Re AG Merchant Pty Ltd (Administrators Appointed); [No 2]
[2025] WASC 302
•1 AUGUST 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE AG MERCHANT PTY LTD (ADMINISTRATORS APPOINTED); EX PARTE DOMINISH, SHAW AND ALBARRAN [No 2] [2025] WASC 302
CORAM: HILL J
HEARD: 1 AUGUST 2025
DELIVERED : 1 AUGUST 2025
PUBLISHED : 1 AUGUST 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 - External administration - Application by administrators to extend convening period for second creditors' meeting - Whether modification in creditors' interests as a whole - Whether interests of any persons prejudiced by modification protected by terms of orders - Turns on own facts
Corporations - External administration - Where company in administration is bare trustee - Application for appointment of administrators as receivers of trust property - Application for directions that administrators are justified in treating trust property as property of the company - Turns on own facts
Legislation:
Corporations Act 2001 (Cth) s 439A(6), sch 2 s 90-15, s 90-20
Supreme Court Act 1935 (WA) s 25(9)
Result:
Application granted
Category: B
Representation:
Counsel:
| First Plaintiff | : | Z Weng |
| Second Plaintiff | : | Z Weng |
| Third Plaintiff | : | Z Weng |
Solicitors:
| First Plaintiff | : | Mendelawitz Morton Commercial Lawyers |
| Second Plaintiff | : | Mendelawitz Morton Commercial Lawyers |
| Third Plaintiff | : | Mendelawitz Morton Commercial Lawyers |
Cases referred to in decision:
Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd [2011] FCA 677
Diamond Press Australia Limited [2001] NSWSC 313
In the matter of Mecfab Holdings Pty Ltd [2015] NSWSC 46
Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (in liq) [2018] FCAFC 40; (2018) 260 FCR 310
Mighty River International Limited v Hughes [2018] HCA 38
Re AG Merchant Pty Ltd (Administrators Appointed); Ex Parte Dominish, Shaw and Albarran [2025] WASC 286
Shaw and Albarran (Joint and Several Administrators of Home Art Building Group Pty Ltd) v Home Art Building Group Pty Ltd (Administrators Appointed) [2016] WASC 274
Tucker (Administrator) v Bolten (Trustee), in the matter of Quintis Leasing Pty Ltd (Administrators Appointed) (No 2) [2024] FCA 46
HILL J:
On 28 July 2025, the plaintiffs filed an interlocutory process seeking an extension of the convening of the second meeting of AG Merchant Pty Ltd (Company) pursuant to s 439A(6) of the Corporations Act 2001 (Act), for a period of 90 days, until 1 November 2025. Unless an extension is granted by the court, the meeting is required to be convened on or about 12 August 2025 with the meeting to be held on or about 19 August 2025.[1]
[1] Affidavit of Aaron Joseph Dominish filed 28 July 2025 [16].
The plaintiffs also seek orders appointing the plaintiffs as receivers of the assets of the Huisman Property Trust (Trust), as well as directions pursuant to s 90-15 and s 90-20 of the Insolvency Practice Schedule (Corporations) (IPS) that the plaintiffs are justified in treating these Trust assets as assets of the Company.
The plaintiffs have also filed a certificate of urgency certifying that the application was required to be listed 'immediately', because the convening period for the second creditors' meeting expires shortly. Given that the related matter (COR 106 of 2025) was listed before me this morning, this application was listed at the same time.
In support of the application, the plaintiffs rely on four affidavits, being:
(a)an affidavit of the first-named plaintiff, Aaron Joseph Dominish, filed 28 July 2025;
(b)an affidavit of the second-named plaintiff, Cameron Hugh Shaw, filed 16 July 2025; and
(c)two affidavits of Yutong Wu, a solicitor employed by the plaintiffs' solicitors, filed 30 and 31 July 2025.
I have also had the benefit of a written outline of submissions, as well as brief oral submissions from counsel who appeared before me this morning.
I am satisfied the application has been served on the Australian Securities and Investments Commission (ASIC), as required by r 2.8 of the Supreme Court (Corporations) Rules 2004 (WA), and notice of the application has been given to creditors. Neither ASIC nor any creditor has given notice that they wished to be heard on this application.[2]
[2] Affidavit of Yutong Wu filed 30 July 2025 [5], 'YW-1'; Affidavit of Aaron Joseph Dominish filed 28 July 2025 [38] - [40], 'AJD-8'.
At the conclusion of the hearing, I was satisfied that it was appropriate to make orders in terms of the interlocutory process and indicated I would subsequently provide reasons for my decision. These are those reasons.
