Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd [2016] NSWSC 1899 | Case summary

Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd [2016] NSWSC 1899 | Case summary | Zoe

Background to the application and affidavit evidence

By Interlocutory Process filed on 6 December 2016, the Plaintiffs, Messrs Goyal and Winterbottom, as administrators of Maria's Farm Veggies Pty Limited ("Company"), seek an order under s 447A of the Corporations Act 2001 (Cth) varying the operation of Part 5.3A of the Corporations Act and, primarily, s 436C of the Corporations Act, with an effect that their appointment as administrators of the Company is valid. They also seek alternative orders, to which it will presently not be necessary to refer. They also seek relief under s 1322 of the Corporations Act to validate their acts as administrators, but such relief would not be necessary if the relief that they seek under s 447A of the Corporations Act were granted.
I have referred to aspects of the background of the application in several judgments, most recently in my judgment ([2016] NSWSC 1770) ("Earlier Judgment") in respect of an unsuccessful application by the administrators for a declaration under s 447C of the Corporations Act that their appointment as administrators of the Company was valid. I declined to make that order on the basis that I found that the administrators' appointor, Macquarie Bank Limited ("MBL"), was not a person entitled to enforce its security interest over the whole or substantially the whole of the Company's property for the purposes of s 436C of the Corporations Act at the relevant time because it had not, at that point, complied with requirements as to mediation under the Farm Debt Mediation Act 1994 (NSW) ("FDMA"). I there noted that the administrators had foreshadowed an application under s 447A of the Corporations Act which would raise somewhat different considerations as to whether their appointment should be validated to advance the purposes of Part 5.3A of the Corporations Act.
As I noted in the Earlier Judgment, both the earlier application and this application have significant commercial urgency about them, because the administrators propose shortly to take steps directed to advancing construction of a substantial glasshouse on the Company's property, in a manner which they anticipate would realise value for the Company's creditors. Any significant delay in delivery of this judgment, and determination of the relevant issues, would have the capacity to frustrate those steps, or potentially delay them for a significant period, so far as it is expected that they could occur over the Australian summer. This matter was heard on 14 December 2016, and judgment has been delivered the next day as an oral judgment.
Three issues arise in the application. The first is whether this application can properly be determined on the basis of certain assumptions favourable to the Defendants as to the application of the FDMA. The administrators were content to take that course, to which the Defendants had previously expressly consented in the determination of the application under s 447C of the Corporations Act. The Defendants resisted that course in this application, at least unless the administrators admitted the relevant matters for all purposes. The second question was a matter that I had addressed, and determined in the Earlier Judgment, namely, whether the appointment of administrators by MBL constitutes "enforcement action" for the purposes of the FDMA. That matter was agitated by Mr Cook, who appears with Mr Lipp for the Defendants in this application, and I considered that I should again address that question for the reasons to which I will refer below. The third issue was the ultimate question, whether the Court had power to, and should, validate the administrators' appointment under s 447A of the Corporations Act.
The administrators relied on several affidavits of one of the administrators, Mr Goyal, affirmed on 15 and 22 July 2016, 28 September 2016 and 5 and 12 December 2016. Mr Goyal's first affidavit referred to the structure and operations of the Company, to which I have referred in the Earlier Judgment and which I need not repeat, and to the fact that the Company had liabilities to creditors in excess of $83 million, including liabilities to secured creditors exceeding $37 million. Mr Goyal also set out the work that had been done by the administrators in the period after their appointment until the date of that affidavit. Mr Goyal's second affidavit provided further information as to the Company's creditors and further information as to additional financing provided by the secured creditors to advance investigations into construction work, in respect of the Company's glasshouse project, and identified the matters which were relevant to the administrators' assessment of the merits of the construction of that glasshouse. Mr Goyal's third affidavit, dated 28 September 2016, updated his evidence as to the Company's financing and the merits of completing the first stage of the glasshouse project.
