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[2026] NSWSC 1156
Supreme Court of NSW
2026-09-18
Nixon J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: In the matter of Universal Property Group Pty Limited (admins apptd) (No 2) [2026] NSWSC 1156
Hearing dates: 18 September 2026
Date of orders: 18 September 2026
Decision date: 18 September 2026
Jurisdiction: Equity - Corporations List
Before: Nixon J
Decision: See paragraph [96] below
Catchwords: CORPORATIONS – voluntary administration – creditors’ meeting – application for extension of time fixed by s 439A of the Corporations Act 2001 (Cth) for convening of the second meeting of creditors – where administrators have been appointed to 542 companies that operated a property development business – where numerous development projects were incomplete at time of appointment – where administrators seek extension to allow time to complete developments and to carry out investigations – extension granted – further relief sought to ensure the orderly and efficient administration of the Companies
Legislation Cited: Corporations Act 2001 (Cth) ss 249B, 250MA, 435A, 437A, 437B, 439A, 439C, 443A, 447A, 491, 532
Insolvency Practice Rules (Corporations) 2016 (Cth) r 75-225
Insolvency Practice Schedule (Corporations) ss 60-20, 65-6, 65-26, 65-45, 90-15
Cases Cited: Australian World-Wide Proprietary Limited v Christopher John Palmer [2014] NSWSC 141
Chief Commissioner of State Revenue v Rafferty's Resort Management Pty Ltd (in liq) (2008) 66 ACSR 199; [2008] NSWSC 452
Colley, in the matter of PF Group Holdings Pty Ltd (Administrators Appointed) [2024] FCA 792
Diamond Press Australia Pty Ltd [2001] NSWSC 313
In the matter of Daisytek Australia Pty Ltd (2003) 45 ACSR 446; [2003] FCA 575
In the matter of Global Food Equipment Pty Ltd (under administration); Carter v Global Food Equipment Pty Ltd [2007] NSWSC 901
In the matter of Green Camel Pty Limited [2024] NSWSC 1199
In the matter of Mosaic Brands Limited (admins apptd) (recs and mgrs apptd) [2024] NSWSC 1439
In the matter of Orbis Commodities Pty Ltd (administrators appointed) (receiver and manager appointed) [2021] NSWSC 1172
In the matter of RCR Tomlinson Ltd (administrators appointed) & Ors [2018] NSWSC 1859
In the matter of Renex Holdings (Dandenong) 1 Pty Ltd (administrators appointed) & Ors [2015] NSWSC 2003
In the matter of Riviera Group Pty Ltd (admins apptd)(recrs & mgrs apptd) (2009) 72 ACSR 352; [2009] NSWSC 585
In the matter of Universal Property Group Pty Ltd (admins apptd) [2026] NSWSC 1062
Jahani, in the matter of The Ralan Group Pty Ltd (administrators appointed) [2019] FCA 1446
Korda, in the matter of Ten Network Holdings Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2017] FCA 1144
McGrath & Anor re HIH Insurance Ltd & Ors (2010) 266 ALR 642; [2010] NSWSC 404
Mentha, in the matter of Griffin Coal Mining Company Pty Ltd (administrators appointed) (2010) 82 ACSR 142; [2010] FCA 1469
Mighty River International Limited v Hughes; Mighty River International Limited v Mineral Resources Limited (2018) 265 CLR 480; [2018] HCA 38
Quinlan, in the matter of Halifax Investment Services Pty Ltd (Admininstrators Appointed) [2018] FCA 1891
Re Paradise Constructors Pty Ltd (administrator appointed); Pong Property Development Pty Ltd v Sleiman (2004) 8 VR 171; [2004] VSC 92
Secatore, in the matter of Fletcher Jones and Staff Pty Ltd (Administrators Appointed) [2011] FCA 1493
Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 2) (2020) 144 ACSR 347; [2020] FCA 717
Category: Procedural rulings
Parties: Andrew John Scott, Adam John Colley, Daniel Austin Walley, Rebecca Louise Gill and Stephen Graham Longley in their capacities as joint and several administrators of Universal Property Group Pty Limited (Administrators Appointed) and others (First Plaintiffs)
Universal Property Group Pty Limited (Administrators Appointed) and others (Second to Five Hundred and Forty-Third Plaintiffs)
Representation: Counsel:
J Hynes (First Plaintiffs)
Solicitors:
William James (First Plaintiffs)
File Number(s): 2026/00355106
Publication restriction: Nil
By an Interlocutory Process filed in Court today, the First Plaintiffs, who are the joint and several Administrators of the 2nd to 543rd Plaintiffs (the Companies), seek a range of relief including the extension of the convening period for the second meeting of creditors pursuant to s 439A of the Corporations Act 2001 (Cth) (Act).
This application is brought in the early stages of a very large and complex administration. The Administrators commenced these proceedings urgently on 27 August 2026. On that date, Black J made various orders to expedite the conduct of the administrations of the Companies: see In the matter of Universal Property Group Pty Ltd (admins apptd*)* [2026] NSWSC 1062.