Factual background
Much of the factual background to this application was canvassed in my previous decision validating the plaintiffs' appointment as administrators of the Company.[3] I do not intend to repeat that summary. In these reasons that I give for my decision, I have adopted the definitions that were used in those original reasons.
[3] Re AG Merchant Pty Ltd (Administrators Appointed); Ex Parte Dominish, Shaw andAlbarran [2025] WASC 286.
The following developments have occurred since I gave those reasons.
On 17 July 2025, the plaintiffs gave notice to creditors that the first meeting of the creditors of the Company would be convened on 25 July 2025. Due to insufficient numbers of creditors in attendance, a quorum was not constituted for this meeting and the meeting lapsed in accordance with Insolvency Practice Rules (Corporations) 2016 (Cth).[4]
[4] Affidavit of Aaron Joseph Dominish filed 28 July 2025 [13] - [15], 'AJD-2', AJD-3'.
On 21 July 2025, Rabobank appointed Martin Jones, Matthew Woods, and Sarah Seeckts as receivers and managers of the Company. Following payment of the outstanding debt on 22 July 2025, the receivers and managers have retired.
The plaintiffs have now commenced their review of the financial affairs of the Company, including a review the Company's books and records.[5]
[5] Affidavit of Aaron Joseph Dominish filed 28 July 2025 [20].
The books and records include a copy of the deed establishing the Trust dated 8 February 2006. Pursuant to cl 11.4 of the Trust Deed, on the appointment of a receiver to the Company, the office of trustee was automatically vacated.[6]
[6] Affidavit of Cameron Hugh Shaw filed 16 July 2025 [21], 'CHS-7'; Affidavit of Aaron Joseph Dominish filed 28 July 2025 [35] - [36].
Based on the plaintiffs' investigations to date, they believe:[7]
(a)the Company only acted in its capacity as trustee of the Trust and did not carry on business in any other capacity; and
(b)the Company holds a lien or charge securing its right of indemnity out of Trust assets.
[7] Affidavit of Aaron Joseph Dominish filed 28 July 2025 [33] - [36].
At this stage, the plaintiffs have not had sufficient time to complete their investigations. Mr Dominish considers that a further 90 days is required to enable this to occur. During this time, the administrators propose to undertake the following tasks:[8]
(a)conduct investigations into the financial position and historical affairs of the Company;
(b)prepare documentation associated with their proposed sale campaign;
(c)conduct a marketing campaign for the Company and formalise any transaction documentation associated with a sale; and
(d)report to creditors on the outcome of the above matters.
[8] Affidavit of Aaron Joseph Dominish filed 28 July 2025 [22].
Should an extension of time to convene the second creditors' meeting be granted?
The plaintiffs' application for an extension of time is brought pursuant to s 439A(6) of the Act.
The legal principles that govern an application under s 439A(6) are well known.
In considering whether to grant the extension sought, the court is required to consider and take into account the objects and scheme of pt 5.3A of the Act, as set out in s 435A.
This requires the court, in reaching its decision, to maintain an appropriate balance between an expectation that an external administration will be undertaken in a relatively speedy and summary manner, with a need to ensure that an administration is not concluded without consideration of sensible and constructive options directed towards maximising returns for creditors and any possible return for shareholders.[9] The court is also required to take into account any possible detriment to third parties, including the suspension of rights and remedies of secured creditors, lessors, and others.[10]
[9] Tucker (Administrator) v Bolten (Trustee), in the matter of Quintis Leasing Pty Ltd (Administrators Appointed) (No 2) [2024] FCA 46 [54], citing in Diamond Press Australia Limited [2001] NSWSC 313 [10].
[10] Shaw and Albarran (Joint and Several Administrators of Home Art Building Group Pty Ltd) v Home Art Building Group Pty Ltd (Administrators Appointed) [2016] WASC 274 [18].
The court will generally exercise its discretion to extend the convening period where one or more of the established categories are satisfied, where there is no evidence of material prejudice to those affected by the extension, and the court is satisfied that the estimate of time required has a reasonable basis.[11]
[11] Mighty River International Limited v Hughes [2018] HCA 38 [73].
On the evidence before me, I accept that further time is needed to conclude the necessary investigations into the financial affairs of the Company. I also accept that as a result of the need to obtain orders from the court to validate their appointment as well as the negotiations with Rabobank, the plaintiffs have been unable to complete these tasks within the time frame contemplated by the Act.[12]
[12] Affidavit of Cameron Hugh Shaw filed 16 July 2025 [33] - [39]; Affidavit of Aaron Joseph Dominish filed 28 July 2025 [21.1].
