Re Pentridge Village Pty Ltd (in Liquidation)
[2025] WASC 412
•26 SEPTEMBER 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE PENTRIDGE VILLAGE PTY LTD (IN LIQUIDATION); EX PARTE ROBERT ALLAN JACOBS [2025] WASC 412
CORAM: HILL J
HEARD: 8 AUGUST 2025
DELIVERED : 8 AUGUST 2025
PUBLISHED : 26 SEPTEMBER 2025
FILE NO/S: COR 118 of 2025
MATTER: IN THE MATTER OF PENTRIDGE VILLAGE PTY LTD (IN LIQUIDATION)
EX PARTE
ROBERT ALLAN JACOBS as liquidator of PENTRIDGE VILLAGE PTY LTD (IN LIQUIDATION)
Plaintiff
Catchwords:
Corporations - External administration - Applications for approval for entry into two agreements - Application by liquidators for directions that liquidators would be justified and acting properly in entering into and performing agreements - Turns on own facts
Legislation:
Corporations Act 2001 (Cth) s 477
Rules of the Supreme Court 1971 (WA) O 67B r 5
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiff | : | L Christensen |
Solicitors:
| Plaintiff | : | CX Law |
Case(s) referred to in decision(s):
ASIC v Forestview Nominees Pty Ltd [2007] FCA 1985; (2007) 164 FCR 237
Elderslie Finance Corp Ltd v Newpage Pty Ltd (No 6) [2007] FCA 1030; (2007) 160 FCR 423
Empire (Aust) Nominees Pty Ltd v Vince [2000] VSC 324; (2000) 35 ACSR 167
Pentridge Village Pty Ltd (in Liq) v Capital Finance Australia Limited (No 3) [2023] VSC 605
Re Bell Group Ltd (in liq); Ex parte Woodings [2013] WASC 409
Re HIH Insurance Ltd [2004] NSWSC 5
Re McDermott and Potts [2019] VSCA 23
Re Spedley Securities Ltd (in liq) (1992) 9 ACSR 83
HILL J:
(This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings and to correct matters of grammar and expression.)
By originating process dated 5 August 2025, the plaintiff, Robert Allan Jacobs, seeks orders pursuant to s 477(2)(b) of the Corporations Act 2001 (Cth) (Act), approving the entry into a costs agreement executed on 8 March 2023, as well as a litigation funding agreement. Mr Jacobs also seeks confidentiality orders over his affidavit dated 5 August 2025 (Confidential Affidavit).
On the same date, Mr Jacobs filed a certificate of urgency certifying the application was of such an urgent nature that it was required to be listed 'well prior to 11 August 2025'. The basis for the urgency is that an appeal in proceedings that are closely associated with the subject matter of this application is listed for hearing in the Supreme Court of Victoria on 11 August 2025, which is Monday.
For this reason, the application has been listed before me this morning on an urgent basis.
In support of the application, Mr Jacobs relied on an open affidavit filed 5 August 2025, as well as the Confidential Affidavit. I have also had the benefit of a written outline of submissions, as well as a brief exchange with counsel who appeared before me this morning.
Factual background
As noted in my exchange with counsel, the factual background to this matter is somewhat complex.
The dispute arises out of a residential and commercial property development on the site of the former Pentridge Prison in Victoria (Project). Pentridge Village Pty Ltd (Pentridge) acted as custodian of three joint-venture companies (Pentridge, West Homes Australia Pty Ltd (West Homes), and Capital Finance Australia Ltd (Capital Finance)) (together, the Companies) in relation to the Project, which commenced on 5 June 1999. Leigh Chiavaroli was and is the sole director of each of the Companies.[1] West Homes was the manager and builder of the Project, and Capital Finance was the financier of the Project.[2]
[1] Open affidavit of Robert Allan Jacobs filed 5 August 2025 [12].
[2] Open affidavit of Robert Allan Jacobs filed 5 August 2025 [8] - [9].
Capital Finance assigned its debt and securities to AET SPV Management Pty Ltd (AET) as trustee of the Lawson Trust, which subsequently assigned the debt and securities to Daimleigh Capital Pty Ltd (Daimleigh Capital).[3] As a consequence, Daimleigh Capital is a secured creditor of both Pentridge and West Homes and is owed an estimated $180 million. Mr Jacobs is also the liquidator of Daimleigh Capital.[4]
[3] Open affidavit of Robert Allan Jacobs filed 5 August 2025 [15].