Mr Goyal's fourth affidavit, dated 5 December 2016, was the primary affidavit relied on in this application and referred to the Company's default under its loan arrangements prior to the administrators' appointment; the steps taken by the administrators since they became aware of the potential application of the FDMA, which had been raised by the director and shareholder of the Company, Mr Disselkoen, on 24 October 2016; the steps taken in the administration, including to advance the glasshouse project; and the lack of viability of the Company if it was returned to its directors' control.
Mr Goyal also referred to evidence as to the effect of the continuance of the administration upon the Company's creditors, including the relevant moratoriums; to an offer by MBL, without prejudice and without admissions, to participate with the Company in a farmer-initiated mediation under the FDMA; to liabilities incurred by the administrators for third party expenses in the course of the administration; and to the delay in relation to the relation-back date which would result from termination of the administration.
Mr Goyal also referred to, and there was tendered, information as to the Company's solvency, which indicated a substantial negative cash flow position. Mr Goyal expressed the view, which seems to me to be plainly correct, that the Company was insolvent at the date of the administrators' appointment, and was presently insolvent by reference to the cash flow test and the indicators as to insolvency identified by Australian Securities and Investments Commission v Plymin [2003] VSC 123; (2003) 46 ACSR 126, the utility of which has frequently been noted in subsequent decisions. Mr Goyal also referred to the existence of substantial continuing losses of the Company; the absence of trading income until the glasshouse is constructed and the first crop harvested; the fact that the Company has no current assets and over $80 million in current liabilities; the fact of unpaid tax liabilities and apparent inability to borrow additional funds (although I note that Mr Disselkoen had put the contrary position in evidence, to which I referred in the Earlier Judgment which was not read in this application); to debts well outside payment terms at the time of the administrators' appointment and to the fact that the Company's assets are materially less than its known liabilities. Mr Goyal also expressed the view, which seems to me to be amply supported by his evidence, that, if the Company were returned to the control of its directors, it could not practically continue to remain outside external administration in the near future. It seems to me that, on one view, if the Company were taken out of administration, it could not incur any debts other than on a cash on delivery basis without contravening the insolvent trading provisions of the Corporations Act.
Mr Goyal's fifth affidavit of 12 December 2016 referred to the notification of this application to creditors; to correspondence with the Defendants' solicitors and also with a Mr Shanahan, who purports to represent Mr Disselkoen or the Company (although not as a legal adviser) and who appears to have set conditions on any participation by Mr Disselkoen in a mediation under the FDMA; and to further correspondence by Mr Disselkoen which appears to have adopted those conditions.
The administrators also rely on two affidavits of their solicitor, Mr Walters, dated 9 and 24 November 2016, dealing with the Company's financing arrangements and the circumstances of its default under those financing arrangements and with the fact, which I noted in my Earlier Judgment, that MBL had not taken any step to appoint receivers, take possession or give any statutory enforcement notice in respect of its security.

[3]

Factual basis of the application

I now turn to the substantive issues raised by the application. Both parties accepted, and I recorded in the course of the hearing, that the Court could not and should not reach factual findings as to whether the property owned by the Company was a farm or the Company was a farmer for the purposes of the FDMA in this judgment, and I will reach no such finding.
The Court had, with the parties' consent, previously determined the application by the administrators brought under s 436C of the Corporations Act on the basis of several assumptions favourable to the Defendants, which had the result that the FDMA would apply to the Company, and to which I had referred in paragraphs 2 and 14 of the Earlier Judgment. That step was taken, with the express consent of Mr Bennett QC, who then appeared with Mr Cassimatis for the Defendants, as well as with the consent of Counsel for the administrators. Mr Cook, who now appears with Mr Lipp for the Defendants as I noted above, does not take the same approach in this application and submitted that the Court cannot determine the application on the basis of hypothetical assumptions and should decline to do so. It appears that the result of this would, subject to a matter to which I will refer below, be that the application would have to be deferred for a further hearing to reach factual findings, albeit that those findings could be no more favourable to the Defendants than the assumptions which they have been invited to adopt for the purposes of this application.
