Re Yeeda Pastoral Company Pty Ltd (Administrators Appointed) (ACN 094 819 717); [No 3]
[2024] WASC 360
•2 OCTOBER 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE YEEDA PASTORAL COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 094 819 717); EX PARTE RICHARD SCOTT TUCKER as joint and several administrator of YEEDA PASTORAL COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 094 819 717) [No 3] [2024] WASC 360
CORAM: HILL J
HEARD: 27 SEPTEMBER 2024
DELIVERED : 27 SEPTEMBER 2024
PUBLISHED : 2 OCTOBER 2024
FILE NO/S: COR 49 of 2024
MATTER: IN THE MATTER OF YEEDA PASTORAL COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 094 819 717)
EX PARTE
RICHARD SCOTT TUCKER as joint and several administrator of YEEDA PASTORAL COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 094 819 717)
First named First Plaintiff
ANTHONY JAY EDWARD MISKIEWICZ as joint and several administrator of YEEDA PASTORAL COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 094 819 717)
Second named First Plaintiff
DAVID CHRISTOPHER OSBORNE as joint and several administrator of YEEDA PASTORAL COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 094 819 717)
Third named First Plaintiff
RICHARD SCOTT TUCKER as joint and several administrator of AUSTRALIAN RANGELAND MEAT PTY LTD (ADMINISTRATORS APPOINTED) (ACN 156 047 111)
First named Second Plaintiff
ANTHONY JAY EDWARD MISKIEWICZ as joint and several administrator of AUSTRALIAN RANGELAND MEAT PTY LTD (ADMINISTRATORS APPOINTED) (ACN 156 047 111)
Second named Second Plaintiff
DAVID CHRISTOPHER OSBORNE as joint and several administrator of AUSTRALIAN RANGELAND MEAT PTY LTD (ADMINISTRATORS APPOINTED) (ACN 156 047 111)
Third named Second Plaintiff
RICHARD SCOTT TUCKER as joint and several administrator of KIMBERLEY PROPERTIES PTY LTD (ADMINISTRATORS APPOINTED) (ACN 658 990 160)
First named Third Plaintiff
ANTHONY JAY EDWARD MISKIEWICZ as joint and several administrator of KIMBERLEY PROPERTIES PTY LTD (ADMINISTRATORS APPOINTED) (ACN 658 990 160)
Second named Third Plaintiff
DAVID CHRISTOPHER OSBORNE as joint and several administrator of KIMBERLEY PROPERTIES PTY LTD (ADMINISTRATORS APPOINTED) (ACN 658 990 160)
Third named Third Plaintiff
RICHARD SCOTT TUCKER as joint and several administrator of KIMBERLEY MEAT COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 159 933 392)
First named Fourth Plaintiff
ANTHONY JAY EDWARD MISKIEWICZ as joint and several administrator of KIMBERLEY MEAT COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 159 933 392)
Second named Fourth Plaintiff
DAVID CHRISTOPHER OSBORNE as joint and several administrator of KIMBERLEY MEAT COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 159 933 392)
Third named Fourth Plaintiff
RICHARD SCOTT TUCKER as joint and several administrator of YEEDA KIMBERLEY TOURS PTY LTD (ADMINISTRATORS APPOINTED) (ACN 126 760 281)
First named Fifth Plaintiff
ANTHONY JAY EDWARD MISKIEWICZ as joint and several administrator of YEEDA KIMBERLEY TOURS PTY LTD (ADMINISTRATORS APPOINTED) (ACN 126 760 281)
Second named Fifth Plaintiff
DAVID CHRISTOPHER OSBORNE as joint and several administrator of YEEDA KIMBERLEY TOURS PTY LTD (ADMINISTRATORS APPOINTED) (ACN 126 760 281)
Third named Fifth Plaintiff
RICHARD SCOTT TUCKER as joint and several administrator of YEEDA FODDER COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 660 216 777)
First named Sixth Plaintiff
ANTHONY JAY EDWARD MISKIEWICZ as joint and several administrator of YEEDA FODDER COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 660 216 777)
Second named Sixth Plaintiff
DAVID CHRISTOPHER OSBORNE as joint and several administrator of YEEDA FODDER COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 660 216 777)
