Lender’s appeal over rival’s security dismissed

With the credibility of private credit adhered precariously to the rim of the toilet one must question the wisdom of litigating to challenge securities and remove receivers, at least in the form that lender Blackbird Capital First Mortgage Pty Ltd (BFMC) has unsuccessfully attempted.

BFMC, which recently changed its name to Blackbird Mortgage Corporation (BMC) faces the prospect of a substantial costs bill after the Federal Court of Appeal this week delivered judgment in Blackbird First Mortgage Corporation Pty Ltd v Jacobs [2025] FCAFC 136.

As iNO reported last year when judgment was first delivered in this matter, BMC failed in its efforts to persuade the court that rival lender John Grono‘s claims were contingent in nature and therefore extinguished when he voted in favour of the entry of Specialised Welding Australia Pty Ltd (SWA) into deed of company arrangement (DoCA). As such he was not entitled to appoint receiver managers.

Grono, a former director of SWA, had loaned amounts to SWA before and after the company entered into the DoCA.

When the company defaulted on the terms of repayment he appointed Bob Jacobs and Andrew Smith of Auxilium Partners to recover the amounts owing.

A week later, on July 25, 2024 BMC appointed Richard Albarran and Brent Kijurina as receivers and shortly afterwards filed an interlocutory application seeking orders that Grono’s security had been extinguished when he voted in favour of the DoCA and he had no right to appoint anybody.

Those proceedings were dismissed and Albarran and Kijurina retired while Jacobs and Smith got on with their job before retiring their appointments in February this year.

But BMC shortly thereafter filed a notice of appeal and approximately 12 months later that appeal has this week been decided contrary to BMC’s wishes. Dismissing BMC’s appeal the three judges also ordered BMC to pay Grono’s costs.

Albarran and Kijurina however are back in office as receivers and the company was earlier this year placed into liquidation after BMC obtained consents from John Kukulovski and Shaun Fernando.

The Mackay Goodwin duo however have problems of their own with a recent remuneration resolution failing to attract sufficient votes.

Further reading:

Receivers lose bid to invalidate rivals’ appointment