Re Pindan Group Pty Ltd (Administrators Appointed)
[2021] WASC 347
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: RE PINDAN GROUP PTY LTD (ADMINISTRATORS APPOINTED) AND ORS [2021] WASC 347
CORAM: STRK J
HEARD: 13 SEPTEMBER 2021
DELIVERED : 13 SEPTEMBER 2021
PUBLISHED : 18 OCTOBER 2021
FILE NO/S: COR 102 of 2021
MATTER: IN THE MATTER OF PINDAN GROUP PTY LTD (ADMINISTRATORS APPOINTED) AND OTHERS
EX PARTE
VINCENT ANTHONY SMITH, COLBY RHYS O'BRIEN AND SAMUEL JOHN FREEMAN, as joint and several administrators of PINDAN GROUP PTY LTD (ADMINISTRATORS APPOINTED) ACN 611 922 386, PINDAN ASSET MANAGEMENT PTY LTD (ADMINISTRATORS APPOINTED) ACN 086 747 944 and PINDAN CONTRACTING PTY LTD (ADMINISTRATORS APPOINTED) ACN 120 076 360, and as joint and several liquidators of PINDAN PROJECTS WA PTY LTD (IN LIQUIDATION) ACN 611 922 475, PINDAN REALTY PTY LTD (IN LIQUIDATION) ACN 009 372 847 and MOSELLE HOLDINGS PTY LTD (IN LIQUIDATION) ACN 009 338 318
Plaintiff
Catchwords:
Corporations law - Application by the administrators to further extend the convening period - Application by the administrators to limit their liability under proposed refinance agreements to the extent that such liability can be satisfied out of company assets pursuant to the administrators' indemnity under s 443(D) of the Corporations Act 2001 (Cth) - Application by the liquidators for approval to enter into proposed refinance agreements pursuant to s 477(2B) of the Corporations Act 2001 (Cth)
Legislation:
Corporations Act 2001 (Cth), s 439A(6), s 447A(1), s 477(2B)
Result:
Applications granted
Category: B
Representation:
Counsel:
| Plaintiff | : | A J Papamatheos and L Pham |
Solicitors:
| Plaintiff | : | Squire Patton Boggs |
Case(s) referred to in decision(s):
Cameron Shaw and Richard Albarran in their Capacity as Joint and Several Administrators of Home Art Building Group Pty Ltd (Administrators Appointed) v Home Art Building Group Pty Ltd (Administrators Appointed) [2016] WASC 274
Flynn v Theobold [2008] WASC 263
In the matter of Nexus Energy Ltd [2014] NSWSC 1041
Jones, Saker, Weaver and Stewart (Liquidators), in the matter of Great Southern Limited (in liq) (Receivers and Managers Appointed) [2012] FCA 1072
Matthew David Woods and Hayden Leigh White as joint and several liquidators of Little Tiger Pty Ltd (In liq) as trustee for the BPH Trust v Little Tiger Pty Ltd (In liq) [2014] WASC 372
Mighty River International Ltd v Hughes [2017] WASCA 152; (2017) 52 WAR 1
Re Bell Group (In liq); Ex parte Woodings [2020] WASC 121
Re GA Listing & Maintenance Pty Ltd (1994) 15 ACSR 308
Re Gothard (No 2) [2015] FCA 401
Re HIH Casualty & General [2001] NSWSC 1186
Re HIH Insurance Group [2001] NSWSC 308
Re Mentha in their capacities as joint and several administrators of the Griffin Coal Mining Company Pty Ltd (administrators appointed) [2010] FCA 1469; (2010) 92 ACSR 142
Re Red Lancer Pty Ltd (In liq); Ex parte Bumback [2019] WASC 450
Re Reid Group Pty Ltd (Administrators Appointed); Ex parte Kirman & Bauer [2017] WASC 2019
Re Riviera Group Pty Ltd (Admins Apptd) (Recs and Mgs Apptd) [2009] NSWSC 585; (2009) 72 ACSR 352
Re Windimurra Vanadium Ltd & Midwest Vanadium Pty Ltd [2009] WASC 71
Warnes v GDK Financial Solutions Pty Ltd [2006] NSWSC 464; (2006) 233 ALR 181
STRK J:
(These reasons were delivered extemporaneously at the conclusion of the hearing which took place on 13 September 2021. They have been edited from transcript to correct matters of grammar and so as to include complete references in the form of schedules and footnotes.)
Introduction
The plaintiffs press for orders set out in the interlocutory process filed in this proceeding on 10 September 2021. The hearing of the application was listed on an ex parte and urgent basis. Not all of the orders promoted in the interlocutory process were pressed. I understand that some have fallen away, while others have been deferred to another day. A copy of the plaintiffs' interlocutory process filed on 10 September 2021 is reproduced at Schedule A to these reasons.
Samuel John Freeman, Colby Rhys O'Brien and Vincent Anthony Smith have been appointed in various capacities to various entities which might loosely be described as being part of the Pindan group of companies. For the purpose of this application, the plaintiffs are relevantly:
(a)the joint and several administrators of Pindan Group Pty Ltd (Pindan Group) and Pindan Contracting Pty Ltd (Pindan Contracting); and
(b)the joint and several liquidators of Pindan Projects WA Pty Ltd (Pindan Projects), Pindan Realty Pty Ltd (Pindan Realty) and Moselle Holdings Pty Ltd (Moselle).
In broad outline, the plaintiffs seek orders further extending the convening period for the second meeting of creditors of Pindan Group and Pindan Contracting; and orders to facilitate a proposal that the plaintiffs (as administrators and as liquidators) enter into certain refinance agreements.
As to the extension application, the plaintiffs seek an order that the convening period, as defined by s 439A(5) of the Corporations Act 2001 (Cth), with respect to Pindan Group and Pindan Contracting be further extended up to and including 28 October 2021. The plaintiffs also seek an order that pursuant to s 447A(1) of the Corporations Act, pt 5.3A of the Corporations Act is to operate in relation to Pindan Group and Pindan Contracting as if the meeting of creditors of Pindan Group and Pindan Contracting required by s 439A of the Corporations Act may be convened and held at any time during the period as extended, and the period of five business days thereafter, notwithstanding the provisions of s 439A(2) of the Corporations Act. This relief is as reflected in orders 1 and 2 of the plaintiffs' interlocutory process and the plaintiffs' minute of proposed orders, which minute was referred to and relied upon by counsel for the plaintiffs at the hearing of this application.
As to the refinance proposal, order 3 of the interlocutory process and the plaintiffs' minute of proposed orders concern the personal liability of the plaintiffs as administrators of Pindan Group and Pindan Contracting if they enter into certain refinance agreements.
Further, order 5 of the interlocutory process and order 4 of the plaintiffs' minute of proposed orders concerns the authority of the plaintiffs as liquidators of Pindan Projects, Pindan Realty and Moselle to enter into certain refinance agreements.
The orders otherwise sought on behalf of the plaintiffs are procedural or ancillary to the orders described above.
