JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE GEOGRAPHE WORKFORCE PTY LTD (ADMINISTRATORS APPOINTED) [2022] WASC 250
CORAM: STRK J
HEARD: 3 AUGUST 2022
DELIVERED : 3 AUGUST 2022
PUBLISHED : 5 AUGUST 2022
FILE NO/S: COR 139 of 2022
MATTER: IN THE MATTER OF GEOGRAPHE WORKFORCE PTY LTD (ADMINISTRATORS APPOINTED)
EX PARTE
ROBERT MICHAEL KIRMAN as joint and several administrator of GEOGRAPHE WORKFORCE PTY LTD (ADMINISTRATORS APPOINTED) ACN 630 339 758 AND SJ TRAFFIC MANAGEMENT PTY LTD (ADMINISTRATORS APPOINTED) ACN 613 399 163
First Plaintiff
ROBERT CONRY BRAUER as joint and several administrator of GEOGRAPHE WORKFORCE PTY LTD (ADMINISTRATORS APPOINTED) ACN 630 339 758 AND SJ TRAFFIC MANAGEMENT PTY LTD (ADMINISTRATORS APPOINTED) ACN 613 399 163
Second Plaintiff
Catchwords:
Corporations law - External administration - Application by the administrators pursuant to the Corporations Act 2001 (Cth) s 447A seeking an order as to how Pt 5.3A is to operate in relation to a particular company in administration - Funding deed and liability under the Corporations Act 2001 (Cth) s 443A - Application for directions pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations) that the plaintiffs as administrators are and were justified in causing the company in external administration to enter into a funding deed
Legislation:
Corporations Act 2001 (Cth), s 447A
Insolvency Practice Schedule (Corporations), s 90-15
Result:
Application granted
Category: B
Representation:
Counsel:
| First Plaintiff | : | L Bone |
| Second Plaintiff | : | L Bone |
Solicitors:
| First Plaintiff | : | HWL Ebsworth Lawyers |
| Second Plaintiff | : | HWL Ebsworth Lawyers |
Case(s) referred to in decision(s):
Australasian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270
Brash Holdings Ltd v Katile Pty Ltd [1996] 1 VR 24
Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth [2019] HCA 20; (2019) 268 CLR 524
Correa v Whittingham [2013] NSWCA 263; (2013) 278 FLR 310
Deputy Commissioner of Taxation v Portinex Pty Ltd [2000] NSWSC 99; (2000) 156 FLR 453
GDK Projects Pty Ltd; Re Umberto Pty Ltd (in liq) v Umberto Pty Ltd (in liq) [2018] FCA 541
Honest Remark Pty Ltd v Allstate Explorations NL [2006] NSWSC 735; (2006) 234 ALR 765
Nipps v Remagen Lend ADA Pty Ltd; Re Adaman Resources Pty (No 4) [2021] FCA 644
R v Toohey; Ex parte Northern Land Council [1981] HCA 74; (1981) 151 CLR 170
Re Ansett Australia Ltd (No 3) [2002] FCA 90; 115 FCR 409
Re Autocare Services Pty Ltd [2021] FCA 167
Re Bosnjak Holding Pty Ltd (2005) 53 ACSR 8; [2005] FCA 275 [9]
Re Broens Pty Ltd [2018] NSWSC 1747
Re Community Work Pty Ltd (in liq) [2018] FCA 425
Re Estate Property Group Ltd [2007] FCA 1393
Re Frigger [2020] WASC 365
Re Fund Options (Australia) Pty Ltd [2020] FCA 1256
Re GB Nathan & Co Pty Ltd (1991) 24 NSWLR 674
Re GGA Lifestyle Pty Ltd [2019] WASC 167
Re Great Southern Infrastructure Pty Ltd [2009] WASC 161
Re Greg Sewell Forgings…
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- AGLC
- Re Geographe Workforce Pty Ltd (Administrators Appointed) [2022] WASC 250
- Case
- [2022] WASC 250
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the court was whether the administrators were justified in causing the company in external administration to enter into a funding deed and, if so, whether the court could provide direction under section 447A of the Corporations Act to mitigate any personal liability under section 443A. The court had to determine the scope of its power under section 447A and whether such power could be used to address concerns regarding personal liability for the administrators.
