“Your Honour, is it OK if I enter into this deed?” | Grain Technology (No 5) [2023] NSWSC 1141

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Long-running litigation was on foot relating to, among other things, land with a value of around $40m.

By NoM, a receiver appointed by the Court to the relevant Ds in the litigation sought the Court’s advice about whether they would be justified entering into a Deed settling all the pieces of litigation: [12], [15]

The receiver relied on evidence, including confidential advice from counsel on the nature of the settlement: [17]

Some earlier claims, being a portion of the matters in dispute, were settled in a deed 2019: [23]

Some orders in the proceedings were made in May 2023. The Ps filed a Notice of Appeal in respect of them: [30]

Various negotiations followed by correspondence leading to a proposed draft Deed: [31] - [36]

That was the question before the Court in this matter: whether the receiver would be justified in settling the dispute on the proposed terms.

There is settled law that a Court can give advice and direction to a Court-appointed receiver in a manner analogous to judicial advice given to a trustee: [37]

The law relating to judicial advice to trustees was relevant with the question of whether a claim can be settled on certain terms being a well-recognised area for the giving of advice: [41]

The Court noted the complexity of the dispute: originating in 1948, proceedings commenced in 2013, 4 years of mediation leading to only partial settlement in 2019, a valuable underlying asset: [43]

The Court said the giving of its advice required a comparison of the position if the deed was entered into versus the position if it was not: [47]

The draft Deed contemplated that all proceedings would be dismissed, mutual releases provided, and all parties bearing their own costs - a “walk away”: [48]

The 2019 deed included releases for costs related to the litigation, but not "additional costs": [49]

Considerable attention was paid to the implication of the releases if the draft Deed was entered into including a claim the “additional costs” outside the bounds of the 2019 Deed: [50] - [58]

The draft Deed would also see the receiver releasing any rights to enforce a damages undertaking made by the Ps in relation to a 2013 interoloctory injunction: [60] - [63]

Ultimately, providing releases of the “additional costs” claim and the damages undertaking were commercial considerations for the receiver: [59], [64]

If the Deed was rejected outstanding risks would remain, including the outcome of the impending appeal, and the difficulty recovering costs in the face of the 2019 Deed: [65] - [68]

The Court considered it would be reasonable for the receiver to enter into the Deed, giving the judicial advice sought: [69], [70]

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