ASIC obtained orders on 21 October 2021 appointing receivers to, and an injunction against, A One Multi Services Pty Ltd (AOMS) which was suspected to be engaging in unlawful activity. The Court appointed receivers John Ross Lindholm and Timothy James Michael (who was subsequently replaced by William Colwell) (Receivers) to manage AOMS and to preserve any assets for the benefit of creditors, which included investors in AOMS.

The receiverships ended on 7 August 2024, when the Federal Court made orders winding up AOMS and appointing Michael McCann and Graham Killer of Grant Thornton as joint and several liquidators.

On 23 May 2023, the Receivers filed an application with the Court seeking:

• approval for the Receivers’ remuneration from 1 June 2022 to 30 April 2023, and an order that the amount of the Receivers’ remuneration be recovered from the property of AOMS, and
• an indemnity from ASIC to cover any shortfall in the monies available from the assets of AOMS to pay the Receivers’ remuneration and disbursements incurred during the entirety of the receivership.

The Court:

• approved the Receivers’ remuneration and ordered that the Receivers be entitled to recover that sum from the property of AOMS, and
• dismissed the Receivers’ application for an indemnity against ASIC.

The Court stated that ‘The receivers were aware of the terms of the appointment and of the orders which ASIC intended to seek in relation to the indemnity from the defendants’ assets, and they agreed to the appointment on that basis. They were aware of the risks inherent in the appointment and also of the likelihood, as the receivership progressed, that they would be unable to realise sufficient assets to cover their expenses’.

The Court held that there is no implied obligation for a person seeking to appoint a receiver to assets of a third party to indemnify the receiver for their costs. The Court also noted that it is a matter for receivers, prior to accepting an appointment, to make determinations about whether or not accepting an appointment will be financially viable for them.

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Judgment

Background

ASIC’s application to appoint receivers over AOMS was made under to s1323 of the Corporations Act, in order to preserve and recover the assets of AOMS to protect the interests of creditors, including investors in AOMS. Between 1 January 2019 and 30 June 2021, more than 60 investors deposited approximately $25 million into AOMS’ accounts.

The appointment of receivers enabled the assets remaining in AOMS to be preserved and further recovery of assets of the company.

Registered liquidators including receivers have defined roles under the Corporations Act 2001 which include exercising their discretion on how to administer the affairs of companies over which they are appointed. In all appointments, registered liquidators should carefully consider the basis on which they are appointed, including what if any assets are available to pay their costs. Registered liquidators are required to adequately and properly perform their duties and functions as required by the Corporations Act, common law and professional codes and standards.

The sole director of AOMS, Mr Aryn Henry Hala, has been charged with 9 offences of carrying on a financial services business without a licence and the prosecution continues.