Third named Sixth Plaintiff
Catchwords:
Corporations - Insolvency - External administration - Proposed funding agreements - Where additional funding required for insurance and continued operation of companies - Application by deed administrators to be relieved from personal future liabilities in respect of debts and liabilities arising out of funding agreements - Turns on own facts
Corporations - Insolvency - Security interest over personal property - Where security interest securing obligations of funding agreement arose after appointment of administrators - Application for directions under s 90-15 of Sch 2 of the Corporations Act 2001 (Cth) that the deed administrators are justified in not seeking relief under s 588FL(2)(b)(iv) of the Corporations Act 2001 (Cth) - Application to extend time to the extent necessary for registration of security interest - Proper construction of s 588FL of Corporations Act 2001 (Cth)
Legislation:
Corporations Act 2001 (Cth) s 435A, s 443A, s 443D, s 447A, s 588FL, s 588FM, Sch 2 s 90-15
Result:
Application granted
Category: B
Representation:
Counsel:
| First named First Plaintiff | : | L D Ayres |
| Second named First Plaintiff | : | L D Ayres |
| Third named First Plaintiff | : | L D Ayres |
| First named Second Plaintiff | : | L D Ayres |
| Second named Second Plaintiff | : | L D Ayres |
| Third named Second Plaintiff | : | L D Ayres |
| First named Third Plaintiff | : | L D Ayres |
| Second named Third Plaintiff | : | L D Ayres |
| Third named Third Plaintiff | : | L D Ayres |
| First named Fourth Plaintiff | : | L D Ayres |
| Second named Fourth Plaintiff | : | L D Ayres |
| Third named Fourth Plaintiff | : | L D Ayres |
| First named Fifth Plaintiff | : | L D Ayres |
| Second named Fifth Plaintiff | : | L D Ayres |
| Third named Fifth Plaintiff | : | L D Ayres |
| First named Sixth Plaintiff | : | L D Ayres |
| Second named Sixth Plaintiff | : | L D Ayres |
| Third named Sixth Plaintiff | : | L D Ayres |
Solicitors:
| First named First Plaintiff | : | Lavan |
| Second named First Plaintiff | : | Lavan |
| Third named First Plaintiff | : | Lavan |
| First named Second Plaintiff | : | Lavan |
| Second named Second Plaintiff | : | Lavan |
| Third named Second Plaintiff | : | Lavan |
| First named Third Plaintiff | : | Lavan |
| Second named Third Plaintiff | : | Lavan |
| Third named Third Plaintiff | : | Lavan |
| First named Fourth Plaintiff | : | Lavan |
| Second named Fourth Plaintiff | : | Lavan |
| Third named Fourth Plaintiff | : | Lavan |
| First named Fifth Plaintiff | : | Lavan |
| Second named Fifth Plaintiff | : | Lavan |
| Third named Fifth Plaintiff | : | Lavan |
| First named Sixth Plaintiff | : | Lavan |
| Second named Sixth Plaintiff | : | Lavan |
| Third named Sixth Plaintiff | : | Lavan |
Case(s) referred to in decision(s):
Re Antquip Hire Pty Ltd (in liq) [2021] NSWSC 1122
Re Cubic Interiors NSW Pty Ltd (in liq) [2023] FCA 694
Re One Steel Manufacturing Pty Ltd (Administrators Appointed) [2017] NSWSC 21; (2017) 93 NSWLR 611
Re Yeeda Pastoral Company Pty Ltd (Administrators Appointed) (ACN 094 819 717); Ex parte Richard Scott Tucker as joint and several administrator of Yeeda Pastoral Company Pty Ltd (Administrators Appointed) (ACN 094 819 717) [2024] WASC 120
Re Yeeda Pastoral Company Pty Ltd (Administrators Appointed) (ACN 094 819 717); Ex parte Richard Scott Tucker as joint and several administrator of Yeeda Pastoral Company Pty Ltd (Administrators Appointed) (ACN 094 819 717) [No 2] [2024] WASC 221
HILL J:
(This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings and to correct matters of grammar and expression.)
