Sanyo Australia Pty Ltd v Componere Informations Systems Pty Ltd

Sanyo Australia Pty Ltd (Sanyo) appealed to the Supreme Court of New South Wales, Court of Appeal, against a decision concerning the validity of the appointment of a receiver. The dispute arose from a deed of equitable mortgage and floating charge granted by Componere Informations Systems Pty Ltd (Componere) to Sanyo. Componere had defaulted under the terms of the mortgage, prompting Sanyo to appoint a receiver. Componere challenged the validity of this appointment.

The central legal issue before the Court of Appeal was whether the appointment of the receiver was invalid because the receiver was appointed as the agent of the mortgagor, Componere, rather than as the agent of the mortgagee, Sanyo. This question turned on the interpretation of the deed of equitable mortgage and the legal effect of appointing a receiver under such a charge.

The Court of Appeal, comprising Spigelman CJ, Priestley and Sheller JJA, found that the appointment of the receiver was valid. Their Honours reasoned that the deed of equitable mortgage expressly provided for the appointment of a receiver upon default. Crucially, the deed stipulated that any receiver appointed would be the agent of the mortgagor, Componere. The Court held that this provision was effective and did not render the appointment invalid. The legal principle applied was that parties are generally bound by the terms of their contractual agreements, and the deed clearly contemplated and authorised the appointment of a receiver as the agent of the mortgagor in the event of default.

The appeal was allowed.