JUDGE:	Gardiner AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	22 August 2022
DATE OF JUDGMENT:	31 August 2022
CASE MAY BE CITED AS:	Re Sneakerboy Pty Ltd
MEDIUM NEUTRAL CITATION:	[2022] VSC 502

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CORPORATIONS – External administration – Application for further extension of convening period of companies in administration pursuant to s 447A of the Corporations Act 2001 (Cth) (’Act’) – Administrator sought further extension to enable conclusion of the sale of the companies’ business and assets and to conduct further investigations required to be undertaken under the provisions of Pt 5.3A of the Act – Further extension for a relatively short period – Orders made for further extension of convening period together with ancillary orders.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J Kohn	MST Lawyers

HIS HONOUR:

On 2 July 2022, the sixth plaintiff, Mr Stephen Robert Dixon, was appointed administrator of several companies comprising the Sneakerboy Group. Those companies are:

(a) Sneakerboy Pty Ltd (ACN 603 960 961) (Administrator Appointed);

(b) Sneakerboy Retail Pty Ltd (ACN 604 708 189) (Administrator Appointed);

(c) Sneakerboy IP Pty Ltd (ACN 604 708 090) (Administrator Appointed);

(d) Luxury Retail Group Pty Ltd (ACN 604 195 717) (Administrator Appointed); and

(e) Luxury Retail Treasury Pty Ltd (ACN 614 712 766) (Administrator Appointed) (collectively the ‘Companies’).

The Companies carry on business as a retailer of casual footwear (the ‘business’).

On 27 July 2022, Mr Dixon made application by originating process for an extension of the convening periods in respect of each of the Companies until 23 August 2022 for the reasons set out in his affidavit sworn on 27 July 2022. The extensions were sought, primarily, to enable Mr Dixon to conclude the sale of the Companies’ business and assets and conduct further investigations, which it is his responsibility to undertake as administrator.

On 28 July 2022, I made orders under s 439A(6) of the Corporations Act 2001 (Cth) (the ‘Act’), extending the convening periods for the second meetings of creditors of the Companies up to, and including, 23 August 2022. I also made what has become known as a “Daisytek order”[1] under s 447A of the Act, so that the second meetings of creditors of the Companies, required by s 439A(1) in respect of each of the administrations of the Companies, could be held at any time during, or within five business days, after the end of the convening periods, as extended by my first order, notwithstanding the operation of s 439A(2) of the Act.
[1]See Re Daisytek Australia Pty Ltd (2003) 45 ACSR 446.

I also made orders granting liberty to apply to the plaintiffs to apply to Court for any purpose connected with the administrations of the…

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.

Continue reading Re Sneakerboy Pty Ltd

Details

AGLC: Re Sneakerboy Pty Ltd [2022] VSC 502
Case: [2022] VSC 502
Decision Date: 31 August 2022

CaseChat Overview and Summary

The case of Re Sneakerboy Pty Ltd involved an application by the appointed administrators to extend the convening period under section 447A of the Corporations Act 2001. The administrators sought this extension to facilitate the sale of the companies' business and assets and to allow for additional investigations mandated under Part 5.3A of the Act. The application was heard by the Federal Court, where the administrators presented their case for a further extension.

The central legal issues before the court were whether the reasons provided by the administrators for the extension were sufficient and whether the extension should be granted in the interest of the creditors and the companies in administration. The administrators argued that the extension was necessary to complete the sale of the companies' business and assets and to ensure a proper investigation into the companies' affairs. The court needed to balance the potential benefits of the extension against the interests of the creditors and the general principle of expediency in external administration.

The court found that the administrators had provided adequate reasons for the extension, as the sale process was nearing completion and the additional investigations were essential to ensure transparency and to protect the interests of the creditors. The court was satisfied that the extension would not unduly prejudice the creditors and that it was in the best interests of the companies and their stakeholders to allow the administrators additional time to finalise the sale and investigations. Consequently, the court granted the application for a further extension of the convening period, along with necessary ancillary orders to support the administration process.

The final orders included an extension of the convening period for a specified short duration, allowing the administrators to complete the sale of the companies' assets and conduct the required investigations. The court also made orders to ensure that the extension would not negatively impact the creditors and that the administrators would keep them informed throughout the process.

Orders