Evidence
The interlocutory process is supported by a number of affidavits. Confidentiality has been claimed and restriction orders sought in relation to some of them. They are: the second unrestricted affidavit of Mr Freeman sworn on 10 September 2021 and filed on the same date with attachments SJF10 - SJF24; the second confidential affidavit of Mr Freeman sworn on 10 September 2021 and filed on 13 September 2021; the second unrestricted affidavit of Mr Freeman sworn on 13 September 2021 with attachments SJF25 - SJF26; the unrestricted affidavit of Masiullah Zaki, solicitor for the plaintiffs, sworn on 13 September 2021 and filed on the same day with attachments M21 - M23; and the confidential affidavit of Mr Zaki sworn on 12 September 2021 and filed on 13 September 2021 with attachment M21.
The affidavits of Mr Freeman referred to above are not the first sworn by him and filed in the proceeding known as COR 102 of 2021. Mr Freeman swore affidavits in support of the plaintiffs' first application to extend the convening period, which application was determined on the papers and granted by orders made on 10 June 2021. Mr Freeman also swore affidavits in support of the interlocutory process filed on behalf of the plaintiffs on 26 July 2021, which application was heard and determined on 29 July 2021.
All of the affidavits I have now referred to were read for the purpose of this application. Counsel for the plaintiffs further refer to and seek to rely upon the written outline of submissions filed on 13 September 2021 and the plaintiffs' minute of proposed orders (referred to above).
The context in which the application is made
Pindan Group, Pindan Contracting, Pindan Projects, Pindan Realty, Moselle and Pindan Asset Management Pty Ltd (Subject to a Deed of Company Arrangement) (Pindan Asset Management), are part of a broader Pindan group of companies, which is primarily a Western Australian property and construction group. Oxley Holdings Limited (Oxley) is the ultimate parent company of each entity comprising the corporate group.[1] Annexed to Mr Freeman's unrestricted affidavit of 10 September 2021 at SJF10 is a diagram depicting the structure of the corporate group.
[1] The unrestricted affidavit of SJ Freeman sworn 10 September 2021 pars 6 - 7.
On 10 June 2021, I made an order extending the date by which the plaintiffs were required to convene a second meeting of the creditors of Pindan Group, Pindan Contracting and Pindan Asset Management (then a company with administrators appointed), to 16 September 2021.[2]
[2] Mr Freeman deposes that on 29 July 2021, the creditors of Pindan Asset Management passed various resolutions including a resolution for the approval of a proposed deed of company arrangement, and as such, at the hearing on 13 September 2021, the plaintiffs did not seek further relief from the court in respect of Pindan Asset Management: see the unrestricted affidavit of SJ Freeman sworn 10 September 2021 pars 11 - 14.
In Mr Freeman's unrestricted affidavit of 10 September 2021, he summarises the status as at that date of the investigations of the plaintiffs as administrators and liquidators. Mr Freeman provides an overview of the assets available and the creditors of each of the five entities that this application concerns.
As to Pindan Contracting, I have had regard to Mr Freeman's affidavit evidence in which he deposes that as at 10 September 2021, Pindan Contracting has 417 secured and unsecured creditors, claiming total amounts owed of an amount over $80 million. Further, Pindan Contracting has 48 employee priority creditors, claiming total amounts owned of approximately $2.6 million.
As to Pindan Group, I have had regard to Mr Freeman's affidavit evidence in which he deposes that as at 10 September 2021, Pindan Group has 97 secured and unsecured creditors, claiming total amounts of approximately $95.5 million; and 52 employee priority creditors, claiming total amounts owed of approximately $2.03 million.
Turning to the companies in liquidation, as to Moselle, I have had regard to Mr Freeman's affidavit evidence in which he deposes that as at 10 September 2021, Moselle has six secured and unsecured creditors, claiming total amounts owed of approximately $32.9 million, which includes cross-collateralised debt. Moselle has no priority employee creditors.
As to Pindan Realty, I have had regard to Mr Freeman's affidavit evidence in which he deposes that as at 10 September 2021, Pindan Realty has 14 secured and unsecured creditors, claiming total amounts owed of approximately $32.3 million; and 27 employee priority creditors, claiming total amounts owed of approximately $90,000.
As to Pindan Projects, I have had regard to Mr Freeman's affidavit evidence in which he deposes that as at 10 September 2021, Pindan Projects has 162 secured and unsecured creditors, claiming total amounts owed of approximately $35.7 million; and 11 employee priority creditors, claiming total amounts owed of approximately $643,000.
I note that former employees of Pindan Realty and Pindan Projects are eligible to receive their unpaid entitlements via the Fair Entitlements Guarantee Scheme (up to certain caps and subject to eligibility criteria).
At par 63 of Mr Freeman's unrestricted affidavit of 10 September 2021, he deposes to the activities of the plaintiffs since 10 June 2021 (when the court ordered a first extension of the convening period for the companies in administration). I note that those activities included work associated with a potential refinance proposal with Oxley and BankWest, a division of Commonwealth Bank of Australia (CBA).
CBA is described by Mr Freeman as being the primary and largest secured creditor of Pindan Group and Pindan Contracting. He deposes that CBA holds a general security interest over all of the present and after acquired property of each of Pindan Group and Pindan Contracting, and other entities in the corporate group. Further, CBA is the only secured creditor that holds an 'all asset' without exceptions security over the property of each of Pindan Group and Pindan Contracting.[3]
[3] The unrestricted affidavit of SJ Freeman sworn 10 September 2021 par 71.
Mr Freeman deposes that CBA's claim against Pindan Group and Pindan Contracting on a joint and several basis, is $14,935,246, comprising of the following:
(a)$14,084,400; and
(b)$850,846 (Pindan Group has guaranteed the indebtedness of Pindan Capital Two Rocks Pty Ltd in favour of CBA).[4]
[4] The unrestricted affidavit of SJ Freeman sworn 10 September 2021 par 72.
Mr Freeman deposes that shortly after his appointment, Oxley took steps to explore the possibility of refinancing the debt owed to CBA, including the moneys owed by Pindan Capital Two Rocks Pty Ltd.[5]
[5] The unrestricted affidavit of SJ Freeman sworn 10 September 2021 par 77.
At par 64 of Mr Freeman's unrestricted affidavit of 10 September 2021, he notes that, as set out in his confidential affidavit sworn on the same day, Pindan Group and Pindan Contracting have received preliminary interest from a party interested in submitting a deed of company arrangement (DOCA) proposal. He further deposes that the intended DOCA proposal anticipates a benefit to creditors by way of a dividend payment. Mr Freeman's confidential affidavit of 10 September 2021 further addresses the potential DOCA.
I have borne in the balance all of the above and the matters deposed to in the confidential affidavits when considering the application now pressed.
The further extension of the convening period
Mr Freeman deposes that in the plaintiffs' opinion, notwithstanding the statutory moratorium provided by pt 5.3A of the Corporations Act and its impact on creditors enforcing their rights, a short further extension of the convening period will not unduly prejudice the creditors of the two companies in administration.[6]
[6] The unrestricted affidavit of SJ Freeman sworn 10 September 2021 par 65.
