Case: University of Western Australia v Gray (No 8) [2006] FCA 1825
Outcome: cited
Because of difficulties that arose in ascertaining the identity of the membership of CRI, the matter came back to Court on 27 November 2006 with the receiver seeking an expansion of his powers. For reasons published on 22 December 2006 I made orders expanding the powers of the receiver in the following terms (inter alia): 3. Without limiting the other powers conferred on the receiver by these orders, the receiver have the power to: (a) determine the position that the third respondent should take in these proceedings; (b) have the conduct of these proceedings on behalf of the third respondent; (c) instruct solicitors to appear and to file and serve any documents in the proceedings; and (d) subject to the approval of the Court, enter into and give effect to any agreement for the resolution of all or part of these proceedings so far as they affect the third respondent. 4. For the purposes of orders 2 and 3 of these orders the receiver have all of the rights and powers: (a) of a member of the third respondent; (b) of the third respondent as a shareholder in the second respondent; (c) of the board of management of the third respondent including, without limitation, the power to manage any and all of the assets and undertakings of the third respondent in such manner as he considers appropriate, consistent with the objectives of the third respondent, and for the purposes of the conduct or resolution of these proceedings; (d) as may be reasonably incidental to the pursuit of any of those purposes or the exercise of any of the powers conferred by these orders. 5. In order to enable him properly to discharge his functions and exercise his powers under these orders, the receiver may obtain independent commercial and legal advice as he deems appropriate, including without limitation the advice of senior counsel. 6. The receiver is not required to file security pursuant to Order 26 Rule 3. See: University of Western Australia v Gray (No 8) (2006] FCA 1825 7 Subsequently the University and CRI by its receivers, entered into a further settlement agreement on 22 February 2007 (the Terms of Settlement). It provided for the creation of a new charitable trust in essentially the same terms as had been contemplated by the agreement made on 31 July 2006. It also provided: 3. CRI and UWA instruct Mrs Elizabeth Heenan to prepare the documents required to constitute the Trust in accordance with the following principles: (a) the Trust be a charitable trust; (b) the primary objects of the Trust are to be: (i) to support and promote cancer research and education, including without limitation funding cancer research and education at a state, national and international level; and (ii) to establish, maintain and administer a public fund or funds for any charitable purposes it may decide in relation to cancer research and education. (c) the Trust be managed by a Board of Management initially comprising: (i) a chairman appointed by UWA, CRI and the WA Institute for Medical Research ("WAIMR") jointly; (ii) two nominees proposed by WAIMR; (iii) one nominee appointed by CRI; (iv) one nominee appointed UWA, with the intention that all persons to be appointed to the Board of Management be acceptable to each of UWA, CRI and WAIMR. The University and WAIMR acknowledge that CRI may propose as its nominee a representative of the Walter &amp; Eliza Hall Institute of Medical Research ("WEHI") and the University and WAIMR agree that they will have no objection to a representative of WEHI being appointed to the Board provided the nominee is otherwise appropriately qualified; (d) an external national/international scientific committee ("the scientific committee") be appointed by the Board of Management to advise and assist the Board of Management and to oversee and facilitate the peer review process; (e) the Trust deed will include provisions the purpose of which is to ensure that the Board of Management/the scientific committee observe proper corporate governance principles including those that relate to conflicts of interest in assessing and determining the best method of achieving the Trust's objects and it is specifically agreed that the Trust deed will incorporate: (a) provisions for the utilisation of an international peer review process for the assessment and allocation of grants from the Trust; and b) all research conducted pursuant to grants from the Trust shall be conducted in accordance with the Joint NHMRC/AVCC Statement and Guidelines on Research Practice (1997) or such other guidelines as may replace those guidelines; (f) WAIMR provide administrative support (to be audited annually) to the trust; (g) The Trust deed will include provisions for the establishment of a nominations committee to call for and examine suitable appointees to the Board of Management to replace retiring Board members from time to time; (h) Any disputes between the parties as to the terms of the Trust deed will be resolved by Mrs Heenan having regard to the objects of the Trust, the terms of this document and considerations of fairness and equity. Mrs Heenan must give the parties the opportunity to make representations to her in such manner as she may in her absolute discretion think fit. Mrs Heenan will act as an expert and her decision will be final and binding. 4. Upon the constitution of the Trust and the appointment of its inaugural Board of Management, CRI shall transfer to the Trust all of its assets. ... 6. The Trust will pay any taxation liabilities including stamp duty that may arise in consequence of the transfer of assets referred to in paragraph 4 above, out of those assets. 7. Subject to being empowered by the Federal Court to do so the Receiver of CRI will take all such steps as are necessary to wind up its activities and to be deregistered as an incorporated association. ... 10. CRI and UWA to execute a consent order in the proceedings numbered WAD 292 of 2004 in the Federal Court of Australia providing for the dismissal of UWA's claim against CRI on the basis that no order as to costs is made and that existing orders for costs, if any, be discharged as between CRI and UWA. 8 In accordance with the orders made on 22 December 2006 it was necessary for the University and CRI to seek approval of the settlement agreement. Because that approval process did involve some reference to what occurred in mediation and was opposed by Sirtex, the application for approval was referred to another judge, Graham J.