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Re RCR Tomlinson Ltd (admins apptd)

Re RCR Tomlinson Ltd (admins apptd)

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Case Copied 15 June 2020 83 min read

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of RCR Tomlinson Ltd (administrators appointed) and Ors [2020] NSWSC 735
Hearing dates: 1 and 8 May 2020
Decision date: 15 June 2020
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Parties to bring in short minutes of order. Directions to be given that Plaintiffs are justified in: treating the Appointment Date as the relevant “snapshot” date for determining whether an Asset is the subject of a Circulating Security Interest for payment of Priority Employee Entitlements, notwithstanding a change in the nature of the Asset’s security interest post-Appointment Date; treating the Surplus Proceeds as not being an ‘account’ or property subject to a circulating security interest; treating WIP permutations 1 and 2 as circulating assets; treating WIP permutation 3 and Intangible WIP as not being circulating assets; treating Subcontractor Proceeds as not being an ‘account’ or property subject to a ‘circulating security interest’.

Catchwords: MORTGAGES AND SECURITIES — Personal Property Securities Act 2009 (Cth) — Circulating asset — Circulating security interest — s 561 of the Corporations Act 2001 (Cth) — Administrator appointment date relevant date for whether asset subject to circulating security interest — Definitions of ‘account’ and ‘monetary obligation’ in ss 10 and 340 of Personal Property Securities Act 2009 (Cth) — Whether ‘monetary obligation’ requires existing liability to pay a fixed, certain, specific or liquidated sum of money — Whether Plaintiffs’ rights to any surplus proceeds on performance bonds called on after appointment date are PPSA personal property at appointment date — Whether rights to any surplus proceeds on performance bonds called on after appointment date are ‘accounts’ or ‘monetary obligations’ — Whether certain tangible work in progress are ‘accounts’ or ‘monetary obligations’— Whether certain intangible work in progress are ‘accounts’ or ‘monetary obligations’ — Whether Plaintiffs’ rights to call on subcontractor performance bonds after appointment date are ‘accounts’ or ‘monetary obligations’ at appointment date
Legislation Cited: - Companies Act 1961 (NSW), s 292
- Companies Act 1929 (UK), s 264
- Companies Act 1948 (UK), s 319
- Companies (New South Wales) Act 1981 (NSW), s 446
- Corporations Act 1989 (NSW), s 561
- Corporations Act 2001 (Cth) ss 433, 553, 553C, 554, 561; Sch 2, s 90-15
- Personal Property Securities Act 2009 (Cth), ss 10, 340
- Personal Property Securities Act 1999 (NZ), s 16
- Personal Property Securities Act 1990 (Ontario), s 4
- Preferential Payments in Bankruptcy (Amendment) Act 1897 (UK), s 2
- Supreme Court (Corporations) Rules 1999 (NSW), r 2.13
- Trustee Act 1925 (NSW), s 63
- Uniform Commercial Code (US), art 9
Cases Cited: - Agent’s Equity Inc v Mendlowitz & Associates Inc (Trustees of the Estate of Hope) (1996) 30 OR (3d) 557
- Aldi Foods Pty Ltd v Shop, Distributive and Allied Employees Association [2017] HCA 53
- Buchler v Talbot [2004] 2 AC 298
- Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth [2019] HCA 20; (2019) 93 ALJR…

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.

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Details

Case: [2020] NSWSC 735
Decision Date: 15 June 2020

CaseChat Overview and Summary

Re RCR Tomlinson Ltd (admins apptd) involved the administrators of RCR Tomlinson Ltd, who brought a case to determine the legal status of various assets and interests in the context of the Personal Property Securities Act 2009 (Cth) and the Corporations Act 2001 (Cth). The administrators sought clarification on whether certain assets were subject to circulating security interests and if specific monetary obligations and work in progress qualified as accounts or monetary obligations under the Personal Property Securities Act.

The primary legal issues before the court were the interpretation of the terms 'account' and'monetary obligation' as defined in sections 10 and 340 of the Personal Property Securities Act. The court needed to determine whether these terms required an existing liability to pay a fixed, certain, specific or liquidated sum of money. Furthermore, the court had to decide whether the plaintiffs' rights to any surplus proceeds on performance bonds called on after the appointment date, as well as certain tangible and intangible work in progress, qualified as accounts or monetary obligations. Additionally, the court considered whether the plaintiffs' rights to call on subcontractor performance bonds after the appointment date were accounts or monetary obligations at the appointment date.

The court found that the administrator's appointment date was the relevant date for determining whether assets were subject to circulating security interests. It clarified that a monetary obligation under the Personal Property Securities Act does not necessarily require an existing liability to pay a fixed sum of money but can also include contingent or future obligations. The court determined that the plaintiffs' rights to surplus proceeds on performance bonds called on after the appointment date did not constitute personal property at the appointment date. It further held that certain tangible work in progress qualified as accounts or monetary obligations, while certain intangible work in progress did not. The court concluded that the plaintiffs' rights to call on subcontractor performance bonds after the appointment date did not constitute accounts or monetary obligations at the appointment date.

The final orders of the court addressed the specific assets and interests in question, providing clarity on their status under the Personal Property Securities Act and the Corporations Act. The court's decision provided valuable guidance on the interpretation of key terms in the legislation and the implications for the administration of companies in liquidation.

Orders