The court held that while the power under section 447A is broad, it is not unlimited. The court's power must be exercised for the purpose for which it was granted and must have a nexus with how Part 5.3A is to operate in relation to the company. The court must consider the objects of Part 5.3A, as stated in section 435A, and the nature and aims of external administration. The court also noted that section 447A could be used to address concerns about personal liability under section 443A, particularly where the indemnity provided under section 443D is insufficient. The court found that the administrators were justified in entering into the funding deed to enable the company's business to continue trading for the benefit of creditors.
The court granted the application, providing the administrators with the necessary direction to mitigate their personal liability under section 443A to the extent that the indemnity provided under section 443D was insufficient. This decision ensures that the administrators can continue their role without undue personal risk, while also achieving the objectives of the external administration process.
Orders
Orders of the court
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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
However, while the power is broad, it is not unlimited.[21] It is well established that the power vested in a court by s 447A is a statutory power which may be exercised only for the purpose for which it was granted.[22] As was noted by Brereton J in Honest Remark Pty Ltd v Allstate Explorations NL at [66], in reliance on Re New Tel Ltd at [7], 'an order under s 447A must have a nexus with how pt 5.3A is to operate in relation to a particular company'.[21] Correa v Whittingham [2013] NSWCA 263; (2013) 278 FLR 310 [2] - [8], [97] - [105], [304], citing Honest Remark Pty Ltd v Allstate Explorations NL [2006] NSWSC 735; (2006) 234 ALR 765 and Re New Tel Ltd [2004] FCA 1154; (2004) 210 ALR 270 [3].[22] R v Toohey; Ex parte Northern Land Council [1981] HCA 74; (1981) 151 CLR 170, cited in Correa v Whittingham [4]. Further, Barrett JA in Correa v Whittingham at [4] observed:… The 'nexus' with the operation of Pt 5.3A to which reference is made in the decided cases must be understood accordingly. The relevant purpose is to be ascertained by reference to the language of the statute, its subject matter and objects and the consequences of a decision that the power has been exceeded: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355. The principal source of constraint and limitation upon the power is therefore the statement of the object of Pt 5.3A in s 435A, coupled with the nature, incidents and aims of the particular form of external administration as gathered from the provisions of Pt 5.3A as a whole. I accept that any order granted pursuant to s 447A must be designed to achieve in relation to a particular company the objects of pt 5.3A as stated in s 435A of the Corporations Act.[23][23] Australasian Memory Pty Ltd v Brien; Re Greg Sewell Forgings Pty Ltd (1995) 17 ACSR 602. Section 435A of the Corporations Act is reproduced at [60]. Counsel for the plaintiffs noted that there is authority for the proposition that s 447A may be used as a basis for addressing concerns as to the potential for personal liability that would otherwise arise by reason of s 443A of the Corporations Act. By way of example, counsel noted that in circumstances where the indemnity that an administrator has under s 443D of the Corporations Act is insufficient to satisfy debts for which the administrator is personally liable pursuant to s 443A(1) of the Corporations Act, the court has the power to order that the administrator will not (notwithstanding s 443A(2) of the Corporations Act) be liable to the extent of the insufficiency: see Re Spyglass Management Group Pty Ltd (2004) 51 ACSR 432; [2004] FCA 1469 [3].[24][24] Plaintiffs' submissions par 15. Counsel further submitted that the courts have been willing to grant orders similar to those sought in this application in circumstances where the court has been satisfied that the administrator entered into the loan agreement or other arrangement to enable the company's business to continue to trade for the benefit of the creditors of the company.[25][25] Plaintiffs' submissions par 16.