[4] Open affidavit of Robert Allan Jacobs filed 5 August 2025 [10] - [11].
Daimleigh Capital borrowed funds from CVS Lane Capital Partners Pty Ltd (CVS). In July 2014, CVS assigned the loan and its securities to Varde Capital Partners Pty Ltd.
On 27 November 2014, CVS appointed receivers and managers over the property comprising the Project (Project Property). The receivership continued until 29 October 2020, when the Project Property was sold.[5]
[5] Open affidavit of Robert Allan Jacobs filed 5 August 2025 [15] - [16].
On 3 April 2014, West Homes was wound up by order of the Supreme Court of Victoria. On 20 August 2014, Pentridge was wound up, also by order of the Supreme Court of Victoria.[6]
[6] Open affidavit of Robert Allan Jacobs filed 5 August 2025 [17] - [18].
In June 2016, Pentridge and West Homes commenced proceedings against Capital Finance in the Supreme Court of Victoria (Proceedings).
On 30 September 2022, Mr Jacobs was appointed liquidator of Pentridge. As the Proceedings were still on foot when Mr Jacobs was appointed as liquidator of Pentridge, on 8 March 2023 he entered into a costs agreement with Pentridge's solicitors on the record (Costs Agreement).[7]
[7] Open affidavit of Robert Allan Jacobs filed 5 August 2025 [21], 'RJ9'.
On 13 October 2023, on the application of the defendant in the Proceedings, the Proceedings were dismissed by Stynes J for want of prosecution (Decision).[8]
[8] Pentridge Village Pty Ltd (in Liq) v Capital Finance Australia Limited (No 3) [2023] VSC 605; Open affidavit of Robert Allan Jacobs filed 5 August 2025 [19], 'RJ5', 'RJ7'.
On 30 November 2023, Pentridge and West Homes filed an application for leave to appeal against this Decision. It is this appeal that is listed for hearing on Monday, 11 August 2025.[9]
[9] Open affidavit of Robert Allan Jacobs filed 5 August 2025 [20] - [22], 'RJ8'.
At the time the application for leave to appeal was filed, Pentridge and West Homes had entered into a litigation funding agreement. This agreement was terminated by the litigation funder in about late December 2023 or early 2024.[10]
[10] Open affidavit of Robert Allan Jacobs filed 5 August 2025 [23], 'RJ10'.
On 3 April 2024, Alice Ruhe was appointed liquidator of West Homes. On 12 February 2025, Mr Jacobs and Andrew Smith were appointed as administrators of West Homes under the terms of a deed of company arrangement (DOCA).[11]
[11] Open affidavit of Robert Allan Jacobs filed 5 August 2025 [5] - [7], 'RJ1' - 'RJ3'.
The director of each of the Companies, Mr Chiavaroli, has identified alternative funding for the prosecution of the appeal and the potential continuation of the Proceedings if the appeal is successful. The proposed terms of this alternate funding are annexed to the confidential affidavit (Litigation Funding Agreement).[12]
[12] Open affidavit of Robert Allan Jacobs filed 5 August 2025 [28].
Should the requested approvals be given?
Mr Jacobs seeks orders in these proceedings approving both the Costs Agreement and the Litigation Funding Agreement (together, Agreements). Approval is required for both Agreements under the Act as it is anticipated that both will, or certainly may, extend beyond three months.
Liquidators are granted broad powers under s 477 of the Act. Section 477(2B) is a fetter on this broad power. Once this provision is enlivened, as it is in this case, a liquidator cannot enter into an agreement on the company's behalf without the approval of the court, the committee of inspection or a resolution of creditors.[13] The purpose of the provision is to ensure there is appropriate oversight of the liquidator's actions.[14]
[13] Elderslie Finance Corp Ltd v Newpage Pty Ltd (No 6) [2007] FCA 1030; (2007) 160 FCR 423 [26].
[14] Re HIH Insurance Ltd [2004] NSWSC 5 [15].
In considering an application under s 477(2B), there is a particular focus on ensuring the winding‑up proceeds as expeditiously as circumstances allow.[15] In considering whether to grant the approval sought by the liquidator, the usual approach taken by the court is that:[16]
[T]the court pays regard to the commercial judgment of the liquidator. That is not to say that it rubber stamps whatever is put forward by the liquidator but the court is necessarily confined in attempting to second guess the liquidator in the exercise of his powers, and generally will not interfere unless there can be seen to be some lack of good faith, some error in law or principle, or real and substantial grounds for doubting the prudence of the liquidator's conduct. (citations omitted)
[15] Re HIH Insurance Ltd [15].
