JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE WILUNA MINING CORPORATION LTD; EX PARTE MICHAEL JOSEPH RYAN as administrator of WILUNA MINING CORPORATION LTD (ADMINISTRATORS APPOINTED) [2023] WASC 194
CORAM: ACTING MASTER MCDONALD
HEARD: 27 APRIL 2023
DELIVERED : 6 JUNE 2023
FILE NO/S: COR 63 of 2023
MATTER: IN THE MATTER OF WILUNA MINING CORPORATION LTD (ADMINISTRATORS APPOINTED) AND OTHERS
EX PARTE
MICHAEL JOSEPH RYAN as administrator of WILUNA MINING CORPORATION LTD (ADMINISTRATORS APPOINTED)
First Plaintiff
MICHAEL JOSEPH RYAN as administrator of WILUNA OPERATIONS PTY LTD (ADMINISTRATORS APPOINTED)
Second Plaintiff
MICHAEL RYAN RYAN as administrator of WILUNA GOLD PTY LTD (ADMINISTRATORS APPOINTED)
Third Plaintiff
MICHAEL JOSEPH RYAN as administrator of KIMBA RESOURCES PTY LTD (ADMINISTRATORS APPOINTED)
Fourth Plaintiff
MICHAEL JOSEPH RYAN as administrator of ZANTHUS ENERGY PTY LTD (ADMINISTRATORS APPOINTED)
Fifth Plaintiff
MICHAEL JOSEPH RYAN as administrator of LIGNITE PTY LTD (ADMINISTRATORS APPOINTED)
Sixth Plaintiff
MICHAEL JOSEPH RYAN as administrator of SCADDAN ENERGY PTY LTD (ADMINISTRATORS APPOINTED)
Seventh Plaintiff
DANIEL HILLSTON WOODHOUSE as administrators of WILUNA MINING CORPORATION LTD (ADMINISTRATORS APPOINTED)
Eighth Plaintiff
DANIEL HILLSTON WOODHOUSE as administrator of WILUNA OPERATIONS PTY LTD
Ninth Plaintiff
DANIEL HILLSTON WOODHOUSE as administrator of WILUNA GOLD PTY LTD (ADMINISTRATORS APPOINTED)
Tenth Plaintiff
DANIEL HILLSTON WOODHOUSE as administrator of KIMBA RESOURCES PTY LTD (ADMINISTRATORS APPOINTED)
Eleventh Plaintiff
DANIEL HILLSTON WOODHOUSE as administrator of ZANTHUS ENERGY PTY LTD (ADMINISTRATORS APPOINTED)
Twelfth Plaintiff
DANIEL HILLSTON WOODHOUSE as administrator of LIGNITE PTY LTD (ADMINISTRATORS APPOINTED)
Thirteenth Plaintiff
DANIEL HILLSTON WOODHOUSE as administrator of SCADDAN ENERGY PTY LTD (ADMINISTRATORS APPOINTED)
Fourteenth Plaintiff
IAN CHARLES FRANCIS as administrators of WILUNA MINING CORPORATION LTD (ADMINISTRATORS APPOINTED)
Fifteenth Plaintiff
IAN CHARLES FRANCIS as administrators of WILUNA OPERATIONS PTY LTD (ADMINISTRATORS APPOINTED)
Sixteenth Plaintiff
IAN CHARLES FRANCIS as administrator of WILUNA GOLD PTY LTD (ADMINISTRATORS APPOINTED)
Seventeenth Plaintiff
IAN CHARLES FRANCIS as administrator of KIMBA RESOURCES PTY LTD (ADMINISTRATORS APPOINTED)
Eighteenth Plaintiff
IAN CHARLES FRANCIS as administrator of ZANTHUS ENERGY PTY LTD (ADMINISTRATORS APPOINTED)
Nineteenth Plaintiff
IAN CHARLES FRANCIS as administrator of LIGNITE PTY LTD (ADMINISTRATORS APPOINTED)
Twentieth Plaintiff
IAN CHARLES FRANCIS as administrator of SCADDAN ENERGY PTY LTD (ADMINISTRATORS APPOINTED)
Twenty First Plaintiff
KATHRYN GUINIVERE WARWICK as administrator of WILUNA MINING CORPORATION LTD (ADMINISTRATORS APPOINTED)
Twenty Second Plaintiff
KATHRYN GUINIVERE WARWICK as administrator of WILUNA OPERATIONS PTY LTD (ADMINISTRATORS APPOINTED)
Twenty Third Plaintiff
KATHRYN GUINIVERE WARWICK as administrator of WILUNA GOLD PTY LTD (ADMINISTRATORS APPOINTED)
Twenty Fourth Plaintiff
KATHRYN GUINIVERE WARWICK as administrator of KIMBA RESOURCES PTY LTD (ADMINISTRATORS APPOINTED)
Twenty Fifth Plaintiff
KATHRYN GUINIVERE WARWICK as administrator of ZANTHUS ENERGY PTY LTD (ADMINISTRATORS APPOINTED)
Twenty Sixth Plaintiff
KATHRYN GUINIVERE WARWICK as administrators of LIGNITE PTY LTD (ADMINISTRATORS APPOINTED)
Twenty Seventh Plaintiff
KATHRYN GUINIVERE WARWICK as administrators of SCADDAN ENERGY PTY LTD (ADMINISTRATORS APPOINTED)
Twenty Eighth Plaintiff
Catchwords:
Corporations - Voluntary administration - Application under s 447A Corporations Act 2001 (Cth) - Payment of employee entitlements during administration - Objects of Part 5.3A - Order that pt 5.3A operates to empower administrators to pay employees in accordance…
Continue reading Re Wiluna Mining Corporation Ltd
Sign in free to access the full text
- AGLC
- Re Wiluna Mining Corporation Ltd [2023] WASC 194
- Case
- [2023] WASC 194
- Decision Date
CaseChat Overview and Summary
The central legal issue before the court was whether section 447A of the Corporations Act empowers the court to make orders that alter the operation of Part 5.3A in a way that affects the rights of unsecured creditors. The court considered the language of the statute, the subject matter and objects of Part 5.3A, and the consequences of a decision that the power has been exceeded. The court also referred to previous cases such as Re Maria's Farm Veggies Pty Ltd and Correa v Whittingham to understand the concept of 'nexus' in relation to the operation of Part 5.3A.
