Candelori v Umberto [2006] NSWSC 777 | Case summary

HIS HONOUR: Background and applications 1 Mrs Candelori (the first plaintiff) is the mother of Mauro (the second plaintiff) and Rossano Candelori (the third defendant). I shall refer to the brothers and Rossano's wife Gina (the sixth defendant) by their first names, for convenience. The plaintiffs say that in 1997 Mrs Candelori and her husband, now deceased, owned a property in Hassall St Wetherill Park ("the Hassall Street Property"). In 1997 they entered into negotiations to purchase a property in The Horsley Drive, Smithfield ("the Horsley Drive Property"). The plaintiffs allege that Mr and Mrs Candelori, senior, retained the services of Sergio Laureti (the fourth defendant) through his company LCI Partners Pty Ltd (the fifth defendant) as their accountant and adviser, on the recommendation of Rossano and Gina. They say Mr and Mrs Candelori were persuaded by Mr Laureti and Rossano and Gina to establish a family trust and to transfer the Hassall Street Property and the Horsley Drive Property (in course of acquisition) to the trust. The trustee was Candelori Pty Ltd (the second defendant, "Candelori") although there is now a disputed claim that the trustee has become a company called Umberto Pty Ltd (the first defendant). There are disputed questions about who is and should be the directors and beneficial owners of the shares in Candelori. 2 The plaintiffs allege that in 1999 Candelori began trading on its own account as Candelori's Italian Restaurant in premises within the Horsley Drive Property. Mrs Candelori, the brothers and Gina worked in the restaurant together, but there were disputes between the brothers about the restaurant's takings and the banking of the takings, and eventually Mauro and then Mrs Candelori fell out with Rossano and ceased working in the restaurant. The plaintiffs say that since that time, Rossano has distributed money from the restaurant to himself and Gina in excess of their entitlement and at the plaintiffs' expense. 3 In the present proceeding, the plaintiffs seek relief on grounds of undue influence, negligent misrepresentation, breach of the Trade Practices Act and the Fair Trading Act in relation to the establishment of the trust, and they seek various orders including orders for recovery by Mrs Candelori of the trust property and damages. 4 That is only an approximate summary of quite complex litigation, but it suffices for present purposes. Since the commencement of the proceeding, there have been frequent applications and interlocutory hearings. As a result of one of the applications, Peter Burton, an insolvency practitioner, was appointed receiver and manager of the property of Candelori, including the restaurant business but excluding assets held by the company on trust. 5 The most recent applications came before me as Equity Duty Judge on 27 July 2006. I was Duty Judge for a single day, and I am otherwise fully engaged in hearing a long-running case. I mention that because it means that I am not available to case-manage this proceeding, one that cries out for that kind of attention. 6 By notice of motion first filed on 21 July 2006 and amended in court on 27 July 2006, Mr Burton sought an order to "reinstate" Order 6a of orders made by the court on 16 June 2006 and subsequently varied, and in the alternative, orders that would secure payment of his fees as receiver, or permit him to cease to carry on the restaurant business, or to be discharged from his office, or to be authorised to cause the company to seek an order for its winding up in insolvency or on the just and equitable ground. 7 By notice of motion filed on 21 July 2006 and amended in court on 27 July 2006, the plaintiffs sought orders that Mr Burton be removed as receiver and manager of Candelori and ordered to deliver up documents, that Candelori be wound up and a nominated person be appointed as its liquidator, and that Rossano and Gina be restrained from participating in the management of the restaurant. They also sought leave to amend an application that Rossano and Gina be found guilty of contempt of court. That application is listed for hearing by Windeyer J later this month. I granted leave to amend and it will be unnecessary to refer again to the contempt application in these reasons for judgment. 8 Mr Eassie, appearing for Mr Burton, filed in court a notice of motion for the winding up of Candelori under s 459P of the Corporations Act. He did not move on the application. 9 At the hearing on 27 July Mr Feller SC for the plaintiffs moved for orders that Mr Burton be discharged as receiver and manager, and that Candelori be wound up and the plaintiffs' nominated insolvency practitioner be appointed liquidator. Mr Eassie moved for an order "reinstating" Order 6a of the orders of the court on 16 June 2006, and alternative relief. I was informed by Mr Feller SC that all beneficiaries of the Candelori Family Trust were represented before the court at the hearing on 27 July (Transcript page 5). 