Mr Jackman, who appeared with Mr Bova for the administrators, submitted that the Court could proceed on the basis of the assumed facts, where those facts were favourable to the Defendants and adverse to the administrators and (he submitted) would bring about a final determination of the application under s 447A of the Corporations Act. Mr Jackman referred to the High Court's observations in Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334, and particularly the discussion (at [50]) of the conduct of demurrer proceedings, in circumstances that the identified facts exhausted the universe of relevant factual material. Mr Jackman also referred to the recent consideration of this matter in the Court of Appeal in HP Mercantile Pty Ltd v Hartnett [2016] NSWCA 342, where all members of the Court of Appeal, with hesitation, were prepared to proceed on the basis of facts that may be in future contested where the ultimate issue on appeal, that of construction of the relevant contract, would be finally determined by proceeding on that basis.
That position has at least some analogy with the present position so far as the application under s 447A of the Corporations Act, at least if successful, would be finally determined if conducted on assumed facts that were adverse to the administrators. However, there is a difficulty with that analogy. As Mr Cook points out, an unsuccessful application would not necessarily determine the question (at least if the administrators could later re-agitate the position, albeit not likely, by reference to s 447A of the Corporations Act) by contesting the factual basis of the application of the FDMA and potentially putting the Defendants to the cost of a further application. On balance, while it may be open to the Court to proceed on that basis, by analogy of the position with a demurrer application or the approach adopted by the Court of Appeal in HP Mercantile Pty Ltd v Hartnett above, I do not think that it is appropriate to do so.
That is, however, not the end of the Court's jurisdiction in this application and does not require that a plainly urgent application be deferred to a future day so as to find facts that would have the result either that the FDMA did not apply (so that the administrators did not seek relief under s 447A of the Corporations Act) or, alternatively, that the position was as the administrators had invited the Defendants to assume it to be for the purposes of this application. It is not necessary to take that course because, as I raised with Counsel at the commencement of the hearing, one fact is plain, namely, that there is a significant dispute between the parties as to the application of s 447A of the Corporations Act. Other facts are the subject of evidence, including the impact upon creditors of a failure to advance the construction of the glasshouse and of the issues relating to whether the administrators' appointment should be validated. The Court is in a position to assess that evidence and to find, to the extent that it is not already common ground, that there is at least a seriously arguable case that the FDMA applies and a real dispute as to that matter and that there are also substantial commercial urgencies in clarifying the administrators' position for the purposes of Part 5.3A of the Corporations Act.
It does not seem to me that there is anything in the structure of s 447A of the Corporations Act that requires the Court to determine anything other than what the section directs it to determine, namely, whether it is appropriate to make an order that Part 5.3A of the Corporations Act operates in a way in relation to a particular company in the circumstances which then subsist. The section does not dictate the range of factual findings which need to be made, or the generality with which those circumstances might be identified. It seems to me that that section can readily apply in circumstances where there is a dispute about a matter, and the urgencies of the matter are such that it could not be readily determined on a factual basis while meeting the commercial urgencies of the matter. In those circumstances it is open to the Court to find, in a proper case, that the existence of that dispute warrants an order under s 447A of the Corporations Act that will provide for Part 5.3A to operate in a particular way in relation to that company. It follows that the exercise of the Court's jurisdiction under s 447A of the Corporations Act does not require that it first determine whether or not the FDMA applies. Section 447A of the Corporations Act will authorise the making of an order where that matter is disputed, at least so long as the Court is satisfied that the making of that order would advance the purposes of Part 5.3A of the Corporations Act and the prompt resolution of the dispute would also advance the purposes of Part 5.3A. I am comfortably satisfied that that is the case for the reasons I indicate below.

[4]

Whether the administrators' appointment was invalidated by the FDMA

The second question raised by Mr Cook in oral submissions was a matter that had previously been addressed by Mr Bennett QC in the earlier application by the administrators under s 447C of the Corporations Act, namely, whether the appointment of administrators by MBL amounted to "enforcement action" for the purposes of the FDMA so that such an appointment was avoided by s 6 of the FDMA. I permitted Mr Cook to re-agitate this matter in full against the contingency that the Earlier Judgment might be characterised as interlocutory in nature and not having finally determined that issue between the parties. I had reviewed the relevant issues in paragraph 14ff of the Earlier Judgment, and there pointed to the requirements of s 8 of the FDMA; the definition of "enforcement action" in s 4(1) of the FDMA; the argument then put by Mr Bennett as to how a purposive interpretation of the FDMA was required by s 33 of the Interpretation Act 1987 (NSW) and the authorities that had considered the question whether the appointment of an administrator and other actions, such as a winding up, amounted to an "enforcement action" for various purposes.
