In the matters of MROC Car Wholesalers Pty Ltd and ors [2017] NSWSC 287

In the matters of MROC Car Wholesalers Pty Ltd and ors [2017] NSWSC 287

There is a serious question to be tried regarding the validity of appointment of administrators on the question of whether the engagement letter bound the plaintiff companies and granted an enforceable security interest, and whether the administrators could appoint themselves in reliance on the very step as triggering the charge. The balance of convenience and inadequacy of damages support the grant of interlocutory injunctive relief, with ancillary orders under s 447A and s 1322(4)(d) of the Corporations Act to suspend the operation of the administration pending resolution of the central issues.

Jurisdiction
Australia
Judgment Date
15 March 2017
Procedural Posture
Interlocutory Application / Application for Injunction Pending Determination of Validity of Appointment of Administrators
Outcome
Interlocutory injunction and ancillary orders granted pending determination of proceedings.
Legal Topics
['interlocutory Injunction' 'appointment of Administrators' 'validity of Security Interest' 'extension of Time for Creditors Meeting' 'suspension of External Administration']
['corporations Law' 'insolvency Law' 'civil Procedure'] ['interlocutory Injunction' 'appointment of Administrators' 'validity of Security Interest' 'extension of Time for Creditors Meeting' 'suspension of External Administration']

Case Brief

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Procedural Posture

Interlocutory Application / Application for Injunction Pending Determination of Validity of Appointment of Administrators

Legal Issues

  1. 1 ['Whether the appointment of voluntary administrators was valid under s 436C of the Corporations Act 2001 (Cth)' 'Whether the engagement letter bound the plaintiff companies and created a security interest' 'Whether the charge permitted the appointment of administrators under the events which occurred' 'Whether interlocutory relief (injunction and ancillary relief) should be granted, including under s 447A and s 1322(4)(d) of the Corporations Act']

Ratio Decidendi

There is a serious question to be tried regarding the validity of appointment of administrators on the question of whether the engagement letter bound the plaintiff companies and granted an enforceable security interest, and whether the administrators could appoint themselves in reliance on the very step as triggering the charge. The balance of convenience and inadequacy of damages support the grant of interlocutory injunctive relief, with ancillary orders under s 447A and s 1322(4)(d) of the Corporations Act to suspend the operation of the administration pending resolution of the central issues.

Court Disposition

Interlocutory injunction and ancillary orders granted pending determination of proceedings.

Orders

  • ['Until determination of the proceedings, or further order, Andrew John Spring and Amanda Young are restrained from acting or taking steps as administrators of the plaintiff companies.' 'Assaf Financial Services Pty Ltd is restrained from enforcing, or taking steps to enforce, the purported security interest against...