10 Mr Feller SC submitted that I should not hear Mr Burton's application because, when the matter was last before Windeyer J on 21 July, his Honour had indicated "in no uncertain terms" that he would not make the order Mr Eassie was seeking (Transcript page 13). But the Associate's Record in the court's file recorded: "Notice of motion filed in court by Mr Burton as receiver, stand over for hearing on 27 July. Direct further evidence of the receiver be served by 25 July." Mr Burton's first affidavit was served in accordance with that direction. I decided it was appropriate to hear Mr Burton's application in view of Windeyer J's orders and directions. 11 I directed that the evidence on each application be evidence on the other, and evidence was formally tendered and read on Mr Burton's and the plaintiffs' applications. There was no oral evidence. After some discussion, I decided that the most productive way to use the limited time I had available for the case was to hear and decide Mr Burton's application, and then consider what the next steps should be. There was no time to hear any of the other applications. Although the plaintiffs' application was before the court and evidence was formally read, I do not in the circumstances regard myself as part-heard on that application. I see no reason why the plaintiffs' application cannot be made afresh before another judge. Mr Feller SC informed me that he agrees with this point of view. 12 The hearing of Mr Burton's application ran late into the evening on 27 July. By the time submissions on the application concluded, it had become impractical to deliver ex tempore reasons for judgment, which would have taken approximately an additional hour. With the consent of the parties, I announced my decision on the application, reserving publication of my reasons for judgment. My decision was to make an order for the "reinstatement" of Order 6a as sought by Mr Burton. After I announced my decision, Mr Burton informed the court that he would continue to manage the restaurant business as receiver and manager. 13 These are my reasons for the decision I made on 27 July 2006. Facts 14 Mr Burton gave affidavit evidence which was not challenged, and I have decided to accept it. He said that he received a telephone call on 23 May 2006 from Stephen Dadich, a chartered accountant. Mr Dadich said he was preparing a forensic report in a court proceeding involving a company called Candelori, which operated a restaurant business. He said there had been a massive "knock-off" of cash in the business in the order of $50,000-$60,000 per week. He said Mr Burton would receive a telephone call from a solicitor, Mr Azzopardi, who at that time was acting for the plaintiffs in the proceeding, regarding his possible appointment by the court as a receiver. 15 Mr Azzopardi contacted him on 23 May, but nothing substantial was said. Then on 25 May Mr Azzopardi telephoned him again, asking for his consent to act as receiver and manager of Candelori. Mr Azzopardi said that the company operated an Italian restaurant at Smithfield. 16 Mr Burton prepared a letter on the same day and sent it to Mr Azzopardi and to Mr Dadich. Mr Burton's letter referred to a telephone conversation regarding "the proposed litigation" relating to Candelori. He said he was prepared to consent to act as receiver appointed by the court. He confirmed his qualifications and set out his rate of remuneration. He nominated his solicitor, Mr Blessington, and suggested that any queries be directed to Mr Blessington. 17 Two things should be noted about the letter. One is that it implies that Mr Burton knew very little about the present proceeding, since he referred to it as "the proposed litigation". By 25 May the litigation had been running for some time, very fiercely. There is no reference in the letter to any trust or trust property, or even to Candelori's business. Secondly, there is nothing in the letter to indicate any limitation to or qualification on Mr Burton's consent to appointment. 18 On 29 May Mr Burton received a letter from Mr Horowitz of counsel, setting out some proposed orders. The draft orders were, relevantly, for Mr Burton to be appointed receiver and manager "of the property of Candelori", and for the receiver to be entitled to reasonable remuneration and reasonable costs and expenses, "to be paid out of the assets of the Company as a first charge". The draft orders made no mention of trust property. On the same day Mr Horowitz telephoned Mr Burton and told him that an application for Anton Piller orders would be made on 30 May, and for the appointment of a receiver on 1 or 2 June. 19 Mr Burton attended a conference in the chambers of Mr Horowitz of counsel on the morning of 2 June, in the company of Mr Azzopardi. There he signed a written consent to act as receiver and manager. He said in evidence that he had no discussion with Mr Horowitz at the conference about the content of any proposed orders. It does not appear that there was any discussion about trust property. Mr Azzopardi asked Mr Horowitz what his client would be "up for" if Mr Burton were to be appointed, and Mr Horowitz responded by saying: "Nothing Mario because it will come out of the assets of the Company". 