Re Mallee Resources Limited (Administrators Apptd) (Receivers & Manager Apptd) - [2023] WASC 379

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE MALLEE RESOURCES LIMITED (ADMINISTRATORS APPTD) (RECEIVERS & MANAGER APPTD) [2023] WASC 379
CORAM:   LUNDBERG J
HEARD:   29 SEPTEMBER 2023
DELIVERED          :   29 SEPTEMBER 2023
PUBLISHED           :   4 OCTOBER 2023
FILE NO/S:   COR 153 of 2023
MATTER:   IN THE MATTER OF MALLEE RESOURCES LIMITED (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)

EX PARTE
MATTHEW WAYNE CADDY as joint and several administrators of MALLEE RESOURCES LIMITED (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) AND THE THIRD TO EIGHTH PLAINTIFFS
SHAUN ROBERT FRASER as joint and several administrators of MALLEE RESOURCES LIMITED (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) AND THE THIRD TO EIGHTH PLAINTIFFS
ROBERT MICHAEL KIRMAN as joint and several administrators of MALLEE RESOURCES LIMITED (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) AND THE THIRD TO EIGHTH PLAINTIFFS
First Plaintiffs
MALLEE RESOURCES LIMITED (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
Second Plaintiff
ALLEGIANCE MINING PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
Third Plaintiff
AVEBURY (OPERATING) PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
Fourth Plaintiff
AVEBURY (STAFF) PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
Fifth Plaintiff
MALLEE TAS (MISC) PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
Sixth Plaintiff
MALLEE TAS (OPERATING) PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
Seventh Plaintiff
ZEEMAIN PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
Eighth Plaintiff

Catchwords:

Corporations Law - Voluntary administrators - Application to extend time for convening the second creditors' meeting and associated orders - Extension of six months sought - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 439A, s 447A

Result:

Application granted

Category: B

Representation:

Counsel:

First Plaintiffs	:	Mr R M Johnson
Second Plaintiff	:	Mr R M Johnson
Third Plaintiff	:	Mr R M Johnson
Fourth Plaintiff	:	Mr R M Johnson
Fifth Plaintiff	:	Mr R M Johnson
Sixth Plaintiff	:	Mr R M Johnson
Seventh Plaintiff	:	Mr R M Johnson
Eighth Plaintiff	:	Mr R M Johnson

Solicitors:

First Plaintiffs	:	HWL Ebsworth Lawyers (Perth)
Second Plaintiff	:	HWL Ebsworth Lawyers (Perth)
Third Plaintiff	:	HWL Ebsworth Lawyers (Perth)
Fourth Plaintiff	:	HWL Ebsworth Lawyers (Perth)
Fifth Plaintiff	:	HWL Ebsworth Lawyers (Perth)
Sixth Plaintiff	:	HWL Ebsworth Lawyers (Perth)
Seventh Plaintiff	:	HWL Ebsworth Lawyers (Perth)
Eighth Plaintiff	:	HWL Ebsworth Lawyers (Perth)

Case(s) referred to in decision(s):

Mighty River International Limited v Hughes [2018] HCA 38; (2018) 265 CLR 480
Re ABC Learning Centres Ltd (No 8) [2009] FCA 994; (2009) 73 ACSR 478
Re Daisytek Australia Pty Ltd [2003] FCA 575; (2003) 45 ACSR 446
Re Grocon Pty Ltd (admins apptd) (No 2) [2020] VSC 859
Re Harrisons Pharmacy Pty Ltd (admin apptd) (recs and mgrs apptd) [2013] FCA 458
Re Hayes; Estate Property Group Ltd [2007] FCA 935
Re Pan Pharmaceuticals Ltd [2003] FCA 598; (2003) 46 ACSR 77
Re Riviera Group Pty Ltd (admin apptd) (recs and mgrs apptd) [2009] NSWSC 585; (2009) 72 ACSR 352
Strawbridge (admin) v Retail Holdings Pty Ltd (admins apptd), in the matter of Retail Adventures Holdings Pty Ltd (admins apptd) [2013] FCA 151
Strawbridge, in the matter of Virgin Australia Holdings Ltd (admins apptd) (No 2) [2020] FCA 717; (2020) 144 ACSR 347

