Panthera Finance Pty Ltd v Spotjobs Holdings Pty Ltd

[2023] QSC 208

SUPREME COURT OF QUEENSLAND

CITATION:

Panthera Finance Pty Ltd v Spotjobs Holdings Pty Ltd [2023] QSC 208

PARTIES:

PANTHERA FINANCE PTY LTD ACN 147 634 482

(respondent/plaintiff)

v
SPOTJOBS HOLDINGS PTY LTD ACN 628 670 351

(applicant/defendant)

FILE NO:

BS5511/23

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

14 September 2023

DELIVERED AT:

Brisbane

HEARING DATE:

30 August 2023

JUDGE:

Freeburn J

ORDERS:

1.   The application filed on 3 July 2023 is dismissed;

2.   The plaintiff has leave to file and serve an amended statement of claim;

3.   I will hear the parties on costs.

CATCHWORDS:

CORPORATIONS – ADMINSTRATION – DEEDS OF COMPANY ARRANGEMENT – where the applicant/defendant and the respondent/plaintiff entered into a debt sale agreement – where the respondent/plaintiff contend that money was not remitted pursuant to this debt sale agreement – where the company was put into administration and a deed of company arrangement was executed – where the pleading is not clear as to the period the debt is claimed – where the applicant/defendant brings an application to set aside the claim – whether the claims made by the respondent/plaintiff were extinguished after the deed of company arrangement was executed

Corporations Act 2001 (Cth)
Uniform Civil Procedure Rules 1999 (Qld)

Brash Holdings Ltd v Katile Pty Ltd [1996] I VR 24

COUNSEL:

A M Laylee for the applicant/defendant
A O’Brien and M Windsor for the respondent/plaintiff

SOLICITORS:

Harwood Andrews for the applicant/defendant
Burns & Associates Solicitors for the respondent/plaintiff

REASONS

1. The plaintiff, Panthera Finance Pty Ltd (Panthera), has brought proceedings against the defendant, Spotjobs Holdings Pty Ltd (Spotjobs), seeking money due as debts, or by way of restitution, or an account. By this application, Spotjobs seeks to strike out the claim. 

Background

1. The claim arises in this way. On 19 November 2019 Panthera and Spotjobs entered into a debt sale agreement.  By that agreement Spotjobs agreed to sell to Panthera all of Spotjobs’ rights, title and interest in “Debts” and the “Credit Contracts” for $1.964 million, although subsequent tranches of debts increased the amount to approximately $5.4m.

2. There is some imprecision about the definitions in the agreement. The expression “Debts” (plural)[1] is the expression used in the operative clause (Clause 2) but only the expression “Debt” (singular) is defined in Clause 20.1:

   Debt in respect of a Credit Contract, means the amount due to the Vendor [Spotjobs] by the Debtor in respect of that Credit Contract, the balance of which as at the Cut-Off Date is specified as the “Current Account Balance” is Schedule 3.

   [1]Clause 20.3 provides that “The singular includes the plural and vice versa.”  Probably that needs to be read as including definitions.

3. There is nothing in Schedule 3 except for a heading “Schedule 3 – Debt and Credit Contract Details” followed by a large blank space on the page. No attempt was made to give content to Schedule 3. The expression “Debtor” was defined as any person who is liable under a Credit Contract to pay a Debt to the Vendor [Spotjobs]. “Credit Contracts” was also defined as the agreements in respect of accounts held by Debtors as set out in Schedule 3. Probably the precise debts to be transferred are identifiable by the tranches referred to below.

4. The agreement provides that completion must take place on the Completion Date at a time and location as agreed in writing between the parties.  However, the expression “Completion Date” is defined as the date of the agreement or such other date as the parties may agree. There is no evidence of the parties agreeing on another date and so the agreement appears to have been executed and completed on 19 November 2019.

5. Spotjobs sale of its debts appears to also rely on various tranches which identify the specific debts sold to Panthera and the purchase price attributable to each tranche of debts. There were eight tranches and, in total the purchase price was just under $5.4 million. The last tranche was sold on 21 August 2020. To complicate matters the agreement also included a provision whereby debts could be re-assigned back to Spotjobs.

6. The details of the tranches of debts sold, and the purchase prices paid, are as follows:

   (a)Tranche 1 – 20 November 2019 - $1,964,485

   (b)Tranches 2 and 3 – 23 December 2019 - $314,611

   (c)Tranche 4 – 28 January 2020 - $481,758

   (d)Tranche 5 – 19 February 2020 - $605,668

   (e)Tranche 6 – 19 March 2020 - $563,241

   (f)Tranche 7 – 21 April 2020 - $577,043

   (g)Tranche 8 – 21 August 2020 - $997,944

   (less Tranche 1 debts of $384,866 re-assigned for $125,312 which reduced the purchase price for Tranches 2 and 3 to $314,611) and less some further debts re-assigned.

