Axed administrator appointed for improper purpose

It’s only early but details recently released may represent the most egregious example of an administrator turning a blind eye that we’ll see all year.

“I am conscious of the gravity of concluding that I do not accept Mr Pleash’s evidence given his status as a registered liquidator. Affording due weight to the contemporaneous documents, I have concluded that Mr Pleash primarily relied on the PPSR registration as the relevant security interest for the purpose of s 436C. However, I am not satisfied that I can exclude that he also relied in part on his understanding that iLend had a charge on real property which supported his appointment.” Justice Elisabeth Cheeseman.

Following a hearing in the Federal Court late last year the practitioner in question – Hall Chadwick partner Blair Pleash – can likely anticipate some regulatory scrutiny of his role in the affair, which saw him accept an appointment as an administrator for the purposes of debt collection, in breach of Part 5.3 of the Act.

The hearing was for an application for declaratory relief and costs brought by the directors of the company to which Pleash had been appointed in early December 2022.

Last week the court found that Pleash failed to take the steps necessary to satisfy himself that the security under which he had been appointed was current and enforceable.

in Patel v Pleash [2025] FCA 77 Justice Elizabeth Cheeseman said: “The plaintiffs contend that, in the circumstances described above, Mr Pleash failed to take appropriate steps to satisfy himself that iLend was in fact entitled to appoint him as an administrator of Jubilee under s 436C. I accept that submission.”

Pleash was appointed on December 2, 2022 under Section 436C of the Act pursuant to a loan agreement between broker Marwan Salim, his firm iLend Capital, and the directors of Jubilee Infrastructure, who engaged Salim to find finance for a property development in Adelaide.

Following the signing of a mandate agreement between iLend and Jubilee, a loan was identified from Sean Katz’s ProLend Solutions in the amount of $3.573 million.

This was well short of the sum of $12 million sought and it didn’t comply with the mandate the Jubilee directors had agreed.

They said thanks but no thanks and in March 2022 completed the purchase of the target property without recourse to borrowings.

Based on the findings of Justice Cheeseman it would seem Salim stewed over the lost opportunity for six months before concluding that Jubilee’s directors owed him despite not proceeding under the terms of the iLend Agreement.

“On October 31, 2022, an email was sent to Jubilee’s directors alleging that they were “in default” of their “payment to iLend Capital,” the judge said.

“The email stated that the iLend Invoice was “due and payable immediately”. In the iLend Invoice, iLend claims payment of $259,000, described as “Mandate Fee + Interest”, and $7,700, described as “Legal Fees & Charges”, in total a debt of $293,370 (inclusive of $26,670 GST).

“The iLend Invoice included as the “Due Date” the word “immediately” in red text and also in red text, an assertion that all “late invoices incur a 4% p/m interest fee”,” the judge said.

One the same day the broker, unbeknownst to Jubilee’s directors, registered an ALLPAP – No exceptions security interest against Jubilee on the PPSR, despite not having provided any financing offer to Jubilee which complied with the relevant clauses of the iLend Agreement they’d signed.

Four days late the Jubilee directors received an offer of finance which they accepted from Angas, a different financier, which was not introduced to the plaintiffs by Salim or iLend.

The Angas finance, which would have paid bills associated with the ongoing development of the property, was due to settle on December 2 but the funds never came through as Pleash was appointed administrator of Jubilee on the same day. It would however be a short-lived appointment.

Within days Jubilee’s directors obtained an injunction and Pleash’s appointment was terminated on December 16, 2022.

More than two years later the directors have won declaratory relief and a costs order against Pleash on the basis that he failed to satisfy himself that he could accept the appointment.

But it’s what regulators will do with the court’s findings – made public last Friday – that make it impossible to think that ARITA won’t convene a disciplinary committee or that ASIC won’t receive a Section 40-100 complaint, if indeed the regulator isn’t roused into action without such a prompt.

The judge also found that the invoice issued to Jubilee’s owners didn’t align with the terms of the iLend agreement and that there was doubt about the legitimacy of certain documents tended to the court by the broker before he decided to take no further part in the proceedings around July 2024.

“Both the deed of appointment and the notification of the appointment to ASIC are framed by reference to the PPSR registration ostensibly made pursuant to the iLend Agreement,” the judge said.

“While Mr Pleash maintained that the deed of appointment recitals should be construed so that reference to the iLend Agreement implicitly included a reference to a charge on real property effected by that agreement, he accepted that the notification to ASIC only identified the PPSR registration as the basis for his appointment.

“He said that the notification to ASIC was wrong and that he understood at the time that the PPSR registration did not supply a valid basis for his appointment.

“He could not explain how he came to make the mistake of relying on the PPSR registration in the documents. After saying the notification to ASIC was probably completed by the most junior person in the office, he accepted that the content of the notification was his responsibility.

“It was put to Mr Pleash that his evidence in relation to not relying on the PPSR registration as the basis for his appointment was false. Mr Pleash did not accept that proposition,” she said.