By interlocutory process filed on 26 September 2024, the plaintiffs seek a series of further orders in relation to Yeeda Pastoral Company Pty Ltd (Yeeda) and various companies that fall within that group (Companies).
The plaintiffs were appointed as joint and several administrators of Yeeda on 29 February 2024, having been appointed as joint and several administrators to Kimberley Meat Company Pty Ltd (KMC) two days previously.
In the interlocutory process before me this morning, the plaintiffs seek to be relieved from personal future liabilities in relation to a premium funding agreement with Attvest Finance Pty Ltd (Attvest) as well as a funding agreement with TLP4 Australian Holdings Pty Ltd (TLP4), which is proposed to fund the operation of the Companies during the period of the various deeds of company arrangement prior to effectuation of these deeds. Directions are also sought in relation to whether an extension of time is required under s 588FM of the Corporations Act 2001 (Cth) (Act) for the registration of a security interest granted by the plaintiffs to TLP4.
In support of the application, the plaintiffs relied on the affidavits previously filed in these proceedings as well as two affidavits of David Christopher Osborne, filed 26 September 2024 (one open and one confidential). I have also had the benefit of a detailed written outline of supplementary submissions and oral submissions from counsel who appeared on behalf of the plaintiffs this morning.
Factual background
Much of the factual background to this matter has been set out in my reasons for decision on the earlier applications made by the plaintiffs heard on 27 March 2024[1] and 10 June 2024.[2]
[1] Re Yeeda Pastoral Company Pty Ltd (Administrators Appointed) (ACN 094 819 717); Ex parte Richard Scott Tucker as joint and several administrator of Yeeda Pastoral Company Pty Ltd (Administrators Appointed) (ACN 094 819 717) [2024] WASC 120.
[2] Re Yeeda Pastoral Company Pty Ltd (Administrators Appointed) (ACN 094 819 717); Ex parte Richard Scott Tucker as joint and several administrator of Yeeda Pastoral Company Pty Ltd (Administrators Appointed) (ACN 094 819 717) [No 2] [2024] WASC 221.
Since the date of those decisions, the plaintiffs have continued to operate the Yeeda group and have finalised a term sheet as a result of the sale process that they undertook.[3]
[3] Affidavit of David Christopher Osborne filed 26 September 2024, 'DCO‑1'.
The evidence of Mr Osborne is that second creditors' meetings were held for each of the Companies on 30 July 2024 and that at these meetings, creditors resolved to enter into deeds of company arrangement (DOCAs) with TLP4. Since that date, each of the DOCAs has been executed and the plaintiffs have become the deed administrators for each of the Companies.[4]
[4] Affidavit of David Christopher Osborne filed 26 September 2024, 'DCO‑3', 'DCO‑4'.
The administrators have entered into two funding agreements: a premium funding agreement with Attvest to fund continuing insurance coverage for the Companies (Attvest Funding Agreement);[5] and a DOCA funding agreement with TLP4 to fund the operations of the Companies during the period the Companies are subject to the DOCAs (TLP4 Funding Agreement).[6]
[5] Confidential affidavit of David Christopher Osborne filed 26 September 2024, 'DCO‑8'.
[6] Confidential affidavit of David Christopher Osborne filed 26 September 2024, 'DCO-17'.
Applications to be relieved from personal future liabilities
Attvest Funding Agreement
I set out in my initial reasons for decision the legal principles that govern this part of the application, and I incorporate those principles into these reasons without repeating them.[7]
[7] Re Yeeda Pastoral Company Pty Ltd (Administrators Appointed) (ACN 094 819 717); Ex parte Richard Scott Tucker as joint and several administrator of Yeeda Pastoral Company Pty Ltd (Administrators Appointed) (ACN 094 819 717) [35] - [41].
