Hill, in the matter of Autocare Services Pty Ltd (administrators appointed)

• Jurisdiction: Australia Federal only
• Court: Federal Court
• Judgment Date: 26 February 2021
• Neutral Citation: [2021] FCA 167
• Date: 26 February 2021

FEDERAL COURT OF AUSTRALIA

Hill, in the matter of Autocare Services Pty Ltd (administrators appointed) [2021] FCA 167

File number(s):	NSD 109 of 2021
Judgment of:	FARRELL J
Date of judgment:	26 February 2021
Date of publication of reasons:	3 March 2021
Catchwords:	CORPORATIONS – application for extension of the convening period for the second meeting of creditors under s 439A(6) of the Corporations Act 2001 (Cth) – application granted ; CORPORATIONS – application for modification of operation of s 443A under s 447A of the Corporations Act 2001 (Cth) and s 90-15 of the Insolvency Practice Schedule (Corporations) to limit the liability of administrators under a proposed funding agreement – where funding may be necessary to ensure that the company may pay debts as they fall due during the extended convening period – where administrators not willing to incur personal liability for repayment of debts or satisfaction of liabilities arising under the proposed funding agreement to the extent that the property of the company in administration is insufficient to satisfy those debts and liabilities – application granted ; CORPORATIONS – application for directions under s 90‑15 of the Insolvency Practice Schedule (Corporations) as to whether the administrators would be justified in entering into the proposed funding agreement – where proposed funder is sole shareholder and possibly is secured creditor and security would apply to advances under the funding agreement – application granted
Legislation:	Corporations Act 2001 (Cth) ss 435A, 439A, 443A, 443D, 447A Corporations Act 2001 (Cth) Sch 2, Insolvency Practice Schedule (Corporations) s 90-15 Federal Court of Australia Act 1976 (Cth) s 37AF
Cases cited:	GDK Projects Pty Ltd, in the matter of Umberto Pty Ltd (in liq) v Umberto Pty Ltd (in liq) [2018] FCA 541 Diamond Press Australia Pty Limited [2001] NSWSC 313 In the matter of Harrisons Pharmacy Pty Limited (Administrators Appointed) (Receivers and Managers Appointed) [2013] FCA 458 In the matter of Hawden Property Group Pty Ltd (in liq) (ACN 003 528 345) [2018] NSWSC 481; (2018) 125 ACSR 355 In the matter of Octaviar Administration Pty Ltd (in liq) [2017] NSWSC 1556 In the matter of Renex Holdings (Dandenong) 1 Pty Ltd (administrators appointed) [2015] NSWSC 2002 In the matter of Riviera Group Pty Ltd (admins apptd) (recs & mgrs apptd) [2009] NSWSC 585; (2009) 72 ACSR 352 Re Unlockd Ltd (administrators appointed) [2018] VSC 345 Mighty River International Limited v Hughes [2018] HCA 38; (2018) 265 CLR 480 Re Ansett Australia Ltd (No 3) [2002] FCA 90; (2002) 115 FCR 409 Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 2) [2020] FCA 717; (2020) 144 ACSR 347
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Number of paragraphs:	54
Date of hearing:	25 February 2021
Counsel for the Plaintiffs:	Ms T Jonker
Solicitor for the Plaintiffs:	Hamilton Locke

ORDERS

		NSD 109 of 2021
IN THE MATTER OF AUTOCARE SERVICES PTY LTD ACN 004 497 607 (ADMINISTRATORS APPOINTED)
	CHRISTOPHER HILL, JOSEPH HANSELL AND ROSS BLAKELEY IN THEIR CAPACITY AS JOINT AND SEVERAL VOLUNTARY ADMINISTRATORS OF AUTOCARE SERVICES PTY LTD ACN 004 497 607 (ADMINISTRATORS APPOINTED) First Plaintiff ; AUTOCARE SERVICES PTY LTD ACN 004 497 607 (ADMINISTRATORS APPOINTED) Second Plaintiff

order made by:	FARRELL J
DATE OF ORDER:	26 fEBRUARY 2021

THE COURT ORDERS THAT:

1. Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) and on the ground that the order is necessary to prevent prejudice to the proper administration of justice the following documents are to be marked “confidential” on the electronic court file and are not to be published or accessed, except pursuant to an order of the Court or the written agreement of the plaintiffs until 5 pm on Tuesday, 1 June 2021 or further order:

(a) paragraph 27 and Tab 4 of exhibit CCH-1 to the affidavit of Christopher Clarke Hill sworn on 24 February 2021;

(b) exhibit CCH-2 to the affidavit of Christopher Clarke Hill sworn on 24 February 2021; and

(c) exhibit CCH-3 to the affidavit of Christopher Clarke Hill sworn 25 February 2021.

2. The first plaintiffs (administrators) must file versions of the affidavit and exhibit referred to in Order 1(a) redacted to omit paragraph 27 and Tab 4 by 4 pm on Tuesday, 2 March 2021.

3. Pursuant to s 439A(6) of the Corporations Act 2001 (Cth) (Act), the convening period, as defined by s 439A(5) of the Act, with respect to Autocare Services Pty Ltd ACN 004 497 607 (Administrators Appointed) (the Company) be extended up to and including 24 May 2021.

4. Pursuant to s 447A(1) of the Act, Part 5.3A of the Act is to operate in relation to the Company such that the meeting of creditors required by s 439A(1) of that Act, be held at any time during the period as extended under Order 3 above, and the period of five (5) business days thereafter, notwithstanding the provisions of s 439A(2) of the Act.

5. Pursuant to s 447A(1) of the Act, and s 90-15 of the Insolvency Practice Schedule (Corporations) being Sch 2 to the Act (IPSC), Part 5.3A of the Act is to operate in relation to the plaintiffs as if s 443A(1) of the Act provides that:

(a) the liabilities of the administrators (in their capacity as administrators of the Company) incurred with respect to any obligations arising out of, or in connection with any funding agreement substantially in accordance with confidential exhibit CCH-3 to the affidavit of Christopher Clarke Hill sworn 25 February 2021 (Funding Agreement), between the Company, LINX Cargo Care Group Pty Ltd ACN 123 683 885 (LINX) and the administrators are in the nature of debts incurred by the administrators in the performance and exercise of their functions as joint and several administrators of the Company; and

(b) notwithstanding that the liabilities referred to in Order 5(a) are debts incurred by the administrators in the performance and exercise of their functions as joint and several administrators of the Company, the administrators will not be personally liable to repay such debts or satisfy such liabilities to the extent that the property of the Company is insufficient to satisfy the debts and liabilities incurred by the administrators arising out of, or in connection with, the Funding Agreement.

6. Pursuant to s 90-15 of the IPSC, the administrators (in their capacities as administrators of the Company) are justified in causing the Company to borrow monies not exceeding the sum of $6 million pursuant to the Funding Agreement.

7. Pursuant to s 447A(1) of the Act, Part 5.3A of the Act is to operate in relation to the Company such that notice of the second meeting of the creditors of the Company will be validly given to creditors of the Company by:

(a) causing notice to be published on the published notices website of the Australian Securities and Investments Commission (ASIC) at https://insolvencynotices.asic.gov.au;

(b) sending a hyperlink to the notices published on the ASIC published notices website by email to the email address of each creditor at such email address as is recorded in the books and records of the Company;

(c) where an email address is not recorded in the books and...