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Silvia v FEA Carbon Pty Ltd

Silvia v FEA Carbon Pty Ltd

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FEDERAL COURT OF AUSTRALIA
Silvia v Fea Carbon Pty Ltd (ACN 009 505 195) (Administrators Appointed) (Receivers and Managers Appointed) [2010] FCA 515

Citation: Silvia v Fea Carbon Pty Ltd (ACN 009 505 195) (Administrators Appointed) (Receivers and Managers Appointed) [2010] FCA 515

Parties: BRIAN SILVIA, PETER KREJCI AND MATHEW MULDOON IN THEIR CAPACITY AS ADMINISTRATORS OF FEA CARBON PTY LTD (ACN 009 505 195) (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED), FOREST ENTERPRISES AUSTRALIA LTD (ACN 009 553 548) (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED), TASMANIAN PLANTATION PTY LTD (ACN 009 560 463) (ADMINISTRATORS APPOINTED) (CONTROLLERS APPOINTED) AND FEA PLANTATIONS LTD (ACN 055 969 429) (ADMINISTRATORS APPOINTED) and FEA PLANTATIONS LTD (ACN 055 969 429) (ADMINISTRATORS APPOINTED) v FEA CARBON PTY LTD (ACN 009 505 195) (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED), FOREST ENTERPRISES AUSTRALIA LTD (ACN 009 553 548) (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) and TASMANIAN PLANTATION PTY LTD (ACN 009 560 463) (CONTROLLERS APPOINTED)

File number: VID 283 of 2010

Judge: FINKELSTEIN J

Date of judgment: 30 April 2010

Catchwords:
CORPORATIONS – voluntary administration – administrator’s liability for rent under s 443B – extension of time during which administrator not personally liable – when appropriate to grant extension

CORPORATIONS – voluntary administration – whether mere service of notice under s 443B(3) constitutes repudiation of lease

Legislation: Corporations Act 2001 (Cth), ss 440C & 443B

Cases cited: Buchanan v Byrnes (1906) 3 CLR 704 cited
Lam Soon Australia Pty Ltd (administrator appointed) v Molit (No 55) Pty Ltd (1997) 70 FCR 34 discussed
Molit (No 55) Pty Ltd v Lam Soon Australia Pty Ltd (administrator appointed) (1996) 19 ACSR 160 discussed
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 cited
Shevill v Builders Licensing Board (1982) 149 CLR 620 cited

Date of hearing: 28 April 2010

Place: Melbourne

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 29

Counsel for the Plaintiffs: A P Young

Solicitor for the Plaintiffs: DLA Phillips Fox

Counsel for the Defendants: J G Santamaria QC and H N G Austin

Solicitor for the Defendants: Maddocks

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 283 of 2010

BETWEEN:
BRIAN SILVIA, PETER KREJCI AND MATHEW MULDOON IN THEIR CAPACITY AS ADMINISTRATORS OF FEA CARBON PTY LTD (ACN 009 505 195) (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED), FOREST ENTERPRISES AUSTRALIA LTD (ACN 009 553 548) (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED), TASMANIAN PLANTATION PTY LTD (ACN 009 560 463) (ADMINISTRATORS APPOINTED) (CONTROLLERS APPOINTED) AND FEA PLANTATIONS LTD (ACN 055 969 429) (ADMINISTRATORS APPOINTED)
First Plaintiff

FEA PLANTATIONS LTD (ACN 055 969 429) (ADMINISTRATORS APPOINTED)
Second Plaintiff

AND:
FEA CARBON PTY LTD (ACN 009 505 195) (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
First Defendant

FOREST ENTERPRISES AUSTRALIA LTD (ACN 009 553 548) (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
Second Defendant

TASMANIAN PLANTATION PTY LTD (ACN 009 560 463) (CONTROLLERS APPOINTED)
Third Defendant

JUDGE:

FINKELSTEIN J

DATE OF ORDER:

30 APRIL 2010

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.The…

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] FCA 515
Decision Date

CaseChat Overview and Summary

Silvia v FEA Carbon Pty Ltd is a decision by Justice Finkelstein of the Federal Court of Australia concerning the liability of company administrators for rent under the Corporations Act 2001 (Cth). The administrators of FEA Carbon Pty Ltd sought an extension of time to decide whether to serve a notice of non-exercise of rights in relation to leased property, and to avoid personal liability for rent under the Act. The court was required to decide whether the mere service of a notice under s 443B(3) constituted a repudiation of the lease, and whether it was appropriate to grant an extension of time.

Justice Finkelstein held that the mere service of a notice under s 443B(3) did not amount to a repudiation of the lease, as it only indicated that the administrator would not use the leased property and did not accept personal liability for the continuing occupation or possession of the property. The court found that the notice related to the rights of the company, not the performance of its obligations, and did not affect the lessor's rights under the terms of the lease. The court also found that it was appropriate to grant an extension of time for the administrators to complete their investigation and decide whether to serve a notice. The court granted the relief sought until 31 May 2010, and noted that if this extension was insufficient, the administrators could seek further relief.

The final orders of the court included an amendment to the title of the proceeding, an extension of time for the administrators to avoid personal liability for rent, an extension of time for the service of a notice of non-exercise of rights, and an order for the plaintiffs to pay the defendants' costs of the proceeding.

Orders