In the matter of BRS Quarries Australia Pty Ltd and Pleasure Point Mine Pty Ltd

[2025] NSWSC 307

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of BRS Quarries Australia Pty Ltd and Pleasure Point Mine Pty Ltd [2025] NSWSC 307

Hearing dates:

2 April 2025

Date of orders:

2 April 2025

Decision date:

02 April 2025

Jurisdiction:

Equity - Corporations List

Before:

Nixon J

Decision:

Orders made extending convening period for second meeting of creditors.

Catchwords:

CORPORATIONS – voluntary administration – creditors’ meeting – application for extension of time fixed by s 439A of the Corporations Act 2001 (Cth) for convening of the second meeting of creditors – where administrator requires further time to obtain valuation of assets and to complete investigations – extension granted

Legislation Cited:

Corporations Act 2001 (Cth) ss 438A, 439A

Cases Cited:

Albarran, in the matter of Bonza Aviation Pty Ltd (Admins Apptd) [2024] FCA 575

Australian World-Wide Pty Ltd v Palmer [2014] NSWSC 141

Carter v Global Food Equipment Pty Ltd [2007] NSWSC 901

Colley, in the matter of PF Group Holdings Pty Ltd (Admins Apptd) [2024] FCA 792

In the matter of BCD Resources NL (receivers and managers appointed) (administrators appointed) [2015] NSWSC 777

In the matter of Daisytek Australia Pty Ltd [2003] FCA 575

In the matter of Mosaic Brands Limited (admins apptd) (recs and mgrsapptd) [2024] NSWSC 1439

In the matter of Orbis Commodities Pty Ltd (administrators appointed) (receiver and manager appointed) [2021] NSWSC 1172

Mighty River International Ltd v Hughes and Bredenkamp (2018) 265 CLR 480; [2018] HCA 38

Re Diamond Press Australia Pty Ltd [2001] NSWSC 313

Re Riviera Group Pty Ltd (admins apptd)(recrs & mgrsapptd) [2009] NSWSC 585

Re Strawbridge (in their capacity as joint and several voluntary administrators of each of Virgin Australia Holdings Ltd (admins apptd) (ACN 100 686 226)) (No 2) [2020] FCA 717

Category:

Principal judgment

Parties:

Aaron Kevin Lucan in his capacity as Administrator (First Plaintiff)
BRS Quarries Australia Pty Ltd (Administrator Appointed) ACN 113 428 587 (Second Plaintiff)
Pleasure Point Mine Pty Ltd (Administrator Appointed) ACN 636 910 935 (Third Plaintiff)

Representation:

Counsel:
C Hamilton-Jewell (First Plaintiff)

Solicitors:
Sullivan Fernan Lawyers (First Plaintiff)

File Number(s):

2025/125893

Publication restriction:

Nil

EX TEMPORE JUDGMENT (Revised 2 April 2025)

1. The First Plaintiff, Mr Aaron Lucan is the Administrator of each of the Second Plaintiff, BRS Quarries Australia Pty Ltd, and the Third Plaintiff, Pleasure Point Mine Pty Ltd (together, the Companies). Pleasure Point Mine owns 100% of the shares in BRS.

2. By Originating Process filed in Court on 2 April 2025, the Plaintiffs seek orders, pursuant to section 439A(6) of the Corporations Act 2001 (Cth) (Act), to extend the convening period for the second meeting of creditors for each of the Companies to 30 June 2025, as well as other ancillary relief (Application).

3. In support of the Application, the Plaintiffs rely on an affidavit of the Administrator affirmed on 31 March 2025.

4. The Plaintiffs have given notice of this Application to the creditors of the Companies. No creditor has appeared to oppose the relief sought on the Application.

Relevant background

5. On 7 March 2025, the Administrator was appointed to each of the Companies, pursuant to resolutions of their respective directors.

6. The first meeting of creditors for each of the Companies was held on 19 March 2025.

7. By operation of s 439A of the Act, the Administrator must convene the second meeting of creditors by 4 April 2025, unless the time is extended under s 439A(6) of the Act.

8. Pleasure Point Mine owns freehold land in Helidon, Queensland (the Land), and BRS holds a mining lease and an EPA permit in relation to the Land.