7. The statement of claim alleges that some of the debtors became confused and therefore, in about February 2020 Spotjobs and Panthera agreed that:

   (a)Spotjobs or its agent would recover the Panthera Assigned Debts from debtors directly on behalf of Panthera;

   (b)each month, Spotjobs would pay to Panthera the value of the Panthera Assigned Debts which Spotjobs, or its agents, received by that time; and

   (c)if any debtors defaulted on their payment plans with Spotjobs for the payment of their respective Panthera Assigned Debts, Panthera would give the debtors notice of assignment, such that the debtors were required to pay Panthera directly in the future.

   This is called, in the pleading, the “debt sale program”.

8. The statement of claim alleges that some amounts received by Spotjobs for the debtors were remitted from Spotjobs to Panthera but, since March 2021, no money has been remitted by Spotjobs to Panthera.

9. On 11 August 2021 administrators were appointed to Spotjobs.  I will come to the detail of the statement of claim in a moment. However, in broad terms, Panthera claims for monies received on or after 11 August 2021 on the basis that those monies were received by Spotjobs on behalf of Panthera.

The Application

1. Spotjobs has filed a conditional defence. Spotjobs disputes the jurisdiction of the court to entertain the claim. Spotjobs argues that the claims made by Panthera were extinguished on 11 August 2021 as a result of Spotjobs’ administrators executing a deed of company arrangement (DOCA).

2. For that reason, Spotjobs applies pursuant to rule 16 of the Uniform Civil Procedure Rules 1999 (UCPR) to set aside the claim. Alternatively, Spotjobs applies to strike out the statement of claim pursuant to rule 171 of the UCPR.

3. Various technical issues were raised by both parties. However, to their credit, both parties set aside the technical issues and were content to argue the application on the basis that Spotjobs’ application depended on demonstrating that it was entitled to summary dismissal of the proceeding because the DOCA had the effect of extinguishing Panthera’s right to recover the money it claimed.

Timing

1. Panthera claims that it only seeks from Spotjobs any money that Spotjobs received from debtors on and from 11 August 2021 – which is the date on which administrators were appointed to Spotjobs.[2] However, that limitation on Panthera’s claim does not appear in the statement of claim, or at least it appears in a rather oblique way in the statement of claim. Paragraph 34 of the statement of claim alleges that during 2020 Spotjobs remitted to Panthera some payments it had received from debtors.  Paragraph 35 alleges that:

   “Notwithstanding the receipt of remittances from Spotjobs of some Panthera Assigned Debts, as at 24 February 2021, based on information Panthera received from Spotjobs, Spotjobs was indebted to Panthera in the amount of $1,002,807 being Panthera Assigned Debts received by Spotjobs but not remitted to Panthera.”[3]

   [2]Respondent/plaintiff’s written submissions at [3].

   [3]The particulars refer to an email dated 24 February 2021 between Panthera and Spotjobs.

2. That paragraph rather suggests that, as at 24 February 2021, Spotjobs had received but not remitted to Panthera just over $1 million.

3. Similarly, paragraph 36 of the statement of claim alleges that based on the information provided by Spotjobs and its collectors, as at 6 July 2021, Spotjobs had failed to account to Panthera for Panthera Assigned Debts in the amount of $1,219,362.  Paragraph 37 alleges that the last time any Panthera Assigned Debts were received by Panthera from Spotjobs was on 10 March 2021.

4. Paragraph 38 alleges that, despite demand, Spotjobs has failed to:

   (a)account to Panthera [for] the value of the Panthera Assigned Debts[4] it or its agents have received from debtors; or

   (b)paid in full the Panthera Assigned Debts it or its agents have received from debtors.

   [4]The expression “Panthera Assigned Debts” is defined in paragraph 27 of the pleading as all of the assigned debts – except for those that were reassigned.

5. And so, up to this point in the statement of claim (paragraph 38) claims all debts, irrespective of whether the amounts were received before or after 11 August 2021.  The claim to an account is similarly wide.

6. However, paragraph 39 of the statement of claim is as follows:

   In the premises:

   (a)      the value of the Panthera Assigned Debts received by Spotjobs or its agents on and from 11 August 2021 are due and owing to Panthera as a debt; and

   (b)      to the extent the value of the Panthera Assigned Debts cannot be readily identified, and Panthera proves debts are due and owing, Panthera is entitled to an account from Spotjobs as to the value of the Panthera Assigned Debts received by it or its agents on and from 11 August 2021.

   Particulars

   Panthera claims the value of the Panthera Assigned Debts only after the date of the appointment of administrators to Spotjobs.

   [emphasis added]

7. The restitution claim, pleaded in paragraph 40, is unrestricted, as is the prayer for relief in both the statement of claim and the claim.