20 Later on the same day, Mr Horowitz telephoned Mr Burton to tell him that the application for the appointment of the receiver had been stood over. Mr Burton's next contact in relation to the matter was with Mr Azzopardi, who contacted him on Friday 16 June, saying that the matter was listed for hearing that morning and that his appointment as receiver and manager was likely. At 3 p.m. on 16 June Mr Burton received a telephone call from Mr Azzopardi who said that the appointment was imminent but the terms of the order were "under debate". He said Mr Burton would be required to attend the restaurant premises at 5 p.m. He said another solicitor would be taking the matter over from him. 21 Mr McCusker, the plaintiffs' present solicitor, telephoned Mr Burton on the evening of 16 June to tell him he had been appointed and that the orders would be faxed to him. 22 The Associate's Record of Proceedings on the Court file indicates that the orders made by Windeyer J on Friday 16 June were for Mr Burton's appointment as receiver and manager of all the property at Candelori "other than trust property until further order". The quoted words were a handwritten correction to a typescript draft. They replaced the typescript words "whether held beneficially or as trustee, for a period of six months from the date hereof, such period of appointment to be reviewed before the expiration of the six-month period by this Court", which were crossed out by hand. The orders, so amended, were initialled and dated by his Honour. 23 Order 6a of the orders made on 16 June, wholly in typescript without any handwritten amendments, was as follows: "the receiver and manager shall be entitled to reasonable remuneration and reasonable costs and expenses properly incurred in the performance of his duties and the exercise of his powers as receiver and manager, to be calculated on the basis of the time reasonably spent by the receiver and manager, his partners and staff in accordance with the scale of fees normally charged by the firm Burton Glenn Allen or such other scale as the Registrar may decide, such fees to be paid out of the assets of the Company or out of the Candelori Family Trust as a first charge, as appropriate". 24 Mr Burton's evidence, as modified by his third affidavit (27 July 2006) is that he received a facsimile copy of the orders of 16 June from Mr McCusker at some time between 5 p.m. and 6 p.m. that evening. It appears that by that time the orders had been entered and the copy that he received was a facsimile of a sealed copy. 25 Mr Burton said that on the basis of Mr Dadich's comments in their initial conversation of 23 May, he had little concern about the ability of the company to meet his liabilities and pay his costs and expenses as receiver. He said that if he had been aware that Mr Dadich's representation that $50,000-$60,000 per week in cash was being taken out of the restaurant business was incorrect, that the company was trading at about "break even" and that he would not have access to all the assets of the business, he would not have taken the appointment as receiver and manager without an adequate indemnity being provided for his personal liability and his remuneration and expenses. 26 Mr Burton attended the restaurant premises on the evening of 16 June and had discussions with Rossano and Gina Candelori on 18 June, when they told him that employees of the restaurant were paid in party in cash, and cash payments by patrons were used to pay the cash component of employees' wages. They denied that cash was being taken out of the business in the order of $50,000-$60,000 per week. 27 According to the Associate's Record for 16 June, the proceeding was adjourned to Monday 19 June before Windeyer J for "hearing on trust matters". During the morning of 19 June 2006 Mr Horowitz telephoned Mr Burton and asked him to provide a letter of consent to act as a signatory to the bank account of the Candelori Family Trust. He provided a letter of consent as requested. It appears from his evidence that, although Mr Burton was asked to consent to be appointed as a signatory to the bank account, he was not notified that there would be application at the hearing for amendment of the orders appointing him receiver and manager. 