Tenants under administration: canvassing the options for relief against forfeiture

Appointment of an administrator over company assets under the Corporations Act 2001 (Cth) is a means by which company property may be protected for the benefit of creditors and shareholders in the face of actual or anticipated insolvency. Creditors' and shareholders' interests in or claims upon company property are often in conflict with those of third parties – such as lessors of real property who might seek to forfeit the company's lease and regain possession of property. In these circumstances, the tenant company in administration may make a claim for relief against forfeiture or call upon the application of a s444 moratorium. As two recent cases show, such a moratorium may be extended beyond the expiration or termination of a deed of company arrangement. This paper examines the decisions in Kelly and Morris v Hedz Pty Ltd (voluntary administrators appointed) (receiver and managers appointed) [2010] QSC (30 July 2010) and Strazdins v Birch Carroll & Coyle 178 FCR 300 to examine the extent to which s444 declarations can be considered to align with or augment equitable relief