Mr Cook fairly accepts that I may be bound by the majority view in Australian Cherry Exports Pty Ltd v Commonwealth Bank of Australia (1996) 39 NSWLR 537, to which I had referred in the Earlier Judgment, unless I were to distinguish the position in respect of a winding up from the position in respect of an administration so far as the application of the FDMA was concerned. Plainly, the appointment of an administrator is a different act from an act of winding up a company. What those acts have in common is the fact that they are not acts that would traditionally be regarded as the enforcement of a security. It seems to me that the reasoning in Australian Cherry Exports Pty Ltd v Commonwealth Bank of Australia above is, at the very least, a matter which should be given great weight by a judge at first instance in dealing with these questions, as I had done in the Earlier Judgment.
Mr Cook also submits that the second limb of the definition of "enforcement action" in s 4 of the FDMA extends beyond taking possession of property under a mortgage to any action to enforce the mortgage. Mr Jackman, in turn, relied on the administrators' submissions at the previous hearing under s 447C of the Corporations Act and on my reasoning in the Earlier Judgment. I continue to take the view, consistent with the authorities to which I referred in the Earlier Judgment, that the appointment of an administrator is an alternative to actions to enforce a mortgage, and not an action to enforce the mortgage, both for the purposes of the FDMA and for other similar purposes and is, therefore, not "enforcement action" for the purposes of the FDMA. Mr Cook submitted that that view would not give effect to the purposes of the FDMA, which he submitted is intended to have wide operation. With the greatest of respect to the submission, it seems to me to fail to recognise that the operation of the FDMA and the purposes which emerge from it must be determined by reference to its terms and not by reference to an a priori assumption that it should be given the widest possible application and then seeking to read its terms so as to give effect to that a priori assumption.
It seems to me, for the reasons that I noted in the Earlier Judgment, that a secured creditor would not ordinarily be entitled to appoint an administrator without having first complied with the FDMA since it would not satisfy the requirements of s 436C of the Corporations Act that it be entitled to enforce the relevant security. In those circumstances, the FDMA and s 436C of the Corporations Act would ordinarily work together in a satisfactory manner because the FDMA does not need to prohibit what would ordinarily not be permitted by the terms of s 436C of the Corporations Act, namely, the appointment of an administrator by a secured creditor which has not yet complied with the requirements of the FDMA. It does not, however, follow from that proposition that the Court is deprived of the statutory powers which the legislature has conferred on it under s 447A of the Corporations Act, in an appropriate case, to order that Part 5.3A of the Corporations Act operate in a modified fashion in relation to a particular company or that it be said that there can never be a case where it would be an appropriate exercise of the Court's powers under s 447A of the Corporations Act to validate an administrators' appointment, having regard to the purposes of Part 5.3A of the Corporations Act notwithstanding the secured creditor was not entitled to make that appointment by reason of non-compliance with the FDMA.
I now turn to the ultimate question in this application, whether the appointment of the administrators should be validated under s 447A of the Corporations Act in the particular circumstances. That section provides, inter alia, that the court may make such order as it thinks appropriate about how Part 5.3A of the Corporations Act is to operate in relation to a particular company. The section gives examples of the kind of orders that can be made. The case law has, in turn, recognised that the section confers "plenary powers" on the court to do whatever it thinks just in all the circumstances "having regard to the rights of the various groups of persons affected by the administration, including making orders which would enter what would otherwise be the operation of Part 5.3A of the Act", Australasian Memory Pty Ltd v Brien [2000] HCA 30; (2000) CLR 270. The overriding requirement for an order under that section is that any order made and any directions given must be designed to achieve the objective of Part 5.3A as expressed in s 435A of the Corporations Act, and as Mr Cook pointed out, must have a nexus with how Part 5.3A is to operate in relation to the particular company: Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd [2004] FCA 130; (2004) 49 ACSR 1 at 15; Correa v Whittingham [2013] NSWCA 263; (2013) 278 FLR 310 at [4].
