Caddy, in the matter of Roberts Co (VIC) Pty Ltd (Administrators Appointed) [2025] FCA 243 (21 March 2025)

1. Pursuant to ss 443B(8) and 447A(1) of the Corporations Act 2001 (Cth), Pt 5.3A of the Act is to operate in relation to the second plaintiff as if:

(a) the first plaintiffs' personal liability under ss 443A(1)(c) and 443B(2) of the Act begins on 12 April 2025, such that the first plaintiffs are not personally liable for any liability with respect to any property leased, used, occupied or possessed by the second plaintiff (including amounts due pursuant to any leases entered into by the second plaintiff), in the period from 14 March 2025 to 11 April 2025 inclusive; and

(b) the words "within five business days after the beginning of the administration" in s 443B(3) of the Act instead read "by 11 April 2025".

1. The first plaintiffs take all reasonable steps to cause notice of these orders to be given, within one business day, to:

(a) the creditors (including persons or entities claiming to be creditors) of the second plaintiff, in the following manner:

(i) where the first plaintiffs have an email address for a creditor, notifying each such creditor, via email, of the making of the orders and providing a link to a website where the creditor may download the orders and the originating process;

(ii) where the first plaintiffs do not have an email address for a creditor but have a postal address for that creditor (or have received notification of non-delivery of a notice sent by email in accordance with sub-order (i) above), notifying each creditor, via post, of the making of the orders and providing a link to a website where the creditor may download the orders and the originating process; and

(iii) placing scanned, sealed copies of the orders and the originating process on the website maintained by the first plaintiffs at https://www.mcgrathnicol.com/creditors/roberts-co-vic-pty-limited; and

(b) the Australian Securities and Investments Commission; and

(c) the Deputy Commissioner of Taxation; and

(d) the Attorney-General's Department (administering the Fair Entitlements Guarantee Scheme).

1. Any person who can demonstrate a sufficient interest has liberty to apply to vary or discharge these orders, on three business days' notice being given to the plaintiffs and the Court.
2. The first plaintiffs have liberty to apply to vary or discharge these orders on one business days' notice.
3. The plaintiffs' costs of and incidental to the application be costs in the administration of the second plaintiff.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

1. This is an application brought by originating process dated 20 March 2025 seeking an order pursuant to ss 447A(1) or 443B(8) of the Corporations Act 2001 (Cth), alternatively s 90-15 of the Insolvency Practice Schedule (Corporations), being Sch 2 to the Act, to modify the operation of ss 443A(1)(c) and 443B(2) of the Act so as to limit the personal liability of the first plaintiffs, voluntary administrators of Roberts Co (Vic) Pty Ltd, for the continued use, occupation or possession of any third-party property, such that they have no liability until 12 April 2025.
2. The administrators relied on two affidavits of Mr Matthew Caddy dated 20 and 21 March 2025.
3. The application was listed before me as the Commercial and Corporations Duty Judge on 21 March 2025. It was self-evidently urgent because, pursuant to s 443B(2) of the Act, the administrators will become personally liable for rent and other amounts payable under leases or other agreements in respect of third-party property from 22 March 2025. The application was heard ex parte.
4. For the reasons that follow, I am satisfied that the relief sought by the administrators should be granted.

1. Roberts Co (Vic) is a construction company that undertakes constructions works on major residential, commercial, industrial and public sector projects in Victoria. It is part of the Roberts Co Group of companies, although it is the only company in the group that is under administration.
2. The administrators were appointed on 14 March 2025.
3. At the time of the administrators' appointment, Roberts Co (Vic) was undertaking:

(a) four major construction projects, including the design and construction of a 28-storey office building at 130 Little Collins Street, Melbourne and a 209,000 square metre Amazon distribution centre in Craigieburn, Victoria (major projects);

(b) three smaller construction projects at schools in Victoria; and

(c) defect rectification work required on projects it had already completed, but which were still within their contractual "defects liability period".

1. In the limited time available, the administrators have been unable to ascertain the nature and extent of the property owned by or leased from third parties which Roberts Co (Vic) continues to use, occupy or possess, or the major projects on which the property is located. Their investigations are ongoing.
2. Searches undertaken of the Personal Property Securities Register (PPSR) show a total of 46 registrations against Roberts Co (Vic).
3. On 18 March 2025, the administrators sent notices under s 275 of the Personal Property Securities Act 2009 (Cth) to all of the secured parties with registered security interests against Roberts Co (Vic) requesting copies of the security agreements, details of the relevant obligations of Roberts Co (Vic) and the amounts owed to these creditors. The notice requires the secured party to confirm the nature of their claim for their security interest registered on the PPSR within 10 business days of the date of the notice. Registered secured creditors have until 1 April 2025 to respond to the notices.
4. The administrators are in discussions with the principals of the major projects in relation to potential "works continuation agreements" (WCA). The outcome of those discussion might be that the administrators will be able to reach agreement with the principals in relation to a funding arrangement pursuant to which Roberts Co (Vic) may be able to continue to undertake the works on the major projects. Another potential outcome is the novation of the works contracts to another contractor.
5. The administrators believe that if they can reach agreement with any of the principals in relation to a WCA, that would substantially reduce the claims by the principals against Roberts Co (Vic). It would also preserve value in the business and ensure employees, trade creditors and sub-contractors can continue to be paid to complete the major projects, which will in turn reduce the number and quantum of claims against Roberts Co (Vic).
6. If a WCA can be agreed in relation to any of the major projects, the administrators expect to require the continued use, occupation or possession of the third-party property that is in use in connection with the relevant projects. However, they do not yet know what property might be required for the resumption of the works. If a WCA is not agreed, the administrators consider it unlikely that Roberts Co (Vic) would wish to continue using the third-party property.
7. The administrators say that it has not been possible to form a view as to whether, in the interests of preserving and maximising the value of the business, it is necessary or desirable to exercise rights over any leases or other agreements relating to the use and occupation of property belonging to third parties.
8. The administrators are concerned, however, not to incur personal liabilities in respect of the ongoing use of such third-party property. Furthermore, the administrators believe that if their exposure to potential liabilities were to force them to cease the WCA negotiations, that would be detrimental to the creditors as a whole.
9. The administrators therefore seek an extension of the relevant period under s 443B of the Act until 11 April 2025 to allow them to progress the WCAs, assess the prospects of novating any works contracts, conclude discussions with any lessors or owners of third-party property and finalise their assessment of the third-party property required for works to resume on the major projects.