The present application has also been brought on an urgent basis in circumstances where the convening period for each of the 542 Companies will expire next Tuesday, 22 September 2026. The Administrators also seek other relief to assist in the orderly conduct of the administrations, as described below.
In support of their application, the Plaintiffs relied on three affidavits of Mr Andrew Scott, one of which was sworn on 26 August 2026 and the other two on 17 September 2026. Mr Scott is one of the Administrators. One of his affidavits of 17 September 2026 was marked as confidential, on the basis that it contains commercially sensitive information in relation to various funding arrangements which are the subject of confidentiality obligations.
The Administrators were appointed only three weeks ago. Their investigations into the Companies are therefore at an early stage and ongoing. I set out below a brief summary of matters which have been ascertained from their investigations to date.
The Companies operate a business involving the purchase, development and subsequent sale of parcels of land (Properties). Some of the Companies operate as “land banks”, meaning they hold parcels of land with the intention of either developing or selling them when favourable opportunities arise.
At a high level, there are two main operational holding companies (TopCos), each of which has a large number of wholly-owned subsidiaries that are special purpose vehicles (SPVs). In particular:
the Second Plaintiff, Universal Property Group Pty Ltd (Administrators Appointed), is the holding company of the 3rd to 456th Plaintiffs and the 539th and 542nd Plaintiffs; and
the 457th Plaintiff, Raj & Jai Construction Pty Ltd (Administrators Appointed), is the holding company of the 458th to 527th Plaintiffs.
The other members of the group include a smaller holding company (the 528th Plaintiff, Buildwell NSW Pty Ltd (Administrators Appointed)) which owns the 529th to 531st Plaintiffs, and ten other standalone companies which are held by individuals (being the 532nd to 538th, 540th, 541st and 543rd Plaintiffs).
Each of the TopCos holds a NSW Contractor License, Class: Builder. The SPVs are the registered owners of the Properties, with each SPV typically holding only one Property at a time (although that Property may consist of more than one title).
The TopCos provide the labour, equipment, subcontractors and head office functions for the group. This means that they incur most of the employee liabilities, and all of the subcontractor and equipment leasing liabilities.
Whenever any liabilities fell on any SPV, the respective TopCo would generally provide an intercompany loan to the SPV for the purpose of meeting those liabilities. These arrangements were the subject of journal and accounting entries, and are not necessarily documented.
The SPVs typically borrowed funds to acquire the Properties, and there is usually a secured mortgage and general security agreement in respect of those borrowings.
There are around 40 lenders to whom secured debts are owed.
The known creditor position is currently estimated to total $3.441 billion, including $3.078 billion owing to secured lenders, $48m owing to other private lenders, $145m owing to the Australian Taxation Office and $110m owing to various unsecured creditors.
There is estimated to be $6m owing to employees, $10m owing to iCare, and amounts of $44m in respect of payroll and land tax.
The financial records of the Companies are incomplete, difficult to interpret and require verification and reconciliation before a reliable view can be formed as to the financial position of the Companies. For example, the Administrators have been informed by a member of the Companies’ finance team that intercompany receivables and payables are overstated by up to $736m.
There are currently 219 projects underway at different stages of development. The total value ascribed to those projects (when completed) is $4.87 billion.
Mr Scott explained that, after discussions with key staff members at the TopCos, it was anticipated that the last of these projects was expected to take up to 12 months to complete, if not longer.
In the event of a liquidation of the TopCos, the building licences held by them will be cancelled, resulting in a likely closure of the projects currently under development.
In addition to the development sites, there are around 167 sites at which no construction is occurring and which form part of the Companies’ land bank. Since the Administrators’ appointment, receivers and managers have been appointed to the property of a number of the Companies.
The Companies have approximately 349 employees. The Administrators have stood down or terminated a number of employees for funding reasons. The Administrators have sought to retain those members of staff necessary to complete various development projects and to perform critical functions of the business.
As discussed further below, the Administrators have secured funding to cover the ongoing costs of construction, payroll and rent expenses for only a limited period. The Administrators continue to seek further funding to cover trading costs for a more extended period.
On 4 September 2026, the first meetings of creditors were held in respect of all of the Companies, and the creditors voted in favour of appointing a single consolidated committee of inspection (COI) (in accordance with the Court’s orders of 27 August 2026). Mr Scott, as chairperson, advised the attendees of the Administrators’ intention to seek an extension of the convening period for the second meetings of creditors, having regard to the scale and complexity of the administration of the Companies, and in order to allow the development of projects currently under construction to continue.
On 16 September 2026, the Administrators sent an email to the members of the COI, advising them that the Administrators were preparing an urgent application to extend the convening period for the second meetings of creditors by up to twelve months. The Administrators requested any feedback, queries or objections. The Administrators subsequently notified the members of the COI that the hearing of the extension application was listed for today.
