Sharvain Facades - Case Update

The Federal Court of Australia has refused to grant an eight-week extension requested by the administrator of Sharvain Facades, instead finding a “barely sufficient” reason to support a much shorter extension to allow the company to try to collect a significant judgment debt.

Sharvain Facades, the company behind Sydney Fish Market's new wave roof and the façade on the University of Technology Sydney's Chau Chak Wing building, entered voluntary administration on 4 March, with Graeme Beattie of Worrells appointed as administrator.

On 18 June, the company secured a $3.27 million judgment against Roberts Co (NSW) in relation to the Westmead Children’s Hospital development project. The administrator then sought a third extension for an initial period of eight weeks until 15 August, but foreshadowed the possibility of applying for a further extension to deal with any potential appeal by Roberts.

The administrator was concerned that if the company were placed into liquidation before recovering the funds, section 32B of the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) might prevent enforcement of that judgment. However, the Court found that section 32B only prevents enforcement actions under the SOPA process—not enforcement of a final court judgment. Therefore, this ground was rejected.

A secondary concern arose regarding the operation of section 553C of the Corporations Act 2011, which allows for mutual set-offs in a liquidation. The administrator feared that if Sharvain entered liquidation before collecting the judgment, Roberts might offset the debt against claims it had against Sharvain, potentially reducing the actual recovery. Although speculative, this concern was viewed as slightly more concrete and offered a just—if marginal—basis for a limited extension.

Balancing these risks against the interests of employees owed $1.26 million in entitlements, the Court granted a short extension of the convening period until 15 August. The Court stated: “I do not find the present case to be a clear case. On balance, and not without hesitation, I conclude that there is a sufficient reason (but barely sufficient) to support a single extension of time to enable Sharvain to see if it can obtain prompt payment by Roberts of the judgment debt.”

If Roberts obtains a stay of execution of the judgment, the extension will end five business days after that stay.

Read the decision HERE.

Professionals involved:

• Michael Hazan of 11 St James Hall Chambers (instructed by Chamberlains) for the administrator