For the following reasons, I am satisfied that it is appropriate in the circumstances of this case to grant the requested application for an extension of the convening period until 1 August 2025.
First, I accept that the administration of the Company has had some specific challenges as already noted.
Second, an extension to the convening period is required to enable a possible sale of the Company or a deed of company arrangement (DOCA) to be proposed and negotiated, which may result in a better return to creditors than a winding up of the Company.[13] These matters are consistent with the purposes and objects of pt 5.3A of the Act, as set out in s 435A.
[13] Affidavit of Aaron Joseph Dominish filed 28 July 2025 [[23], Plaintiffs' submissions filed 28 July 2025 [20].
Third, Mr Dominish's evidence, which I accept, is that the plaintiffs require an extension to enable them to prepare and finalise a report to creditors with a considered recommendation to creditors.
Fourth, the plaintiffs' opinion is that an extension of time is required for a period of 90 days. On the evidence before me, I am satisfied that there is a reasonable basis for this estimate.
Finally, and importantly, no creditor or any other relevant party has appeared before me today or raised any opposition to the proposed extension.[14] I am satisfied on all the evidence before me that the return to creditors is likely to be significantly enhanced if a further extension is granted. In my view, the potential benefit of the extension outweighs any possible prejudice to creditors and is in the best interests of creditors as a whole.
Should the plaintiffs be appointed as receivers of the Trust and should the directions sought be made?
[14] Affidavit of Aaron Joseph Dominish filed 28 July 2025 [38].
The legal principles that govern the application relating to the Trust are well known and can be summarised as follows.
Where a corporate trustee enters external administration, the company's right of indemnity and accompanying equitable lien over the assets of the trust survives the appointment. Where a company is removed as trustee of the trust under the terms of the trust deed, the company retains the right to holds trust assets as bare trustee. However, the administrator does not have the power to sell those assets to satisfy that indemnity unless they obtain orders from the court.[15]
[15] See Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (in liq)[2018] FCAFC 40; (2018) 260 FCR 310 [44], [85] ‑ [91] (Allsop CJ), [139], [142], [198]; Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd [2011] FCA 677 [22] - [28].
In those circumstances, the administrator has, in essence, two options. First, to apply to be appointed as receiver and manager of the trust, or alternatively, to apply for an order that confers power on the administrator to deal with the assets of the trust.
In this case, the plaintiffs have sought orders for their appointment as receivers of the Trust.
Section 25(9) of the Supreme Court Act 1935 (WA) gives the court power to appoint a receiver where it appears to be just and convenient.
Appointing the external administrator of a corporate trustee as receiver of a trust's assets facilitates and simplifies the external administration of the corporate trustee by providing for the trust's business and assets to be under the same control as the corporate trustee while it is in external administration. It also aids in the vindication of the trustee company's right of indemnity out of the trust's assets.[16]
[16] In the matter of Mecfab Holdings Pty Ltd [2015] NSWSC 46 [9].
On the evidence before me, I accept that by reason of cl 11.4 of the Trust deed, on the appointment of receivers to the Company, the Company automatically vacated the position as trustee of the Trust. As a consequence, the Company is now a bare trustee and does not have the power to sell or otherwise deal with the assets to vindicate the Company's right of indemnity out of the Trust's assets.
For the following reasons, I accept that it is appropriate for the plaintiffs to be appointed as receivers of the Trust.
First, this is in accordance with the legal principles that I have outlined and will protect the Company's right of indemnity, as well as the position of creditors.
Second, there are other advantages with this proposed order, including that the plaintiffs are subject to the regulatory regime applicable to insolvency practitioners, have professional indemnity insurance, and are subject to the continued supervision of the court.
Mr Dominish's evidence, which I accept, is that the Company has only acquired assets and incurred liabilities in its capacity as trustee of the Trust. For this reason, I accept that it is also appropriate to make directions under s 90-15 of the IPS that the plaintiffs will be acting properly and are justified in proceeding to conduct the affairs of the Trust on the basis that the business and assets of the Company comprised the assets of the Trust.
Conclusion
The plaintiffs sought orders for the costs of the application be paid from the Trust property. I consider this to be the appropriate costs order and will make this order.
I also accept that the form of orders sought in terms of service of the court's orders, and the allowance for any aggrieved party to apply to this court to vacate or vary these orders, will protect the creditors of the Company from any possible prejudice of this application.
For these reasons, it was my view that it was appropriate to make orders broadly in terms of the plaintiffs' minute of proposed orders.
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
1 AUGUST 2025
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