No person appeared at the hearing to oppose the relief sought.
The Administrators have received six responses to date from members of the COI. Five of those responses have either expressed support for, or have not expressed opposition to, the proposed extension. One member of the COI has expressed opposition to the extension, raising a concern as to whether the extension should apply, in particular, to an SPV which was purchasing a Property, in circumstances where the contract had not been completed, where a purchaser caveat remains on the title, and where the extension will mean that action cannot be taken to enforce a personal guarantee.
Section 439A(6) of the Act gives the Court power to extend the convening period specified in s 439A(5).
Section 439A(7) provides that, on such an application, the Court may only extend the convening period if the Court is satisfied that it would be in the best interests of the creditors if the convening period were extended in accordance with the application.
The principles governing such an application are well established.
The Court’s task on an application under s 439A(6) is to balance the need for the administration of a company to be carried out as efficiently and expeditiously as practicable so as to minimise the effect on those persons who are subject to the moratorium imposed by Pt 5.3A of the Act, against the need to give the administrators time to present meaningful choices to the creditors at their meeting: In the matter of Global Food Equipment Pty Ltd (under administration); Carter v Global Food Equipment Pty Ltd [2007] NSWSC 901 at [11] (White J).
The courts have recognised that, on the one hand, the legislation establishes an expectation that administrations will be carried out relatively swiftly so that creditors can make their own decision at a relatively early point in time; and on the other, the objects of Pt 5.3A may in some cases be better served by allowing an administrator time to see if the business of the company can be continued or a better return secured for creditors than upon an immediate winding up: Australian World-Wide Proprietary Limited v Christopher John Palmer [2014] NSWSC 141 at [10] (Brereton J); and In the matter of Riviera Group Pty Ltd (admins apptd*)(recrs & mgrs apptd)* (2009) 72 ACSR 352; [2009] NSWSC 585 at [15]-[16] (Austin J).
In Mighty River International Limited v Hughes*;* Mighty River International Limited v Mineral Resources Limited (2018) 265 CLR 480; [2018] HCA 38 at [72]-[73], Nettle and Gordon JJ (in dissent, but not relevantly in this respect) observed that:
the period fixed by s 439A(5) of the Act for convening creditors’ meetings is “designedly brief”, reflecting that the emphasis of Pt 5.3A is “on informality … and speed of action”;
it is, however, recognised that it is not always practicable for an administrator to gather sufficient information within the convening period to form the requisite opinions and communicate them to creditors in accordance with ss 438A and 439A, and accordingly, courts are given a power under s 439A(6) to extend the convening period;
consistently with the legislative intention of Pt 5.3A that the administration of a company be brought to an end within a short period of time, there is a presumptive expectation that extensions will be brief, but the courts have recognised that significant extra time may be required, and should be allowed, in complex cases; and
provided that the evidentiary case for extension has been properly prepared, there has been no evidence of material prejudice to those affected by the moratorium imposed by the administration, and the administrator’s estimate of time has had a reasonable basis, the courts have tended to grant extensions for the periods sought by administrators.
Their Honours quoted with approval Barrett J’s observations in Diamond Press Australia Pty Ltd [2001] NSWSC 313 at [10] that:
“The function of the Court on an application [for an extension under s 439A(6)] is ... to strike an appropriate balance between, on the one hand, the expectation that administration will be a relatively speedy and summary matter and, on the other, the requirement that undue speed should not be allowed to prejudice sensible and constructive actions directed towards maximising the return for creditors and any return for shareholders.”
These observations of Nettle and Gordon JJ have frequently been cited and applied in cases at first instance: see, for example, In the matter of Orbis Commodities Pty Ltd (administrators appointed) (receiver and manager appointed) [2021] NSWSC 1172 at [29] (Rees J); Strawbridge*, in the matter of* Virgin Australia Holdings Ltd (administrators appointed) (No 2) (2020) 144 ACSR 347; [2020] FCA 717 at [67] (Middleton J); and In the matter of Mosaic Brands Limited (admins apptd*) (recs and* mgrs apptd*)* [2024] NSWSC 1439 at [34] (Black J).
Importantly, the case law has recognised that the Court will give substantial weight to the considered judgment of voluntary administrators in matters of this kind: Mosaic Brands at [35], referring to In the matter of BCD Resources NL (receivers and managers appointed) (administrators appointed) [2015] NSWSC 777 (Black J).
In Australian World-Wide at [13], Brereton J observed that the following matters may be relevant to the exercise of the discretion under s 439A(6):
“the size and scope of the business; substantial offshore activities; complex transactions entered into by the company; complex prospective recovery proceedings; the time needed to execute an orderly process of disposal of assets; the time needed for thorough assessment of a proposal for a deed of a company arrangement; where the extension will allow sale of the business as a going concern; and, more generally, that additional time is likely to enhance the return for unsecured creditors.”
