Refund Property Fees Pty Ltd v Prime Project Development [2015] FCA 613 | Case summary

The appointment of the receivers and managers made pursuant to order 1 of the order of this Honourable Court made 2 February 2012 be discharged.
The receivers and managers are not required to file any accounts with the Court.
The receivers and managers be released and discharged from any and all claims whatsoever and howsoever arising from their appointment made pursuant to order 1 of the order of this Honourable Court made 2 February 2012 unless such claim is instituted within three months of the date of this order, or within such longer period as the Court may in its discretion on application at first instance allow.
Each party is to bear their own costs of and incidental to the proceeding, including reserved costs.
The proceeding otherwise be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 227 of 2013

REASONS FOR JUDGMENT 1 A sequel to the delivery of judgment by the Full Court on 13 February 2015 in Promoseven Pty Ltd v Markey, in the matter of Bluechip Development Corporation (Cairns) Pty Ltd (in Liquidation) (Receivers and Managers Appointed) [2015] FCAFC 12, was provision for the further hearing of this matter on remission. In the result, the conduct of such a hearing has been rendered, at least in terms of the view of the parties, unnecessary by virtue of a particular agreement which they have reached between themselves. These reasons for judgment must, in light of the agreement concerned, stand as reasons for judgment in each of QUD 172 of 2011, QUD 230 of 2013, and QUD 227 of 2013. 2 The terms of the agreement reached as between the parties are contained in a comprehensive settlement deed, the various counterparts to which form exhibits to an affidavit of Mr Markey, which has been filed in Court. The nature of the compromise is such that I have directed that that particular affidavit and the related settlement deed be placed in a sealed envelope with a direction that it not be opened without the leave of the Court or a judge. I have, though, had the benefit of comprehensive submissions from the parties as to the agreement reached, as reflected in that settlement deed, and why it is that orders promoted by them and contemplated in the deed ought to be made. 3 A particular controversy, which featured in the proceedings in the original jurisdiction before me, and also in the Full Court, concerned a challenge by Promoseven to an adjudication of its proofs by the receivers and managers. The effect of the compromise concerning that challenge is to take into account individual components of the proof and the reasoning both of the majority in the Full Court as well as Dowsett J, and to posit particular outcomes on the facts were that reasoning to be applied at the remitter hearing. 4 The end result is a concession jointly made by the parties that an amount greater than $2,503,009.50 is at least a conceivable outcome. It is put that that sum, which reflects a commercial compromise of their respective positions, should be regarded as a reasonable outcome, having regard to the detailed submission in respect of the various items, which is contained in the written outline of submissions made on behalf of the receivers. I accept that that is so. In particular, having regard to the reasoning evident in those submissions and the judgments delivered in the Full Court, I consider it would be unreasonable to interfere with a commercial value judgment which has been made by independently advised parties. 5 There are other features of the orders which are promoted which should be noted. The orders promoted in QUD 172 of 2011 provide not only for the discharge of receivers appointed by an order made by me on 2 February 2012, but also for a dispensation in respect of the filing of accounts by those receivers. 6 As to the discharge, the property secured by the mortgage concerned has been recovered and, as mentioned, agreement has been reached between relevant interested parties with respect to the distribution of the surplus proceeds among the secured creditors. 7 As to the filing of accounts, r 14.25(1) of the Federal Court Rules 2011 (Cth) provide for the filing of accounts by receivers. There is, though, power to dispense with that requirement. That power of dispensation may be exercised where the cost of compliance with the requirement would exceed any benefit that might accrue from the filing of accounts: see Kerr, in the matter of Angel's Castle Pre-School Pty Ltd (In Liquidation) (No 2) [2012] FCA 57 at [5]; and also Ide v Ide (2004) 50 ASCR 324 at [24] to [26]. 8 In this particular case, and as is evident from a further affidavit of Mr Markey which is not confidential, the scope and complexity of the work performed in the receivership would make for a burdensome erosion of the available surplus were the receivers to be required to comply with the requirement otherwise falling on them to file accounts. 9 Also relevant is that, as a matter of practicality, the only parties who might be interested in those accounts are independently advised and commercially sophisticated. They do not seek the filing of accounts. They consent to the remuneration proposed for the receivers and take no issue with the amount available for distribution. That this is so is eloquently shown by the subscription to the deed of settlement. The receivers will in any event file accounts with the Australian Securities & Investments Commission. 10 In the circumstances of this case, it seems to me that it would be unreasonable to do other than dispense with the requirement for the filing of accounts. 11 The orders made in QUD 172 of 2011 also make provision for a release from liability of the receivers arising from the conduct of their duties pursuant to Court order. There is provision in the proposed orders for the release to operate unless a claim is made by way of application to the Court by some third party within three months of the date of the order. That was a period of time which commended itself in Inland Revenue Commissioners v Hoogstraten [1985] QB 1077 at 1094. That it did so in the circumstances of that case does not, of course, mean that it ought uncritically to be fixed as a time in the circumstances of the present case. Nonetheless, the evidence here is that there are no threatened or foreshadowed claims against the receivers. Those who have had such claims are parties to a compromise. Once the moneys which are presently held by the receivers are distributed, there will be no funds available to the receivers to provide an indemnity in respect of proceedings which might be brought against them. Given the absence of threatened or foreshadowed claims and the compromise of the claims made to date, it seems to me that a period of three months is a reasonable period to allow in the circumstances of this case. 12 I note that there is the necessary formality, in relation to the observance of the terms of the deed, for the Full Court to make orders in terms of an agreement which has been reached as between the parties to the appeal as to the costs outcome on that appeal. I am satisfied, having regard to the existence of such an agreement, that the making of the various orders today need not await the formal making, pursuant to consent of orders by the Full Court, giving effect to the agreed outcome as to costs. 13 I particularly wish to commend the parties and their advisors for the particular outcome reached, and for the assistance provided to the Court today. I note also that the liquidator of that company was present in Court but did not seek to appear. I should also record that the making of the proposed orders was notified last week to Australian Securities and Investments Commission (ASIC), and that there was no appearance by or on behalf of ASIC today. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

Refund Property Fees Pty Ltd v Prime Project Development

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