Re AG Merchant Pty Ltd (Administrators Appointed)
[2025] WASC 286
•24 JULY 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE AG MERCHANT PTY LTD (ADMINISTRATORS APPOINTED); EX PARTE DOMINISH, SHAW AND ALBARRAN [2025] WASC 286
CORAM: HILL J
HEARD: 17 JULY 2025
DELIVERED : 17 JULY 2025
PUBLISHED : 24 JULY 2025
FILE NO/S: COR 108 of 2025
MATTER: IN THE MATTER OF AG MERCHANT PTY LTD (ADMINISTRATORS APPOINTED)
EX PARTE
AARON JOSEPH DOMINISH as administrator of AG MERCHANT PTY LTD (ADMINISTRATORS APPOINTED)
First Plaintiff
CAMERON HUGH SHAW as administrator of AG MERCHANT PTY LTD (ADMINISTRATORS APPOINTED)
Second Plaintiff
RICHARD ALBARRAN as administrator of AG MERCHANT PTY LTD (ADMINISTRATORS APPOINTED)
Third Plaintiff
Catchwords:
Corporations - Voluntary administrator - Whether administrators validly appointed - Purported appointment of administrators after sudden death of sole director - Whether orders should be made under s 447A of the Corporations Act 2001 (Cth) to validate the appointment of the plaintiffs as administrators
Legislation:
Corporations Act 2001 (Cth) s 9AC, s 447A
Result:
Application granted
Category: B
Representation:
Counsel:
| First Plaintiff | : | P Edgar SC & J Cook |
| Second Plaintiff | : | P Edgar SC & J Cook |
| Third Plaintiff | : | P Edgar SC & J Cook |
Solicitors:
| First Plaintiff | : | Mendelawitz Morton Commercial Lawyers |
| Second Plaintiff | : | Mendelawitz Morton Commercial Lawyers |
| Third Plaintiff | : | Mendelawitz Morton Commercial Lawyers |
Cases referred to in decision:
Australian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270
Calabretta v Redpen Developments Pty Ltd (in liq) (2010) 183 FCR 47
Correa v Whittingham [2013] NSWCA 263; (2013) 278 FLR 310
Hayes v Doran [No 2] [2012] WASC 486
Honest Remark Pty Ltd v Allstate Explorations NL [2006] NSWSC 735; (2006) 234 ALR 765
Hutton, Re Big Village Australia Pty Ltd (Administrators Appointed) [2023] FCA 48
Re Keneally [2015] NSWSC 937
Re New Tel Ltd [2004] FCA 1154; (2004) 210 ALR 270
Re Pasdonnay Pty Ltd (ACN 009 131 622) (admins apptd); McDonald (2005) 53 ACSR 717
Shirlaw v Graham [2001] NSWSC 612
Smolarek v McMaster (as administrator of Eznut Pty Ltd) [2006] WASCA 216
HILL J:
On 16 July 2025, the plaintiffs filed an originating process seeking orders under s 447A(1) of the Corporations Act 2001 (Cth) (Act) to validate their appointment as administrators of AG Merchant Pty Ltd (Company).
On the same date, the plaintiffs filed a certificate of urgency certifying that the application was of such an urgent nature that it was required to be listed at 'the next available opportunity'. The Company is part of the group of companies which trades as 'Kettridges'. An originating process involving Kettridges Pty Ltd, another company within the Kettridges group, was listed for hearing before me on at NB 10.30 am on 17 July 2025 (COR 106 of 2025). Given the urgency of the matter, this originating process was listed before me at the same time.
In support of the application, the plaintiffs relied on affidavit of the second plaintiff, Mr Shaw, filed 16 July 2025, as well as the two affidavits filed in COR 106 of 2025.[1] I also had the benefit of a written outline of submissions as well as oral submissions from senior counsel who appeared before me this morning.
[1] The affidavits of Aaron Joseph Dominish filed 11 July 2025 and Boika Simeva Panov filed 16 July 2025.
At the conclusion of the hearing, I was satisfied that it was appropriate to make orders in terms of the originating process and indicated that I would subsequently produce reasons for my decision. These are those reasons.
