White v Huxtable

Ian Carson and Warren Brian White, as receivers and managers of Lake Federation, brought this proceeding against the directors of Lake Federation to seek directions concerning the sale of property owned by Lake Federation. The primary issue before the court was whether the receivers and managers were bound by a planning scheme restriction that prohibited the development of the land in question as a residential and recreational property development. The court held that the receivers and managers were not bound by the planning scheme restriction, as they were appointed to act in the interests of the chargee, Thorney, and not the chargor, Lake Federation. The court found that the receivers and managers were entitled to disregard the planning scheme restriction in order to maximise the value of the secured property.

The court also considered whether the receivers and managers were required to comply with a condition in the trust deed that required the approval of the majority of the unit holders before any sale of the property could be made. The court held that the receivers and managers were not bound by this condition, as it was a restriction on the exercise of the power of sale conferred by the charge and not a condition subsequent that could be enforced by the chargor. The court found that the receivers and managers were entitled to sell the property without the approval of the unit holders, as long as they acted in the best interests of the chargee.

The court made an order directing the receivers and managers to sell the property in accordance with the directions set out in the judgment, and also ordered the defendants to pay the costs of and incidental to the application out of the funds in the hands of the receivers and managers.