See also Colley, in the matter of PF Group Holdings Pty Ltd (Administrators Appointed) [2024] FCA 792 at [26] (Shariff J) and the authorities there cited.
The Administrators sought a twelve-month extension of the convening period.
In seeking an extension of this length, the Administrators referred, with evident justification, to “the uniquely colossal nature of the undertaking” to which they have been appointed, which requires “conducting 542 separate administrations at the same time”, in circumstances where the affairs of the Companies have been conducted in an uncoordinated manner, including unsophisticated accounting functions for a group of this size, and where there is a lack of well-maintained books and records.
The two main reasons why the Administrators seek an extension of twelve months are as follows.
First, an extension of this length will allow the Companies as a group to continue progressing the construction projects which are on foot (subject to obtaining necessary funding). As noted above, if the TopCos are wound-up, the building licences will be cancelled. This would give rise to a risk that these projects would be closed, with the sites being sold at a significant discount by reason of their incomplete state. Mr Scott deposed that, in his view, a period of twelve months will allow the Administrators to “assess and where possible preserve the value of realisations in the large number of construction projects and land bank sites for the benefit of creditors”.
Secondly, and having regard to the size of the external administration, the deficiencies in the Companies’ books and records, and the complexities confronting the Administrators, a twelve-month extension will allow the Administrators to be in a position to be able to provide a meaningful report to creditors prior to the second meetings, which will in turn allow creditors to make informed decisions about the future of each of the Companies.
I considered whether the Court should grant an extension for a shorter period (of, say, six months), with the Administrators being able to return to Court to apply for a further extension if required. However, there is no basis to conclude, having regard to Mr Scott’s evidence, that a six-month extension would allow sufficient time for the Administrators to meaningfully progress the administration of the Companies, or to complete current projects, and it is likely that an extension of this length would simply result in the administrative burden and cost of a further extension application.
Plainly, as raised by the member of the COI who voiced opposition to an extension of this length, it may well be, and likely is, the case that all of the 542 Companies are not in a similar position. Matters may be more straightforward for some than for others. However, it is not practicable, or sensible, for the Administrators to attempt to propose different extensions for 542 different Companies. To some extent, the concern that some Companies may be able to be dealt with more swiftly than others is addressed by the proposed “Daisytek order” and by certain other relief (concerning the winding up of particular Companies in advance of the end of the convening period) which I address below.
Having regard to the size, scope and complexity of the tasks facing the Administrators (as summarised above), I am satisfied that a twelve-month extension of the convening period strikes an appropriate balance between, on the one hand, the interests of the creditors in a speedy administration and, on the other, the need to ensure that undue speed does not prejudice sensible and constructive actions by the Administrators which are directed towards maximising the return for creditors.
The proposed extension is consistent with and will further the object of Pt 5.3A, as set out in s 435A of the Act, by maximising the chances of some or all of the Companies, or their business, continuing in existence or, if this is not possible, resulting in a better return for the Companies’ creditors than would result from an immediate winding up of all 542 Companies.
The Administrators seek, and I will make, an order providing for the creditors to be notified of the extension order (and the other relief granted today) and for any person who can demonstrate a sufficient interest to have liberty to apply to vary or discharge the orders on three business days’ notice.
The Administrators also seek a “Daisytek order” pursuant to s 447A of the Act, that is, an order allowing the Administrators, if they see fit, to hold the second meeting of creditors of any of the Companies prior to the expiry of the extended convening period if desirable, so as to avoid unnecessary delay: see In the matter of Daisytek Australia Pty Ltd (2003) 45 ACSR 446; [2003] FCA 575 at [14]-[17] (Lindgren J). Such an order is now more or less the ordinary practice on a s 439A(6) application: Australian World-Wide at [28].The Administrators seek, and I will make, an order providing for the creditors to be notified of the extension order (and the other relief granted today) and for any person who can demonstrate a sufficient interest to have liberty to apply to vary or discharge the orders on three business days’ notice.
In addition, the Administrators seek:
an order permitting the Administrators to give notice to creditors under s 439A of the Act and the information required by r 75-225(3) of the Insolvency Practice Rules (Corporations) 2016 (Cth) in a combined single report; and
an order permitting the Administrators to hold a combined meeting of two or more of the Companies together.
Mr Scott gives evidence that the average cost of preparing a standalone report and holding a meeting of creditors of a single Company is in the range of $25,000 to $30,000.
Given that there are 542 Companies, it follows that the costs of preparing a separate report and holding a separate meeting for each Company would be in excess of $13.5m. In those circumstances, the orders sought are plainly in the interests of creditors.
The Administrators seek orders which would have the effect of allowing them - within the extended convening periods - to cause individual Companies to enter into liquidation without the need for the Administrators to go through the process of issuing a report to creditors and obtaining a resolution at a second meeting that the relevant Company be wound up.
It is proposed that the Administrators be permitted to take such a course only in circumstances where the Administrators determine that:
the relevant Company is insolvent; and
there is no deed of company arrangement proposed in relation to the Company that would in the opinion of the Administrators be capable of recommendation to creditors.
