Background
ACFS Port Logistics Pty Ltd operated a large transport, warehousing and freight-logistics business across Australia and New Zealand, employing about 1,100 people. On 6 August 2026, Scottish Pacific Business Finance Pty Ltd, the secured creditor, appointed receivers and managers as well as voluntary administrators. The receivers continued trading the business while pursuing a sale or recapitalisation.
ACFS and the Maritime Union of Australia (MUA) had negotiated a replacement enterprise agreement covering about 58 employees in Melbourne and Adelaide. After protected industrial action was authorised and twice notified, the receivers and MUA reached in-principle agreement on 10 September 2026; the MUA withdrew the second notice. The administrators urgently sought a direction that they could cause ACFS to enter the agreement and orders limiting their potential personal liability.
The Court’s Holding
Younan J granted both forms of relief. Under s 90-15 of the Insolvency Practice Schedule (Corporations), the Court held that the administrators were justified in causing ACFS to enter the proposed MUA enterprise agreement. The evidence supported the conclusion that the agreement would help prevent industrial action, preserve operations and workforce stability, and protect the value of the business during the sale or recapitalisation process.
The Court also made orders under s 447A of the Corporations Act 2001 (Cth) modifying the operation of s 443A. Any personal liability of the administrators connected with the proposed agreement was confined to liabilities accruing during, or attributable to, the voluntary administration; it excluded liability arising merely because ACFS proposed or agreed to the agreement and liability attributable to the post-administration period. The administrators were not personally liable beyond the amount available under their statutory indemnity.
Key Takeaways
- A court may direct that administrators are justified in entering an enterprise agreement where it serves the continuation and value preservation of an insolvent business.
- Preventing industrial action during a receivership sale or recapitalisation process can support relief under the insolvency regime.
- Section 447A can limit administrators’ uncertain personal exposure under s 443A without changing creditors’ claims against the company or their ranking.
Why It Matters
The decision shows how the Federal Court can facilitate a negotiated workforce agreement where industrial stability is material to preserving a distressed operating business. The Court treated the proposed MUA agreement’s approximately $1 million annual additional labour cost as proportionate to the potential disruption and value loss from industrial action.
It also confirms that tailored personal-liability protection may be available where administrators must take steps affecting an ongoing business but do not control its trading, provided the arrangement advances the objectives of voluntary administration and does not prejudice creditors.