Federal Court of Australia

Connelly, in the matter of Gregorski Investments Pty Ltd (in liq) v 320 Nominees Pty Ltd as trustee of the Gregorski Property Trust (No 2) [2022] FCA 914

ORDERS

THE COURT ORDERS THAT:

1.    On the date seven days after (but not including) the date of closure of the bank account opened by the Receivers and managers of the Property Trust following the disbursement of all funds held in that bank account and on the basis that the plaintiffs are satisfied that they have realised or collected all the Property Trust and the Investment Trusts’ property and distributed those pursuant to the orders Justice Derrington made on 29 August 2019:

(a)    the plaintiffs forthwith be discharged from their appointment as the joint and several Receivers and managers of the Property Trust and the Investment Trust; and

(b)    the plaintiffs, their firm McGrathNicol, and their employees and agents forthwith be discharged and released from any and all claims whatsoever and however arising out of or in connection with their appointment as joint and several Receivers and managers of the Property Trust and the Investment Trust.

2.    Pursuant to r 1.34 of the Federal Court Rules 2011 (Cth) (Rules), the requirement in r 14.25 of the Rules to file accounts be dispensed with, as well as the need to pass accounts.

3.    Liberty to apply on three business days’ written notice.

4.    Costs of this application be paid from the assets of the Property Trust on an indemnity basis.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1    By an order made on 29 August 2019, Mr Anthony Connelly and Mr William Harris (the Receivers), who were the liquidators of Gregorski Investments Pty Ltd (Gregorski Investments), were appointed as the receivers and managers of certain trust property of which Gregorski Investments was the trustee. The property was the subject of two trusts, the Gregorski Property Trust (Property Trust) and the Gregorski Investment Trust (Investment Trust). By the orders made on that day, the Receivers were obliged to carry out particular tasks with a view to recovering the assets of the trusts and distributing the proceeds of any recoveries to the persons entitled. They have now completed their duties to the fullest extent possible and seek to be discharged from their role as Receivers.

2    On the evidence before the Court the Receivers have fully conducted the tasks of identifying the assets of the trusts to which they were appointed, liquidating any assets, and paying the same to the persons entitled. It is relevant to the discretion to make the orders sought that the individuals who stand behind Gregorski Investments have not voiced any complaint about the administration of the receivership. Nor have they raised any concerns as to the Receivers’ claims to remuneration and the like.

Discharge of the Receivers

3    It is undoubted that a court appointed receiver may be discharged where the object of the appointment has been achieved: Re Say Enterprises Pty Ltd [2018] NSWSC 396 [33]. Orders of that nature may be made in conjunction with other ancillary orders concerning the Receivers such as those which may be made in relation to remuneration and the relief from liability arising out of the conduct of the receivership.

4    In this case the evidence before the Court establishes that the Receivers have investigated the Property Trust and the Investment Trust, identified any assets, realised those which were available, and dissipated the proceeds appropriately. They have fulfilled the duties associated with their appointment and have properly distributed the funds received by them in the course of administering the duties. The only remaining duties concern the finalisation of the receivership in relatively formal ways. In those circumstances it is appropriate that an order be made discharging the Receivers from their appointment.

Relief from liability

5    The Receivers also seek orders relieving them from any liability arising out of or in connection with their appointment. It is not unusual for such orders to be made: see Hutchins, in the matter of Ardenberg Pty Ltd (in liq) (Administrators Appointed) (No 3) [2021] FCA 519 (Hutchins, in the matter of Ardenberg); Re Say Enterprises Pty Ltd. The granting of the release from liability can extend to the employees and agents of the court appointed Receivers. See Hutchins, in the matter of Ardenberg.

6    In this case there is no evidence of any questioning of the Receivers’ conduct. Mr Nicholas Grzegorzewski, who is a director of and who stands behind Gregorski Investments, was invited to appear on the application but chose not to do so. He has not raised any concerns about the receivership which was a relatively straightforward affair. He has indicated that he does not oppose the plaintiffs’ application, and did not intend to appear at the hearing scheduled for the matter.

Remuneration

7    The Receivers have also raised the matter of the finalisation of their claims for remuneration. Previously the Registrar of this Court had approved the Receivers’ remuneration for the period from 29 August 2019 to 22 January 2021 at $205,501 (excluding GST). Since that time they have been able to pay themselves the sum of $191,235.09 leaving an amount owing of $14,265.91. Further, they have incurred entitlements to remuneration in the amounts of $18,840 and $21,500, the latter amount being for the period from 14 August 2021 to the finalisation of the receivership. Each amount has been approved and no order is required for it to be paid.

8    Mr Connelly has deposed that based on his forecast of receipts and payments he anticipates being able to draw approximately $11,995 (excluding GST) of his approved outstanding remuneration from the funds currently held. That will leave approximately $42,000 unpaid.

9    The Receivers have established their entitlement to the remuneration sought and in the circumstances they ought to be entitled to be paid the remuneration and costs insofar as they can from the proceeds in their hands. Considering that the formal approvals have already been given there is no need for any further order.

Accounts dispensation

10    The Receivers also seek an order dispensing with the requirement for them to submit their final accounts. In this respect they rely on the observations of White J in Golden Star Resources Limited v Keryn Beatrice Rosel [2010] QSC 28 [24] where her Honour said:

[24]    Rule 270 places the onus upon a receiver to persuade the court that accounts need not be ordered. Young CJ at Common Law when CJ in Equity observed in Ide v Ide that there are benefits associated in taking a holistic approach to this question. Here the Receivership was straight forward, the defendant has not sought to challenge any basis upon which the Receivers proceeded to discharge their obligations under the order of 25 February 2009 and there is nothing which calls for the cumbersome procedure of an account. His Honour mentioned that the court will usually work off time sheets created in the receiver’s office provided that they do significantly more than merely detail the total number of hours spent by the receiver and officers of particular grades on his or her staff. That is what the Receivers have done here.

11    The above was cited by Williams J in Re Kirman & Harris [2020] QSC 99. In that case her Honour considered it appropriate to relieve the Receivers of the obligation to submit accounts (at [36]). Her Honour adopted (at [35]) a similarly “holistic approach”. In that case the receiverships were straightforward and to the date of the application there were no objections seeking to challenge the receiver’s remuneration or conduct. Further, there were no factual matters which called for the procedure on account.

12    Here also there is nothing which warrants the additional expenditure which would be required for the purposes of producing further accounts. It is evident that the Receivers will be unable to recover the remuneration to which they are already entitled and requiring the preparation of final accounts will only add further to their burden.

13    In the circumstances the order ought to be given that the Receivers be relieved from submitting final accounts.

Costs

14    The Receivers also seek an order that their costs of this application should be payable from the property of the Gregorski Property Trust. There is no reason why such an order should not be made, and indeed it should be made on an indemnity basis. It is far from apparent that the Receivers will be able to recover their costs on an indemnity basis or at all.

Associate:    

Dated:    9 August 2022