Re Aqua Star Pty Ltd - [2024] VSC 377

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2024 03054

IN THE MATTER of AQUA STAR PTY LTD (ADMINISTRATORS APPOINTED)
(ACN 074 614 538)

BETWEEN:

DANIEL PETER JURATOWITCH in his capacity as an Administrator of AQUA STAR PTY LTD (ADMINISTRATORS APPOINTED) (ACN 074 614 538) & ORS
(according to the attached schedule)

Plaintiffs

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JUDGE:	Gardiner AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	19 June 2024
DATE OF JUDGMENT:	19 June 2024 (ex tempore, revised 28 June 2024)
CASE MAY BE CITED AS:	Re Aqua Star Pty Ltd
MEDIUM NEUTRAL CITATION:	[2024] VSC 377

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CORPORATIONS — External administration — Application for extension of convening period of second meeting of creditors of company in voluntary administration pursuant to s 439A(6) of the Corporations Act 2001 (Cth) – Extension sought of approximately 3 months of convening period of administration of a single corporate enterprise conducting a large and complex business — Administrator seeking extension to enable director of the company to put forward a proposal for a Deed of Company Arrangement — Sound reasons given for extension – Extension in the interests of creditors – No significant prejudice to those affected by moratorium by grant of extension — Orders made for extension of convening period together with ancillary orders including liberty to apply to administrator and those whose interests are affected by orders.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Silver, of Counsel	Broadside Lawyers Pty Ltd

HIS HONOUR:

By an originating process filed on 17 June 2024, the plaintiffs, Mr Daniel Juratowitch and Mr Shaun Matthews (together ‘Administrators’) who are the voluntary administrators of Aqua Star Pty Ltd (Administrators Appointed) (ACN 074 614 538) (‘Company’), make application under ss 439A(6) and 447A of the Corporations Act 2001 (Cth) (‘Act’) for an extension of the convening period for the second meeting of creditors of the Company required to be held by s 439A(1) of the Act (‘Application’). Unless extended the convening period will expire at midnight on 28 June 2024.

The Administrators seek an extension until 30 September 2024. They also seek a ‘Daisytek order’,[1] allowing the Administrators to hold the second creditors’ meeting any time during, or within five business days after, the end of the period as extended, notwithstanding the operation of s 439A(2) of the Act.
[1]See Re Daisytek Australia Pty Ltd (2003) 45 ACSR 446, 448 [10]–[14] (Lindgren J) (‘Daisytek’).

In addition, the originating process seeks orders that the Company’s creditors be informed by the several means specified of the making of the orders sought, together with liberty to apply to persons affected by the orders sought and costs.

On 19 June 2024, I made orders which are set out at the conclusion of these reasons and gave brief reasons on the return of the Application. I indicated that I would provide more elaborate reasons which I now do.

The Application is supported by an affidavit of Shaun James Matthews (‘Mr Matthews’) sworn…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Aqua Star Pty Ltd

Details

AGLC: Re Aqua Star Pty Ltd [2024] VSC 377
Case: [2024] VSC 377
Decision Date: 19 June 2024 (ex tempore, revised 28 June 2024)

CaseChat Overview and Summary

Aqua Star Pty Ltd, a single corporate enterprise involved in a large and complex business, found itself in voluntary administration. The administrator of the company sought an extension of the convening period for a second meeting of creditors, as permitted by section 439A(6) of the Corporations Act 2001 (Cth). The extension was sought to provide the company director with the opportunity to propose a Deed of Company Arrangement. The nature of the application necessitated the court to determine whether the reasons provided for the extension were sound and whether the extension would be in the best interests of the creditors. Additionally, the court had to consider whether the granting of the extension would cause significant prejudice to those affected by the moratorium.

The court examined the soundness of the reasons for the extension and assessed whether the proposed Deed of Company Arrangement would benefit the creditors and the company as a whole. The court found that the administrator had provided adequate reasons for the extension, as the proposal for a Deed of Company Arrangement would likely result in a more favourable outcome for the creditors. The court also determined that the extension would not cause significant prejudice to those affected by the moratorium, as the interests of the creditors would be safeguarded and potentially improved by the proposed arrangement.

In light of the above findings, the court granted the administrator's application for an extension of the convening period for the second meeting of creditors. The court made orders allowing the extension, along with ancillary orders that granted liberty to apply to the administrator and those affected by the orders. This decision ensured that the company would have the opportunity to present a potentially beneficial proposal for a Deed of Company Arrangement, ultimately working towards the best interests of the creditors and the company.

Orders