Re Refap Pty Ltd (Admin Apptd)

[2024] WASC 205

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   RE REFAP PTY LTD (ADMIN APPTD); EX PARTE ROBERT MICHAEL KIRMAN AND LINDA METHVEN SMITH as joint and several administrators of REFAP PTY LTD [2024] WASC 205

CORAM:   HILL J

HEARD:   17 MAY 2024

DELIVERED          :   17 MAY 2024

PUBLISHED           :   6 JUNE 2024

FILE NO/S:   COR 35 of 2024

MATTER:   IN THE MATTER OF REFAP PTY LTD (ADMIN APPTD)

EX PARTE

ROBERT MICHAEL KIRMAN AND LINDA METHVEN SMITH as joint and several administrators of REFAP PTY LTD

First Plaintiff

ROBERT MICHAEL KIRMAN AND LINDA METHVEN SMITH as joint and several administrators of REFAP INDUSTRIAL SERVICES

Second Plaintiff

ROBERT MICHAEL KIRMAN AND LINDA METHVEN SMITH as joint and several administrators of BUSHLOLLY ENTERPRISES PTY LTD

Third Plaintiff

Catchwords:

Corporations - Insolvency - External administration - Extension granted to extend convening period for second creditors' meeting - Application to seek further extension - Whether modification in the interests of creditors as a whole - Whether interests of any persons prejudiced by modification are protected by terms of orders - Turns on own facts

Legislation:

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

Result:

Application granted

Category:    B

Representation:

Counsel:

First Plaintiff	:	A McDonald
Second Plaintiff	:	A McDonald
Third Plaintiff	:	A McDonald

Solicitors:

First Plaintiff	:	Pragma Lawyers
Second Plaintiff	:	Pragma Lawyers
Third Plaintiff	:	Pragma Lawyers

Cases referred to in decision:

Re Daisytek Australia Pty Ltd (Administrators Appointed) [2003] FCA 768

Re Refap Pty Ltd; Ex parte Kirman [2024] WASC 93

HILL J:

(This judgment was delivered extemporaneously and has been edited from the transcript.)

1. On 8 March 2024, the plaintiffs filed an originating process seeking orders under s 439A(6) of the Corporations Act2001 (Cth) (Act) for the extension of the convening period with respect to the Refap group of companies (Refap Group Companies). On 15 March 2024, orders were made extending the convening period up to and including 20 May 2024.

2. On 15 May 2024, the plaintiffs requested the matter be relisted as a matter of urgency to seek a further extension of the convening period until 21 June 2024.  The plaintiffs also seek what is termed a Daisytek order pursuant to s 447A(1) of the Act, that the meetings of creditors of each of the group companies required by s 439A of the Act may be held at any time during the extended period and the period of five business days thereafter, notwithstanding the provisions of s 439A(2) of the Act.[1]

   [1] Re Daisytek Australia Pty Ltd (Administrators Appointed) [2003] FCA 768.

3. In support of the application, the plaintiffs filed two affidavits of Robert Michael Kirman (one open, one confidential) on 15 May 2024.

Factual background

1. Much of the relevant background to the application is set out in my original reasons for decision which granted the initial extension.[2]  Those reasons must be read with these reasons. 

   [2] Re Refap Pty Ltd; Ex parte Kirman [2024] WASC 93.

2. The evidence of Mr Kirman is that some of the business and associated assets of the Refap Group Companies have been sold, as was contemplated at the initial hearing, although not all assets of the Refap Group Companies have yet been sold.  Mr Kirman estimates that a further period of four weeks (until 21 June 2024) is required to enable either a deed of company arrangement (DOCA) to be proposed by one of the directors or to enable finalisation of the views of the administrators, as well as to review all relevant matters that are still outstanding.

Disposition

1. On the basis of the evidence before the court, for the following reasons, I am satisfied it is appropriate to grant a further extension of the convening period.

2. First, the initial extension of the convening period was granted to facilitate the sale of the business (or the associated assets) of the Refap Group Companies, or to enable a DOCA to be proposed.  These processes have not yet been completed, although the administrators have a basis to believe a DOCA will be proposed, as set out in the affidavits filed in support of the application.

3. Second, I am satisfied that there remains some complexity to the administration of the Refap Group Companies, which the administrators are still in the process of resolving.

4. Third, no creditor has raised any opposition to the extension, nor has anyone appeared before me today to oppose the orders sought. 

5. Fourth, Mr Kirman's opinion is that an extension is required until 21 June 2024.  On the basis of the evidence before me, I am satisfied that there is a reasonable basis for this estimate.

6. Finally, I am satisfied on all of the evidence that the potential benefit of the extension will outweigh any prejudice to the creditors and is in the best interest of creditors of the Refap Group Companies as a whole.  In particular, I note the evidence of Mr Kirman that, if a DOCA is proposed, there is some realistic prospect that all creditors of the Refap Group Companies will be paid out in full and there will be a return to members, which is a different position than that which would apply in a liquidation.

Conclusion

1. Given these matters, I am satisfied that orders should be made in terms of the plaintiffs' minute of proposed orders, subject to one amendment.  These orders include the provision that a Daisytek order ought to be made by the court.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

JN

Associate to the Honourable Justice Hill

6 JUNE 2024