Re Eyre Kingston Pty Limited (in Liquidation); [No 2]
[2025] WASC 88
•21 MARCH 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE EYRE KINGSTON PTY LIMITED (IN LIQUIDATION); EX PARTE ROBERT MICHAEL KIRMAN AS JOINT AND SEVERAL LIQUIDATOR OF EYRE KINGSTON PTY LIMITED (IN LIQUIDATION) (ACN 603 038 811) & ORS [No 2] [2025] WASC 88
CORAM: HILL J
HEARD: 24 FEBRUARY 2025
DELIVERED : 24 FEBRUARY 2025
PUBLISHED : 21 MARCH 2025
FILE NO/S: COR 109 of 2024
MATTER: IN THE MATTER OF EYRE KINGSTON PTY LIMITED (IN LIQUIDATION)
EX PARTE
ROBERT MICHAEL KIRMAN as joint and several liquidator of EYRE KINGSTON PTY LIMITED (IN LIQUIDATION) (ACN 603 038 811)
First Plaintiff
SHANE NORMAN O'KEEFFE as joint and several liquidator of EYRE KINGSTON PTY LIMITED (IN LIQUIDATION) (ACN 603 038 811)
Second Plaintiff
EYRE KINGSTON PTY LIMITED (IN LIQUIDATION) (ACN 603 038 811)
Third Plaintiff
Catchwords:
Corporations - External administration - Applications for approval for entry into two deeds - Application by liquidators for directions that liquidators would be justified and acting properly in entering into and performing deeds - Turns on own facts
Legislation:
Corporations Act 2001 (Cth) s 477(2A), s 477(2B), s 1322(4), sch 2 s 90-15
Result:
Applications granted
Category: B
Representation:
Counsel:
| First Plaintiff | : | N J Wallwork |
| Second Plaintiff | : | N J Wallwork |
| Third Plaintiff | : | N J Wallwork |
Solicitors:
| First Plaintiff | : | Norton Rose Fulbright & Edwards Mac Scovell |
| Second Plaintiff | : | Norton Rose Fulbright & Edwards Mac Scovell |
| Third Plaintiff | : | Norton Rose Fulbright & Edwards Mac Scovell |
Case referred to in decision:
Re Robert Michael Kirman as joint and several liquidator of Eyre Kingston Pty Ltd (in liq) (ACN 603 038 811) & Ors; ex parte Robert Michael Kirman as joint and several liquidator of Eyre Kingston Pty Ltd (in liq) (ACN 603 038 811) & Ors [2024] WASC 498
HILL J:
(This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings and to correct matters of grammar and expression.)
By separate interlocutory processes both dated 20 February 2025, one filed by Norton Rose Fulbright and the other by Edwards Mac Scovell, the plaintiffs apply for directions and approvals in relation to two deeds of assignment: the first entered into on 12 February 2025 in relation to potential claims against Construction Control Australia Pty Ltd (Construction Control) (Construction Control Deed), and the second on 19 February 2025 in relation to potential claims against WSP Australia Pty Ltd (WSP) (WSP Deed) (collectively, Deeds). For convenience, both applications were heard together before me this afternoon.
In substance, the plaintiffs seek:
(a)orders nunc pro tunc for approval for the first plaintiffs to enter into the Deeds from the date that each was signed; and
(b)directions that the first plaintiffs would be acting properly and are justified in entering into and performing the obligations under each Deed.
In support of the applications, the plaintiffs have relied on a large number of affidavits. Specifically, in relation to the Construction Control Deed, these affidavits include the affidavits that were filed on 20 February 2025 by Mr Kirman, and two affidavits of service of Mr White, which were filed on 21 February 2025 and 24 February 2025. In respect of the application regarding the WSP Deed, the affidavits included two affidavits of Mr Kirman filed 20 February 2025 (one open and one confidential), as well as three affidavits of Charmaine Ruth James, filed on 21 February and 24 February 2025, attesting to service of the interlocutory process on the Australian Securities and Investments Commission.
Factual background
Much of the factual background to these applications was canvassed in my previous decision in relation to this liquidation.[1] For the purposes of today, I do not intend to repeat that summary and have adopted, in these reasons, the definitions used previously.
Construction Control Deed
[1] Re Robert Michael Kirman as joint and several liquidator of Eyre Kingston Pty Ltd (in liq) (ACN 603 038 811) & Ors; ex parte Robert Michael Kirman as joint and several liquidator of Eyre Kingston Pty Ltd (in liq) (ACN 603 038 811) & Ors [2024] WASC 498.