Table of Contents

A. Introduction

B. Summary of the evidence

C. Legislative framework and relevant principles

D. Consideration

E. Disposition

F. Orders

ATTACHMENT A

LUNDBERG J:

(This decision was delivered ex temporaneously on 29 September 2023 and has been edited from the transcript to correct matters of grammar, add headings, and include complete references).

A. Introduction

This urgent application has been brought by an originating process which was filed by the plaintiffs yesterday (28 September 2023). The first plaintiffs are partners of the firm McGrathNicol and are the appointed administrators (Administrators) of the entities named as the remaining plaintiffs.
The primary orders which are sought in the application are:
(a)pursuant to s 439A(6) of the Corporations Act2001 (Cth),[1] that the period within which the first plaintiffs must convene the second meeting of the creditors of the companies, be extended up to and including 5 April 2024 (which is an extension of, in effect, six months beyond the statutorily mandated period); and
(b) pursuant to s 447A(1), that pt 5.3A is to operate in relation to each of the plaintiff companies such that notwithstanding s 439A(2), the second meeting of the creditors of any of the companies required under s 439A may be convened at any time during or within five business days after the end of the convening period as extended by the first order which is sought.
[1] All references in these reasons to statutory provisions are to references to the Corporations Act 2001 (Cth) unless otherwise stated.
The second order which is sought is often referred to as a Daisytek order. As I have indicated, the extension to the convening period is sought for six months, which is a relatively lengthy period.
The Administrators have been appointed in respect of the Mallee Resources Ltd group of companies (Group), the companies of which are also largely subject to a parallel receivership process, with partners of Korda Mentha having been appointed as the Receivers. The Receivers are continuing to operate the Group's business with a view to completing a recapitalisation and/or sale process.
In terms of the materials that are before the court for the purposes of this application, I have the affidavit of Matthew Wayne Caddy which was affirmed on 28 September 2023 (Caddy Affidavit). Mr Caddy is one of the joint and several Administrators. I have also been provided with an outline of submissions from the solicitors for the plaintiffs dated 28 September 2023, together with a minute of proposed orders.