[16] Re Spedley Securities Ltd(in liq) (1992) 9 ACSR 83, 85; cited with approval in numerous authorities including in Re McDermott and Potts [2019] VSCA 23 [72].
In controlling the liquidator's exercise of the power to enter into an agreement, the court 'looks to the interests of creditors' and asks whether the agreement is in their interests.[17] Where the major creditors have had an opportunity to consider the proposed compromise and do not oppose it, or support it, this will be a highly influential factor. This is because creditors, if properly informed, are in the best position to judge what is in their own commercial interests.[18]
[17] Re Spedley Securities Ltd [74]; Re McDermott and Potts [69].
[18] Re McDermott and Potts [93].
Approval for entry into any deed or agreement should normally be obtained prior to entry into the deed or agreement. However, there is no doubt that the court has power to give approval that operates from the date of entry into the agreement.[19]
[19] Re Bell Group Ltd (in liq); Ex parte Woodings [2013] WASC 409 [34] and the authorities cited therein.
There is some divergence of opinion as to the precise basis as to how retrospective approval ought to be effected.[20] The orders that are sought by the applicant in this proceeding give effect to the more recent approach of the court, which is to extend the time for approval under s 1322(4)(d) of the Act and to grant retrospective approval to enter into the agreement with a declaration that the relevant compromise is not invalid by reason of it having been entered into without prior approval of the court.
[20] Empire (Aust) Nominees Pty Ltd v Vince [2000] VSC 324; (2000) 35 ACSR 167 [10]; cf ASIC v Forestview Nominees Pty Ltd [2007] FCA 1985; (2007) 164 FCR 237 [40] - [41].
Given that the Litigation Funding Agreement is confidential, I am somewhat constrained in the reasons I can give for the decision I made.
In considering the application, I have taken into account the evidence in the open and Confidential Affidavit of Mr Jacobs concerning the complexity of the proceedings that are the subject of the Agreements. This matter is relevant to the court's consideration of whether Mr Jacobs is acting in good faith in entering into the Agreements and whether there is any error or other ground which may call his decision into question.
On the evidence before me, I am satisfied there is no such basis to call into question Mr Jacobs' decision to enter into the Costs Agreement or the Litigation Funding Agreement. In reaching this decision, I have taken into account the following key factors.
First, the application for leave to appeal the Decision is the only means by which creditors of the Companies can receive any amount.[21]
[21] Plaintiff's submissions filed 5 August 2025 [7].
Second, Mr Jacobs has explained the rationale for both Agreements and provided reasons for his decision to enter into the Costs Agreement and the Litigation Funding Agreement.
Third, there is a deed of indemnity and insurance policy in place in relation to any adverse costs orders that could be made in the Proceedings.[22]
[22] Open affidavit of Robert Allan Jacobs filed 5 August 2025 [37], 'RJ13'.
Given these matters, I accept that approving the Agreements is reasonable and in the best interests of creditors.
While approval was not sought by Mr Jacobs before entry into the Agreements, I also consider that it is appropriate that approval be granted retrospectively. In relation to the Costs Agreement, I accept Mr Jacobs' evidence that at the time he entered into this agreement, he assumed it would only be for a short time. In relation to the Litigation Funding Agreement, I note that this agreement is conditional upon approval being granted by the court under s 477(2)(b) of the Act.
Should confidentiality orders be made over the Confidential Affidavit?
Mr Jacobs also seeks confidentiality orders to be made over the Confidential Affidavit, pursuant to O 67B r 5(3) of the Rules of the Supreme Court 1971 (WA).
Mr Jacobs submits that it is not unusual for confidentiality orders to be made over litigation funding agreements due to their sensitivity. He also notes that it is a term of the Litigation Funding Agreement that its contents be kept confidential.[23]
[23] Plaintiff's submissions filed 5 August 2025 [12].
Having considered the Confidential Affidavit as well as the open affidavit of Mr Jacobs, I am satisfied in the circumstances of this case that it is appropriate to make the confidentiality orders sought.
Conclusion
For these reasons, I am satisfied that it is appropriate to make orders broadly in terms of the originating process, with the amendment proposed by counsel who appeared before me today.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KS
Associate to the Hon Justice Hill
26 SEPTEMBER 2025
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