WA Property Law - Payment by Receiver to Mortgagee

[Roger Crook]

I am many years retired. A friend of mine had his farming empire (big) put into the hands of a receiver manager. All the properties were sold months ago and a clearing sale of all machinery goods and chattels was conducted. He is now without funds and lives by grace and favour in a friend's house.

It would appear that no money has been paid to the mortgagee as my friend is still getting bank statements which grow at the rate of 13.5%.

When should funds be paid by the receiver to the mortgagee under Property Law?

 

[Therese]

Hi Roger,

under the Property Law Act 1969 WA sections 58, 65 & 66 relate to receivership and paying off a mortgage.

There is no time limit specified - however my understanding is that once the money is collected from the sale of items, straight away the money should be put towards paying off the debts of the mortgagee.

The ASIC website clearly sets out the role of a receiver:

• collect and sell enough of the charged assets to repay the debt owed to the secured creditor (this may include selling assets or the company’s business)
• pay out the money collected in the order required by law, and
• report to ASIC any possible offences or other irregular matters they come across.

See http://asic.gov.au/regulatory-resou...vency-for-creditors/creditors-receivership/#2.

The mortgagee has the power to appoint a new receiver if he so wishes.

I would suggest writing to the receiver to ask why payments have not been made and seeking legal advice. See Get Connected with the Right Lawyer for You.