Factual background
The Company was incorporated in 2000 and is the trustee of the Huisman Property Trust (Property Trust). The Company in its capacity as trustee of the Property Trust is the registered proprietor of:[2]
(a)6 Golding Crescent, Picton East (Golding Crescent Property); and
(b)a half interest in 6 Hardisty Court, Picton East.
[2] Affidavit of Cameron Hugh Shaw filed 16 July 2025 [21.2].
The Golding Crescent Property is leased to Kettridges Pty Ltd in its capacity for the Mark Huisman Family Trust (Family Trust) under a written lease agreement dated 4 May 2021. The Family Trust's business, which trades as Kettridges, is run and operated from the Golding Crescent Property.[3]
[3] Affidavit of Cameron Hugh Shaw filed 16 July 2025 [21.3].
Mr Mark Huisman is the sole appointed director and secretary of the Company. The Company has two shareholders: Mr Huisman, who owns 151 ordinary fully paid shares in the Company; and Mrs Keeva Huisman, who own 150 ordinary fully paid shares in the Company.[4]
[4] Affidavit of Cameron Hugh Shaw filed 16 July 2025, 'CHS-2' - 'CHS-3'.
On 1 July 2025, Mr Huisman died suddenly. This left the Company without a director and Mrs Huisman as the only shareholder of the Company. Under Mr Huisman's will, Mrs Huisman has been appointed as executor of his estate. However, at this stage, probate has not been granted.
On 4 July 2025, the plaintiffs were appointed as administrators of Kettridges Pty Ltd. Shortly after their appointment, a query was raised by a secured creditor of both Kettridges Pty Ltd and the Company as to the validity of this appointment. As a consequence, the plaintiffs filed COR 106 of 2025 seeking orders validating their appointment as administrators.
On 15 July 2025, the plaintiffs met with Mrs Huisman and representatives of the Company. At this meeting, Mrs Huisman executed minutes of resolution of the sole director and shareholders of the Company. The minute stated that it was executed by her in her capacity as executor of Mr Huisman's estate as both a director and shareholder, as well as in her personal capacity as a shareholder of the Company. The minute resolved that the Company was likely to become insolvent at some future time and appointed the plaintiffs as administrators of the Company.[5]
[5] Affidavit of Aaron Joseph Dominish filed 11 July 2025 [8], [28.8], 'AJD-1', 'AJD-25'.
On 14 July 2025, Rabobank, the senior secured creditor of Kettridges Pty Ltd, issued a notice of default and demand to the Company and its related entities. The evidence before the court is that there are ongoing discussions between the plaintiffs and Rabobank about paying out Rabobank's loan in full.[6] As at the time of this hearing, no formal agreement had been entered into.
[6] Affidavit of Cameron Hugh Shaw filed 16 July 2025 [26] - [27], 'CHS-16', pages 250 - 257.
On 16 July 2025, the plaintiffs held the first creditors' meeting of the Company. The issue concerning the validity of the appointment of the administrators was raised at the creditors' meeting. No creditor asked any questions or raised any concern in relation to the plaintiffs' appointment. At the meeting, the creditors resolved to confirm the appointment of the plaintiffs as administrators of the Company and to appoint a committee of inspection.
Should orders be made under s 447A in relation to the appointment of the Administrators?
Section 447A(1) of the Act provides that:
The Court may make such order as it thinks appropriate about how this Part is to operate in relation to a particular company.
As was noted by the High Court in Australian Memory Pty Ltd v Brien:[7]
It is important to notice that the orders that may be made under s 447A(1) are described as orders about how Pt 5.3A is to operate 'in relation to a particular company'. The power is not cast in terms of a power to make orders to cure defects or to remedy the consequences of some departure from the scheme set out in the other provisions of Pt 5.3A. Its operation is not confined to such cases. Nor is there anything on the face of s 447A(1) that suggests that it should be read down. In particular, the words of the provision are wide enough to confer power to make orders which will have effect in the future but which are occasioned by something that has been done (or not done) under the other provisions of Pt 5.3A before application is made under s 447A(1).
[7] Australian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270 [17].
Section 447A of the Act permits the court to make orders to cure any defects in the appointment of an administrator.[8] Pursuant to s 447A(4)(f) of the Act, an administrator, who has been invalidly appointed and acted on the basis of the purported appointment, has standing to make an application as an 'interested person'.[9] On this basis, I am satisfied the plaintiffs have standing to bring the application.
