Hayes, in the matter of Estate Property Group Limited (Administrators Appointed) [2007] FCA 1393

Hayes, in the matter of Estate Property Group Limited (Administrators Appointed) [2007] FCA 1393

Given the need for short-term funding to maintain the operations of the EPG Group and propound deeds of company arrangement, the existing security position in favour of ACR, the anticipated absence of prejudice to unsecured creditors of Hunter and Developments, the support of PNAL and the administrators of ACR, and ASIC's decision not to express a view, it was appropriate under s 447A to order that Part 5.3A operate so that advances under the CBA facility are treated as debts incurred by the administrators in the performance and exercise of their functions and powers and attract the s 443D indemnity, with no personal liability to the extent of any insufficiency.

Jurisdiction
Australia
Judgment Date
03 August 2007
Procedural Posture
Corporations Application Under S 447 a of the Corporations Act 2001 (cth) Concerning Companies in Voluntary Administration / Application for Orders Heard and Determined on 3 August 2007
Outcome
Application granted.
Legal Topics
['operation of Part 5.3 a of the Corporations Act 2001 (cth)' "administrators' Personal Liability for Borrowings" "administrators' Indemnity Out of Company Property" 'temporary Overdraft Facility for Companies in Administration' 'deeds of Company Arrangement']
['corporations Law' 'insolvency' 'voluntary Administration'] ['operation of Part 5.3 a of the Corporations Act 2001 (cth)' "administrators' Personal Liability for Borrowings" "administrators' Indemnity Out of Company Property" 'temporary Overdraft Facility for Companies in Administration' 'deeds of Company Arrangement']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Corporations Application Under S 447 a of the Corporations Act 2001 (cth) Concerning Companies in Voluntary Administration / Application for Orders Heard and Determined on 3 August 2007

Legal Issues

  1. 1 ['Whether Part 5.3A of the Corporations Act 2001 (Cth) should operate in relation to Estate on Hunter Pty Limited and Estate Projects Developments Pty Limited as if advances made by Commonwealth Bank of Australia under the proposed facility were debts incurred by the administrators in the performance and exercise of their functions and powers as administrators.' 'Whether the administrators should be entitled to indemnity under s 443D of the Corporations Act 2001 (Cth) for debts arising from drawdowns under the facility and not be personally liable to the extent of any insufficiency of that indemnity.']

Ratio Decidendi

Given the need for short-term funding to maintain the operations of the EPG Group and propound deeds of company arrangement, the existing security position in favour of ACR, the anticipated absence of prejudice to unsecured creditors of Hunter and Developments, the support of PNAL and the administrators of ACR, and ASIC's decision not to express a view, it was appropriate under s 447A to order that Part 5.3A operate so that advances under the CBA facility are treated as debts incurred by the administrators in the performance and exercise of their functions and powers and attract the s 443D indemnity, with no personal liability to the extent of any insufficiency.

Court Disposition

Application granted.

Orders

  • ['Part 5.3A of the Corporations Act 2001 (Cth) is to operate in relation to Estate on Hunter Pty Limited (administrators appointed) and Estate Projects Developments Pty Limited (administrators appointed) as if section 443A(1)(a) provides that advances made by the Commonwealth Bank of Australia under the Temporary...