(together, the Winding Up Preconditions)
In respect of those Companies which are wholly owned subsidiaries of the TopCos, the Administrators are able, by virtue of ss 437A and 437B of the Act, to pass a special resolution of the Company’s sole member for the voluntary winding up of the Company: see s 491(1) of the Act, as well as ss 249B(1) and 250MA.
Although the Administrators regard this power as uncontentious, they seek an order pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations), being Sch 2 to the Act (IPSC), that they would be justified, where the Winding Up Preconditions exist in relation to a Company, to cause that Company to be wound up. The Administrators seek such a direction because they are concerned that an issue might be raised regarding the propriety or reasonableness of their proposed course, which will mean that the question of the relevant Company’s winding up will not be left for the second meeting of creditors.
I am satisfied that the Administrators would be justified, in circumstances where they have determined that a Company is insolvent and that there is no prospect of a deed of company arrangement that would be capable of recommendation to creditors, to take steps to wind up the Company at any time during the extended convening period, without the delay and cost involved in convening a second meeting of creditors for that particular Company. It is difficult to see that such a course, which is proposed in order to ensure that, where appropriate, the administration of a particular Company is brought to an end as quickly and inexpensively as possible, will cause prejudice to any person. I will therefore make the order sought by the Administrators.
As a corollary, the Administrators also seek an order, pursuant to s 447A of the Act, that where the Administrators determine that any particular Company is solvent, the creditors of the Company will be taken to have passed a resolution under s 439C(b) bringing the administration of that Company to an end (without the delay and cost involved in convening a second meeting of creditors for that Company). For similar reasons, I am satisfied that this relief is appropriate.
For the ten standalone Companies which are not owned by holding companies but instead are owned by individuals (being those identified in paragraph [8] above), the Administrators seek a different form of relief pursuant to s 447A.
In particular, it is proposed that the power in s 447A be used to modify the operation of s 439C(c), such that the creditors be taken to have passed a resolution to wind up any of those ten Companies in circumstances where:
the Administrators determine that the Winding Up Preconditions exist in relation to that Company;
there is insufficient property available in the Company for the Administrators to cover their remuneration and expenses in convening a second meeting of creditors;
the creditors are given no less than five business days’ notice of the Administrators’ intention to make such a determination; and
no objection is received from any creditor of that Company.
The Administrators acknowledged that there is some novelty to this aspect of their application, and that there are potentially conflicting authorities regarding the power of the Court to grant such relief: see Re Paradise Constructors Pty Ltd (administrator appointed); Pong Property Development Pty Ltd v Sleiman (2004) 8 VR 171; [2004] VSC 92 at [63]-[64] (Mandie J); and Chief Commissioner of State Revenue v Rafferty*’s* Resort Management Pty Ltd (in liq*)* (2008) 66 ACSR 199; [2008] NSWSC 452 at [8]-[10] (Austin J). Further, the Administrators acknowledged that it is unclear whether the preconditions specified above will be satisfied in respect of any of the ten Companies to which this relief would apply.
In those circumstances, I have determined that, rather than dealing with a novel question on a hypothetical basis, this element of the Administrators’ application should be adjourned, sine die, for consideration if and when the relevant preconditions for the proposed relief are satisfied.
The Administrators also seek an order that, where any of the Companies is wound up in the circumstances described above, the Administrators have such leave as may be required under s 532(2) of the Act to be liquidators of such Company.
The guiding consideration in determining whether to grant such leave is the legislative intention that a liquidator should be free from the potentially conflicting allegiance referred to in s 532 of the Act unless the Court sees that independent judgment will nevertheless still be available: McGrath & Anor re HIH Insurance Ltd & Ors (2010) 266 ALR 642; [2010] NSWSC 404 at [50] (Barrett J).
I do not apprehend, on the evidence before the Court, a basis for any genuine concern that the Administrators might be compromised in their ability to act as liquidators of any Company by reason that they were previously its voluntary administrators. Further, it is plainly desirable, and will promote efficiency and reduce costs, for the various entities within the group to be in the control of a single set of external administrators.
The Administrators seek relief regarding a number of loan agreements which they have entered (described in the confidential affidavit of Mr Scott as the VA Loan Agreements). In particular, the Administrators seek orders, nunc pro tunc, that they were justified in entering into the VA Loan Agreements and drawing down funds under those agreements, and also seek orders relieving them from personal liability in respect of these arrangements.
Having regard to the material in the confidential affidavit, I am satisfied that it was in the interests of creditors of the Companies for the Administrators to enter into the VA Loan Agreements and to draw down funds under those agreements. In short, and without disclosing the contents of this confidential affidavit, it would have been necessary, if the Administrators had not obtained this urgent short-term funding, to stand down or dismiss employees and immediately cease trading the business of the Companies, which would have resulted in a significant loss of value to the assets of the Companies having regard to the significant number of construction projects that are currently being undertaken. I am also satisfied, having regard to the matters set out in the confidential affidavit, that the Administrators took appropriate steps in an effort to ensure that the short-term funding obtained was on the best available terms. As noted above, the Administrators continue to seek longer term funding.
