject to Deed of Company Arrangement)

The applicant, the deed administrator, applied to be appointed as the receiver and manager of the property of the Cambria Corporation Unit Trust. The Cambria Management Corporation Pty Ltd, which was the trustee of the Trust, was the subject of a deed of company arrangement. The Federal Court was called upon to consider the application. The primary legal issue before the court was whether the deed administrator should be appointed as the receiver and manager of the trust property under section 57(1) of the Federal Court of Australia Act 1976. The deed administrator argued that he should be appointed as the receiver and manager of the property due to concerns about the management of the trust assets and the potential for mismanagement or insolvency of the trustee.

The court found that the deed administrator had a legitimate interest in the application and that there was a reasonable likelihood that the applicant would be able to demonstrate a need for the appointment of a receiver and manager. The court noted that the deed administrator had identified the rent roll as the only substantial asset of the trustee and that the rent roll was being managed by a related entity. The court was satisfied that the deed administrator had acted in good faith and that the appointment of a receiver and manager was necessary to protect the interests of the trust beneficiaries. Accordingly, the court granted the application and appointed the deed administrator as the receiver and manager of the trust property.

The court further ordered that the receiver has all of the powers under section 420 of the Corporations Act 2001 as if the reference in that section to “the corporation” were a reference to “the Trust”. The court also ordered that the receiver’s costs, expenses and remuneration in connection with the receivership be paid from the assets of the Trust. The court further ordered that the deed administrator’s costs of and incidental to this application be costs in the deed administration of The Cambria Management Corporation Pty Ltd, to be paid out of the assets comprising the deed fund as defined in the Deed of Company Arrangement executed on 23 June 2020. Finally, the court granted liberty to the deed administrator to apply for the relief claimed in prayer 3 of the originating process and for approval of his remuneration as deed administrator and or liquidator of CMC from the Trust assets.