Jenner, Barry Lorne v Selmoore Pty Ltd - [1997] FCA 318

IN THE FEDERAL COURT OF AUSTRALIA )
)

VICTORIA DISTRICT REGISTRY ) No. VG 3322 of 1995
)

GENERAL DIVISION )

BARRY LORNE JENNER in his capacity as Receiver and Manager of Selmoore Pty Ltd (ACN 053 244 152) (Receiver and Manager appointed)

(Applicant)

and

SELMOORE PTY LTD (ACN 053 244 152) (Receiver and Manager Appointed) by its directors CAROL JANE WILLIAMS and BARRY JOHN WILLIAMS

(Respondents)

JUDGE MAKING ORDER: Ryan J
DATE OF ORDER: 5 May 1997
WHERE MADE: Melbourne

MINUTES OF ORDER

THE COURT ORDERS:

That the application be dismissed.

That the applicant pay the respondent's costs of and incidental to the application, such costs to be taxed in default of agreement.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA )
)

VICTORIA DISTRICT REGISTRY ) No. VG 3322 of 1995
)

GENERAL DIVISION )

BARRY LORNE JENNER in his capacity as Receiver and Manager of Selmoore Pty Ltd (ACN 053 244 152) (Receiver and Manager appointed)

(Applicant)

and

SELMOORE PTY LTD (ACN 053 244 152) (Receiver and Manager Appointed) by its directors CAROL JANE WILLIAMS and BARRY JOHN WILLIAMS

(Respondents)

CORAM:    Ryan J
DATE:     5 May 1997
PLACE:    Melbourne

REASONS FOR JUDGMENT

RYAN J: On 19 April 1994, Selmoore Pty Ltd ("Selmoore") executed a mortgage debenture in favour of the National Australia Bank ("the Bank"). The mortgage debenture, at least in part, secured an overdraft facility to Selmoore from the Bank under which, when it expired on 31 October 1994, Selmoore was indebted to the Bank in an amount of approximately $102,000. The mortgage debenture under the heading "Payment of Secured Amounts" stipulated that "the Mortgagor undertakes to pay the Bank on demand all the secured amounts referred to in the demand." It was further stipulated by cl. 12 under the heading "Events of Default:"

The following events (whether or not the happening of an event is in the control of the Mortgagor) are Events of Default:

(a)if default is made in the payment of any Secured Amounts;

(b)if an application or order is made for the winding up of the Mortgagor or any Related Body Corporate of the Mortgagor or any surety;

...

(f)if the Mortgagor or any Surety fails to comply with this Deed or any Collateral Security or any agreement of any kind with the Bank or if any representation or warranty made or deemed to have been made by the Mortgagor or any Surety in, or in connection with, this Security or any Collateral Security or any agreement of any kind with the Bank is untrue or misleading when made or when deemed to have been made;

The consequences of an "event of default" were enumerated in cl. 14 under the heading "Rights of Enforcement" which, as far as is relevant, provided:

14.1Rights of the Bank

Subject to Clause 14.2, at any time after an Event of Default…

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.

Continue reading Jenner, Barry Lorne v Selmoore Pty Ltd

Details

AGLC: Jenner, Barry Lorne v Selmoore Pty Ltd [1997] FCA 318
Case: [1997] FCA 318
Decision Date: 5 May 1997

CaseChat Overview and Summary

The Federal Court of Australia was asked to determine the validity of an appointment of a receiver and manager of Selmoore Pty Ltd, a company in financial distress. The applicant, Mr Barry Lorne Jenner, sought a declaration that his appointment on 8 June 1995 as receiver and manager of Selmoore was valid, or alternatively, that he had validly entered into possession or assumed control of Selmoore's property under the terms of a registered charge on that property. The respondents, Selmoore Pty Ltd and its directors, challenged the validity of Mr Jenner's appointment, arguing that he was disqualified from being appointed due to his earlier invalid appointment on 26 April 1995. They further argued that the Bank was not entitled to rely on its demand dated 21 April 1995 to re-appoint Mr Jenner without a fresh notice to Selmoore. The court had to decide whether Mr Jenner was disqualified from being appointed as a receiver and manager on 8 June 1995, whether the Bank was entitled to rely on its demand dated 21 April 1995 to re-appoint Mr Jenner, and whether Selmoore was given a reasonable time to comply with the demand.

The court found that Mr Jenner was not disqualified from being appointed as a receiver and manager on 8 June 1995, as the exclusion from disqualification effected by s. 418(2) of the Corporations Law in respect of a receiver appointed under an instrument extended to any person holding such an appointment, even if some prerequisite for the making of the appointment or some other condition of its validity had not been satisfied. The court also found that the Bank was not entitled to rely on its demand dated 21 April 1995 to re-appoint Mr Jenner without a fresh notice to Selmoore after 5.08pm on 8 June 1995, as a fresh demand was necessary because the demand relied on was not made on Selmoore until after control of its affairs and assets had passed de facto into the hands of the receiver. The court further found that it was unnecessary to answer the third question, as the applicant's submissions on the third question were rejected.

The court dismissed the applicant's application with costs.

Orders