JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE AERISON PTY LTD (ADMINISTRATORS APPOINTED); EX PARTE AERISON PTY LTD [2023] WASC 360
CORAM: LUNDBERG J
HEARD: 21 SEPTEMBER 2023
DELIVERED : 21 SEPTEMBER 2023
FILE NO/S: COR 146 of 2023
MATTER: IN THE MATTER OF AERISON PTY LTD (ADMINISTRATORS APPOINTED) & ORS
EX PARTE
RICHARD SCOTT TUCKER, CRAIG PETER SHEPHARD AND JOHN ALLAN BUMBAK in their capacities as joint and several administrators of AERISON PTY LTD (ADMINISTRATORS APPOINTED), AERISON ENERGY SERVICES PTY LTD (ADMINISTRATORS APPOINTED), AERISON EPC PTY LTD (ADMINISTRATORS APPOINTED), AERISON HOLDINGS PTY LTD (ADMINISTRATORS APPOINTED), AERISON MECHANICAL AND ELECTRICAL TECHNOLOGY PTY LTD (ADMINISTRATORS APPOINTED) AND AERISON SERVICES PTY LTD (ADMINISTRATORS APPOINTED)
First Plaintiff
AERISON PTY LTD (ACN 060 786 656) (ADMINISTRATORS APPOINTED)
Second Plaintiff
AERISON ENERGY SERVICES PTY LTD (ACN 665 237 392) (ADMINISTRATORS APPOINTED)
Third Plaintiff
AERISON EPC PTY LTD (ACN 640 499 387) (ADMINISTRATORS APPOINTED)
Fourth Plaintiff
AERISON HOLDINGS PTY LTD (ACN 149 198 176) (ADMINISTRATORS APPOINTED)
Fifth Plaintiff
AERISON MECHANICAL AND ELECTRICAL TECHNOLOGY PTY LTD (ACN 620 639 974) (ADMINISTRATORS APPOINTED)
Sixth Plaintiff
AERISON SERVICES PTY LTD (ACN 617 466 529) (ADMINISTRATORS APPOINTED)
Seventh Plaintiff
Catchwords:
Corporations - External administration - Urgent application for orders pursuant to s 447A of the Corporations Act 2001 (Cth) - Administrators unable to have Deed of Company Arrangement executed following insoluble impasse with original proponent - Second meeting of creditors already held - Alternative and viable DOCA proposal available - Orders sought to modify operation of the Act to allow further second meeting of creditors to be convened and alternative DOCA proposal to be considered - Balancing of the benefits and detriments of the outcomes under pt 5.3A - Turns on own facts
Legislation:
Corporations Act 2001 (Cth), s 447A
Insolvency Practice Rules (Corporations) 2016 (Cth), s 75-20
Insolvency Practice Schedule(Corporations) (Cth), s 90-15
Result:
Application granted
Category: B
Representation:
Counsel:
| First Plaintiff | : | Mr P R Edgar |
| Second Plaintiff | : | Mr P R Edgar |
| Third Plaintiff | : | Mr P R Edgar |
| Fourth Plaintiff | : | Mr P R Edgar |
| Fifth Plaintiff | : | Mr P R Edgar |
| Sixth Plaintiff | : | Mr P R Edgar |
| Seventh Plaintiff | : | Mr P R Edgar |
Solicitors:
| First Plaintiff | : | Clayton Utz |
| Second Plaintiff | : | Clayton Utz |
| Third Plaintiff | : | Clayton Utz |
| Fourth Plaintiff | : | Clayton Utz |
| Fifth Plaintiff | : | Clayton Utz |
| Sixth Plaintiff | : | Clayton Utz |
| Seventh Plaintiff | : | Clayton Utz |
Case(s) referred to in decision(s):
Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270
Deputy Commissioner of Taxation v Portinex Pty Ltd [2000] NSWSC 99; (2000) 156 FLR 453
Hurt v Ausroc Metals Ltd [2017] WASC 169
In the matter of Mediacloud Pty Ltd [2021] NSWSC 357
Re Aerison Group Ltd (Administrators Appointed) [2023] WASC 274
Re Aerison Group Ltd (Administrators Appointed) [No 2] [2023] WASC 275
Re Ansett Australia Ltd v Sydney Airports Corporation Ltd [2002] FCA 530; (2002) 120 FCR 310; (2002) 41 ACSR 352
Re Eastmark Holdings Pty Ltd (recs and mgrs apptd) [2015]…
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- AGLC
- Re Aerison Pty Ltd (Administrators Appointed) [2023] WASC 360
- Case
- [2023] WASC 360
- Decision Date
CaseChat Overview and Summary
The court was required to decide whether the Administrators' application for relief was made for a proper purpose and whether there was a logical nexus between the relief sought and the reason provided. Additionally, the court had to determine whether the Administrators were at fault for the withdrawal of PIC and if there was utility in granting the relief by pursuing an alternative DOCA proposal with APC. The court also needed to consider the impact of the relief on the employees of the Aerison Group.