9. Pleasure Point Mine purchased the Land and the shares in BRS for $5.2m in August 2021.

10. The Land is a greenfield site, where mining operations have not yet commenced. The Land, the mining lease and the EPA permit (which are collectively referred to by the Administrator as the Mine) represent the only substantial assets of the Companies.

11. The Companies have never traded or had employees. According to the Administrator’s investigations, the only activities of the Companies appear to have been to engage experts for the purpose of exploration and reporting on the Mine.

12. Based on an exploration drilling program, the Mine has a measured resource of 40.9m tonnes of sandstone, including an estimated 16m tonnes of silica. However, the Administrator deposes, based on his investigations to date, that the current permit and licence for the Mine are not sufficient to allow the extraction of sufficient quantities of construction sand and aggregate or refined silica.

13. The presently known secured creditors of Pleasure Point Mine have lodged proofs of debt for claims in the amount of $31,159,914 and the presently known unsecured creditors of Pleasure Point Mine have lodged proofs of debt for claims in the amount of $2,987,429.

14. The presently known unsecured creditors of BRS have lodged proofs of debt for claims in the amount of $2,027,147.

15. The Administrator has not yet adjudicated on any claims.

16. The Administrator has considered the potential for a Deed of Company Arrangement (DOCA) for each of the Companies and has met with two interested parties. He deposes that he is unable to progress any such negotiations until the value of the Companies’ assets is determined.

17. Since 12 March 2025, the Administrator’s staff have taken steps to obtain a valuation of the Mine. It is unnecessary to set out here the detail of the steps taken. I am satisfied that the Administrator has proceeded with appropriate diligence in seeking to retain a valuer, but has encountered problems in finding a valuer with both capacity and availability. The Administrator has now received a proposal from one valuer, and another valuer has indicated that a proposal will shortly be provided. Based on his discussions with potential valuers, the Administrator has ascertained that it will take until at least the end of April 2025 for the valuation to be prepared.

18. The Administrator has also been undertaking investigations in relation to around 180 related party transactions. In addition, the Administrator has been investigating related party creditors. The Administrator estimates, based on the complexity of those investigations and the poor state of the relevant documentation, that it will take another four to six weeks to complete those investigations.

19. Having regard to those matters, the Administrator seeks that the convening period for the second meeting of creditors be extended by just over twelve weeks, to 30 June 2025. The extension is sought by the Administrator to allow sufficient time to:

1. obtain a valuation of the Mine;

2. complete the Administrator’s investigations into the related party transactions and related party creditors;

3. provide a meaningful report to creditors; and

4. have further discussions with interested parties as to a possible DOCA proposal.

Relevant principles

20. Section 439A(6) of the Act gives the Court power to extend the convening period on an application made within the period specified in s 439A(5). The present application is brought within time.

21. Section 439A(7) provides that, on such an application, the Court may only extend the convening period if the Court is satisfied that it would be in the best interests of the creditors if the convening period were extended in accordance with the application.

22. The principles governing such an application are well known.

23. In Australian World-Wide Pty Ltd v Palmer [2014] NSWSC 141 at [7], Brereton J observed that the Court no longer, if it ever did, approaches such an application with a presumption against extending the convening period. The Court’s task on an application under s 439A(6) is to balance the need for the administration of a company to be carried out as efficiently and expeditiously as practicable so as to minimise the effect on those persons who are subject to the moratorium imposed by Pt 5.3A of the Act, against the need to give the administrators time to present meaningful choices to the creditors at their meeting: ibid at [8], referring to Carter v Global Food Equipment Pty Ltd [2007] NSWSC 901 at [11] (White J).

24. On the one hand, the legislation establishes an expectation that administrations will be carried out relatively swiftly so that creditors can make their own decision at a relatively early point in time; and on the other, the objects of Pt 5.3A may in some cases be better served by allowing an administrator time to see if the business of the company can be continued or a better return secured for creditors than upon an immediate winding up: ibid at [10]; and see also Re Riviera Group Pty Ltd(admins apptd)(recrs & mgrs apptd) [2009] NSWSC 585 at [15]-[16] (Austin J).