The evidence of Mr Osborne is that it was necessary to enter into the Attvest Funding Agreement in July 2024 (which was amended in August 2024)[8] to ensure that the Companies had ongoing and continuing insurance coverage for industrial special risks and workers' compensation from 1 June 2024. This was required to enable the Companies to trade during the ongoing sale process and to maximise the chances of the businesses continuing. The payment of these insurance premiums were not contemplated nor the subject of funding under either the loan agreement or the second funding deed that were previously entered into by the plaintiffs.
[8] Confidential affidavit of David Christopher Osborne filed 26 September 2024, 'DCO-10'.
The key terms of the Attvest Funding Agreement are that:
(a)the plaintiffs entered into the Attvest Funding Agreement solely in their capacity as joint and several administrators of Yeeda and KMC and not in their personal capacity;
(b)Attvest paid the insurance premiums for continuing workers' compensation and industrial special risk policies; and
(c)the Attvest Funding Agreement sets out the timing and the amounts of the repayments, together with all charges that are associated with this funding.
For the following reasons, on the evidence before me, I am satisfied it is appropriate to make the order sought in respect of the Attvest Funding Agreement.
First, I accept that the purpose of the funding under the Attvest Funding Agreement is to enable continuing insurance coverage, which is and was necessary to enable the trading Companies within the group (Yeeda and KMC) to continue to operate without unnecessary risk. Without this coverage, I accept there would be significant risk to the value of these Companies and potentially the return to creditors.
Second, the proposed orders are, in my view, consistent with the interests of unsecured creditors and the objects of pt 5.3A of the Act, as set out in s 435A of the Act.
Third, notice has been given to ADM Capital Investments Pte Ltd (ADM) and the Commonwealth Bank of Australia (CBA), who are the largest creditors of the Companies, and, as such, the primary parties who may be affected by these orders. Each has consented to entry into the Attvest Funding Agreement.[9]
TLP4 Funding Agreement
[9] Confidential affidavit of David Christopher Osborne filed 26 September 2024, 'DCO-11', 'DCO-12'.
The evidence of Mr Osborne is that it has also been necessary to enter into the TLP4 Funding Agreement to fund the deed administrators for the period between the execution of the DOCAs and the date on which the DOCAs either terminate or complete. This additional funding is required to fund the costs of the Companies in preserving the assets of the Companies, including, most notably, the cattle; as well as muster costs; water infrastructure; the remuneration of the deed administrators; costs associated with implementation of the DOCAs; and any other matters that are approved by TLP4.
Mr Osborne's evidence is that this funding is required to enable the operations and businesses of the Companies to continue and that without this funding, it would not be possible to adequately preserve the Companies' assets.
The key terms of the funding of the TLP4 Funding Agreement are:
(a)the plaintiffs entered into the TLP4 Funding Agreement in their capacity as joint and several administrators of the Companies;
(b)TLP4 agreed to provide the funding required to preserve the assets of the Companies, as well as the cost of specified activities and monthly trading costs;
(c)the TLP4 Funding Agreement sets out the basis on which TLP4 will be entitled to repayment of any funds advanced; and
(d)the loan facility is subject to the satisfaction of certain conditions precedent, including the execution of various documents which have now occurred.
For the following reasons, I am satisfied it is appropriate to make the orders sought in respect of the TLP4 Funding Agreement.
First, I accept that the purpose of the funding under the TLP4 Funding Agreement is to fund the costs of the Companies before the DOCAs are effectuated. Without the funding of these matters, I accept there is a risk that the value of the businesses will be diminished.
Second, the TLP4 Funding Agreement has been entered into with the proponent of the DOCAs, who is able to determine for itself the extent to which its interests are affected by the proposed orders.
Third, the proposed orders are, in my view, consistent with the interests of unsecured creditors and the objects of pt 5.3A of the Act as set out in s 435A of the Act.
