University of Western Australia v Gray (No 30)
[2010] FCA 1063
FEDERAL COURT OF AUSTRALIA
University of Western Australia v Gray (No 30) [2010] FCA 1063
Citation: University of Western Australia v Gray (No 30) [2010] FCA 1063 Parties: THE UNIVERSITY OF WESTERN AUSTRALIA v BRUCE NATHANIAL GRAY, SIRTEX MEDICAL LIMITED (FORMERLY KNOWN AS PARAGON MEDICAL PTY LTD) (ACN 078 166 122), CANCER RESEARCH INSTITUTE INCORPORATED (REGISTERED NUMBER 1001005);
BRUCE NATHANIAL GRAY v THE UNIVERSITY OF WESTERN AUSTRALIA and YAN CHEN
SIRTEX MEDICAL LIMITED (ACN 078 166 122) v BRUCE NATHANIAL GRAY and CANCER RESEARCH INSTITUTE INCORPORATEDFile number: WAD 292 of 2004 Judge: BARKER J Date of judgment: 28 September 2010 Catchwords: CORPORATIONS - discharge of court appointed receiver and manager Cases cited: Burt, Boulton & Hayward v Bull [1895] 1 QB 276
Inland Revenue Commissioners v Hoogstraten [1985] 1 QB 1077
The Commonwealth of Australia v ABC2 Group Pty Ltd [2009] NSWSC 1442Date of hearing: Determined on the papers Date of last submissions: 12 August 2010 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 14 Solicitor for the Third Respondent: McKenzie Moncrieff Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 292 of 2004
BETWEEN: THE UNIVERSITY OF WESTERN AUSTRALIA
ApplicantAND: BRUCE NATHANIAL GRAY
First RespondentSIRTEX MEDICAL LIMITED (FORMERLY KNOWN AS PARAGON MEDICAL PTY LTD) (ACN 078 166 122)
Second RespondentCANCER RESEARCH INSTITUTE INCORPORATED (REGISTERED NUMBER 1001005)
Third RespondentBRUCE NATHANIAL GRAY
First Cross-ClaimantTHE UNIVERSITY OF WESTERN AUSTRALIA
First Cross-Respondent to First Cross‑ClaimYAN CHEN
Second Cross-RespondentSIRTEX MEDICAL LIMITED
Second Cross-ClaimantTHE UNIVERSITY OF WESTERN AUSTRALIA
Cross-Respondent to Second Cross‑ClaimBRUCE NATHANIAL GRAY
Second Cross-Respondent to Second Cross‑ClaimCANCER RESEARCH INSTITUTE INCORPORATED
Third Cross-Respondent to Second Cross‑Claim
JUDGE:
BARKER J
DATE OF ORDER:
28 SEPTEMBER 2010
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.Within 28 days from the date of this order, Mr Mark Anthony Conlan of RSM Bird Cameron Partners, the receiver appointed to the third respondent in this action by orders dated 5 October 2006 (as amended on 25 October 2006 and later substituted on 22 December 2006) (Receiver), must lodge a final report to the Court in relation to the progress of the receivership for the period from 5 June 2010 to the date of the report.
2.The passing of the Receivers’ final account of the costs and expenses of the receivership is to be in accordance with the procedure prescribed by order 3 of the orders dated 13 March 2007, save that notwithstanding anything to the contrary in those orders, the period in respect of which the final account is to apply is to be from 5 June 2010 until the day on which the account is prepared (Final Period).
3.Within 28 days from the date of this order, the Receiver must serve the Receiver’s Application Documents (as that term is defined in order 2 of the orders dated 13 March 2007) on each party in relation to the Final Period.
4.Upon the expiry of 14 days from the determination by the District Registrar of the Receiver’s account of the costs and expenses of the receivership in accordance with the orders dated 13 March 2007 for the Final Period, the Receiver be discharged as the receiver appointed to the third respondent.
5.Upon the discharge of the Receiver in accordance with order 4 of this order, Mr Mark Anthony Conlan of RSM Bird Cameron Partners is entitled to retain possession of all remaining property of the third respondent in his capacity as liquidator of the third respondent and deal with that property in the course of the liquidation.
6.Notwithstanding the discharge of the Receiver in accordance with order 4 of this order, any unpaid costs and expenses of the receivership as at the date of discharge and which have been approved by the Court must be paid from any remaining property of the third respondent.
7.Upon the discharge of the Receiver in accordance with order 4 of this order, the Receiver, his agents, his employees and his firm RSM Bird Cameron Partners be released from all or any liability whatsoever arising directly or indirectly by reason of any acts or things done or omitted to be done by the Receiver in connection with the receivership of the third respondent.
