Pleash, in the matter of Consolidated Tin Mines Limited (Administrators Appointed) (No 2)
[2016] FCA 1366
•16 November 2016
FEDERAL COURT OF AUSTRALIA
Pleash, in the matter of Consolidated Tin Mines Limited (Administrators Appointed) (No 2) [2016] FCA 1366
File number: QUD 609 of 2016 Judge: EDELMAN J Date of judgment: 16 November 2016 Catchwords: CORPORATIONS – application by administrators to extend time period of confidentiality orders – prejudice to the proper administration of justice – application granted Legislation: Federal Court of Australia Act 1976 (Cth) ss 37AF, 37AG(1)(a) Cases cited: Australian Competition and Consumer Commission v Air New Zealand Ltd (No 12) [2013] FCA 533
Australian Competition and Consumer Commission v Valve Corporation (No 5) [2016] FCA 741
Computer Interchange Pty Ltd v Microsoft Corp [1999] FCA 198; (1999) 88 FCR 438
Pleash, in the matter of Consolidated Tin Mines Limited (Administrators Appointed) [2016] FCA 931
Date of hearing: 16 November 2016 Registry: Queensland Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 10 Solicitor for the Applicants: Mr W Jiear of HWL Ebsworth Lawyers ORDERS
QUD 609 of 2016 IN THE MATTER OF CONSOLIDATED TIM MINES LIMITED (ADMINISTRATORS APPOINTED) ACN 126 634 606
BLAIR ALEXANDER PLEASH AND KATHLEEN ELIZABETH VOURIS IN THEIR CAPACITY AS JOINT AND SEVERAL VOLUNTARY ADMINISTRATORS OF CONSOLIDATED TIN MINES LIMITED (ADMINISTRATORS APPOINTED) ACN 126 634 606
First Applicant
CONSOLIDATED TIN MINES LIMITED (ADMINISTRATORS APPOINTED) ACN 126 634 606
Second Applicant
BLAIR ALEXANDER PLEASH AND KATHLEEN ELIZABETH VOURIS IN THEIR CAPACITY AS JOINT AND SEVERAL VOLUNTARY ADMINISTRATORS OF SNOW PEAK MINING PTY LTD (ADMINISTRATORS APPOINTED) ACN 161 212 504 (and another named in the Schedule)
Third Applicant
JUDGE:
EDELMAN J
DATE OF ORDER:
16 NOVEMBER 2016
THE COURT ORDERS THAT:
1.The date in order 1 of the Orders of the Court made on 11 August 2016 be extended until the earlier of either:
(a)any further order of the Court; or
(b)23 December 2016.
2.The first and third applicants’ costs of this application be paid pro-rata as a cost in the administration of each of the second and fourth applicants.
3.The first and third applicants cause notice of these Orders, within two business days after the making of these Orders, to be sent to all creditors (including those who claim to be creditors) of the second and fourth applicants (or either of them) who have provided the first and/or third applicants with:
(a)an email address – by email; or otherwise
(b)a facsimile number – by facsimile; or otherwise
(c)a postal address – by post.
4.There be liberty to apply for any creditor or any person who can demonstrate sufficient interest to make such application to vary or discharge these orders upon three (3) clear business days’ written notice being given to the applicants by their solicitors on the record and to the Court.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
EDELMAN J:
Introduction
On 11 August 2016 I made non-publication orders under s 37AF of the Federal Court of Australia Act 1976 (Cth) preserving the confidentiality of one of the affidavits provided by the Administrators (the Confidential Affidavit). The Confidential Affidavit concerned valuations of company assets and other information relevant to a potential sales process. All interested parties were represented. On the evidence before me, I was satisfied that the non-publication of the Confidential Affidavit was necessary to prevent prejudice to the proper administration of justice: Pleash, in the matter of Consolidated Tin Mines Limited (Administrators Appointed) [2016] FCA 931 [21]. I restricted access to that affidavit until 17 November 2016, and granted liberty to apply to extend the restriction.
