“Deed of Novation” to cure receiver’s validity issue

validity
Domenic Calabretta. Image: Mackay Goodwin.

Mackay Goodwin principal Domenic Calabretta was able to partially assuage concerns about validity during a interlocutory hearing on Monday by producing documents in relation to his appointment as receiver of Harris Health Care Pty Ltd (HHC) but as the presiding judge observed, doubt remains.

The question of standing emerged early in the hearing Calabretta’s amended interlocutory application, which he brought in proceedings involving Sirrah Pty Ltd, a company in liquidation to which HHC, Sirrah’s majority shareholder, owes a significant judgment debt.

Calabretta’s appointor, solicitor Farshad Amirbeaggi of Yates Beaggi Lawyers (YBL) has a registered security for unpaid fees in respect of work YBL performed for Ms Michelle Joy Harris, who is a former director of HHC and a shareholder in Sirrah.

Calabretta’s appointment covers the property of Ms Harris, potentially giving him standing in any distribution from Sirrah’s liquidator, Hayes Advisory’s Alan Hayes.

Last month however Hayes applied to the court for special leave to distribute a surplus to certain contributories of Sirrah.

The leave he sought specifically excluded HHC as a participating contributory and sought to make a smaller distribution to Ms Harris.

Calabretta challenged that application and as can be seen In the matter of Sirrah Pty Ltd (in liq) [2024] NSWSC 784, he lost, incurring an adverse costs order in the process. He has since appealed.

Monday’s hearing related to a separate proceeding in relation to costs said to be owed to YBL.

The doubt about Calabretta’s standing to make such an application was raised due to the fact that at the time of his appointment Amirbeaggi hadn’t correctly registered YBL as a business name.

Barrister Bridie Nolan, acting for Calabretta rebutted this by saying the issue was cured by a “Deed of Novation”, which prompted the judge ask if such a deed could be said to act retrospectively or only prospectively, which then raised the issue of whether costs incurred by the other parties up to Monday had been wasted and were therefore Calabretta’s to pay?

The judge adjourned until this Friday to allow the parties to make further submissions on the deed of novation point and his honour may make a decision on the papers. Depending on what he decides, this one could have a way to go.

Further reading:

Properly contradictory or utterly adversarial?

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