I will accordingly make orders that the Administrators were justified in entering into these arrangements.
As regards the application for relief from personal liability, I summarised the relevant principles in In the matter of Green Camel Pty Limited [2024] NSWSC 1199 at [29]-[38], and this summary is largely repeated below.
Section 443A of the Act provides that the administrator of a company under administration is liable for debts which he or she incurs, in the performance or exercise, or purported performance or exercise, of any of his or her functions and powers as administrator, including for repayment of money borrowed, interest in respect of money borrowed, or borrowing costs.
Section 447A provides that the Court may make such order as it thinks appropriate about how Part 5.3A is to operate in relation to a particular company.
It is well established that the Court has power under s 447A to make orders limiting an administrator’s personal liability under s 443A, including in respect of the repayment of money borrowed or interest on money borrowed.
In Secatore*, in the matter of Fletcher Jones and Staff Pty Ltd* (Administrators Appointed) [2011] FCA 1493 at [23], Gordon J stated as follows:
“Section 447A(1) of the Act empowers the Court, in an appropriate case, to modify the operation of s 443A to exclude personal liability on the part of a voluntary administrator, and to provide that a loan taken by the company via the voluntary administrator is repayable on a limited recourse basis. Orders in similar terms have frequently been made in circumstances where the Court is satisfied that an administrator has entered into a loan agreement or other arrangement to enable the company’s business to continue to trade for the benefit of the company’s creditors: see, for example, Re Ansett Australia Ltd (No 1) at [49]; Re Spyglass Management Group Pty Ltd (admin apptd) (2004) 51 ACSR 432 at [6]; Sims; Re Huon Corporation Pty Ltd (admins apptd) (2006) 58 ACSR 620 at [12]; Re Malanos [2007] NSWSC 865 at [13].”
“(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 …”.
This statement of principles has been adopted in subsequent authorities, including by Gordon J in Secatore at [24], and by Black J in In the matter of RCR Tomlinson Ltd (administrators appointed) & Ors [2018] NSWSC 1859 at [11] (and see the cases there cited).
In RCR Tomlinson at [11], Black J, after referring to and adopting those principles, continued as follows:
“It seems to me that, in the present circumstances, the question ultimately becomes whether it is in the interests of the Companies that the borrowing take place, because it is plain enough that the Administrators could not be expected to assume unlimited personal liability for a borrowing of this magnitude, or the risk that their indemnity against the Companies’ assets is ultimately not sufficient to discharge that borrowing.”
Relief may be sought under s 447A of the Act retrospectively, that is, after the relevant borrowing has taken place: In the matter of Renex Holdings (Dandenong) 1 Pty Ltd (administrators appointed) & Ors [2015] NSWSC 2003 at [14] (Black J).
In the present case, I am satisfied, by reference to the material in the confidential affidavit, that the proposed arrangements are in the best interests of the Companies’ creditors and are consistent with the objectives of Pt 5.3A of the Act, since the short-term funding under the VA Agreements will enable at least part of the business of the Companies to continue to trade for the benefit of their creditors for the period of such funding. It is not apparent that any prejudice or disadvantage will be caused by the proposed orders, particularly because the lenders who might be affected by such orders have agreed that the Administrators will have no personal liability in respect of the VA Loan Agreements or the amounts drawn down under them. I will accordingly grant the relief sought.
The confidential affidavit of Mr Scott explains that there is a relationship between the Administrators and one of the lenders who has provided short-term funding, such that it might be said that the Administrators stand to gain an indirect profit from entry into the loan.
Section 60-20(1) of the IPSC prohibits an external administrator from directly or indirectly deriving a profit from the external administration. This prohibition does not apply where the external administrator has been granted leave by the Court: s 60-20(3).
The material in the confidential affidavit establishes that the relevant loan was entered in urgent circumstances, within two days of the Administrators’ appointment, in order to provide preliminary funding for the initial period of the administration, including critical expenses such as payroll, in circumstances where:
there was no other immediate alternative that could be agreed in the time available; and
absent the funding, the Administrators would have been required to immediately cease trading the business of the Companies.
Having regard to those matters, I am satisfied that the grant of leave is appropriate.
This order will, along with the other relief obtained today, be notified to creditors, and any person who can demonstrate sufficient interest will have liberty to apply, on three business days’ notice, to set aside or vary such relief.
Since their appointment, the Administrators have used the existing bank accounts of the group, which were operated by 32 of the Companies (including the TopCos). The majority of the Companies do not have a separate bank account.
It is a requirement under s 65-5 of the IPSC for an external administrator to pay all money received by or on behalf of, or in relation to, a company into an “administration account for the company”.
