PARTIES:		ELDERS RURAL FINANCE LIMITED, FOSTERS BREWING GROUP LIMITED AND ELDERS LIMITED

V

WILLIAM TAPP as representative of the estate of CHARLES WILLIAM TAPP

and

WILLIAM REX TAPP, JOE TAPP, BEN TAPP, WILLIAM TAPP and DANIEL TAPP

TITLE OF COURT:	COURT OF APPEAL OF THE NORTHERN TERRITORY

JURISDICTION:	CIVIL

FILE NOS:	No. AP 3 of 1993

DELIVERED:	Darwin 11 rnAY 1993

HEARING DATES:	17 March 1993, 18 March 1993

JUDGMENT OF:	MARTIN CJ, KEARNEY & ANGEL JJ

CATCHWORDS:

Receivers -	Powers and duties - Whether lack of power rendered receivership futile

Appeal	When appeal lies - Interlocutory - Plaintiffs appeal from decision on receivers application

Appeal	Interlocutory order - Leave to appeal - Decision not attended with sufficient doubt - Injustice to appellants

Nationwide News v Bradshaw (1986) 41 NTR 1

Costs		Costs of this appeal - Departing from the general rule - Indemnity basis not warranted

REPRESENTATION:

Counsel:

Appellant:
First Respondent: Second Respondent:

Solicitors:

Appellant:
First Respondent: Second Respondent: Receiver:

J Wells QC, Mr Rydon M Maurice QC
G Hiley QC

Finlaysons Philip & Mitaros Noonans
R Cowling

Judgment category classification: Judgment ID Number:
Number of pages:

ang93001
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ang93001

IN THE COURT OF APPEAL OF THE NORTHERN TERRITORY OF AUSTRALIA

No. AP3 of 1993

BETWEEN:

ELDERS RURAL FINANCE LIMITED, FOSTERS BREWING GROUP LIMITED AND ELDERS LIMITED
Applicants

AND:
WILLIAM TAPP as representative of the estate of CHARLES
WILLIAM TAPP
First Respondent

AND:

WILLIAM REX TAPP, JOE TAPP, BEN TAPP, WILLIAM TAPP and DANIEL TAPP
Second Respondents CORAM:	MARTIN CJ, KEARNEY AND ANGEL JJ

REASONS FOR JUDGMENT

(Delivered 11 May 1993)

MARTIN CJ and ANGEL J:

This is the latest round in a series of interlocutory skirmishes between the parties which have become a regular feature of the cause lists of the court over the last 12 months or more.	It is an application for leave to appeal from a decision of Thomas J delivered on 5 February 1993

dismissing a summons by a court appointed receiver, Robert William Cowling, that he do have possession of certain plant, equipment, stores and consumable items.		Her Honour observed that the receiver already had power to possess and use for the purposes of his appointment as receiver items constituting fixtures and items constituting non-fixtures which had been purchased, hired leased or otherwise acquired by him in the course of his receivership.	Such was not disputed by the respondents.	Her Honour held that those powers did not extend to other non-fixtures.	In the course of her reasons for judgment, Thomas J found that it was not essential to the running of the business of which the receiver was receiver and manager that he use the particular plant and equipment in issue and that by refusing the relief sought the appointment of the receiver to manage the stations and livestock, the subject matter of the action, did not render the appointment of the receiver futile.

Charles William Tapp deceased was the one time owner of three cattle stations respectively named Killarney, Roper Valley and Maryfield.	Each was a pastoral lease.	Each property was mortgaged to one or other of the applicants.
The deceased had also granted stock mortgages in respect of the livestock on each station to one or other of the applicants.	In this action the applicants seek to enforce their securities with respect to the lands in question and

the stock in question.	There have been numerous interlocutory arguments over the state of the pleadings and they are yet to close.	At the time the application was argued one member of this court had reserved judgment on a strike out application with respect to the pleadings.