Mr Jackman submits, and Mr Cook does not contest, that the section is available to cure defects in the appointment of an administrator, both where the administrator has been appointed by directors of a company or where it has been appointed by a secured creditor: see, for example, Calabretta v Redpen Developments Pty Ltd (in liq) (recs & mgrs apptd) [2010] FCA 81; (2010) 183 FCR 47; National Australia Bank v Horne [2011] VSCA 280; (2011) 85 ACSR 869; Photios v Cussen (in their capacity as joint administrators of Beechworth Land Estates Pty Ltd (admins apptd)) ("Photios v Cussen"). Mr Jackman submits, and I accept, that the position in this case is closely analogous to that considered by Robb J in Photios v Cussen above so far as the effects of State legislation in that case (namely, the Duties Act 1997 (NSW)) was not to prohibit the appointment of the administrator but had the result that the secured creditor's standing to make such an appointment was not established under s 436C of the Corporations Act.
Mr Cook submits that validation for the administrators' appointment is not available, as a matter of jurisdiction, by analogy with the position to which the Court of Appeal referred in Correa v Whittingham above. I do not accept that submission. I held in the Earlier Judgment, and have again held in this judgment in respect of Mr Cook's submissions in respect of the same issue, that the appointment of the administrators by MBL was not an act of enforcement of the relevant security for the purposes of the FDMA and it was, therefore, not in breach of and not invalidated by the FDMA. There is no question in this case, as there was also no question in Photios v Cussen, of an exercise of powers under s 447A of the Corporations Act to avoid the effect of the FDMA because the findings I have made have the consequence that the FDMA had no application in respect of the events as they have occurred. The only potential application of s 447A of the Corporations Act in this application is to address the fact that the eligibility of MBL to appoint the administrators under s 436C of the Corporations Act is not established by reason of its noncompliance with the FDMA. That is the product of the terms of how s 436C of the Corporations Act applies in the relevant circumstances, and is capable of modification by s 447A of the Corporations Act.
On the basis that I find, as I do, that the Court has jurisdiction to make an order under s 447A of the Corporations Act, the question arises whether it ought to do so in order to advance the purposes of Pt 5.3A of the Corporations Act in the relevant circumstances. Mr Jackman identifies several relevant considerations to the application of s 447A of the Corporations Act drawing upon the useful summary of the authorities and the factors identified in Hayes v Doran (No 2) [2002] WASC 486 at [279] (where that paragraph number second occurs in the judgment). Mr Cook fairly accepted that the Defendants did not and could not contest the factual basis of the matters on which Mr Jackman relied, where they had not challenged Mr Goyal's evidence in that respect.
In particular, Mr Jackman refers to Mr Goyal's evidence that the Company was, as at 28 June 2016, and is, insolvent (Goyal 5.12.16 [21], Ex A1) to which I have referred above. Mr Jackman submits, and I accept, that this consideration weighs in favour of granting the relief claimed by the administrators. There is no evidence of inquiries made, or advice sought, in relation to the validity of the administrators' appointment. Mr Jackman submits, and I accept, that this consideration is neutral in the exercise of the discretion. The question of disruption to the Company's affairs arising from a challenge to the validity of what has occurred in the administration to date is also relevant. Mr Goyal's evidence is that a significant amount of work has been undertaken in the administration, including in the approximately four month period prior to any challenge to the validity of the administrators' appointment being raised (Goyal 5.12.16 [18]-[20]). Mr Jackman submits, and I accept, that the potential for disruption to the Company's affairs, if the administration ended and challenges made to the steps taken by the administrators since 28 June 2016, is significant.