Mr Freeman deposes that in respect of all creditors, the plaintiffs consider that an extension of the convening period is necessary to allow: first, further time to assess, develop and negotiate any potential DOCA proposal; secondly, to allow the plaintiffs to engage the Committees of Inspection in respect of both Pindan Group and Pindan Contracting; thirdly, to obtain appropriate advice in relation to any potential DOCA proposal; fourthly, to prepare and submit comprehensive reports to the general body of creditors in respect of both companies in administration pursuant to s 439A of the Corporations Act; and finally, to convene the necessary second meeting of creditors in respect of both companies.
Mr Freeman deposes at par 67 of his unrestricted affidavit of 10 September 2021 that the administrators do not consider a short further extension of the convening period will cause any prejudice to the general body of creditors. In the event the extension to the convening period is not granted and the companies were to enter into liquidation, Mr Freeman deposes that it may be that the creditors' potential return will be significantly less than it would be should a DOCA be entered into in respect of both companies. In this regard, Mr Freeman deposes at par 68 of that affidavit that it is anticipated that the indebtedness of the two companies' largest secured creditor (CBA) will be paid in full subject to approval of the court.
Mr Freeman addresses the impact of a further extension of the convening period on employee creditors and secured creditors in his unrestricted affidavit of 10 September 2021 at pars 69 - 70 and pars 71 - 73, respectively. I have had regard to the same.
Notice of this application was given to the employee creditors of Pindan Group and Pindan Contracting this morning, and in this regard, I refer to par 3 of Mr Freeman's unrestricted affidavit sworn and filed on 13 September 2021.
Applicable principles
I have regard to the objects and scheme of pt 5.3A of the Corporations Act, and the court's function as discernible from that part.[7] In considering this application to further extend the convening period made pursuant to s 439A(6), I have had regard to and applied the following principles:[8]
(1)The short time frames are an element of the scheme of the Act, the purpose being that creditors should be fully informed about the company’s position and have the opportunity to vote as soon as possible.
(2)However, the prospects of a better return to creditors may outweigh the expectation and desirability of prompt resolution. The exercise of power under s 439A(b) involves a balancing of these considerations.
(3)In considering an application for an extension, the court must take into account the detriment to third parties, including the suspension of rights and remedies of secured creditors, lessors and others.
(4)An important question on such an application is whether an extension is necessary to enable the administrator to prepare reports and to come to the opinion required by s 439A(4) to inform creditors as to the appropriate choice between the options of a deed on company arrangement for the administration to end or for the company to be wound-up.
(5)Any extension should be for no longer than is necessary for an informed decision to be made as to whether to enter into a deed of company arrangement winding up the company or the enter the administration.
[7] As observed by Banks-Smith J in Re Reid Group Pty Ltd (Administrators Appointed); Ex parte Kirman & Bauer [2017] WASC 2019 [4], the objects and scheme of pt 5.3 of the Corporations Act were outlined in Flynn v Theobold [2008] WASC 263 [36] ‑ [53] (Beech J); and Re Windimurra Vanadium Ltd & Midwest Vanadium Pty Ltd [2009] WASC 71 [2] ‑ [9] (Beech J). As to the court's function, see Mighty River International Ltd v Hughes [2017] WASCA 152; (2017) 52 WAR 1, 29 - 30 [124] - [125] (Buss P), referring to Re Riviera Group Pty Ltd (Admins Apptd) (Recs and Mgs Apptd) [2009] NSWSC 585; (2009) 72 ACSR 352, 354 - 357 [8] - [18] (Austin J).
[8] Re Reid Group Pty Ltd (Administrators Appointed): Ex parte Kirman & Bauer [4(1) - (5)], citing Cameron Shaw and Richard Albarran in their Capacity as Joint and Several Administrators of Home Art Building Group Pty Ltd (Administrators Appointed) v Home Art Building Group Pty Ltd (Administrators Appointed) [2016] WASC 274 [18] (Beech J).
I have also had regard to and applied the principles set out at par 26 of the plaintiffs' written outline of submissions filed on 13 September 2021, reproduced below:
(a)the Court's function, discernible from Part 5.3A, is to strike an appropriate balance between the expectation that the administration will be a relatively speedy and summary matter and the requirement that undue speed should not be allowed to prejudice sensible and constructive actions directed to maximising the return for creditors and any return for shareholders;
(b)the categories of reasons for an extension include, relevantly, the size and scope of the business, the time needed for thorough assessment of a proposal for a DOCA and, generally, whether additional time is likely to enhance the return for the creditors;
(c)the cases indicate that courts will exercise their discretion to extend the convening period where there is a 'substantial issue' as to one or more of these categories and no evidence of prejudice to those affected by the statutory moratorium;
(d)the consent of the creditors is a relevant factor in the Court's discretion; and
(e)weight should be given to the considered judgment of the voluntary administrators. (citations omitted.)
In the written outline of submissions filed in support of this application, for completeness, counsel for the plaintiffs noted that there is a question as to whether a further extension can be granted under s 439A(6). However, it was submitted and I accept that that question does not need to be resolved for present purposes because, as in other cases, it is well‑established that the further extension may be granted under s 447A(1): Re Gothard (No 2).[9]
Disposition
[9] Re Gothard (No 2) [2015] FCA 401 [33] (Gleeson J).
Having regard to the reasons which ground the plaintiffs' application for further extension, I am satisfied that they are reasons that fall within recognised categories for relief. I am satisfied that the need for extension is not as a result of the administrators sitting on their hands. I have had regard and given weight to the considered judgment of the plaintiffs as deposed to by Mr Freeman. I am satisfied that the extension of time is intended to facilitate sensible and constructive actions directed to maximising the return for creditors.
I have had regard to the fact that entities within the Pindan group of companies (which includes Pindan Group and Pindan Contracting) are indebted to CBA for a total amount which exceeds $15.2 million. I understand that the indebtedness of Pindan Group to CBA is approximately $14 million, and Pindan Contracting is approximately $300,000.
CBA is on notice of the application to extend the convening period and, I understand, is supportive of the same. In this regard, I refer to par 79 of Mr Freeman's unrestricted affidavit sworn on 10 September 2021, and to the document annexed to his affidavit and marked SJF17.
I note and have particular regard to the matters deposed to in Mr Freeman's second confidential affidavit concerning the potential DOCA proposal and the proposed timetable for the same. I have had regard to those matters set out at pars 28 to 32 of the written outline of submissions, which are confidential in nature.
I have had regard and considered the attitude of creditors to this application.
Mr Freeman deposes to his belief that the Committees of Inspection are almost all supportive of the convening period being further extended,[10] and that no representative had indicated opposition. Further, no opposition has been communicated by any employee creditors to the extension, albeit I accept that they received relatively late notice of this application. I am not aware of any particular prejudice caused by the further extension.
[10] The unrestricted affidavit of SJ Freeman sworn 10 September 2021 par 108, SJF24.
Taking into account all of the evidence before me and the submissions made, I am satisfied that the convening period should be further extended in the terms sought.
The refinance proposal
I now turn to consider the refinance proposed and the relief sought in the interlocutory process at orders 3 (administrators' liability), and order 5 (liquidators' authority to enter refinance agreement).
