ASIC has obtained orders from the Federal Court in Perth extending the orders previously made by the Court to appoint receivers to the assets of a number of company directors and companies associated with the Westpoint group of companies, including Mr Norman Phillip Carey.

In a hearing before the Honourable Justice French in late December 2006, ASIC told the Court it was seeking an extension to the asset-freezing orders while its investigations continued because it is concerned that there is a real risk that the assets of various individuals and companies associated with Westpoint might be shifted or dissipated to the detriment of creditors.

ASIC also sought a receivership order in relation to Silkchime Pty Ltd, similar to those made previously in relation to other companies in the Westpoint Group and an asset preservation order made in relation to Healthcare Properties Pty Ltd.

In a decision handed down yesterday, the Federal Court indicated that the orders previously made against the following people and companies would be extended until 30 June 2007:

• Mr Norman Phillip Carey
• Richstar Enterprises Pty Ltd
• Westpoint Realty Pty Ltd
• Bowesco Pty Ltd
• Redchime Pty Ltd, and
• Keypoint Developments Pty Ltd.

In addition, the Court ordered that receivers be appointed to Silkchime Pty Ltd and an asset preservation order made in relation to Healthcare Properties Pty Ltd (which had already had receivers separately appointed to it).

Orders against Messrs Graeme John Rundle, Cedric Richard Palmer Beck and John Norman Dixon were extended by consent. Mr Rundle agreed to those orders being extended to 16 June 2007 and Mr Beck and Mr Dixon agreed to those orders being extended to 20 April 2007.

The Court rejected an alternate regime of Court-appointed supervision proposed by Mr Carey in relation to his personal assets and those of various companies associated with him.

Mr Carey and the companies associated with him had acknowledged that some form of Court-ordered supervision was appropriate. However, Mr Carey and his associated companies had argued that the regime of Court-appointed receivership previously imposed should be substituted for a looser regime of Court-appointed supervision, allowing the expenditure of up to $25,000 per week by the affected companies without approval by any court appointed expert (but with those expenditures being reviewed by a court appointed accountant on a monthly basis).

The Court rejected the alternate proposal put forward by Mr Carey and his associated companies.

Background

ASIC commenced proceedings in the Federal Court in Perth on 29 March 2006 seeking the appointment of receivers to the property of certain officers and former officers the Westpoint Group of Companies (Messrs Carey, Rundle, Beck and Dixon) and various companies, which are members of the Westpoint Group. The application was brought under s 1323 of the Corporations Act 2001 (Cth).

ASIC’s original application was opposed.

Interim freezing orders affecting the property of the various defendants were made by the Honourable Justice Siopis on 5 April 2006 and extended until ASIC’s application was determined.

ASIC’s application was heard before the Honourable Justice French on 12 April 2006, who handed down a decision on 20 April 2006, agreeing to appoint receivers to the respondents’ property for a specified period expiring in late 2006. The parties affected by the receivership orders were subsequently expanded to include other companies in the Westpoint Group on an interim basis.

Editor's note: On 17 April 2007, the Federal Court of Australia in Perth refused an application permitting Mr Norm Carey, and others, to use $300,000 of the funds held by Healthcare Properties Pty Ltd which is subject to asset preservation orders.

Editor's note:

On 3 September 2008, the Honourable Justice Gilmour granted ASIC leave to discontinue proceedings in the Federal Court in Perth to wind up Bowesco Pty Ltd.

ASIC’s decision to seek leave to discontinue the proceedings was due to the provision of new evidence that a debt owed by Bowesco to Richstar Enterprises Pty Ltd, a Westpoint-related entity, had been released or would not be pursued.

The release of this debt had a significant positive impact on Bowesco’s financial position.

On 23 March 2009 the Federal Court ordered Bowesco Pty Ltd to pay ASIC's costs of the discontinued winding up application.