28 Mr Burton was not represented before the court on 19 June. By consent of the parties appearing (the plaintiffs and the first, third and sixth defendants), orders were made amending and re-entering the orders of 16 June 2006, in terms setting out fully a set of substituted orders for the appointment of Mr Burton as receiver and manager. The only substantive change implemented by the new orders, relevant for present purposes, was to Order 6a. The words "such fees to be paid out of the assets of the Company or out of the Candelori Family Trust as a first charge, as appropriate" were removed and replaced by the words "such fees to be paid out of the assets of the Company as a first charge". 29 Orders were also made and entered on 19 June, by consent, for the appointment of Mr Burton as a compulsory joint signatory to a business cheque account in the name of Candelori as trustee of the Candelori Family Trust, so that all cheques would be countersigned by Mr Burton. He was authorised to countersign cheques on that account in the ordinary course of business in connection with the Horsley Drive and Hassell Street properties. Undertakings were given to the court by Rossano and Gina not to make distributions of assets of the Candelori Family Trust without prior written consent of the plaintiffs' solicitors, and not to cause any resolution to be passed of Candelori or Umberto Pty Ltd authorising the distribution of any trust assets except with the prior written consent of the plaintiffs' solicitors. They also undertook not to cause funds to be transferred out of the bank account by means other than by cheque, except for monthly mortgage payments and bank charges. 30 On the 19 June 2006 Mr Horowitz sent Mr Burton an e-mail attaching the court's orders made on that day. The e-mail said: "The orders of 16 June 2006 were varied slightly today, with the result that you may now receive payment only from the assets of the company, and not from the assets of the trust (see order 6a)." 31 Mr Burton and his staff put considerable time and effort into coming to grips with the running of the company's business. His evidence was that on about 9 July 2006 he became concerned about the financial position of Candelori. He prepared a report which he e-mailed to the solicitors for the parties on 12 July, convening a meeting for 13 July. 32 The report was not intended to be the full report ordered by the court, but was prepared, he said, to put before the parties certain matters of importance and/or concern to him (Report page 1). It contains a detailed analysis of the business, and an explanation of the controls that Mr Burton put in place. In his second affidavit (25 July 2006) Mr Burton gave further information, including a fuller explanation of the controls and his response to a report by Mr Dadich (who reached the conclusion that he had major concerns over the completeness of the revenue reported by the business). It is unnecessary to analyse this material in any detail for the purposes of the present application, though no doubt it will be relevant on the plaintiffs' application. A brief summary of Mr Burton's views in his report is sufficient for present purposes. 33 In his report Mr Burton said the figures he had prepared indicated that the company, under his control, was operating at a small cash surplus of around $4,000 per week, but the costs of and incidental to his administration were in the order of $25,000 a week. He explained that he had put some controls in place to track cash usage. He said that based on the trading since the instigation of those controls, he had formed the view that the amount of cash in the business operations was not of an abnormal or unusual amount (Report page 3). He said that to continue with the operations of the business would put him in a position of significant personal financial exposure, and therefore he required a "significant financial indemnity to secure the payment of current and future liabilities". He said that if a suitable indemnity were not forthcoming, the appropriate course would seem to be for him to seek retirement as a receiver, "with suitable security for costs". He concluded (Report page 5): "I also wish to flag that notwithstanding any agreement reached between the stakeholders, consideration will need to be given as to the requirement to address the Orders under which I currently operate and the need to possibly seek adjustment to them or further Orders from the Court". 