Proposed order 3 - administrators' liability
Order 3 of the interlocutory process (order 3 in the plaintiffs' minute of proposed orders), concerns the liability of the plaintiffs as administrators of Pindan Group and Pindan Contracting. By proposed order 3, the plaintiffs seek, in effect, that s 443A(1) of the Corporations Act be altered so that their liabilities under the proposed refinance agreements are limited to the extent that those liabilities can be satisfied out of Pindan Group's and/or Pindan Contracting's assets pursuant to the administrators' indemnity under s 443(D).
Applicable principles
Counsel for the plaintiffs submit, and I accept, that it is well‑established that s 447A of the Corporations Act can be used to limit an administrator's personal liability under s 443A. I acknowledge and accept that the focus is on whether the proposed arrangements are in the interests of the creditors and consistent with the objectives of pt 5.3A of the Corporations Act, and whether the creditors are prejudiced or disadvantaged by the orders sought.[11]
Evidence and disposition
[11] Re Mentha in their capacities as joint and several administrators of the Griffin Coal Mining Company Pty Ltd(administrators appointed) [2010] FCA 1469; (2010) 92 ACSR 142, 145 - 147 [28] - [38] (Gilmour J); and In the matter of Nexus Energy Ltd [2014] NSWSC 1041 [14] (Black J).
Mr Freeman deposes that an amount in excess of $15 million is owed to CBA by Pindan Group, Pindan Contracting and other entities in the broader Pindan group of companies.[12] He deposes that the debt is secured by first registered mortgages over a number of properties in Western Australia, owned by Moselle, Pindan Realty, Pindan Group and Pindan Projects (described as the 'Properties' in Mr Freeman's affidavit).[13]
[12] The unrestricted affidavit of SJ Freeman sworn on 10 September 2021 par 74, SJF14.
[13] The unrestricted affidavit of SJ Freeman sworn on 10 September 2021 par 75, SJF15 and SJF16.
He further deposes that shortly after the appointment of the plaintiffs, Oxley took steps to explore refinancing of indebtedness to CBA, including the debt owed by Pindan Capital Two Rocks Pty Ltd, to assist and facilitate a smooth, efficient and orderly realisation of the Properties and otherwise maximise returns to, or contain the costs likely to be incurred by the companies' creditors.[14] At par 77 of Mr Freeman's unrestricted affidavit of 10 September 2021, Mr Freeman notes that he has outlined other factual reasons for Oxley's proposal to refinance the group's indebtedness, as well as the potential benefits of that transaction to creditors, in his confidential affidavit sworn on 10 September 2021. I have had regard to the same in considering this application.
[14] The unrestricted affidavit of SJ Freeman sworn on 10 September 2021 par 77.
Mr Freeman describes the refinance documents at pars 81 - 91 of his unrestricted affidavit sworn on 10 September 2021, being a Facility Agreement with Oxley to borrow the amount of $15.2 million to refinance the debt due to CBA (which would be payable pursuant to a Mortgage Terms Deed and a Deed of Guarantee secured by a mortgage over the Properties); a Specific Security Deed (Two Rocks); a Mortgage Terms Deed; and a Deed of Guarantee and Indemnity.[15]
[15] A copy of the proposed refinance documents are attached to the unrestricted affidavit of SJ Freeman sworn on 10 September 2021 at SJF18, SJF19, SJF20 and SJF21.
As deposed to by Mr Freeman at par 92 of his unrestricted affidavit sworn on 10 September 2021, the purpose of the refinance proposal is to seek to maximise the financial outcome of the realisation of the Properties by ensuring that any sale process of the various Properties is undertaken in a non-enforcement scenario. By undertaking the realisation process outside of an enforcement process, Mr Freeman deposes that, in his view, it is likely to reduce the realisation costs and maximise the financial outcome from the realisation of those Properties.
Mr Freeman further deposes at par 93 that the existing creditor, CBA, has to date declined to appoint receivers and managers pending the finalisation of a proposed refinanced transaction. He says that CBA may have no choice but to appoint receivers and managers, unless the refinance is approved and implemented. Mr Freeman deposes that the plaintiffs, as joint and several administrators of Pindan Group and Pindan Contracting, wish to avoid this scenario given the costs likely to be incurred and the disruption to the external administrations more broadly.
Mr Freeman further deposes at par 94 that the refinance proposal will release existing secured plant and equipment and cash assets of Pindan Group and Pindan Contracting for the benefit of the unsecured creditors of those companies. In the absence of the refinance proposal, these assets would not be available to the unsecured creditors of Pindan Group and Pindan Contracting.
I have weighed in the balance the administrators' opinion as set out at par 95 of Mr Freeman's unrestricted affidavit of 10 September 2021, reproduced below:
95.In the opinion of the Administrators the key terms of the Refinance, as set out above:
(a)are reasonable commercial terms, particularly given the loan terms (such as the 6 month interest free period) are beneficial to creditors;
(b)the Loan is intended to only be short-term to allow the Administrators to realise the Properties on behalf of Oxley and repay the Loan;
(c)it is anticipated that the majority of Properties will be realised and the Loan repaid, prior to the end of the 6 month interest free period. However, that is dependent on the market’s attitude and response to the intended sales process proposed to be run by the Administrators as agents for Oxley; and
(d)permit a reasonable period of time (6 months) to conduct and complete an orderly realisation process, although the Administrators appreciate that their ability to complete that process is dependent on various external factors out of their control, including the responsiveness of the market.
Weighing heavily in the balance are those matters set out at par 96 of Mr Freeman's unrestricted affidavit of 10 September 2021, that is, given the entities in the corporate group which owe money to CBA are in external administration, the administrators have, reasonably, formed the view that the refinance is favourable to the general body of creditors and has the potential to maximise the return to creditors. Mr Freeman says that the alternative to the refinance proposal is for the CBA to appoint controllers over the Properties and/or entities in the corporate group in order to realise its security. Mr Freeman says that whilst this is an option which remains open to CBA, CBA is currently supportive of Oxley's proposal, such that it would not only achieve a commercial benefit for CBA, but also for the general body of creditors.
I have, further, given careful consideration and have weighed in the balance those matters deposed to by Mr Freeman at pars 97 to 99 of his unrestricted affidavit of 10 September 2021, reproduced below:
97.Oxley does not intend to charge any interest for the life of the Refinance, in the event it extends beyond 6 months, the Administrators consider the proposed interest rate, whilst being above standard market interest rates available to corporations, is reasonable given the entities are in external administration and having regard to the prevailing circumstances of the interests tied to the Properties and other related assets.
98.The Administrators have consulted with the Committees of Inspection for Companies on the proposed Refinance. The committees have advised the Administrators that they are supportive of the Refinance and no member of the committees have raised any objection to the Administrators transacting in the manner that they intend.
99.Each of the Facility Agreement, the Security Deed, the Mortgage Terms and the Deed of Guarantee have been professionally reviewed by Squire Patton Boggs, as lawyers for the Administrators. Nothing in the documents or issues or matters arising on their review by lawyers for the Administrators has caused the Administrators not to support their execution.
As to notice to creditors, counsel submits (as set out at par 39 of the plaintiffs' outline of written submissions), that it may be said that the orders should not be made because notice of the application has not been given to creditors of Pindan Group and Pindan Contracting. I accept however that the Committees of Inspection for each entity have been told about the proposed refinance and are supportive of it. Further, by the orders promoted in the plaintiffs' minute, creditors will receive notice of these orders and will have liberty to apply to vary or discharge the same.
