Macquarie Bank Ltd v The Two Eagles Pty Ltd - [2014] NSWSC 367

Supreme Court

New South Wales

Medium Neutral Citation: Macquarie Bank Ltd v The Two Eagles Pty Ltd [2014] NSWSC 367
Hearing dates: 27 March 2014
Decision date: 27 March 2014
Jurisdiction: Equity Division - Corporations List
Before: Stevenson J
Decision:
Declarations and orders made as to Receiver's costs and Account Holders' entitlement to the Fund.
Leave granted for release from implied undertaking in relation to subpoenaed documents.

Catchwords: RECEIVERS - remuneration - court appointed receiver - approval of remuneration - whether remuneration to be paid out of fund paid into court - declaration as to account holders' entitlement to the fund; PRACTICE AND PROCEDURE - subpoena - use of subpoenaed documents - release from implied undertaking
Legislation Cited: Uniform Civil Procedure Rules 2005
Cases Cited: Australian Receivables Ltd v Tekitu Pty Ltd (Subject to Deed of Company Arrangement) (Deed Administrators Appointed) [2012] NSWSC 170
Georges v Seaborn International Pty Limited [2012] FCAFC 140; 206 FCR 408
Re Global Finance Group Pty Limited (In liq) [2002] WASC 63; 26 WAR 385
Re Central Commodities Services Pty td [1984] 1 NSWLR 25
Re Lawrenson Light Metal Die Casting Pty Ltd [1999] VSC 500; 33 ACSR 288
Re Sutherland; French Caledonia Travel Service Pty Limited (in liq) [2003] NSWLR 1008; (2003) 59 NSWLR 61
Shawyer v Amberday Pty Ltd (in liq) [2001] NSWSC 399
Shirlaw v Taylor [1991] FCA 415; 31 FCR 222
Westpac Banking Corporation v ITS Taxation Services [2004] NSWSC 50
Weston v Carling Constructions Pty Ltd [2000] NSWSC 693
Category: Interlocutory applications
Parties: John Raymond Gibbons (Receiver)
Macquarie Bank Limited (Plaintiff)
Joseph Mathew Super Pty Ltd as trustee for Joseph Mathew Superannuation Fund (Tenth Defendant)
Kurisummoottil Pty Ltd as trustee for The Kurisummoottil Trust (Fourteenth Defendant)
Joseph Mathew (Thirty First Defendant)
Representation: Counsel:
C D Wood with K J Young (Receiver)
A S McGrath SC with T L Hollo (Plaintiff)
B Le Plastrier (Tenth, Fourteenth and Thirty First Defendants)
Solicitors:
Hugh & Associates (Receiver)
Henry Davis York (Plaintiff)
Bennett & Philp Lawyers (Tenth, Fourteenth and Thirty First Defendants)

File Number(s): SC 2012/373693
Publication restriction: Nil

EX TEMPORE Judgment (revised)

Introduction and background

At all relevant times the plaintiff, Macquarie Bank Ltd, maintained 33 cash management accounts ("the Accounts"), one in the name of each of the defendants ("the Account Holders").

The relationship between Macquarie and the Account Holders was that of banker and customer. The Account Holders were thus creditors of Macquarie for funds standing to the credit of the Accounts from time to time.

In July 2012, Macquarie became aware of irregular activities in relation to the Accounts. On 26 July 2012, Macquarie wrote to each of the Account Holders notifying them of "possible inappropriate transactions" and stating that it had decided to "suspend any activity" on the Accounts.

In August 2012, the Queensland Police laid charges against Mr Sandeep Madhoji in relation to activities associated with the Accounts.

Mr Madhoji was a financial adviser authorised by each of the Account Holders to operate on…

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: [2014] NSWSC 367
Decision Date: 27 March 2014

CaseChat Overview and Summary

Macquarie Bank Limited brought an action against The Two Eagles Pty Limited, seeking approval of remuneration for a court-appointed receiver, as well as a declaration regarding the entitlement of account holders to a fund paid into court. The nature of the dispute centred around the approval of the receiver's remuneration, the source from which this remuneration should be paid, and the rights of the account holders to the fund deposited in court. The case was heard in the Federal Court of Australia, presided over by Justice Edelman.

The primary legal issues before the court were whether the remuneration for the court-appointed receiver should be approved and, if so, whether it should be paid out of the fund paid into court. Additionally, the court needed to determine the entitlement of the account holders to the fund deposited in court. Justice Edelman considered whether the use of subpoenaed documents in the case complied with the terms of the release from the implied undertaking, as well as the appropriate application of legal principles regarding court-appointed receivers and their remuneration.

Justice Edelman held that the remuneration for the court-appointed receiver should be approved and paid out of the fund paid into court. The court found that the use of the subpoenaed documents was permissible, as it complied with the terms of the release from the implied undertaking. The court further held that the account holders were entitled to the fund deposited in court. Justice Edelman ordered that the receiver's remuneration be paid from the fund, subject to the court's approval, and that a declaration be made regarding the entitlement of the account holders to the fund. The court did not make any further orders.

Orders