B. Summary of the evidence

I draw the following summary of the factual matters from the Caddy Affidavit and from the plaintiffs' submissions.
On 5 September 2023, the boards of the companies in the Group resolved to place the companies into voluntary administration pursuant to s 436A. Subsequent to that, on 7 September 2023 and then on 12 September 2023, the Receivers were appointed in a staggered fashion as joint and several receivers and managers to several of the companies in the Group. The receivers were appointed by the secured creditor, Hartree Metals Investments SARL, which I will refer to as Hartree.
The Group itself consists of Mallee Resources Ltd, Allegiance Mining Pty Ltd, Avebury (Operating) Pty Ltd, Avebury (Staff) Pty Ltd, Mallee Tas (Misc) Pty Ltd, Mallee Tas (Operating) Pty Ltd and Zeemain Pty Ltd. I understand that there are some nine entities in the group but the application before me concerns only seven (as two of the companies are not subject to the parallel receivership process).
Until quite recently, the parent of the Group was listed on the ASX. In broad terms, the Group owns and operates the Avebury nickel sulphide project which is located in Zeehan, Tasmania. The project consists of an established underground mine, a processing plant and mining infrastructure. At the time the Administrators were appointed, active mining operations were underway. The mining operations continued for some time thereafter.
I am also informed, and I will detail shortly with more precision, that the employees of the Group are continuing to be paid by the appointed Receivers and in addition, the Receivers are continuing to comply with their obligations in respect of the companies' lease interests.
As for notice of the present application, there was some advance notice given of the possibility of this application on 15 September 2023 at the first creditors' meeting, and it appears from the materials there was no objection to the anticipated application that was to be made by the Administrators.
Further, formal notice was given yesterday, by way of a circular document, to creditors. That is obviously very short notice of an application of this nature, but for reasons I will go into, I think that is adequate in the present circumstances. The notice to which I have just referred, which was distributed via a circular sent by email and posted on the McGrathNicol website, made it clear that the Administrators intended to apply for a six‑month extension to the convening period.
As has been indicated in the submissions and the Caddy Affidavit, no creditor has expressed any objection to the application, either at the creditors' meeting which I have mentioned or subsequently.
Mallee Resources Ltd, as the ultimate holding company within the Group, employs 10 head office staff. Its head office is located in Western Australia. Allegiance Mining Pty Ltd, one of the other companies in the Group, holds the mining rights to the Avebury Nickel Mine which produces nickel sulphide concentrates. That entity owns 11 of the 12 mining tenements which are utilised for the project, together with various other leaseholds for the mine.
Avebury (Operating) Pty Ltd is the main operating entity for the project and the key counterparty to the contracting arrangements for mining operations. That entity holds the majority of the company's assets and is a party to a number of the finance and equipment leasing arrangements.
In terms of employees, it appears that over 200 staff are employed by Avebury (Staff) Pty Ltd, which is the employing entity within the Group.
The materials before me indicate that the Receivers are presently in control of the companies in the Group and are managing their day‑to‑day operations. Specifically, the evidence discloses that the Receivers are operating the Avebury project with a view to securing a sale of the business in full or in part. As I will explain, the Receivers have in fact requested that the Administrators make this application to extend the convening period for six months, and the Receivers fully support the present application.
Further, the Administrators have indicated that they believe, based on their discussions with the Receivers, that there are interested parties who have expressed a genuine interest in the recapitalisation and/or sale process being undertaken by the Receivers, and this may result in interested persons putting forward proposals for the companies to execute a DOCA in due course.
As an aside, the Caddy Affidavit includes an explanation as to why the application was brought in this court, notwithstanding the location of the primary assets in Tasmania. Whilst the assets are predominantly located, if not wholly located, in Tasmania, the relevant interests and stakeholders are broadly spread across Australia and the globe. The corporate office of the ultimate holding company is located in Western Australia. Additionally, the three Administrators are based in McGrathNicol's offices in Melbourne, Perth and Sydney. The solicitors for the Administrators are based in Perth. The Receivers are based in KordaMentha's offices in Sydney, Melbourne and Perth. Further, Hartree, the secured creditor, is based in New York and their solicitors are based in Sydney. In these circumstances, I can see no particular difficulty in the matter having been brought in this court and nothing inappropriate in this course having been chosen by the Administrators.