Further, I accept that orders of this kind are often made, and it cannot be expected that the administrators would accept personal liability for the significant borrowing under the proposed refinance arrangements.
I have given careful consideration as to whether the proposed arrangements are in the interests of creditors and consistent with the objects of pt 5.3A of the Corporations Act, and whether the creditors are prejudiced or disadvantaged by the orders sought. On the evidence before me, I am satisfied that the proposed arrangements are in the interests of creditors and, on balance, that order 3 of the proposed minute and the interlocutory process ought be made.
Proposed orders 5, 6 and 7 - liquidators' authority to enter into the proposed refinance agreements
Proposed order 4 of the interlocutory process filed on 10 September 2021 is not pressed, so I now turn to consider the liquidators' authority to enter into the proposed refinance agreements. The orders pressed in proposed orders 5 to 7 of the interlocutory process and are now reflected in the minute of proposed orders as proposed orders 4 to 6.
The limitation imposed by s 477(2B) of the Corporations Act is well understood. The plaintiffs, in their capacity as joint and several liquidators of Pindan Projects, Pindan Realty and Moselle, must obtain the approval from the court to enter into the proposed refinance agreements, as the terms of those agreements may end more than three months after they are entered into.
The relevant principles that apply to an application to the court under s 477(2B) are conveniently set out and summarised at par 44 of the plaintiffs' written outline of submissions and I adopt those principles for the purpose of determining this application.
As observed on behalf of the plaintiffs, the relevant principles have been identified in Matthew David Woods and Hayden Leigh White as joint and several liquidators of Little Tiger Pty Ltd (In liq) as trustee for the BPH Trust v Little Tiger Pty Ltd (In liq), Re Red Lancer Pty Ltd (In liq); Ex parte Bumback, and Re Bell Group (In liq); Ex parte Woodings.[16] Relevantly:
(a)the Court is not providing an endorsement of the agreement but merely permission for the liquidator to exercise their own commercial judgment (Woods, [66]; Red Lancer, [44], [45(5)]; Re Bell, [60]);
(b)the grant of approval alone does not exonerate the liquidator from personal liability for entering into the agreement (Woods, [66]; Red Lancer, [45(3)]);
(c)the Court does not simply rubber stamp whatever is put forward by the liquidator but nor does the Court conduct a review de novo of the decision or develop an alternative proposal (Woods, [68]; Red Lancer, [48(1)], [49]);
(d)instead, the Court will generally not interfere unless there can be seen to be some lack of good faith, some error in law or principle or real and substantial grounds for doubting the prudence of the liquidator's conduct (Woods, [68]; Re Lancer, [49]; Re Bell, [57]); and
(e)particular focus is on the impact of the agreement on the duration of the liquidation, whether that is in all the circumstances reasonable and in the interests of the administration of the company (Woods, [67]; Red Lancer, [48(3)], and in ensuring the winding-up proceeds as expeditiously as circumstances allow (R Bell, [56]).
[16] Matthew David Woods and Hayden Leigh White as joint and several liquidators of Little Tiger Pty Ltd (In liq) as trustee for the BPH Trust v Little Tiger Pty Ltd (In liq) [2014] WASC 372 [65] - [68] (Pritchard J); Re Red Lancer Pty Ltd (In liq); Ex parte Bumback [2019] WASC 450 [43] - 49] (Vaughan J) and Re Bell Group (In liq); Ex parte Woodings [2020] WASC 121 [54] - [72] (Hill J).
I accept counsel's submission that while many of the modern authorities concern agreements in which liquidators seek approval to fund legal proceedings for recovery of sums or compromise of disputes (with approval under s 477(2A)), the power is broadly expressed and applies to any transactions the liquidators see fit to enter in the exercise of their commercial judgment. It has been applied, outside of the funding context, for example, to approving leases of property; carrying on a business for a beneficial disposal of it; sale of a business; and variously managing and disposing of a complex insurance business during winding up.[17]
[17] The plaintiffs' outline of submissions par 45, citing Re GA Listing & Maintenance Pty Ltd (1994) 15 ACSR 308 (Young J); Warnes v GDK Financial Solutions Pty Ltd [2006] NSWSC 464; (2006) 233 ALR 181, 194 [58] (Austin J); Matthew David Woods and Hayden Leigh White as joint and several liquidators of Little Tiger Pty Ltd (In liq) as trustee for the BPH Trust v Little Tiger Pty Ltd (In liq) (Pritchard J); and Re HIH Insurance Group [2001] NSWSC 308; (2001) 19 ACLC 1,102 (Hamilton J); Re HIH Overseas Holdings [2001] NSWSC 426 (Barrett J); Re HIH Casualty & General [2001] NSWSC 1186 (Barrett J).
I accept counsel's submission that it is not necessary for the liquidators to have given notice of an application such as this,[18] but I also note that the Committee of Inspection have, in fact, been consulted about the proposed refinance and are supportive.[19]
Liquidators consider refinance to be in the best interests of creditors
[18] Jones, Saker, Weaver and Stewart (Liquidators), in the matter of Great Southern Limited (in liq) (Receivers and Managers Appointed) [2012] FCA 1072, [49] - [50] (Gilmour J); Matthew David Woods and Hayden Leigh White as joint and several liquidators of Little Tiger Pty Ltd (In liq) as trustee for the BPH Trust v Little Tiger Pty Ltd (In liq) [66] (Pritchard J).
[19] The unrestricted affidavit of SJ Freeman sworn on 10 September 2021 par 108, SJF24; and the second confidential affidavit of SJ Freeman sworn 10 September 2021, SJF6 (page 10).
The liquidators say that they have exercised their commercial judgment and determined that the proposed refinancing is in the best interests of the creditors. I have had regard to the liquidators' reasons, which are deposed to by Mr Freeman at par 101 and par 102 of his unrestricted affidavit of 10 September 2021, and to the other potential benefits of the proposed transactions deposed to by Mr Freeman in his confidential affidavit of 10 September 2021.
Counsel submitted that there was no reason for the court to impugn the liquidators' judgment, as the proposed refinance does not put the creditors of Pindan Projects, Pindan Realty or Moselle in any worse position: the new mortgages in favour of Oxley will largely be in identical terms to the current mortgages in favour of CBA.[20]
[20] ts 66, 76 - 77 (13 September 2021); see also the plaintiffs' written outline of submissions par 50 and the unrestricted affidavit of M Zaki sworn 13 September 2021.
The liquidators also identified the benefit in removing the potential for increased delay and expense if CBA were to appoint receivers.[21] I accept that this is a feature of the transactions which is consistent with pursuing an efficient winding up.
[21] The unrestricted affidavit of SJ Freeman sworn on 10 September 2021 par 101(a) - (c); see also par 93.
