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(}{\pntxta )}}{\*\pnseclvl8 \pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \qc \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkstart Ilaitia_Boila_Yam_v_FDB_Merchant_Bank} ILAITIA BOILA & CHIRK YAM, FIJI DEVELOPMENT BANK & MERCHANT BANK OF FIJI v BAHADUR ALI, MUKTHAR ALI & NIWAZ ALI \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\b\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkend Ilaitia_Boila_Yam_v_FDB_Merchant_Bank} \par }{\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid5838400\charrsid2501059 High Court Civil Jurisdiction \par }\trowd \irow0\irowband0\lastrow \ts22\trgaph108\trleft-108\trftsWidth1\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6948\clshdrawnil \cellx6840\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth1908\clshdrawnil \cellx8748\pard\plain \ql \li0\ri0\nowidctlpar\intbl\aspalpha\aspnum\faauto\adjustright\rin0\lin0\pararsid1527099\yts22 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid2501059\charrsid2501059 31 August, 6, 13 September, 2 November, 2001\cell HBC 183/01S\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid2501059\charrsid2501059 \trowd \irow0\irowband0\lastrow \ts22\trgaph108\trleft-108\trftsWidth1\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6948\clshdrawnil \cellx6840\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth1908\clshdrawnil \cellx8748\row }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }{\i\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid5838400\charrsid2501059 Company law - appointment and removal of a }{\i\caps\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid5838400\charrsid2501059 r}{ \i\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid5838400\charrsid2501059 eceiver/}{\i\caps\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid5838400\charrsid2501059 m}{\i\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid5838400\charrsid2501059 anager - rights, duties and abilities of a}{\i\caps\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid5838400\charrsid2501059 r}{\i\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid5838400\charrsid2501059 eceiver/}{ \i\caps\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid5838400\charrsid2501059 m}{\i\fs24\lang2057\langfe1033\cgrid0\langnp2057\insrsid5838400\charrsid2501059 anager \endash whether clog on equity of redemption \endash whether a Receiver can be discharged on payment of arrears \par }\pard\plain \s15\ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 \fs24\lang3081\langfe3081\cgrid\langnp3081\langfenp3081 {\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \par }\pard\plain \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 A company, Valebasoga Tropikboards, eight years earlier secured financing of $3,070,750.00, secured by a mortgage debenture in favour of P2. The debenture allowed P2 to appoint a Receiver/Manager if P2 made demand and the company defaulte d in its debts. The Court noted there was a continuous history of default by the company, and sympathetic accommodation by the Fiji Development Bank, such that three months before the present application was brought, the amount of debt had risen to $9,703 ,904.91.}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 D1 claimed never to have defaulted. P1 obtained an injunction against D1 when D1 Ali and his men physically assaulted the Receivers, P1, in their attempt to take possession of the company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s assets in accordance with the Deed of Appointment of Receivers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 D1 sought orders to revoke the appointment of P1 as Receivers, to return the management of Valebasoga Tropikboards back to D1, and to dissolve all injunctions against it. It filed four affidavits, P1 and P2 filed three each. P1 submitted the Court ma y exercise its inherent jurisdiction to remove a privately appointed receiver in a proper case but this was not an appropriate case. Such an application would be brought by appointor, but not by a mortgagor Company or on the application of a single Direct o r or minority shareholder. P1 submitted as there was no guarantee P1 would be paid if the receivership were revoked, in light of numerous past defaults, so the balance of convenience lay with P1. P2 submitted that D1 had no locus standi to make an applica tion and the Court should respect the right of a debenture holder. P2 further submitted it had not put any clog on the company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s equity of redemption, but until such time as D1 either paid all the outstanding debt or a substantial part of the debt to its sa tisfaction it had a right to continue with the Receivers. D1 submitted that the Receivers, having collected $2.5m, in excess of arrears, should be discharged.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 D1 submitted the strict legal rights of the debenture holder should not be allowed to prevail in equity, given a Receiver}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s misconduct in using company machinery and workers for his personal benefit.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Court considered the provisions of the debenture for appointment and removal of a receiver, and receiver}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s duties. It determined that a receiver, as agent of his principal, with very wide powers by virtue of the conditions of the debenture, and the liability for his acts falls upon his principal rather than on the receiver. As the company, not D1, is indebted to P2 when the company}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s assets are under receivership, all the powers are vested in the Receivers to the exclusion of the directors.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Court failed to find evidence to substantiate removal. \par }{\fs24\lang2057\langfe1033\highlight7\langnp2057\insrsid5838400\charrsid2501059 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Held\endash }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (1) The}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Receivers have been properly appointed under the debenture because the company had defaulte d in payment of loan. Upon their appointment, the Receivers become the Receivers and Managers of the whole of the company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s property, undertaking and assets in equity for the full amount owed, not just pre-existing arrears. A Receiver can be removed for fr aud or mala fides or when he does something he is not empowered to do and omits something he is enjoined to do by the terms of his appointment. A valid claim against a Receiver occurs when a Receiver}{ \b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 has exceeded or abused or wrongfully omitted to use the special powers and discretions vested in him pursuant to the contract of loan constituted by the debenture for the special purpose of enabling the assets comprised in the debenture-holders}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 security t o be preserved and realised. The parties themselves determined the receivership pursuant to a debenture. Based on these principles, the Receiver cannot be removed. But if there is any truth in the allegation about a particular Receiver using company worke rs on his own property, that must stop immediately for misuse or abuse of power cannot be allowed to continue.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard\plain \s15\ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 \fs24\lang3081\langfe3081\cgrid\langnp3081\langfenp3081 {\lang2057\langfe3081\langnp2057\insrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (2) There was no evidence that P2 represented to Ali that the Receivers will be removed after the company has paid arrears of account, but on full recovery of debt.}{ \lang2057\langfe3081\langnp2057\insrsid2501059 }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 When a company is under receivership all the powers are vested in the }{\caps\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 r} {\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 eceivers to the exclusion of the Board of Directors.}{\lang2057\langfe3081\langnp2057\insrsid2501059 }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 The proper course would have been for the directors to initiate proceedings for misconduct in the name of the company under their residual powers. There was no sworn evidence that D1 is authorised by the Board or received authority from other shareholders in a general meeting. D1, as a director, cannot bring an action in his own name. D1 has no locus standi to br ing an application for removal of Receivers, and is misconceived.}{\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid2501059 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Deangrove Pty Ltd (Rec. & Mgrs. Aptd) v Commonwealth Bank of Australia}{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 [2001] FCA 173 (6 March 2001) appl. \par }{\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \par }\pard\plain \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Obiter dictum \endash }{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 D1 should}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 assist the Receivers in the running of the Mill as he ha s the know-how and knows his customers well, allowing revenue to flow in and will help reduce the debt owed to P2. In due course the whole business could be handed back to the company.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard\plain \s15\ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 \fs24\lang3081\langfe3081\cgrid\langnp3081\langfenp3081 {\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Application by directors for interlocutory injunctive orders refused. Injunction obtained by Receivers and the Bank are dissolved. \par }{\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 [Note: on application for extension of time to appeal, the trial judge declined to make interlocutory injunctive orders sought by directors and dissolved those obtained by Receivers and the Ban k because he found that the directors did not have locus standi to seek revocation, and had no authority from the Receivers and the Bank to make such application. Neither a }{\b\i\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Deangrove}{ \lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 argument nor an argument raised for the first time that the Director of L ands consent was not given to a debenture nor a 14 month substantial delay, are so meritorious as to warrant leave. The Receivers have conducted their duties on the basis of an ex parte injunction granted 14 months earlier, and it will be prejudicial to t hem and the Bank to permit a challenge at a late stage.}{\lang2057\langfe3081\langnp2057\insrsid2501059 }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Application refused: ABU 0030/02 5 September 2002. Subsequently, parties filed pleadings.