Freezing order against Westpoint company rejected
The extension of an asset-freezing order against former Westpoint company Rold Corporation has been rejected by the Federal Court of Australia as a result of legislative limitations.
Rold Corporation, owned and controlled by Alan Frank Carey, the brother of Norman Carey, founder of the Westpoint Group of companies, was issued with interim asset freezing orders in August 2006 after the Australian Securities and Investments Commission (ASIC) made an urgent application to the Federal Court in Perth.
In a further hearing of the regulator’s applications, held on February 26, 2007, ASIC applied to continue the existing asset freezing orders over the property of Rold, or have receivers appointed.
Other companies associated with the Westpoint collapse have had assets frozen as a result of ASIC’s applications, including Silkchime, Richstar Enterprises, Westpoint Realty, Bowesco and Redchime.
ASIC’s application to continue the orders against Rold was made in a bid to protect around $935,000 held in a Rold bank account, funds that could be called upon in a potential claim against the company by the liquidator of Westpoint Corporation.
Justice French, of the Federal Court of Australia, refused to extend the orders on the basis that there “was not sufficient risk of the moneys held in Rold’s account being dissipated as to warrant the appointment of receivers under s 1323 [of the Corporations Act], nor the making of orders under s 23 of the Federal Court Act”.
The judge noted the Federal Court did not have the power under either s 1323 of the Corporations Act or s 23 of the Federal Court Act to make orders freezing Rold’s property, unless certain conditions were met.
However, French did suggest consideration be given to amending the Corporations Act in order to grant the court powers to freeze property.
ASIC’s application will be held by the liquidator of Westpoint, which can apply for interlocutory relief, including a freezing order, if it considers the property of Rold is at risk.
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