On or around 13 August 2018, Eyre Kingston, Construction Control, and DTM Investments Pty Ltd (DTM Investments) entered into a document which was titled 'Design Coordination & Construction Contract' (DCC Contract).[2]
[2] Affidavit of Robert Michael Kirman filed 20 February 2025 [12] - [13]; Affidavit of Robert Michael Kirman filed 9 July 2024, 'RMK-16'.
Pursuant to the DCC Contract, on or about 23 September 2021, Construction Control provided Eyre Kingston with a bank guarantee which secured its performance of the DCC Contract (Bank Guarantee).[3] Since about July 2023, the plaintiffs and Construction Control have exchanged solicitors' correspondence in relation to the question as to whether the Bank Guarantee is required to be returned by the plaintiffs. At this stage, this has not occurred.
[3] Affidavit of Robert Michael Kirman filed 20 February 2025 [15] - [16], 'RMK-156'.
On 5 December 2024, the plaintiffs received a confidential offer from a third party (Confidential Offer) to purchase all rights, titles, interests, and claims against Construction Control (Construction Control Claims).
Following the receipt of that offer in December 2024, the solicitors for the plaintiffs wrote to a number of parties, including the solicitors for Construction Control, informing them of the receipt of the Confidential Offer and inviting them to submit any competing offers by 17 January 2025.[4]
[4] Affidavit of Robert Michael Kirman filed 20 February 2025 [41] - [42], 'RMK-179'.
Following negotiations, on 12 February 2025, the plaintiffs executed the Construction Control Deed, which assigned claims against Construction Control to the counterparty to that agreement. The Construction Control Deed includes a condition precedent that the plaintiffs obtain approval for entry into the Construction Control Deed in terms of the minute of proposed orders.[5]
[5] Affidavit of Robert Michael Kirman filed 20 February 2025 [55], 'RMK-155' p 26 (cl 3.1).
I note that the Construction Control Deed does not include any provision for the assignment of the Bank Guarantee. Mr Kirman's evidence is that, based on his review of this document, the Bank Guarantee is not capable of assignment.[6]
WSP Deed
[6] Affidavit of Robert Michael Kirman filed 20 February 2025 [17].
In around November 2017, WSP provided a fee proposal for structural design services for the Atria Project.
In 2019, WSP initiated a review of the design of this project and, as part of that review, identified various structural design elements which required rectification and augmentation. One of the issues that was identified concerned a concrete slab in the basement carpark. WSP proposed a remediation scheme to rectify these issues, which included the installation of stitch bolts. This work was carried out by Construction Control in around October 2019.
In June 2022, Eyre Kingston commenced proceedings against WSP and AWT Consulting Engineers Pty Ltd (AWT) in respect of losses that were sustained in relation to the development of the Atria Project resulting from its alleged defective structural design.[7] These proceedings were discontinued in November 2022, for the reasons which are set out in Mr Kirman's confidential affidavit.[8]
[7] Affidavit of Robert Michael Kirman filed 20 February 2025 [21].
[8] Affidavit of Robert Michael Kirman filed 20 February 2025 [22].
The first plaintiffs were appointed as liquidators of Eyre Kingston on 13 July 2023.[9]
[9] Affidavit of Robert Michael Kirman filed 20 February 2025 [9].
On 21 July 2023, a defect in the stitch bolts, installed as part of the remediation work to the basement's concrete slab, was identified in a report obtained from Northrop Consulting Engineers Ltd.[10]
[10] Affidavit of Robert Michael Kirman filed 20 February 2025 [24], 'RMK7'.
On 31 October 2024, the liquidators issued letters to various parties who they considered may be interested in purchasing Eyre Kingston's claim in respect of this defect (Stitch Bolt Defect Claim).[11] The only offer that was received in response to these letters was from the assignee or counterparty of the WSP Deed.[12]
[11] Affidavit of Robert Michael Kirman filed 20 February 2025 [32].
[12] Affidavit of Robert Michael Kirman filed 20 February 2025 [32], [35].
Following confidential negotiations between the plaintiffs and the proposed assignee, the parties entered into the WSP Deed on 19 February 2025 to give effect to the assignment of the Stich Bolt Defect Claim.[13] The WSP Deed includes a requirement that the plaintiffs obtain court approval pursuant to s 477(2B) of the Corporations Act 2001 (Cth) (Act).[14]
[13] Affidavit of Robert Michael Kirman filed 20 February 2025, 'RMK1'.