The court held that section 447A of the Corporations Act empowers the court to make orders that may alter the operation of other provisions of Part 5.3A. However, any order made under section 447A must be designed to achieve the objects of Part 5.3A as stated in section 435A of the Act. The court also held that there is no limitation on the power under section 447A that the alteration to the way in which Part 5.3A is to operate cannot affect or impinge upon creditors. However, whether the power under section 447A should be exercised in a way that may affect or impinge upon creditors will depend upon the particular circumstances of the case.
The court did not make any specific orders in this case, as the matter was resolved through the arguments presented. However, the decision provides guidance to practitioners on the scope of the power under section 447A of the Corporations Act and the importance of considering the objects of Part 5.3A when making orders under this section.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Further, s 447A must have a nexus with how pt 5.3A is to operate in relation to a particular company.[51][51] Honest Remark Pty Ltd v Allstate Explorations NL [2006] NSWSC 735; (2006) 234 ALR 765 [66]; Re Maria's Farm Veggies Pty Ltd (admins apptd) [2016] NSWSC 1899 [21]. Barrett JA in Correa v Whittingham [2013] NSWCA 263; (2013) 278 FLR 310 [4] observed: … The 'nexus' with the operation of Pt 5.3A to which reference is made in the decided cases must be understood accordingly. The relevant purpose is to be ascertained by reference to the language of the statute, its subject matter and objects and the consequences of a decision that the power has been exceeded: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355. The principal source of constraint and limitation upon the power is therefore the statement of the object of Pt 5.3A in s 435A, coupled with the nature, incidents and aims of the particular form of external administration as gathered from the provisions of Pt 5.3A as a whole. Any order granted pursuant to s 447A therefore must be designed to achieve in relation to a particular company the objects of pt 5.3A as stated in s 435A of the Act. In Re Ansett Australia Ltd (all administrators apptd) and Mentha (as administrator) [2001] FCA 1806; (2001) 115 FCR 376 (Re Ansett) an application was made by the administrators under s 447A and the now repealed s 447D of the Act to approve a deed between the administrators of Ansett and the Commonwealth in respect of which the Commonwealth would pay employee entitlements during the administration process. However, such payments would be treated as debts incurred by the administrators so that pt 5.3A would operate so that repayment of those debts would have priority equal to the priority under s 556 and s 560 in the winding up.[52] The effect of the proposal was to give the Commonwealth priority in terms of the repayment of any advances made by it to the administrators for employee entitlements as if it stood in the shoes of the employees to whom the payments were made.[53][52] Re Ansett [2] ‑ [3].[53] Re Ansett [12]. The purpose of the advances by the Commonwealth was to alleviate the hardship to employees given the realisation of Ansett's assets was estimated to take up to two years.[54] Goldberg J was initially concerned the making of the orders sought would deny the unsecured creditors the opportunity to vote against a deed of company arrangement that gave the Commonwealth priority in respect of payments advanced under the proposal equal to the priority received under s 560 of the Act.[55] [54] Re Ansett [9].[55] Re Ansett [39]. Goldberg J, referring to Australasian Memory Pty Ltd v Brien, considered whether the approval of an agreement pursuant to s 447A might impact the rights of unsecured creditors found in pt 5.3A:[56] The High Court made it clear (at 279) that s 447A(1) empowers the Court to make orders which may alter the operation of other provisions of Pt 5.3A. An analysis of the High Court's consideration of the particular limitations on the power under s 447A suggested to it in the course of argument, leads me to the conclusion that it is not a limitation on the power which may be exercised under s 447A that such exercise must not impinge upon or affect the rights of unsecured creditors found in Pt 5.3A.Goldberg J further held:[57] … there is no limitation on the power under s 447A that the alteration to the way in which Pt 5.3A is to operate cannot affect or impinge upon creditors. Of course, whether the power under s 447A should be exercised in a way that may affect or impinge upon creditors will depend upon the particular circumstances of the case. But that issue raises matters as to the exercise of discretion, rather than the existence of the power.[56] Re Ansett [53].[57] Re Ansett [53].