Effect of the DOCA

1. As explained, an administrator was appointed on 11 August 2021. Two months later, on 6 October 2021, the DOCA was executed.

2. The DOCA provided that, subject to clause 24,[5] as is provided in s 444G and s 444D of the Corporations Act2001 (the Act), it is acknowledged that the DOCA binds Spotjobs, its officers and members, its creditors, the deed administrators and Fincap.  Fincap is sought to purchase the business and to do so by supplying two funds (approximately $150,000 and $400,000) which were then to used, with Spotjob’s own funds for creditors and employee entitlements.

   [5]Clause 24 reserves the position of secured creditors to deal with their security.

3. The DOCA defines a creditor as:

   “A person who has a debt payable by or claim against [Spotjob] whether present or future, certain or contingent, ascertained or sounding only in damages, the circumstances giving rise to which occurred on or before the Relevant Date.” 

4. The Relevant Date is defined as 11 August 2021.

5. Panthera was plainly a “creditor” within that definition.  The definition of “creditor” is relatively construed.[6]

   [6]See Brash Holdings Ltd v Katile Pty Ltd [1996] I VR 24 at 33.

6. However, for present purposes the vital question is whether the claims by Panthera qualify as debts or claims which arise from circumstances that occurred on or before 11 August 2021.

7. Clause 2 of the DOCA (quoted above) adopts s 444D and s 444H of the Act.  Section 444D(1) expressly provides that a DOCA binds all creditors of the company, “so far as concerns claims arising on or before the day specific in the [DOCA].”[7]  Similarly, s 444H provides that a DOCA releases the company from a debt only in so far as the DOCA provides for the release and the creditor concerned is bound by the DOCA.

   [7]It does not matter that s 444D(1) only refers to “claims” rather than “debts (and) claims”.  The word “claims” here is interpreted as including both debts and claims: Brash (supra) at 34.

The Debts/Claims Released

1. Spotjob submits that, in its entirety, Panthera’s debt was extinguished by the execution of the DOCA. Spotjobs submits that “the monies advanced by Panthera to Spotjobs was repayable by Spotjobs” although contingent on certain events occurring.[8] However, in my opinion, and based on the evidence tendered on this application that is not the character of transactions recorded by and authorised by the debt sale agreement. The nature of that transaction was that Spotjobs immediately assigned the debts to Panthera. The problem was that the precise debts being transferred were not properly identified by the agreement. Nevertheless, once the debts came to be identified the likely interpretation is that the right, title and interest in the debts was transferred to Panthera. Under the transactions the debts became Panthera’s property.

   [8]Applicant/defendant’s submissions at [25].

2. As explained, the agreement itself does not identify the debts that are assigned.  The precise debts assigned are identified in each tranche. But it is at least arguable that the debts were assigned at the time they were specified – i.e. at each tranche.  That appears from Clause 2 of the agreement which specifies that Spotjobs transfers its right title and interest in the debts to Panthera.

3. It may be that the purpose of the arrangement was for Panthera to provide Spotjobs with finance. But that purpose does not detract from or alter the actual agreement which appears to be a transfer of ownership of the debt.[9]

   [9]A lease or hire purchase may be a form of finance but that does not detract from the legal status of the lessee/hirer’s title.

4. What, then, is the effect of the DOCA? Conceivably, the debtors may have sent money to Spotjobs:

   (a)on or before 11 August 2021; or

   (b)after 11 August 2021.

5. Those in the former category are discharged by the DOCA.  That is because the money was paid to Spotjobs on or before the Relevant Date (11 August 2021) and, pursuant to the “debt sale program” any money incorrectly paid to Spotjobs would be passed on to Panthera. Panthera’s claim for those monies was, in essence, a claim by Panthera against its agent, Spotjobs, for necessary money due by the agent to its principal.

6. Payments in the latter category are not released by the DOCA. Those payments, if shown to be debts payable to Panthera, comprise Panthera’s money which debtors have paid to the wrong creditor (i.e. the assignor rather than the assignee). Those claims are not released because the circumstances giving rise to Panthera’s claim occurred after the Relevant Date – 11 August 2021.

Conclusion

1. Accordingly, it is at least arguable that any amounts claimed by Panthera for debts paid to Spotjob after 11 August 2021 were not released by the DOCA.

2. As explained, the statement of claim does not enable the court to determine the amounts received before 11 August 2021. Certainly, the amounts specified in paragraphs 35 ($1,002,807) and paragraph 36 ($1,219,362) appear to be amounts received by Spotjobs before 11 August 2021 and would be released by operation of the DOCA. On the other hand, any amounts comprehended by paragraph 39, which are alleged to be received after 11 August 2021, are unaffected by the DOCA.

3. In the circumstances, the appropriate orders are to dismiss Spotjob’s application and to permit Panthera to file and serve an amended statement of claim. I will hear the parties on costs.