Fourth, notice has been given to ADM, CBA and Westpac Banking Corporation who are the largest creditors of the Companies, and, as such, the primary parties who may be affected by these orders. Each of these parties have entered into intercreditor deeds.[10]
[10] Confidential affidavit of David Christopher Osborne filed 26 September 2024, 'DCO-18', 'DCO-19'.
Relief in relation to registration of security interests
The final orders that are sought by the plaintiffs on the interlocutory application concern the question as to whether relief is required under s 588FM of the Act in relation to the registration of the security interest on the Personal Property Securities Register (PPSR), as required by the general security deed entered into between TLP4, the plaintiffs, and each of the Companies (General Security Deed). The General Security Deed was entered into in August 2024.[11]
[11] Confidential affidavit of David Christopher Osborne filed 26 September 2024, 'DCO-20'.
This issue arises because of the question as to whether, by operation of s 588FL of the Act, the security interest created by the General Security Deed, which was created after the appointment of the plaintiffs as external administrators, vests in KMC. This is because it will not be registered until after the 'critical time' referred to in s 588FL(7)(a) of the Act, being the appointment of external administrators.
In this case, there is no question that the agreement is a 'security interest' within the meaning of s 12 of the Personal Property Securities Act 2009 (Cth) (PPSA) as the General Security Deed provides for 'an interest in personal property' and secures payment of an obligation under the TLP4 Funding Agreement.
Where a security interest is not perfected in the manner prescribed by the PPSA prior to the appointment of an external administrator to the grantor of the interest, the security interest vests in the grantor.[12] This vesting is irreversible.[13]
[12] Personal Property Securities Act 2009 (Cth) s 267.
[13] Re One Steel Manufacturing Pty Ltd (Administrators Appointed) [2017] NSWSC 21; (2017) 93 NSWLR 611 [82] (Brereton J).
A security interest is perfected if it has attached to collateral, is enforceable against third parties, and certain extra steps (such as possession or control of the collateral or registration on the PPSR) have been taken to protect the interest.[14]
[14] Personal Property Securities Act 2009 (Cth) s 21.
Pursuant to s 588FL of the Act, a security interest under the PPSA vests in the company on the appointment of a voluntary administrator if:
(a)the security interest is enforceable and was perfected by registration;
(b)it was registered within the six months preceding the administration or liquidation; but
(c)it was not registered within 20 business days after the grant, unless it was registered within such later time as is ordered by the court under s 588FM of the Act.
At present, there is a divergence on the authorities as the extent to which s 588FL of the Act applies to security interests that arise after the 'critical time' and before the company is no longer the subject of external administration. In my first reasons for decision in this matter, I summarised this divergence as well as the basis upon which I concluded that the preferable construction was that of Brereton JA in Re Antquip Hire Pty Ltd (in liq)[15] for the reasons given by Cheeseman J in Re Cubic Interiors NSW Pty Ltd (in liq).[16] My views on the matter have not changed since that decision. On this basis, I consider it is appropriate to make the order sought in paragraph 6 of the plaintiff's minute of proposed orders.
[15] Re Antquip Hire Pty Ltd (in liq) [2021] NSWSC 1122 [41] - [63].
[16] Re Cubic Interiors NSW Pty Ltd (in liq) [2023] FCA 694 [49] - [81].
I also accept there is utility in making the additional order sought by the plaintiffs in order 7 of the minute. As acknowledged in my first reasons, at present there is no intermediate appellate authority on the proper construction of s 588FL of the Act. The order sought by the plaintiffs is conditional on there being a requirement for the extension of time for registration under s 588FM of the Act. In my view, the orders sought are a practical and appropriate resolution of the issues confronted by the plaintiffs. In this case, it is my view that it would be just and equitable to make the order sought by the plaintiffs as required under s 588FM(2)(b) of the Act.
The security interests granted by the plaintiffs form part of a transaction entered into to enable the Companies to continue to trade during the period they are subject to the DOCAs. Completion of the DOCAs will, in my view, maximise the return to creditors, and accordingly it is just and equitable to make the order sought.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KC
Associate to the Honourable Justice Hill
2 OCTOBER 2024
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