8.The Receiver’s costs of this motion be costs and expenses in the receivership and subject to being approved in accordance with the procedure prescribed by order 3 of the orders dated 13 March 2007, may be paid from the remaining property of the third respondent.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 292 of 2004
BETWEEN: THE UNIVERSITY OF WESTERN AUSTRALIA
ApplicantAND: BRUCE NATHANIAL GRAY
First RespondentSIRTEX MEDICAL LIMITED (FORMERLY KNOWN AS PARAGON MEDICAL PTY LTD) (ACN 078 166 122)
Second RespondentCANCER RESEARCH INSTITUTE INCORPORATED (REGISTERED NUMBER 1001005)
Third RespondentBRUCE NATHANIAL GRAY
First Cross-ClaimantTHE UNIVERSITY OF WESTERN AUSTRALIA
First Cross-Respondent to First Cross‑ClaimYAN CHEN
Second Cross-RespondentSIRTEX MEDICAL LIMITED
Second Cross-ClaimantTHE UNIVERSITY OF WESTERN AUSTRALIA
Cross-Respondent to Second Cross‑ClaimBRUCE NATHANIAL GRAY
Second Cross-Respondent to Second Cross‑ClaimCANCER RESEARCH INSTITUTE INCORPORATED
Third Cross-Respondent to Second Cross‑Claim
JUDGE:
BARKER J
DATE:
28 SEPTEMBER 2010
PLACE:
PERTH
REASONS FOR JUDGMENT
ISSUE
This is a notice of motion of the third respondent, the Cancer Research Institute Incorporated (CRI), for the discharge of the receiver and manager of CRI, Mr Mark Anthony Conlan (Mr Conlan) of RSM Bird Cameron Partners. The motion is brought by Mr Conlan in that capacity. The motion is unopposed and the parties have consented to it being determined on the papers without the need for oral submissions.
Mr Conlan was appointed as the receiver and manager of CRI by orders of French J of this Court made 5 October 2006. These orders were amended and expanded on 25 October 2006 and again on 22 December 2006. On 25 May 2010, Mr Conlan was appointed as liquidator of CRI by a Master of the Supreme Court of Western Australia. Mr Conlan now seeks to be discharged from his role as receiver and manager of CRI.
The discharge of Mr Conlan from his appointment as receiver and manager of CRI is the only remaining issue left to be determined in these proceedings generally.
CONSIDERATION
As Mr Conlan was appointed by the Court he can only be discharged by an order of the Court: Burt, Boulton & Hayward v Bull [1895] 1 QB 276 at 279. In the absence of provisions for the discharge of a receiver in the order appointing him, it is generally necessary to apply to the Court to dismiss him and divest him of his portion of the estate. In the present case, there is no such provision in the orders of French J appointing Mr Conlan as the manager and receiver of CRI.
Matters which have been taken into account by courts in the past in deciding whether to bring a court-appointed receivership to an end include the following:
·Whether to do so will be in the interests of the creditors and contributories of the entity to which the appointment relates or its parent entity;
·Whether it is in the public interest to terminate the receivership;
·Whether the object of the appointment has been achieved;
·Whether some relevant claim or some aspect of the receivership is unsatisfied or unresolved.
See generally: The Commonwealth of Australia v ABC2 Group Pty Ltd [2009] NSWSC 1442 at [28].
Mr Conlan submits that the receivership should be brought to an end in the circumstances of the present case for the following reasons:
· The termination of the receivership in the present case is consistent with the Approved Settlement Terms. Those terms contemplate the transfer of surplus assets to a charitable trust and the winding up of the third respondent. It is submitted that the function of winding up the third respondent would best be performed by Mr Conlan in his capacity as a court appointed liquidator. There is no suggestion that the third respondent is insolvent and the membership of the third respondent, whilst unclear, is unlikely to be relevant now.
·The termination of the receivership facilitates the transfer of the remaining assets of the third respondent to a charitable trust for the purposes of cancer research. The trust is called the Cancer Research Trust. It is in the public interest to further cancer research.
·Mr Conlan has achieved the objects of his appointment. Mr Conlan was appointed due to uncertainties concerning the membership and composition of the board of the third respondent: [2]-[6] of the affidavit of Mark Anthony Conlan dated 28 July 2010. A dispute arose between those asserting control over the third respondent as to the enforceability of the 2006 Settlement Terms. Mr Conlan was appointed to investigate the enforceability of that document. The document was later superseded by the Approved Settlement Agreement which has been approved by the Court and is being carried into effect. Accordingly, whilst uncertainties concerning the membership and composition of the board of the third respondent remain, they no longer have any significance because of the terms of the Approved Settlement Agreement. In circumstances where a liquidator has been appointed to wind up the affairs of the third respondent, it is submitted that Mr Conlan, as manager and receiver, has no further function to perform.
·Mr Conlan is aware of only one outstanding claim against the third respondent. It has been made by Professor Mark Andrew Burton who between April to June 2009 asserted a claim to the third respondent’s property which was the subject of the Approved Settlement Agreement. Despite being put on notice that the property of the third respondent would be transferred to another charitable entity pursuant to the terms of the Approved Settlement Agreement, Professor Burton took no steps to prevent that transfer (see [14] to [21] of the affidavit of Mark Anthony Conlan dated 28 July 2010, and the annexures there referred). As matters presently stand, Mr Conlan does not consider Professor Burton’s claim to have any merit. It is proposed that to the extent any residual claim is pursued by Professor Burton, it be dealt with by Mr Conlan as liquidator in the proof of debt process in the winding up. Any residual claim by Professor Burton may be appropriately resolved in this way.
