Court appoints receiver where no default has occurred

Receivers are commonly appointed by secured parties on the occurrence of an event of default by the grantor of the security interest in respect of the relevant transaction documents. The Court also has the power to appoint receivers in various circumstances which power was recently exercised on application by a trustee of a debenture trust deed even though there had been no default event.

The decision of Rares J in the matter of Australian Executor Trustees Limited v Provident Capital Ltd demonstrates the broad and discretionary power of the Federal Court to make orders under section 283HB of the Corporations Act, including the appointment of a receiver to property constituting security for the debentures, on application by a trustee or ASIC.