On 28 February 1992, Martin J, as he then was, appointed one Johnston receiver and manager of the stations and livestock and businesses conducted on the stations.		Mr Johnston was seriously injured in a motor vehicle accident and thereby rendered unable to discharge his duties as receiver and manager.	By further order of Martin Jon	22 October 1992, Mr Johnston was discharged from his receivership and Robert William Cowling was appointed receiver and manager.	We set out the terms of that order in full:

"1.	The appointment of Frank David Johnston as receiver and manager of the stations and stock identified and described in the order of this Court made on 28 February 1992 and of the business or businesses now or normally carried on in respect of the said stations and stock be terminated, and, subject to this order, the said Frank David Johnston is hereby discharged therefrom.

Subject to Robert William Cowling of Ernst & Young, 9-11 Cavenagh Street, Darwin providing security to the Court in an amount of $610,000.00 in terms of form 39A under the rules of this Court, within 7 days of the date of this order being made, Robert William Cowling be and is hereby appointed the receiver and manager of the stations and stock identified and described in the schedule hereto and of the business or businesses

now or normally carried on in respect of the said stations and stock.

For the purposes and subject as aforesaid, and until further order Robert William Cowling do have possession of the said stations and stock to the extent necessary to enable him to conduct and carry on any business or businesses now or normally carried on in respect of the stations and stock and to enable him to preserve the stations and stock pending the hearing and determination of the within action.

For the purposes and subject as aforesaid, and until further order, Robert William Cowling be and is hereby empowered to:-

manage the business or businesses now or normally carried on in respect of the stations and stock in every respect;
sell the Killarney and Maryfield Stock and the Roper Valley Stock in the ordinary course of business;
purchase, hire, lease or otherwise acquire on whatever terms from time to time goods, chattels, provisions, plant and equipment;
borrow monies with or without security;
meet expenses including but not limited to outgoings incurred in the ordinary course;
employ and terminate the employment of workers;
enter into contracts for services with any other persons;
appoint any agent to perform any act or do any matter or thing on his behalf;
discharge any salaries, fees or other expenses of any employee, contractor or agent;
insure the stations and stock;
receive, collect and compromise any debts due;
obtain and act upon such legal advice as he in his discretion may consider necessary;
repair and maintain as may be necessary all or any plant and equipment on or about Killarney Station, Maryfield Station and Roper Valley Station;
enter into contract;
institute and defend any legal proceedings; and
draw cheques and operate accounts.

Until further order, the said Robert William Cowling shall:-

be remunerated for the work performed by him in respect of the receivership and management of the stations and stock at the hourly rate set by the Insolvency Practitioners' Association of Australia being the rate applicable to insolvency practitioners generally and being an amount which has been approved by the Court;
submit accounts in respect of his receivership and management of the said stations and stock to the Court and to the solicitors for each of the parties to the proceedings on or before the 8th day of each calendar month.

Within 2 clear days of the said Robert William Cowling giving security pursuant to paragraph 2 herein:

the defendants do deliver up to the said Robert William Cowling possession of the said stations and stock together with all books, accounts and records relating thereto for the period from 1 July 1990 to date and as may be reasonably required by him;
The said Frank David Johnston or KPMG Peat Marwick deliver or cause to be delivered to the said Robert William Cowling all records, documents and other items or materials used or created by the said Frank David Johnston in carrying on the receivership and management of the said stations and stock; and
the costs of and incidental to the said delivery of a submission of final accounts of Frank David Johnston referred to in paragraph
8 hereof be costs in the administration of Frank David Johnston.

Until further order, the said Robert William Cowling do permit the plaintiffs, defendants and their duly appointed agents access to Killarney Station, Roper Valley Station and Maryfield Station for the purposes of observing and monitoring the receivership and management of the said stations and stock.

The said Frank David Johnston or KPMG Peat Marwick cause to be filed in this Court accounts in respect of his receivership and management of the said stations and stock from the date of completion of the last accounts up to the commencement of the appointment of the said Robert William Cowling.

The costs of this application be costs in the cause.

That there be liberty to apply including on the part of Frank David Johnston and KPMG Peat Marwick."