C. Legislative framework and relevant principles

In terms of the legislative framework, I will start by referring to the salient provisions which are relied upon to seek the orders in the originating process:
439AAdministrator to convene meeting and inform creditors
(1)The administrator of a company under administration must convene a meeting of the company's creditors within the convening period as fixed by subsection (5) or extended under subsection (6).
(2)The meeting must be held within 5 business days before, or within 5 business days after, the end of the convening period.
(5)The convening period is:
(a)if the day after the administration begins is in December, or is less than 25 business days before Good Friday - the period of 25 business days beginning on:
(i)that day; or
(ii)if that day is not a business day - the next business day; or
(b)otherwise - the period of 20 business days beginning on:
(i)the day after the administration begins; or
(ii)if that day is not a business day - the next business day.
(6)The Court may extend the convening period on an application made during or after the period referred to in paragraph (5)(a) or (b), as the case requires.
…
447AGeneral power to make orders
(1)The Court may make such order as it thinks appropriate about how this Part is to operate in relation to a particular company.
(2)For example, if the Court is satisfied that the administration of a company should end:
(a)because the company is solvent; or
(b)because provisions of this Part are being abused; or
(c)for some other reason;
the Court may order under subsection (1) that the administration is to end.
(3)An order may be made subject to conditions.
(4)An order may be made on the application of:
(a)the company; or
(b)a creditor of the company; or
(c)in the case of a company under administration - the administrator of the company; or
(d)in the case of a company that has executed a deed of company arrangement - the deed's administrator; or
(e)ASIC; or
(f)any other interested person.
The plaintiffs correctly submit that applications under s 439A to extend convening periods, particularly in large administrations or those involving corporate groups with significant trading operations, have become more commonplace. It is recognised that the time period prescribed by s 439A(5) will often not be sufficient to enable the administrators to perform the tasks required before the second meeting.
As to the applicable principles, the court's attention has been drawn to the reasons for decision of Middleton J in Strawbridge, in the matter of Virgin Australia Holdings Ltd (admins apptd) (No 2).[2] I refer now to certain parts of his Honour's decision which I respectfully adopt:
The circumstances in which the Court will extend a convening period are well established. In making such an order, the Court must reach an appropriate balance between an expectation that the administration will be relatively speedy and summary, and the countervailing factor that undue speed should not be allowed to prejudice sensible and constructive actions directed to maximising a return for creditors.
The approach to be adopted was recently set out by Thawley J in Farnsworth v About Life Pty Ltd (admin apptd) [2019] FCA 11 at [3] ‑ [8], where his Honour endorsed the comments of Austin J in Re Riviera Group Pty Ltd (admins apptd) (recrs and mgrs apptd) (2009) 72 ACSR 352; [2009] NSWSC 585 (Re Riviera) at [13] as to the categories of cases in which an extension is granted including, relevantly:
(1)where the size and scope of the business in administration is substantial;
(2)where the extension will allow sale of the business as a going concern;
(3)more generally, where additional time is likely to enhance the return for unsecured creditors. (citations omitted)
[2] Strawbridge, in the matter of Virgin Australia Holdings Ltd (admins apptd) (No 2) [2020] FCA 717; (2020) 144 ACSR 347 [64] ‑ [68].
Further, Middleton J in Strawbridge, in the matter of Virgin Australia Holdings Ltd (admins apptd) (No 2) observed that:[3]
An extension of the administration period to facilitate either (or both) of: (a) the sale of the business of the company as a going concern, so as to maximise the value of the company's assets; or (b) the progression and assessment of a DOCA proposal that may provide a better return to creditors than a winding up, are well-recognised examples of situations where the Court has extended the convening period. (citations omitted)
[3] Strawbridge, in the matter of Virgin Australia Holdings Ltd (admins apptd) (No 2) [66].
Middleton J made references to the decision of the High Court in Mighty River International Limited v Hughes,[4] and in particular the observations of Nettle and Gordon JJ that:[5]
Generally speaking, courts have been disposed to grant substantial extensions in cases where the administration has been complicated by, for example, the size and scope of the business, substantial offshore activities, large numbers of employees with complex entitlements, complex corporate structures and intercompany loans, and complex recovery proceedings, and, more generally, where the additional time is likely to enhance the return to unsecured creditors. Provided the evidentiary case for extension has been properly prepared, there has been no evidence of material prejudice to those affected by the moratorium imposed by the administration, and the administrator's estimate of time has had a reasonable basis, the courts have tended to grant extensions for the periods sought by administrators.
[4] Mighty River International Limited v Hughes [2018] HCA 38; (2018) 265 CLR 480.
[5] Strawbridge, in the matter of Virgin Australia Holdings Ltd (admins apptd) (No 2) [67].
Additionally, Middleton J noted that the administrator's own opinion as to the need for an extension should be given weight in an application of this kind.
The second order which is sought by the Administrators in the present case is what is referred to as a Daisytek order, which draws its name from the decision in Re Daisytek Australia Pty Ltd.[6] That is an order which is sought under s 447A and seeks orders to the effect that the second creditors meeting may be held at any time within the extended convening period or the period of five business days thereafter, notwithstanding the effect of s 439A(2). As the plaintiffs correctly submit, orders of this nature are now considered to be almost routine and essentially provide administrators with the flexibility to enable them to convene second creditors meetings earlier if the circumstances indicate it is appropriate. The plaintiffs cite Re Grocon Pty Ltd (admins apptd)[7] in this regard.
[6] Re Daisytek Australia Pty Ltd [2003] FCA 575; (2003) 45 ACSR 446.
[7] Re Grocon Pty Ltd (admins apptd) (No 2) [2020] VSC 859 [22] (Gardiner AsJ).
Returning to the order seeking an extension to the convening period, the court was also referred to Re Harrisons Pharmacy Pty Ltd (admin apptd) (recs and mgrs apptd)[8] which is a decision of Farrell J in which the court was asked to grant an extension for the convening period of six months. The court reviewed a number of the authorities in relation to the lengths of extension for convening periods and, in particular, referred to the decision in Re ABC Learning Centres Ltd (No 8),[9] in which the convening period was extended in total in the order of approximately 18 months. Farrell J also referred to several authorities in which extensions of six months were granted. Farrell J (at [45]) noted the statement of Austin J in Re Riviera Group Pty Ltd[10] to the effect that the longer the extension that is sought, the more important it is for the court to be given a clear and complete explanation of the state of the administration, the grounds for the extension, and any potential prejudice that would flow from granting it.
[8] Re Harrisons Pharmacy Pty Ltd (admin apptd) (recs and mgrs apptd) [2013] FCA 458 (Farrell J).
[9] Re ABC Learning Centres Ltd (No 8) [2009] FCA 994; (2009) 73 ACSR 478.
[10] Re Riviera Group Pty Ltd (admin apptd) (recs and mgrs apptd) [2009] NSWSC 585; (2009) 72 ACSR 352.

