Hutton, in the matter of Big Village Australia Pty Ltd (Administrators Appointed)

Big Village Australia Pty Ltd was in financial difficulty and appointed Matthew Hutton and Robert Smith as administrators. The Administrators sought an order that Part 5.3A of the Corporations Act 2001 (Cth) is to operate as though their appointment was valid. This was an urgent application because it was necessary for the Administrators to proceed with an "expression of interest" campaign for the sale or recapitalisation of the Company’s business, the deadline for which was 3 February 2023. The application was opposed by the Company’s sole director, Ms Kracht, who had appointed the Administrators but had not ordinarily resided in Australia at the time the resolutions were passed. Ms Kracht also purported to resign as a director before the resolutions were passed.

The Court was required to determine whether it should make an order pursuant to s 447A of the Corporations Act 2001 (Cth) (Act) that Part 5.3A is to apply to the second plaintiff as though the appointment of the Administrators was valid. The Court was also required to determine whether it should make an order under s 1322(4) of the Act, which allows the Court to correct irregularities in the exercise of any power conferred by the Act. The Administrators submitted that the evidence before the Court formed a sufficient basis for the Court to conclude that the resolutions were validly made, and to make an order under s 447C.

The Court found that the Administrators had not suffered any prejudice or substantial injustice as a result of the Court making the orders sought in this application. The Court also found that Ms Kracht, the sole director of the Company, was aware of and supported this application. Creditors of the Company had been informed of the substance of the application and a copy of the documents filed in this proceeding had been made available to them. At the time of Mr Hutton swearing his affidavit, no person had objected to the application. The Court was satisfied that the actions taken by the Administrators were consistent with the objects of Part 5.3A of the Act as set out in s 435A. The Court was satisfied that the evidence before it was sufficient to conclude that the resolutions were validly made and to make an order under s 447A.

Pursuant to section 447A(1) of the Corporations Act 2001 (Cth), Part 5.3A of the Act is to operate in relation to the second plaintiff as though the first plaintiffs were validly appointed as joint and several administrators of the second plaintiff on 26 January 2023. The plaintiffs’ costs of and incidental to this application be costs in the administration of the second plaintiff. There is liberty to apply.