34 The meeting on 13 July was attended by Mr Burton and his solicitor (Mr Blessington), the plaintiffs and their solicitor (Mr McCusker), Mr Blackburn-Hart SC and Mr Ledlin, solicitor, on behalf of Rossano, Mr Gray, solicitor on behalf of Gina, and a representative of Mr Laureti and his company. Mr Burton explained that he was at risk for his remuneration and costs and asked the parties to consider providing him with a suitable indemnity. No decisions were made. 35 On 13 July Mr Blessington wrote to the legal representatives of the parties saying Mr Burton believed that neither the plaintiffs nor Rossano and Gina would be able or willing to provide the cash or security which a bank would require to support his fees and indemnity. The letter said: "That leaves the trust as a source of funds to meet any shortfall. The orders of 16 June 2006 (para 6a) would have been satisfactory had they continued." Mr Blessington said Mr Burton required that the parties agree to reinstate para 6a and if they did not, Mr Burton would make an application to the court for termination of his appointment. Mr McCusker replied on 14 July asking for a breakdown of the receiver's weekly costs. There was further correspondence but no agreement was reached as to indemnity. 36 Mr McCusker gave evidence on behalf of the plaintiffs concerning some contacts he made with Mr Burton, in which Mr Burton explained to him his conclusions as to cash takings, and Mr McCusker tried to arrange for access to the restaurant's records but was frustrated by Mr Burton in certain ways. He recorded that Mr Burton informed him, on several occasions, that he was satisfied that all dockets raised had been accounted for. But that position was challenged by the plaintiffs in affidavit evidence given by Mr Dadich, Ms DeBono (a paralegal employed by the plaintiffs' solicitors) and Mr Lockett (a licensed private inquiry agent). This evidence was directed to showing that after the appointment of Mr Burton, questionable transactions were carried out when restaurant patrons paid cash. It appears that on some occasions the cash was not placed in the cash register and instead credit card transactions were generated at the counter for equivalent amounts. Mr Dadich said that if restaurant checks (bills) relating to certain credit card transactions that he inspected, in respect of a period of three days, were originally paid by cash, the effect of the credit card transactions would have been to significantly decrease the percentage of cash taken by the business in those three days. 37 It is unnecessary for me to deal more fully with this evidence for the purposes of the present judgment. It is obviously relevant to the plaintiffs' application to remove Mr Burton as receiver or have the company wound up. But it is relevant to note that on 17 July 2006 Mr Feller SC, Mr Blessington: Mr Burton and Mr McCusker conducted a three-way telephone conference during which Mr Feller drew attention to the evidence of the regular transactions that had been obtained, and told Mr Burton that this evidence would suggest that Rossano and Gina were doing things contrary to the intention of the receivership. Mr Burton agreed to give access to restaurant records and said he did not understand how the transactions were being carried out. Mr Feller said his clients, the plaintiffs, were prepared to take over the management of the restaurant and to work there initially for a period free of wages. 38 Mr Burton has prepared a "Summary Report as to Affairs" ("RATA"), as at 25 July 2006, which shows an estimated deficiency of liabilities over assets, before administration costs, of $316,919. The RATA substantially writes down the book value of furniture, fittings and equipment and certain other assets, while including as liabilities the professional fees of Mr Burton's firm, and his lawyers, for June and July, in a sum in excess of $140,000. A full assessment of the company's solvency would involve analysis of loans to the Candelori Family Trust and Rossano shown as assets in the RATA in an amount of about $420,000. It is unnecessary to explore the question of solvency further for the purposes of the present judgment. Mr Burton's consent 39 It was submitted on behalf of Mr Burton that he did not consent to an appointment as receiver and manager of only part of the property of Candelori, in the terms of the orders of 19 June. Attention was drawn to the following facts: · Mr Dadich represented to Mr Burton on 23 May that there was a "massive knock-off of cash", and this was followed by Mr Burton's initial consent on 25 May, which he gave on the assumption that there were sufficient assets to cover his fees and expenses; · the original draft orders sent to Mr Burton on 29 May drew no distinction between trust and non-trust property; · at the conference in the chambers of Mr Horowitz on 2 June, Mr Burton heard Mr Horowitz tell Mr Azzopardi that Mr Burton's remuneration would come out of the assets of the company, and then he executed a formal consent to appointment; · Mr Burton did not receive a copy of the orders of 16 June before they were made, and it was not brought to his attention that those orders limited the appointment to non-trust property, thus excluding trust property of considerable value; · Mr Burton, having received a copy of the orders of 16 June, was not informed that an application would be made on 19 June to vary those orders so as to deny his recourse to the trust property for reimbursement of his remuneration and expenses. 