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Owen v Madden (No 5)

Owen v Madden (No 5)

Case [2013] FCA 1443 28 November 2013

Corporate Administration

Indemnification

Insurance Claims

Litigation Management

Remuneration of Administrators

Stay of Proceedings

Corporate Law & Governance

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FEDERAL COURT OF AUSTRALIA
Owen, in the matter of RiverCity Motorway Pty Limited (Administrators Appointed) (Receivers and Managers Appointed) v Madden (No 5) [2013] FCA 1443

Citation: Owen, in the matter of RiverCity Motorway Pty Limited (Administrators Appointed) (Receivers and Managers Appointed) v Madden (No 5) [2013] FCA 1443

Parties: MICHAEL ANDREW OWEN, STEPHEN JAMES PARBERY AND CHRISTOPHER CLARKE HILL IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF RIVERCITY MOTORWAY PTY LIMITED (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) ACN 116 665 304 (AND EACH OF THE COMPANIES LISTED IN THE ATTACHED SCHEDULE))

File number: QUD 60 of 2011

Judge: LOGAN J

Date of judgment: 28 November 2013

Catchwords: CORPORATIONS – application by administrators to extend the convening period for the second meeting of creditors under s 439A of the Corporations Act 2001 (Cth) – previous existing extension by the Court to convening period ending – earlier other extension granted – whether Court satisfied that further extending administration in best interests of creditors – where complex corporation group involving toll road infrastructure – where prospects of company to conclude a sale of its business thereby improving its assets – Court satisfied that further extension of convening period necessary

Legislation: Corporations Act 2001 (Cth) ss 440D, 443D, 443F, 447A, 447D, 601GA, Pt 5.3A

Cases cited: Re Octavia Ltd (No 8) (2010) 237 FLR 315 considered
Owen, in the matter of Rivercity Motorway Pty Limited (Administrators Appointed) (Receivers and Managers Appointed) v Madden [2011] FCA 295 considered
Owen, in the matter of Rivercity Motorway Pty Limited (Administrators Appointed) (Receivers and Managers Appointed) v Madden (No 2) [2012] FCA 312 considered
Owen, in the matter of RiverCity Motorway Pty Limited (Administrators Appointed) (Receivers and Managers Appointed) v Madden (No 4) (2012) 92 ACSR 255 considered

Date of hearing: 28 November 2013

Place: Brisbane

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 49

Counsel for the Administrators: Mr S Doyle QC with Mr S Webster

Solicitor for the Administrators: Johnson Winter & Slattery

Counsel for the Receivers: Mr J Bond QC with Mr A Stumer

Solicitor for the Receivers: Allens

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION

QUD 60 of 2011

IN THE MATTER OF RIVERCITY MOTORWAY PTY LIMITED (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (AND EACH OF THE COMPANIES LISTED IN THE ATTACHED SCHEDULE)

BETWEEN:
MICHAEL ANDREW OWEN, STEPHEN JAMES PARBERY AND CHRISTOPHER CLARKE HILL IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF RIVERCITY MOTORWAY PTY LIMITED (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) ACN 116 665 304 (AND EACH OF THE COMPANIES LISTED IN THE ATTACHED SCHEDULE)
Applicant

JUDGE:

LOGAN J

DATE OF ORDER:

28 NOVEMBER 2013

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:
1.Pursuant to section 447A(1) of the Corporations Act 2001 (Cth) (the Act), rule 1.8 of the Federal Court (Corporations) Rules 2000, and rule 10.24 of the Federal Court Rules, the Applicants are deemed to have given adequate and proper notice of the Interlocutory Process filed in this proceeding dated 22 November 2013.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Owen v Madden (No 5)

Details

AGLC: Owen v Madden (No 5) [2013] FCA 1443
Case: [2013] FCA 1443
Decision Date

CaseChat Overview and Summary

The application before the Court involved the administrators of RiverCity Motorway Pty Limited (Administrators Appointed) (Receivers and Managers Appointed) seeking an extension of the convening period for the second meeting of creditors, directions in relation to three proceedings in the New South Wales registry, and approval of their remuneration for the preceding twelve months. The administrators and receivers and managers had a common interest in extending the convening period for the second meeting of creditors, which was sought until the end of June 2014. The administrators had taken the initiative to investigate claims and identify insurance policies that may respond to the claims in the New South Wales proceedings. The Court was satisfied that an extension of the convening period was necessary to ensure that the possibility of maximizing the worth of the tolling operation, which was the core asset, was realised. The Court was also satisfied that the extension would not result in any detriment to trade creditors, including employees, and that the administrators had responsibly discharged their duties.

The Court granted the administrators' request for directions to continue monitoring and investigating the claims made in the New South Wales proceedings, to identify and enforce rights under any insurance policies that may respond to the claims, and to take legal and other advice as required. The Court also approved the administrators' remuneration for the preceding twelve months and made orders to indemnify the administrators out of the property of the schemes for the remuneration and expenses incurred in relation to the schemes. The Court further made orders to ensure that the administrators had direct recourse to the scheme assets without having to rely on the responsible entity's right of indemnity and to apportion the indemnity between the schemes in proportion to the value of the funds held by the schemes at the time the indemnity was satisfied. The Court considered that the proposed apportionment was principled and sensible, and it would remove the risk of the administrators becoming out of pocket if the funds in one scheme were exhausted before the other.

In summary, the Court granted the application for an extension of the convening period until the end of June 2014, directions for the administrators to continue monitoring and investigating the claims in the New South Wales proceedings, and orders to indemnify the administrators out of the property of the schemes for their remuneration and expenses. The Court also approved the administrators' remuneration for the preceding twelve months and made orders for confidentiality to balance the desirability of public administration of justice with the present desirability that some aspects of the administration be kept confidential.

Orders