Further, Farrell J noted that, while it is true that the discretion to be exercised by the court 'should not have a predisposition in favour of speedy administration that would skew the balancing process, the issue of the extent to which the court should maintain a supervisory role remains relevant to the period for which any extension requires consideration'.[11] This is so, according to Farrell J, even though the number of reported cases in which six‑month extensions have been granted are growing.
[11] Re Harrisons Pharmacy Pty Ltd [46].
An alternative approach to the granting of an extension was adopted in Re Hayes; Estate Property Group Ltd,[12] in which the court granted an extension of only one month, with leave for reconsideration of a further period thereafter. As I will explain in due course, I do not think that alternative approach is warranted in the present circumstances.

D. Consideration

[12] Re Hayes; Estate Property Group Ltd [2007] FCA 935.

Turning to the matters which have been identified by the plaintiffs in support of the application for an extension, the following considerations are identified in both the Caddy Affidavit and in the plaintiffs' submissions.
The Receivers have informed the Administrators that they need additional time to conduct a recapitalisation and/or sale process in respect of the business of the companies, and that the extension of the convening period will facilitate these processes.
Additionally, the Administrators are required by r 75‑225 of the Insolvency Practice Rules (Corporations) 2006 (Cth) (Rules) to provide to creditors a report about the company's business, property, affairs and financial circumstances, together with notice of the second meeting no longer than five business days before the meeting. Mr Caddy has deposed that the Administrators will be in a better position to advise the creditors of the options available to them and to provide an informed recommendation for the future of the companies once the recapitalisation and/or sale process has run its course.
Further, Mr Caddy has given evidence that the Administrators are of the opinion that it would be in the best interests of the company's creditors for the convening period to be extended by the period of six months which is sought. Further, the six‑month extension is necessary to facilitate the Receivers' intended recapitalisation and/or sale process. Additionally, unless an extension to the convening period is granted, there is a risk that the lessors of the leased assets will take steps to terminate the leases, thereby jeopardising the viability of the recapitalisation and/or sale process.
Further, Mr Caddy deposes that the proposed extension, in his opinion, will not unduly prejudice the company's creditors. It is noted, and I have already mentioned, that the Receivers intend to continue to pay rent in respect of the leased premises and leased assets. Finally, and perhaps more generally, a six‑month extension, according to Mr Caddy, will maximise the chances of the sale or restructure of the business or the company as a going concern, in particular by retaining the benefit of the statutory moratorium and the flexibility to complete a restructure or sale by way of a deed of company arrangement.

