Booth v Cerreto

JUDGMENT

1. On 22 December 2023 I delivered judgment in this matter: In the matter of Lorebray Pty Ltd [2023] NSWSC 1650 (Judgment). I heard submissions from the parties on 6 February 2024 as to the form of the final orders. While there is common ground as to many of the proposed orders sought by the plaintiff, there remain a number of areas in dispute. These are my reasons for the final orders to be made.

Plaintiff's proposed orders

1. The plaintiff has sought the following orders to be made (proposed orders): THE COURT ORDERS THAT: Order - Brooklyn Road 1. Pursuant to section 67 of the Supreme Court Act 1970 (NSW), David Sampson (the Plaintiff) be: a. appointed as receiver and manager (without security of the land) at: i. 35 Brooklyn Road, Brooklyn; ii. 37 Brooklyn Road, Brooklyn; and iii. 39 Brooklyn Road, Brooklyn (together the Brooklyn Property) b. given the power to sell the Brooklyn Property in accordance with the terms of this order. 2. Lorebray Pty Limited, Peter John McNamee, Brooklyn Road Pty Limited, Helen Monica McNamee, must: a. Within 3 business days after the date these Orders are made: i. deliver to the Plaintiff any Certificate of Title for the Brooklyn Property which is in their/its possession or under their/its control; and b. Within 28 days after the date these Orders are made: i. give vacant possession (excluding, to the extent necessary, the dredged waste material that is in situ) of the Brooklyn Property to the Plaintiff. c. Within 7 days after being requested in writing by the Plaintiff by email deliver to the Plaintiff any other documents in their/its possession or under their/its control relating to the Brooklyn Property that are reasonably required by the Plaintiff to conduct or complete the sale of the Brooklyn Property. Orders - Kellyville 3. Pursuant to section 67 of the Supreme Court Act 1970 (NSW), the Plaintiff be: a. appointed as receiver and manager (without security of the land) at 41 Arnold Avenue, Kellyville (Folio ID 38/224917) (the Kellyville Property): b. given the power to sell the Kellyville Property in accordance with the terms of this order. 4. Lorebray Pty Limited, Philippa Margaret Hardy and John Hardy as trustees of the Hardy Family Trust must: a. within 3 business days after the date these Orders are made: i. deliver to the Plaintiff any Certificate of Title for the Kellyville Property which is in their/its possession or under their/its control; and ii. give vacant possession of the Kellyville Property to the Plaintiff. b. within 14 days after being requested in writing by the Plaintiff by email deliver to the Plaintiff any other documents in their/its possession or under their/its control relating to the Kellyville Property that are reasonably required by the Plaintiff to conduct or complete the sale of the Kellyville Property. Powers of Sale 5. The Plaintiff have the power to conduct and complete the sale of the Kellyville Property and the Brooklyn Property (together the McNamee Properties) in accordance with these Orders and convey the McNamee Properties upon completion of the sale, together with the power to do anything necessarily ancillary to these steps. 6. Any sale conducted pursuant to these orders may be by auction or by private treaty or by tender, and may be by unconditional contract or by grant of an option (as the Plaintiff deems appropriate). 7. In order to exercise the power or powers granted above, the Plaintiff; a. shall take all reasonably necessary steps required (including, but not limited to, appointing a real estate agent and auctioneer) to sell the Brooklyn Property and (separately) the Kellyville Property (McNamee Properties). b. shall obtain a valuation of the McNamee Properties by a registered valuer appointed by the Plaintiff and upon receipt of the valuation is to set the reserve price for the sale of the McNamee Properties by public auction (the Reserve Price). c. may seek directions or judicial advice from the Court, if he considers necessary or appropriate, in respect of: i. the setting of the Reserve Price; and ii. sale below the Reserve Price in the event that price is not met at a public auction; d. if, at a public auction of the McNamee Properties the Reserve Price is not reached, then the McNamee Properties are to be passed in and the Plaintiff is to take all reasonably necessary steps required to sell the McNamee Properties by further public auction or by private treaty or tender at or above the highest bid at the public auction. 