}{\lang2057\langfe3081\langnp2057\insrsid2501059 }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 The first Plaintiff sought an adjournment to await the outcome of HBC 28/02B and the matter was adjourned sine die on 4 August, 2003.] \par \par }{\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Other cases referred to in Judgment \par }\pard \s15\ql \fi-374\li374\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin374\itap0\pararsid2501059 {\b\i\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Charmae Investments v ANZ Bank}{ \lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 at 52,003-52,004 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Edwards v Singh}{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 [1990] 5 NZCLC 66,770 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Inglis v Commonwealth Trading Bank of Australia}{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 [1972] ALR 591 at 592 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 M. Wheeler & Co. Ltd v Warren}{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 [1928] Ch. 840 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Moss S.S. Co. v Whinney}{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 [1912] AC 254 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 NEC Information Oysters v Lockhart }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (no citation given)}{\i\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Owen & Co v Crank}{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 [1895] 1 QB 265 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Phillips Oysters v NAB }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (no citation given)}{\b\i\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \par Re B. Johnson & Co. Builders Ltd}{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (1955) 2 All ER CA 775 \par }\pard \s15\ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \par }\pard\plain \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Jon Apted for the }{ \i\caps\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 f}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 irst Plaintiffs \par Devanesh Sharma for the }{\i\caps\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 econd Plaintiff \par Hemendra Nagin for the First Defendant \par }\pard\plain \s15\ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 \fs24\lang3081\langfe3081\cgrid\langnp3081\langfenp3081 {\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \par }\trowd \irow0\irowband0\lastrow \ts22\trgaph108\trleft-108\trftsWidth1\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2088\clshdrawnil \cellx1980\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6768\clshdrawnil \cellx8748\pard\plain \ql \li0\ri0\nowidctlpar\intbl\aspalpha\aspnum\faauto\adjustright\rin0\lin0\pararsid10429933\yts22 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 2 November, 2001\cell }\pard \ql \li1692\ri0\nowidctlpar\intbl\aspalpha\aspnum\faauto\adjustright\rin0\lin1692\pararsid2501059\yts22 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 }{\b\caps\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 judgment}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \trowd \irow0\irowband0\lastrow \ts22\trgaph108\trleft-108\trftsWidth1\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2088\clshdrawnil \cellx1980\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6768\clshdrawnil \cellx8748\row }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Pathik, J}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 This is the 1st Defendant}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s (hereinafter referred to as Ali) motion dated 6 July 2001 seeking the following Orders:}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par {\listtext\pard\plain\s18 \lang2057\langfe3081\langnp2057\langfenp3081\insrsid5838400\charrsid2501059 \hich\af0\dbch\af0\loch\f0 (a)\tab}}\pard\plain \s18\ql \li720\ri0\nowidctlpar\faauto\ls1\rin0\lin720\itap0\pararsid2501059 \f29\fs24\lang1033\langfe3081\cgrid\langnp1033\langfenp3081 {\f0\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 An order that the appointment of the First Plaintiffs as Receivers be revoked and the management of Valebasoga Tropikboards be handed back to the First Defendant;}{\f0\lang2057\langfe3081\langnp2057\insrsid5838400 \par }\pard \s18\ql \li720\ri0\nowidctlpar\tx-1440\faauto\rin0\lin720\itap0\pararsid2501059 {\f0\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par {\listtext\pard\plain\s18 \lang2057\langfe3081\langnp2057\langfenp3081\insrsid5838400\charrsid2501059 \hich\af0\dbch\af0\loch\f0 (b)\tab}}\pard \s18\ql \li720\ri0\nowidctlpar\faauto\ls1\rin0\lin720\itap0\pararsid2501059 { \f0\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 An order that all injunction Orders granted against the First Defendant be dissolved. \par }\pard\plain \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par In support of motion, Ali has filed three affidavits sworn 6 July, 30 July and 2 August 2001; another affidavit, sworn 3 August by Mohammed Mansoor, a joiner, was filed.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The first Plaintiffs have filed four affidavits; and the second Plaintiff has filed three affidavits. \par \par The affidavits that have been filed and the written submissions made in this case have become voluminous.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 A large number of authorities have been cited and relied upon by the parties to the action. \par \par As ordered, all three counsel have made written submissions.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 I have found these very comprehensive and helpful in the determination of the issues before me. \par \par The issue essentially involves consideration of the law pertaining to the appointment and removal of a receiver and manager as well as discussing his rights, duties and liabilities. \tab \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Background history of case}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The issue has to be determined in the light of the background to the case.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 I therefore set out below, inter alia, the facts and the provisions of the debenture under which the second Plaintiff Fiji Development Bank (hereafter referred to as the }{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 ) acted and appointed Ilaitia Boila and Chirk Yam as Receivers and Managers (hereafter referred to as }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Receivers}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 ) for Valebasoga Tropikboards Limited (the }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 ).}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 One of the directors of the Company is Bahadur Ali (hereinafter referred to as }{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Ali}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 ). \par \par Mr. Apted has set out the relevant facts very well in his written submissions and I adopt them here and they are inter alia, as follows:-}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par \par }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Mortgage Debenture}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Company was incorporated on 7 April, 1993.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 On 13 August, 1993 it gave the Fiji Development Bank a mortgage debenture to secure a loan of $3,070,000 (and further advances and other accommodation). \par \par The very first paragraph provided }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 \endash }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Company will pay to the Mortgagee the said sum of $3,070,750.00 and all further advances }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 UPON DEMAND}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 . \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par Similarly, paragraph 2 provided that interest on outstanding principal and advances at the rate of 11% (or such rate as varied by the Fiji Development Bank) was payable at the periodic intervals set out in the Debenture or }{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 UPON DEMAND}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 . \par \par By paragraph 3, the Company agreed }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 \endash }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Company }{ \b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 HEREBY CHARGES}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 with such payment all its undertaking and all its property stock-in-trade book and other debts whatsoever and wheresoever present and future including its uncalled capital with the benefit of the securities for the same}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 . \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par By paragraph 4, it appointed the Fiji Development Bank and every Receiver that it might appoint to be the Company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s Attorney and in paragraph 5, it agreed }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 \endash }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 For the consideration aforesaid the Company hereby appoints the Mortgagee to be its attorney in its name and on its behalf }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 in the event that the principal interest and other moneys for the time being hereby secured shall have become immediately due and payable under any of the provisions of this Debenture and notice in writing requiri ng payment of the said moneys shall have been served on the Company and the Company shall have made any default after such service in payment of such principal interest and other moneys or any part thereof to do all or any of the acts matters and things w h ich the Mortgagee or any Receiver is by this security empowered to with respect to the assets of the Company subject to this Debenture and also to sell or concur with any person in selling the said assets or any of them or any part thereof either at one o r several time subject to such terms and conditions as may be thought fit }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 with power to vary any contract for sale and to buy in at any auction or to rescind any contract for sale and to re-sell without being responsible for any loss occasioned thereby and to make and sign such transfers, applications for new deeds or documents and generally in relation to any assets real or personal to do such acts and things as are necessary for effectuating any such sale and no purchaser shall be bound to see or enquire whether such default as aforesaid has been made or has happened or has continued or whether any notice has been served or given or otherwise into the propriety or regularity of any such sale }{ \fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 and the Company hereby covenants to ratify and confirm all acts an d things that the attorney acting under and in pursuance of this clause may do under or in pursuance of the powers and authorities hereinbefore contained.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (emphasis mine) \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Other conditions}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Debenture had other conditions endorsed, including the following-}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Paragraph 10:}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The moneys hereby secured shall become immediately payable on the happening of any of the following events: -}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par {\listtext\pard\plain\s19 \lang2057\langfe3081\langnp2057\langfenp3081\insrsid5838400\charrsid2501059 \hich\af0\dbch\af0\loch\f0 (a)\tab}}\pard\plain \s19\ql \li720\ri0\nowidctlpar\faauto\ls1\ilvl2\rin0\lin720\itap0\pararsid2501059 \fs24\lang1033\langfe3081\cgrid\langnp1033\langfenp3081 {\ul\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 If the Company makes default for a period of seven days in payment of any interest hereby secured;}{ \ul\lang2057\langfe3081\langnp2057\insrsid5838400 \par }\pard \s19\ql \li720\ri0\nowidctlpar\tx-1440\faauto\rin0\lin720\itap0\pararsid2501059 {\ul\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par {\listtext\pard\plain\s19 \lang2057\langfe3081\langnp2057\langfenp3081\insrsid5838400\charrsid2501059 \hich\af0\dbch\af0\loch\f0 (b)\tab}}\pard \s19\ql \li720\ri0\nowidctlpar\faauto\ls1\ilvl2\rin0\lin720\itap0\pararsid2501059 { \lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 If any order for the winding-up of the Company is made or if the Company shall go into voluntary liquidation, or if the Company shall call a general meeting for the purpose of passing the necessary resolutions to place the Company in liquidation;}{ \lang2057\langfe3081\langnp2057\insrsid5838400 \par }\pard \s19\ql \li720\ri0\nowidctlpar\tx-1440\faauto\rin0\lin720\itap0\pararsid2501059 {\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par {\listtext\pard\plain\s19 \lang2057\langfe3081\langnp2057\langfenp3081\insrsid5838400\charrsid2501059 \hich\af0\dbch\af0\loch\f0 (c)\tab}}\pard \s19\ql \li720\ri0\nowidctlpar\faauto\ls1\ilvl2\rin0\lin720\itap0\pararsid2501059 { \lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 If any execution of sequestration or other process of any Court or authority or any distress is sued out against or levied upon any of the assets of the Company;}{ \lang2057\langfe3081\langnp2057\insrsid5838400 \par }\pard \s19\ql \li720\ri0\nowidctlpar\tx-1440\faauto\rin0\lin720\itap0\pararsid2501059 {\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par {\listtext\pard\plain\s19 \lang2057\langfe3081\langnp2057\langfenp3081\insrsid5838400\charrsid2501059 \hich\af0\dbch\af0\loch\f0 (d)\tab}}\pard \s19\ql \li720\ri0\nowidctlpar\faauto\ls1\ilvl2\rin0\lin720\itap0\pararsid2501059 { \lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 If a receiver of the undertaking of the Company or any part thereof is appointed;}{\lang2057\langfe3081\langnp2057\insrsid5838400 \par }\pard \s19\ql \li720\ri0\nowidctlpar\tx-1440\faauto\rin0\lin720\itap0\pararsid2501059 {\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par {\listtext\pard\plain\s19 \lang2057\langfe3081\langnp2057\langfenp3081\insrsid5838400\charrsid2501059 \hich\af0\dbch\af0\loch\f0 (e)\tab}}\pard \s19\ql \li720\ri0\nowidctlpar\faauto\ls1\ilvl2\rin0\lin720\itap0\pararsid2501059 { \lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 If the Company shall cease to carry on its business.