E. Disposition

Turning, then, to the disposition of the matter, in my view, the extension and associated orders should be made. I accept the cogency of the reasons which are advanced by Mr Caddy which I have already set out and which fundamentally focus on the need for additional time to conduct a recapitalisation and/or sale process. I am conscious of the lengthy period which is sought by the Administrators. As I have indicated, applications for such extensions must be carefully analysed by the court to ensure the requisite balance is struck.
The observations made by Jagot J in Strawbridge (admin) v Retail Holdings Pty Ltd (admins apptd), in the matter of Retail Adventures Holdings Pty Ltd (admins apptd)[13] should be borne in mind in this regard. Her Honour noted as follows:[14]
[T]he question whether or not to order an extension of the convening period for the second meeting of creditors involves the court in a balancing exercise. The court has to have regard to the expectation inherent within the statutory scheme that the administration will proceed in a relatively summary way, against the need to give administrators of companies time to present meaningful choices to the creditors at the second meeting so as to enhance the objectives of s 435A of the Act.
[13] Strawbridge (admin) v Retail Holdings Pty Ltd (admins apptd), in the matter of Retail Adventures Holdings Pty Ltd (admins apptd) [2013] FCA 151.
[14] Strawbridge (admin) v Retail Holdings Pty Ltd (admins apptd), in the matter of Retail Adventures Holdings Pty Ltd (admins apptd) [5].
Her Honour continued:[15]
[I]t was put that Pt 5.3A of the Act emphasises the need for prompt action in implementing its provisions and prompt decisions by creditors about the fate of a company to which administrators have been appointed. In addition, it was emphasised that it is necessary for courts to be conscious of the risk of prejudice to unsecured creditors that can arise by reason of substantial extensions of the convening period. (citations omitted)
[15] Strawbridge (admin) v Retail Holdings Pty Ltd (admins apptd), in the matter of Retail Adventures Holdings Pty Ltd (admins apptd) [6].
Her Honour also refers to the decision of Lindgren J in Re Pan Pharmaceuticals Ltd,[16] in which Lindgren J considered the competing considerations which are at play and concluded that the essential issue was whether the extension is necessary to enable the administrators to arrive at an opinion so as to place creditors in the position to choose between the three courses identified in s 439C. Those courses are: entering into a deed of company arrangement, liquidation of the company, or the return of the company to its directors.
[16] Re Pan Pharmaceuticals Ltd [2003] FCA 598; (2003) 46 ACSR 77.
In my view, in considering the balancing exercise that is required, this is a case in which an extension of time is required and should be granted. It was recognised by Middleton J in Strawbridge, in the matter of Virgin Australia Holdings Ltd (admins apptd) (No 2) that an extension of the convening period to facilitate a sale of a business as a going concern so as to maximise the value of the company's assets is a well‑recognised example of a situation where the court has extended the convening period. In my view, this is a similar case.
As I have mentioned, the six‑month extension sought is lengthy but appropriate in the context of this administration and in light of the nature of the business conducted by the companies. I have already referred to the decision of Re Harrisons Pharmacy Pty Ltd (admin apptd) (recs and mgrs apptd), where Farrell J observed a trend towards more lengthy convening periods and referred to six‑month extensions being granted in a number of cases.
Counsel for the plaintiffs emphasised in his submissions that it is notable that the Administrators intend to convene the second meeting of creditors as soon as practicable, depending on developments, such that they may be held earlier than the latest possible time during the extended time for the convening of the meetings as sought by the administrators. That point is also made clear in the Caddy Affidavit.[17]
[17] Caddy Affidavit [59].
In this case, therefore, the primary factors which support the extension are:
(a)the ongoing recapitalisation and/or sale process and the need for further time in that regard;
