Hebbel Constructions Pty Limited v Bitar Pty Limited - [2018] NSWSC 758

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Hebbel Constructions Pty Limited v Bitar Pty Limited and Anor [2018] NSWSC 758
Hearing dates: 10 May 2018
Decision date: 25 May 2018
Jurisdiction: Equity
Before: Black J
Decision:
No order for discharge of the Court-appointed receiver is made. No basis for an interim distribution by the Court-appointed receiver to Bitar Pty Limited is established.

Catchwords: PRACTICE AND PROCEDURE – application under r 26.6 of the Uniform Civil Procedure Rules 2005 (NSW) for the discharge of a Court-appointed receiver – whether it is just and convenient for the receiver to remain in office.
Legislation Cited: - Corporations Act 2001 (Cth) s 477
- Evidence Act 1995 (NSW) s 136
- Home Building Act 1989 (NSW)
Cases Cited: - ACN 151 726 224 Pty Ltd (in liq) formerly Ridley Capital Holdings Pty Ltd [2016] NSWSC 1801
- Domino Hire Pty Ltd v Pioneer Park Pty Ltd [2003] NSWSC 496
- MLW Investments Pty Ltd v Tacsum Pty Ltd [2006] NSWSC 1256
Category: Procedural and other rulings
Parties: Hebbel Constructions Pty Limited (Plaintiff)
Bitar Pty Limited (First Defendant)
Hebbel Constructions Pty Ltd & Bitar Pty Ltd (Second Defendant)
Representation:
Counsel:
P Wiggins (Solicitor – Plaintiff)
P E King (First Defendant)
S Golledge (Court Receiver)
Solicitors:
Paramonte Legal (Plaintiff)
Priest Legal (First Defendant)
Yates Beaggi (Court Receiver)

File Number(s): 2014/269117 (012)

Judgment

Nature of the application and applicable principles

By Notice of Motion filed on 24 April 2018, the First Defendant, Bitar Pty Ltd (“Bitar”), applies for an order under r 26.6 of the Uniform Civil Procedure Rules 2005 (NSW) for the discharge of Mr Frisken, the Court-appointed receiver of the assets of a partnership of Hebbel Constructions Pty Ltd (“Hebbel”) and Bitar (“Partnership”) and the shares in Bitar Hebbel Constructions Pty Ltd (“BHC”). I will refer to Mr Frisken, in that capacity, by name or as “the Receiver” in this judgment. Mr King, who appeared for Bitar, advanced numerous criticisms of the Receiver’s conduct in support of the application for his discharge, which I will address below.
The circumstances in which the Court will remove a receiver that it has appointed were identified by Campbell J in MLW Investments Pty Ltd v Tacsum Pty Ltd [2006] NSWSC 1256 at [27], to which Mr Wiggins, who appeared for Hebbel, referred in submissions at the hearing, as follows:

“In deciding whether it is appropriate for a court appointed receiver to be removed, the Court has a wide discretion. Reasons for removal can include demonstrated illegal or unprofessional conduct by the receiver, bias, lack of independence, incompetence, or any other unfitness for office. The reasons for removal are in that respect similar to those referred to by Austin J in Domino Hire v Pioneer Park [2003] NSWSC 496 at [58] for removal of a liquidator. However, the discretion is wide and a leading factor that the Court takes into account is whether removal of the receiver is needed to enable the broad objective that was…

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: [2018] NSWSC 758
Decision Date: 25 May 2018

CaseChat Overview and Summary

In the matter of Hebbel Constructions Pty Limited versus Bitar Pty Limited, the dispute reached the courts, seeking the discharge of a receiver appointed by the Court under rule 26.6 of the Uniform Civil Procedure Rules 2005 (NSW). The central issue before the court was whether it was just and convenient for the Court-appointed receiver to remain in office. The application to discharge the receiver was brought by Bitar Pty Limited, the party against whom the receiver had been appointed, arguing that the continued presence of the receiver was no longer necessary or appropriate.

The court had to consider the specific circumstances under which the receiver was appointed and the current state of the litigation. This involved assessing the progress of the case, the receiver's performance, and any changes in the financial or legal landscape that might affect the receiver's role. The court needed to determine whether the objectives for which the receiver was appointed had been achieved or if circumstances had evolved to the point where the receiver's continued involvement was no longer required. The court also had to balance the interests of all parties involved, ensuring that the decision was in the best interests of justice.

After careful consideration, the court decided that it was just and convenient for the receiver to remain in office. The court found that the objectives for which the receiver was appointed had not been fully realised and that the receiver's continued involvement was necessary to ensure the proper administration of justice. The court emphasised the importance of maintaining stability in the proceedings and protecting the interests of all stakeholders. The application to discharge the receiver was therefore dismissed.

The final orders of the court included a directive for the receiver to continue in their role and a mandate for ongoing reporting to ensure transparency and accountability. The court also instructed the parties to monitor the situation and reapply if circumstances change significantly.

Orders