Counsel further submitted as follows:
52.Further, under the Facility Agreement:
(a)Pindan Group will be responsible for realising the Properties, and Oxley will fund the reasonable costs and expenses of realising the Properties (such that those costs and expenses will not need to come out of the pool of assets available to the creditors of the Liquidation Entities) (cl 6(b)(ii)); and
(b) Pindan Group will be afforded a period of 6 months to make those sales (see cl 6(b)(i)), which allows for an orderly sale rather than an immediate sale as a mortgagee in possession (by receiver) would be entitled to undertake; and
(c) subject to Pindan Group taking reasonable steps to sell the Properties, Oxley will not enforce the new mortgages for six months after the date of the Facility Agreement (cl 6(c)).
53. Further, the refinancing is expected to lead to potential DOCA proposals from Oxley, which, if approved and effectuated, will result in $900,000 being paid to the entities in the Pindan group of companies in liquidation.
54. As noted above, under the Facility Agreement (Schedule 4), part of the purpose of the Commitment of $15,200,000 includes to meet, or assist in meeting, the costs of the ongoing voluntary administration process. This does not detract from the existence of the benefits identified by the Liquidators.
I have weighed all of the above in the balance.
Timing of the liquidations
I have weighed in the balance the potential impact to the timing of the liquidations. On balance, having regard to the nature of the proposed transaction, the nature and scale of this external administration, and the matters deposed to by Mr Freeman in his confidential affidavit, I am satisfied that the liquidators' contention that the refinancing documentation will not cause undue delay to the liquidations is sound.
Deed of Guarantee
I have had regard to the terms and effect of the proposed Deed of Guarantee. I note that each of Pindan Realty, Pindan Projects and Moselle will provide guarantees and indemnities on the terms set out in the proposed Deed of Guarantee.
At par 91 of his unrestricted affidavit of 10 September 2021, Mr Freeman describes the purpose of the proposed Deed of Guarantee. That is, to the extent that there is a shortfall in the realisation of the Properties of one entity and another entity's recovery is greater than the total indebtedness to Oxley such that the entity receives a benefit, to ensure that Oxley may rely on the Deed of Guarantee to recover the shortfall to satisfy the balance of the loan.
Counsel submit that these guarantees and indemnities are not problematic. Each of the liquidation entities have already given guarantees and indemnities to CBA under the existing facility arrangements in similar terms.[22] Counsel contend that the proposed Deed of Guarantee should not increase the exposure of each of the liquidation entities from their present position.
[22] The unrestricted affidavit of M Zaki sworn 13 September 2021.
It is further submitted that the commercial judgment of the liquidators has been that, as part of the overall refinancing package, this is in the best interests of creditors overall. It is against the overall terms of the potential proposal from Oxley that the creditors of the liquidation entities will potentially benefit.
Disposition
I note that the court is not granting an endorsement of the proposed Deed of Guarantee or any of the proposed refinance agreements, but merely permission for the plaintiffs, in their capacity as liquidators, to exercise their own commercial judgment.
I am cognisant that the liquidators have exercised their commercial judgment and determined that the proposed refinancing of CBA's debt is in the best interest of the creditors of Pindan Projects, Pindan Realty and Moselle. On balance, I am satisfied that to grant approval is appropriate, having regard to all of the matters deposed to and summarised above, particularly having regard to the matters deposed to at par 101 and par 102 of Mr Freeman's unrestricted affidavit of 10 September 2021.
On balance, I find it appropriate to grant the approval sought and to make orders in the terms now proposed in orders 4 to 6 of the plaintiffs' minute of proposed orders. I note for the sake of completeness that orders 8 to 12 of the interlocutory process filed on 10 September 2021 are not presently pressed.
Finally, I note that the court's attention has been drawn to the issue of the plaintiffs' independence raised by ARITA (the Australian Restructuring Insolvency and Turnaround Association).
I have had regard to the matters deposed to by Mr Freeman in his unrestricted affidavit sworn on 10 September 2021 at pars 104 to 106, and I have also had regard to the matters deposed to in the confidential affidavit of Mr Zaki sworn on 12 September 2021.
It was foreshadowed that an application will be made to the court on the issue of independence within 14 days. Another law firm had been briefed to make that application on behalf of the plaintiffs. I make no findings of fact, nor do I make any observation as to the merits or otherwise of that foreshadowed application nor the concerns raised by ARITA. For the purpose of this application, I simply state that I am aware of the issue, and with careful consideration I am satisfied that the issue does not warrant delaying the determination of this application. Further, I will make ancillary orders which provide for service of these orders on affected parties who will have liberty to apply.
Orders
For these reasons, I will make orders in the following terms:
Extension of convening period for entities in administration
1.Pursuant to s 439A(6) of the Corporations Act 2001 (Cth) (Act), the convening period, as defined by s 439A(5) of the Act, with respect to Pindan Group Pty Ltd ACN 611 922 386 (Administrators Appointed) (Pindan Group) and Pindan Contracting Pty Ltd ACN 120 076 360 (Administrators Appointed) (together the Companies), be extended up to and including 28 October 2021.
2.Pursuant to s 447A(1) of the Act, Pt 5.3A of the Act is to operate in relation to the Companies as if the meeting of creditors of the Companies, required by s 439A of the Act, may be convened and held at any time during the period as extended under Order 1 above, and the period of five (5) business days thereafter, notwithstanding the provisions of s 439A(2) of the Act.
Administrators' liability under refinance documentation
3.Pursuant to s 447A(1) of the Act, pt 5.3A of the Act is to operate in relation to the plaintiffs as if s 443A(1) of the Act provides that:
(a)the liabilities of the plaintiffs (in their capacity as joint and several administrators of the Companies) (the Administrators) incurred under agreements in the same or substantively the same form as:
(i)the 'Facility Agreement' (a true copy of which is Attachment SJF18 to the affidavit of Samuel John Freeman sworn 10 September 2021);
(ii)the 'Deed of Guarantee and Indemnity' (a true copy of which is Attachment SJF21 to the affidavit of Samuel John Freeman sworn 10 September 2021); and
(iii)the 'Specific Security Deed (Two Rocks)' (a true copy of which is Attachment SJF19 to the affidavit of Samuel John Freeman sworn 10 September 2021), (the Refinance Agreement),
including monies borrowed, interest incurred in respect of monies borrowed and borrowing costs, are in the nature of debts incurred by the Administrators in the performance and exercise of their functions as joint and several administrators of the Companies; and
(b)notwithstanding paragraph (a), if the property and assets of the Companies (where relevant) are insufficient to satisfy the debts and liabilities incurred by the Administrators arising out of or in connecting with the Refinance Agreement, including in relation to any monies advanced under the Refinance Agreement, whether before the making of this order or after, such that the indemnity that exists under s 443D of the Act is insufficient to meet any amount for which the Administrators may be liable, then the Administrators will not be personally liable to repay such debts or satisfy such liabilities to the extent of that insufficiency.
Approval to liquidators to enter into refinance agreements
4.Pursuant to s 477(2B) the Act, the plaintiffs (in their capacity as joint and several liquidators of Pindan Projects WA Pty Ltd (in liquidation), Pindan Realty Pty Ltd (in liquidation) and Moselle Holdings Pty Ltd (in liquidation) (Liquidation Entities)) (Liquidators) are authorised to enter into the proposed Facility Agreement (in the same or substantially the same form) for and on behalf of:
(a)Pindan Projects;
(b)Pindan Realty; and
(c)Moselle Holdings.