25. In Mighty River International Ltd v Hughes and Bredenkamp (2018) 265 CLR 480; [2018] HCA 38 at [72]-[73], Nettle and Gordon JJ (in dissent, but not relevantly in this respect) observed that:

1. the period fixed by s 439A(5) of the Act for convening creditors’ meetings is “designedly brief”, reflecting that the emphasis of Pt 5.3A is “on informality… and speed of action”;

2. it is, however, recognised that it is not always practicable for an administrator to gather sufficient information within the convening period to form the requisite opinions and communicate them to creditors in accordance with s 438A and s 439A, and accordingly, courts are given a power under s 439A(6) to extend the convening period;

3. consistent with the legislative intention of Pt 5.3A that the administration of a company be brought to an end within a short period of time, there is a presumptive expectation that extensions will be brief, but the courts have recognised that significant extra time may be required, and should be allowed, in complex cases; and

4. provided that the evidentiary case for extension has been properly prepared, there has been no evidence of material prejudice to those affected by the moratorium imposed by the administration, and the administrator's estimate of time has had a reasonable basis, the courts have tended to grant extensions for the periods sought by administrators.

26. Their Honours quoted with approval Barrett J’s observations in Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 at [10] that:

"The function of the Court on an application [for an extension under s 439A(6)] is ... to strike an appropriate balance between, on the one hand, the expectation that administration will be a relatively speedy and summary matter and, on the other, the requirement that undue speed should not be allowed to prejudice sensible and constructive actions directed towards maximising the return for creditors and any return for shareholders."

27. These observations of Nettle and Gordon JJ have frequently been cited and applied in cases at first instance: see, for example, In the matter of Orbis Commodities Pty Ltd (administrators appointed) (receiver and manager appointed) [2021] NSWSC 1172 at [29] (Rees J); Re Strawbridge (in their capacity as joint and several voluntary administrators of each of Virgin Australia Holdings Ltd (admins apptd) (ACN 100 686 226)) (No 2) [2020] FCA 717 at [67] (Middleton J); and In the matter of Mosaic Brands Limited (admins apptd) (recs and mgrs apptd) [2024] NSWSC 1439 at [34] (Black J).

28. Importantly, the case law has recognised that the Court will give substantial weight to the considered judgment of voluntary administrators in matters of this kind: Mosiac Brands at [35], referring to In the matter of BCD Resources NL (receivers and managers appointed) (administrators appointed) [2015] NSWSC 777 (Black J).

29. In Australian World-Wide at [13], Brereton J observed that the following matters may be relevant to the exercise of the discretion under s 439A(6):

“the size and scope of the business; substantial offshore activities; complex transactions entered into by the company; complex prospective recovery proceedings; the time needed to execute an orderly process of disposal of assets; the time needed for thorough assessment of a proposal for a deed of a company arrangement; where the extension will allow sale of the business as a going concern; and, more generally, that additional time is likely to enhance the return for unsecured creditors.”

See also Colley, in the matter of PF Group Holdings Pty Ltd (Admins Apptd) [2024] FCA 792 at [26] per Shariff J and the authorities there cited.

30. In Albarran, in the matter of Bonza Aviation Pty Ltd (Admins Apptd) [2024] FCA 575 at [12], Jackman J said that:

“An extension of the administration period to facilitate either (or both of): (a) the sale of the business of the company as a going concern, so as to maximise the value of the company’s assets; or (b) the progression and assessment of a DOCA proposal that may provide a better return to creditors than a winding-up, are central instances in which it will generally be appropriate for the court to extend the convening period. An additional factor in favour of extending the convening period is the need for creditors to have sufficient information at the second meeting to allow them to exercise their decision as to the future of the company in as informed a manner as possible.”

Determination

31. Having regard to the facts and principles outlined above, I am satisfied that an order should be made extending the convening period for the second meeting of creditors, for three main reasons.

32. First, the basis for the requested extension has been explained in the evidence. In particular, additional time is sought to obtain a valuation of the Companies’ only substantial assets, being the Mine assets, which is necessary for the Administrator to negotiate any proposed DOCA with interested parties and to assess any such proposal. The Administrator has formed the view that the assets of Pleasure Point Mine and BRS are likely to obtain a greater value when sold together, because the mining and environmental permits held by BRS are linked to the Land held by Pleasure Point Mine, and the value of the Land is improved by the existence of the licences and permits, due to the economic activity which they enable.

