Re SJ Traffic Management Pty Ltd (Administrators Appointed) - [2022] WASC 279

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE SJ TRAFFIC MANAGEMENT PTY LTD (ADMINISTRATORS APPOINTED) [2022] WASC 279
CORAM:   STRK J
HEARD:   16 AUGUST 2022
DELIVERED          :   16 AUGUST 2022
PUBLISHED           :   26 AUGUST 2022
FILE NO/S:   COR 139 of 2022
MATTER:   IN THE MATTER OF SJ TRAFFIC MANAGEMENT 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 - Book debts - Invoice finance arrangement 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 administrators are and were justified in causing the company in external administrators to enter into invoice financing documents

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

Cases referred to in decision:

Australasian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270
Brash Holdings Ltd v Katile Pty Ltd [1996] 1 VR 24
Re Bosnjak Holdings Pty Ltd [2005] FCA 275; (2005) 53 ACSR 8
Re Geographe Workforce Ltd [2022] WASC 250
Re Spyglass Management Group Pty Ltd [2004] FCA 1469; (2004) 51 ACSR 432

TABLE OF CONTENTS

Introduction

Evidence

Affidavit of Robert Conry Brauer sworn on 26 July 2022

Confidential affidavit of Robert Conry Brauer sworn on 26 July 2022

Affidavit of Julia Abbott Vincent sworn on 2 August 2022

Further confidential affidavit of Robert Conry Brauer sworn on 9 August 2022

Affidavit of Christopher James Simpson sworn on 11 August 2022

Submissions

Urgency

Application pursuant to s 447A of the Corporations Act

Applicable principles

Disposition

Directions pursuant to s 90-15(1) of the Insolvency Practice Schedule (Corporations)

Applicable principles

Disposition

Confidentiality

Costs

Conclusion and orders

Sch A - Minute of proposed orders filed on 10 August 2022

Sch B - Orders made on 16 August 2022

STRK J:

Introduction

On 4 July 2022, Robert Conry Brauer and Robert Michael Kirman (together the plaintiffs) were appointed as joint and several administrators of Geographe Workforce Pty Ltd (administrators appointed) ACN 630 339 758 and SJ Traffic Management Pty Ltd (administrators appointed) ACN 613 399 163.
By an originating process filed on 27 July 2022, the plaintiffs sought orders pursuant to s 447A of…

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: [2022] WASC 279
Decision Date: 26 AUGUST 2022

CaseChat Overview and Summary

The administrators of SJ Traffic Management Pty Ltd, a company under external administration, sought clarification and direction from the court regarding the operation of Part 5.3A of the Corporations Act 2001 in relation to the company's book debts. The administrators also sought an order to affirm their actions in entering into invoice financing documents, which were argued to be justified under section 90-15 of the Insolvency Practice Schedule. The primary issue before the court was whether the administrators had acted within their authority when they entered into invoice financing arrangements, and whether such actions were consistent with the obligations imposed by section 443A of the Corporations Act.

The court considered the nature and scope of the administrators' powers under the Corporations Act and the Insolvency Practice Schedule. It was necessary to determine whether the invoice financing arrangements were legitimate transactions entered into in the ordinary course of business, as required by section 443A. The court also examined whether the administrators had acted within the bounds of their statutory duties and whether they had appropriately exercised their discretion in managing the company's assets during the administration process. After reviewing the evidence and submissions, the court found that the administrators had acted within their authority and had justified their entry into the invoice financing documents.

Following its analysis, the court ruled in favour of the administrators. It confirmed that the invoice financing arrangements were legitimate and that the administrators had properly exercised their discretion in managing the company's assets. The court provided the requested directions to ensure that the administrators could continue to manage the company's affairs in a manner consistent with their statutory obligations. The court's decision affirmed the administrators' actions and provided clarity on the operation of Part 5.3A in the context of the company's book debts and invoice financing arrangements.

Orders