FEDERAL COURT OF AUSTRALIA
Patel v Pleash [2025] FCA 77
File number(s): NSD 1073 of 2022 Judgment of: CHEESEMAN J Date of judgment: 14 February 2025 Catchwords: CORPORATIONS – validity of the appointment of administrator pursuant to s 436C of the Corporations Act 2001 (Cth) – where administrator did not take appropriate steps to be satisfied the power in s 436C was engaged prior to accepting the appointment – where the appointment was made for the purpose of debt recovery – whether appointment was exercised for a purpose inconsistent with the statutory objectives of Part 5.3A of the Corporations Act – Held: appointment invalid
CONTRACTS – commercial finance broking agreement – whether on proper construction, agreement was performed – whether agreement terminated – whether debt due and payable under the agreement – whether security enforceable under the agreement – Held: agreement not performed, alleged debt not due and payable, security not engaged.
CONSUMER LAW – unconscionable conduct – statutory unconscionability under ss 20 or 21 of the Australian Consumer Law (ACL) or ss 12CA or 12CB of the Australian Securities and Investments CommissionAct2001 (Cth) (ASIC Act) – where the second and third defendants caused the first defendant to be appointed as the administrator of the third plaintiff and refused to take steps to set aside that appointment – whether conduct was in relation to financial services – whether conduct was unconscionable – whether joint misconduct – whether conduct had causal nexus with loss claimed – Held: contravention of s 12CB ASIC Act established
CONSUMER LAW – misleading or deceptive conduct – contraventions of s 18 of the ACL or s 12DA of the ASIC Act – where representations were in connection with a finance broking agreement – whether conduct was in relation to financial services – whether conduct was misleading or deceptive – whether conduct had causal nexus with loss claimed – Held: contravention of s 12DA of ASIC Act established
Legislation: Acts Interpretation Act 1901 (Cth) s 15AA
Australian Consumer Law, being Sch 2 of the Competition and Consumer Act 2010 (Cth) ss 2, 4, 6, 18, 20, 21, 22, 237
Australian Securities and Investments Commission Act2001 (Cth) ss 12BAA, 12BAB, 12BB, 12CA, 12CB, 12CC, 12DA, 12GF
Competition and Consumer Act 2010 (Cth) ss 131(1), 131A
Corporations Act 2001 (Cth) ss 79, 435A, 436A, 436B, 436C, 443A, 443D, 447A, 447C, 448A, 448B, 1322(4)(d), 588FL(2)(b), 588FL(4), 588FM, 1335(2)
Federal Court of Australia Act 1976 (Cth) s 43
Australian Securities and Investments Commission Regulations 2001 (Cth) reg 2B
Federal Court Rules 2011 (Cth) r 30.21(1)(a)(i)
Fair Trading Act 1987 (NSW) ss 28, 32
Cases cited: Associated Newspapers v Bancks [1951] HCA 24; 83 CLR 322
Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18; 214 CLR 51
Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90
Australian Securities and Investments Commission v Kobelt [2019] HCA 18; 267 CLR 1
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- AGLC
- Patel v Pleash [2025] FCA 77
- Case
- [2025] FCA 77
- Decision Date
CaseChat Overview and Summary
The court found that the appointment of Mr Pleash as an administrator was invalid as he failed to take necessary steps to confirm the statutory basis for the appointment before accepting it. The court also ruled that the financial agreement between the parties was not performed, and no debt was due or payable. Additionally, the court held that the defendants engaged in unconscionable conduct and misleading or deceptive conduct under the Australian Consumer Law and the Australian Securities and Investments Commission Act.
The court ordered that the plaintiffs' costs be paid by the defendants, with the possibility of contribution claims between the defendants if costs are enforced against only one party. The plaintiffs were granted leave to submit short minutes of order to formalise the court's decision.
This case highlights the importance of ensuring statutory compliance in the appointment of administrators and the potential consequences of failing to meet contractual obligations. It also underscores the serious nature of consumer law violations, particularly when they involve financial services.
Orders
Orders of the court
1. Within 14 days, the plaintiffs submit proposed short minutes of order by email to the Associate to Cheeseman J.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
At 5.31pm on that same day, iLend registered a security interest against “All present and after-acquired property - No exceptions”, against Jubilee on the PPSR (AllPAP Registration). Mr Salim was nominated as the contact and address for service on the AllPAP Registration. The AllPAP Registration did not come to Jubilee’s attention until later. At the time iLend registered its alleged security interest, it had not provided any finance offer that accorded with clause (i) of the iLend Agreement. On 4 November 2022, Jubilee received an offer of finance (the Angas Offer), which it accepted on that same day, from Angas, a different financier, which was not introduced to the plaintiffs by Mr Salim or iLend. Although there are two copies of the Angas Offer in evidence, both are missing pages. The issues in dispute in this proceeding do not require me to consider the terms of the Angas finance arrangements which were accepted by Jubilee. The purpose of the Angas finance was to fund the ongoing costs of the development of the Property, including an invoice issued by TSDB to Jubilee on 29 November 2022 which was payable on 15 December 2022. It suffices to note that the Angas finance was due to, but did not, settle on 2 December 2022 as a result of Mr Pleash being appointed as administrator of Jubilee on that day. The TSDB invoice was not paid and TSDB suspended construction work at the Property pending payment of the invoice. On 17 November 2022, Jubilee lodged a complaint with AFCA in respect of the iLend Invoice. Mr Salim dealt with Mr Pleash and his colleagues at Hall Chadwick in relation to Mr Pleash’s appointment to Jubilee and two other companies from which iLend was seeking to recover fees. After Mr Pleash was appointed as the administrator of Jubilee, Mr Salim continued to deal with Mr Pleash and his colleagues in relation to the administration of Jubilee. By email on 1 December 2022, one of Mr Pleash’s subordinates, Duke Wolfgramm, provided Mr Salim with a deed of appointment and indemnity and a notice of appointment in relation to Mr Pleash’s appointment as the administrator of Jubilee for Mr Salim’s review and execution. In the recitals of the deed of appointment, the security interest claimed by Jubilee is described as follows:A. [Jubilee] granted a security interest over all of the property and assets of [Jubilee] both present and after acquired in favour of the [iLend] (Charge) pursuant to the provisions contained Ÿ Under the Mandate, Brokerage Agreement and Irrevocable Authority to Pay on First Drawdown or Settlement, whichever occurs first dated 11 February 2022Ÿ Pursuant to the personal properties securities registration registered over [Jubilee] being registration number 202210310076005. B. The Charge has become, and still is, enforceable and the Chargee are entitled to enforce the Charge on the whole, or substantially the whole, of the Company's property. The notice of appointment similarly described Mr Pleash’s appointment as being (as written):… pursuant to the provisions contained ŸUnder the Mandate, Brokerage Agreement dated 11 February 2022; and ŸPursuant to the personal properties securities registration registered over the Company being registration number 202210310076005.