40 In my opinion those facts do not establish the proposition that Mr Burton did not consent to the appointment that was made. He gave his consent in general terms. It was a consent to his appointment to be receiver and manager of the property of the company. The consent did not address the distinction between trust and non-trust property. It was not qualified. 41 As indicated above, it appears that at the time of the original consent he knew very little about the present proceeding and may not have known that some of Candelori's property was trust property. He became aware that there was trust property no later than the morning of 19 June, when he was asked to consent to become a signatory of the trust bank account, but there is no indication that he then sought to clarify his access to trust assets for payment of his remuneration and expenses, or to qualify his general consent by reference to that matter. 42 I accept for the purposes of this judgment Mr Burton's evidence that if he had been aware that Mr Dadich's representation of the cash takings was incorrect and that the company was trading at about "break even" and that he would not have access to all the assets of the business, he would not have taken the appointment as receiver and manager without adequate indemnity and protection for his remuneration and expenses. But, no doubt because he believed Mr Dadich's statement, he did not express this limitation to his consent in any of his conversations or in the documents he signed. Procedural fairness 43 It was not submitted that Mr Burton should be entitled to the relief that he sought, namely the reinstatement of the original Order 6a, on any ground related to non-disclosure, misrepresentation or estoppel. Instead, reliance was placed on the court's inherent jurisdiction to vary its orders, and the powers given to the court under Part 36 of the Uniform Civil Procedure Rules 2005. 44 In his written submissions, Mr Eassie drew attention to the general principle that the court will never permit its own orders to be a source of injustice: Logwon v Warringah Shire Council (1994) 33 NSWLR 13 at 25G, per Sheller JA. He contended that the court's orders of 19 June were made in violation of "a fundamental principle that persons likely to be adversely affected by orders have a right to be heard" (Ritchie's Uniform Civil Procedure NSW, para [36.16 .5], citing Cameron v Cole (1944) 68 CLR 571). 45 Mr Eassie contended that the orders made by the court on 16 June 2006 conferred a valuable right on Mr Burton, upon his appointment as receiver and manager on that day. The right, according to Order 6a, was to recover his reasonable remuneration and expenses out of the assets of the Candelori Family Trust, as a first charge, as well as out the assets of the company. The facts that Mr Burton did not require that right to be conferred on him as a condition of his appointment, and did not realise that he might need it, are beside the point. When, on 19 June, the court varied Order 6a, it took that valuable right away from Mr Burton. It did so in circumstances where no notice had been given to him of the application for variation, and he had no opportunity to be heard in defence of his rights. Therefore the law requires that the variation of the original Order 6a be set aside. 46 At the hearing I reached the conclusion that I agreed with Mr Eassie's submission. The rules of procedural fairness do not depend upon the affected party being formally a party to the proceeding in which the order is made. The person likely to be adversely affected by the court's orders has a right to be heard. That was made clear in Cameron v Cole, and reaffirmed by the Court of Appeal of New South Wales in BP Australia Ltd v Brown (2003) 58 NSWLR 322. In Dahozo Pty Ltd v Oz-US Film Productions Pty Ltd (1997) 24 ACSR 739, at 743, Bryson J observed that "review of the cases to which counsel has referred me has confirmed my view that the court does not, and should not, adopt any practice in which notice to persons affected is treated as unimportant or the burden is put on such persons of applying to set aside an order after it has been made." 47 Mr Eassie submitted that the general law principle of procedural fairness is reflected in the UCPR. The Uniform Civil Procedure Rules 2005 make the following relevant provisions on the subject of setting aside and variation of orders: "36.15(1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith." "36.16(2) The court may set aside or vary a judgment or order after it has been entered if: … (b) the judgment or order has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order." "36.16(4) Nothing in this rule affects any other power of the court to set aside or vary a judgment or order." 