David Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

asked the Minister representing the Minister for Financial Services and Superannuation, upon notice, on 29 September 2010:

When any assets are, or property is, sold, does a bank take steps to minimise the costs incurred; if so, why do banks in most cases use higher priced law firms for often routine matters for which the customer is obligated to pay for under the security documents.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

The Minister for Financial Services and Superannuation has provided the following answer to the honourable senator's question:

Commonly, a receiver is appointed as part of the contract between the bank and the borrower. A receiver is required by law to be a registered liquidator.

A receiver is primarily obligated to look after the interests of the secured creditor who appointed them. However, the Corporations Act 2001 also requires them to take reasonable steps to attempt to sell charged property for not less than its market value or, if there is no market value, the best price reasonably obtainable. In addition, they are under an obligation to incur only reasonable and necessary costs.

In addition to this, their conduct is subject to a range of duties that apply to company officers in general. Receivers are afforded a high degree of independence in the manner in which they carry out their functions. The Courts have the power to review and intervene in the manner in which they legally carry out their functions.