Question 6 (10 marks)

Imaging Pty Ltd (Imaging) sells health care and consumer imaging products. Big Bank has a security interest over all of the business and assets of Imaging.

Imaging has been struggling financially and has missed a loan repayment due to Big Bank. The loan agreement between Big Bank and Imaging provides that where there is a default in payment Big Bank is entitled to appoint a receiver.

On 1 June 2019 Tim is appointed receiver of Imaging. Tim decides to sell the medical imaging assets. He lists the assets on Gumtree and takes the first offer. Tim decides that the medical imaging side of the business is not profitable and dismisses 15 employees.

Advise Tim as to his rights and duties as receiver.