The court found that the application for relief was brought for a proper purpose, as the Administrators were not seeking to avoid the consequences of the execution of the DOCA. The inability to secure the DOCA with PIC arose through no fault of the Administrators, who promptly identified an alternative DOCA proponent in APC. The court was satisfied that there was utility in granting the relief as an alternative DOCA proponent had been identified and was prepared to engage in negotiations. The Administrators had also taken steps to update and brief the employees of the Aerison Group regarding the new DOCA proposal, ensuring that the ongoing employment of the majority of employees would be preserved.
The final orders granted the Administrators the requested extensions and adjourned the meeting of creditors to allow for the negotiation of the DOCA with APC.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
First, in all the circumstances, I am satisfied the application for relief has been brought for a proper purpose, and there is a logical nexus between the relief which is sought and the purported reason for the relief.[29] The Administrators are not seeking to avoid the consequences of the execution of the DOCA, such as in Re Ansett Australia Ltd v Sydney Airports Corporation Ltd.[30] The extension is sought to progress the DOCA process contemplated within pt 5.3A, albeit through an alternative proposal.[29] Hurt v Ausroc Metals Ltd [2017] WASC 169 [12] and [15] (Pritchard J).[30] Re Ansett Australia Ltd v Sydney Airports Corporation Ltd [2002] FCA 530; (2002) 120 FCR 310; (2002) 41 ACSR 352 [58]. Second, the inability of the Administrators to secure the execution of the DOCA with the preferred proponent (namely, PIC) has arisen through no fault, or lack of diligence, on the part of the Administrators. The reality is that the preferred proponent has decided that it cannot proceed forward to execution and the Administrators have been left to pursue other alternatives. As one might expect when dealing with a relatively rapid process being undertaken in respect of a company or companies which are subject to financial stress, the pathway to securing a DOCA does not always produce the projected outcome. These processes involve sometimes difficult and complex negotiations between insolvency professionals and businesspersons, against the backdrop of ongoing risk assessments where the risk profiles of those involved may alter as the negotiations develop and fluctuations occur in the participants' perceptions of the financial health of the subject companies. Third, the Administrators have taken prompt steps to identify a suitable alternative DOCA proponent, namely APC. As noted, that company has provided the Administrators with a signed term sheet and paid a non‑refundable deposit to the Administrators. The Administrators and APC have now executed a term sheet outlining a DOCA proposal and entered into an exclusivity agreement. Accordingly, I am satisfied there is utility in granting the relief in that an alternative DOCA proponent has been identified and that proponent is, at least at this stage, prepared to engage with the Administrators to negotiate towards the execution of a final DOCA. If the relief is granted, the Administrators propose to convene a meeting of creditors tomorrow (22 September 2023) to determine whether the Aerison Group will execute the DOCA with APC, or be wound up.[31][31] First Tucker Affidavit [31]. Fourth, the Administrators have taken steps to directly update and to brief the employees of the Aerison Group. Two in person briefings have been held by the Administrators in this regard, in order to update employees on the withdrawal of PIC as a DOCA proponent and explain the new DOCA proposal.[32] The importance of updating the employees of a company under financial stress, such as the Aerison Group, given the uncertainty surrounding the future of the business over the past several months, cannot be overstated. Further, and more fundamentally, the alternative DOCA and continued trading of the businesses of the Aerison Group will allow the ongoing employment of the majority of employees.[32] Third Tucker Affidavit [12].