The effect of a change in the relation-back date if the appointment of the administrators is invalidated is also relevant. Mr Goyal's evidence is that the administrators' investigations into possible voidable transactions of the Company are ongoing (Goyal 5.12.16 [44]-[46]) and I accept that retaining an earlier relation-back date is a source of potential benefit to the Company's creditors, at least if the Company later transitions from voluntary administration into liquidation. This consideration also weighs in favour of granting the relief claimed by the administrators.
The question whether a creditor who challenged the validity of the appointment promptly pursued that challenge is also relevant. A challenge to the validity of the administrators' appointment was first raised about four months after that appointment. That delay, where significant steps were taken by the administrators in the intervening period, weighs in favour of the exercise of the Court's discretion to validate the appointment. Mr Jackman also points out that the administrators have sought and obtained orders in this proceeding varying the operation of Part 5.3A to limit their personal liability in respect of additional moneys (in the amount of $2,199,000) that the administrators have caused the Company to borrow from the Company's lenders: Re Maria's Farm Veggies Pty Limited (administrators appointed) [2016] NSWSC 1457. There is at least a risk that they would suffer material prejudice were the appointment not validated and their access to a right of indemnity against the Company's assets for that borrowing was prejudiced.
Mr Jackman submits, and I accept, that other relevant matters include that the administration of the Company is at an advanced stage, and a significant amount of work has been undertaken by the administrators, and the convening period for the second meeting of creditors of the Company expires on 28 February 2017 (Goyal 5.12.16 [18]); the Company's financial position is poor, to say the least, as I have noted above, and it has no readily available source of funding to complete the glasshouse project or realise value for its assets without support from its secured lenders, which would not be provided to the Company under Mr Disselkoen's control (Goyal 5.12.16 [19], [21], [24]). As I have noted above, Mr Goyal also expresses the opinion that, if the Company was returned to its directors, it would not realistically be able to exist outside of a further form of "external administration" in the near future (Goyal 5.12.16 [31]-[33]). Mr Jackman submits, and I accept, that that evidence suggests that the present voluntary administration is the best option to address its present financial position.
These considerations, which are supported by Mr Goyal's uncontested evidence, seem to me to weigh heavily in favour of validating the administrators' appointment in the interests of creditors and also in the interests of maximising the prospect of survival of the Company's business.
Mr Cook responds by pointing to the statutory purpose of the FDMA, which he submits is to delay any enforcement of a securities interest until after an opportunity to mediate is given. Varga v Commonwealth Bank of Australia (1997) NSWConvR 55-797; Re Sundara Pty Ltd [2015] NSWSC 1694 at [14]; and see also the Earlier Judgment at [17]. It seems to me that, whilst these observations have weight, they cannot expand the scope of the FDMA beyond its terms. Nor can the Court construe the FDMA, as I noted above, by a preconception as to its purpose, which exists outside its terms. For the reasons set out in the Earlier Judgment, it seems to me that the FDMA in its terms does not invalidate the appointment of the administrators without compliance with the mediation requirement by MBL. Whether the administrators' appointment is now to be validated, where MBL was not eligible to make that appointment under s 436C of the Corporations Act, is to be determined, not by reference to a focus only on an assumed intent of the FDMA but rather by reference to the wider focus that ss 435A and 447A of the Corporations Act require.
Mr Cook developed these propositions further in oral submissions, by contending either it was not a proper purpose (within the terminology adopted by Barrett JA, as his Honour then was, in Correa v Whittingham above) to rely on s 447A of the Corporations Act where MBL had not been entitled to enforce its security. As I noted above, it seems to me, that, adopting the same reasoning as Robb J in Photios v Cussen above, the issue here turns only on the scope of s 436C of the Corporations Act and it is within the proper purpose of s 447A of the Corporations Act to modify that section where an appointment is invalid by reason of s 436C of the Corporations Act, at least where that does not involve overturning a direct prohibition of appointment under State legislation of the kind considered in Correa v Whittingham above.