Section 65-25 similarly provides that an external administrator must not pay any money out of the administration account for the company other than for purposes related to the external administration of the company (or otherwise in accordance with the Act or a direction of the Court).
Section 65-45 provides the Court may give directions regarding the payment, deposit or custody of money that is payable to, or held by, an external administrator. Pursuant to this section, the Court may modify the arrangements with respect to the operation of administration accounts, including as regards compliance with ss 65-5 and 65-25: Korda, in the matter of Ten Network Holdings Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2017] FCA 1144 at [91]-[95] (Markovic J).
Mr Scott gives evidence of the cost and administrative burden that would be involved in opening and operating hundreds of separate bank accounts for the Companies. On the basis of this evidence, the Administrators seek dispensation from the requirement to open and operate separate accounts for each of the SPVs, and instead propose that any money received in the administration of a particular SPV be received into the relevant holding company’s account. Relief is also sought in respect of payments out of the administration accounts. Mr Scott deposes that, if such relief is granted, the Administrators will, in keeping with their obligations to keep proper financial records of the administrations of each of the Companies, keep records of money which is paid in and out of the accounts on behalf of other Companies in the group for which there is not a specific administration account.
Similar relief was granted by Middleton J in Virgin Australia Holdings, with his Honour observing as follows (at [194]):
“Given that there are now 39 companies within the Virgin Group that are in external administration, opening a separate bank account for each entity would increase cost and bring added complexity to the administration.”
The Administrators seek an order regarding the provision of notice of these orders to creditors. The proposed orders would involve notification being provided by various means, including by sending an email (where an email address is known) and by causing scanned copies of the application and orders to be published on a creditor portal.
It has become commonplace for orders to be made for notices to be provided to creditors by electronic means: see Quinlan, in the matter of Halifax Investment Services Pty Ltd (Admininstrators Appointed*)* [2018] FCA 1891 at [12]-[14] (Yates J); and Jahani, in the matter of The Ralan Group Pty Ltd (administrators appointed) [2019] FCA 1446 at [21]-[23] (Gleeson J).
I am satisfied that such an order, particularly in the circumstances of this case, will promote the efficient and cost-effective giving of notices to creditors and other interested parties.
Finally, the Administrators seek an order that their costs of this application be costs in the administrations of the Companies and be paid out of the property of the Companies.
I will also make this order. As outlined above, I am satisfied that this application has been brought with a view to furthering the efficient conduct of an especially large and complex administration.
For the reasons set out above, I make the following orders:
Upon the undertaking of the Plaintiff’s solicitor to pay the applicable filing fee, the Plaintiff is granted leave to file in Court the Interlocutory Process dated 17 September 2026, the Affidavit of Andrew John Scott, sworn 17 September 2026 (the Supporting Affidavit) and the confidential Affidavit of Andrew John Scott, sworn 17 September 2026 (the Confidential Affidavit).
The Interlocutory Process be made returnable instanter.
Pursuant to r 1.3 of the Supreme Court (Corporations) Rules 1999 (NSW) or s 61(1) of the Civil Procedure Act 2005 (NSW), the requirement of r 2.4(2) of the Supreme Court (Corporations) Rules 1999 (NSW), to the extent that rule requires the Supporting Affidavit to annex or exhibit a search of the records maintained by the Australian Securities and Investments Commission (ASIC) in respect of each Company, be dispensed with.
Extension of convening period and associated relief
(a) in causing the administration of the Company to end in the circumstances described in s 435C(3)(d) of the Corporations Act; and (b) in circumstances where the Administrators are administrators of any company that holds more than 75% of the issued capital in the Company (parent company), causing the parent company to pass a special resolution under s 491 of the Corporations Act that the Company be wound up with themselves appointed as liquidators of the Company
Administrators’ indemnity
(a) in entering each of the agreements referred to at paragraphs 7, 32, 35, 37. 38, 40, 42 and 44 of the Confidential Affidavit (each a VA Loan Agreement, together the VA Loan Agreements); and (b) in causing each Company that is named as a party to a VA Loan Agreement to enter it.
(a) the liabilities of the Administrators incurred with respect to any obligations arising out of, or in connection with the VA Loan Agreements are debts incurred by the Administrators in the performance and exercise of their functions and powers as the joint and several administrators of the Companies (within the meaning of s 443A of the Corporations Act); and (b) notwithstanding that the liabilities in subparagraph (a) are debts incurred by the Administrators in the performance and exercise of their functions and powers as the joint and several administrators of the Companies, in connection with the:
(i) VA Loan Agreement referred to at paragraph 7 of the Confidential Affidavit, to the extent that the property of the Companies is insufficient to satisfy the debts and liabilities incurred under that VA Loan Agreement, such that the indemnity that exists under s 443D of the Corporations Act is insufficient to meet any amount for which the Administrators may be personally liable, the Administrators are not personally liable to repay such debts or satisfy such liabilities under that VA Loan Agreement; and (ii) VA Loan Agreements referred to at paragraphs 32, 35, 37. 38, 40, 42 and 44 of the Confidential Affidavit the Administrators are not personally liable to repay such debts or satisfy such liabilities.
