In the matter of RCR Tomlinson Ltd (administrators appointed) and Ors [2020] NSWSC 735

Supreme Court New South Wales

Medium Neutral Citation: In the matter of RCR Tomlinson Ltd (administrators appointed) and Ors [2020] NSWSC 735 Hearing dates: 1 and 8 May 2020 Decision date: 15 June 2020 Jurisdiction: Equity - Corporations List Before: Black J Decision: Parties to bring in short minutes of order. Directions to be given that Plaintiffs are justified in: treating the Appointment Date as the relevant "snapshot" date for determining whether an Asset is the subject of a Circulating Security Interest for payment of Priority Employee Entitlements, notwithstanding a change in the nature of the Asset's security interest post-Appointment Date; treating the Surplus Proceeds as not being an 'account' or property subject to a circulating security interest; treating WIP permutations 1 and 2 as circulating assets; treating WIP permutation 3 and Intangible WIP as not being circulating assets; treating Subcontractor Proceeds as not being an 'account' or property subject to a 'circulating security interest'. Catchwords: MORTGAGES AND SECURITIES — Personal Property Securities Act 2009 (Cth) — Circulating asset — Circulating security interest — s 561 of the Corporations Act 2001 (Cth) — Administrator appointment date relevant date for whether asset subject to circulating security interest — Definitions of 'account' and 'monetary obligation' in ss 10 and 340 of Personal Property Securities Act 2009 (Cth) — Whether 'monetary obligation' requires existing liability to pay a fixed, certain, specific or liquidated sum of money — Whether Plaintiffs' rights to any surplus proceeds on performance bonds called on after appointment date are PPSA personal property at appointment date — Whether rights to any surplus proceeds on performance bonds called on after appointment date are 'accounts' or 'monetary obligations' — Whether certain tangible work in progress are 'accounts' or 'monetary obligations'— Whether certain intangible work in progress are 'accounts' or 'monetary obligations' — Whether Plaintiffs' rights to call on subcontractor performance bonds after appointment date are 'accounts' or 'monetary obligations' at appointment date Legislation Cited: - Companies Act 1961 (NSW), s 292 - Companies Act 1929 (UK), s 264 - Companies Act 1948 (UK), s 319 - Companies (New South Wales) Act 1981 (NSW), s 446 - Corporations Act 1989 (NSW), s 561 - Corporations Act 2001 (Cth) ss 433, 553, 553C, 554, 561; Sch 2, s 90-15 - Personal Property Securities Act 2009 (Cth), ss 10, 340 - Personal Property Securities Act 1999 (NZ), s 16 - Personal Property Securities Act 1990 (Ontario), s 4 - Preferential Payments in Bankruptcy (Amendment) Act 1897 (UK), s 2 - Supreme Court (Corporations) Rules 1999 (NSW), r 2.13 - Trustee Act 1925 (NSW), s 63 - Uniform Commercial Code (US), art 9 Cases Cited: - Agent's Equity Inc v Mendlowitz & Associates Inc (Trustees of the Estate of Hope) (1996) 30 OR (3d) 557 - Aldi Foods Pty Ltd v Shop, Distributive and Allied Employees Association [2017] HCA 53 - Buchler v Talbot [2004] 2 AC 298 - Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth [2019] HCA 20; (2019) 93 ALJR 807 - Conley v Deputy Commissioner of Taxation (1998) 152 ALR 467 - Cook v Italiano Family Fruit Co Pty Ltd (in liq) (2010) 190 FCR 474 - Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) [2017] WASC 152; (2017) 52 WAR 90; (2017) 320 FLR 259 - Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) [2018] WASCA 163 - National Provincial Bank Ltd v Ainsworth [1965] AC 1175 - Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 - Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 - Re Amerind Pty Ltd (recs and mgrs apptd) (in liq) [2018] VSCA 41 - Re CMI Industrial Pty Ltd (in liq) [2015] QSC 096 - Re Go Energy Group Ltd [2019] NSWSC 558 - Re Hawden Property Group Pty Ltd (in liq) [2018] NSWSC 481 - Re Langdon; Forge Group Ltd (recs and mngrs apptd) (in liq) [2017] FCA 170; (2017) 118 ACSR 434 - Re Maiden Civil (P&E) Pty Ltd (2013) 277 FLR 337 - Re Plutus Payroll Australia Pty Ltd (in liq) [2019] NSWSC 1171 - Shepherd v Commissioner of Taxation (1965) 113 CLR 385 - Stein v Saywell (1969) 121 CLR 529 - Strategic Finance Ltd (in liq) v Bridgman [2013] NZCA 357; [2013] 3 NZLR 650 - SZTAL v Minister for Immigration and Border Protection [2017] HCA 34 - TCE Capital Corporation v Mendlowitz & Associates Inc (Trustee of the Estate of Vesna Kolenc) (1999) 44 OR (3d) 148 - US Claims Inc v Flomenhaft & Cannata LLC 519 F Supp 2D 515 (2006) - Walley; Re Poles & Underground Pty Ltd (admins apptd) [2017] FCA 486 - Warner (liquidator), Re Sakr Bros Pty Ltd (in liq) [2019] FCA 547 - Whitton v ACN 003 266 886 Pty Ltd (controller appointed) (in liq) (1996) 42 NSWLR 123 Texts Cited: - D Brown and A Duggan, Australian Personal Property Securities Law (LexisNexis, 2nd ed, 2012) - R Cummings and R Wood, Alberta Personal Property Security Act Handbook (Carswell, 4th ed, 1998) - D Denomme and J Ziegel, The Ontario Personal Property Security Act: Commentary and Analysis (LexisNexis, 2nd ed, 2000) - C Proctor, Mann of the Legal Aspect of Money (Oxford, 7th ed, 2012) - J Stumbles, 'The Impact of the Personal Property Securities Act on Assignment of Accounts' (2013) 37 MULR 415 Category: Procedural and other rulings Parties: Jason Preston, William James Harris, Robert Conry Brauer and Matthew Wayne Caddy in their capacity as joint and several liquidators of RCR Tomlinson Ltd (in liquidation) (and other Companies) (Plaintiffs) Representation: Counsel: D Cook SC/M Rose (Plaintiffs) V Whittaker SC/B Hancock (CBA Corporate Services (NSW) Pty Ltd) (Lenders) Dr R Higgins SC/P Herzfeld (Commonwealth of Australia represented by the Attorney General's Department (Commonwealth)