[14] Affidavit of Robert Michael Kirman filed 20 February 2025 [39].
Should approval be given nunc pro tunc for entry into each of the Deeds?
The plaintiffs seek approval nunc pro tunc to enter into the Deeds pursuant to s 477(2)(b) of the Act.
The relevant principles that govern this application were set out in my previous decision concerning this company and the plaintiffs, and those reasons reflect my views on this issue. It is therefore unnecessary to repeat them in giving my decision today.
Some of the evidence that I have considered for the purposes of these applications is confidential, and for that reason, I am somewhat constrained in the reasons I can give for the orders I propose to make. In considering each of the applications, I have taken into account the evidence in the confidential and non-confidential affidavits of Mr Kirman that have been filed. These affidavits give evidence as to the process that has been undertaken by the liquidators in relation to the proposed assignment of each of the claims, details of the negotiations that have occurred, and the reasons for the decision that has been made by the liquidators.
I accept that the terms of each of the Deeds impose obligations on the liquidators, which may require performance more than three months after the date of entry into each Deed, and that, as a result, approval under s 477(2B) of the Act is required.
On the evidence before me, I do not consider that there is any error or ground which calls into question the decision of the liquidators to assign these claims (rather than to pursue them personally) or that would support any inference being drawn that the plaintiffs are not acting in good faith in entering into each of these Deeds. I am satisfied, on the evidence before me, that the plaintiffs are acting properly and are justified in entering into each of the Deeds.
In reaching this decision, I have taken into account the following key factors.
First, Eyre Kingston has insufficient assets to fund either of the claims, and litigation funding is unlikely to be available, based on the efforts that have been made by the liquidators to date.[15] Second, I accept Mr Kirman's evidence that the terms of each Deed are the best that could be reasonably negotiated in the circumstances. The process undertaken by the liquidators was reasonable, and there is a plausible evidentiary basis for the exercise of their commercial judgment. Third, entry into each of the Deeds is expected to lead to an increased dividend to unsecured creditors and will offer certainty to these creditors.[16] Fourth, entry into these Deeds is one of the last matters to be dealt with in Eyre Kingston's liquidation. If these Deeds are approved, this will enable the liquidation to be finalised earlier than would otherwise be the case.[17]
[15] Confidential affidavit of Robert Michael Kirman filed 20 February 2025 [44] - [52], 'RMK-180'.
[16] Confidential affidavit of Robert Michael Kirman filed 20 February 2025 [56].
[17] Affidavit of Robert Michael Kirman filed 20 February 2025 [51(e)].
I also consider it is appropriate to grant approval to enter into each of these Deeds nunc pro tunc. The grounds on which the liquidators entered into the Deeds without seeking respective approval have been explained, and importantly, each Deed is conditional on court approval being obtained.
I am also satisfied that it is appropriate to give the directions sought. In the circumstances of this matter, particularly given the history of the liquidation and the extensive disputes (not only between the shareholders but between the relevant parties), I accept there is a possibility that an issue may be raised as to the entry into the Deeds by the liquidators, and that this is not merely hypothetical.[18]
[18] Confidential affidavit of Robert Michael Kirman filed 20 February 2025 [58].
The orders propose the giving of notice to creditors and that there be a short period of time for any person aggrieved by the orders to apply to set these orders aside. In these circumstances, I am satisfied that the interests of other parties are appropriately protected by the orders that are sought.
Should confidentiality and non-publication orders be made?
The plaintiffs also seek confidentiality orders pursuant to O 67B r 5 of the Rules of the Supreme Court 1971 (WA).
The plaintiffs request that the court makes orders to preserve the confidentiality of Mr Kirman's affidavits, which annex unredacted copies of the Deeds. This is primarily because the terms of each Deed require confidentiality to be maintained, and the matters set out in the bodies of these confidential affidavits contain information that is commercially sensitive.[19]
[19] Affidavit of Robert Michael Kirman filed 20 February 2025 [57].
I am satisfied in the circumstances of this case that it is appropriate to make the orders sought. This is for two primary reasons. First, the affidavits contain evidence of the process of negotiations and attach unredacted copies of the Deeds which, on their terms, impose obligations of confidentiality. Second, both Deeds assign potential claims against third parties where proceedings have not been commenced. I accept in those circumstances that the matters referred to are commercially sensitive.
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
21 MARCH 2025
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