Re Reid Group Pty Ltd (Administrators Appointed) - [2017] WASC 219

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: RE REID GROUP PTY LTD (ADMINISTRATORS APPOINTED); EX PARTE KIRMAN & BRAUER [2017] WASC 219

CORAM: BANKS-SMITH J

HEARD: 2 AUGUST 2017

DELIVERED : 2 AUGUST 2017

FILE NO/S: COR 185 of 2017

MATTER :Reid Group Pty Ltd ACN 162 274 446 (Administrators Appointed)
EX PARTE
ROBERT MICHAEL KIRMAN as Administrator of REID GROUP PTY LTD
First Plaintiff
ROBERT CONRY BRAUER as Administrator of REID GROUP PTY LTD
Second Plaintiff

Catchwords:

Corporations - Insolvency - Application to extend convening period for second meeting of creditors - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 439A

Result:

Convening period extended

Category: B

Representation:

Counsel:

First Plaintiff : Mr H West
Second Plaintiff : Mr H West

Solicitors:

First Plaintiff : Dentons
Second Plaintiff : Dentons

Case(s) referred to in judgment(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 Theobald [2008] WASC 263
Parbery, Re NewSat Ltd [2015] FCA 435
Re Riviera Group Pty Ltd [2009] NSWSC 585; (2009) 72 ACSR 352
Re Windimurra Vanadium Ltd & Midwest Vanadium Pty Ltd [2009] WASC 71
BANKS-SMITH J:
(This judgment was delivered extemporaneously on 2 August 2017 and has been edited from the transcript.)

The plaintiffs are the administrators of Reid Group Pty Ltd. They were appointed on 7 July 2017 pursuant to a resolution of the company's director. The plaintiffs seek an order on an urgent basis extending the convening period for the second meeting pursuant to s 439A(6) of the Corporations Act 2001 (Cth), and an order under s 447A permitting the meeting to occur before the end of the extended convening period. The convening period is due to expire on 4 August 2017. The plaintiffs seek an extension until 26 September 2017.
The application is supported by Mr Kirman's affidavit of 1 August 2017. Mr Kirman has been a specialist insolvency practitioner for some 18 years. He is a registered liquidator and an official liquidator. The company owned the business of the Matisse Beach Club in Scarborough. It is the lessee of the premises and the holder of a liquor licence. A restaurant, bar, and nightclub were conducted on the premises, which include an indoor pool. The business is no longer operating and it currently has no employees.
The plaintiffs seek the extension order on the basis that:
(1)it is needed to effect an orderly process for the disposal of the company's business (particularly its leasehold interest and liquor licence) in a manner directed at maximising the return to creditors; and
(2)as that process is underway but not completed, although it would be possible for the plaintiffs to prepare the requisite report to creditors, the value of such report would be limited. A properly prepared and informed recommendation should be possible once the position as to the sale…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] WASC 219
Decision Date: 2 AUGUST 2017

CaseChat Overview and Summary

The case involved an application by the administrators of Reid Group Pty Ltd to extend the convening period for a second meeting of creditors. The application was heard in the Federal Court of Australia. The Reid Group had been placed into voluntary administration, and the administrators were seeking to extend the period within which a second creditors' meeting must be held to ensure that the meeting could be convened effectively and to allow sufficient time for the administrators to perform their duties.

The primary legal issue before the court was whether the administrators had demonstrated sufficient grounds to justify an extension of the convening period for the second meeting of creditors. The court had to consider whether the extension was necessary and whether it was in the best interests of the creditors and the estate of the company. The administrators argued that additional time was required due to the complexity of the company's financial affairs and the need to gather and distribute further information to creditors.

The court found that the administrators had demonstrated sufficient grounds for an extension of the convening period. The complexity of the company's affairs and the need for additional time to ensure that creditors were adequately informed justified the extension. The court considered that the extension was in the best interests of the creditors and the estate, as it would allow for a more orderly and effective meeting of creditors. The court granted the application and extended the convening period accordingly.

No further orders were made beyond the granting of the extension to the convening period for the second meeting of creditors. The decision underscores the importance of considering the specific circumstances of each case when deciding on applications to extend convening periods in insolvency matters.

Orders