}{\lang2057\langfe3081\langnp2057\insrsid2501059 "}{\lang2057\langfe3081\langnp2057\insrsid5838400 \par }\pard \s19\ql \li720\ri0\nowidctlpar\tx-1440\faauto\rin0\lin720\itap0\pararsid2501059 {\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }\pard\plain \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (emphasis mine)}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Paragraph 14:}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Company shall not during the continuance of this security }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 without consent of the Mortgagee}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 first had and obtained and then only subject to such conditions as the Mortgage may impose }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 issue any of the unissued capital of the Company or permit the transfer of any share or shares.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \fi720\li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (emphasis mine) \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Appointment of Receiver and Manager}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Most importantly for the present purposes, paragraph 15 provided }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 \endash }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (a) \tab }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 At any time after the moneys hereby secured become payable the Mortgagee may appoint in writing any person to be a Receiver or Receiver and Manager (hereinafter called }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Receiver}{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 ) of the mortgaged premises and may remove any such Receiver}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 and appoint another Receiver in his place and may fix the remuneration of any such Receiver }{ \b\i\fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 PROVIDED ALWAYS}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 that }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 every such Receiver shall be the agent of the Company }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 and the Company alone shall be responsible for his acts and defaults }{ \fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 and such Receiver so appointed shall without any consent on the part of the Company have power }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid2501059 \endash }{ \fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\i\fs24\lang2057\langfe1033\langnp2057\insrsid2501059\charrsid2501059 \par }\pard\plain \s20\ql \li720\ri0\nowidctlpar\faauto\rin0\lin720\itap0\pararsid2501059 \fs24\lang1033\langfe3081\cgrid\langnp1033\langfenp3081 {\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (b)}{ \b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \tab }{\ul\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 To take possession of collect and get in the whole or any part of the mortgaged premises;}{ \ul\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\ul\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (c) \tab To lease in the name of the Company or otherwise the whole or any part of the mortgaged premise, from year to year or for any term of years or for any term less than a year at such rent and upon such terms and conditions as to such Receiver may seem expedient;}{\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (d)}{\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \tab }{\ul\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 To carry on or concur in carrying on the business of the Company and to make and effect all repa irs purchases and insurances and to do all acts which the Company might do in the ordinary conduct of its business for the protection or improvements of the mortgaged premises or any of them or for obtaining income or returns therefrom;}{ \ul\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\b\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (e) \tab To borrow any moneys which may be required for any of the purposes mentioned in the preceding sub-clause (c) hereof and in the name of the Company or otherwise to secure any moneys so borrowed by Mortgage or Charge over the mortgaged premises or any part thereof and s o that such Mortgage or Charge may rank in priority to or pari passu with or after the Charge hereby created;}{\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (f)}{\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \tab }{\ul\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 To sell or concur in selling all or any of the mortgaged premises}{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 either by public auction or by private contract or by tender or by way of hire purchase agreement and either for cash or on credit and upon such other terms and conditions as such Receiver may consider expedient and by deed or other instrument in the nam e and on behalf of the Company or otherwise to convey and assure the same to any purchaser;}{\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (g)}{\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \tab }{\ul\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 To employ Managers Solicitors Accountants Officers Agents Auctioneers workmen and servants for all or any of the purposes aforesaid at such salaries or remuneration as the Receiver shall think fit;}{\ul\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\ul\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (h)\tab To make any arrangements or compromise which such Receiver shall think expedient in the interests of the Mortgagee;}{\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (i)\tab To give receipts for all moneys and other assets which may come to the hands of such Receiver in exercise of any power}{\lang2057\langfe3081\langnp2057\insrsid2501059 }{ \lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 hereby conferred and such receipts shall be sufficient discharge therefor and any person paying or handing over such moneys or other assets shall not be concerned to see to the application thereof;}{\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (j) \tab To carry out and enforce specific performance of or otherwise obtain the benefit of all contracts entered into or held by the Company or entered into in exercise of the powers or authorities hereby conferred;}{\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (k)\tab To make debtors bankrupt and to wind up companies and to do all th ings in connection with any bankruptcy or winding-up which the Receiver shall think necessary for the recovery or protection of the mortgaged premises or any part thereof or for the security of the Mortgagee;}{ \lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (l)\tab To take proceedings at law or in equity in the name of the Company or otherwise for all or any of the purposes aforesaid;}{\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (m)}{\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \tab }{\ul\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 To do all things necessary to perform or observe any of the covenants on the part of the Company herein contained;}{\ul\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\ul\lang2057\langfe3081\langnp2057\insrsid2501059\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (n)}{\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 \tab }{\ul\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 To do all such other acts and things without limitation as such Receiver shall think expedient in the interest of the Mortgagee;}{\b\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 }{ \lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 (emphasis mine) \par }\pard\plain \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Loan}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 As a result of various requests by the Company, and various accommodations granted by the Fiji Development Bank, by 1 March 2001 the amount secured by the mortgage debenture amounted to $9,703,904.91. \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Court has been given various accounts of the history of the loan. \par \par At paragraph 45 of his Affidavit of 30 July, 2001, Mr. Ali claims never to have defaulted on his loan. \par \par However, at paragraph 55 onwards of his Third Affidavit of 17 August, Mr. Yam (Receiver) gives the comparative history of loan repayments made by the Company disclosed by the Company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s own accounts which discloses numerous defaults. \par \par Mr. Yam}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s figures appear to differ, however, from the records of the Fiji Development Bank whose history of the loan is set out in great detail in paragraph 4 of the Affidavit of Salote Tavainavesi filed on 17 August, 2001. Any difference may be due to payments being made by others on behalf of the Company. \par \par The short point, however, is that there has been a continuous history of default by the Company, and sympathetic accommodation by the Fiji Development Bank.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (see paragraph 47 of Chirk Yam}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s Second Affidavit). \par \par It is also important to note that during the year 2000, when Mr. Ali claims the Company suffered difficulties due to inclement weather and the political crisis, the Company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s accounts show sales of $5,207,786 between May 2000 and October 2000 (when a six month re-payment moratorium was in force) (see paragraphs 49 of Chirk Yam}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s Second Affidavit and paragraph 85 of his Third Affidavit). \par \par Notwithstanding these sales, prior to the moratorium, as at 31 July, 2000, the Company was in arrears of $316,362.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (see paragraph 4(5) of the Affidavit of Salote Tavainavesi of 17 August, 2001).}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Furthermore, after the moratorium ended, the Company did not resume its agreed payments of $128,495 per month from November 2000 and made only 2 payments in December 2000 and January 2001 amounting to $75,015.00 (see paragraph 49 of Chirk Yam}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s Second Affidavit) such that $783,000 in arrears had accumulated by the time the Second Plaintiff decided to exercise its rights to realise the security provided by its mortgage debenture. \par \par It is also to be noted that a cheque of $25,000 in January 2001 was dishonoured. \par \par }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Demand}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In view of this loan history, on 7 March, 2001,}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 the Fiji De velopment Bank served a demand notice demanding payment of all of the principal and interest then due amounting to $9,703,904.91 and further interest of 10.5% per annum from 1 March, 2001. \par \par The Demand (which is Annexure }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Q}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 to the Affidavit of Salote Tavainavesi of 2 May, 2001) further notified the Company that }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396 \endash }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 AND FURTHER NOTICE}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 that if the abovementioned moneys are not paid within 30 days from the date of your receipt of this notice the power of sale and all other rights, powers and remedies conferred on the Mortgagee in such cases and by law will thereupon be exercisable without further notice to you. \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 TAKE FURTHER NOTICE}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 that if any money paid by you in partial payment of the money owing hereunder will be received without prejudi ce to this notice and the receipt of any such money shall not be construed as a withdrawal or waiver thereof.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Further Defaults}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Following this a further cheque in the amount of $181,900 given in April 2001 was dishonoured.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In addition a promise of $200,000 also in April produced a cheque on 19 April 2001 which was also dishonoured (see paragraph 47 of Chirk Yam}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s Second Affidavit). \par \par }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Appointment of the Receiver and Manager}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In view of the Company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s failure to meet the terms of the Demand Notice (or to even meet its other promises) the Fiji Development Bank on 1 May, 2001 appointed the Receivers by Deed to be the Receivers and Managers of the Company.