[8] Hayes v Doran [No 2] [2012] WASC 486 [406]; Hutton, Re Big Village Australia Pty Ltd (Administrators Appointed) [2023] FCA 48 [30] ‑ [32].
[9] Re Pasdonnay Pty Ltd (ACN 009 131 622) (admins apptd); McDonald (2005) 53 ACSR 717 [17].
In exercising the broad discretion conferred by s 447A(1), the court has regard to all the circumstances of the case.[10] While the court's power under s 447A is broad, it is not unlimited.[11] The power vested in a court by s 447A is a statutory power which can only be exercised for the purpose for which it was granted. For this reason, an order made under s 447A must have a nexus with the objects of pt 5.3A and how pt 5.3A is to operate in relation to a particular company.[12]
[10] Calabretta v Redpen Developments Pty Ltd (in liq) (2010) 183 FCR 47 [37].
[11] Correa v Whittingham [2013] NSWCA 263; (2013) 278 FLR 310 [2] ‑ [8], [97] ‑ [105], [304], citing Honest Remark Pty Ltd v Allstate Explorations NL [2006] NSWSC 735; (2006) 234 ALR 765 and Re New Tel Ltd [2004] FCA 1154; (2004) 210 ALR 270 [3].
[12] Honest Remark Pty Ltd v Allstate Explorations NL [66].
In Hayes v Doran [No 2], Kenneth Martin J summarised the factors that the court may consider relevant on an application under s 447A of the Act. These include:[13]
(a)the likely insolvency of the company;
(b)whether the administrator[s] made inquiries to confirm the validity of his [their] appointment including seeking external legal advice;
(c)whether it would be potentially disruptive to the affairs of the company for there to be the capacity to challenge the validity of what has occurred in the administration to date;
(d)whether it would be wrong to give the imprimatur of the court to the conduct giving rise to the purported appointment;
…
(g)whether any creditor opposes the application. (citations omitted)
[13] Hayes v Doran [No 2] [406] at [279].
In this case, the document signed by Mrs Huisman appointing the plaintiffs as administrators was signed by her as a director in her capacity as executor of Mr Huisman's will. While she is nominated to be executor under her late husband's will, probate has not yet been granted. There is not dispute that Mrs Huisman has not been formally appointed a director of the company, although she holds almost 50% of the shares in the Company.
At the time this document was signed, the plaintiffs were aware that there was a question about the validity of their appointment to another company in the same group of companies. This question arose because the minute was not signed by a director of that Company. In these circumstances, immediately after their appointment, the plaintiffs applied to the court to resolve any issues in respect of their appointment.[14]
[14] Re Keneally [2015] NSWSC 937 [44] and the authorities referred to.
Section 436A(1) of the Act relevantly provides that:
A company may, by writing, appoint an administrator of the company if the board has resolved to the effect that:
(a)in the opinion of the directors voting for the resolution, the company is insolvent, or is likely to become insolvent at some future time; and
(b)an administrator of the company should be appointed.
'Director' is defined in s 9AC of the Act to mean:
(a)a person who:
(i)is appointed to the position of a director; or
(ii)is appointed to the position of an alternate director and is acting in that capacity;
regardless of the name that is given to their position; and
(b)unless the contrary intention appears, a person who is not validly appointed as a director if:
(i)they act in the position of a director; or
(ii)the directors of the company or body are accustomed to act in accordance with the person's instructions or wishes (excluding advice given by the person in the proper performance of functions attaching to the person's professional capacity or their business relationship with the directors or the corporation).
In these proceedings, the plaintiffs seek orders under s 447A of the Act rather than s 447C. The difference between these sections is that orders under s 447A are declaratory rather than curative.[15] Section 447A of the Act can be used to overcome a defect in compliance with the procedure in the appointment of administrators under s 436A of the Act.[16]
[15] Smolarek v McMaster (as administrator of Eznut Pty Ltd) [2006] WASCA 216 [25].
[16] Shirlaw v Graham [2001] NSWSC 612 [14].
