Habrok (Dalgaranga) Pty Ltd v Gascoyne Resources Ltd

Habrok (Dalgaranga) Pty Ltd sought judicial review of a decision by Gascoyne Resources Limited to implement a deed of company arrangement (DOCA) over the assets of the GCY Group, which comprises several mining and exploration companies. The Federal Court was tasked with determining whether the administrators of the GCY Group acted appropriately in approving the DOCA and whether the court should set aside the implementation of the DOCA and order the winding up of the companies. Key legal issues included the adequacy of the administrators' investigation and the fairness of the process, particularly in light of the COVID-19 pandemic and the dual track process involving both a sale and a recapitalisation of the GCY Group.

The Court found that the administrators had acted within their powers and had not breached their duties in approving the DOCA. The administrators were deemed to have conducted a thorough investigation and had provided a comprehensive report to creditors, enabling them to make an informed decision. The court held that the administrators' decision to proceed with the DOCA was in the best interests of the creditors and was consistent with the objectives of the relevant sections of the Corporations Act. The court also found that the administrators had adequately considered the impact of COVID-19 on the process and had provided sufficient information to creditors to allow them to consider the DOCA proposals. Furthermore, the court ruled that there was no conflict of interest on the part of the administrators, despite their prior work with some of the parties involved.

In light of the above, the Court dismissed the proceeding with costs. The administrators' decision to implement the DOCA was upheld, and the winding up of the companies was not ordered. The court held that the administrators had discharged their duties properly and that the DOCA was in the best interests of the creditors of the GCY Group as a whole. The implementation of the DOCA was consistent with the objectives of the relevant sections of the Corporations Act, and terminating the DOCA would have been contrary to the interests of the creditors. The shareholders' approval of the resolutions to approve the issue of shares under the entitlement offer, the issue of shares under the placement, the conversion of NRW debt to equity, and the issue of shares to the trustees of the creditors' trust further supported the court's decision.