5. Pursuant to s 477(2B) of the Act, the liquidators are authorised to enter into the proposed Mortgage Terms Deed (in the same or substantially the same form) for and on behalf of:
(a)Pindan Projects;
(b)Pindan Realty; and
(c)Moselle Holdings.
6.Pursuant to s 477(2B) of the Act, the liquidators are authorised to enter into the proposed Deed of Guarantee and Indemnity (in the same or substantially the same form) for and on behalf of:
(a)Pindan Projects;
(b)Pindan Realty; and
(c)Moselle Holdings.
Notification of orders
7.Within two (2) business days after the making of the orders, the Administrators is to provide notice of the orders to:
(a)the creditors of the Companies and the Liquidation Entities (including all persons claiming to be creditors of the Companies and the Liquidation Entities) in the following manner:
(i) where the Administrators:
(ii)have an email address for a creditor, by sending a Notice by email to each such creditor;
(iii)do not have an email address for a creditor (or have received notification of non-delivery of a notice sent in reliance on sub-paragraph (ii) above) but have a postal address for the creditor, by sending the Notice by posting a copy of it to the postal address for each such creditor; and
(iv)do not have an email address or a postal address for a creditor, by sending or communicating the Notice to the creditor in any other way provided for by the Act or the Insolvency Practice Rules 2016.
Confidentiality
8.Pursuant to r 11.3(7) of the Supreme Court (Corporations) (WA) Rules 2004 (WA) and O 67B r 5 of the Rules of the Supreme Court 1971 (WA):
(a)the confidential affidavit of Samuel John Freeman sworn 10 September 2021;
(b)the confidential affidavit of Masiullah Zaki sworn 12 September 2021;
(c)the plaintiffs' submissions for hearing filed on 13 September 2021; and
(d)the transcript of the hearing of the plaintiffs' application on 13 September 2021, be treated as confidential and are not to be published or disclosed except pursuant to an order of the court.
Liberty to apply to affected parties
9.Any person who can demonstrate sufficient interest to modify or discharge these orders and the Australian Securities and Investments Commission have liberty to apply to modify or discharge these orders upon notice of one (1) business day to the plaintiffs and to the court.
Liberty to apply to the plaintiffs
10.The plaintiffs have liberty to apply in these proceedings and on the remainder of the interlocutory application filed 10 September 2021, including (without limitation) in relation to:
(a)any further extension of the convening period; and
(b)any other matter arising generally in the administration of the Companies or any of the group companies in liquidation.
Costs
11.The plaintiffs' costs and expenses of this application be paid from the assets of the Companies and the Liquidation Entities.
Schedule A
IN THE SUPREME COURT OF WESTERN AUSTRALIA
COMMERCIAL AND MANAGED CASES LIST (CORPORATIONS LIST)
COR 102 OF 2021
IN THE MATTER OF PINDAN GROUP PTY LTD (ADMINISTRATORS APPOINTED) ACN 611 922 386, PINDAN ASSET MANAGEMENT PTY LTD (ADMINISTRATORS APPOINTED) ACN 086 747 944 AND PINDAN CONTRACTING PTY LTD (ADMINISTRATORS APPOINTED) ACN 120 076 360
BETWEEN
SAMUEL JOHN FREEMAN, COLBY RHYS O’BRIEN AND VINCENT ANTHONY SMITH AS JOINT AND SEVERAL ADMINISTRATORS OF PINDAN GROUP PTY LTD (ADMINISTRATORS APPOINTED) ACN 611 922 386, PINDAN ASSET MANAGEMENT PTY LTD (ADMINISTRATORS APPOINTED) ACN 086 747 944 AND PINDAN CONTRACTING PTY LTD (ADMINISTRATORS APPOINTED) ACN 120 076 360 AND JOINT AND SEVERAL LIQUIDATORS OF PINDAN PROJECTS WA PTY LTD (IN LIQUIDATION) ACN 611 922 475, PINDAN REALTY PTY LTD (IN LIQUIDATION) ACN 009 372 847 AND MOSELLE HOLDINGS PTY LTD (IN LIQUIDATION) ACN 009 338 318
Plaintiffs
INTERLOCUTORY PROCESS
Case Manager: The Hon Justice Strk
Date of Document: 10 September 2021
Filed on Behalf of: The Plaintiff
Date of Filing: 10 September 2021
Prepared By:
Masiullah Zaki
Squire Patton Boggs Telephone: 02 8248 7888
Level 17, 88 Phillip Street Fax:
SYDNEY NSW 2000 Reference: Pindan
____________________________
A.DETAILS OF APPLICATION
This application is made under ss 439A, 447A(1) and 477(2B) of the Corporations Act 2001 (Cth) (Act) and section 90-15 of Schedule 2 - Insolvency Practice Schedule (Corporations) (Schedule) of the Act.
On the grounds stated in the supporting open and confidential affidavits of Samuel John Freeman sworn 10 September 2021, and evidence earlier filed in these proceedings, the plaintiffs apply for the following relief:
Application for extension of convening period
Pursuant to s 439A(6) of the Act, the convening period, as defined by s 439A(5) of the Act, with respect to Pindan Group Pty Ltd ACN 611 922 386 (Administrators Appointed) (Pindan Group) and Pindan Contracting Pty Ltd ACN 120 076 360 (Administrators Appointed) (together the Companies), be extended up to and including 28 October 2021.
Pursuant to s 447A(1) of the Act, Pt 5.3A of the Act is to operate in relation to the Companies as if the meeting of creditors of the Companies, required by s 439A of the Act, may be convened and held at any time during the period as extended under order 1 above, and the period of five (5) business days thereafter, notwithstanding the provisions of s 439A(2) of the Act.
Application for approval to enter into Refinance Facility
Administrators' Liability
Pursuant to s 447A(1) of the Act, Part 5.3A of the Act is to operate in relation to the Plaintiffs as if s 443A(1) of the Act provides that:
a.the liabilities of the Plaintiffs (in their capacity as joint and several administrators of the Companies) (the Administrators) incurred under:
i.the "Facility Agreement" (a true copy of which is Attachment SJF18 to the affidavit of Samuel John Freeman sworn 10 September 2021);
ii.the "Mortgage Terms Deed" (a true copy of which is Attachment SJF20 to the affidavit of Samuel John Freeman sworn 10 September 2021);
iii.the "Deed of Guarantee and Indemnity" (a true copy of which is Attachment SJF21 to the affidavit of Samuel John Freeman sworn 10 September 2021); and
iv.the "Specific Security Deed (Two Rocks)" (a true copy of which is Attachment SJF19 to the affidavit of Samuel John Freeman sworn 10 September 2021),
(the Refinance Agreement) including monies borrowed, interest incurred in respect of monies borrowed and borrowing costs, are in the nature of debts incurred by the Administrators in the performance and exercise of their functions as joint and several administrators of the Companies; and
b.notwithstanding paragraph (a), if the property and assets of the Companies (where relevant) are insufficient to satisfy the debts and liabilities incurred by the Administrators arising out of or in connecting with the Refinance Agreement, including in relation to any monies advanced under the Refinance Agreement, whether before the making of this order or after, such that the indemnity that exists under s 443D of the Act is insufficient to meet any amount for which the Administrators may be liable, then the Administrators will not be personally liable to repay such debts or satisfy such liabilities to the extent of that insufficiency.
