Re Rewards Group Ltd - [2010] WASC 276

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: RE REWARDS GROUP LTD; EX PARTE REWARDS PROJECTS LTD (ADMINISTRATORS APPOINTED) IN ITS CAPACITY AS THE RESPONSIBLE ENTITY OF THE MANAGED INVESTMENT SCHEMES LISTED IN SCHEDULE 1 [2010] WASC 276

CORAM: LE MIERE J

HEARD: 30 JUNE 2010

DELIVERED : 30 JUNE 2010

FILE NO/S: COR 110 of 2010

MATTER :Rewards Group Ltd (Administrators Appointed) (Receivers and Managers Appointed), Rewards Projects Ltd (Administrators Appointed) Rewards Land Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) Rewards Management Pty Ltd (Administrators Appointed), Ord Packers Pty Ltd (Administrators Appointed), Berry Packers Pty Ltd (Administrators Appointed) Rural Labour Pty Ltd (Administrators Appointed) and Greentree Capital Pty Ltd (Administrators Appointed)
EX PARTE
REWARDS PROJECTS LTD (ADMINISTRATORS APPOINTED) IN ITS CAPACITY AS THE RESPONSIBLE ENTITY OF THE MANAGED INVESTMENT SCHEMES LISTED IN SCHEDULE 1
First Plaintiff
ANDREW JOHN SAKER, MARTIN BRUCE JONES AND DARREN GORDON WEAVER IN THEIR CAPACITY AS THE ADMINISTRATORS OF THE FIRST PLAINTIFF
Second Plaintiff

Catchwords:

Corporations - Managed investment scheme - Application for directions by administrators - Entry into loan agreements - Maintenance of schemes

Legislation:

Corporations Act 2001 (Cth), s 443A(1), s 443D, s 447A, s 447D

Result:

Application granted

Category: B

Representation:

Counsel:

First Plaintiff                :     Mr J W S Peters SC & Mr S B Rosewarne
Second Plaintiff            :     Mr J W S Peters SC & Mr S B Rosewarne
Connection Group         :     Mr K Baker
Rewards Growers
Advocacy Group           :     Mr D H Solomon

Solicitors:

First Plaintiff                :     Tottle Partners
Second Plaintiff            :     Tottle Partners
Connection Group         :     Kliger Partners
Rewards Growers
Advocacy Group           :     Clarendon Lawyers

Case(s) referred to in judgment(s):

Coad v Wellness Pursuit Pty Ltd (in liq) [2009] WASCA 68; (2009) 71 ACSR 250
Re Ansett Australia Ltd and Mentha [2001] FCA 1439; (2001) 39 ASCR 355
Re Ansett Australia Ltd and Mentha [2001] FCA 1806; (2001) 115 FCR 376
Re Great Southern Managers Australia Ltd [2009] VSC 642; (2009) 77 ACSR 9

LE MIERE J: (This judgment was delivered extemporaneously on 30 June 2010 and has been edited from the transcript.)

The plaintiffs have brought proceedings by originating process dated 25 June 2010 and filed on 28 June 2010, by which they seek orders or directions in relation to various matters arising from the entry by the second to fourth plaintiffs (the Administrators) into loan agreements in their capacity as joint and several administrators of the first plaintiff (RPL).
The provision of funding under the loan agreements is conditional on the court making orders in relation to the Administrators' decision to enter into the agreements and the consequences that attach to the provision of funds to the Administrators. The condition is required to be satisfied today, 30 June 2010, and for that reason the matter has been brought on and heard by the court as a matter of urgency.
In support of the application the plaintiffs rely on the affidavits of Martin Bruce Jones sworn 25 June 2010…

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.

Continue reading Re Rewards Group Ltd

Details

AGLC: Re Rewards Group Ltd; [2010] WASC 276
Case: [2010] WASC 276
Decision Date: 30 JUNE 2010

CaseChat Overview and Summary

In the case of Re Rewards Group Ltd, the parties involved were the company, Rewards Group Ltd, and its administrators. The nature of the dispute was whether the administrators were authorised to enter into loan agreements to maintain the company's managed investment schemes. The court involved was the Federal Court of Australia. The administrators sought directions from the court to proceed with the loan agreements to ensure the schemes' continued operation.

The legal issues the court had to decide included whether the administrators had the necessary authority under the Corporations Act 2001 (Cth) to enter into the loan agreements. The court needed to determine if the loans were necessary to maintain the schemes and if the loans would benefit the company's creditors. Additionally, the court considered the potential impact of the loans on the company's assets and whether the loans would jeopardise the company's ongoing viability.

The court concluded that the administrators did have the authority to enter into the loan agreements to maintain the managed investment schemes. The court found that the loans were necessary to preserve the value of the schemes and would benefit the creditors by ensuring the continued operation of the schemes. The court also determined that the loans would not jeopardise the company's assets and would not undermine the company's ongoing viability. The court's reasoning was based on the need to protect the interests of the company's creditors and the importance of maintaining the managed investment schemes. The court granted the administrators the directions they sought, allowing them to proceed with the loan agreements.

Orders