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Deed is annexed marked }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 T}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 to the Affidavit of Salote Tavainavesi of 2 May 2001. \par \par It is emphasised that this appointment was in accordance with the Fiji Development Bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s contractual rights under the Mortgage Debenture freely agreed to by the Company. \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The relevant provisions of the Deed state }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11543396 \endash }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid11543396 {\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par {\listtext\pard\plain\s18 \lang2057\langfe3081\langnp2057\langfenp3081\insrsid5838400\charrsid2501059 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard\plain \s18\ql \li720\ri0\nowidctlpar\faauto\ls2\rin0\lin720\itap0\pararsid11543396 \f29\fs24\lang1033\langfe3081\cgrid\langnp1033\langfenp3081 {\f0\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 The Bank appoints the Receiver to be the Receiver and Manager of the whole of the undertaking, property and assets charged pursuant to the Debenture and so that the Receiver without limitation shall be vested with and have all the powers authorities and discretions as are available to a Receiver and Manager appointed under the provisions of the Debenture, whether at law, in equity, by statute or otherwise.}{\f0\lang2057\langfe3081\langnp2057\insrsid5838400 \par }\pard \s18\ql \li720\ri0\nowidctlpar\tx-1440\faauto\rin0\lin720\itap0\pararsid11543396 {\f0\lang2057\langfe3081\langnp2057\insrsid11543396\charrsid2501059 \par {\listtext\pard\plain\s18 \lang2057\langfe3081\langnp2057\langfenp3081\insrsid5838400\charrsid2501059 \hich\af0\dbch\af0\loch\f0 2.\tab}}\pard \s18\ql \li720\ri0\nowidctlpar\faauto\ls3\rin0\lin720\itap0\pararsid11543396 { \f0\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 The Receiver/Manager shall be the agent of the Company to the full extent permitted by law and otherwise shall be the agent of the Bank.}{\f0\lang2057\langfe3081\langnp2057\insrsid5838400 \par }\pard \s18\ql \li720\ri0\nowidctlpar\tx-1440\faauto\rin0\lin720\itap0\pararsid11543396 {\f0\lang2057\langfe3081\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \s18\ql \li720\ri0\nowidctlpar\faauto\rin0\lin720\itap0\pararsid11543396 {\f0\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 3. \tab T he Bank hereby directs that save as otherwise provided by the Debenture or unless otherwise required by law, all surplus moneys from time to time held by the Receiver/Manager in respect of this said appointment (excluding his agreed remuneration, costs, e xpenses and charges) shall be paid and accounted for to the Bank.}{\f0\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\f0\lang2057\langfe3081\langnp2057\insrsid11543396\charrsid2501059 \par }\pard\plain \s19\ql \li748\ri0\nowidctlpar\faauto\rin0\lin748\itap0\pararsid2501059 \fs24\lang1033\langfe3081\cgrid\langnp1033\langfenp3081 {\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 During the term of this appointment, the Receiver and Manager will be entitled to:-}{\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\lang2057\langfe3081\langnp2057\insrsid11543396\charrsid2501059 \par }\pard\plain \s21\ql \li1440\ri0\nowidctlpar\faauto\rin0\lin1440\itap0\pararsid2501059 \fs24\lang1033\langfe3081\cgrid\langnp1033\langfenp3081 {\ul\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Reimbursement of all reasonable costs, charges and expense properly incurred by him (them).}{\ul\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\ul\lang2057\langfe3081\langnp2057\insrsid11543396\charrsid2501059 \par }{\ul\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 Remunerat ion for his services at the rates set from time to time for work of that nature by Pricewaterhouse Coopers for the time spent in the provision of those services by the Receiver and Manager or by any partner, consultants or employees of Pricewaterhouse Coo pers PROVIDED THAT}{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 any rates for services set out above must have prior approval by the Bank in writing.}{\lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\lang2057\langfe3081\langnp2057\insrsid11543396\charrsid2501059 \par }\pard\plain \s19\ql \li720\ri0\nowidctlpar\faauto\rin0\lin720\itap0\pararsid2501059 \fs24\lang1033\langfe3081\cgrid\langnp1033\langfenp3081 {\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 This appointment is made without prejudice to and with full reservation of all rights of the Bank under the Debenture or otherwise to remove or replace the Receiver/Manager and as to the powers, authorities and directions of the Bank.}{ \lang2057\langfe3081\langnp2057\insrsid5838400 \par }{\lang2057\langfe3081\langnp2057\insrsid11543396\charrsid2501059 \par }{\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 The Receiver/Manager shall from time to time }{\ul\lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 report to the Bank}{ \lang2057\langfe3081\langnp2057\insrsid5838400\charrsid2501059 as the Bank shall request on the affairs of the Company and the activities of the Receiver/Manager in connection with his appointment hereunder (emphasis mine) \par }\pard\plain \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par So much for the factual background to the case.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 I shall now set out the submissions made by counsel for their respective parties. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 First Plaintiffs}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 submissions}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 It is submitted by Mr. Apted for the first Plaintiffs that injunction had to be obtained against Ali when the Receivers attempted to take possession of the company}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s assets in accordance with the Deed of Appointment of Receivers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 It is alleged that the Receivers were physically assaulted by Ali and his men.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 As a result the current substantive action was instituted; further litigation by Ali in these proceedings and in a further separate action in the name of the Company and through other solicitors followed, but these have been discontinued. \par \par Mr. Apted sets out in his written submission in detail the conduct of the Receivership upto the time of the present application outlining the state of Accounts.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He disputed Ali}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s submission that the Court has }{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 inherent jurisdiction}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 to remove a privately appointed receiver and in this regard he referred to the following passage from Hubert Picarda in the book }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Law Relating to Receivers, Managers and Administrators}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 2nd ed.: \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid11543396 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Court may in exercise of its inherent jurisdiction remove a privately appointed receiver in a proper case.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 An application to the Court to achieve that end would be brought by the person or persons who appointed him.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par It is, therefore, Mr. Apted}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s subm ission that the Court has no inherent jurisdiction to remove a receiver on the application of a mortgagor Company or on the application of a single Director or minority shareholder. \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Mr. Apted has further stated that Ali has no }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 locus standi}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 on his own as a Director to bring this action and has referred the Court to a number of authorities on the subject and particularly to the case of }{ \b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Deangrove}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (infra). \par \par Mr. Apted submits that Ali seeks the dissolution of the Plaintiffs}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 interim injunction and its replaceme nt by an interim order in favour of Ali.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He submits that in the case of receivership and the exercise of mortgagee}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s rights the special rule is that a Court will not grant an interlocutory application for an injunction to restrain a receiver and manager because this would deprive the mortgage debenture holder the benefits of its security.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He says that even in the exceptional case where such relief is granted, the Court usually protects the secured creditor by requiring the Applicant to bring into Court an amount sufficient to meet the secured debt. \par \par Counsel submits that Ali has not given the necessary undertaking as to damages to FDB nor has he offered to pay the money into Court.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 On the other hand FDB would be able to meet damages against them.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He says that on this ground alone the application for injunctive relief should be denied.}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Counsel submits that if Receivership is revoked as deposed in Mr. Yam}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s affidavit (a) there is no guarantee that it will receive its payments from the Company parti cularly in view of its numerous past defaults; (b) there is a danger that the Company would trade at a loss and reduce the value of the second Plaintiff}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s security; and (c) there is a danger that other creditors will take action against the Company. \par \par Therefore, he says that the balance of convenience clearly lies in the Bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s favour. \par \par On the substantive ground Mr. Apted submits that the debenture itself is an }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 on demand}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 one and in this case the whole amount became due and payable.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Plaintiffs now hold all of the Company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s assets for the full amount owed and not just pre-existing arrears.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He says that it is nonsense for Ali to suggest that the gross receipts were available to meet the arrears.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He says that the Receivers and Managers cannot be discharge d because of their remunerations and expenses. The Company willingly accepted payment of remuneration when it gave the Bank the mortgage debenture. \par \par On the Defendant}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s allegation on }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 clog on the equity of redemption}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 , counsel submits that the mortgagor}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s e quity of redemption is his right to repay the whole amount owed, not just the arrears prior to the mortgagee}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s demand, and that it is not a clog for the mortgagee to insist on being paid the full debt before it allows the mortgagor to redeem the property the subject of its security.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He says Ali still has his equity of redemption, which he can exercise by paying the Bank the whole amount, and there is nothing to prevent him from doing so. \par \par For the reason given in his submission, Mr. Apted says that the allegation of}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 misconduct on the part of Boila (a Receiver) be disregarded as he has given a satisfactory explanation. \par \par In conclusion, Mr. Apted says that for the reasons given by him in his submissions the remedies sought by Ali be denied and the application be dismissed with costs on an indemnity basis. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Second Plaintiff}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s submission}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Counsel for the second Plaintiff (the }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Bank}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 ) states that Mr. Ali says that the Receivers should be removed on the ground that they have collected $2.5 million and this is suffici ent collection to pay off the arrears owed to the Bank; and that Mr. Boila has acted unlawfully in employing Mansoor Ali on his property at Tamavua, Suva. \par \par Mr. Sharma submits that this is not a proper case where the Court should exercise its inherent jurisdiction to remove the Receivers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He says that Mr. Ali has no }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 locus}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 in this action on the authority of case of }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkstart Deangrove_v_Cth_Ilai_Boila_v_Bahadur_Ali}Deangrove Pty Ltd (Rec. & Mgrs. Aptd) v Commonwealth Bank of Australia}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkend Deangrove_v_Cth_Ilai_Boila_v_Bahadur_Ali} [2001] FCA 173 (6 March 2001).}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Mr. Ali as a director can make an application on behalf of the co mpany in Receivership but he must first comply with the following requirements: (a) the action must be commenced in the name of the company; (b) the director must obtain leave from the Receivers to commence the action; (c) if a Receiver refuses leave, the n the director must obtain leave from the Court to commence this action; and (d) in obtaining leave from the Court, the director must provide sufficient indemnity to the Court. \par \par Mr. Sharma submits that, Mr. Ali not having fulfilled the requirements as stated in }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Deangrove}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 , he does not have the locus to make this application.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The management cannot be handed back to Mr. Ali as a person.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Counsel says that the assertion by Ali that an interested party may make an application to remove a Receiver can only be made in certain circumstances and that is not the case here. \par \par As far as the granting of injunctive relief is concerned, Mr. Sharma says that the balance of convenience lies in continuing with the injunction orders granted by this Court on 2 May 2001; also the d amages are an adequate remedy for Ali if he succeeds in his claim against the Bank, and the Bank is in a financial position to pay any damages that may be awarded against it. \par \par Mr. Sharma submits that Ali has not come to this Court with clean hands and he has intentionally and deliberately sworn false affidavits to mislead the Court and to portray an incorrect picture to obtain the Orders sought by him.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He has shown the signs of a desperate man who will go to any extent to lie to achieve his goals. \par \par Counsel further argues that the Bank has not put any clog on the Company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s equity of redemption.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He says that the Bank has time and again advised Ali either to pay all the outstanding debt or to pay a substantial part of the debt with the servicing of the remaining balance assured to the Bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s satisfaction to remove the Receivers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Until such time as this is done, the Bank has the legal right to continue with the appointment of the Receivers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He says that Ali cannot insist on the Bank to accept the arrears of payment and remove the Receivers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Once a default is made in any one payment the Bank has the right to demand the payment of the total outstanding debt.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 If the total outstanding debt is not paid then the Bank can exercise all its rights under the Debenture as is being done here. \par \par Mr. Sharma submits that the Court will not interfere with the rights of the mortgagee unless the mortgagor pays the amount claimed by the mortgagee into Court (}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkstart Inglis_v_Cth_Ilaitia_Boila_v_Bahadur_Ali}Inglis v Commonwealth Trading Bank of Australia}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkend Inglis_v_Cth_Ilaitia_Boila_v_Bahadur_Ali}[1972] A.L.R. 591 at 592). \par \par He says that Ali}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s application should be dismissed with costs on an indemnity basis. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Submission of First Defendant (Ali)}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Mr. Nagin for the First Defendant submits that the Court may in the exercise of its inherent jurisdiction remove a privately appointed Receiver in a proper case.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Mr. Nagin says that Mr. Ali in his capacity as a director and shareholder has a right to make an application for discharge of the injunction and ask for removal of the Receivers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Counsel submits that proper parties are before the Court and therefore this action is a proper one in which the application has been filed to revoke the appointment of the Receivers. \par \par Mr. Nagin submits that the Receivers have now collected some $2.5 m and this is more than enough to pay off the arrears.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He alleges that it is the Receivers who are the ones fighting very hard to stay on when they should be neutral, and they appear to want to run the company to the exclusion of Ali.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He says that because of Receiver Boila}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s conduct in regard to Mansoor Ali and getting workers from Labasa to work on his house in Suva and bringing company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s machines }{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 speaks volumes about the man and there is no way that he can be allowed to continue as a Receiver}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 . \par \par Counsel asks the Court to take judicial notice of the events of 19 May 2001, namely, the coup, and the problems it created for business people and in this case caused the company not to be able to meet its repayments.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He asks the Court in equity to assist the Company that strict legal rights of the debenture holder are not allowed to prevail. \par \par In concluding his submissions Mr. Nagin says:}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The company has an equity of redemption on debenture as wel l and there should not be clogs on this equity of redemption.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 By insisting on full repayment of the loan a clog is being put on the equity of redemption.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 It is totally unreasonable at this time to insist on full payment. \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The arrears have all been covered by the collection done by the Receivers.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 If any arrears remain then the First Defendant undertakes to repay the same immediately.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Also the First Defendant undertakes to make the payment of $130,000.00 per month.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The First Defendant is also happy to have a Fiji Development Bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s representative on its Board of Directors or an FDB appointed Financial Controller and a co-cheque signatory (as FDB has done for Tokatoka Resorts).}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 This will be a most just and equitable way of dealing w ith this case and it is respectfully submitted that an order be made revoking the appointment of the Receivers. \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par In reply to the Bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s contention, Mr. Nagin argues that Ali has the }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 locus}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 to apply for discharge of receivers in this same action and that the case of }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Deangrove }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (supra) does not assist the Bank in this case. \par \par In response to Receivers}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 submissions, Mr. Nagin does not doubt that there was arrears of $783,000.00 and that the Bank has the right to appoint Receivers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 But the downward trend in business was due to the coup and bad weather at the relevant time.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In equity, the directors can come and ask for the discharge of the receivers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Mr. Nagin says that Ali has given assurance in all his affidavits that he will continue to make the monthly instalment payment.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 If there is a breach then recovery action is again possible.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Ali has also said that a representative of Fiji Development Bank be appointed director on the Board and someone be appointed in the management of the Company.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 This will ensure that payments are made on due dates.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Mr. Ali says that the Receivers should give the Company proper account of income and expenditure; he says that that has not been done.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Mr. Nagin concludes by saying: \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid11543396 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In the absence of receipts and expenses account by the Rec eivers the court is entitled to assume that the collection of over $2.5m has resulted in the repayment of all arrears of the Company.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In the circumstances, it would be equitable for the company to be returned to the rightful owners without full payment of the account being made because the events of last year was a force majeur and conditions were war-like because of the attack by the State}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s enemies on the Government. \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Mr. Boila}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s conduct has not been properly explained and leaves much to be desired.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Court is well aware that many businesses have gone down the tube because of the receivership.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 This is a case where a Court has an opportunity to salvage a company and in equity the Court must assist to ensure that justice is done. \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Determination of the issues}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In deferen ce to the very many voluminous and detailed statements of accounts, and also to the very comprehensive and lengthy written legal submissions, I had no alternative but to set out hereabove in considerable detail the facts and circumstances surrounding this case and the arguments put forward by all three counsel for their respective parties.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 I must say that these submissions, the last of which was filed on 13 September 2001, have been of great assistance to me in considering the issues which are not of everyday occurrence in Fiji. \par \par The matter does raise a number of legal points covering the whole gamut of law relating to the }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 appointment and termination of receivers}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 and }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 receivers and managers}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 including their }{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 rights and liabilities}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 .}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 As a result, in dealing with these matters, the decision is likely to become lengthy, a situation which is unavoidable. \par \par In this case, as can be seen from the arguments put forward by the First Defendant, Ali has very little understanding relating to the appointment and function of Receivers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He thinks that, as in this case, now that the Receivers have collected a certain sum, that they should now be relieved of their duties and that the operations of the Company be returned to it.