On 14 November 2016, the Administrators brought an interlocutory application seeking orders to extend the confidentiality orders until 23 December 2016 or until further order of the Court. This request was made because a second meeting of creditors is to be held on 23 November 2016, at which time the creditors must make a decision as to the future of the companies in administration. Reports to creditors were issued last night and were provided to the Court, together with a proposed joint Deed of Company Arrangement, in an affidavit this morning. The Administrators submitted that an extension to 23 December 2016 would allow for negotiations and an execution of contracts for sale of assets of the companies, if the creditors were to vote to liquidate the companies. The Administrators estimated that it would take approximately one month to conclude terms of sale from the date of the second meeting, and to execute a contract of sale.
The affidavit filed by the Administrators this morning also explained that they had notified ASIC of this application, and that ASIC had responded saying that it will not intervene or seek to be heard. No creditor has been notified of this application but it is extremely unlikely that any would oppose it. The creditors were notified of the confidentiality orders made on the first occasion and none opposed them or sought to vary them. Nevertheless, I will order that the creditors be given notice of these orders, and that any creditor or interested person has liberty to apply.
I am satisfied that this further extension until 23 December 2016 or until further order of the Court is necessary to prevent prejudice to the proper administration of justice. The appropriate order is simply to extend the orders that I made on 11 August 2016 to the earlier of (i) any further order of the Court or (ii) 23 December 2016.
Reasons for the extension of time
This application for extension of the confidentiality orders is made under s 37AF of the Federal Court of Australia Act 1976 (Cth) in order to “prevent prejudice to the proper administration of justice” (s 37AG(1)(a)). The authorities concerning these orders were helpfully summarised in the submissions of Mr Jiear. They establish that the order is not to be made lightly. The effect of the orders is often to suppress information relied upon by the Court and to reduce transparency of proceedings and the open nature of justice. The onus for these orders is the balance of probabilities but the matters to be satisfied (including “necessity”) make the satisfaction of the onus a very heavy one: see Computer Interchange Pty Ltd v Microsoft Corp [1999] FCA 198; (1999) 88 FCR 438, 442 [16] (Madgwick J); Australian Competition and Consumer Commission v Air New Zealand Ltd (No 12) [2013] FCA 533 [7] (Perram J); Australian Competition and Consumer Commission v Valve Corporation (No 5) [2016] FCA 741 [8].
On 11 August 2016, in the course of my reasons concerning the application to extend the convening period, I explained that the Confidential Affidavit should be sealed and remain confidential during the administration process. This was the only effective way of ensuring the proper execution by the Administrators of their duties during any consequent sale process. The Confidential Affidavit contains commercial information pertaining to the value of assets of both companies in administration.
At the 23 November 2016 creditors meeting, the creditors will consider a joint Deed of Company Arrangement proposal which is in evidence before the Court. If the decision at the creditors meeting on 23 November 2016 results in the companies being put into liquidation, the assets will need to be sold. The evidence before me is that this process could take up to one month. I am satisfied from the evidence that if the information about the value of the assets be made public, it could jeopardise any sale process and could potentially jeopardise the Deed of Company Arrangement proposal. None of the information is publicly available and none is presently required to be disclosed to the market. The proper administration of justice requires the orderly conduct of any Deed of Company Arrangement or liquidation.
Although it is possible that a Deed of Company Arrangement might mean that a shorter extension of time could be granted, the difference in time is marginal in this case. The most efficient order is to extend time on the assumption of liquidations, to 23 December 2016, but to provide for variation of that order (which could be done in chambers without the necessity of any appearance) if the time period needed were shorter as a result of entry into a Deed of Company Arrangement.
Conclusion
Orders should be made extending the period of confidentiality subject to the qualifications I have mentioned.
It was necessary for the Administrators to bring this application. The submissions and evidence was appropriate and presented in a manner which was of considerable assistance to the Court. It is appropriate that the first and third applicants’ costs of this application be paid pro-rata as a cost in the administration of each of the second and fourth applicants.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edelman. Associate:
Dated: 16 November 2016
SCHEDULE OF PARTIES
QUD 609 of 2016 Applicants
Fourth Applicant:
SNOW PEAK MINING PTY LTD (ADMINISTRATORS APPOINTED) ACN 161 212 504
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