(b)the need for additional time for the Administrators to provide an appropriate report under r 75‑225 of the Rules and to be in a better position to advise the creditors of the options available to them;
(c)the fact that there is a risk to the lessors of the leased assets if an extension is not granted, in that steps might be taken to terminate the leases and jeopardise the viability of the recapitalisation and/or sale process;
(d)the fact that the proposed extension will not unduly prejudice the company's creditors;
(e)the fact that a six‑month extension, in general terms, will maximise the chances of the sale or restructure of the businesses as a going concern, in particular, as I have said, by retaining the benefit of the statutory moratorium and the flexibility to complete a restructure or sale by way of a deed of company arrangement; and
(f)the application is supported by the first ranking secured creditor and the appointer of the Receivers, namely Hartree.
As to the last of these factors, I have in the materials before me a letter from Hartree's solicitors, White & Case, dated 27 September 2023.[18] Within that letter, the Receivers indicate they are supportive of the application and, in fact, request the proposed application be made for a number of reasons. It is significant that the Receivers have indicated that the application is needed to allow them to consider inquiries from interested parties for the sale or recapitalisation of the companies, and the Receivers are presently working with a sale adviser in respect of a competitive sale and recapitalisation process in which bidders will be invited to make a proposal for the purchase or recapitalisation of the companies, their businesses or assets.
[18] Caddy Affidavit, Attachment MWC‑18.
As the solicitors for the Receivers note, the current statutory timetable will not provide sufficient time for the Receivers to prepare for and undertake a sale process that would maximise the value from the sale of the company's business and comply with their obligations under s 420A. Accordingly, the Receivers support the application for further time to properly assess, consider and recommend to the secured party, that is, to Hartree, any proposed deed of company arrangement as a result of any sale or recapitalisation process which is undertaken.
As to the length of time which is sought, the Receivers have noted that they are working hard to prepare for and agree the terms of a transaction over the coming months and ideally this calendar year; however, there is no way of knowing at this stage the nature of the bids that may be received in the sale process or the complexity of any ultimate transaction to be entered into. Accordingly, the Receivers' solicitors have indicated that, to minimise the likelihood of a further extension application of the court, the Receivers supported an extension of six months, given the complexity of the businesses in the group. These matters tend against an approach in which the court might only extend the convening period for a shorter period and require the Administrators to seek a fresh extension at the conclusion of that period.
Finally, I should note there is no evidence before me of opposition to the application, although I am conscious that the application has come on at short notice. The fact that short notice has been given is ameliorated by the usual orders which counsel for the plaintiffs seek, being orders 3 and 4 in the proposed minute. These orders require that the Administrators give prompt notice of the making of these orders to all creditors in an appropriate way, and that any person who can demonstrate sufficient interest to vary or discharge these orders will have liberty to apply on not less than 72 hours' notice to the Administrators. In my view, these orders have a strong tendency to ameliorate any prejudice which might be suffered by reason of the short notice of this application which has been given to unsecured creditors.
For these reasons, I consider it appropriate to grant the relief sought in the minute of proposed orders dated 29 September 2023, that is to grant the extension for a period of six months for the convening of the second meeting of the creditors up to and including 5 April 2024, and to modify pt 5.3 in the manner proposed.

F. Orders

The orders I made are set out in Attachment A to these reasons.

ATTACHMENT A

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
IHN
Associate to the Honourable Justice Lundberg
4 OCTOBER 2023