8. The Plaintiff be empowered to: a. Appoint agents, valuers, solicitors and/or conveyancers as required to sell the McNamee Properties; b. Make all necessary adjustments of rates and taxes on settlement of sale of the McNamee Properties; c. Deduct, from the proceeds of sale of the McNamee Properties, the commission and other expenses of any real estate agent employed by the Plaintiff); d. Deduct, from the proceeds of sale of the McNamee Properties, the remuneration and expenses of the Plaintiff relating to the sale of the McNamee Properties; e. Deduct, from the proceeds of sale of the McNamee Properties, the legal expenses of and relating to transferring the McNamee Properties to the respective purchasers; f. Deduct, from the proceeds of sale of the McNamee Properties, the legal expenses and disbursements in respect of the sale including (without limitation) valuation fees, insurance premiums and all other out of pocket expenses; g. Deduct and pay from the Third, Fourth Sixth Seventh and Eight Defendants' interest in the proceeds of sale of the McNamee Properties, any legal costs ordered in respect of these proceedings; h. hold the net balance of the proceeds of sale of the McNamee Properties pending further order of the Court or agreement between the parties. 9. The Plaintiff be remunerated for the work done by him in respect of the sale of the McNamee Properties at the rates charged from time to time for work of that type by the firm BPS. 10. Subject to the terms set out in Order 7 above, any party be at liberty to purchase the McNamee Properties. Brooklyn Partnership 11. Declares that the partnership between Lorebray Pty Limited and Brooklyn Road Pty Limited, respect of the development being undertaken at the Brooklyn Property (the Partnership), was dissolved in accordance with the notice of termination sent by Richard Allsop on 20 October 2021 and the acceptance by Henry William Lawyers on 22 October 2021. 12. The Partnership business be wound up under the direction of the Court. 13. For the purpose of winding up the Partnership business: a. the Plaintiff be appointed receiver and manager of the Partnership business without security. b. the Plaintiff have power to carry on the Partnership business and have the powers in relation to the Partnership business as are given to a liquidator pursuant to section 477 of the Corporations Act 2001 (Cth). 14. The parties deliver all the books and records of the Partnership and the Partnership assets in their custody, possession, control or power to the Plaintiff within 14 days of the making of this order. 15. The Plaintiff have the following powers: a. to employ such person or persons to manage the Partnership business and at such salary as the Plaintiff(s) considers appropriate; b. make enquiries of the parties and compel the production of documents at a reasonable time; c. to pay, out of the net proceeds of sale of the assets of the Partnership, all such monies as may be required to be paid for the purpose of discharging the present obligations of the Partnership to its external creditors, which excludes any of the partners to the Partnership and/or any entities associated with the partners to the Partnership; and d. to invest any money for the time being in their hands on behalf of the Partnership in an interest bearing deposit in a trading bank pending the determination of the parties' entitlement to such proceeds; e. to investigate the liabilities of the Partnership; and f. to make interim distributions to the parties. 16. The Partnership business and assets including the goodwill thereof be realised by the Plaintiff and that Lorebray Pty Limited, Brooklyn Road Pty Limited, Peter John McNamee and Helen McNamee be at liberty to purchase from the Plaintiff(s) any Partnership asset including the Brooklyn Property. 17. The Plaintiff be empowered to draw remuneration for his services as receiver and manager in an amount equal to the cost of the time actually spent in the performance of such services by the Plaintiff or any director in or employee of the firm of BPS calculated at the firm's standard rates from time to time for work of that nature, such amount to be drawn by the Plaintiff at the end of each calendar month from bank accounts maintained by them in respect of the receivership. 18. Upon the sale of the business assets of the Partnership and after the discharge of the debts of the Partnership (or so much of them as can be discharged from the assets of the Partnership), the proceedings be referred to a Judge of the Equity Division of the Supreme Court for the taking of accounts of the Partnership to determine the net profit or loss of the Partnership and inquiry into the amount, if any, payable on the taking of accounts. 