Cinema Plus Ltd (Administrators Appointed) v ANZ Banking Group Limited

Cinema Plus Ltd (Administrators Appointed) (the appellant) appealed to the Court of Appeal of New South Wales against a decision of Windeyer J concerning the rights of ANZ Banking Group Limited (the respondent) to combine accounts of Cinema Plus Ltd following the appointment of administrators. The dispute arose from the respondent's actions in consolidating Cinema Plus Ltd's current account and loan account, and the priority of the respondent's claim against the administrator's lien.

The Court of Appeal was required to determine whether the respondent bank was entitled to consolidate the current and loan accounts of Cinema Plus Ltd, notwithstanding the appointment of administrators. This involved considering whether the contractual terms permitted such consolidation, and crucially, whether the respondent's actions constituted the creation of a charge under s 440B of the Corporations Law. Further issues included the interpretation of "recover" under s 440C of the Corporations Law and the priority of the administrator's indemnity and lien under ss 443E and 443F of the Corporations Law. The court also considered whether a sale and lease-back agreement clause was void for uncertainty or penal in nature.

The Court of Appeal held that the respondent bank was not entitled to consolidate the accounts in the manner it did. The court reasoned that the act of consolidation, in the context of the appointment of administrators, did not create a charge within the meaning of s 440B of the Corporations Law. The court found that the respondent's actions were not taken "on behalf of" the company as contemplated by s 437D of the Corporations Law. Furthermore, the court determined that the administrator's lien under s 443E of the Corporations Law had priority over the respondent's claim. The court allowed the appeal, set aside the orders of Windeyer J, and dismissed the respondent's notice of contention.