In the matter of RCR Tomlinson Ltd (administrators appointed) & Ors [2018] NSWSC 1859

In the matter of RCR Tomlinson Ltd (administrators appointed) & Ors [2018] NSWSC 1859

The proposed borrowing and associated limitation of personal liability were justified because the facility was likely the only available source of funds, would maximise the prospect of preserving the Companies' business value and avoiding immediate cessation of trading, was in the interests of creditors and consistent with the objectives of Pt 5.3A, and the Administrators could not reasonably be expected to assume unlimited personal liability for borrowings of this magnitude. The urgency of the Companies' position justified making the orders without notice to creditors other than CBA.

Jurisdiction
Australia
Judgment Date
23 November 2018
Procedural Posture
Corporations; Voluntary Administration / Originating Process Seeking Directions and Orders, Heard Ex Tempore on 23 November 2018
Outcome
Directions and orders made in the form initialled by the Court and placed on the file.
Legal Topics
['voluntary Administration' "administrators' Directions" "administrators' Personal Liability" 'borrowing by Companies in Administration' 'electronic Notice to Creditors' 'administration Bank Accounts']
['corporations' 'insolvency'] ['voluntary Administration' "administrators' Directions" "administrators' Personal Liability" 'borrowing by Companies in Administration' 'electronic Notice to Creditors' 'administration Bank Accounts']

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Procedural Posture

Corporations; Voluntary Administration / Originating Process Seeking Directions and Orders, Heard Ex Tempore on 23 November 2018

Legal Issues

  1. 1 ['Whether the Administrators should be directed under s 90-15 of the Insolvency Practice Schedule (Corporations) that they would be justified in procuring relevant Companies to borrow loan funds from CBA pursuant to a facility agreement.' "Whether an order should be made under s 447A of the Corporations Act 2001 (Cth) altering the operation of s 443D to limit the Administrators' personal liability in respect of the borrowings to the amount of any indemnity available from the assets of the Companies." "Whether the Administrators' personal liability in respect of inter-company administration loans should be similarly limited." 'Whether orders should be made permitting a single administration bank account and electronic notice to creditors.']

Ratio Decidendi

The proposed borrowing and associated limitation of personal liability were justified because the facility was likely the only available source of funds, would maximise the prospect of preserving the Companies' business value and avoiding immediate cessation of trading, was in the interests of creditors and consistent with the objectives of Pt 5.3A, and the Administrators could not reasonably be expected to assume unlimited personal liability for borrowings of this magnitude. The urgency of the Companies' position justified making the orders without notice to creditors other than CBA.

Court Disposition

Directions and orders made in the form initialled by the Court and placed on the file.

Orders

  • ['Direction given under s 90-15 of the Insolvency Practice Schedule (Corporations) that the Administrators would be justified in procuring the relevant Companies to borrow loan funds pursuant to a facility agreement with CBA.' "Order made under s 447A of the Corporations Act 2001 (Cth) altering the operation of s...