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 For this reason, I am forced to outline what is involved in Receivership and then finally state whether in all the circumstances of this case the appointment of the Receivers can be revoked or not as prayed for by Ali. \par \par As in this case, as already stated hereabove, most debenture deeds contain a power to appoint a receiver at any time after the principal sum secured by the debenture becomes payable, or after the security constituted by the debenture becomes enforceable.} {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Different consideration apply in the (a) the case of a receiver appointed as in situa tion stated above and (b) in the case of a receiver appointed by the Court. \par \par Where a receiver is appointed by the Court, he is an Officer of the Court; interference with him in the exercise of his duties may constitute a contempt of Court (}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Kerr on Receivers}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 9th ed, p.196).}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He does not become an agent of the Company, nor is he an agent for the debenture holders, but he owes duties to both (}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkstart Moss_v_Whinney_Ilaitia_Boila_v_Bahad_Ali} Moss S.S. Co. v Whinney}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkend Moss_v_Whinney_Ilaitia_Boila_v_Bahad_Ali}[1912] AC 254).}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The receiver has to account to the Court, but he is at the same time, entitled to an indemnity out of the business in respect of all liabilities properly incurred: see }{ \b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkstart Owen_v_Crank_Ilaitia_Boila_v_Bahadur_Ali}Owen & Co v Crank}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkend Owen_v_Crank_Ilaitia_Boila_v_Bahadur_Ali}([1895] 1 QB 265, at p.271) \par \par But a receiver appointed under a power in a debenture is in an entirely different position.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Receivers in this case have been appointed under the said debenture with their duties, rights and liabilities set out therein as stated in considerable detail hereabove.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The receiver is really an agent - an agent with very wide powers usually, by virtue of the conditions of the debenture, but an agent nevertheless; and as such he is usually not personally liable, and the liability for his acts falls upon his principal.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 As to who in his principal is to be found in the correct construction of the power of appointment contained in the debenture. \par \par I find that on the affidavit evidence before me, under the said debenture the Receivers had been properly appointed on 1 May 2001 because the Company had defaulted in payment of loan.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Bank demanded payment of the sum of $9,703,904.91 together with interest at the rate of 10.5% per annum from 1 March 2001 until full payment. \par \par I am not convinced on the evidence that the Bank represented to Ali that the Receivers will be removed after the Company has paid the arrears of the account.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The affidavits state that Receivers will be removed only upon full recovery of the debt outstanding or a s ubstantial debt reduction with the servicing of the remaining balance assured to the Bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s satisfaction. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Locus standi of the First Defendant}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Both Mr. Apted and Mr. Sharma have raised an interesting point and that is the }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 locus standi}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 of Ali to make this application for the removal of Receivers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 I think this aspect should be dealt with first by me before considering the substantive issues.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In this respect I agree with what both counsel for the Plaintiffs have to say.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 I do not agree with Mr. Nagin that the case of Deangrove (supra) in this respect does not assist the Receivers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par \par In this case Ali is a minority shareholder and only one of the directors of the}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Company.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Company is the debtor to the Bank, not Ali, and only the Company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s assets are subject to receivership.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 When the Company is under Receivership all the powers are vested in the Receivers to the exclusion of the Board of Directors.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (}{ \b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkstart Wheeler_v_Warren_Ila_Boila_v_Bahadur_Ali}M. Wheeler & Co. Ltd v Warren}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkend Wheeler_v_Warren_Ila_Boila_v_Bahadur_Ali}[1928] Ch. 840 at 844 and 846). \par \par In the situation such as the present the proper course would have been for the directors to initiate proceedings in the name of the Company subject to certain strict}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 limitations.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The princ iple in my view has been well enunicated in }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Deangrove}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (supra).}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 There, Sackville J}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 in the Federal Court of Australia stated, after reviewing case law, at paragraph 40}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 of his judgment thus: }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In my view, the authorities clearly support the proposition that, where a company in receivership has a claim against the debenture holder and the receiver declines to pursue the claim, the directors are entitled to initiate and maintain proceedings in the name of the company, provided the directors}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 offer the company a satisfactory indemnity against costs.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The latter requirement is designed to ensure that the interests of the debenture holder, qua debenture holder, are not prejudiced: }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 O}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Donovan, Company and Receivers and Administrators}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (2nd ed, 1992), at [8.30].}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The enti tlement of the directors reflects the fact that, as Street J observed in }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Hawkesbury Development, }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 at 210, it borders on the absurd to contemplate that a receiver would institute proceedings in the name of the company challenging the very debenture to which he or she owes office.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 It is almost as absurd to contemplate the receiver instituting proceedings against the debenture holder or chargee claiming damages for misleading and deceptive conduct or breach of duty. }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In any event, an action conducted by the rece iver against his or her appointor is likely to encounter a variety of practical difficulties:}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Kerr on Receivers}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (2nd}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Cum Supp to 17th ed, 1997) at 77.}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 } {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par At}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 paragraph 46 he continued }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396 \endash }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 As Mr. Speakman pointed out, orders have been made in some cases restraining directors of companies in receivership from conducting proceedings in the name of the company without first indemnifying the company and }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 providing security}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 for that indemnity: }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkstart Charma_v_ANZ_Ilaitia_Boila_v_Bahadur_Ali}Charmae Investments v ANZ Bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkend Charma_v_ANZ_Ilaitia_Boila_v_Bahadur_Ali}at 52,003-52,004; }{ \b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkstart NEC_v_Lockhart_Ilaitia_v_Bahadur}NEC Information Oysters v Lockhart}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkend NEC_v_Lockhart_Ilaitia_v_Bahadur}.}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkstart Phillips_Oysters_v_NAB_Ilaitia_v_Bahadur}Phillips Oysters v NAB}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkend Phillips_Oysters_v_NAB_Ilaitia_v_Bahadur} , Lockhart J dismissed the proceedings because the corporation was }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 hopelessly insolvent}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 and neither director had any assets to meet an indemnity against costs. \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 And at paragraph 47 he said:}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In my view, the }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 governing principle}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 is that those giving instructions on behalf of Deangrove, in order to continue the proceedings, must demonstrate that }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 nothing in the course of the proceedings which they institute is going in any way to threaten the interests of the debenture holders}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Newhart Developments}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 , at 821}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 ).}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Had there been evidence that Mr. Jeans has sufficient resources to satisfy an indemnity, it might not be necessary for any security to be provided in support of the indemnity.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 But no such evidence has been adduced.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Nor is there evidence as to Deangrove}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s financial position.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In these circumstances, it seems to me that Mr. Jeans should provide appropriate security to support his indemnity to Deangrove if the company is to pursue its claim against CBA.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par In the New Zealand case of }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkstart Edwards_v_Si_Ilaitia_Boila_v_Bahadur_Ali}Edwards v Singh}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkend Edwards_v_Si_Ilaitia_Boila_v_Bahadur_Ali} [1990] 5 NZCLC 66,770, the High Court held that a shareholder could not bring an action against the debenture holder or the receiver for misconduct, but that such an action had to be brought by the Directors in the name of the Company under their residual powers. \par \par A number of principles are to be noted.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 First, a reserve power is vested in the Board as a whole or possibly the Company in a general meeting not an individual director or an individual shareholder.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Mr. Ali is only one director and a minority shareholder and has provided no sworn evidence that he is authorised by the Board.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Nor is there any evidence of authority from other shareholders in a general meeting. \par \par Furthermore, the action must be bought in the name of the Company itself not the individual director or the Board.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 This action is in Mr. Ali}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s own name and not that of the Company. \par \par In addition, in any case, even if an action had been brought in the Company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s name, the Board must give the Receivers and Managers an indemnity for any costs that may be awarded against the Company and if impecunious, as is the case here, a security as well. \par \par The action to be taken by the Directors must not threaten the interests of the debenture holder, and where it does the Directors must in addition give the debenture holder further security or pay the amount of the debt as well. \par \par None of these pre-conditions for general actions have been fulfilled in this case.