Both at the time of Johnston's appointment and Cowling's appointment there was a large quantity of plant and equipment situated on the stations.	The second respondents are the sons of Charles William Tapp deceased and they live and have spent much of their lives working the stations.	Much of the plant and equipment on the stations they claim to be their own and there is a substantial dispute as to which of the plant and equipment belongs to the estate and which belongs to the second respondents.	It was submitted before us, as it was submitted before her Honour, that the terms of Martin J's orders of 28 February 1992 and 22 October 1992, gave possession or at least the use of the plant and equipment to the receiver for the purposes of his receivership and management of the stations.
Alternatively it was argued that at least the orders were ambiguous in that regard and that the receiver ought to have the use of such plant and equipment in the running of the station.	Her Honour held that the orders did not give the

receiver such use or possession and having found that it was not essential to the running of the business that he have such use, Her Honour, as a matter of discretion considered it inappropriate to make an order on the receiver's summons giving him such use.	As we have already related, her Honour pointed out that in refusing to make such an order the receiver's appointment was not rendered futile and the receiver is quite able to preserve the security (the land and the livestock) and properly carry out the terms of his receivership by purchasing or hiring equipment from elsewhere.	The substance of the present dispute is whether the receiver can use any of the plant and equipment presently situated on the stations without having to pay for such use.

The receiver did not appeal from her Honour's order and counsel for the receiver appeared at the commencement of this matter to indicate the receiver abided by the order of the court and did not wish to participate in it.		Counsel for the receiver did not indicate that the receiver supported the appeal and the matter before us was a contest between the applicants (the plaintiffs in the action) and the respondents (the defendants in the action).	At the conclusion of the hearing, the learned Chief Justice announced that the application for leave to appeal would be

dismissed, that the court's decision on the question of costs would be reserved and that we would give our reasons later.

We are of the view that the decision of Thomas J is not attended with sufficient doubt to justify the grant of leave to appeal.	Nor are we satisfied any injustice results to the applicants consequent upon the dismissal of the summons.
(Nationwide News v Bradshaw (1986) 41 NTR 1).	Her Honour held that as a matter of construction, the orders of Martin J did not embrace the plant and equipment situated on the stations at the time of the orders.			Her Honour was clear in that view.	It may be, with respect, that there is some ambiguity though we are inclined to agree with her Honour, if not only because the orders expressly refer to certain personalty, eg, the books of account, and the expression 'business' clearly includes the goodwill of the business and thus the use of the trading name of the stations and the right to brand cattle accordingly.		In our view, it cannot be said that in the circumstances of these orders the disputed personalty was included.	We agree with counsel for the respondents, the real question before Thomas J was whether in order to preserve the realty and livestock the subject matter of the securities, her Honour in her discretion ought to have enlarged the receivership to include the disputed plant and equipment.	The plant and

equipment is not itself the subject of a claim for relief in the action.	The plant and equipment is not the subject of the securities, and it is by no means clear how the applicants would be entitled to use the same even if they were in possession of the land and stock.		The applicants' claims with respect to the plant and equipment have at all times been disputed by the respondents.	In our view, it is inappropriate to resolve that dispute in the present interlocutory proceedings.	The plant and equipment, as her Honour held, was not essential to the running of the business nor did refusal to order the receiver to have the possession or use of it render futile his appointment to manage the stations and the stock and to run the business.
In our opinion, Thomas J's conclusions are not affected by error, and we agree with her that it is unnecessary in order to preserve the property, the subject matter of the action, to make any order enlarging the present receivership.
Fixtures apart, the applicants in the present action make no claim to security over the plant and equipment, much of which is claimed by the second respondents and some of which apparently is claimed by third parties.	On the summons before her Honour it was plainly inappropriate in these circumstances to make any decision concerning property rights and we further agree with counsel for the respondent that, on the present state of the pleadings, it was also

inappropriate to finally determine any question of construction.

The respondents sought costs of the appeal and before her Honour on an indemnity basis - her Honour had stood over the question of costs before her.	We see no peculiarly significant features of this case sufficient to warrant an order for costs on an indemnity basis.

The application for leave to appeal having been dismissed, we order that the applicants pay the respondents' costs of the application before this court and of the hearing before her Honour.	The receiver's costs will be costs in the receivership.

KEARNEY J:

I agree with Thomas J that it is clear that the orders of Martin J did not embrace the plant and equipment on the stations at the time of those orders.	Apart from that, I respectfully concur in the joint opinion of the Chief Justice and Angel J, their conclusions, and the orders they propose.