FEDERAL COURT OF AUSTRALIA
Kirk, in the matter of RL Adams Pty Ltd (Administrators Appointed) [2017] FCA 1111
File number(s): QUD 323 of 2017 Judge(s): DERRINGTON J Date of judgment: 5 July 2017 Catchwords: BANKRUPTCY AND INSOLVENCY - Administrators seeking an order to extend the period in which administrators must convene second meeting of creditors under s 439A(6) of the Corporations Act 2001 (Cth) – potential liability under Environmental Protection Act 1994 (Qld) - investigation into possible contraventions of the Corporations Act 2001 (Cth) – consideration of importance of sale of the business as going concern. Legislation: Corporations Act 2001 (Cth), s 439A, s 439B
Environmental Protection Act 1994 (Qld), Schedule 4
Cases cited: Algeri, Re Colorado Group Limited [2011] VSC 260
Re Linc Energy Ltd (In Liquidation) (2017) QSC 53
Date of hearing: 5 July 2017 Registry: Queensland Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Commercial Insolvency Category: Catchwords Number of paragraphs: 28 Counsel for the Plaintiffs: Mr CA Wilkins Solicitor for the Plaintiffs: Clayton Utz ORDERS
QUD 323 of 2017 IN THE MATTER OF RL ADAMS PTY LTD (ADMINISTRATORS APPOINTED) ACN 093 556 613 & CLEARMEDAL PTY LTD (ADMINISTRATORS APPOINTED) ACN 096 432 192
DARRYL EDWARD KIRK AND BRUNO ANTHONY ROBERT SECATORE AS ADMINISTRATORS OF RL ADAMS PTY LTD AND CLEARMEDAL PTY LTD
First Plaintiff
RL ADAMS PTY LTD (ADMINISTRATORS APPOINTED) ACN 093 556 613
Second Plaintiff
CLEARMEDAL PTY LTD ACN 096 432 192
Third Plaintiff
JUDGE:
DERRINGTON J
DATE OF ORDER:
5 JULY 2017
THE COURT ORDERS THAT:
1.Pursuant to r 8.21 of the Federal Court Rules 2011 (Cth), the plaintiffs have leave to file an amended originating application.
2.Pursuant to s 439A(6) of the Corporations Act 2001 (Cth), the period in which the first plaintiffs must convene the second meetings of creditors of RL Adams Pty Ltd (Administrators Appointed) and Clearmedal Pty Ltd (Administrators Appointed) be extended so as to end on 3 November 2017.
3.Pursuant to s 447A(1) of the Corporations Act 2001 (Cth), the second meetings of creditors of RL Adams Pty Ltd (Administrators Appointed) and Clearmedal Pty Ltd (Administrators Appointed) may be held at any time during, or within 5 business days after the end of, the convening period as extended by Order 2 above notwithstanding the provisions of s 439A(2) of the Corporations Act 2001 (Cth).
4.Pursuant to s 447A(1) of the Corporations Act 2001 (Cth), the first plaintiffs shall within three business days:
(a)publish a copy of this Order on the "News & Events" section of the website maintained by the first plaintiffs’ firm, Cor Cordis, at and
(b)notify the respective creditors of RL Adams Pty Ltd (Administrators Appointed) and Clearmedal Pty Ltd (Administrators Appointed) of the making of this Order by:
(i)where the email address of the creditor is known to the first plaintiffs, sending to the creditor electronically to that email address; and
(ii)where the email address of the creditor is not known to the first plaintiffs, sending to the creditor by pre-paid post…
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- AGLC
- Kirk, in the matter of RL Adams Pty Ltd (Administrators Appointed) [2017] FCA 1111
- Case
- [2017] FCA 1111
- Decision Date
CaseChat Overview and Summary
The legal issues before the court were whether the administrators had sufficient grounds to seek an extension of the convening period and whether the potential liabilities and ongoing investigations were compelling enough to warrant the extension. The court also had to consider the importance of the sale of the business as a going concern. The administrators argued that the extension was necessary to allow sufficient time to address the potential liabilities and ongoing investigations, and that the sale of the business as a going concern was crucial for the benefit of the creditors.
In granting the extension, the court found that the administrators had provided sufficient grounds to justify the extension. The court noted the potential liabilities under the Environmental Protection Act 1994 (Qld) and the ongoing investigation into possible contraventions of the Corporations Act 2001 (Cth) as compelling reasons for the extension. The court also acknowledged the importance of the sale of the business as a going concern, which would benefit the creditors. The court was satisfied that the administrators had acted in the best interests of the creditors and that the extension was necessary to allow sufficient time to address the issues at hand.
The court ordered that the administrators be granted leave to file an amended originating application, that the period in which the administrators must convene the second meetings of creditors be extended to 3 November 2017, and that the second meetings of creditors may be held at any time during, or within 5 business days after, the convening period as extended. The court also ordered that the administrators publish a copy of the order on their firm's website and notify the creditors of the order. Any person with sufficient interest was granted liberty to apply to modify the orders, including the Australian Securities and Investments Commission. The administrators' costs of the application were ordered to be costs in the administrations.
Orders
Orders of the court
1. Pursuant to r 8.21 of the Federal Court Rules 2011 (Cth), the plaintiffs have leave to file an amended originating application.
2. Pursuant to s 439A(6) of the Corporations Act 2001 (Cth), the period in which the first plaintiffs must convene the second meetings of creditors of RL Adams Pty Ltd (Administrators Appointed) and Clearmedal Pty Ltd (Administrators Appointed) be extended so as to end on 3 November 2017.
3. Pursuant to s 447A(1) of the Corporations Act 2001 (Cth), the second meetings of creditors of RL Adams Pty Ltd (Administrators Appointed) and Clearmedal Pty Ltd (Administrators Appointed) may be held at any time during, or within 5 business days after the end of, the convening period as extended by Order 2 above notwithstanding the provisions of s 439A(2) of the Corporations Act 2001 (Cth).
4. Pursuant to s 447A(1) of the Corporations Act 2001 (Cth), the first plaintiffs shall within three business days:
(a) publish a copy of this Order on the "News & Events" section of the website maintained by the first plaintiffs’ firm, Cor Cordis, at https://www.corcordis.com.au/home/news-events/; and
(b) notify the respective creditors of RL Adams Pty Ltd (Administrators Appointed) and Clearmedal Pty Ltd (Administrators Appointed) of the making of this Order by:
(i) where the email address of the creditor is known to the first plaintiffs, sending to the creditor electronically to that email address; and
(ii) where the email address of the creditor is not known to the first plaintiffs, sending to the creditor by pre-paid post to the last known postal address of the creditor, a letter or circular informing the creditor of the substance of this Order and enclosing a copy of this Order.
5. The following parties have liberty to apply:
(a) Any person with sufficient interest to modify Orders 2, 3 or 4 above, including the Australian Securities and Investments Commission, on giving not less than three business days' notice to the first plaintiffs.
(b) The first plaintiffs, for any purpose connected with the administration of RL Adams Pty Ltd (Administrators Appointed) and Clearmedal Pty Ltd (Administrators Appointed), including for the purpose of seeking a further extension or further extensions of the convening period.
6. The first plaintiffs’ costs of this application be costs in the administrations.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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