Key Point

The word “advance” does not automatically imply an obligation to repay the funds advanced, nor does it automatically imply a repayment trigger.

The Facts

TOC Investments Corporation (“TOC”) had entered into a funding agreement with the provisional liquidators (the “PLs”) of Beppler & Jacobson Limited (“BJUK”) which provided for the “advance” of monies for the purpose of paying the fees and costs of the PLs. The winding up petition issued against BJUK was dismissed and TOC applied for a determination that TOCbe repaid by BJUK (amongst other arguments) because (i) the agreement should be construed such that funds advanced are repayable out of the assets of BJUK (ii) TOC is subrogated to the PL’s rights to be paid by BJUK pursuant to rule 4.30 of the Insolvency Rules 1986, or (iii) the terms of a court order pursuant to which the funding agreement was made provide for this.

The Decision

TOC was entitled to reimbursement from the assets of BJUK as the context of this case implies a right to repayment out of the assets of BJUK pursuant to rule 4.30 and the court order.


Use of the word “advance” does not automatically imply a right to repayment, and even if it does, evidence is needed as to what the trigger for repayment is intended to be. The usual assumption that where a loan agreement is silent as to repayment, the loan is repayable on demand, was not applicable in this case. In the context of funding agreements, and loan agreements, care should be taken that specific provision is made for repayment and repayment triggers.

TOC Investments Corporation v Bepplier & Jacobson Ltd