Hundy (liquidator), in the matter of 3 Property Group 13 Pty Ltd (in liquidation) (No 2) [2023] FCA 173

Hundy (liquidator), in the matter of 3 Property Group 13 Pty Ltd (in liquidation) (No 2) [2023] FCA 173

The retrospective approval of the funding agreements under s 477(2B) of the Corporations Act is granted because the agreements were entered into in good faith, are commercially reasonable, advance the interests of creditors, and there is no evidence of impropriety or error; confidentiality orders are also necessary to prevent prejudice to the liquidator due to the commercial sensitivity of the agreements' terms.

Parties
Plaintiff: Stephen John Hundy (Liquidator); Plaintiff: 3 Property Group 13 Pty Ltd (in liquidation); Plaintiff: Be Athletic Canberra Pty Ltd (in liquidation); Interveners: Various intervening creditors (e.g. 3PGH2, 3PG11, 3PG17, Stormer Corporation, KFT Group, Lifestyle, Sage Campbell, Mr Kelly, Mr Farrelly)
Jurisdiction
Australia
Judgment Date
10 February 2023
Procedural Posture
Corporations Liquidation Approval Application / Application for Retrospective Court Approval of Funding Agreements
Outcome
Retrospective Court approval granted for entry into the funding agreements under s 477(2B) of the Corporations Act; confidentiality/non-publication orders made; costs to be treated as costs and expenses in the winding up.
Legal Topics
Liquidators' Powers and Obligations, Approval of Funding Agreements, Section 477(2 B) Corporations Act, Retrospective Court Approval, Confidentiality/suppression Orders
Bankruptcy and Insolvency Corporations Law Liquidators' Powers and Obligations Approval of Funding Agreements Section 477(2 B) Corporations Act Retrospective Court Approval Confidentiality/suppression Orders

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Parties

Stephen John Hundy (Liquidator)

Plaintiff

3 Property Group 13 Pty Ltd (in liquidation)

Plaintiff

Be Athletic Canberra Pty Ltd (in liquidation)

Plaintiff

Various intervening creditors (e.g. 3PGH2, 3PG11, 3PG17, Stormer Corporation, KFT Group, Lifestyle, Sage Campbell, Mr Kelly, Mr Farrelly)

Interveners

Procedural Posture

Corporations Liquidation Approval Application / Application for Retrospective Court Approval of Funding Agreements

Legal Issues

  1. 1 Whether the liquidator should be granted retrospective Court approval under s 477(2B) of the Corporations Act for entry into funding agreements exceeding three months
  2. 2 Whether the terms of the funding agreements are commercially reasonable and in the interests of creditors
  3. 3 Whether confidentiality orders should be made regarding the content of the funding agreements

Ratio Decidendi

The retrospective approval of the funding agreements under s 477(2B) of the Corporations Act is granted because the agreements were entered into in good faith, are commercially reasonable, advance the interests of creditors, and there is no evidence of impropriety or error; confidentiality orders are also necessary to prevent prejudice to the liquidator due to the commercial sensitivity of the agreements' terms.

Court Disposition

Retrospective Court approval granted for entry into the funding agreements under s 477(2B) of the Corporations Act; confidentiality/non-publication orders made; costs to be treated as costs and expenses in the winding up.

Orders

  • Confidentiality/non-publication orders made under ss 37AF and 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) regarding identified documents and information disclosing the terms of the funding agreements for both 3 Property Group 13 Pty Ltd (in liquidation) and Be Athletic Canberra Pty Ltd (in liquidation)
  • Approval is given under s 477(2B) of the Corporations Act 2001 (Cth) to the entry by the second plaintiff into the specified funding agreements (as defined in the April affidavit) for both companies