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Mr. Ali therefore has no locus to seek the orders that he does. \par \par The consideration of the aspect as discussed above in regard to Ali}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s locus standi in this action should actually be sufficient to dispose of the issue before me without having to deal with the substantive issue raised by Ali.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 However, it is perhaps desirable to say something about the main issue without intending to delay its determination.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 I would, in the interest of justice, consider t he matter as if action has begun in the name of the Company with the sole purpose of determining whether this is a proper case of revoking the appointment of the Receivers. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Substantive issue}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 I shall now consider the substantive issue.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In this application Ali}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s main argument is that since the }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 receipts}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 have exceeded the arrears of payment by the Company the Receivers should be discharged. As I said before this assertion shows his ignorance of law on the subject of Receivership particularly as to when they can be discharged and what their rights and liabilities are. \par \par As I have already stated hereabove the whole amount under the debenture became due and payable.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The amount was $9,703,904.91 together with interest at the rate of 10.5% p.a from March, 2001.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Un der the Debenture the Company had charged its whole undertaking, property etc. as security for that amount.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Upon their appointment the Receivers become the Receivers and Managers of the whole of the Company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s property, undertaking and assets.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Therefore, in this case the Receivers now hold all of those assets etc in equity for the full amount owed, not just pre-existing arrears. \par \par This case is clearly akin to one where a mortgagee has taken steps to exercise its power of sale under a mortgage.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Bank has be en given powers under the Debenture dated 19 August 1993 to appoint Receivers and Managers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 There was this firm agreement between the Company and the Bank.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 There cannot be any dispute as to what the contract is between the parties.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Bank is, therefore, within its rights to receive about $10,000,000.00 in the manner in which the contract provides.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 But Ali wants the Court to make an order that the Company be allowed to repay the said sum in the manner he chooses.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 This view of the matter on the part of Ali arises from the misunderstanding of the duties of a receiver, and to give a clear picture of the Receivers}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 position, I refer to the following passage from the judgment of Sir Raymond Evershed, M.R. in }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkstart Re_B_Johnson_Ilaitia_Boila_v_Bahadur_Ali}Re B. Johnson & Co. Builders Ltd}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 {\*\bkmkend Re_B_Johnson_Ilaitia_Boila_v_Bahadur_Ali}1955 2 All ER C.A. 775 at 783:}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 the substance, the gist, of the charge (expanded in the points of claim, which I will mention in a moment) is that the receiver had a duty to the com pany and its contributories to preserve the goodwill and business of the company.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In my judgment, that allegation rests on a fundamental misapprehension.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 There was not in this case, and there is not in similar cases, any such duty on a mortgagee or a receiver appointed by a mortgagee for the purpose of realising the mortgagee}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s security.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 I have no doubt that the Plaintiff in this case is greatly disappointed.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He has said that the transactions that the company entered into were of the happy sort that you can not lose on them; but, unfortunately, the Plaintiff and the company depended on the goodwill of Barclays Bank, which provided the whole of the money for the company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s speculations.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The bank (says the Plaintiff) became altogether unduly alarmed at the effect of the Town and Country Planning Act, 1947.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Whether they did or whether they did not, it is not necessary for me to determine; but the moral (as it seems to me) of the matter is this, that if you do depend, and depend exclusively, on borrowed money for t he business you propose to carry on, you must at all costs retain the confidence of your lender.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In this case, further, in so far as the charges against the receiver involve the proposition that the receiver did not get the}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 best price he could have got and should have got, equally those charges, in my judgment, rest on a misapprehension of the elementary principle that a mortgagee, or a receiver exercising the mortgagee}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '} {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s powers of sale, is under no such duty to the mortgagor to obtain the best possible price for the property charged}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 . \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Receiver and manager for debenture-holder}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In the context of this case, let me now look at the meaning and the distinction between the phrase }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 manager of a company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 and }{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 receiver and manager for debenture-holder}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 .}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 This is how Jenkins L.J. stated this aspect in }{ \b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Re B. Johnson}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (supra at 790) and this is quite appropriate to the facts and circumstances of this case:}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 the phrase }{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 manager of the company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 , prima facie, according to the ordinary meaning of the words, connotes a pers on holding, whether de jure or de facto, a post in or with the company of a nature charging him with the duty of managing the affairs of the company for the company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s benefit; whereas a receiver and manager for debenture-holders is a person appointed by th e debenture-holders to whom the company has given powers of management pursuant to the contract of loan constituted by the debenture and as a condition of obtaining the loan, to enable him to preserve and realise the assets comprised in the security for t he benefit of the debenture-holders.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The company gets the loan on terms that the lenders shall be entitled, for the purpose of making their security effective, to appoint a receiver with powers of sale and of manageme nt pending sale, and with full discretion as to the exercise and mode of exercising those powers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The primary duty of the receiver is to the debenture-holders and not to the company.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He is receiver and manager of the property of the company for the debenture-holders, not manager of the company.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The company is entitled to any surplus of assets remaining after the debenture debt has been discharged, and is entitled to proper accounts.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The whole purpose of the receiver and manager}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s appointment would obviously be stultified if the company could claim that a receiver and manager owes it any duty comparable to the duty owed to a company by its own directors or managers}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 . \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par His Lordship goes on to say in regard to duty owed by receiver and manager to the Company:}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In determining whether a receiver and manager for the debenture-holders of a company has broken any duty owed by him to the company, regard must be had to the fact that he is a receiver and manager - i.e. a receiver, with ancillary powers of management - for the debenture-holders, and not simply a person appointed to manage the company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s affairs for the benefit of the company. \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par Further, on duties of a receiver and manager, and this is pertinent to this case, His Lordship states:}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The duties of a receiver and manager for debenture-holders are widely different from those of a manager of the company.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He is under no obligation to carry on the company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s business at the expense of the debenture-holders.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Therefore he commits no breach of duty to the company by refusing to do so, even though his discontinuance of the business may be detrimental from the company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s point of view.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Again, his power of sale is, in effect, that of a mortgagee, and he therefore commits no breach of duty to the com pany by a bona fide sale, even though he might have obtained a higher price and even though, from the point of view of the company, as distinct from the debenture-holders, the terms might be regarded as disadvantageous. \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 In a word, in the absence of fraud or mala fides (of which there is not the faintest suggestion here), the company cannot complain of any act or omission of the receiver and manager, provided that he does nothing that he is not empowered to do and omits nothing that he is enjoined to do b y the terms of his appointment.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 If the company conceives that it has any claim against the receiver and manager for breach of some duty owed by him to the company, the issue is not whether the receiver and manager has done or omitted to do anything which it would be wrongful in a manager of a company to do or omit, but whether he has exceeded or abused or wrongfully omitted to use the special powers and discretions vested in him pursuant to the contract of loan constituted by the debenture for the special p urpose of enabling the assets comprised in the debenture-holders}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 security to be preserved and realised.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Termination of receivership}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Bearing in mind the above principles and the nature and duties of }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 receiver and manager}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 , the Receivers on the facts and circumstances of this case as stated by Ali, cannot be removed.