33. Further, additional time is sought to complete the investigations into related party transactions and related party creditors, in circumstances where those investigations are attended by complexity and poor documentation.

34. The Administrator has explained that he needs to complete those tasks before he can provide a meaningful report to creditors.

35. Secondly, the Administrator has deposed that he is not aware of any prejudice that would be suffered by any creditor as a result of the extension. Neither of the Companies had employees and therefore the extension would not delay any employee claims. The Administrator gave notice of his intention to make this Application to creditors on 28 March 2025. No creditor has appeared to oppose the Application. Further, the Plaintiffs have proposed, and I will make, an order granting leave to any person who can demonstrate sufficient interest, including any creditor, to apply to vary or discharge the extension order on three days’ written notice. Such an order is appropriate, lest a creditor who has not been heard on this ex parte application be adversely affected: Australian World-Wide at [25]-[26], referring to Global Food Equipment at [25].

36. Thirdly, the Administrator's estimate of time has a reasonable basis, having regard to the evidence in respect of the time needed to obtain a valuation of the Mine and to complete the investigations into related party transactions.

37. In circumstances where the Mine assets are the Companies’ only substantial assets, where the Administrator has formed the view that those assets are likely to obtain a greater value if sold together, and where further time is required for the Administrator to obtain and consider a valuation of those assets before negotiating any DOCA proposal and reporting to creditors, I am satisfied that the Court should exercise its discretion to grant the relief sought. The proposed extension will allow the Administrator to pursue sensible and constructive actions directed towards maximising the return to creditors and any return for shareholders.

38. The Administrator also seeks a Daisytek order pursuant to s 447A of the Act, that is, an order allowing the Administrator to hold the second meeting of creditors prior to the expiry of the extended convening period if desirable, so as to avoid unnecessary delay until the end of that period: see In the matter of Daisytek Australia Pty Ltd (2003) 45 ACSR 446; [2003] FCA 575 at [14]-[17] per Lindgren J. I am satisfied that this order should also be made, which is now more or less the ordinary practice on a s 439A(6) application: Australian World-Wide at [28]. Again, there will be leave for any interested person, including any creditor, to apply to set aside this order on three days’ notice.

39. In addition, the Administrator seeks, and I will make, orders facilitating the giving of notice of the second meeting of creditors, and the giving of notice of these orders to creditors and to the Australian Securities and Investments Commission (ASIC).

40. Finally, the Administrator seeks an order that the costs of and incidental to this Application be costs in the administration of each of the Companies. Given that I have concluded that the extension sought by the Application is in the best interests of the creditors of the Companies, it is appropriate that this form of costs order be made.

orders

41. For those reasons, I make the following orders.

1. Pursuant to section 439A(6) of the Act, the period within which the First Plaintiff must convene the second meeting of creditors of:

1. the Second Plaintiff; and

2. the Third Plaintiff;

be extended up to and including 30 June 2025.

2. Pursuant to section 447A(1) of the Act, Part 5.3A of the Act is to operate in relation to each of the Second Plaintiff and the Third Plaintiff as if the second meeting of creditors may be convened and held at any time during the convening period and up to 5 business days after the end of the convening period, as extended by Order 1, notwithstanding section 439A(2) of the Act.

3. Pursuant to section 447A(1) of the Act, Part 5.3A of the Act is to operate in relation to each of the Second Plaintiff and the Third Plaintiff such that notice of the second meeting of creditors will be validly given if:

1. given not less than 5 business days before the date fixed for the meeting;

2. given by email to creditors who have provided an email address;

3. sent by post or facsimile to all other known creditors; and

4. published on the ASIC Insolvency Notices website.

4. Leave be reserved to the Plaintiffs, or any person with sufficient interest, including any creditor, to apply to vary or discharge Orders 1 to 3 on three days' written notice to the Plaintiffs and the Court.

5. The Plaintiffs are to cause notice of these orders to be given within 48 hours to the creditors of each of the Second Plaintiff and the Third Plaintiff and to ASIC by:

1. email to those creditors who have provided an email address;

2. post or facsimile to all other known creditors; and

3. post to ASIC.

6. The costs of and incidental to this application be costs in the administration of each of BRS and Pleasure Point Mine.

7. These orders be entered forthwith.

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Decision last updated: 03 April 2025