As I have said, these submissions are made unopposed and since their filing no contradictor has come forward to contest Mr Conlan’s entitlement to be discharged from his appointment. As regards Professor Burton in particular, Mr Conlan has deposed in an affidavit sworn 12 August 2010, that he caused a circular to creditors to be sent by post to Professor Burton. Mr Conlan says that to the best of his knowledge Professor Burton is the only person who may assert to be a creditor of CRI. The circular notified Professor Burton of Mr Conlan’s appointment as liquidator of CRI and formally invited Professor Burton to lodge a formal proof of debt or claim on or before 20 August 2010. As of the swearing of Mr Conlan’s affidavit on 12 August 2010, Mr Conlan has not received any formal proof of debt or claims from any persons claiming to be creditors of CRI. I accept that this is so.
In all of these circumstances I consider it appropriate that Mr Conlan now be discharged from his role as manager and receiver of CRI.
Mr Conlan raises two further issues in his motion which are supported by submissions. The first is as to the procedure to be followed for the reporting and the passing of the final accounts of CRI. Pursuant to orders made by a Registrar of this Court on 13 March 2007, the period to which the final report and final account is to relate was to be one month in duration. Mr Conlan submits that this procedure should be varied so that the period in respect of which the final report and final account is to relate is to be from 5 June 2010 to the date of the report and account respectively. Mr Conlan says this is to avoid unnecessary costs being incurred in preparing multiple reports and accounts where one report and account is likely to be sufficient. I accept Mr Conlan’s submissions on this point and will vary the procedure for the reporting and passing of final accounts accordingly.
Finally, Mr Conlan seeks a release from personal liability for acts done in his capacity as manager and receiver of CRI. Mr Conlan makes the point that he has the benefit of an indemnity from the Cancer Research Trust estate for certain claims however other claims, which are not covered by the indemnity, would necessarily be borne by Mr Conlan personally in the absence of a release from liability. Mr Conlan submits that the Court has jurisdiction to release a court-appointed receiver from liability for acts done during the appointment but will not normally exercise it without first investigating claims of which the Court has notice: Inland Revenue Commissioners v Hoogstraten [1985] 1 QB 1077 at 1094 (Hoogstraten). Mr Conlan submits that the scope of any release may extend to cover the receiver’s firm, including his employees and agents: Hoogstraten at 1094.
Mr Conlan, in his affidavit date 12 August 2010, deposes that, save for expenses incurred by him during his appointment which he intends to pay prior to his discharge, he is not aware of any claims made against him or his servants, his agents or the firm RSM Bird Cameron Partners in relation to his appointment as manager and receiver of CRI.
Again, in all of these circumstances, which I accept, it is appropriate that Mr Conlan should have the benefit of a court ordered release on the terms he proposes.
For these reasons I would make the orders sought in the motion of the third respondent filed 28 July 2010.
CONCLUSION AND ORDERS
The Court orders as follows:
1.Within 28 days from the date of this order, Mr Mark Anthony Conlan of RSM Bird Cameron Partners, the receiver appointed to the third respondent in this action by orders dated 5 October 2006 (as amended on 25 October 2006 and later substituted on 22 December 2006) (Receiver), must lodge a final report to the Court in relation to the progress of the receivership for the period from 5 June 2010 to the date of the report.
2.The passing of the Receivers’ final account of the costs and expenses of the receivership is to be in accordance with the procedure prescribed by order 3 of the orders dated 13 March 2007, save that notwithstanding anything to the contrary in those orders, the period in respect of which the final account is to apply is to be from 5 June 2010 until the day on which the account is prepared (Final Period).
3.Within 28 days from the date of this order, the Receiver must serve the Receiver’s Application Documents (as that term is defined in order 2 of the orders dated 13 March 2007) on each party in relation to the Final Period.
4.Upon the expiry of 14 days from the determination by the District Registrar of the Receiver’s account of the costs and expenses of the receivership in accordance with the orders dated 13 March 2007 for the Final Period, the Receiver be discharged as the receiver appointed to the third respondent.
5.Upon the discharge of the Receiver in accordance with order 4 of this order, Mr Mark Anthony Conlan of RSM Bird Cameron Partners is entitled to retain possession of all remaining property of the third respondent in his capacity as liquidator of the third respondent and deal with that property in the course of the liquidation.
6.Notwithstanding the discharge of the Receiver in accordance with order 4 of this order, any unpaid costs and expenses of the receivership as at the date of discharge and which have been approved by the Court must be paid from any remaining property of the third respondent.
7.Upon the discharge of the Receiver in accordance with order 4 of this order, the Receiver, his agents, his employees and his firm RSM Bird Cameron Partners be released from all or any liability whatsoever arising directly or indirectly by reason of any acts or things done or omitted to be done by the Receiver in connection with the receivership of the third respondent.
8.The Receiver’s costs of this motion be costs and expenses in the receivership and subject to being approved in accordance with the procedure prescribed by order 3 of the orders dated 13 March 2007, may be paid from the remaining property of the third respondent.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. Associate:
Dated: 28 September 2010
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