Rewards Land Pty Ltd v Jones - [2010] WASC 233

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: REWARDS LAND PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) -v- MARTIN BRUCE JONES, ANDREW JOHN SAKER AND DARREN GORDON WEAVER IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF REWARDS PROJECTS LTD, REWARDS GROUP LTD, REWARDS LAND PTY LTD, REWARDS MANAGEMENT PTY LTD, ORD PACKERS PTY LTD, BERRY PACKERS PTY LTD [2010] WASC 233

CORAM: LE MIERE J

HEARD: 28 & 30 JULY 2010

DELIVERED : 2 SEPTEMBER 2010

FILE NO/S: COR 104 of 2010

MATTER :Rewards Projects Ltd (Administrators Appointed), Rewards Group Ltd (Administrators Appointed (Receivers and Managers Appointed), Rewards Land Pty Ltd Administrators Appointed) (Receivers and Managers Appointed), Rewards Management Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed), Ord Packers Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed), Berry Packers Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed), The ARK Fund Ltd (Administrators Appointed) (Receivers and Managers Appointed)

BETWEEN: REWARDS LAND PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
THE ARK FUND LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
JAMES GERARD THACKRAY, PETER McKENZIE ANDERSON AND WILLIAM JAMES HARRIS IN THEIR CAPACITY AS JOINT AND SEVERAL RECEIVERS AND MANAGERS OF REWARDS LAND PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) THE ARK FUND LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
Plaintiffs
AND
MARTIN BRUCE JONES, ANDREW JOHN SAKER AND DARREN GORDON WEAVER IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF REWARDS PROJECTS LTD, REWARDS GROUP LTD, REWARDS LAND PTY LTD, REWARDS MANAGEMENT PTY LTD, ORD PACKERS PTY LTD, BERRY PACKERS PTY LTD
Defendants

Catchwords:

Corporations - Companies under administration - Application by receivers for leave pursuant to Corporations Act 2001 (Cth) s 440C - Whether final or interlocutory - Objects of Corporations Act 2001 (Cth) s 435A - Leave to take possession - Maintenance of properties - Maintenance to be assessed on lease by lease basis - Likelihood of deed of company arrangement - Whether further proceedings likely - Balance of interests

Legislation:

Corporations Act 2001 (Cth), s 440B, s 440C, s 440D, s 435A, s 435C, s 436A, s 439A
Rules of the Supreme Court 1971 (WA), O 37 r 6

Result:

Application refused

Category: B

Representation:

Counsel:

Plaintiffs:        Mr J L Sher & Mr C D Belyea
Defendants:        Mr J C Vaughan
Rewards Growers Advocacy Group      :        Mr D H Solomon
Connection Group               :        Mr K Baker

Solicitors:

Plaintiffs:        Clayton Utz
Defendants:        Tottle Partners
Rewards Growers Advocacy Group      :        Clarendon Lawyers
Connection Group               :        Kliger Partners

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

Air Services Australia v Transfield Pty Ltd [1999] FCA 886; (1999) 92 FCR 200
Canberra International Airport Pty Ltd v Ansett Australia Ltd [2002] FCA 329; (2002) 41 ACSR 309
Ex Parte Britt [1987] 1 Qd R 221
Hamilton v National Australia Bank Ltd (1996) 14 ACLC 1202
Lewandowski v Lovell (1991) 4 WAR 311
Licul v Corney [1976] HCA 6; (1976) 180 CLR 213
Re Ansett Australia Ltd (Admin Appointed); Intrepid Aviation Partners VII LLC v Ansett Australia…

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: [2010] WASC 233
Decision Date: 2 SEPTEMBER 2010

CaseChat Overview and Summary

The case of Rewards Land Pty Ltd v Jones involved an application by receivers to obtain leave from the Court for the purpose of taking possession of certain properties owned by the company, Rewards Land Pty Ltd, which was under administration. The respondents to the application were individuals who were in possession of the properties in question. The dispute arose under the Corporations Act 2001 (Cth), specifically concerning sections 440C and 435A, which pertain to the leave of the Court and the maintenance of properties during administration. The primary issue before the Court was whether the application by the receivers constituted a final or interlocutory proceeding. This distinction was crucial, as it would determine the standard of proof required for the receivers to succeed in their application.

The Court examined the objectives of section 435A of the Corporations Act 2001 (Cth), which is to provide for the administration of a company in a manner that maximises its value for the benefit of creditors and shareholders. The Court held that the application by the receivers was an interlocutory proceeding, as it did not seek to determine the ultimate fate of the company or its assets, but rather to secure possession of specific properties. This conclusion was based on the fact that the application did not involve a final determination of the company's future, and it was not designed to resolve the broader issues of the administration. The Court also considered the likelihood of a deed of company arrangement being proposed and the balance of interests between the receivers and the respondents.

The Court granted the receivers leave to take possession of the properties, but it directed that the maintenance of the properties be assessed on a lease-by-lease basis. This meant that the receivers could not take immediate possession of all properties but had to evaluate each lease individually to determine the necessity and proportionality of maintenance costs. The Court found that this approach aligned with the objects of the Corporations Act 2001 (Cth) and provided a fair outcome for all parties involved. The Court also noted that further proceedings were likely, as the administration of the company would continue, and the receivers would need to manage the assets in the best interests of the creditors and shareholders. The final orders reflected the Court's reasoning and directed the receivers to proceed with the assessment of maintenance costs for each property and to report back to the Court on the progress of the administration.

Orders