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Re Total Essential Services Group Pty Ltd

Re Total Essential Services Group Pty Ltd

Case [2024] VSC 331 7 June 2024

Insolvency Law

Voluntary Administration

Deed of Company Arrangement

Corporate Law & Governance

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2024 02799

IN THE MATTER of TOTAL ESSENTIAL SERVICES GROUP PTY LTD (ADMINISTRATOR APPOINTED) (ACN 099 386 393)

BETWEEN:

STEPHEN ROBERT DIXON as Voluntary Administrator of TOTAL ESSENTIAL SERVICES GROUP PTY LTD (ADMINISTRATOR APPOINTED) (ACN 099 386 393)

Plaintiff

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JUDGE:	Gardiner AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	7 June 2024
DATE OF JUDGMENT:	7 June 2024 (ex tempore, revised 19 June 2024)
CASE MAY BE CITED AS:	Re Total Essential Services Group Pty Ltd
MEDIUM NEUTRAL CITATION:	[2024] VSC 331

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CORPORATIONS — External administration — Application for extension of convening period of second meeting of creditors of company in voluntary administration pursuant to s 439A of the Corporations Act 2001 (Cth) — Administrator seeking extension to enable completion of investigations into affairs of the company required under Pt 5.3A of the Corporations Act2001 (Cth) and to enable the proposal of a Deed of Company Arrangement — Modest extension sought of convening period of administration of a single corporate enterprise — No significant prejudice to those affected by moratorium by grant of extension — Orders made for extension of convening period together with ancillary orders including liberty to apply to administrator and those whose interests are affected by orders.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Koroneos, solicitor	Capstone Koroneos Legal Pty Ltd

HIS HONOUR:

By originating process filed on 4 June 2024, the plaintiff, Mr Stephen Dixon (‘Administrator’) who is the voluntary administrator of Total Essential Services Group Pty Ltd (Administrator Appointed) (ACN 099 386 393) (‘Company’), makes application under ss 439A(6) and 447A of the Corporations Act 2001 (Cth) (‘Act’) for an extension of the convening period for the second meeting of creditors of the Company, required to be held by s 439A(1) of the Act (‘Application’).
The convening period expired at midnight on 4 June 2024 and the Application was made that day. The Administrator seeks an extension pursuant to s 439A(6) of the Act until 26 June 2024, a period of 15 business days.[1] He also seeks an order often described as a ‘Daisytek order’,[2] allowing the Administrator to hold the second creditors’ meeting any time during, or within five business days after, the end of the period as extended, notwithstanding the operation of s 439A(2) of the Act.
[1]In his originating process, the Administrator sought an extension of 10 business days but at the hearing of this matter, he sought an amendment of the originating process for an extension of 15 business days.
[2]See Re Daisytek Australia Pty Ltd (2003) 45 ACSR 446, 448 [10]–[14] (Lindgren J) (‘Daisytek’).
In addition, the originating process seeks orders that the creditors of the Company be informed by several means of the making of the orders sought, together with liberty to apply to persons affected by those orders and costs.
On 7 June 2024, I made orders and gave brief reasons on the return…

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 Total Essential Services Group Pty Ltd

Details

AGLC: Re Total Essential Services Group Pty Ltd [2024] VSC 331
Case: [2024] VSC 331
Decision Date: 7 June 2024 (ex tempore, revised 19 June 2024)

CaseChat Overview and Summary

Re Total Essential Services Group Pty Ltd involved an application by the administrator of a company in voluntary administration for an extension of the convening period of a second meeting of creditors. The application was made under section 439A of the Corporations Act 2001 (Cth) to facilitate the completion of investigations into the affairs of the company as required by Part 5.3A of the same Act and to allow the proposal of a Deed of Company Arrangement. The court had to decide whether to grant a modest extension of the convening period for the administration of a single corporate entity, considering the impact on creditors and the necessity of the extension for the completion of the administrator's duties.

The court considered whether the extension would cause significant prejudice to the creditors and whether the administrator had acted diligently and in good faith. The primary concern was whether the extension was necessary for the administrator to complete the investigations and propose a viable Deed of Company Arrangement, which was critical for the potential recovery of assets for the benefit of creditors. The court evaluated the administrator's efforts and the potential benefits of the proposed arrangement against the interests of the creditors and other stakeholders.

In its reasoning, the court found that the administrator had acted diligently and that the proposed extension was modest and necessary for the completion of the investigations. The court determined that the extension would not cause significant prejudice to the creditors, as the administrator had ensured that the interests of all parties would be protected and that the process would be as transparent and efficient as possible. The court granted the application for an extension of the convening period, along with several ancillary orders to ensure that all stakeholders had the opportunity to be heard and to apply to the administrator if necessary.

The court's orders included an extension of the convening period for the second meeting of creditors, as well as liberty to apply provisions to the administrator and those whose interests were affected by the orders. These provisions aimed to safeguard the interests of all parties involved and to ensure that the administration process would proceed in a manner that was fair and just.

Orders