48 Mr Eassie contended that the reference in rule 36.15(1) to an order made "irregularly" encompasses the case where the order was made without affording to a directly affected person the opportunity to be heard. His submission was that rule 36.16(2)(b) expressly empowers the court to set aside or vary an order given in the absence of a "party", and that the word "party", in this context, is not confined to a person joined as a party to the proceeding. The first of those submissions seems to me plausible, although I was not referred to any case in which denial of the right to be heard in the Cameron v Cole sense was regarded as an "irregularity" for the purposes of the rule. I would hesitate to find that a person in the position of Mr Burton is a "party" for the purposes of rule 36.16(2)(b). But these rules do not qualify the principle of the general law (as rule 36.16(4) makes clear). I decided to base my decision on the principle of the general law, which requires that in the present circumstances, Mr Burton should have been given notice of the application to vary the order that conferred upon him the right as receiver and manager to have access to the trust assets, and should have had the opportunity to be heard before the order was made. Since this did not occur, I held that the orders of 19 June should be varied so as to reinstate Order 6a to the form in which it was first made on 16 June. 49 Mr Feller SC submitted that as a matter of construction, Order 6a of the orders of 16 June did not confer upon Mr Burton any right of access to the trust property. He said that the intention of the drafter of Order 6a had obviously been, by use of the words "as appropriate", to give the receiver access to the assets of the company when acting as receiver of the property of the company, and the assets of the trust when acting as receiver of the property of the trust. When the provision of the draft order that would have appointed Mr Burton receiver of the assets of the company including the trust assets was varied, the statement in Order 6a that the receiver's fees were to be paid out of the assets of the trust as a first charge, "as appropriate", had no more work to do, and was simply otiose. 50 At the hearing on 27 July I was in a position to construe Order 6a because the trustee and all the beneficiaries of the trust were represented before me. I disagreed with Mr Feller SC's submission. The court's primary task, in construing the orders, is to ascertain the meaning of the orders as made. In my opinion Order 6a clearly gave the receiver access to the assets held by the company in trust. That is what it says. The fact that Mr Burton was not appointed receiver of the assets held on trust is no obstacle to this construction. It is permissible for the orders of the court, in appropriate circumstances, to make provision for payment of the remuneration and expenses of a receiver out of assets other than the assets of the receivership, provided that the affected parties are before it when the order is made. The affected parties, Candelori and the beneficiaries of the trust, were before the court on 16 June. The next steps in the proceeding 51 The plaintiffs' amended application of 27 July 2006, seeking removal of Mr Burton as receiver, an order for the winding up of Candelori, and other relief, will need to be heard if it is pressed. An application by Rossano and Gina was filed on 31 July 2006 for the appointment of a receiver and manager to the trust, and an application was filed by the plaintiffs, also on 31 July 2006, for an order amending Order 6(a). In both cases the applications have, by leave, been made returnable before me, though I will not be available to hear them. I shall consider whether to give directions for the filing of evidence on the applications, and make other procedural orders. 52 At the hearing on 27 July 2006, I raised the question of further mediation. I said (at T 10) that "the strongest reaction any judicial officer will have to a file like this, coming into it cold, is that this is an appalling family tragedy and what is needed is some arrangement to be made quickly for the parties to reconstruct their lives". Mr Feller SC informed me that none of the legal practitioners at the bar table would disagree with that proposition. I am bringing the matters back into my court so that I can consider whether to make a mediation order, and if so when, in the parade of interlocutory applications, the order should be made and executed. I shall need to consider whether satisfactory arrangements are in place for the protection of the restaurant business while any mediation occurs and until the various applications are (if necessary) heard and determined. Subject to considering those matters, it will be necessary for me to stand the proceeding over to the Duty Judge.

Candelori v Umberto

At a glance

Court

Decision date

Before

Source

Judgment (11 paragraphs)

Parties

Cases Cited (3)

Cited By (1)