1. The administrators seek orders under ss 447A(1) or 443B(8) of the Act to vary the operation of s 443A and s 443B of the Act. The effect of the orders sought would be to limit the administrators' personal liability under leases or other agreements relating to property that belongs to third parties, such that they have no liability until 12 April 2025.
2. Section 447A(1) of the Act provides that the Court may make such order as it thinks appropriate about how Pt 5.3A of the Act is to operate in relation to a particular company.
3. It is well established that s 447A confers power on the Court to make orders limiting the administrators' liability and that s 447A has broad application where to make orders would serve the objects of Pt 5.3A: Algeri, in the matter of WBHO Australia Pty Ltd (Administrators Appointed) [2022] FCA 169 at [16] (Beach J).
4. The principles that apply in an application of this type were conveniently summarised by Markovic J in Strawbridge (Administrator), in the matter of CBCH Group Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 472 at [35]-[37], [39] as follows:

[35] Section 447A of the Act enables the making of orders which alter the way in which Pt 5.3A is to operate in relation to a particular company and to permit a company to depart from an otherwise mandatory requirement under Pt 5.3A of the Act: see Australasian Memory Pty Limited v Brien (2000) 200 CLR 270 (Australasian Memory v Brien) at [18]-[19].

[36] It is well established that the Court has power under s 447A of the Act to make orders limiting an administrator's personal liability: see Mentha, in the matter of Griffin Coal Mining Company Pty Ltd (administrators appointed) [2010] FCA 1469; (2010) 82 ACSR 142 (Griffin Coal) at [29].

[37] In Griffin Coal at [30] Gilmour J summarised the principles governing the grant of an application for orders under s 447A to vary an administrator's liability under s 443A as follows:

(a) the proposed arrangements are in the interests of the company's creditors and consistent with the objectives of Pt 5.3A of the Corporations Act.

(b) typically the arrangements proposed are to enable the company's business to continue to trade for the benefit of the company's creditors.

(c) the creditors of the company are not prejudiced or disadvantaged by the types of orders sought and stand to benefit from the administrators entering into the arrangement.

(d) notice has been given to those who may be affected by the order.

(Citations omitted.)

...

[39] Section 447A(1) of the Act also gives the Court ample power to alter the operation of s 443B(2) and (3) of the Act: see In the matter of Mothercare Australia Limited (administrators appointed) [2013] NSWSC 263 at [6]. Alternatively, s 443B(8) gives the Court an additional power to alter the operation of s 443B(2) and (3): see Silvia v FEA Carbon Pty Ltd [2010] FCA 515; (2010) 185 FCR 301 (Silvia v FEA) at [13]. The usual rationale behind the extension of the five business day period in s 443B(2) and (3) or the exercise of the power in s 443B(8) is because the administrator has had insufficient time to conduct the necessary investigations to decide whether he or she thinks it best to retain or give up possession of leased property: see Silvia v FEA at [12]-[13]. Further it seems that s 443B(8) allows the Court to excuse the administrator from liability to pay rent even after the five business day period has passed (see Silvia v FEA at [13]-[14]) or that s 447A enables a court to amend the operation of Pt 5.3A of the Act retrospectively (see Australasian Memory v Brien at [26]).

1. Extensions of the time period under s 443B(3), similar to the extension sought by the administrators in this case, were granted by the Court in WBHO at [26] (Beach J); CBCH at [44] (Markovic J); Algeri, in the matter of Murray & Roberts Pty Ltd (Administrators Appointed) [2022] FCA 1506 at [74] (Banks-Smith J); Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 3) [2020] FCA 726 at [36] (Middleton J).

1. It is clear that in the circumstances of this case the administrators have not had sufficient time to conduct the necessary investigations required to form a decision as to whether it is necessary or desirable to retain or give up possession of property that belongs to third parties.
2. I am satisfied that the extension sought by the administrators is consistent with the objectives of Pt 5.3A of the Act and should be granted for the following reasons.
3. First, it will provide more time to enable the administrators to better identify the third-party property and the major projects on which it is located.
4. Second, it will maximise the prospect of preserving the business of Roberts Co (Vic) and the prospect of works resuming on the major projects if a WCA can be negotiated with the principals on such projects or, alternatively, a novation of any works contracts to another contractor. This in turn will assist to reduce the number and/or quantum of claims by creditors and maximise potential returns to creditors.
5. Third, if an extension is not granted, the administrators would need to immediately consider issuing s 443B(3) notices to avoid incurring personal liabilities, which would need to be issued today, stating that Roberts Co (Vic) does not intend to exercise rights in relation to property used, occupied or in its possession. The administrators state, and I accept, that this course would be detrimental to the negotiations of the WCAs and, therefore, to the interests of creditors as a whole.
6. Four, the nature and length of the extension sought is not without precedent, see paragraph 21 above.

1. For the foregoing reasons, I will make orders substantially in the form sought by the administrators.

I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Neskovcin.