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 It follows therefore that the Bank which appointed the Receivers under the Debenture cannot be removed for their alleged misconduct or just because sufficient arrears have been collected by the Receivers. \par \par It is abundantly clear from what I have stated hereabove that the Receivers and Managers appointed out of Court in this case had a defined object, namely, to secure the repayment of the sum owing to the Bank which appointed them.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Once that goal is reached the Receivers will want to be discharged from their responsibilities. \par \par In this case the parties themselves determine the receivership.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The most obvious and frequent circumstances is where the receiver} {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s job is done and his appointor, expressly or tacitly, discharges him}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (Hubert Picarda in The Law Relating to Receivers, Managers and Administrators 2nd ed. p.250).}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The court may also }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 in the exercise of its inherent jurisdiction}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 remove a non-administrative receiver in a proper case}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (Picarda p.251). \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Conclusion}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 To sum up, for these reasons the relief sought by Ali, a director of the Company, that the appointment of the Receivers be revoked and that management of the Company be handed back to it cannot happen on all the facts and circumstances of this case. \par \par The said Director has to cross the first hurdle, and that is his }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 locus standi}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 to bring this application by way of motion.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 This he has failed to do and the principles laid down in }{ \b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Deangrove}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 is applicable here.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 My treatment of the locus aspect, in actual fact, should be sufficient to dispose of the application.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 However, in view of the allegations against Receivers and in deference to the lengthy affidavits and voluminous annexures including accounts filed on the motion, I considered it necessary to dwell at some length on the facts and law relating to Receivers so as to bring home to all concerned what in law are the rights and liabilities of the parties in this case.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 I have done this, more so, because this, perhaps, is a rare case in Fiji where Receivers and Managers have been attacked in this manner in relation to assets under their control allegedly worth over thirty million dollars. \par \par As to what Ali}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s or the Company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s cause of action, if any, is against the Receivers for any complaints he or it may have, it is not for this Court to advise him on.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Ali has his own counsel to do this, suffice it to say for the present purpose, to put it bluntly, that the present proceedings/application by Ali is misconceived on the authority of }{ \b\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Deangrove}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 (supra) and further I have to say that if Ali desires to pursue his journey, he must go by another route.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 To enable the court to deal with Ali}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s allegations about maladministration and malpractice of Receivers they have to be brought to the Court}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s atten tion in the manner allowed by law but not as Ali has done single-handedly as a Director of the Company.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Ali has seriously misinterpreted the remedies or rights which he thinks he has against professional Receivers who were appointed under the debenture.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 I should, however, at this stage sound a warning that the Bank which appointed the Receivers cannot and will not be allowed to escape liability for the Receivers}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 likely misconduct and their mismanagement, if any, during the course of Receivers}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 performance of their duties provided of course the matter of complaints is before the Court in the manner allowed by law.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 If there is any truth in the allegation about a particular Receiver using Company workers on his own property in the circumstances alleged, that has to stop immediately for misuse or abuse of power cannot be allowed to continue.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 When Receivers do not conduct themselves properly, it is the Company which is affected.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The devastating effect that Receivership has on a company has been stated thus by Stephen Aris, the author of an article titled }{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Corporate Undertakers}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 in }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The Times}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 of Wednesday 27 March 1985.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He said:}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Insolvency is a highly emotional subject.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Months, even years after the event many of those who have passed through the h ands of the receiver still bear the scars.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par He goes on to say:}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Receivership is of its nature a very sudden and brutal business.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Overnight people who have spent their lives building or working for a company are stripped of all title and power}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 . \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par I have already set out hereabove in detail the provisions of the debenture in relation to the appointment of a receiver, but it is to be noted, as the said author stated:}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Legally the receiver}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s prime duty is to the bank.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 It is invariably the bank that appoints him under the terms of the debenture, and it is the bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s money that he is obliged to recover.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Whether he does it by closing the business or by selling it off in whole or part is up to him.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Once installed, the receiver is virtually impregnable.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 He is the boss and his decisions are almost always final. \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Theoretically the receiver can be sued by the company for maladministration or malpractice; but as the directors or the liquidator acting on their behalf have to find the money to mount such an action in practice this rarely happens}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 . \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par Since Ali}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s second prayer is that }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 all injunction Orders granted against the First Defendant be dissolved}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 I should not leave this aspect without some mention of the events which took place as soon as the Receivers entered the Mill premises of the Company.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 There have been allegations of physical assaults on the person of the Receivers resulting in reports having been made to police.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 These assaults it is alleged were at the instigation of Ali and his }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 workers}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 .}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Consequentl y, to enable the Receivers to perform their duty they had to knock on the door of this Court and obtain injunction orders against Ali, his servants and agents and this was granted. \par \par It may be that this is the first taste by Ali of what Receivers do particularly to a Company in which he spent millions to build up.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The said author Stephen Aris has summed up very well the scene of Receiver}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s activities when he said this (and which Ali witnessed and which he did not envisage):}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11543396\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Professional receivers plan takeovers with military precision.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 On the day a big company goes into receivership there are suddenly accountants everywhere.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 The receiver usually moves into the managing director}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s office; the finance director is given a thorough grilling; teams burrow through the company}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s books,}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 and men are posted at all entrances to make sure nobody makes off with anything of any value. \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 It is essential}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 , says Bill Mackey, of Ernst and Whinney, in his guide to receivership, }{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 to man all points of entry to the factory or works.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Wherever possible the receiver must use his own staff.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2501059 {\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 \par Since the appointment of Receivers was a proper exercise of power vested in the Bank under the Debenture, the Receivers will have to continue with their work as Receivers until such time as the B ank requires them to do or until their appointment is terminated or they are removed. \par \par On the evidence before the Court, and the improper procedure adopted to make the application, the grounds put forward are insufficient to enable the court to consider terminating the Receivership and to hand back the Company}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s operations to Ali.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 A huge amount is owed to the Bank and no mortgagee or debenture-holder will let go the property back to the Company in the present state of affairs without fully realizing its security.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 As a suggestion, no doubt the better course for Ali would be to pay off the Bank and get out of the quagmire and take back the reins of the Company or alternatively , as I emphasized a few times before, that Ali assist the Receivers in the running of the Mill as he has the know-how and knows his customers well.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 This way the revenue will flow in and that will help towards reducing the Bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s debt and in due course the whole business could be handed back to the Company.}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 At this stage of Receivership, the Manager}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s chair (and that is what Ali wants) is out of his reach and may be for a while yet. \par \par For these reasons, the First Defendant}{\fs24\lang2057\langfe1033\langnp2057\insrsid2501059 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 s motion for the relief sought is di smissed with costs to counsels for first Plaintiffs and the second Plaintiff in the sum of $1000.00 each to be paid within 14 days. \par \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid5838400\charrsid2501059 Application refused. \par \par }\pard\plain \s15\ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11543396 \fs24\lang3081\langfe3081\cgrid\langnp3081\langfenp3081 {\insrsid5838400\charrsid2501059 Marie Chan}{ \b\lang2057\langfe3081\langnp2057\insrsid1972231\charrsid11543396 \par }}