There is some dispute on the authorities as to whether, in exercising its power under s 447A of the Act, the requirement of an opinion of the directors as to insolvency is an issue that goes to the power of the court to make the order sought or to the court's discretion.[17] For the purposes of this case, it is not necessary for me to express any view on this. On the evidence before me, I accept that Mrs Huisman believes the Company is insolvent or likely to be insolvent in the near future, and that there is a reasonable basis for that belief.
[17] Re Keneally [114] and the discussion of the relevant contrasting positions there.
Senior counsel for the plaintiffs submitted that it was open to the court to find that Mrs Huisman had, in fact, been acting as a director of the Company since the death of her husband and that, by reason of s 9AC(c)(ii) of the Act, there has been compliance with the requirements of s 436A of the Act appointing the plaintiffs as directors.
On the evidence before me, I accept that since her husband's death, Mrs Huisman has made decisions and taken steps on behalf of the Company which (at least arguably) are consistent with her acting as a director of the Company. Ultimately, it is not necessary for me to reach any concluded view as to whether this is the case. This is because, as has been made clear on the authorities, in the court exercising the broad discretion conferred by s 447A(1) of the Act, a relevant consideration is whether the purposes of pt 5.3A of the Act would be best served by the making of the order. This includes consideration of the possibility of saving the business of the company as well as the employment of its staff.[18]
[18] Hayes v Doran [No 2] [406] at [276].
For the following reasons, I am satisfied that it is appropriate to make orders which have the effect of validating the appointment of the plaintiffs as administrators.
First, as set out above, while I accept that it is arguable that the plaintiffs have not been validly appointed as the administrators of the Company under s 436A of the Act, in the circumstances of this case (that is, pending a grant of probate), there was no mechanism by which a shareholders' meeting could be held or for anyone to be formally appointed as a director of the Company.[19] On the death of Mr Huisman, it was in the interests of the Company, its staff, and its creditors and shareholders that urgent action be taken. Mrs Huisman was the only person in a position who could appropriately take these actions.
[19] Plaintiffs' submissions filed 14 July 2025 [15].
Second, if the plaintiffs' appointment is not recognised, the Company will be deprived of the potential benefits of pt 5.3A of the Act.
Third, the plaintiffs have been acting as administrators since their appointment on 15 July 2025. In this short time, they have taken substantive steps in the administration, including by convening and holding the first creditors' meeting. Unless the question around the validity of their appointment is resolved, there will be ongoing uncertainty which will be disruptive to the Company and create further inconvenience and potential loss to creditors.
Fourth, there is no suggestion of bad faith on the part of Mrs Huisman in the process which led to the appointment of the administrators. The evidence of Mr Shaw, which I accept, supports a conclusion that Mrs Huisman has acted honestly and in the best interests of the Company (including its employees and creditors) in seeking to appoint the plaintiffs as administrators.
Fifth, on the evidence before me, in circumstances where the plaintiffs have been appointed as administrators of Kettridges Pty Ltd (which is the only source of income for the Company) and the secured creditor of the Company has issued a notice of demand, I accept that it is proper that the Company be the subject of external administration and the same administrators be appointed to each relevant company in the group.
Sixth, there is no evidence that there would be any prejudice to any party if the orders are made. In contrast, if the orders are not made, I consider there is likely to be significant prejudice to the Company. This prejudice includes the ongoing uncertainty regarding the validity of any actions taken by the administrators or what has occurred in the administration to date, as well as uncertainty for employees and creditors of the Company. I also consider that there is potential prejudice to the plaintiffs, as they may not be entitled to a statutory indemnity or remuneration, if ultimately their appointment was declared to be invalid.
In my view, the orders sought by the plaintiffs are consistent with and reflect the objects of pt 5.3A of the Act. Mr Shaw's evidence, which I accept, is that the Administrators intend to either negotiate a sale of the Company or propose and negotiate a deed of company arrangement in relation to the Company.[20] Both of these options are consistent with the purposes and objects of pt 5.3A.
[20] Affidavit of Cameron Hugh Shaw filed 16 July 2025 [40].
Conclusion and orders
For these reasons, I consider it appropriate to orders in terms of paragraph 1 of the plaintiffs' originating process.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KS
Associate to the Honourable Justice Hill
24 JULY 2025
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