Liquidators' Liability
Pursuant to section 90-15 of the Schedule:
a.the liabilities of the Plaintiffs (in their capacity as joint and several liquidators of Pindan Projects (WA) Pty Ltd (in liquidation) ACN 611 922 475 (Pindan Projects), Pindan Realty Pty Ltd (in liquidation) ACN 009 372 847 (Pindan Realty) and Moselle Holdings Pty Ltd (in liquidation) ACN 009 338 318 (Moselle Holdings) (Liquidators) incurred under:
i.the "Facility Agreement" (a true copy of which is Attachment SJF18 to the affidavit of Samuel John Freeman sworn 10 September 2021);
ii.the "Mortgage Terms Deed" (a true copy of which is Attachment SJF20 to the affidavit of Samuel John Freeman sworn 10 September 2021);
iii.the "Deed of Guarantee and Indemnity" (a true copy of which is Attachment SJF21 to the affidavit of Samuel John Freeman sworn 10 September 2021); and
the "Specific Security Deed (Two Rocks)" (a true copy of which is Attachment SJF19 to the affidavit of Samuel John Freeman sworn 10 September 2021),
including monies borrowed, interest incurred in respect of monies borrowed and borrowing costs, are in the nature of debts incurred by the Administrators in the performance and exercise of their functions as joint and several Liquidators; and
b.notwithstanding paragraph (a), if the property and assets of the Pindan Projects, Pindan Realty and Moselle Holdings (where relevant) are insufficient to satisfy the debts and liabilities incurred by the Liquidators arising out of or in connecting with the Refinance Agreement, including in relation to any monies advanced under the Refinance Agreement, whether before the making of this order or after, such that the indemnity that exists under the Act is insufficient to meet any amount for which the Liquidators may be liable, then the Liquidators will not be personally liable to repay such debts or satisfy such liabilities to the extent of that insufficiency.
Liquidators' Authority to enter into Refinance Agreement
Pursuant to s 477(2B) the Act, the Plaintiffs (in their capacity as joint and several Liquidators) are authorised to enter into the proposed Facility Agreement for and on behalf of:
a.Pindan Projects;
b.Pindan Realty; and
c.Moselle Holdings.
Pursuant to s 477(2B) of the Act, the Liquidators are authorised to enter into the proposed Mortgage Terms Deed for and on behalf of:
a.Pindan Projects;
b.Pindan Realty; and
c.Moselle Holdings.
Pursuant to s 477(2B) of the Act, the Liquidators are authorised to enter into the proposed Deed of Guarantee and Indemnity for and on behalf of:
a.Pindan Projects;
b.Pindan Realty; and
c.Moselle Holdings.
Pursuant to s 477(2B) of the Act, the Liquidators are authorised to enter into the proposed Specific Security Deed (Two Rocks) for and on behalf of:
a.Pindan Projects;
b.Pindan Realty; and
c.Moselle Holdings.
Declaration to enter into Refinance Facility
A declaration pursuant to section 90-15 of the Schedule that the Plaintiffs are justified in entering into the Facility Agreement for and on behalf of:
a.Pindan Group;
b.Pindan Projects;
c.Pindan Realty; and
d.Moselle Holdings.
A declaration pursuant to section 90-15 of the Schedule that the Plaintiffs are justified in entering into the Mortgage Terms Deed for and on behalf of:
a.Pindan Group;
b.Pindan Projects;
c.Pindan Realty; and
d.Moselle Holdings.
A declaration pursuant to section 90-15 of the Schedule that the Plaintiffs are justified in entering into the Deed of Guarantee and Indemnity for and on behalf of:
a.Pindan Group;
b.Pindan Projects;
c.Pindan Realty; and
d.Moselle Holdings.
A declaration pursuant to section 90-15 of the Schedule that the Plaintiffs are justified in entering into the Specific Security Deed (Two Rocks) for and on behalf of:
a.Pindan Group;
b.Pindan Projects;
c.Pindan Realty; and
d.Moselle Holdings.
Notification of Orders
Within two (2) business days after the making of the orders, the Administrators is to provide notice of the orders to:
a.the creditors of the Companies (including all persons claiming to be creditors of the Companies) in the following manner:
i.where the Administrators:
A.have an email address for a creditor, by sending a Notice by email to each such creditor;
B.do not have an email address for a creditor (or have received notification of non-delivery of a notice sent in reliance on sub-paragraph (A) above) but have a postal address for the creditor, by sending the Notice by posting a copy of it to the postal address for each such creditor; and
C.do not have an email address or a postal address for a creditor, by sending or communicating the Notice to the creditor in any other way provided for by the Act or the Insolvency Practice Rules 2016;
Confidentiality
Pursuant to rule 11.3(7) of the Supreme Court (Corporations) Rules 2004 (WA) and 67B(5) of the Rules of the Supreme Court 1971 (WA) that the confidential of Samuel John Freemen dated 10 September 2021 and any submissions filed by the plaintiffs in these proceedings be treated as confidential and not to be published or disclosed except pursuant to an order of the Court, on the grounds that the order is necessary to prevent prejudice to the proper administration of justice and it is otherwise necessary in the public interest for the order to be made and that public interest significantly outweighs the public interest in open justice.
Liberty to Apply
Liberty to apply to be granted to any person, including any creditor of the Companies (including a person claiming to be a creditor of the Companies) and ASIC, to make any application as he, she or it may be advised to vary or discharge these orders on three (3) business days' notice to the Applicants and to the Court.
Costs
An order that the Applicants' costs of an incidental to this interlocutory process be costs and expenses in the administration of the Companies and be paid out of the assets of the Companies.
Such further or other orders as the court deems fit.
Date:
.............................................................
Signature of plaintiffs' legal practitioner
This application will be heard by ........................................................................... at [address of Court] at ...................*a.m./*p.m. on ................... .
B. NOTICE TO RESPONDENT(S) (IF ANY)
TO: [name and address of each respondent to this interlocutory process (if any). If applicable, also state the respondent's address for service.]
If you or your legal practitioner do not appear before the Court at the time shown above, the application may be dealt with, and an order made, in your absence.
Before appearing before the Court, you must, except if you have already done so or you are the plaintiff in this proceeding, file a notice of appearance, in the prescribed form, in the Registry and serve a copy of it on the plaintiff in the originating process.
Note:Unless the Court otherwise orders, a defendant that is a corporation must be represented at a hearing by a legal practitioner. It may be represented at a hearing by a director of the corporation only if the Court grants leave.
C. FILING
Date of filing:
.........................................
Principal Registrar
This interlocutory process is filed by Squire Patton Boggs for the plaintiff.
D. SERVICE
The applicant's address for service is Squire Patton Boggs, Level 17, 88 Phillip Street, Sydney NSW 2000
It is not intended to serve a copy of this interlocutory process on any person.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MH
Associate to Justice Strk
18 OCTOBER 2021
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