Mr Cook also advanced a submission that, in effect, that if the Court were to validate the appointment of the administrators in this case, where MBL had not complied with the FDMA, then secured creditors will regularly disregard the FDMA and appoint administrators without affording the opportunity of a mediation under the FDMA. I am not persuaded by that form of a floodgates argument. The Court's previous exercise of its power to validate appointments where quorums of directors have not been established, or a secured creditor does not hold security over all or substantially all of a company's assets, or a security is not enforceable by reason of s 211 of the Duties Act, does not appear to have generated a flood of directors or secured creditors making invalid appointments in the hope that they will later be validated. It seems to me to be highly unlikely that secured creditors would generally seek to incur the risk, stress and costs of applications of this kind, rather than engaging in mediation under the FDMA. Whether or not that is the case, and I accept that there is no evidence about the matter, there is no more reason to speculate that secured creditors will regularly proceed in that manner than to anticipate that they would prefer the certainty of compliance with the FDMA to the risks of court applications of this kind. In any event, s 447A of the Corporations Act requires that I have regard to the purposes of Part 5.3 of the Corporations Act, so as to maximise the chance of the Company continuing in existence and, if that is not possible, secure a better return for the Company's creditors and members than would result from its immediate winding up, and this requires an assessment of the wider range of considerations which were addressed in Mr Goyal's evidence to which I have referred above.
Mr Cook also submitted that, if the Court granted the relief sought in this application, MBL would not engage in a mediation process. I would not draw that inference, where MBL has offered to engaged in a farmer-initiated mediation and that offer has not been withdrawn, although I recognise that the Defendants have as yet not accepted that offer, by reason of the conditions which they have imposed on their participation in such a mediation. Even if that were to occur, it seems to me that the disadvantage of that result would have to be weighed against, and would not outweigh, the benefits to the Company and its creditors from seeking to restore some value by advancing the construction of the glasshouse, having regard to the evidence of Mr Goyal to which I have referred to above, and the advantage to the Company and its creditors of maintaining an insolvency administration in respect of a company that is plainly insolvent. I also do not accept Mr Cook's characterisation of the issues raised by this application as to whether MBL should be given the right that it would not have by reason of the FDMA. The issue in this case is not the question of what rights MBL should have, or should not have, but instead of the application of ss 435A and 447A of the Corporations Act, which authorise certain steps to be taken, when that would advance the interests of the Company in its business continuing in its existence and its creditors and members. It seems to me that, given the uncontested evidence of Mr Goyal in that respect, that that is plainly the case here.
I should, for completeness, also note that two parties intervened in this application. The first, MBL, did not advance any substantive submissions. The second, two creditors who were represented by Mr Weigand, indicated that they opposed the application for validation and supported the Defendants' position. I invited Mr Weigand to expand on the reasons that the creditors took that view, but he indicated that he had no instructions in that regard. I am not assisted by the fact that two creditors, for reasons that they do not disclose, did not support the relief that is sought.
In these circumstances, I am comfortably satisfied that an order should be made validating the administrators' appointment under s 447A of the Corporations Act notwithstanding that, at the time of the appointment, MBL was not entitled to enforce its security interests for the purposes of s 436C of the Corporations Act. It is therefore not necessary to address the alternative forms of relief sought by the administrators under s 1322 of the Corporations Act. It seems to me, however, that the formulation of the order sought by the administrators in paragraph 1 of the Interlocutory Process is unnecessarily complex. I would be inclined to adopt the form of order, subject to any further submissions which Counsel may make in that respect, that was adopted by the Court of Appeal of the Supreme Court of Victoria in National Australia Bank v Horne above as follows: "That Pt 5.3A of the Corporations Act is to operate in relation to Maria's Farm Veggies Pty Limited in such a way as to treat the appointment by Macquarie Bank Ltd on 28 June 2016, pursuant to s 436C of the Corporations Act of Rahul Goyal and David Winterbottom as voluntary administrators of Maria's Farm Veggies Pty Limited as a valid appointment."
I would also be inclined to reserve the question of costs, and allow the parties an opportunity for written submissions as to the costs of this application and the earlier application under s 447C of the Corporations Act, which I have reserved, which may then indicate whether an oral hearing is required. I will, however, allow both Counsel, and an intervening party who appears today, an opportunity to make submissions as to the form of those orders.

Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd

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