19. The proceedings be reserved for further consideration and, after the determination by the Judge of the account, the parties cause the matter to be re-listed for orders as to the distribution of profits and losses and interest on any amount payable. 20. The costs of Lorebray Pty Limited and Brooklyn Road Pty Limited, in respect of the taking of accounts of the Partnership be paid out of the assets of the Partnership. Kellyville 21. The joint venture between Lorebray Pty Limited, Philippa and John Hardy on behalf of the Hardy Family Trust in respect of the development being undertaken at the Kellyville Property (the Joint Venture) be wound up under the direction of the Court. 22. Pursuant to section 67 of the Supreme Court Act 1970 (NSW) the Plaintiff be appointed receiver and manager of the Joint Venture business without security. 23. The Plaintiff have power to wind up the Joint Venture business and have the powers in relation to the Joint Venture business as are given to a liquidator pursuant to section 477 of the Corporations Act 2001 (Cth). 24. The parties deliver all the books and records of the Joint Venture and the Joint Venture assets in their custody, possession, control or power to the Plaintiff within 7 days of the making of this order. 25. The Plaintiff have the following powers: a. to employ such person or persons to wind up the Joint Venture business and at such salary as the Plaintiff (considers appropriate); b. make enquiries of the parties and compel the production of documents at a reasonable time; c. to pay, out of the net proceeds of sale of the assets of the Joint Venture, all such monies as may be required to be paid for the purpose of discharging the present obligations of the Joint Venture to its creditors; and d. to invest any money for the time being in their hands on behalf of the Joint Venture in an interest bearing deposit in a trading bank pending the determination of the parties' entitlement to such proceeds; e. to investigate the liabilities of the Joint Venture; and f. to make interim distributions to the parties. 26. The Joint Venture business and assets including the goodwill thereof be realised by the Plaintiff and that Lorebray Pty Limited, Philippa and John Hardy be at liberty to purchase from the Plaintiff(s) any Joint Venture asset including the Kellyville Property (or part thereof). 27. The Plaintiff be empowered to draw remuneration for his services as receiver and manager in an amount equal to the cost of the time actually spent in the performance of such services by the Plaintiff or any director in or employee of the firm of BPS calculated at the firm's standard rates from time to time for work of that nature, such amount to be drawn by the Plaintiff(at the end of each calendar month from bank accounts maintained by them in respect of the receivership. 28. Upon the sale of the business assets of the Joint Venture and after the discharge of the debts of the Joint Venture (or so much of them as can be discharged from the assets of the Joint Venture), the proceedings be referred to a Judge of the Equity Division of the Supreme Court for the taking of accounts of the Joint Venture to determine the net profit or loss of the Joint Venture and inquiry into the amount, if any, payable on the taking of accounts. 29. The proceedings be reserved for further consideration and, after the determination by the Judge of the account, the parties cause the matter to be re-listed for orders as to the distribution of profits and losses and interest on any amount payable. 30. The costs of Lorebray Pty Limited, Philippa and John Hardy in respect of the taking of accounts of the Joint Venture be paid out of the assets of the Joint Venture. Generally 31. The cross claim is otherwise dismissed, 32. The Plaintiff be at liberty to seek directions from the Court on any matter arising from his appointment or these orders. 33. The Second, Third, Fourth, Sixth, Seventh and Eighth Defendants pay the Plaintiff's costs of and occasioned by these proceedings including the costs of the cross claim, as agreed or assessed. 34. The Second, Third, Fourth, Sixth, Seventh and Eighth Defendants pay: a. the First Defendant's costs of the proceedings, as agreed or assessed; and b. The Second Cross Defendant's costs of the cross claim, as agreed or assessed.