Re Grocon Pty Ltd (admins apptd) (No 3) - [2021] VSC 36

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST

S ECI 2020 04517

IN THE MATTER of GROCON PTY LTD (ADMINISTRATORS APPOINTED) (ACN 006 772 238) & ORS in the attached schedule

CRAIG SHEPARD AND MARK KORDA in their capacity as joint and several voluntary administrators of the THIRD PLAINTIFF (as set out in the attached schedule)	First Plaintiffs
CRAIG SHEPARD AND ANDREW KNIGHT in their capacity as joint and several voluntary administrators of the FOURTH to FORTY-FOURTH PLAINTIFFS (as set out in the attached schedule)	Second Plaintiffs

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JUDGE:	Gardiner AsJ
WHERE HELD:	Melbourne
DATES OF HEARING:	29 January and 2 February 2021
DATES OF JUDGMENT:	29 January and 2 February 2021
DATE OF REASONS:	8 February 2021
CASE MAY BE CITED AS:	Re Grocon Pty Ltd (admins apptd) (No 3)
MEDIUM NEUTRAL CITATION:	[2021] VSC 36 (first revision 18 March 2021)

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PRACTICE AND PROCEDURE – Application for joinder of additional companies placed into administration within a large corporate group to existing proceedings – Same administrators appointed to additional companies – Common issues will continue to arise – Additional companies under administration joined to existing proceeding – Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 9.06 – Re Virgin Australia Holdings Ltd (admins apptd) (No 7) [2020] FCA 1182.

CORPORATIONS – Application by administrators appointed to additional companies in a large corporate group for extension of convening period for concurrent second meetings of creditors – Corporations Act 2001 (Cth), s 439A(6) – Forty-two companies now in administration – Additional time needed for thorough assessment of proposal for deed of company arrangement – Complex corporate group structure and intercompany loans – Modest extension granted to align with extension granted to other companies under administration – Insolvency Practice Rules (Corporations) 2016 (Cth), r 75-35 – Re Riviera Group Limited (2009) 72 ACSR 352.

CORPORATIONS – Application by administrators to modify Division 80 of the Insolvency Practice Schedule (Corporations) in Schedule 2 of the Corporations Act 2001 (Cth) to allow for formation of a single committee of inspection for a large group of companies under administration – Plaintiffs sought orders to be permitted to form single committee of inspection by joint resolution of creditors if deed of company arrangement entered into – Potential of forty-two committees of inspection impracticable and inefficient – Orders made permitting single committee of inspection and for mechanism and procedure for nomination to the single committee of inspection – Insolvency Practice Schedule (Corporations) in Schedule 2 of the Corporations Act 2001 (Cth), ss 80-10, 80-15 and 90-15 – Insolvency Practice Rules (Corporations) 2016 (Cth), rr 75-190 and 80-5 – Re Virgin Australia Holdings Ltd (admins apptd) (2020) 144 ACSR 347.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr P Fary SC	Norton Rose Fulbright

HIS HONOUR:

On 27 November 2020, the first plaintiffs, Mark Korda and Craig Shepard (‘Grocon Administrators’), were appointed as joint and several voluntary administrators to the third plaintiff, Grocon Pty Ltd (‘Grocon’), pursuant to…

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.

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Details

Case: [2021] VSC 36
Decision Date: 8 February 2021

CaseChat Overview and Summary

In the matter of Grocon Pty Ltd, the administrators sought to join additional companies within the group that had been placed into administration to existing proceedings. This application was heard in the Supreme Court of Victoria. The primary issue was whether the additional companies should be joined to the existing proceedings given that the same administrators had been appointed to all the companies in the group and common issues would continue to arise.

The court found that joining the additional companies to the existing proceedings would be appropriate given the commonality of issues and the administrative efficiency of handling all related matters within a single proceeding. The court was satisfied that the joinder would not prejudice the rights of the creditors and that it would facilitate a more coherent and comprehensive resolution of the matters at hand.

In addition to the joinder, the administrators sought an extension of the convening period for concurrent second meetings of creditors, as well as an order to allow for the formation of a single committee of inspection for the large group of companies under administration. The court granted a modest extension to the convening period to allow for a thorough assessment of the proposal for a deed of company arrangement. The court also made orders permitting the formation of a single committee of inspection, which was deemed necessary to avoid the impracticality and inefficiency of having forty-two separate committees of inspection.

The court's orders allowed for the joinder of the additional companies, an extension of the convening period, and the formation of a single committee of inspection, thereby providing a unified approach to the administration of the companies within the group.

Orders