(a) entering the Utilisation Side Deed that is referred to at paragraph 63 of the Confidential Affidavit; and (b) in causing each Company that is named as a party to the Utilisation Side Deed to enter that deed.
(a) entering each Utilisation Notice referred to at paragraphs 60, 61, 64, 65 and 66 of the Confidential Affidavit (each a VA Utilisation Notice, together the VA Utilisation Notices); and (b) in causing each Company that is named as a party to a VA Utilisation Notice to enter it.
(a) the liabilities of the Administrators incurred with respect to any obligations arising out of, or in connection with the:
(i) the Utilisation Side Deed that is referred to at paragraph 63 of the Confidential Affidavit; and (ii) VA Utilisation Notices,
are debts incurred by the Administrators in the performance and exercise of their functions and powers as the joint and several administrators of the Companies (within the meaning of s 443A of the Corporations Act); and
(b) notwithstanding that the liabilities in subparagraph (a) are debts incurred by the Administrators in the performance and exercise of their functions and powers as the joint and several administrators of the Companies, in connection with the:
(i) the Utilisation Side Deed that is referred to at paragraph 63 of the Confidential Affidavit; and (ii) each of the VA Utilisation Notices, the Administrators are not personally liable to repay such debts or satisfy such liabilities.
(a) the liabilities of the Administrators incurred with respect to any obligations arising out of, or in connection with any:
(i) loan agreements which the Administrators enter as voluntary administrators of a Company, or which they cause a Company to enter, with a lender during the administrations on or after the date of these orders; or (ii) drawing under any facility a Company was party to with a lender prior to the appointment of the Administrators, and which drawing is made by the Company by act of the Administrators during the administrations on or after the date of these orders,
are debts incurred by the Administrators in the performance and exercise of their functions and powers as the joint and several administrators of the Company (within the meaning of s 443A of the Corporations Act); and
(b) notwithstanding that the liabilities in subparagraph (a) are debts incurred by the Administrators in the performance and exercise of their functions and powers as the joint and several administrators of the Company, the Administrators are not personally liable to repay such debts or satisfy such liabilities provided the loan agreement or drawing is entered or made on terms agreed with by the lender where the lender agrees that the Administrators are to have no personal liability in connection with the loan agreement or the drawing.
Administration accounts
(a) any Company which is a subsidiary of the Four Hundred and Fifty Seventh Plaintiff, Raj & Jai Construction Pty Ltd (administrators appointed) ACN 098 688 218, and which Company did not operate a bank account at the time of the appointment of the Administrators as administrators of that Company, then the Administrators may pay money received in the administration of that Company into the administration account which is being maintained by the Administrators for the Four Hundred and Fifty Seventh Plaintiff; (b) any Company which is a parent of the Five Hundred and Twenty Ninth Plaintiff, Buildwell Australia 1 Pty Ltd (administrators appointed) ACN 639 220 572, or a subsidiary of its parent, and which Company did not operate a bank account at the time of the appointment of the Administrators as administrators of that Company, then the Administrators may pay money received in the administration of that Company into the administration account which is being maintained by the Administrators for the Five Hundred and Twenty Ninth Plaintiff; (c) in respect of any other Company which did not operate a bank account at the time of the appointment of the Administrators as administrators of that Company, then the Administrators may pay money received in the administration of that Company into the administration account which is being maintained by the Administrators for the Second Plaintiff, Universal Property Group Pty Ltd (Administrators Appointed) ACN 078 297 748; and (d) the Administrators are not otherwise required to maintain a separate administration account in relation to any of the Companies which did not operate a bank account at the time of the appointment of the Administrators as administrators of that Company, as would otherwise be required by s 65-5(1) of the IPSC.
Leave to derive a profit
Notice of orders
(a) where the Administrators have an email address for a creditor, owner or lessor, by notifying each such creditor, owner or lessor, via email, of the making of these orders and providing a link to a website where the creditor, owner or lessor may download the orders and the Interlocutory Process; (b) where the Administrators do not have an email address for a creditor, owner or lessor but have a postal address for that creditor, owner or lessor (or have received notification of non-delivery of a notice sent by email in accordance with subparagraph (a) above), by notifying each such creditor, owner or lessor, via such postal address for those creditors, owners or lessors known to the Administrators; (c) by causing scanned copies of the Interlocutory Process and the orders to be published on the creditor portal maintained by the Administrators’ third-party provider EXAD; and (d) in each instance, by stating that a copy of the Supporting Affidavit may be provided upon request sent to a nominated email address that is accessed and monitored by the Administrators or their staff.
Confidentiality and other orders
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[2026] NSWSC 1062
(2010) 266 ALR 642
(2018) 265 CLR 480
(2004) 8 VR 171